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OCTOBER 2015 3 www.securitysystemsnews.com 2015 Access Control Source Book GROWTH see page 7 By Jeff InglIs DENVER—In 2015, electronic locks will be a $325 million business in North America, and more than $1 billion worldwide, as the sector enters a fve-year period of 10- to 12-percent annual growth, according to Blake Kozak, principal analyst at IHS who covers security and building technologies. The electronic lock category, which e n c o m p a s s e s e l e c t ro m e c h a n i c a l , mechatronic and digital-cylinder locks, most of which are connected to their head end via wireless Internet, has solidifed its reputation as secure, reliable and tested. Now it is on pace to become the leading technology in the electronic door access control by 2019, surpassing readers and panels, Kozak said. That presents an oppor- tunity for suppliers, integrators and installers who focus on meshing electronic locks with wall readers in existing systems, he said. Within the category, the largest component will be electromechanical locks, which are similar to hotel room locks in that they combine mechanical locks with elec- tronic credential readers. They are already 77 percent of the total electronic lock market. Multi-system operators (MSOs) and traditional security alarm dealers will be add- ing electronic locks not just as extras but as integrated elements of existing systems, Kozak said. "It's not a matter of: Will a large utility or MSO make their equipment electronic," Kozak told Security Systems News. "It's a question of time." Converting remote offces, connection closets and other facilities is "a huge undertaking," Kozak said, and comes with signifcant upfront costs. But, conversion can save money and time almost immediately. With electronic locks, "keys can be updated in the feld. Contractors don't have to go to a central offce to get their keys for the day," Kozak said. Safety is another feature, particular for remote loca- tions, he said: If a person requests permission to enter a particular facility for work that is supposed to take just a few minutes, but an hour later still hasn't requested permission to leave, security staff can be alerted that some problem may have occurred. Despite the prevalence of electromechanical locks, the fastest growing element of the electronic lock category will be mechatronic locks, which are digital cylinders Electronic lock market poised for rapid growth accepting electronic keys. They are most often used in remote places where batteries run down quickly and can't be easily replaced. Kozak expects mechatronic lock shipments to triple globally from 2014 through 2019, in large part due to larger facilities upgrading their systems or expanding existing systems that may cover only a few access points. "Instead of just doing 10- or 15 percent of the doors within a building, you could do more than that," Kozak said. "Very few internal doors have internal access con- trol," giving installers and integrators an upsell oppor- tunity. "In the past, you sold a system, you collected your revenue," Kozak said. Now they can increase RMR without needing to fnd new clients. The biggest players in the North American market are Assa Abloy, UTC and Allegion. "It's fairly close in the American market between Assa Abloy and UTC, primarily because of the hospitality market," Kozak said. Hotels' pace of lock upgrades is a key factor in the sector's growth. Interest in electronic locks is high, Peter Boriskin, VP of product management at Assa Abloy, told Security Systems News. Trade show discussions of the technology used to be "all education," Boriskin said. "Now we're seeing folks coming to our booth and they already have a wealth of knowledge of what they're looking for." He attributes the shift to the recession. "Prior to the recession, wireless [access control] was for very unique applications" in the U.S. market, providing more of a niche service. During the recession, companies had to secure the same facilities and spaces with lower budgets, and looked to maximize the use of their existing infra- structure, such as Wi-Fi connectivity. Discovering they could improve security control and accountability using Wi-Fi networks already in place was a watershed experience, Boriskin said. Now that the recession is over, "I don't think the genie is going back in the bottle," he said. "They've taken advantage of it and it works well." Beyond the technological improvement has come Blake Kozak It's not a matter of: Will a large utility or MSO make their equipment electronic, it's a question of time." —Blake Kozak, IHS