Corporate security smart card market continues to grow

Dec 5, 2006 4:28 PM

           

Mounting security threats across the world and the positive spillover effects of smart card use in government ID and other applications continue to drive the growth of the global corporate security (physical and logical) smart card market, market research firm Frost and Sullivan reports.

Successful use in the government sector clearly establishes the potential benefits of smart card systems, leading to improved awareness and adoption levels among the corporate sector, the report says. However, lesser-developed countries are yet to overcome challenges related to affordability and lack of IT infrastructure, but are likely to overcome these medium-term barriers in the next five years.

The report, "World Corporate Security (Physical and Logical) Smart Card Market," reveals that revenues in this market totaled $90.4 million in 2005 and could potentially reach $158.5 million in 2011.

"The sharp increase in security threats confronting organizations today makes the case for smart card-based access control solutions more compelling than ever," says Frost and Sullivan senior research analyst Michelle Foong. "Factors stimulating the uptake of smart card-based access control products among corporations include high-profile security breaches featured in the media, increasing awareness of access control products as well as impetus from government initiatives in some regions like North America and the Asia Pacific."

Moreover, the increase in mobile and flexible work options for employees is also providing demand for secure smart card solutions. The use of wireless devices to access company networks creates a need for more secure logical access control. This improves the business case for sophisticated access control systems like smart card-based technologies, which allows the integration of biometrics, two-factor authentication and other more secure methods of identification. Uptake has also increased among entertainment centers as well as educational institutions, which use these cards both as a means to control student entry and as an e-payment option for purchasing items in the vicinity of the campus/institution.

Nevertheless, affordability issues and lack of IT infrastructure in less developed countries of Asia and Latin America continue to restrain overall growth of smart card applications. For many emerging markets, affordability is still a significant barrier to adoption, especially as the technology requires high initial investment on infrastructure-readers, internal systems, application development and smart cards.

"In many developing economies, manual controls and cheaper alternatives such as proximity cards and magnetic swipe cards are often used in place of sophisticated smart card-based access control methods," Foong says. "Without sufficient IT infrastructure, it is hard to justify the costs of implementing a more expensive access control solution and quantifying the benefits of implementing such a system in the early stages of such rollouts."

To overcome such challenges, smart card vendors and government agencies need to undertake awareness and education initiatives that help users understand the value of using this technology in corporate security. Over time, improvements in interoperability and increased use of smart cards in other applications will also lower the costs of implementation and increase demand for these products.

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