Experts Predict Top 5 Challenges Facing the Security Industry in 2020

Tariffs and the 3G sunset are among the challenges experts from PSA Security Network, The Monitoring Association and more foresee.

Experts Predict Top 5 Challenges Facing the Security Industry in 2020

This year’s Security Sales & Integration Gold Book will be the final ever edition. Although it hung in there quite a while, the publication’s utility was undermined by the Internet, with its fate sealed by the proliferation of mobile devices that connected people with the world from anyplace at any time.

But don’t fret, the 2020 edition is here to set you on a successful path for the next decade and beyond. Throughout the month we’ll be sharing facts and insights from the final Gold Book. Below, experts each share their top 5 challenges they expect the industry will face in 2020.


John Brady: TRG Associates

1. Market valuations of RMR and the related cash flows in the residential marketplace are being adjusted downward by Buyers for the perceived risk related to the required upgrade of 3G customers to newer technologies by 2022.

2. State legislatures’ continued focus on the implementation of higher minimum wages, in the midst of a full-employment reality for technicians and central station operators, will continue to exacerbate the challenges of hiring and maintaining qualified, technically trained staff.

3. Monitronics’ capital and operating challenges will be watched carefully by those outside the industry and industry participants to see if the healing powers of RMR will demonstrate again the strengths of our industry economics and related reliable cash flows as the company works to return to a position of growth and profitability.

4. Developing a capital plan for and execution of each company’s 3G transition of their deployed systems to newer technologies will be an important mark of each management teams’ ability to coordinate the upsell and technical implementation challenges that will control the related “costs to maintain” and attrition of their existing customer base.

5. Watching and contributing to the continued efforts of the industry to “push back” against the Sandy Springs, Ga., nonresponse initiative will be critical as we work to stop the spread of municipalities and their government leaders’ effort to settle for a less protected community.


Peter Giacalone: Giacalone Associates

1. The 3G sunset has created more concern and focus on expeditious transitions than originally expected. It really does appear that the carriers will not only stick to their aggressive plan for sunsetting 3G, it has become apparent that the thinning of the services has already started and is in full motion as areas of the country are already experiencing great reductions in service and coverage.

2. Although it appears this is mentioned every year, it is very worthy of repeating: telecom carriers continue to reduce copper and much needed legacy communication paths. This is likely the most serious challenge we have, and it will continue. Even with the rate of systems that are replaced or upgraded to wireless communications, we still have millions of dial-up systems that rely on traditional telecom for communications of legacy protocols. As carriers continue to transform communications and reduce legacy infrastructure, alarm communications continue to deteriorate. It is pure negligence for anyone to install systems that are 100% dial-up and landline monitoring dependent.

3. As the industry keeps growing at such a rapid rate with modern technologies that all ride either wirelessly or tethered to the Internet, the need for cybersecurity protection and education of professionals and consumers is increasing. Many professionals and even more consumers still don’t realize how vulnerable they are and how their vulnerability increases as they continue to expand a variety of technological elements within their homes and businesses.

4. With some of the large and very noticeable company workouts and financial restructuring along with public companies that the street has not been so kind to, we have experienced an apparent digression in company valuations. Although this happens in cycles and we have seen this before, some are concerned that this market adjustment could have some long-term effect on how security companies are valued.

5. Proper training, development and attracting the proper talent is an ever-growing issue for most if not all security companies. Much of the adopted technology requires a higher grade of competencies that has not been required in the past. This a real challenge and is likely one that will require the industry to come together toward better solutions for training and getting talent prepared early on in their paths toward careers the security, safety and integration industry.


Don Young: The Monitoring Association

1. Cybersecurity. A never-ending challenge for businesses of all sizes. Attacks continue to escalate. Constant vigilance, education and awareness is required as attack methods morph and grow in sophistication.

2. Data privacy. Robust applications depend on connected devices sharing data. Maintaining the privacy of that data must be a core competency.

3. Communications. Carriers compete to provide consumers technologies that provide increasingly faster data services. The implementation of these technologies will continue to impact our industry in addition to the retirement of legacy platforms.

4. Disruptive technology. Attempts to disrupt may cause confusion at the expense of customer safety. Need to continue to provide innovative solutions that incorporate new technology, while still offering top-notch protection.

5. Technology. Carefully evaluate innovative applications of technology, knowing when to lead, when to be a fast follower or when to take a cautious view. This will become more prevalent with the application of AI to reduce the human footprint of today’s customer UX.


George De Marco: Deco Ventures

1. Recruiting employees remains highly challenging, especially as the industry’s workforce and leadership transitions to Millennials. The industry needs to rethink its approach to cross generational educational programs for training technical, sales and operational staff that resonates with next gen workers and leaders. This includes attracting leaders from various companies to pick up the baton for industry trade and code and compliance organizations. Brand and culture are important considerations for attracting and retaining employees at all levels within an organization.

2. As market penetration increases for intrusion systems, PERS, mPERS and other tracking services, false alarm dispatches will continue to plague the industry unless there is a significant shift in handling of alarms. Whether from a professionally or self-installed system for a home or business or a location-tracking device, the industry needs to make greater strides in using technology to insure the validity of the alarm and reduce the impact of responding to alarms.

3. Millions of devices that use 2G and 3G technology are affected across many industries. Faced with a looming deadline, the industry will be rushing to the finish line to refresh communications protocols. This will be exasperated as alarm dealers and integrators struggle from higher attrition, the cost of the upgrade and the limited time to complete.

4. Contraction of capital infusion and lending by banks and private equity as margins continue to fall for monitoring services, creation costs increase for residential systems, and competition accelerates from industry disruptors. As a result, many banks and PE firms are rethinking lending metrics and enterprise valuations and limiting their exposure to the market, unless it’s a compelling opportunity from a strong player.

5. Traditional industry players continue to be challenged with competition from industry disruptors, especially as Millennials begin to overtake Baby Boomers in population and consumer spending. Brand loyalty and the buying habits of Millennials are very different from previous generations. Dealers and integrators will need to adjust their brand strategies to align with the next gen’s high expectations of the brands they will be loyal to. This includes making sure their brand values and actions within the communities they serve resonate with consumers in their marketplace.


Blake Kozak: IHS Markit

1. Access control equipment remains vulnerable to cyberattacks, and cybersecurity risks have increased significantly in recent years as more vendors have transitioned to selling connected and IoT-enabled equipment. Compared with video surveillance systems, which were quickly transformed by the advent of network video surveillance cameras, the access control market has lagged behind in adopting networked equipment. As early iterations of connected equipment have been gradually introduced to most markets, new cybersecurity risks have emerged. Recent iterations of MIFARE DESFire and iCLASS Seos credentials are viewed as relatively secure, but most cyberattacks against access control systems today have attempted to compromise control panels and access control software. When control panels are remotely hacked, a malicious actor could open doors or lock doorways using relay latch commands or use the controller as a springboard to further infiltrate a corporation’s local IT networks.

2. As IoT communication protocols are set to become more popular and enable a widespread use of wireless sensors in commercial security systems buildings, the biggest concern remains with cybersecurity of IoT based systems. Installers will also be required to demonstrate a wider array of skills that include IT expertise necessary to troubleshoot connection issues.

3. For cameras, the level of inference is something that can be changed with tradeoffs in features, accuracy, frames rates and resolution, but these new “AI cameras” be able to process basic convolution neural network with low frame rates. This will allow cameras to do basic object detection and classification leading “the motion detection of tomorrow” hinting it will become a standard feature.

4. Tariffs and trade disputes are affecting some regional video surveillance equipment markets. Partly as a result of this, the average price of equipment has been increasing in some regions.

5. Privacy and revenue were big challenges for the smart home in 2019. For privacy, companies such as Amazon, Google and Apple were forced to address audio recording audits by introducing new features that allow uses to delete and manage stored recordings. In another example, The Monitoring Association challenged Ring in terms of its close ties to police in the United States. For privacy advocates and the use of camera recording in public spaces, this shows that associations and consumers may not be ready for 24/7 streaming video in public spaces, especially neighborhood courtyards and sidewalks. As a result, many brands started looking for ways to move analytics and other features to the edge, reducing the need for Cloud services.


Bill Bozeman: PSA Security Network

1. While mergers and acquisitions make the list every year, it was a key trend of 2019 as well; the consolidation of security integrators continues to increase.

2. Cybersecurity is a daily threat in any industry, but ransomware took on a new life victimizing municipalities, higher education, SMBs and more.

3. Five years ago all industries were working to incorporate Big Data into business strategy as quickly as possible. Now there is a focus on how to do so responsibly and legislation is moving to set parameters to protect consumers’ privacy. While GDPR isn’t new, California and other states are quickly following suit.

4. As the security industry is looking to attract and retain talent, keeping top performers is a struggle in a good economy where it is easy to find another job and other industries are providing more progressive benefits packages.

5. Dedicating time and resources to the integration of managed services into an integrator’s existing business model is a necessary challenge facing many industries, including security. RMR will only help integrators future-proof their organizations, but with competing priorities and day-to-day operations it can feel daunting to take on.


Click here to see the top trends these experts observed in 2019. You can download the full Gold Book here.

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!

Subscribe Today!

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Newsletters