2014 SECURITY INDUSTRY LANDSCAPE
Laura Stepanek, SDM Editor
Securing New Ground – 2013
SDM = The Security ChannelPublished since 1971, SDM provides management and technical professionals with a comprehensive overview of the security channel marketplace – in print, online and in person.
‘The Channel’ According to SDM
Percentage of circulation
SDM Research
SDM Subscriber Market Forecast Study Mail-out and Web-based survey conducted among SDM’s
subscribers that are installing-based businesses, measuring revenue and other business conditions. Conducted annually since 1982.
SDM 100 Report A ranking of the industry’s 100 largest electronic security firms in
the installation, service and monitoring business, ranked by RMR and other results. Conducted annually since 1991.
SDM Top Systems Integrators Report A ranking of the industry’s 100+ largest security systems integrators,
ranked by North American systems integration revenue. Conducted annually since 1996.
The Landscape:Top 3 Factors Affecting Sales
SDM subscribers were asked:
‘Check three factors you feel will most significantly affect sales of security systems by your company in 2014.’
78% ECONOMIC CONDITIONS (compared with 77% in 2013)
47% CAPITAL SPENDING BY BUSINESS (compared with 46% in 2013)
43% CRIME (compared with 40% in 2013)
123
Sales up 38% in 2013
2011-2012 2012-2013
-3%
38%
Change in sales volume Mean sales per-location 2013: $2,182,678
25% of people participating in the 2014 SDM Subscriber Market Forecast Study indicated their 2013 sales would be less than $100,000.
37% of people participating in the 2014 SDM Subscriber Market Forecast Study indicated their 2013 sales would be $1 million or more.
The Landscape: Major Challenges to Channel Companies
SDM subscribers were asked:
‘Check three factors you feel will be major challenges toyour company in 2014.’
55% INCREASING SALES (compared with 48% in 2013)
36% PROTECTING PROFIT MARGINS(compared with 39% in 2013)
29% COMPETING EFFECTIVELY(compared with 30% in 2013)
123 Inability/difficulty obtaining credit
2012: 10% of respondents 2013: 2% of respondents
Toughest Competition for the Channel
National/g
lobal se
curit
y compan
ies
Local
secu
rity co
mpanies
Wireless
phone/broadband provid
ers
Internet-only se
curit
y sites
IT VARs
Summer p
rogram model co
mpanies
Other
36% 32%
12% 11%7%
1% 1%
Sources of competition
Google “do it yourself security”
214,000,000 results
Growth Among Channel Companies
2012 Revenue Among SDM Subscriber Market:$43.6 billion
This was 0.7% below 2011.
Preliminary results from SDM’s Subscriber Market Forecast indicate a 9.9% increase
in 2013… with projections for a 12.2% increase
in 2014.
Company Revenue by Type of Product
Video surveil-lance 28%
Burglar alarms 23%
Fire alarms14%
Access control 12%
Integrated commercial
systems 11%
Home systems other than
burg/fire7%Other5%
Company Revenue by Type of Service
Non-residential sales/installation
36%
Residential secu-rity sales/instal-
lation 16%
Service & main-tenance15%Monitoring/
lease:NON-RES-IDENTIAL11%
Monitoring/lease: RESIDENTIAL8%
Home systems installation7%
Hosted, managed, cloud-based services4% Other4%
RMR Performance in the Channel
Survey respondents were asked:Approximately what will be your recurring
monthly revenue (RMR) – generated by thislocation – on Dec. 31, 2013 and 2012?
2013Mean RMR: $58,986Median RMR: $10,000
2012Mean RMR: $55,955Median RMR: $9,000
Composition of SDM 100
TOP 10 SECURITY DEALER FIRMS:
ADT * Tyco Integrated Security * Protection 1
Monitronics Int’l * Vivint * Stanley Security
Slomin’s * Diebold Security * Vector Security
Guardian Protection Services
RMR range of SDM 100 firms in 2012 was $252.5 M to $191 K.
Grew RMR 16% in 2012.
RMR Growth Among SDM 100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0
$100
$200
$300
$400
$500
$600
$700
$321.6
$348.1$385.1
$409.6
$413.1
$439.1$466.3
$510.7$552.3
$641.9
RMR Dec. 31 ($ millions)
Average Monthly Monitoring Prices
$15 or less $16 - $19 $20 - $24 $25 - $29 $30 or more
12%
7%
23%24%
34%
Average monthly monitoring price: RESIDENTIAL
Median monthly monitoring price:
$25
Average Installation Prices: RESIDENTIAL
Less than $500
$500 - $999 $1,000 - $1,499
$1,500 - $1,999
$2,000 - $4,999
$5,000 or more
2%
26% 25%
14%18%
14%
Average installation price for traditional resi-dential system among survey respondents
Mean: $1,957Median: $1,200
Average Installation Prices:NON-RESIDENTIAL
18%16% 17%
10%
19% 20%Lowest system
Under $25,000
$25,000 - $99,999
$100,000 - $249,999
$250,000 - $499,999
$500,000 or more
55%
11%18%
6%10%
Highest system
Mean: $3,474Median: $1,100
Mean: $395,766Median: $25,000
Strongest Sales Potential in 2014: Video
SDM subscribers were asked: How would you rate the potential for sales in 2014 in each of the following markets?
(On a scale of 1 to 5, where 1 = poor and 5 = excellent)
Video surveilla
nce
Monitorin
g
Access
contro
l
Burglar alarm
Fire alarm
/ECS
Home contro
l/enterta
inment
3.613.14 3.14
2.8 2.66 2.43
Average rating on a scale of 1 to 5
Equipment Spending Outlook
These are the top 5 equipment categories in which dealers and integrators expect to increase their spending in 2014.
1. Video surveillance/CCTV2. DVRs/NVRs3. IP-network-based video equipment4. Monitoring5. Intrusion alarm systems
Note that 4 in 10 survey respondents expect their spending on video surveillance to increase by more than 10 percent.
Markets Expected to Offer theBest Growth
Top 3 Residential:1. Middle-market homes (existing) – 47%2. High-end homes (existing) – 20%3. New construction (custom-built) – 18%
Markets Expected to Offer theBest Growth
Top 5 Non-Residential:1 Education: schools, colleges, universities2 Commercial office space3 Retail4 Hospitals, healthcare5 Government facilities6 Industrial, manufacturing, distribution
2014 SDM Subscriber Market Forecast
The new SDM 2014 Subscriber Market Forecast contains much more detail including installation
pricing, service pricing, operational practices, expected spending on products and more.
Please watch for SDM’s January 2014 issue for the full report.
Renewathon Results in Donation to AIREF
SDM magazine launched our first ever
Summer of 2013 Renewathon this past June. Through a series of ads in the magazine, email
renewal reminders, e-newsletter links and cooperative efforts with outside partners, we guaranteed a donation of $0.50 to the Alarm Industry Research & Educational Foundation for each renewal or new subscription processed as part of the Renewathon.
We’re pleased to announce that we will be presenting a check to AIREF for more than $1,200 later this month at ISC East.
SDM Congratulates
2013
Systems Integrator of the YearG4S Technology