Security Industry Predictions for 2000 and Beyond

November 30, 1999 SSI Staff

The security industry’s future is very bright.

That’s probably the safest prediction for the coming millennium you’ve ever heard.

Here’s a truckload of other less risky prognostications from two of the industry’s leading pros: Ron Davis, chairman of Security Associates Intl. (SAI) in Arlington Heights. Ill., and Les Gold, partner at Mitchell, Silberberg & Knupp in Los Angeles. Both men spoke at the Central Station Alarm Association (CSAA) annual conference and offered their perspectives on the coming years.

Lawsuits will increase and lawyers will become a functioning member of security companies. Age discrimination will be a major source of litigation.
Internet sales will increase and legal documents must cover all aspects of Internet-related business.
There will be significant merger activity.
Utilities and phone companies will look for strategic alliances to enter the security industry. Independent alarm companies will partner with utilities vs. being purchased. Dealers will also formulate strategic alliances with businesses such as Internet Service Providers, satellite services, paging companies and high-speed bandwidth providers.
Alarm services will be bundled with other consumer services, including Internet Service Providers and high-speed data line service. These bundled services will appear under one brand name.
Alarm systems will increase their integration with other systems, such as outdoor lighting, CCTV, fire and access control.
Central stations will evolve into information and communication resources. The term “call center” will replace “central station.”
Financing for independent alarm dealers will be integral for survival. Banks will be more familiar with the industry in the future.
Training and education will focus on management skills, not technical skills. Today, dealers have to go outside the alarm industry to receive management training.
Multiples will stay high for large companies, but low for smaller companies. Multiples will focus on cash flow vs. purely RMR.
Much like today’s dealer programs, independent alarm dealers will become agents for multi-national companies, essentially acting as service centers for larger companies that require technical service or support.
Manufacturers will integrate technologies to provide proprietary products for dealer programs. This will create proprietary integrated systems.
Trade associations will merge. The industry will see the development of a single trade group representing large dealers, independent dealers and manufacturers.