SSI’s 2013 Industry Forecast: Security Finance Associates’ Tony Smith
The January edition of SECURITY SALES & INTEGRATION includes our annual industry forecast as a cornerstone of our special 2013 Industry Forecast Issue. For the piece, I interviewed 20 of the industry’s most knowledgeable market analysts, business experts, systems integrators, manufacturer representatives and trade association directors. Some of their perspectives can be found in the magazine article, with the balance of their assessments appearing in separate Under Surveillance blog posts.
Featured in this installment: Tony Smith, President, Security Finance Associates.
What do you expect will be the biggest changes, challenges and/or opportunities as they relate to security technology and business?
Tony Smith: Our use of technology to enhance the effectiveness of security will continue to grow rapidly in the commercial and residential markets. In the residential market we will find that video, both for surveillance and for verification will have the biggest impact. Additionally, analytics and other technical enhancements will refine the video experience. Younger homeowners are used to video and will expand their usage beyond the front door to the swimming pool, living room and other areas of importance to them. Commercial video will grow even faster with the development of many business applications to help businesses manage their travel costs, labor usage and inventory controls. Evolvement of industry-specific uses for convenience stores, gas stations and others will increase the opportunities of integrators to focus on industry silos. We will see the introduction of silent alarms in residential systems so as to increase the number of police apprehensions and which justify a higher level response to the incident. Residential purportedly, is excited about home automation and similar services, actual sales do not seem to match that enthusiasm. We are perhaps one to two years away from such appliances becoming a need rather than cool.
On the business side, manufacturers and suppliers should have commensurate growth as dealers and integrators, especially for basic systems and technology. An industry focused on serving commercial customers and dealer purchase programs who install a very high volume of residential systems will push the dollar volume 2% to 4% beyond what it is for 2012. Monitoring centers will continue to upgrade their centers to support the emerging technologies. I expect that there will be some consolidation, but I doubt that there will be few, if any, startups.
What do you envision as far the industry at large is concerned in 2013?
Smith: I do not have enough information to make specific projections other than the estimated overall growth rate of 2% to 4% noted earlier. M&A should be a little more active than 2012 because the cable/telco operations will be looking for tuck-in deals to acquire technicians and salesmen and to concentrate revenues in their franchise areas. We do not expect the cable cos. to expand outside of their franchise areas for another year or two.
What are some surprises we might see in 2013?
Smith: I don’t expect any major surprises. Some expect ADT residential to be sold, but that is probably a good thing for the industry. My “out of the blue” prediction is that we will lose one and maybe two magazines either through acquisition or bankruptcy. Thank goodness, I don’t believe SSI is one of them.
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