Security System Services


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Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,700 security systems service providers in the US design, sell, install, service, and monitor security alarm systems. Companies may install stand-alone systems or offer monitoring services. Customers include residential, commercial, educational, governmental, and industrial accounts.

Customer Attrition

Failure to retain customers is costly, as companies typically incur acquisition expenses and depend on payments over the term of a contract to recoup costs.

Technology Integration

Advances in technology help drive popularity for integrated security systems that combine multiple features, such as video surveillance, intruder detection, alarm systems, and home control.

Industry size & Structure

The average security systems services provider operates out of a single location, employs 25-26 workers, and generates $4.5 million annually.

    • The security systems services industry consists of about 5,700 firms that employ about 146,600 workers and generate about $26 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom. The top four firms account for 34% of industry revenue. The top 50 firms account for 58% of industry revenue.
    • Large companies include Apollo Global (ADT) and Ascent Capital Group (Brinks). Large companies may be vertically-integrated and have international operations.
    • Estimated US household penetration of alarm systems is 18-19%.
    • The industry includes national and regional chains, franchises, and independent operators.
                                    Industry Forecast
                                    Security System Services Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 15, 2023 - More Small Businesses Struggle with Rent
                                    • Security system service providers could see demand weaken if a slowing economy reduces small business capital spending. In February, the percentage of small businesses that failed to pay their rent in full and on time rose two percentage points to 32% compared to the prior month, according to a report by Alignable, a social media outlet for small business owners. The types of small businesses that continued to have trouble making rent include transportation (53% couldn’t afford rent in February), construction (43%), musicians/artists (40%), restaurants (40%), automotive (39%), and beauty salons (39%).
                                    • In early February, the US Senate introduced the Combating Organized Retail Crime Act of 2023. The bill would establish a multi-agency response to emerging threats in organized retail crime, including a broadening of statutes dealing with the transport of stolen goods. The measure would also provide additional resources to law enforcement on the state and federal levels. In the week following the introduction of the Senate bill, a companion bill of the same name was introduced in the US House. According to a report by the National Retail Federation, organized retail crime resulted in $94.5 billion in losses in 2021.
                                    • Work from home (WFH) patterns have settled into a new normal as the pandemic has wound down. In January 2023, nearly 30% of all US work occurred in workers’ homes, according to WFH Research. That percentage has remained mostly unchanged since return-to-office rates peaked in spring 2022. However, in large urban centers, remote work is closer to half. Hybrid schedules – typically three days in the office and two remote days – have become commonplace. About 13% of workers – including many in payroll services, customer service, and contractors – work entirely from home. Demand for security system services may drop if office occupancy levels remain well below pre-pandemic norms.
                                    • The worldwide smart badge market is projected to experience average annual growth of 9% and grow from $21 billion in 2023 to $50 billion by 2033, according to a recent report by market research firm Fact.MR. Smart badges are small, multi-mode trackers that combine features, including Wi-Fi sniffers, Bluetooth Low Energy, GPS, and other technologies, to provide precise geolocation capabilities. Smart badges are increasingly common in healthcare settings as they enhance patient security and privacy, allow secure medical data access, and reduce fraud. In government facilities, smart badges can ensure regulatory compliance, confirm identity, and enable facility access.
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