SSI’s 2013 Industry Forecast: S.I.C. Consulting’s Mitch Reitman
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: Mitch Reitman, Principal, S.I.C. Consulting.
What do you expect will be the biggest changes, challenges and/or opportunities as they relate to security technology, markets and business for suppliers, integrators and monitoring providers?
Mitch Reitman: Consumers will be looking for more features and benefits with their security systems. Companies that offer systems that take advantage of internet connectivity to offer additional services, such as simple home automation, thermostat control, and IP camera access, will gain market share. The fact that customers are disconnecting their POTS lines and making VoIP or cellular phones their primary phone service will spur the growth of IP communicators, radios, and cellular. As AT&T phases out 2G service, there will be a need to replace the hundreds of thousands of 2G radios in use. Companies that offer IP camera access and simple automation such as thermostat control will be able to sell to small businesses and residential customers that previously did not see value in a security system. Making the system interactive and providing services in addition to intrusion detection will allow savvy companies to expand their customer base. As for equipment, that is not generally consumer driven, with the exception of institutional users, so security companies will still drive the decisions regarding providers. We have been overwhelmed with products from offshore companies and low cost providers. Dealers may find some new products that they are comfortable with, but manufacturers that continue to innovate, provide training and maintain relationships with their customers will hold onto their market share. Companies that do not innovate or supply commodity products will struggle.
What do you envision as far the industry at large is concerned?
Reitman: The industry will continue to grow due to technological innovations and increased customer demand for non-standard services. Many customers that contracted in the past with companies that commoditized monitoring and service will not renew their monitoring agreements while others will look for companies that offer a higher level of customer service. Response will continue to be an issue. Municipalities may attempt to legislate response limitations or to require video verification. It will be very important for security companies to maintain their relationships with local law enforcement so that they can offer input into proposed legislation. Some of the phone and cable companies will lobby authorities to create loopholes in licensing laws and regulations. It is very important for independent companies to belong to, and support the security industry trade groups and SIAC.
What are some nagging or pressing security industry issues you expect to remain unresolved? Any ideas/thoughts about how to address or improve these situations?
Reitman: Security companies that do basic installs or provide noting more than standard, dial-up digital monitoring will suffer in the next few years. Low cost providers will take away the customers that view monitoring as a commodity, while companies offering more technical options will take away the customers looking for increased levels of service. The increased demand for IP connectivity and features such as video monitoring will increase installation costs. Dealers that are able to absorb these costs and recover their outlays over the life of the monitoring account will increase market share. Companies will find that they are in need of credit lines or capital and will have to develop stronger relationships with their banks.
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