Access control equipment: Market instability has not deterred steady growth

Bryan Montany

Principal Analyst,
Physical Security

Pillar 1: Assessing risks

Regional physical security
market risk assessment

Vendors of the equipment installed in access control systems for physical security solutions shared a common theme at ISC West (International Security Conference and Exposition) that has permeated the industry in 2026: geopolitical instability has become the new normal. Increased tensions and conflicts contributed to supply chain disruptions, and rapid inflation dramatically increased the cost of key components such as steel, aluminum and zinc alloys. Shortages of key components such as semiconductors and rare earth minerals have also limited sales opportunities for many manufacturers' most complex controller and reader offerings.

Despite these challenging dynamics, sales of access control equipment have remained steady, and the market has avoided worst-case scenarios that manifested in other tech sectors. One factor contributing to growth in access control sales has been regional fractures in the market. Unlike in the video surveillance industry, end user demand for access control equipment varies significantly by region. Many North American, European, and Asian vendors have relied on their own independent supply chain networks and have bypassed dependencies on broader global trade.

However, increased geopolitical instability increased the risk of cyberattacks, and access control equipment has frequently been used as an entry vector to gain unauthorized access to integrated IT networks. These risks have been further heightened by continued end user dependence on proximity and first-generation smart card credentials that do not possess the encryption standards necessary to deter most cyberattacks.

The credentialing data stored in access control solutions often includes personal data that is protected by regulations such as the EU's General Data Protection Regulation (GDPR). Global regulations have increasingly targeted both the storage of biometric data and the use of generative AI in access control software. Compliance with these regulations will continue to be critical for vendors to gain global market share.

Pillar 2: Identifying opportunities

A prevalent response to increased risks across the industry has been to pursue mergers and acquisitions. Increased demand for unified physical security platforms that integrate access control equipment with video surveillance, intrusion, and life safety equipment has contributed to this trend. The unification of physical security systems has disadvantaged siloed access control specialists and favored vendors that have adopted holistic approaches to security management.

Another advantage of a robust M&A strategy has been the capability to combine multiple vendors with unique regional, technological, and vertical focuses. These trends have collectively contributed to the rise of master systems integrators with broader capabilities across multiple building domains. Access control vendors that have supported these systems integrators have enjoyed a notable competitive advantage.

Many vendors have bypassed hardware dependencies by promoting virtual alternatives. The two trends that have best encapsulated this theme include the industry's rapid adoption of mobile credentials and accelerated sales opportunities for Access Control as a Service (ACaaS) solutions. Global downloads of mobile credentials increased by nearly 32% in 2024, and revenue from sales will double over the next four years.

In addition, the global market for ACaaS solutions is expected to grow twice as fast as demand for traditional products. Many SMB commercial end users who would otherwise struggle to afford the IT infrastructure necessary for locally managed access control systems will invest in ACaaS solutions to limit manufacturing and logistical dependencies.

What is your organization's primary access control priority?

Adopting mobile credentials
Migrating to ACaaS solutions
Expanding M&A partnerships

Physical security market
opportunity identification

Pillar 3: Implementing strategies

Manufacturers that cannot pursue aggressive M&A strategies will benefit from pivoting to open system architectures and promoting partnerships with third-party vendors. The industry has broadly transitioned away from proprietary architectures, and many companies have adapted to rapidly changing market conditions by becoming collaborators instead of competitors.

For example, several leading vendors joined Johnson Controls in promoting the Public Key Open Credential (PKOC) mobile credential as a free, configurable, platform-agnostic and fully interoperable alternative to traditional application and Wallet-based credentials.

Software specialists such as Genetec have partnered with hardware specialists such as Axis Communications to promote solutions that leverage the best features and capabilities of both products. These partnerships also benefit vendors by promoting opportunities to introduce their offerings to regions outside their existing sales channels.

Semiconductor and other critical component shortages have contributed to an industry trend that has replaced traditional centralized IP-enabled controllers in access control systems with 'edge-like' counterparts that are installed next to doors and readers. These controllers are significantly less expensive and tend to utilize less expensive components. Recent trends such as end user preferences for edge system architectures, disproportionate growth of sales into SMB verticals, and the transition to cloud-based software have favored stronger growth rates for 'edge-like' IP-enabled controllers, and manufacturers that invest in these controller architectures will enjoy a substantial competitive advantage in the market.

Physical security sourcing
strategy implementation

There has been an accelerating trend among ACaaS solution vendors to integrate ACaaS and video surveillance as a service (VSaaS) solutions into a single unified analytics platform. Analytics from fully integrated cloud-based solutions can more accurately assess the real-time occupancy levels of buildings, confirm unauthorized security breaches, and allow security professionals to view attempted entries into facilities from remote locations.

The insights in this chapter ‘Access control equipment: Market instability has not deterred steady growth’ is derived from:

Bryan Montany
Principal Analyst