Frost: Access Control Market Creates Opportunities for Smart Card Systems

January 11, 2008 // Published as a news service by IHS

Recent analysis from Frost & Sullivan of the world corporate security (physical and logical access) market found earned revenues of $120.4 million in 2006, with estimates to reach $235.0 million in 2012.

Analysts said in the next four to five years, private sector companies with a focus on security and multi-applications are likely to move toward smart card-based access control systems, which can converge several functions on one card, while also offering sophisticated authentication methods.

Smart cards in access control are increasingly used in leisure and entertainment facilities, as well as educational and research institutions. Analysts said some developing countries leap straight to this technology, forgoing the older magnetic stripe cards.

"Low cost contactless options have seen increased uptake in large-scale events all over the world, particularly in the U.S., Europe and Asia," said Frost & Sullivan industry analyst Michelle Foong.

"These include sporting events, major conferences, live performances, as well as other events where crowd control and security are key considerations."

While the benefits of access technologies are unquestionable, analysts said many small- and medium-sized enterprises (SMEs) are unable to justify an infrastructure that supports a smart card platform for access control.

With the availability of cheaper alternatives, analysts said many enterprises are content with their existing system and do not wish to migrate to smart cards. Even within bigger companies, the migration from legacy systems will take a few more years, unless there is a strong business case to support the move.

Barriers to migration are even higher in logical access control, analysts said, where smart cards do not plug and play into PCs and networks as easily as other options, such as universal serial bus (USB) and one-time passwords.

Positive spillover effects of government mandates, initiatives and increased mobility of workers are resulting in a greater need for securing access to corporate resources. Analysts said various government initiatives, such as the U.S. Common Access Card (CAC) and Civil Service Card in Singapore and Indonesia, raise awareness and educate the market about the benefits of secure and scalable systems such as smart cards.

"In countries where government agencies actively use smart cards for door access, there has been a marked increase in private sector adoption of smart cards in access control," said Foong. "Over time, the drop in prices and the move to more open and standardized platforms will encourage more applications in the private sector."

Source: Frost & Sullivan.