Sandy Jones, Sandra Jones and Co.

Trends
1. Dealers and integrators sharpened their focus on creating new and often unique forms of RMR.
2. Mobile apps moved from novelty to normalcy.
3. Marketing from the cable and carrier companies created visibility for all residential security businesses.
4. Acceptance of hosted access control and video systems continued to gain momentum.
5. Th ere was more money than opportunities for well-run dealers, integrators and technologies that had proven market acceptance.

Industry Challenges
1. Protecting existing channel relationships while creating new paths to market.
2. Helping customers get the value from open systems while protecting legacy investments.
3. Creating programs, services and education that will help small and midsized integrators ga
in the comfort needed to embrace the RMR business model.
4. Trying to get investors to recognize the quality of earnings and the value of predictable revenue that create enterprise value that is more than a multiple of EBITA.
5. Making the convergence of physical and logical databases affordable, simple to implement and reliable.

Projections
1. The residential business will go through a complete metamorphosis. DIY, cable providers and other well-funded companies will have a profound infl uence on the existing residential security industry.
2. Finding better ways to protect privacy and the storage of Big Data.
3. Continued interest in acquisitions of scale and well-positioned systems integrators that are vertical market experts.
4. Providing first responders easy-toaccess reliable information in realtime.
5. Following the Google model: data mining access control or other security databases for additional sources of information, revenue and value.

Jeff Kessler, Imperial Capital

Trends
1. Higher than expected adoption of basic wireless interactive systems by users of monitored residential systems as the value proposition of POTS-based systems faded.
2. Initial separation of integrators from the pack by those who price for full-service value, rather than just installation and break-fix service margins.
3. Dramatic gains (even faster than video) in development and acceptance of wireless, interactive, electronic lock/ access control and ID systems with multiple types of form factors as credentials.
4. Migration of the fight against crime and terrorism to the InfoSec realm.
5. Media remained unaware of fight by the Department of Defense and certain leading integrators to deal with substandard counterfeit parts in critical military and commercial infrastructure that use “provenance” technologies.

Industry Challenges
1. Getting end users of all sizes to finally recognize the password is dead, and that “next gen” authentication is critically needed.
2. Manufacturers continue to not work enough with the channel to partner, collaborate and communicate, thereby missing a chance to have more touch with the end user.
3. VSaaS and other hosted, cloud-based solutions still need to prove out security and ROI concerns to meet elevated expectations of value proposition.
4. In residential security, making sure end-user touch is constant and close, and emphasizing superior life safety capabilities to combat the new entrants’ push into home services.
5. Adapting to an economy that may grow slowly for years, and the likelihood the sequestration will halt projects
by the military, which has become a proving ground for many security technologies and companies.

Projections
1. Continued separation from the pack by a few highly focused integrators with superior “IT IQ” that increase
margins, as well as services as a percentage of revenues, while the majority continue to fall.
2. More interrelationships between video and access/locking/ID toward a common solution, mostly at the premises level, but still growing in the cloud.
3. Finally the breakout, in the same year, of RFID, new-age fingerprint technology and DNA anti-counterfeiting technology in the retail, commercial and government sectors, respectively.
4. The beginning of an entirely new residential technology upgrade in remote health and personal emergency response, plus a major move by larger, better capitalized monitoring companies to upgrade radios to 3G from 2G.
5. BYOD forcing the growth of next-gen IT security technologies and companies, while traditional firewall companies scramble to buy in order to keep up.

John Knox, Electronic Security Association (ESA)

Trends
1. Introduction of more telcos/cable companies into the security market.
2. ESA took the lead in bringing together various related organizations with the goal of finding a common ground on licensing and government relations.
3. ESX 2013 became the third-largest electronic security trade show in the industry.
4. Sales began to trend upward for most dealers, showing a slow recovery from the recession.
5. Due to new telecom and cablecom entrants, consumers were being more heavily exposed to advertising than ever before, which can be considered an advantage for all dealers.

Industry Challenges
1. Ensuring networks connected to smart-home systems are secure, preventing individuals from viewing consumers’ private video feeds, etc.
2. As cybercrime continues to increase, security dealers need to figure out where they fit in.
3. Despite its popularity, smart-home technology doesn’t work all the time, so the challenge will be delivering a solution to consumers that consistently operates properly.
4. As the market penetration for alarms moves from 20% to possibly 40%, the industry runs the risk of overwhelming police departments with false alarms.
5. ESA’s National Training School (NTS) will be challenged with providing enough classes to host the volume of trainees coming into the market.

Projections
1. Th ere will be a push from some of the communications companies to lessen licensing laws.
2. Smartphone apps/lifestyle enhancement features in the security industry will continue to grow.
3. Although 2G won’t sunset until 2017, carriers will not be motivated to repair 2G towers should they become nonoperational.
4. Security Industry Alarm Coalition (SIAC) will need more support than ever to combat bad alarm ordinances as penetration of alarms entering into the market increases.
5. ESX Nashville will become the second-largest security trade show in the United States.

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