ISJ Exclusive: Examining the Gulf gold rush

International Security Journal examines the Middle East security market and how it impacts the rest of the world.

The Middle East has been credited with any number of inventions that we now view as integral to our modern way of life, from algebra to universities and even the humble toothbrush.

The region is renowned for the contributions it has made to our past but it may be about to make an even bigger impact on our future. The Middle East has positioned itself at the vanguard of technology advancement and looks set to shape our societies for decades to come.

Putting plans in place

This enthusiasm for next generation technology can be felt across the region and has led to Saudi Arabia developing the “Saudi Vision 2030” strategy. It was formed in 2016 with the aims of diversifying Saudi’s economy through reducing its dependence on oil revenues and developing public service sectors such as health and education.

The first major step to diversify the economy has recently been taken by the Saudi government after it floated shares in Saudi Aramco on the public stock market for the first time. The initial public offering (IPO) became the biggest in history after US$25.6 billion was raised by selling 3 billion shares in the state-owned oil company.

The funds raised will be used to develop other sectors of the Saudi economy and Lee Copland, Managing Director, Maxxess EMEA is confident that this will prove to be good news for the security industry: “In Saudi Arabia, significant opportunities are already emerging as a result of the Saudi Vision 2030 development programme which aims to modernise infrastructure, education and the entire economy.

“As the programme continues, we can expect to see strong demand for integrated systems with organisations looking to streamline security, fire, building and wider operations. Because of the broad scope of development plans, demand will be strong across many sectors, including retail, higher education, leisure and hospitality – and, of course, in process industries such as oil & gas and petrochemicals.”

This is a view shared by Jake Hernandez, Chief Operating Officer at Another Day: “Despite a fairly stagnant oil price compared to what we’ve previously seen in the past, the wider Middle East should still have significant growth opportunities both from oil and gas and a range of other sectors.

“The obvious one is Saudi Arabia’s increasing investment in its tourism, technology and financial sectors – we’re already seeing megaprojects like NEOM come online, but the growth potential there will be completely dependent on whether Saudi Arabia can convince international travellers and investors that it’s a worthwhile destination.”

A race to the bottom

The region as a whole still depends on external investment and of course, on the price of oil, which has been falling dramatically in recent times. Funding for major projects is perhaps not as easily forthcoming as it once was, which has led to some integrators and installers compromising on the quality of security systems in order to ensure they can offer the lowest price.

Wesley Varughese, Business Development Manager for Video Storage Solutions is concerned about the repercussions this may have: “Innovation continues to be the focal point of discussion as new technologies enter the Middle East security market. The region, however, is faced with a paradox in some ways. There are quite a few large storage opportunities, though one of the biggest challenges we see in the region is that system integrators are compromising on critical features to lower their price.

“Resellers are competing against systems that have been brought to their bare bones, simply to meet the commercial requirement. Because the customer usually decides based on the final cost quoted, resellers are tasked to educate the end users about total cost of ownership: upfront capital investment but lower operating costs. It’s important that the right products are bought from the start so that you aren’t refreshing the project site year after year. Optimal performance is the key to success and if price is weighed in a way that negates the critical features needed, you’re putting your reputation at risk.”

Sadly, it will be the end users that this will impact the most as Said Kiwan, Founder and Director of MVP Tech points out: “There has been a tremendous amount of pressure on the security market across the region from a price point perspective. Active price dumping by security contractors ready to take work at a loss, means that ultimately clients suffering from non-performing awarded contracts, major cost related delays, inferior level products all leading to longer term duplication of cost for the end users for rectification purposes.

“The changes experienced in the past three years are now causing a consolidation of the overall security market, where only a few leading players are considered for the critical infrastructure jobs, whilst the less risky projects are handed to smaller market players. There has also been a shift in dominance from Western based technologies to a rising market share by Eastern based manufacturers.”

The world’s greatest show

Much of the attention around the Middle East is now focused on the upcoming Expo 2020 event, running from October 2020 until April 2021 in Dubai. The event is set to welcome participants from 190 countries as well as millions of visitors from around the world.

More than 4,000 security personnel have been given training through the Security Industry Regulatory Agency (SIRA) specifically to work on Expo 2020. Added to this, a number of infrastructure and hospitality projects have been completed in preparation for the event, giving a welcome boost to the local security industry.

Lee Copland expects demand to carry on growing: “We expect the strong demand we’ve already seen around Expo 2020 to continue, with the focus shifting to mixed-use developments in addition to the hospitality sector. We will see a continuing demand for more efficient integration of security and life safety systems. Maxxess has been well positioned to deliver a number of major projects in this area, including this year’s Intersec Award winning Bluewaters Island project.”

Although huge investment has been made in securing Expo 2020, such a large-scale event can provide opportunities for criminals, especially when it comes to cyber-crime.

Nicolai Solling, CTO at Help AG said: “There’s no doubt that Expo 2020 will be a tremendously large security exercise in terms of both the scale and complexity of technologies needed to protect the infrastructure and visitors to the country. From what you can read in the press, the Expo site will be a technological marvel with smart-city technology and IT integrated into every technical installation.

“At the same time, the Expo is a high-profile event with great visibility on a global scale. While all of this is exciting for us it is unfortunately also exciting for threat actors. We saw this at the 2018 Winter Olympics in South Korea where there was a significant amount of specifically tailored malware targeted at the event organisers, participants and visitors.

“We are also certain, that since the Expo will be such a massive event from a media perspective, phishing campaigns will of course also use this event both on a local and global scale, to impact both businesses and individuals.”

Mostly though, the Expo will provide a platform for the UAE and neighbouring countries to showcase the very best technology it has available. Said Kiwan summed up the local mood: “Expo 2020 will be a focal point from a security and technology perspective showcasing the best the UAE has to offer by regional and global standards.

“The UAE for the past decade has been at the forefront of implementing the latest security technologies in a seamless manner to benefit society, whilst creating a safe and secure environment for its residents.”

It is an exciting and exhilarating time to be part of the Middle East security market. Huge opportunities for growth are available, especially in the surveillance and analytics sectors. With the increasing convergence of physical security and cybersecurity, information is becoming more readily available and therefore, more usable in day-to-day operations.

Dubai was the first city in the world to open a Smart Police Station, offering 27 key services in six different languages with no human interaction required at all. It is clear that this is just the beginning and with the increased investment in smart technology across the region, the future of the Middle East looks set to have a huge impact on how security around the world develops.

This article was published in the January 2020 edition of International Security Journal. To collect your FREE digital copy, please visit here: https://internationalsecurityjournal.com/digital-magazine-2020/