Global Security & Russia Outlook 2016
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“We Accelerate Growth”
Objectives and Highlights
The evolving dynamics of the security challenge
Top Transitional Technologies
Europe in Focus
Russia Security Challenges
Russia Security Forecasts by Sector
Russia Competitive Environment
Top Global Trends in 2016
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Evolving Dynamics The security continues to face a number of challenges
New Technologies Cyber Security Security Funding Intelligence and Data
So
urc
e: F
rost &
Su
lliva
n
Squeeze on
government
budgets and across
CNI sectors.
Pressure on the
security industry to
offer greater
security for less
money.
New technology
that is more
advanced, less
invasive and cost
efficient are the key
requirements from
end users.
The use of data
and open source
intelligence will
allow greater
actionable
intelligence and
situational
awareness,.
Increased cyber
threats will play a
greater role in
security policy with
a clear need for all
industries to be
better equipped
and prepared for
attacks.
4
Border Control Hotspots Source: Frost & Sullivan
Security Challenges in Focus for 2016 Border Security and Migration
Direction of Migration (individuals and
prohibited items)
The illegal
movement of
narcotics and
people combined
with wider border
security issues
remain a key
priority.
Growing concern over the influence of Daesh
in Europe and across the Middle East has
driven debate around border security.
US /Mexico border
continues to pose a
security and political
challenge.
Ongoing US
investment in law
enforcement within
Central America will
also continue for the
long term.
As a result of ongoing security concerns linked to the movement of goods and individuals, an
increase in security budgets is expected in 2016.
5
Internet of Things Growing sensors, devices, and connectivity will allow more data, but cyber security for
devices will become increasingly difficult for end
users to manage.
Managed Services Movement of non-critical data
and operations have been outsourced to industry to improve operations and
reduce costs.
Unmanned Systems Deployed for specific
operations and events, increase in border security
and oil and gas
Wearable Devices Increasing prevalence of body-
worn cameras from total solutions including device and
data management from suppliers
Intelligence Leveraged from structured and unstructured data with
improved solutions to facilitate sharing information
Connected Citizens PSAPs and command centres
will start to take live feeds and information from citizens
using apps and smartphones.
Biometrics Commercialisation of
biometrics continues with greater use for authentication
to everyday life operations
Top Transformational Shifts in Security and Law
Enforcement in 2016 - Connectivity and Automation Continues
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Europe in Focus for 2016 Collaboration across a range of imminent threats and issues is required
Security Funding Increasing Intelligence
Powers Increasing
SAFE HARBOUR SINKING
TRANSATLANTIC DATA
CABLES AT THREAT?
Part of Schengen Area
UAV’s no airspace
integration, no
registration, no radar able
to detect
North Africa Migration into Europe
Instability across the
Middle East, travel to
and from Europe of
people with links to
militant and terrorist
organisations
France: €600 M released
8,500 new law
enforcement jobs
Belgium: €400 M released
520 Army to patrol public areas
UK: 1900 extra intelligence personnel
£1.9 billion on cyber to 2020
Part of Schengen Area – new
border measures introduced
7
Russia– Dealing with high crime rates and terrorism threats
Games Investment 1
• The development of Sochi is a blue print for other Russian cities preparing for the FIFA World Cup in 2018
• Most recent total budget for the event reported as $8.15bn (February 2016).
High City Crime 2
• Russia has a very high crime rate in cities • Racial integration remains challenging • Notable investments in Moscow and smaller integration
projects in other major cities working towards a ‘safe city’ concept.
Protecting the National Assets 4
• Huge investment programs in infrastructure including railways, electricity, oil & gas and ports
• Oil & Gas security investment continues to grow • Global Ports, responsible for 30% of Russia’s containerised
trade investing to expand
Problems down South 3
• Threat of terrorism from the North Caucasus • Enhanced focus on the region as a result of Islamsic
State advances .
Porous borders for trafficking 5
• Southern borders remain porous with people and drug trafficking a continuing challenge
• The FSB has signalled its intent to invest in radars, UAVs, surveillance cameras and night vision technology.
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Russian Security market 2015 – 2016
• Zero market growth / decrease till 2017
• Increased competition: volatility of exchange rates, damping, price
wars
• Market entries from related markets: IT, construction
• Simplification and unification
• Shift to economy segment, attention to service business model
• Import substitution (incld “attempts” for localization)
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Critical Infrastructure
• Continued threat and terrorist
attack on mass transport
networks drive security need.
• The Russian Railways’
strategy is to invest $13.6
billion 2013 – 2020 to meet
increasing demand with $5.9
billion of spending in 2016.
• Upgrades include:
• Metro systems,
• High-speed rail networks
• Stations
• Additional investment
programs involving China and
Germany have also been
announced.
• Air passenger traffic expected
to increase from 66 million in
2012 to 85 million 2018.
• However Russian carriers saw
a 1.2% fall in passenger traffic
in 2015
• 80% of Russia airports
outdated
• Russian Federation Transport
Strategy plans to increase
airports from 315 to 357 in
2020.
• Specific demand for advanced
security systems.
• Move from state owned to
private owned and operated
airports.
• Major investment in refinery
and gas pipeline projects with
external investment coming
from China.
• However reductions in
investment are expected as a
result of falling oil prices with
Lukoil reducing spending for
2016 by $1.5 billion.
• Traditional focus on physical
security and monitoring
solutions.
• Significant investment in
SCADA systems and
modernisation
• Large cyber security solutions
requirement to drive investment
in the market.
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Competitive Analysis
DOMAIN LOCAL INTERNATIONAL
Oil & Gas Integra-S, Ipera, ANCUD, CROC
Border & Maritime
ANCUD, Asteros, Integra-S, CROC, Technoserv
Airports EcoProg, AMT, ICL, Elvees Neotek
Major Events Exacqvision, Asteros, Technoserv
Safe Cities (First Responders)
Asteros, ICL, Stins Coman, Integra –S, CROC, Lanit, Axxonsoft, Rostelecom
Border Control & Biometrics
Oberon, Integra-S, Eleron, Axxonsoft
Mass Transport AMT, Stins Coman
Utilities NCC, Kaspersky, Aladdin
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Source: Frost & Sullivan
Top Predictions for 2016
1
Cyber security will continue to dominate headlines in 2016. Frost &
Sullivan expects at least three major attacks on critical infrastructure that
will either stop or significantly affect operation.
2
With security budgets continuing to be restricted across a range of
industries and with the increasing number of threats, Frost & Sullivan
expects a shift towards new business models.
3
Following on the back of 2015, cyber security mergers and acquisitions
will see its busiest year yet in 2016 with the greatest investment in cyber
companies to date.
4
Following Canon’s acquisition of Axis Communications in January 2015
and the evolving nature of the network security camera industry, Frost &
Sullivan expects at least 1 additional significant acquisition in 2016.
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Source: Frost & Sullivan
Top Predictions for 2016 (continued)
5
6 Growing concerns regarding the movement of potential terrorists and the
growing strength and influence of ISIS will lead to a re-evaluation of border
security programs at both external and internal points within the EU.
7 Growth of wearable devices and IP-enabled devices are expected across
the industry, especially in law enforcement.
8
Discussions around the management and regulation of drone technology
has continued throughout 2015 and this will continue throughout 2016 with
further roadmaps planned.
Debate around the use of data and intelligence will continue in 2016.
Further legislation will be passed in a number of countries increasing
government and security organisations access to data.
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For Additional Information
Alexey Volostnov
Business Development Director
Anthony Leather
Senior Consultant
Aerospace, Defence & Security
(+44) 207 3438334
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