The security technology industry is entering a period in which digital resilience, artificial intelligence and integrated security architectures are becoming central to commercial competitiveness. Manufacturers are facing growing regulatory obligations, increasing demand for interoperable platforms and a gradual shift towards software-driven services. According to the 2027 Security Technology Trend Radar published by German management consultancy Dr. Wieselhuber & Partner (W&P), the key challenge is no longer the availability of technological innovation, but the ability to translate it into secure, scalable and economically sustainable business models. For international suppliers and operators, 2027 is emerging as a critical year for strategic investment and operational readiness.
From technological convergence to strategic necessity
The distinction between physical security and cybersecurity has become increasingly difficult to maintain. Video surveillance, access control, intrusion detection and building management systems are interconnected with corporate networks, cloud environments and operational technology infrastructures. This development changes the role of security technology. What was traditionally purchased as a collection of specialised products is increasingly expected to operate as part of a coordinated security architecture, providing continuous monitoring, reliable system availability and a consolidated view of potential threats. Simon Moser, Head of Industrial Automation, Electrical Engineering and Security Technology at Dr. Wieselhuber & Partner, identifies resilience as the defining issue for the coming year: “Security in 2027 becomes a question of resilience: Those who fail to consider physical security, cybersecurity and AI as an integrated whole risk losing relevance and competitiveness,” Moser states in the W&P Trend Radar 2027 (translated from German).
The assessment reflects a transformation that has been developing for several years. In an industry analysis published in October 2023, Moser and W&P colleague Dr Michael Staudinger examined how connected security products, intelligent analytics and digital services could change the competitive landscape. Their argument was that technological innovation alone would be insufficient without corresponding changes to development processes, customer relationships and business models. By 2026, W&P had already identified integrated security architectures, AI-driven analysis, subscription-based services and regulatory compliance as major industry trends. The significance of the 2027 outlook therefore lies less in the identification of entirely new technologies than in the increasing urgency of implementation. Security manufacturers must now decide which capabilities to develop internally, how to manage long-term product responsibilities and where to position themselves within a more interconnected market.
Cyber resilience becomes a product and market-access requirement
One of the most consequential changes concerns the cybersecurity obligations associated with connected security products. IP cameras, networked access-control systems, intrusion detection devices and other digital security components can introduce vulnerabilities into the environments they are designed to protect. As connectivity expands, manufacturers must address cybersecurity throughout product development, deployment, maintenance and eventual withdrawal from service. The European Union’s Cyber Resilience Act (CRA) represents an important regulatory milestone. The legislation establishes horizontal cybersecurity requirements for products with digital elements placed on the EU market. Its principal provisions will apply from 11 December 2027, while reporting obligations concerning actively exploited vulnerabilities and severe security incidents have applied since 11 September 2026.
According to the European Commission’s implementation guidance, the framework requires manufacturers within its scope to address cybersecurity risks throughout the product lifecycle. For security technology suppliers, this can involve secure product design, vulnerability management, software updates, technical documentation and clearly defined support periods. The precise obligations depend on the product category and applicable provisions. Importantly, the CRA is not limited to European manufacturers. Its requirements are also relevant to international suppliers placing covered products on the EU market. A manufacturer based in Asia, North America or the Middle East may therefore need to adapt its development and compliance processes when serving European customers.
The United Kingdom has established a separate framework. Its Product Security and Telecommunications Infrastructure (PSTI) regime, effective since April 2024, introduced baseline security requirements for relevant consumer connectable products. These include restrictions on easily guessable default passwords, vulnerability reporting arrangements and information about minimum security update periods. The UK framework has a different scope from the EU’s CRA, but both illustrate the growing importance of lifecycle security in international product markets. Outside Europe, legal obligations vary considerably. Manufacturers operating across the Middle East and Africa must assess applicable national cybersecurity, product-security and data-protection requirements rather than assume that compliance with a single European framework satisfies every market.
For multinational suppliers, the resulting challenge is organisational as much as technical. Cybersecurity must be incorporated into product management, engineering, supplier relationships and after-sales operations. Companies that address these requirements early may be better positioned to manage compliance costs and meet customer procurement expectations. At the same time, smaller manufacturers may face additional pressure as software maintenance, documentation and vulnerability handling become permanent responsibilities.
AI and integrated platforms change the security operating model
A second development concerns the evolution of integrated security management. Physical security systems increasingly generate large volumes of information from video cameras, access-control devices, intrusion sensors and other connected equipment. Analysing these sources separately can make it difficult to identify relationships between events or respond consistently to emerging threats. W&P expects integrated security ecosystems to become increasingly important as operators seek consolidated monitoring, standardised interfaces and more coordinated incident management.
The shift is also reflected in international industry research. Genetec’s State of Physical Security Report 2026, based on responses from more than 7,300 physical security professionals worldwide, identified closer cooperation between physical security and IT teams, increasing interest in artificial intelligence and demand for flexible deployment architectures. Interest in AI adoption among end users more than doubled compared with the previous year’s survey, according to Genetec. This growing demand is changing the capabilities expected of security platforms. AI-supported video analysis, object recognition, anomaly detection and event classification can help operators process information from multiple sources and prioritise incidents requiring attention. The long-term objective is to move beyond isolated alerts towards contextual security intelligence. For example, an access-control anomaly may become more significant when correlated with unusual network activity or corresponding video footage. Connecting these information sources can support a more comprehensive assessment than examining each event separately.
However, system integration introduces its own risks. Centralised architectures may create additional dependencies, while poorly secured interfaces can expand the potential attack surface. Interoperability therefore needs to be accompanied by effective access management, system segmentation and resilience planning. AI adds another layer of complexity. The quality of automated event classification depends on the underlying data, the performance of analytical models and the operational context in which they are deployed. False positives can overwhelm security teams, while missed events may undermine confidence in the system. As AI assumes more responsibility for filtering, correlating and interpreting security information, transparency and human oversight become increasingly important.
A relevant indication comes from PwC’s Digital Trust Insights 2027. In its German sample, 29% of respondents indicated that they would allow AI agents to act fully autonomously in cybersecurity operations. A further 42% would consider autonomous actions for low-risk activities. These figures describe the attitudes of surveyed organisations in Germany and should not be interpreted as representative of the entire EMEA market or of physical security operations specifically. They nevertheless illustrate the broader debate surrounding automated decision-making in security-critical environments. The central challenge is not simply whether AI can detect threats more quickly. Operators must also determine which actions systems may execute independently, when human authorisation is required and how automated decisions can be reconstructed and audited. For security manufacturers, demonstrable reliability and controllability may therefore become as important as analytical performance.
Security-as-a-Service changes the economics of the industry
Alongside technological integration, the W&P outlook identifies a continuing shift towards service-oriented business models. Traditional security technology has largely been sold through hardware installations, system integration projects and associated maintenance contracts. Increasingly, customers are also seeking continuously updated software, remote monitoring, managed services and predictable operational expenditure. Security-as-a-Service models respond to this demand by combining physical equipment with recurring software and service agreements.
The commercial implications are substantial. For customers, such arrangements may simplify technology management and provide access to regular updates and specialist support. For manufacturers, recurring revenues can strengthen customer relationships and improve revenue visibility. However, the transition also changes the supplier’s financial and operational responsibilities. Rather than generating most revenue at the point of installation, providers must support customers throughout the contractual relationship. Platform availability, service delivery, cybersecurity maintenance and customer retention become central performance indicators. Moser and Staudinger had already identified smart services as a strategic growth opportunity in their 2023 analysis. W&P’s 2027 outlook now places greater emphasis on the organisational changes needed to make these models commercially sustainable. These include service-oriented sales structures, suitable pricing mechanisms, scalable software platforms and reliable operational support.
The wider cybersecurity market provides evidence of the growing significance of digital offerings, although it should not be confused with the market for physical security equipment. According to Bitkom figures based on IDC research, spending on IT security in Germany is expected to reach €14.3 billion in 2026 and €15.8 billion in 2027. Within that German market, security software spending is projected to grow by 14.6% to €8.9 billion in 2027, while expenditure on IT security services is expected to increase by 8.4% to €5.7 billion. These are national IT security forecasts, not measurements of global or EMEA physical security revenues. Nevertheless, they demonstrate the commercial momentum of software- and service-based security solutions.
For physical security manufacturers, this does not mean that hardware is becoming obsolete. Cameras, sensors, electronic locks, alarm systems and other devices remain essential to the physical protection of facilities and infrastructure. What is changing is the distribution of value across the security technology lifecycle. Differentiation may increasingly depend on software capabilities, integration quality, analytics, service delivery and the ability to maintain systems over time. The challenge for manufacturers is therefore to develop profitable service businesses without undermining the competitiveness of their established product portfolios.
Market expansion requires strategic discipline
The convergence of physical and digital security is also opening new opportunities beyond traditional customer segments. Critical infrastructure operators, industrial facilities, data centres, healthcare organisations and increasingly connected buildings require security solutions capable of addressing physical threats, cyber risks and operational continuity. In an October 2026 industry analysis, Moser examined the potential for security technology manufacturers to diversify into adjacent markets by transferring existing competencies to new customer requirements. Manufacturers with expertise in access control, intelligent sensors, video analytics or security management platforms may find opportunities in industrial cybersecurity, operational monitoring and integrated infrastructure protection.
Yet diversification is not automatically a path to profitable growth. New sectors can require different certifications, technical standards, customer relationships and operational capabilities. Entering them without a clear assessment of internal strengths may increase organisational complexity and dilute investment resources. This concern is consistent with Moser’s earlier comments on innovation management. At a W&P Executive Dialogue in March 2026, he argued that innovation projects frequently struggle because of insufficient strategic clarity, prioritisation and consistent execution. The observation is particularly relevant to an industry facing simultaneous demands for cybersecurity compliance, AI development, software integration and new service models. Companies cannot necessarily pursue every technological opportunity at the same time. For international security suppliers, strategic positioning increasingly requires decisions about which competencies should remain proprietary, which can be acquired through partnerships and where external platforms may offer more efficient access to customers.
The demands facing operators reinforce this need for specialisation. PwC’s German Digital Trust Insights 2027 results show that 42% of surveyed companies identified shortages of OT expertise and resources as a challenge. Another 40% cited legacy systems that could not readily be patched or updated. Again, these findings relate to surveyed German organisations rather than the entire EMEA security technology market. They nevertheless illustrate practical problems affecting the protection of connected industrial environments: outdated technology, limited specialist capacity and the difficulty of maintaining systems that cannot easily be taken offline. For manufacturers and integrators, such challenges can create demand for modernisation, interoperability and long-term support services.
At the same time, the ability to deliver these services reliably may increasingly determine which suppliers secure complex infrastructure projects. The result is a market in which partnerships and technological ecosystems can become strategically important. Few suppliers are likely to develop every element of an integrated security architecture independently. Those capable of combining specialist expertise with open interfaces and dependable service delivery may be better placed to address increasingly complex customer requirements.
Outlook: 2027 will test the industry’s ability to execute
The developments identified in the W&P Trend Radar 2027 are not entirely new. The convergence of physical security and cybersecurity, the adoption of AI and the emergence of service-oriented business models have been reshaping the industry for several years. What is changing is the degree to which these developments now require concrete management decisions. The Cyber Resilience Act creates a defined European regulatory timetable for many connected products. Integrated security architectures increase the need for interoperability and operational reliability. AI introduces opportunities for more effective security analysis but also demands transparent governance and appropriate oversight. Meanwhile, service-oriented models offer new revenue opportunities while requiring manufacturers to maintain platforms, products and customer relationships over extended periods.
For companies operating internationally, these pressures are compounded by differing regulatory frameworks, market maturity levels and customer expectations across Europe, the Middle East and Africa. The strategic response cannot be limited to adding new features or launching individual digital products. Manufacturers must determine where to invest, how to organise long-term software and service capabilities, which technology partnerships to establish and how to manage cybersecurity obligations across their product portfolios. Operators, in turn, will need to evaluate security technology not only in terms of initial functionality and acquisition cost, but also interoperability, lifecycle support, transparency and resilience under operational conditions.
The longer-term implications extend to competition itself. As security systems become increasingly connected and service-dependent, the ability to deliver reliable outcomes throughout the product lifecycle may become a stronger source of differentiation than individual hardware specifications. For the international security technology industry, 2027 is therefore shaping up less as a year of technological reinvention than as a test of strategic execution. Competitive advantage will increasingly depend on the ability to combine cyber resilience, integrated architectures and sustainable service models without losing operational control or commercial discipline.
Editorial sources: This article is based on the W&P Security Technology Trend Radar 2027, including the outlook provided by Simon Moser, Head of Industrial Automation, Electrical Engineering and Security Technology at Dr. Wieselhuber & Partner. It also draws on earlier W&P analyses, including ‚So sichern Unternehmen mit Smart Services ihre Zukunft‘ (2023), the W&P Trend Radar 2026, W&P’s Executive Dialogue of March 2026 and ‚Neue Märkte statt neuer Sorgen‘(October 2026).Additional context is provided by the European Commission’s Cyber Resilience Act implementation guidance, the UK government’s Product Security and Telecommunications Infrastructure regulations, Genetec’s ’State of Physical Security Report 2026‘, Bitkom/IDC German IT security market forecasts published in October 2026 and PwC’s ‚Digital Trust Insights 2027‘.
