Residential Rules the Roost in 2014

SSI Editor-in-Chief Scott Goldfine discusses why 2014 turned out to be the Year of the Connected Home.

I wrote earlier this year how 2014 would likely go down as the Year of the Connected Home. Sure enough, the latest data shows that home is indeed where a substantial number of installing and monitoring security systems providers’ hearts are as far as new business is concerned. In a year where headlines were dominated by household names like Google, Samsung and Microsoft vying for a major stake in the home automation products market, telecom and cable companies continued to expand their bundling of residential services, and well-known security channel brands like Honeywell,, Vivint and ADT targeted the market with evermore gusto, security dealers report residential installation business soared past commercial. That helped fuel overall estimated industry revenue growth of 19% during the period. Home sweet home indeed.

Those are just some of the head-turning findings contained withinSSI‘s annual Installation Business Report (IBR), always one of the most anticipated facets of this annual Gold Book edition. Putting a finer point on it, data compiled from responding dealers and integrators indicates residential installations picked up a whopping 14 percentage points in 2014 to overtake commercial projects (49% vs. 38%); commercial lost 6 points and industrial declined 8 points to 13% of the pie. Along with that, residential business accounted for larger shares of video surveillance, access control and fire/life safety revenues. At the same time, the average price paid for residential intrusion detection systems and monitoring increased, as did interest in keyless entry, mobile system access and surveillance cameras.

At the other end of the spectrum, commercial markets demonstrating the most robust growth during 2014 included government, educational institutions and health care. More good news elsewhere in the IBR includes: the average prices charged for both video and access systems rose; most security company compensation packages increased, particularly for GMs and salespeople; and several specific types of offerings, including IP cameras and encoders, cloud-based services, and mass notification systems, exhibited noteworthy growth. And these security solutions are helping take a bite out of crime as both violent and property offenses declined.

This year also signified a paradigm shift in both alarm and video signal transmission. The former saw POTS fall below 50% for the first time, with cellular hot on its heels, and the latter shows Ethernet cabling has surpassed coaxial. Finally, we have been de-livered into the age of smartphones and networked security.

Alas, the research also reveals the industry’s glowing business complexion was marred by some warts in 2014. The troubling news includes: elevated attrition numbers for both commercial and residential accounts; lower gross profit margins across the board; shrinking staff sizes; drops in prices charged for both residential and commercial fire installations; and stagnation in what had been promising offerings like managed access control, personal emergency response systems (PERS), video analytics, and biometrics. And there was also an uptick in false alarm activity.

That said, with a little ingenuity and a lot of elbow grease most challenges can be flipped into opportunities, and I don’t believe any of the issues the industry faces are insurmountable. We have the experience, expertise, solutions and market demand to over-come any obstacle – plus the industry is not close to reaching its penetration potential. What an amazing business! In the context of challenges, the IBR once again asked respondents to rate their level of concern regarding a range of security business issues. Following are the results, with ratings in parentheses:


(Ratings on 1-5 scale, with 5 being highest level of concern)
1. General operating/business costs (3.24)
2. Technician shortage (3.14)
3. Direct competition from manufacturers (2.95)
4. Government regulation (2.93)
5. Competition from other security companies (2.83)
6. Lack of training (2.81) 
7. Recession/bad economy (2.79) 
8. Verified/No police response (2.73) 
9. Acceptance of new technology (2.57)
10. Competition from telecom, cable/satellite TV companies (2.57)

Several respondents added their own concerns not among those offered as answer choices. They included: The 2G sunset; A/V vendors not licensed to install alarms giving industry a bad name; Committing to a part and having it discontinued; The fight between IP and analog because there is room for both; Integration of locks, cameras, alarms into one system; Lack of IP/ network/WiFi-enabled security panels; Lack of enforcement by the state licensing entity; No or low cost upfront model and free mentality shifting to higher-cost connected services platform; Product quality and software issues, particularly inter-manufacturer compatibilities; Lack of state licensing. And then there was my favorite: “I’m afraid people will discover it is impossible to keep someone from breaking into their property.” Let’s all hope that never happens.


If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!

About the Author


Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Commercial Integrator + 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 to your bottom line.

A FREE subscription to the top resource for security and integration industry will prove to be invaluable.

Subscribe Today!

Get Our Newsletters