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Retail Intrusion Market Roars Back, New Research Shows

SSI's upcoming April issue includes the results of our 2011 Systems Integrator Study. While the expansive report spans eight pages and includes 42 graphs detailing company, access control and video surveillance trends, there was still lots more great data gathered that did not make it in ...

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SSI‘s upcoming April issue includes the results of our 2011 Systems Integrator Study. While the expansive report spans eight pages and includes 42 graphs detailing company, access control and video surveillance trends, there was still lots more great data gathered that did not make it in. But that’s part of what makes online so great, being able to convey even more valuable information.

Following are exclusive statistics gathered from our annual research project, which was conducted with the help of PSA Security Network and Reed/ISC. Specifically, below are select results from the intrusion detection and fire/life-safety portions of the study with brief captions.

Office buildings                            15%
Retail/Entertainment                   12.8%
Hospitals/Schools/Universities    12.5%
Industrial manufacturing             11.7%
Government facilities                   11%
Residential                                  10.3%
Warehousing/Trucking/Transp.    8.1%
Financial institutions                    7.7%
Utilities                                         5.9%
Gaming/Hospitality/Arenas           3.3%
Mass public Transportation          1.8%

Retail/Entertainment exploded during 2010 according to these results, almost doubling its activity from 6.7 percent a year ago. Hospitals/Schools/Universities moved ahead of Industrial manufacturing.

Security dealers               33%
Systems integrators         27%

While systems integrators’ intrusion gross profit margins remained at 27 percent, they gained 2 percentage points on security dealers as they dropped 2 percentage points.

Residential             $1,209
Commercial            $7,420

The amount earned for both residential andf commercial intrusion projects dropped by $377 and $934, respectively.

Use third-party central station    76.6%
Use own central station              14%
Clients monitor themselves          9.4%

Perhaps as a sign of the economic need to hang onto more business as opposed to outsourcing, the use of third-party monitoring centers dropped more than 10 percentage points. Both keeping monitoring in-house and client self-monitoring rose.

                              Integrators    Dealers
Telco landlines        67.7%        73.8%
Cellular                   14.8%        15.2%
VoIP/Internet         13.7%        7.8%
Long-range radio     2.7%        3.3%

Integrators’ use of landlines dropped by about 9 percentage points, with cellular rising some 5 percentage points and VoIP and radio increasing roughly a point a piece.

Strictly hardwired    41.2%
Combination            32.9%
Strictly wireless       25.9%

There was little change in this graph, in fact strictly wireless actually declined by about 2 percentage points.

Security dealers          53%
Systems integrators    37%

The percentage of systems integrators offering fire/life-safety systems and services dropped by 7 percentage points from a year ago. Perhaps tough economics have led some to concentrate more on core competencies that in some cases preclude fire business.

Security dealers           31%
Systems integrators    27%

As with intrusion business, integrators’ gross profit margins stood pat. They gained notably on dealers, however, who saw 8 percentage points chopped off their margins.

Average commercial system price        $18,452
Average monthly systems installed         8
Average number of smoke detectors     35
Percent including CO detection              11%
Percent that install sprinklers                22%
Percent that sell mass notification         56%
Percent integrating w/building controls 44%

The amount charged per system declined sharply, as did the average number of smoke detectors. The percentage of integrators installing sprinkler systems more than doubled. 

Scott Goldfine

Article Topics
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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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Industry Research, Intrusion Alarms, Managing Your Business, Sales, systems integration, Under Surveillance