Diversified development at the supply side and stable position of the leading manufacturers of security products in next few years. AI technology has become the competitive focus for the enterprises in the security industry. In recent years, the industry AI companies, manufacturers of security products and integrators have developed into three major forces in the industry. They are penetrating each other and have become leaders expanding horizontally and vertically in the industry. and with the development of the segment scenarios, providers of cloud services, as platforms of underlying services, have eventually developed into the fourth force and expand towards security and protection platforms. As first movers in the industry, AI companies have accumulated abundant application experience and provide services meet the needs of the users.
To enlarge technical gaps and to establish competitive barriers, and to expand from upstream computing capacity and algorithm to products, applications and overall solutions, AI companies are intentionally improving their overall strength and will become a major force in the next 3-5 years. The leading manufacturers of security products in China take a large market share and even monopolize some market segments. These giant enterprises are competitive thanks to their strength in technology integration, business insights, mature and stable application modules, business resources, financial strength, etc. They also pay much attention to AI technology and increase their investment in independent development. They have clear understanding of the competition and their strength in the era of AI + security and protection. Their position is secure in the next few years. With the diversified development at the supply side, security system integrators, aware of the necessity of transformation, are expanding upstream and downstream. In the form of cooperative R&D, independent R&D, strategic investment, etc., they develop intelligent security solutions and are competitive thanks to their strength in customer acquisition, qualification, channel integration, financial strength, etc.
From the infrastructure construction stage to the application, operation and maintenance stage, the competition will be mainly over downstream layout.China's AI+ security construction is still in its infancy. During this period, the government-led market has rigid demand and is not sensitive to price. The supply side of the security and protection industry continuously develops new technologies and new products. High added value can be generated through the upgrading of products, which can meet the actual needs of the market and find higher social value. Due to these factors, the AI+ security and protection industry will be the focus of attention in the next few years. The non-standardized feature of the security and protection industry provides a premium basis for equipment manufacturers and integrators.
The mid-stream security and protection manufactures have higher status and revenue. But equipment manufacturing and sales have their development limits. What's more, since the industry is greatly affected by the policies, the differentiated development is limited. Therefore, looking for a breakthrough in the upstream and downstream, and carry out layouts in advance have become a new opportunity for the industry. At present, downstream operation companies of security and protect ion are still in the infancy. As infrastructure investment is not yet mature, entry barriers and cumulative effect have not yet been formed, and only lower added value can be obtained. Most of the operation and maintenance are carried out by traditional urban construction companies. But the overall construction of security and protection will inevitably change from the infrastructure construction stage to the application and operation and maintenance stage. Government procurement is also gradually standardizing the software application architecture. There is huge room for future development.
More details can be seen in 2019 China's AI + Security and Protection Industry Report (The Full Edition)