Market Analysis

Analysis

Market sizing statistics refer exclusively to interaction recording systems and adjunct products used in public safety answering points. Examples include logging devices, quality monitoring and coaching software, speech analytics, and citizen survey software.

Market size and growth

Pelorus Associates estimates that current world demand for these products is approximately $85 million. Growth through 2015 will be in the low double digits.

Market structure

Nice Systems has by far the largest market share which has been augmented by its acquisition of Netherlands-based CyberTech international. The second and third place market share leaders are Verint Systems and VPI (formerly Voice Print International).

Over 20 vendors share vendors share the market for public safety interaction recording systems. About half of these have public safety sales of $5 million or less. Pelorus Associates believes that many if not most of these low-volume vendors will exit the market rather than invest the substantial R&D funds required to update their products to meet the requirements for NG 9-1-1.

Vendors sell their products through a combination of direct and indirect sales. Indirect sales are the most common channel because (1) it is the most economic way to reach smaller communities and (2) resellers have the expertise to install and maintain the products and train PSAP personnel on system operation and best practices.

Demand drivers

The single most important factor driving product demand, and conversely restraining product demand, is the availability of funding. While there is some federal funding, public safety emergency calling services are primarily supported by state and local entities. In recent years, weakness in the general economy has sharply limited access to funding, in some cases resulting in staff reductions among call takers and other public safety officials. One-piece absent funding, they will spend it. Most are using early generation logging devices that need to be replaced with the more software-based open architecture designs of performance monitoring and management systems

Other important factors which drive demand for public safety communications solutions include obsolescence of legacy then products, preparation for NG 9-1-1, and the consolidation of jurisdictions.