Slide 1

Report
Securing New Ground – 2013
2014 SECURITY INDUSTRY
LANDSCAPE
Laura Stepanek, SDM Editor
SDM = The Security Channel
Published 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
Architects,
engineers,
consultants
4.0%
Systems
integrators &
VARs
28.7%
Security
product
distributors
1.6%
Security
installing
dealers with
central station
14.0%
Central station
services
0.5%
Manufacturer
reps
0.5%
Security
installing
dealers
50.7%
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)
Sales up 38% in 2013
Change in sales volume
38%
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.
-3%
2011-2012
2012-2013
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 to
your 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)
Inability/difficulty obtaining credit
2012: 10% of respondents
2013: 2% of respondents
Toughest Competition for the Channel
Sources of competition
36%
32%
12%
11%
7%
1%
1%
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
Home systems
other than
burg/fire
7%
Integrated
commercial
systems
11%
Other
5%
Video surveillance
28%
Access control
12%
Fire alarms
14%
Burglar alarms
23%
Company Revenue by Type of Service
Home systems
installation
7%
Monitoring/lease:
RESIDENTIAL
8%
Monitoring/lease:
NON-RESIDENTIAL
11%
Hosted, managed,
cloud-based
services
4%
Other
4%
Non-residential
sales/installation
36%
Service &
maintenance
15%
Residential
security
sales/installation
16%
RMR Performance in the Channel
Survey respondents were asked:
Approximately what will be your recurring
monthly revenue (RMR) – generated by this
location – on Dec. 31, 2013 and 2012?
2013
2012
Mean RMR: $58,986
Median RMR: $10,000
Mean RMR: $55,955
Median 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 $191 K.

Grew RMR 16% in 2012.
RMR Growth Among SDM 100
RMR Dec. 31 ($ millions)
$700
$641.9
$600
$510.7
$500
$409.6
$400
$300
$439.1
$348.1
$385.1
$552.3
$466.3
$413.1
$321.6
$200
$100
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Average Monthly Monitoring Prices
Average monthly monitoring price: RESIDENTIAL
34%
Median monthly
monitoring price:
$25
23%
24%
12%
7%
$15 or less
$16 - $19
$20 - $24
$25 - $29
$30 or more
Average Installation Prices: RESIDENTIAL
Average installation price for traditional residential
system among survey respondents
26%
25%
Mean: $1,957
Median: $1,200
18%
14%
14%
2%
Less than
$500
$500 - $999
$1,000 $1,499
$1,500 $1,999
$2,000 $4,999
$5,000 or
more
Average Installation Prices:
NON-RESIDENTIAL
Highest system
Lowest system
19%
18%
16%
17%
20%
55%
10%
18%
11%
Mean: $3,474
Median: $1,100
6%
10%
Mean: $395,766
Median: $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)
3.61
3.14
3.14
2.8
2.66
Average rating on a scale of 1 to 5
2.43
Equipment Spending Outlook
These are the top 5 equipment categories in which dealers and
integrators expect to increase their spending in 2014.
1.
2.
3.
4.
5.
Video surveillance/CCTV
DVRs/NVRs
IP-network-based video equipment
Monitoring
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 the
Best Growth
Top 3 Residential:
1.
2.
3.
Middle-market homes (existing) – 47%
High-end homes (existing) – 20%
New construction (custom-built) – 18%
Markets Expected to Offer the
Best Growth
Top 5 Non-Residential:
1
2
3
4
5
6
Education: schools, colleges, universities
Commercial office space
Retail
Hospitals, healthcare
Government facilities
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
Year
G4S Technology

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