Editor Introduction
Inflation surged dramatically because of supply disruptions and high energy costs following the COVID pandemic and given the Russia-Ukraine conflict. More recently, inflation has cooled significantly, although it still has not achieved the historically targeted rate of 2%. Factors such as tariffs and the Iran war continue to drive broader inflation. The physical security market faces its own multiple trends that continue to drive inflation of the industry’s products and services. We asked our Expert Panel Roundtable:
What is the current state of price inflation in the security market, and what is the outlook for the near future?
It helps to split the security market into two segments: software and hardware. They are behaving very differently right now.
Software is the stable half. VMS and similar platforms have moved only a few percent over recent years; no real shock there.
Hardware is where the impact is being felt. The servers and hosts these systems run on are built around CPUs, GPUs, RAM, and SSDs, and because those depend on DRAM and NAND chips, we are seeing costs roughly double with some forecasts pointing to another doubling by 2027.
Demand has not cooled; supply has tightened as AI and data centre growth pulls chip makers toward other buyers. Near-term, expect that hardware curve to keep climbing rather than reverse. We will likely see buyers pursuing more cost-effective options, new players entering to fill the gap, and continued interest in cloud and hosted models as an alternative to buying expensive on-prem computers.
Editor Summary
Although general inflation has cooled, the security market faces ongoing price increases. Software remains stable, but hardware and surveillance costs are rising due to labor expenses, compliance rules, and component shortages driven by AI data centers. Experts expect continued upward pricing pressure, prompting buyers to seek strategic alternatives.
This article originally appeared in SecurityInformed, read the full article here
