The security systems services industry in the US includes about 5,000 companies with total annual revenue of about $10 billion. Large companies include ADT Security Services, Brink’s Home Security, and Honeywell. The industry has become consolidated at the top. The 20 largest companies hold more than half the market. A typical large regional company operates four branches and has $20 million of annual revenue.
COMPETITIVE LANDSCAPE
Demand is driven partly by home sales, new home construction, and new commercial and office construction. The profitability of monitoring companies depends on the volume of customers, as most costs are fixed. Large companies have advantages of scale in operating monitoring centers and in national advertising and brand recognition. Small companies often compete by selling customer contracts to the large monitoring companies, or reselling the monitoring companies’ services, which they buy wholesale.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are the manufacture, sales, installation and monitoring of electrical security systems. The industry consists of commercial and residential segments, each of which uses different types of equipment and monitoring. Most companies operate in only one segment. The commercial segment accounts for about 60 percent of industry revenue. The main components of a security system are door, window and motion sensors, control keypads, alarms, and communications modules.
Commercial systems are installed by a large number of electrical contractors and security specialists. Commercial security systems are often integrated with fire alarm, access control, and closed-circuit television (CCTV) systems, and may be monitored ...
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