Publishing the 18th annual
SDM
100 this month was a humbling project. Of course there are always hours and
hours of data collection, data entry, analysis and writing involved; but the
interesting part begins when I review the dealers’ responses to the question:
“Please describe the market for security system sales in 2007. Was the market
strong, average or weak? What segments exhibited the best or worst growth?”
The dealers’ answers overwhelm me with the understanding of how much effort it
takes just to stay in the race. Alarm company owners and executives juggle
dozens of tasks at any one time –improving sales numbers, scrutinizing profits,
adjusting to market conditions, handling human resource issues, solving
operational snafus. These men and women are the leaders of the industry and
where they go, their product manufacturers, distributors, service providers,
educators, and the rest of us follow.
This year’s
SDM 100 report is extremely positive, showing
that both RMR and total annual revenue grew by double digits in 2007. With the economy being what it is, however,
double-digit growth does not mean that 2007 was a piece of cake. Behind the
numbers, alarm dealers told their stories of how they are responding to market
conditions. Many were hard hit by the depressed building market, yet alarm
dealers have an amazing ability to shift gears quickly and find another product
or service to take up the slack.
Sarasota, Fla.-based Dehart Alarm Systems Inc., ranked No. 89 with $176,000 in
RMR, summed up the year in a nutshell, telling us, “Residential down,
commercial up.”
Further north, Woburn, Mass.-based Ultraguard Protective Systems Inc., ranked
No. 77, echoed the statement, telling
SDM, “Residential was
flat and sluggish. New access and CCTV, along with fire alarm systems, had
growth.”
No. 7, Pittsburgh-based Vector Security, which operates both a dealer program
and a national accounts division, described the results of both as “very
successful.” Overall, the company said, “2007 was another strong year in a
difficult economic environment.”
Not all of the
SDM 100 firms were hurt by the lack of
builder business, and some adjusted quickly to the downturn.
Crime Prevention Security Systems of Gainsville, Fla., reported, “Our
integrated residential systems increased from 40 percent [of our total
business] in 2006 to 48 percent in 2007. New home starts were down in our area,
like in most of the country. However, we saw an increase in retrofits and
commercial installations.”
While many residentially focused dealers turned to retrofit jobs or tried out
the commercial market, those that were already strong in the commercial market
found all kinds of opportunities:
“We just adjusted our focus on the municipalities and critical infrastructure
that qualify for Homeland Security funding,” noted the firm, Sonitrol of
Sacramento & Sonitrol Orange County, of Roseville, Calif., No. 39.
Security systems based on IP technology have begun to take hold among these
traditional alarm dealers.
“We have entered system integration market with IP technology,” announced No.
45, Sonitrol Security Systems of Hartford Inc. & Sonitrol Security Systems
of Rhode Island, stating that overall the market was average, and the burglar
alarm business was “flat.”
Ranked at No. 16, Interface Security Systems & The Greater Alarm Co., Earth
City, Mo., said it has “successfully positioned the company to take advantage
of the substantial growth opportunities brought about by the convergence of
physical and logical security. “With our new ability to offer private, secure,
managed IP networks and IP security applications as a single-source provider,
we expect to increase our growth dramatically.”
Interface Security is just one of many companies throughout the industry that
is working hard, intelligently responding to the market, capitalizing on new opportunities,
and, in the end, increasing revenue.
