Confluence of Storage and Networking Technologies - How is It Transforming Physicla Security?

Confluence of Storage and Networking Technologies – How is It Transforming Physical Security?

George C Paul, Industry Analyst

Auto ID and Security

October 28, 2009

2

Focus Points

Snapshot of Economy

1

2

Market Segmentation

Force field Analysis3

4 Vertical Market Growth Rates

5 Key Trends

Total Market and Segment Highlights

7

6

Major Market Participants and Conclusion

3

Market Segmentation

Physical Security Digital Storage MarketPhysical Security Digital Storage Market

Revenue Breakdown

Hardware

Software

Services

Product Categories

DAS

NAS

SAN

Source: Frost & Sullivan

Vertical Market

Government

Critical Infrastructure

Enterprise

Education

Healthcare

Retail

4

Key Revenue Generating Verticals

• This segment includes federal, state, and local government purchases for government buildings, correctional homes, defense projects and border security initiatives.

Retail

Education

Enterprise

Critical Infrastructure

Government

Healthcare

• This segment includes securing critical infrastructures such as airports, seaports, utility infrastructures and city surveillance.

• This segment includes hospitals, clinics, and other medical facilities.

• This segment includes retail outlets, malls, parks, tourist locations and retail bank branches.

• This segment includes kindergarten to grade 12 (K-12) schools, colleges, universities, and other educational institutions.

• This segment includes non-retail office space, high-tech facilities, corporate office premises, and industrial plants.

Source: Frost & Sullivan

5

Unemployment Rate Industrial Output

Retail Sales Consumer Sentiment

Economic Revival:Key Indicators (U.S.)

Source: Federal Reserve Bank of St. Louis

6

Infrastucture

16%

Education

13%

Public

Services

36%

Healthcare

35%

Economic Stimulus

Components of American Recovery and Reinvestment Act (ARRA) of 2009

• Bill signed into law on February 17, 2009

• Total Stimulus Package $ 787 Billion

• 22% of stimulus package paid out as of Oct 2009

Taxe Cuts

38%

Healthcare

7%

Education

7%

Aid for

Vulnerable

10%

Infrastructure

14%

Energy

5%

State and

Local Relief

18%Other

1%

Physical Security Components of ARRA, 2009

Source: Frost & Sullivan

7

Short Term Medium Term

Imp

ac

t

Ma

rke

t D

rive

rsM

ark

et

Res

tra

ints

Imp

ac

t

Long Term

Shift to Mega-pixel Cameras

Stimulus Program

Economic Slowdown

Installed Base Vs New Systems

Absence of Network Infrastructure

Falling Prices

Low

High

Low

High

Forcefield Analysis with Timeframe

Source: Frost & Sullivan.

Converting Hybrid Systems

Growth in Government Vertical

Shift Towards Network Storage

Lack of Awareness and Expertise

Return on Investment Reliability and

Maintenance

8

1

3

6

5

4

2

Small (<$100 million)

Large(>$500 million)

Market Size of Vertical Markets

Low(0-5%)

High(>10%)

CAGR for Vertical Markets

Medium($100-$500 million)

Medium(5-10%)

Sectors with highest total growth potential

CAGR is calculated from 2008 - 2012

Key Physical Security Vertical Growth Rates

Government1

Critical Infrastructure2

3

4

5

Education

6

Retail

Healthcare

Enterprise1

3

6

54

2

Source: Frost & Sullivan

9

Key Trends

Transition from Disk Attached to Network Attached Storage

Video Analytics

Storage Virtualization

Reducing Power Consumption

Mega – Pixel Cameras

Storage at the Edge

Key

Trends

Source: Frost & Sullivan

10

DAS, 25%

NAS, 35%

SAN, 40%

Tape Based,

7%

Disk based,

93%

Total Market and Segment Highlights

• The total storage products market was valued at $26.5 billion for base year 2008 and includes all the application markets

0% 5% 10% 15% 20% 25%

Others

Retail

Energy

Manufacturing

Financial

Education

Healthcare

Government

Storage Revenues – Vertical Market Split

Storage Revenues Tape Based Vs Disk based Storage Split

Storage Revenues DAS, NAS and SAN Based Storage Split

Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan

11

Major Industry Participants

• Data Direct Network (DDN)

• Dell

• EMC

• Fujitsu

• Hie Electronics

• Hitachi Data Systems

• HP

• IBM

• Intransa

• Iomega

• Isilon

• NetApp

• Nexsan

• Omneon

• Pillar Data Systems

• Pivot 3

• Seagate/Maxtor

• Teradata

• Western Digital

12

Key Trends & Conclusions

Government Market relatively unhindered by economic

recession thanks to mandates

Conclusion

Source: Frost & Sullivan

Greater integration of security sub systems likely to overcome

the lethargy in shifting towards IP based storage

Increased proliferation of wireless technology is expected to spur

growth for centralized network storage to stream video feeds.

Video analytics to be a major driving factor for networked security

once the reliability is established along with greater affordability

Storage virtualization to become the norm among enterprise

applications

13

Next Steps

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14

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