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2014 Security Forecast: Right Combination Figures to Unlock a Big Year

Believe the hype: It’s going to be a banner year for security. SSI’s 2014 Industry Forecast projects nimble and well-managed companies should enjoy up to — in some cases well beyond — growth in the high single digits. Find out how those in the know see it playing out.

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2014 Business & Operations

Jim Henry, Executive V.P., Kratos Public Safety & Security Solutions

Consolidation of manufacturers will likely continue as the move away from hardware- to software-based solutions continues. That will probably mean more challenges than opportunity for legacy manufacturers that do not or cannot make the pivot, thereby creating greater opportunity for providers of software/IT-based solutions converging into physical security from adjacent industries. Dealers and integrators that have been in the industry for over 20 years and survived or thrived prior changes and threats will do well if they keep their focus on value-added services, maintain relationships as a trusted advisor and subject matter expert, and embrace rather than fight the latest wave of technological and market changes.

Les Gold, Partner, Mitchell, Silberberg & Knupp

During the recession, the manufacturers and distributors were hit the hardest, with business down significantly. With the recovery, demand for new products will increase significantly and should be a boon for manufacturers and distributors. Where dealers and integrators are concerned, all the conferences I attend share the feeling that business is up at least 10%. My observations are that the integration business well exceeds the 10%. The commercial business lagged during the recession and is now catching up. Many providers are adding health-care, access control, biometrics and fi re systems to their offerings. Companies like Vivint are adding solar power. All of this will improve and increase business. And there is no longer any excuse for lack of training as all the associations are offering training as part of their services.

Mitch Reitman, Principal, S.I.C. Consulting

From a personnel standpoint, as employees of smaller companies that provide limited benefits are required to purchase their own health insurance, some of the older and more experienced employees may find larger employers more attractive. On the wholesale monitoring side, there will be a great deal of consolidation in the market due to the massive amount of capital investment necessary to monitor new technology. Regional central stations will gain market share and independent alarm companies that maintain in-house central stations will decide to outsource their monitoring.

2014 Security Industry

Pat Comunale, President & CEO, Tri-Ed Distribution

The phone and cable companies are getting into the business more and more, and so to stay competitive dealers and integrators have to keep up with technology and embrace the new lifestyle enhancement features with remote access. We want to be part of that and continue to facilitate training and education. As these cable and phone companies come into the space the rising tide lifts all ships — competition is good for the industry. We also still see strong growth in IP video and our intrusion space continues to grow.

Jim Coleman, President, Operational Security Systems

Some of the vertical market growth is going to come from compliance requirements from government regulations or supply chain standards, such as within the power industry and the food products industry. These standards are going to provide systems integrators with opportunity since these industries will need to comply with new requirements. What is also gaining traction is protecting the infrastructure against cyber-attacks where there is an acknowledged vulnerability.

Bill Bozeman, President & CEO, PSA Security Network

Cyber-security gets a voice at the ‘C’ level, while physical security does not. The big budget dollars go to cyber with physical security taking a backseat. I do not see this changing anytime soon, and I logically see cyber gaining a larger percentage of security funding as time goes on. Overall, the electronic security business looks strong to very strong for 2014, but cyber-security looks exceptionally strong with no end in sight.

John Dolan, V.P. of Marketing, Pelco

The overall security market is being impacted more and more by commodity network devices, such as servers, storage and transmission devices. These openly available products are traditionally sold at lower margins in their core markets and have significantly impacted the total margin content available for both the manufacturer and the integrator. When price alone is driving much of the market, and when “good enough” is good enough, this really squeezes everyone’s margins. It’s important for manufactures, integrators and installers to add value and services to offset commoditization.

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About the Author
Scott Goldfine
Scott joined SECURITY SALES & INTEGRATION in October 1998 and has distinguished himself by producing award-winning, exemplary work. His editorial achievements have included blockbuster articles featuring major industry executives, such as Tyco Electronic Products Group Managing Director Gerry Head; Protection One President/CEO Richard Ginsburg; former Brink’s Home Security President/CEO Peter Michel; GE Interlogix President/CEO Ken Boyda; Bosch Security Systems President/CEO Peter Ribinski; and former SecurityLink President/CEO Jim Covert. Scott, who is an NTS Certified alarm technician, has become a respected and in-demand speaker at security industry events, including presentations at the Central Station Alarm Association (CSAA) Annual Meeting; California Alarm Association (CAA) Summer and Winter Conferences; PSA Security Network Conference; International Security Conference and Exhibition (ISC); and Security Industry Association (SIA) Forum. Scott often acts as an ambassador to mainstream media and is a participant in several industry associations. His previous experience as a cable-TV technician/installer and running his own audio company -- along with a lifelong fascination with electronics and computers -- prepared Scott well for his current position. Since graduating in 1986 with honors from California State University, Northridge with a degree in Radio-Television- Film, his professional endeavors have encompassed magazines, radio, TV, film, records, teletext, books, the Internet and more. In 2005, Scott captured the prestigious Western Publisher Maggie Award for Best Interview/Profile Trade for "9/11 Hero Tells Tale of Loses, Lessons," his October 2004 interview with former FDNY Commander Richard Picciotto, the last man to escape the Ground Zero destruction alive.
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