Frost & Sullivan

Aerospace, Defence & Security Practice

CEO 360 Assessment of the Global Security Market

2012

Presented to

1,800 employees 40 Office Locations 32 Countries

Milan Sophia Antipolis

Paris

London Oxford

Frankfurt

Warsaw

Tel Aviv

Dubai

Cape Town Buenos Aires

Bogotá

São Paulo

Mexico City

San Antonio, TX

Mountain View, CA New York, NY

Toronto

Beijing

Chennai

Kuala Lumpur

Mumbai

Bangalore

Kolkata

Delhi

Singapore

Shanghai

Sydney

Seoul

Tokyo

Moscow

Istanbul

Auckland

Bangkok

Jakarta

Pune Hong Kong

Shenzen

Frost & Sullivan: Global Footprint

3

Table of Contents

1. Overview of the Global Security Market 1.1. Security Spending and Global Trends 1.2. Top 15 Markets by Threat Level vs Ability to Spend 2. Assessment of Market Segments

2.1. CNI Security (Energy, Nuclear and Water) 2.2. Oil & Gas Security 2.3. Urban Security 2.4. Cyber Security 2.5. First Responders 3. Technology & Applications 4. Assessment of the Competitive Environment

5. Summary of Key Growth Geographies, Domains and Technologies

Integrated Security one of the major Global Trends

Integrated Security

Increasing Innovation

Smart Architecture & Management

New Energy

Aging PopulationImproved IT Backbone

Increased Technological Sophistication

Shift in Global Balance of Power

Green Buildings

Preventative Healthcare

Top Ten Future Trends Affecting Security

$ B

illio

ns

Global Civil Security Spending by Region, 2010 - 2020

0153045607590

105120135150165180195210

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

46 50 53 54.5 55 56 58 60 61 65 66

32 36 37 38 38.5 40 44 45 46 47 483032 33 34 36 40 42 45 47 48 50

810 11 12 14 15

17 19 20 22 25

45 6 8 9 8

88 9

1015

North America EuropeAPAC (Including India and China) Middle EastSouth America

Top Ten Global Trends

Frost & Sullivan estimates the global security market size at $140 billion currently and expects it to reach $200 billion by the year 2020. The growth is primarily driven by the US and emerging regions such as APAC and Middle East. This excludes cyber security spending.

The global security spend is calculating the spend across several security segments such as airports, mass transport, Oil & Gas, Utilities, Borders, Seaport and Maritime Security. The spending includes both government and private spending on these segments.

5

F&S Country

Rating Region Country

Threat

Factor

Strategic

Factor

Country

Score

1 North America United States of America 71 100 94

2 Europe United Kingdom 90 80 93

3 APAC India 75 80 85

4 CIS Russia 75 80 85

5 Middle East Saudi Arabia 70 80 80

6 Europe France 60 80 77

7 Middle East Israel 70 62 72

8 Europe Turkey 80 43 68

9 Europe Spain 70 50 66

10 Europe Germany 50 70 66

11 APAC China 45 70 63

12 APAC Indonesia 65 50 63

13 Latin America Brazil 43 70 62

14 APAC South Korea 53 60 62

15 APAC Pakistan 90 22 61

Top 15 Security Markets by Threat Level vs Ability to Spend

6

Security Spending by Threat Domains

CNI leads the way in terms of security spending however overall revenue contribution is slightly reducing, followed by border security and airport security, primarily driven increased threats. Oil & Gas security is also seen as a key growth segment in the next decade. CNI includes utilities sectors such as Energy and Water.

8.7%

14%

12.9%

11.6% 19.8%

14.5%

10%

4.5%

4%

% Spending by Domains, 2011

Maritime Oil & Gas Border Security

Mass Transport CNI Airports

Seaports CBRN Defence Large Events

8.2%

12.3%

13.4%

13.7% 17.4%

19.6%

7.8%

4.3% 3.4%

% Spending by Domains, 2020

Maritime Oil & Gas Border Security

Mass Transport CNI Airports

Seaports CBRN Defence Large Events

Critical National Infrastructure Security

Critical Infrastructure to Maintain Healthy Levels of Growth During Downturn

Infrastructure: Government-backed

projects to prove resilient to economic recession

Education is a reactive market – recent shootings in

throughout Europe and North America to maintain high level of growth

Government: National and International

organizations (IATA, ICAO, EUROCONTROL) are unwilling to reduce security investments in favour of cost cutting.

Gaming and Casinos

Low - Negative ‏(5%-5%-)

High ‏(10%<)

CA

GR

for

Ve

rtic

al M

arke

ts

Medium ‏(5-10%)

Large

Market Size of Vertical Markets

Medium

Small 1>$‏)‏ billion)‏

Growing Segments

Healthcare: driven by government projects in

Europe and North America

Banking and Finance: Security spend will remain

important for banks, but overall market will struggle.

Commercial: Retail sales are falling

worldwide, branches are closing and security investment will suffer.

Residential: Historically underperforming

the other verticals, the residential market has proven resilient during the economic recession

9

Critical National Infrastructure Security

Global CNI Security Market, 2010 - 2020

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

9,108 9,21 9,56 9,85 10,23 10,47 10,98 11,47 11,98 12,52 13,068

6,336 6,52 6,89 7,05 7,45 7,83 8,2 8,56 8,93 9,32 9,504 5,94 6,23 6,65 6,98 7,37 7,85 8,43 8,7

9,1 9,45 9,9

1,584 1,87 1,93 2,08

2,24 2,65

3,1 3,78

4,1 4,67

4,95

1,13 1,78

1,96 2,46

2,87 3,1

3,22 2,83

2,91 2,99

3,02

North America Europe APAC (Including India and China) Middle East South America

Re

ven

ue

($ B

illi

on

s)

North America and Europe to lead the way in CNI security spending – driven by heightened threat perception and government assets increasingly seen as favourable targets for terrorist threats. The market is expected to grow from $24 billion in 2010 to approximately $40 billion in 2020 with more than 50% of the spending driven by NA and EU. On a longer run with increased IP penetration , APAC will emerge as a key growth region.

Nuclear Plants

Nuclear Power

2010 2020 2015

Key Impact/Opportunities

1) Focus on safety

2) Life extensions

- up to 20 years = (€500

million)

- new plant = €5 - €6 billion

3) New equipment orders =

approximately 60 pressure

vessels ordered in the next five

years, despite Fukushima

Number of Reactors Planned and Under Construction

Fukushima Accident Start of UK nuclear build

2nd Wave of Gen III+ construction

442 reactors in operation 480+ reactors operational

Source: PRIS, Frost & Sullivan

Global Safety Reviews

65 reactors under construction

Finalised construction of ITER

Power Plant Decommissioning

Power Plant Decommissioning

2010 2020 2015

Key Impact/Opportunities

1) Obvious point decommissioning = need for

replacement plants

- Europe – gas likely to play a key role

- Baseload power needed

- Middle East – gas

- Africa – mixture

2) Potential revenues from remediation work to restore

sites/prepare sites for new development

- Nuclear €300 million per reactor

- Opps for specialist waste companies/EPC players

that could expand

Likely Decommissioning In Selected Regions, 2010 - 2020

First of substantial wave of gas-fired plant closures

Closure of substantial coal-fired capacity in Europe to comply with the

Large Combustion Plant Directive

Gradual closure of nuclear-fired power stations in Europe

and North America

Source: Frost & Sullivan

0

10

20

30

40

50

60

70

80

90

Europe Eastern Europe & Russia

Middle East Africa

Cap

acit

y D

eco

mm

issio

ned

(G

W)

Oil & Gas Security

Oil and Gas Infrastructure Security Market - Revenue

Forecast by Region

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Africa 0,68 0,71 0,74 0,78 0,81 0,85 0,89 0,94 0,98 1,03 1,08

Europe (including Russia) 1,89 2,00 2,11 2,23 2,36 2,49 2,63 2,77 2,93 3,09 3,27

South America 1,42 1,52 1,63 1,75 1,88 2,01 2,16 2,31 2,48 2,66 2,87

Asia Pacific 4,56 4,83 5,11 5,40 5,72 6,05 6,40 6,77 7,16 7,58 8,02

Middle East 3,59 3,81 4,05 4,30 4,57 4,85 5,15 5,47 5,81 6,17 6,55

North America 6,16 6,44 6,72 7,02 7,32 7,65 7,98 8,33 8,70 9,08 9,48

Re

ven

ue

($ B

illio

n)

Oil and Gas Infrastructure Security Revenue Forecast by Region: Global, 2011–2021

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

Key Takeaway: South America will be the region with greatest growth in security spending followed by Middle East

and Asia pacific

Oil and Gas Infrastructure Security Market - Revenue Forecast

by Segment

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Security Services 3,30 3,48 3,67 3,87 4,08 4,30 3,78 3,99 4,21 4,44 4,69

Cyber Security 1,28 1,35 1,43 1,50 1,59 1,67 3,03 3,19 3,37 3,55 3,75

Perimeter Security 2,38 2,51 2,65 2,79 2,95 3,11 2,77 2,93 3,09 3,26 3,44

Access Control 1,83 1,93 2,04 2,15 2,27 2,39 2,27 2,39 2,53 2,67 2,81

Surveillance 3,85 4,06 4,28 4,51 4,76 5,02 5,80 6,12 6,46 6,81 7,19

Screening & Detection 3,11 3,28 3,46 3,65 3,85 4,06 3,53 3,72 3,93 4,15 4,38

Command & Control 2,56 2,70 2,85 3,01 3,17 3,35 4,03 4,26 4,49 4,74 5,00

Re

ven

ue

($ B

illio

n)

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

Key Takeaway: Surveillance will continue to dominate the oil and gas infrastructure security market while cyber

security will have the highest growth rate

Key Trends

• Increasing infrastructure developments in oil and gas sector and evolving threats to critical infrastructures will drive the Global oil and gas infrastructure security market.

• Upstream segment in oil and gas will provide maximum opportunities to suppliers of security systems due to increase in exploration and production activity globally. North America will offer greatest opportunities in security followed by Asia Pacific. Middle East and Asia Pacific regions will see maximum need for security in downstream segment.

• South America will experience greatest growth in security spending followed by Middle East and Asia pacific. Surveillance will continue to dominate the oil and gas infrastructure security market while cyber security will have the highest growth rate

• Pipeline monitoring & surveillance along with pipeline leak detection systems are in great demand

globally with increasing pipeline construction. • Total oil and gas infrastructure security market is expected to increase from $ 18.31 billion in 2011

to $31.27 billion by 2021

Urban Security (Safe Cities)

Urbanization Challenge

Source: UN Population Division, World Urbanization Prospects

15% 17%

51%

41%

64%

39% 41%

72%

78% 81%

62% 66%

84% 89% 90%

0%

100%

Africa Asia Europa Latin America North America

1950

2007

2050

50% of the world’s population lives in cities today and 70% of the global population is expected to live in urban environments by 2050

Growth/ Development/ Acuteness of:

– Terrorism, Crime and Emergencies

– Road congestion

– Energy consumption

– Gas emission and waste contamination

– Demographics

Need/ requirement for:

– Clean water and air storage

– Effective transportation networks

– Reliability and efficiency of energy

– Safety and Security

– Connectivity and Communication

Key Drivers Urban population share by continent

Ability and necessity to transfer current approach of urbanization development to the format of Safe and Smart Cities

•50% of the worlds GDP is produced in Cities with over 750k population

•75% of energy produced is consumed by cities

•80% of the world Co2 Emissions are from cities

• Security becomes more critical as cities and their infrastructure evolve;

• Cities get bigger (urbanisation) = more and more anonymous threats;

• Increasing pressure on Local authorities to cope with expected and unexpected security threats against citizens

• Large number of potential end-users with real budget is another key driver and a challenge at the same time

• Technology adoption and penetration allows us to think about a connected Safe City

0

5

10

15

20

25

30

35

40

45

(3) (1) 1 3 5 7 9 11 13 15 17 19 21 23

19.Seoul20. Miami15.Hong Kong

13.Philadelphia

* Size of the bubble – GDP 2025

5. Chicago 7.Paris

Po

pu

lati

on

(m

illio

n) 1.

Tokyo

2.New York

3. Los Angeles

4. London

10.Buenos Aires

17. Moscow14. Beijing

Ranking based on population and GDP

New definition of Megacity ‘25

U.N. definition

of Megacity ‘09

11.Mumbai

16. Delhi

9.São

Paulo

6.Mexico

City 8. Shanghai 12. Osaka-

Kobe

18. Guangzhou

Top 20 Megacities in 2025Top 20 Megacities in 2025

* Size of the bubble – GDP 2009

* Cities with current or future plans to become Safe Cities

Top 20 Megacities and Safe Cities Projects Top 20 Megacities and Safe Cities Projects -- Ranking (Global), 2009 Ranking (Global), 2009 -- 20252025

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

50% Of The Top 20 Megacities In 2025 Will Be From The Developing Countries

Why are we talking about Cities?

Integrated Solutions

Reliability

Centralised & Remote

Control

Scalable Response

Safe City can be defined as:

(1) An initiative to integrate security solutions across stakeholder groups in a given city to enhance response to security and safety incidents…

(2) The implementation of reliable and all-coverage security measures to counter incidents that a city and its inhabitants are susceptible to…

(3) A combination of civic partners (law enforcement, businesses, and residents) to maintain order and create stability in cities by deploying advanced security systems…

(4) Security concept where key entities of a city work together to identify and act in real-time to security threats of any scale and time

+

+

+

Safe City is a plan to enhance public security and welfare by deploying networked security systems across several entities in a society to optimise the necessary response from detection to action

Safe City

Defining Safe Cities

Defining SMART vs Sustainable Cities

Smart City Sustainable City

• Smart cities are cities built on “Smart” and “Intelligent” Solutions and technology that will lead to adoption of at least 5 out of the 8 following smart parameters

• Smart Energy • Smart Building • Smart Mobility • Smart Healthcare • Smart Infrastructure • Smart Technology • Smart Governance • Smart Citizens • Frost & Sullivan believes as of 2012, there is no smart

city. We expect 26 complete smart cities in 2025. We exclude smart “projects” within a city in this count – as they do not apply to an entire city

• Sustainable cities are cities that are built on eco-friendly basis. These may not necessarily include “intelligent” systems but are built more on an energy-efficient or environmental friendly objective. Sustainable Cities will have 1 or more parameters of the following:

• Green energy • Green buildings • Green mobility • Green healthcare • Green infrastructure • Green technology • Green governance • Green citizens • Frost & Sullivan research indicates there will be 92

sustainable cities in 2025

How SMART drives SAFE and Vice-Versa

SMART Mass Transport: Multimodal Transport Hubs Providing Excellent Air, Rail, Road Connectivity to Other Mega Cities.

SMART Technology:Intelligent Communication Systems Connecting Home, Office, iPhone and Car

on a Single Wireless IT Platform.

Satellite Towns: Main City Centre Will Merge with Several Satellite

Towns to Form ONE BIG MEGA CITY.

SMART Cars: At least 10% of Cars will be Electric Vehicles. Free Fast Charging Stations at Every Half Mile.

SMART GRID: Infrastructure to Enable Real Time Monitoring of Power Flow and Provide Energy Surplus Back to the Grid.

SMART Energy: 20%of Energy Produced in the City Will be Renewable(Wind, Solar etc).

SMART Buildings: At least 50% of Buildings Will be Green and Intelligent Built

with BIPV; 20% of the Buildings Will be Net Zero Buildings.

Source: Google Images

‘SAFE’

‘SAFE’

Integration is the Key Enabler and the biggest Challenge to “Creating” a Safe or SMART city

Implications

• It demands the procurement of new systems.

• It increases workload by sharing responsibility across different operators.

• It is a long-term commitment that is susceptible to governance chance and political agenda.

City Infrastructure

Energy Transport Communications

City Users

Inhabitants (People)

Visitors (People)

Businesses (People & Infras.)

City Operators

Law Enforcers (Fire, Police, etc.)

Service Providers (medical, wastage, etc.)

Infrastructure Operators

Safe City

Key Elements

Access Control, Video Surveillance Intrusion

Detection, Biometrics, Perimeter and

Occupancy Sensors, Fire Alarm Panels,

Detection Devices (Smoke/Heat/Gas/Flame),

Fire suppression, Notification and Evacuation

Energy Logistics, Distribution

Channels (electricity, water, gas),

Utility Monitor, Heat, Lighting,

Back-Up Power, Leakage Monitor

Voice/Video/Data, Audio Visual,

Structured Cabling, TCP/IP/BAS

Protocols, Remote VPN Access,

Computer Logon, Network Access

Logon, Firewalls, Managed

Security Services, Mobile Security,

Security Infrastructure

Building Automation, Building Control, Networked

Systems, Crisis Management Solution (power,

infrastructure damage, evacuation)

Traffic Control & Monitoring

(rail, underground, buses,

personal vehicles), 24/7 Supply

Management (logistics)

Integrated Fire Department,

Police and Medical Services,

Centralised and Remote

Command and Control,

Scalable Decision Making

Process

Communication Infrastructure is Critical and is the Backbone for Scalability

EnergyManagement

EnergyManagement

EnergyManagement

Physical Security

and Safety

Physical Security

and Safety

Physical Security

and Safety

Physical Security

and Safety

Logical Security

andCommunications

Logical Security

andCommunications

Logical Security

andCommunications

ResponseManagement

ResponseManagement

ResponseManagement

MobilityManagement

MobilityManagement

MobilityManagement

Universal Communication

Universal Communication

BuildingManagement

BuildingManagement

BuildingManagement

Operating a Safe or SMART City: The Challenge of “WHO‏vs‏HOW”‏–

Multi – Agency Co - Operation is Critical for Successful City Operations

Energy

Transport

Communications

Citizens (People)

Visitors (People)

Businesses (People & Infras.)

City Operators

Law Enforcers (Fire, Police, etc.)

Service Providers (medical, wastage,)

Infrastructure Operators

EnergyManagement

EnergyManagement

EnergyManagement

MobilityManagement

MobilityManagement

MobilityManagement

City Operators

City GovernanceCity Governance

CentralisedOperatorCentralisedOperator

Law Enforcers(Fire, Police, etc)Law Enforcers(Fire, Police, etc)

Infrastructure OperatorsInfrastructure Operators

Logical Security

andCommunications

Logical Security

andCommunications

Logical Security

andCommunications

ResponseManagement

ResponseManagement

ResponseManagement

Universal Communication

Universal Communication

BuildingManagement

BuildingManagement

BuildingManagementPhysical

Security and Safety

Physical Security

and Safety

Physical Security

and Safety

Physical Security

and Safety

Service Providers(medical, wastage, etc)

Service Providers(medical, wastage, etc)

City Users

City Infrastructure

City Operators

The WHO The HOW

City Infrastructure

City Users

Technology Strategy

Urbanisation Culture

Security & Safety Threat

Safe City Index: Identifying Safe City Opportunities Key Index Factors

Economic Power

Security & Safety Threat examines the extent of possible terrorist attacks, natural disasters, and crime. This factor is of crucial importance to distinguish the need for safe city projects.

Economic Power is one of the main criteria that influences the safe city index. It allows us to distinguish the cities with the healthiest economies and predict the future development of cities.

Technology Strategy is another critical aspect of the safe city index because it allows us to distinguish what state the city is in regarding technological procurement.

Urbanisation Culture allows us to study the way the city is growing. This factor will have a great effect on the extent of the project and the future of safe city technology procurement.

Safe City

Index

Source: Frost & Sullivan analysis.

New

York

Los

Angeles

London

Tokyo Shanghai

Beijing

Osaka

Seoul Hong

Kong

Singapore

Moscow

São

Paulo

Chicago

Guangzhou

Washington

D.C.

Atlanta

San

Francisco

Miami

Detroit

Houston

Bangkok Rio de

Janeiro

Dallas

Philadelphia

Toronto

Mumbai

Sydney

Melbourne

Seattle Istanbul

Pittsburgh

San

Diego Tampa

Phoenix Denver

Buenos

Aires Minneapolis

Madrid Busan

Tianjin Metro

Manila

Paris

Fukuoka

Chongqing

St.

Petersburg

Milan

Cairo Cleveland

Manchester

St.

Louis

Monterrey

Vienna

Jakarta

Baltimore

Boston

Cities with high safe city adoption possibilities and likely to go for Integrated Surveillance Deployment

Cities with very high safe city adoption possibilities and likely to adopt Integrated Surveillance & Response Capabilities

Cities sure of adopting safe city programs & provide very high revenue possibilities through adoption of integrated Detection, Management, and Response

Healthy Economy Strong Economy Powerful Economy

Ex

tre

me

Ce

rta

inty

Hig

h

Ce

rta

inty

Str

on

g

Ce

rta

inty

Source: Frost & Sullivan analysis.

Mexico

City

Johannesburg

The Safe City Index (continued)

CNI

Public Safety

Commercial

Residential

System Integration Technology Cyber/Network

Network Security

Residential Integrators & Service Providers

Information Technology Commercial Integrators & Building

Technology

Security Technology Providers

Defence Integrators

Defence Integrators

Communication Providers

The figure below highlights the complexities of the competitive landscape in relation to safe city solutions but also opportunities. Competition, partnerships, and future acquisition will occur across application and solution areas.

Competitive Environment – “A Fuzzy Picture”

Source: Frost & Sullivan analysis.

The following is a non-exhaustive list of organisations that are respective leaders in their field. The list is not an indication of market share but players that have demonstrated strong security credentials and/or public safety expertise.

Source: Frost & Sullivan analysis.

Safe City Solution

C3I: AGT International, Northrop Grumman, Lockheed Martin, L3 Communications, Frequentis, Unisys, Avaya, NSN, Selex

Elsag, Sepura, Rohde & Schwarz, Motorola, Siemens, Thales, EADS, Rohill,

Mer Systems, Intergraph

Sensors: ShotSpotter, Lenel, Harris

Services and System Integrators: AGT International, Cisco, Raytheon, Lockheed Martin, Cassidian, Thales, BAE Systems, IBM, Alcate-Lucent, Frequentis, Mer Group, AIS

Network & Storage: EMC, IBM, Nexsan, Hewlett Packard,

Cisco, HDS, NetApp, Dell, Sun Microsystems, Pivot3, Intransa, Vico,

Kintronics, QNAP, Veracity, Avaya, Alctatel Lucent, Huawei, NSN,

Motorola, Airware, Seupra, NEC, Fujitsu, among others

Video: Cisco, Pelco, Axis, Panasonic, Bosch, Sony, Toshiba, Samsung, IQinVision,

Verint

Next Generation: UAV, UAS, GIS

Analytics & Integration: AGT International, ObjectVideo, Nice, Cieffe, Viasys, ioimage, Verint, Vidsys,

Avigilon, Arcont Vision, Axxon

What is Included in a Safe City and Who is Providing it?

Smart Cities Now and Tomorrow

Europe

37% North America

34% Asia Pacific

21%

Middle East

6%

Latin America

2%

Worldwide spending in technologies for

Smart City programs development

>100 active and upcoming Smart City projects worldwide

Current Smart Cities Mapping

$bn

8

39

0

10

20

30

40

2012 20XX 2017

About $115bn in cumulative spending is expected during 2012 – 2017 period

CAGR 30%

Smart Cities Selection

"Smart Growth“ concept has emerged in the last 10–20 years

driven by "new guard" urban planners, innovative architects,

visionary developers, community activists and historic

preservationists. There are many institutions engaged in

Smart City selection, which apply similar approach to 6

aforementioned elements, but with different criteria.

Sum-up of existing Smart City projects

Two types: “Greenfield”‏and‏“Brownfield”

Population in size of less 1.5 millions of citizens

Presence of major initiator (often a Grid company)

Community of different stakeholders

Sufficient “room” for smart mobility and grid issues

Proper and convenient territory allocation

Government support (legal and financial)

Set of prepared investors

Different Diagnostics

Final Scoring

Participator application

Short listing

Selected Smart Cities in 2025

Toronto

San Francisco

Vancouver

Paris

New York

London Berlin

Barcelona

Amsterdam

Seattle

Tokyo

Singapore

Calgary

Chicago

Los Angeles

Vienna

Copenhagen

Oslo

Seoul

Beijing

Tianjin Wuhan

Helsinki

Sydney

Shenzhen

Over 26 Global Cities to be “Complete” SMART Cities by 2025 - More than 50% of Smart cities of 2025 will be from Europe and N. America

Source: Forbes Smart City List, Innovation City Index, Specific Smart Project Websites for Each City, Frost & Sullivan

Stockholm

Photo Credits: Dreamstime, willgoto.com, tanamatales.com, sol-group.net

Rio Investment in Mobility

Planned Investments – Greater Rio de Janeiro – 2009 - 2016

High Speed Rail 40 %

BRT, Metro 13 %

Highways 18 %

Airports 6 %

Other 23 % Main Projects Time Frame

International Airport Tom Jobim 2013

5 BRT Lines 2012

Metro Line 4 Construction 2014

5 Road Projects 2013

Public Transportation Program – Rio de Janeiro, 2010 - 2014

Rio’s huge investment in mobility infrastructure to accommodate and growing and wealthier population requires smart solutions

Ch

alle

nge

In

vest

men

t

2000 2010 2020 (f)

Rio de

Janeiro

Cars 1,356,574 1,848,776 2,480,550

Motorcycles 81,997 231,580 357,739

Number of Vehicles – Greater Rio de Janeiro, 2000-2020

1990 2010

Rio de

Janeiro

Highway 64.8 50.0

General

road 24.2 14.4

Average Speed During Peak Hours – Rio de Janeiro, 1990 – 2010

(km/hr)

Rio Operations Centre

Operations Centre

People Governance

Environment

Economy

Mobility Living

Traffic and Transport

Data and Input Examples Output Examples

Weather

Energy

Crowd

Water

Services

Service Improvement

Optimisation of Traffic Flows

Better City Governance

Effective Disaster Response

Better Event Management

Crime Prevention & Analysis

The response and action is only as good as the quality of the data inputs and the concept of operations – what next?

Cyber Security

34

Cyber Security Spending

0

20

40

60

80

100

120

140

160

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

15,5 20 25 30 40 50 60 65 70 81 85

11,7 15

17 20

23 26

28 30

31 33 35

10 11

12 14

16

17 18

19 20

21 22

1,5 2

3 4

4

4

5 5

5

5 5

1,3 2

2,5 3

4

5

6 7

7,5

8 8

North America Europe APAC (Including India and China) Middle East South America

Global Cyber Security Market, 2010 - 2020

• The Cyber Security Market is witnessing a threefold increase from $40 billion in 2010 to over $150 billion in 2020.

• The US alone is expected to spend about $50 Billion by 2015 on Cyber Security.

• Spending patterns by end user segments (such as Governments, Military , Non Military and Private Sector) are very unclear at the moment and can be identified once the market matures and evolves further.

• However, the Government (Military and Non Military Sectors) are likely to be leaders in spending.

Re

ven

ue

($ B

illi

on

s)

Overall Spending Remains High Due to Regulations and Compliance Restrictions

Managed Security Services As the financial claimant changed in the last 18 months, many organizations understood that having a managed security service is a main cost reduction opportunity and a real option due to the maturity level that most MSSPs have reached.

Security Infrastructure More and more organizations understand that investing in a security infrastructure will benefit the organization in the long run. organizations that "patch" different security solutions suffer from high security costs while having the need to always upgrade their systems.

Firewall/ IPsec VPN As most organizations value the ability to work remotely, both for the employees and for business partners, the need for security systems that enable monitoring/enforcing and authenticating the different incoming and outgoing transactions is growing in steady numbers.

Mobile Security As mobile fobs enable the use of financial applications, the need to secure these application and the mobile fobs themselves grows. Mobile security is an up and rising trend that is backed up be a number of products that are close to reach maturity. This trend will grow in the upcoming years and will take a main role in the information security market

Hig

h G

row

th

Low

Gro

wth

Low Economic Impact High Impact

Note: Size represents relative value of markets

• Growing awareness on and need for information security within the small and medium enterprises (SMEs)

• SaaS approach is becoming standard information security platform for enterprise.

• Cost reduction and enhanced ROI driving consolidated security management solutions

• Mobile security as a global trend

Physical Cyber Convergence: Integrated Infrastructure

Evolution of Convergence between Physical Systems and IT Systems

Bridging the Integration Gap

Physical Systems

Information Technology

(IT)

IT champions drive integration to narrow the expertise gap.

Open protocols overriding legacy

2010 2020 2030

Integrated Security Systems

Wireless Controls and Sensors

Smart-Grid Integration

Automated Demand Response Programs and Smart-grid Applications

Information Modelling

Automated Commissioning and Energy Management

The need for interconnecting facilities and accessing real-time

data is driving convergence

36

37

31%

31%

25%

8% 5%

Cyber Security - Spending by Solution

Segments, 2011

Network Security Security Ops

Data Security Identity & Access Control

Endpoint Security

Since the Internet boom and subsequent bust in 2000, operational IT spending in most industries has consistently increased in response to the growing global economy and to the emergence of new regulations forcing companies to invest in technology to meet their updated obligations.

The current spending on information protection indicates that Network Security, Security Operations and Data Security are the areas of highest spend. However, research indicates that Identity and Access Control, followed by Data Security are the fastest growing segments at the rate of 20% each year.

Trends in Cyber Security Spending

38%

3%

27%

2%

4%

26%

Cyber Security Spending by Regions, 2011

North America South America Western Europe

Eastern Europe Middle East & Africa Asia Pacific

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

IT Segment - Expenditure Forecast

Key Takeaway: While Managed/monitoring services will continue to be the most appealing, cloud based services will gain traction in the market gradually

IT Segment Expenditure Forecast Global, 2011-2016, CAGR = 18.1%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Consulting Services 1 545,7 1 847,0 2 214,5 2 644,9 3 150,5 3 706,2 4 373,2 5 160,4 6 383,2 7 529,6 8 882,1

Cloud Based Services 1 389,3 1 655,2 1 978,7 2 360,7 2 894,3 3 401,7 4 008,1 4 722,8 5 925,7 6 981,7 8 226,3

Managed/Monitoring Services 3 730,2 4 442,7 5 308,3 6 327,9 7 254,8 8 523,5 10 042,6 11 832,8 13 288,6 15 662,3 18 460,7

0

5000

10000

15000

20000

25000

30000

35000

40000

Ex

pe

nd

itu

re ($

Mil

lio

ns)

Year

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

IT Segment - Percent Expenditure by Vertical Market

Key Takeaway: The commercial market holds the greatest market share, however the biggest contracts will likely come from Banking and Finance, and the government market.

Global MSS market: Percent Expenditure by Vertical Market Global, 2011

Others 6,8%

Commercial 31,7%

Industrial 17,5%

Government / CIP 15,2%

Banking and Finance 28,8%

40

• Utilise technologies to develop end to end cyber security solutions

• There is always a human element in any security breach. Provide human factors training within

end user organisations.

• Expand marketing efforts to roll out tools/solutions to support different intelligence assets

• Provision of scientific research to plug shortages in organisations.

• Adapt business model to work as a consultant alongside the customer to ensure security

requirements are properly implemented. Audit capabilities serve as an entry point to

opportunities in security.

Cyber Security

First Responders

First Responders C3I Market

Threats and Requirements

First Responders- Life Saving Agencies

Police Ambulance Fire Fighters

C2

COMM. Int.

Total situational Awareness

What does Interoperability have to offer?

Emergency Medical Service

Fire Brigade Law Enforcement

Communication

Command and Control

Surveillance

Network Management Centre Integrated

Preventive Responsive

Key Market Drivers and Restraints M

arke

t D

rive

rs

Res

trai

nts

SATCOM /SDR Autonomous

Tech

Need For Interoperability

Between Services Central Command And Control

Information On The Move

Mar

ket

Res

trai

nts

Res

trai

nts

Different standards and protocols

Fragmented Decision-Making And

Budgetary Allocations

Fragmented End-user Base

High cost of Equipment

Immature Network-based Technology and limited data capability

Source: Frost & Sullivan

TETRA System is setting the standard for

countries across Europe

Radio-SATCOM interface is overcoming

bandwidth limitations

SATCOM Terminals are increasingly being

deployed as Comm. System on the move

Higher bandwidth are used for first responders

market

Integration of C2 system with the Comm.

System is the stepping stone for interoperable

first responders C3I market

Integration of SoS under an overarching

network is the ultimate solution forward for

an interoperable first responders C3I market

C3

Radio SATCOM

C2 Network

First Responder’s C3I Market: Key Industry Trends

Key Industry Trends

The video surveillance market is evolving from

CCTVs to more complex systems involving

computers, IP and intelligent video motion

analysis.

The global demand CCTV systems is

shifting from conventional to IP-based

CCTV surveillance.

The market would increasingly use S/MUAVs as

part of surveillance asset.

Integration of surveillance systems with communications, one being video

surveillance. The real-time videos on mobile phones, eg,Blackberries would be a cheaper

cost.

Surveillance

Video CCTV

UAV Integration

First Responder’s C3I Market: Major Industry Trends

Key Industry Trends (Contd…)

C3I Market Revenue Attractiveness Grid

The Total EU Market is

expected to be worth approx

$17.5 billion between 2010 to

2018.

High Low Medium

Market Openness

Rev

enu

e G

row

th

UAV

Video

Network Solutions

SATCOM

CCTV

Radio

Attractiveness Index

Source: Frost & Sullivan

Communications

Intelligence

C2

First Responders’ C3I Market Share

Communications

Intelligence

C2

Communications

Intelligence

C2

First Responders’ C3I Market Share

Technology & Applications

Emerging Technologies Sustaining Future Growth of the Security Industry

IP Storage (SAN/NAS/DAS)‏ High Resolution

Cameras

Hig

h G

row

th

Low

Gro

wth

Mature Technology Emerging Technology

SaaS (Security/Software as a

Service)

Electronic Access Control

Biometrics

IP Cameras

DVRs/NVRs

Video Analytics

Biometrics is increasingly becoming standard in converged applications for banking and government

Video analytics is still paying for initial disappointment for over-promising and underperforming

Analogue Cameras

Intrusion Detection

Integration Software

The growing importance of integration of security systems with other building management systems has led to the growth of PSIM solutions. Increasingly used to protect critical infrastructure, PSIM has gained some traction in commercial security as well.

The SAAS market is seeing a shift from a traditional security space to a more IT centric industry. The competitive space is being decided by the service providers flexibility in gaining expertise in networking and deploying IP systems

RFID

IP-surveillance and the use of multi-mega pixel technology has driven growth for IT storage solutions (SAN/NAS/DAS), reducing the cost per GB of storage and enabling end users to record and store more video at lower operational cost

Note: Size represents relative size of the total market in 2011

Big Data and Open Source Intelligence requirements drive the

need for advanced data analytics capabilities in security

50

Competitive Assessment

Surveillance Competitive Environment

Capability

High

Low

Market Penetration High Low

Honeywell

Bosch

Axis Indigo Vision

Mobotix

Geuterbruck

Gunnebo

Siemens Panasonic

Sony Samsung

Challenger Leader Contender Specialist

GE Security

Cisco

Security Market: Competitive Landscape for Surveillance, (Global), 2011

Source: Frost & Sullivan analysis.

HIK Vision

Milestone Systems

Screening Competitive Environment

Capability

High

Low

Market Penetration High Low

Smiths Detection

Nuctech

Rapiscan

L-3 Communications

Challenger Leader Contender Specialist

Morpho Thru Vision

Security Market: Competitive Landscape for Screening, (Global), 2011

Source: Frost & Sullivan analysis.

ICX Technologies

Perimeter Security Competitive Environment

Capability

High

Low

Market Penetration High Low

Senstar Inc

Southwest Microwave

Fiber SenSys

Future Fiber Technologies

Magal S3

GE Interlogix Asia Ltd.

Gallagher

Challenger Leader Contender Specialist

GM Advanced Fencing Technologies

RBTec

ST Electronics

Security Market: Competitive Landscape for Perimeter Security, (Global), 2011

Fiber Net

Source: Frost & Sullivan analysis.

Salto Systems

AGT International

Access Control Environment

Capability

High

Low

Market Penetration High Low

ARINC

Siemens

HID Global

Panasonic International

Bosch Security

Lenel

G4 Tech

Challenger Leader Contender Specialist

Digital Persona

Honeywell

CEM Systems

Security Market: Competitive Landscape for Access Control, (Global), 2011

Source: Frost & Sullivan analysis.

C2 Competitive Environment

Security Market: Competitive Landscape for C2, (Global), 2011

Capability

High

Low

Market Penetration High Low

Alcatel Lucent

Axis Communications

Siemens

UTC Fire & Security

Honeywell International

Bosch Security

Cisco Systems Inc.

SITA

Challenger Leader Contender Specialist

ARINC

Source: Frost & Sullivan analysis.

Atos

Harris corporation

Motorola

Thales

AGT International

Integration Competitive Environment

Security Market: Competitive Landscape for Integration, (Global), 2011

Capability

High

Low

Market Penetration High Low

CNL Systems

ARINC

Siemens HID Global

Panasonic International

IBM

SAIC

G4 Tech

Challenger Leader Contender Specialist

Niscayah

Honeywell

Ultra Electronics

Source: Frost & Sullivan analysis.

SAP

Raytheon

Thales

Cassidian

Accenture

Cap Gemini

Selex Elsag

BAE Saab

Wipro

AGT International

LM

Northrop Grumman

Mergers & Acquisitions Activity

2008

2012

IT & Services OEM

L-1 Identity Solutions

GE Homeland Protection

Market Cap: $15.5B Avg. Acquisition: IT (n/a) / OEM ($700M)

BOTTOM LINE: Security

SNPE Materiaux Energetiques

SDU Identification

JV: Sagembat Defence

JV: Snecbat Engine

2008

2012

IT & Services OEM

Narus

Tapestry Solutions

Exmeritus

Kestrel

Digital Receiver Technology

Solutions Made Simple

Argon

Ravenwing

Vought (South Carolina facility)

Global Aeronautica

Insitu

Summit Design

Market Cap: $58B Avg. Acquisition: IT ($870M) / OEM ($540M)

2008

2012

IT & Services OEM

Sparta (Cobham Analytics)

MMI Research (Cobham Surveillance)

Corp Ten

Safelife Systems Trivec-Avant

Telerob

Market Cap: $4B Avg. Acquisition: IT ($150M) / OEM ($80M)

2008

2012

IT & Services OEM

MTC Technologies

BVT Surface Fleet

Diamond Detectors

Advanced Ceramics Research

Fairchild Imaging

Oasys Technology

Atlantic Marine

Market Cap: $16B Avg. Acquisition: IT ($400M) / OEM ($40M)

BOTTOM LINE: Cyber security BOTTOM LINE: Communication

Services

Argotek

Global Microwave Systems

Thrane & Thrane

RVision

BOTTOM LINE: Maintenance Services / Cyber security

Tenixtoll Defence Logistics

BHA Aero Composite Parts

Detica

Summary & Conclusion

Key Growth Geographies, Domains and Technologies

60

Technologies to watch-out Geographies to watch-out Domains to watch-out

• Biometrics • Analytics • Unmanned Systems

• Cloud Data Encryption

• India

• China

• Brazil

• Saudi Arabia • Turkey

• UAE • Russia

• Poland

• Energy & Utilities

• Cyber Security

• Urban Security

Thank You