Critical Security Requirements Act as Catalyst for Revenue Growth

Heightened safety concerns following the 9/11 terrorist attacks have compelled government agencies and commercial establishments in the United States to employ sophisticated security services. Alarmed by the vulnerability of their legacy systems, many companies are upgrading to state-of-the-art security systems, which include monitoring surveillance services. The residential market is also booming due to an increase in security consciousness. These new installations and technology upgrades are spurring the demand for various types of security services, and thereby, paving the way for higher revenues. This trend is likely to continue as various establishments seek greater security due to growing workplace violence, corporate espionage, and employee thefts.

This Frost & Sullivan research examines the U.S. security services market based on end-user segments (residential and non-residential) and product categories (burglar alarm, fire and life safety, video surveillance, and other products and services). The report provides revenue forecasts based on market insights, trend analysis, and key data points.

Want to Increase Profit Margins? - Broaden your Product Portfolio

"The security services industry is highly fragmented with many small companies that cater only to local demand. This intensifies competition and forces market participants to subsidize installation costs and design attractive price schemes for obtaining security monitoring contracts," say the analysts. The emergence of mass-market programs has further increased the deployment of aggressive pricing strategies. This has invariably undercut the profits of companies despite the substantial increase in demand.

"Market participants are widening their product portfolio by integrating non-traditional offerings such as home automation equipment, telecommunication services, structured cabling, Internet, and broadband services to expand their target markets and prevent customer attrition," the analysts state. Burglar alarms continue to be the largest revenue generator across different product categories even as video surveillance and access control systems are rapidly gaining popularity.

Huge Revenue Potential Riding on the Inevitable Need for Security

Growing awareness about security and the corresponding hike in spending by the government as well as commercial and residential customers are boosting the demand for various security services. Equipment price reductions along with technological advancements such as biometric software, digital video recording and intelligent back-end systems are stepping up the pace of market acceptance. Market consolidation, increase in construction projects, strict enforcement of fire codes and regulations, the introduction of bundled systems and services, and the push for a secured work environment by insurance companies are expected to sustain industry growth in the coming years.