SSI serves security installing contractors providing systems and services; surveillance, access control, biometrics, fire alarm and home control/automation. Coverage in commercial and residential product applications, designs, techniques, operations.
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Top 5 Trends, Challenges & Projections: How the Experts See It WALTER BAILEY Secure Strategy Group BILL BOZEMAN PSA Security Network JOHN BRADY TRG Associates Inc. Trends in 2012 1. SaaS/cloud services models continued to gain traction. 2. Cost efectiveness and ROI continued its signifcance. 3. Major players redefned future paths via transactions (Tyco, UTC, Stanley, etc.). 4. Consolidation impacted customer options on larger contracts. 5. Converged expertise (video, PSIM, IT) created competitive advantages. 1. End users demanded standardization for regional, national and global accounts driving industry M&A.; 2. Local and regional integrators formed partnerships to compete with growing list of large public and private equity-backed integrators that pursue national account markets. 3. Video surveillance led the growth curve. 4. Consolidating physical security systems (PSIM) began to make an impact. 5. Video analytics became a game-changer. 1. Industry continued to attract signifcant new capital based on strong, predictable cash fow, operating metrics and growth profles characteristic of security industry companies. 2. Industry attrition continued to be a manageable metric as companies expanded customer retention eforts. 3. Fire training and certifcations continued to become more formalized and legislated by local jurisdictions for technicians involved in installation, maintenance, and test and inspection of fre systems. 4. Te PERS market continued to expand at double-digit growth levels. 5. Companies continued to expand integrated solution ofering of security, access and video within a cohesive package customers can utilize and manage from outside the protected premise. 1. Dealing with and adapting to a stagnant economy. 2. Keeping employees trained and up-to-date with the latest technology. 3. Finding and keeping high quality employees. 4. Acquiring the necessary fnancing to grow small to midsized security companies. 5. Adapting to a managed services model from traditional contractor model as margin for hardware and installation continues to be squeezed. 1. Continuing to work toward a national alarm licensing law that will improve standard of alarm company professionalism and provision of services to consumers nationwide. 2. Developing sales and technical online training tools to help companies remain current with the ever-changing technology and certifcation requirements for employees. 3. Equipment manufacturers and installation companies working together to develop a sustainable equipment ofering in light of continuing evolution of communication carriers' data and voice paths. 4. Technological advancements and conversion of like services that players from outside the industry (Intel, Google, etc.) are beginning to provide to the residential marketplace. 5. Developing creative means to maintain contact and service viability with installed customer base. 1. Alarm companies, with fnancial strength created from alarm RMR, begin to subsidize market entry in midlevel security integration space that creates new managed services RMR opportunities. 2. End users demand higher resolution surveillance, and larger and more fexible storage and search solutions. 3. Compliance becomes a driving issue in all vertical markets, eventually changing landscape for suppliers and integrators of physical security solutions. 4. Global terrorist activity drives demand for private security solutions benefting those with appropriate skill sets and deployment solutions. 5. A very slow growth organic environment drives M&A; opportunities for larger corporations that need to meet growth goals. 1. Increased competitive environment fueled by structural separation of largest marketplace provider amid wellfunded regional and national providers looking to expand market share. 2. Industry participants will adapt to increased employee health-care requirements and costs that will follow with continued deployment of Afordable Health Care Act of 2010. 3. Video verifcation will continue to grow as a means of assisting local AHJs to resolve response dilemma between protection of constituents and decreasing budgets and resources. 4. Health-care providers and telehealth applications will seek partnerships with professionally trained and highly reliable central station platforms provided by our industry. 5. Industry participants will continue to expand core security oferings into energy management, home automation and other services as means of enhancing customers' system utilization and reliance thereon. Industry Challenges 1. Providing diferentiated services in open architected/ interoperable environments. 2. Convincing customers as to the absolute security of the cloud. 3. Navigating cultural/regulatory/ legal variances across customers' geographies. 4. Companies' willingness to strategically invest in techcentric resources/skills. 5. Continued market encroachment from Comms/IT and defense integrators. Projections for 2013 1. Comms/utilities companies continue to expand into residential and SOHO markets. 2. Customers likely begin round of upgrades; drives rebids, revenues and industry M&A.; 3. Building automation expertise as part of ofering increasingly important. 4. On defense/DHS side more contracts go to small companies and 'set asides.' 5. Service ofering gap between smaller and larger players grows. 12 / SECURITYSALES.COM / THE GOLD BOOK 2013