SDM 2016 Top Systems Integrators Report: Expanding Their Scope of Services
Security systems integrators are taking on a much greater role in our connected world through their offerings of cybersecurity and added network services, as evidenced by the 21st annual Top Systems Integrators Report.
Security systems integrators lauded the state of the market in 2015, yet their revenue was down 1 percent overall and among those integrators with which a year-to-year comparison could be made, a significant number — 34 of 82 companies — reported decreased North American systems integration revenue. (See table “Top Systems Integrators: 8-Year Performance.”)
SDM’s Top Systems Integrators Report ranks companies by their North American systems integration revenue, which includes solutions such as design, project management, product, installation, programming, start-up, and training sold directly to an end-user customer or through a tier of contractors. Total North American systems integration revenue — which is not the same as total annual gross revenue — reached $5.63 billion in 2015 for the 100 companies ranked on this year’s report.
One of the reasons revenue growth did not match the commentary given by systems integrators could be that projects secured in the latter part of 2015 will not be on the books until 2016 — contributing to flat financial performance, but elated forecasts by the integrators.
“In my opinion the security market made a comeback last year and it is looking even better in 2016,” says No. 30, Sound Incorporated, which reported $20.2 million in 2015 systems integration revenue, up 2.6 percent over 2014.
While there were some who experienced a flat or downcast market, a larger number of systems integrators say the market expanded in 2015. They cited several factors as having influenced that growth, including a higher level of new construction and the need to upgrade timeworn systems — especially given the greater benefit that digital-based technologies offer.
“2015 saw a strong market for security system sales. In large part the market was driven by increased customer focus on upgrading legacy systems to newer digital technologies. Clients continue to gain a higher level of understanding that digital technologies can drive efficiencies within their security operations and provide more value to their corporate stakeholders,” reports Tutela Inc., ranked No. 35. The company saw strong growth in the logistics and transportation vertical market last year.
Security as a service, managed offerings, and cloud-based solutions are gaining traction in the marketplace, the integrators observed.
“In general, we participated in a strong market in 2015; good economic trends in many of the markets we serve helped to drive strong sales performance,” notes ADS Security, ranked No. 48, reporting 14.1 percent higher integration revenue. “While we saw growth across the board, we especially saw strong growth in our commercial segment and, in particular, with our cloud-based services such as SecureDoor (managed access control) and our family of RemoteView video (cloud based video storage).”
Integrated Security Technologies says, “We are still looking to see the cloud services end of the business take off. It has been discussed more frequently but we anticipate some activity taking hold in 2016.”
Other integrators also commented on factors that contributed to a strong marketplace:
Telenet VoIP Inc. (No. 92): “Overall the market seemed to be healthier, margins seemed to stay flat but more opportunities were available for bidding. After structured cabling, and network upgrades, CCTV and access control seem to continue to be the focal point of educational entities.
Advanced Electronic Solutions (No. 51): “2015 was a strong year for AES. We had many upgrades to IP systems as well as a number of new major projects. Profits increased as opposed to 2014.”
Sentry Security (No. 94): “Market was strong in 2015. Integrated systems dominated.”
Security Integrations (No. 40): “The market was strong, fueled by upgrades from analog CCTV to IP-based solutions.”
Tele-Tector of Maryland Inc. (No. 68): “The market was strong in the area of upgrading analog systems to IP base.”
Perhaps most telling about the direction that things are heading in comes from an observation by MidCo Inc., ranked No. 28: “There is a need for more network-savvy systems integrators like MidCo.”
Not only are offerings of cloud-based and managed security solutions growing, but the market is desiring — and demanding — solutions that deliver “big data.” There is also a greater emphasis on cybersecurity, say the integrators of their clients.
“ITO and big data will continue to be a focus of our go-forward strategy. The industry is way behind other industries in the use of data. Video analytic metadata is going to become very valuable,” claims D/A Central Inc., ranked No. 70.
Therefore, the need for security systems integrators to become more network-savvy is greater than ever. When asked what percentage of projects sold in 2015 incorporated IP-based technology, 45 percent of systems integrators noted that between three-fourths and 100 percent of their projects incorporated IP.
Which Markets Are Spending?
A handful of vertical segments stood out as front-runners in spending on integrated security products and services: education (especially higher-ed), healthcare, utilities/critical infrastructure, and transportation/logistics. Integrators also mentioned:
- Retail (especially multi-location)
- Multi-unit residential
No. 2-ranked Convergint Technologies emphasizes the broad-reaching application of video technologies: “The market for security systems sales and integrated systems continued its strong growth in 2015. Video sales continue to dominate as customers begin to look beyond traditional security applications and start looking at using video for manufacturing, process improvement, regulatory compliance, etc.
“The best growth came from the utility segment as these customers continue to be concerned about the security of their infrastructures. With the downturn in the price of oil, petrochemical has been hit the hardest in terms of being weak in 2015,” Convergint says.
No. 7-ranked G4S Secure Integration LLC, calls out critical infrastructure as a leading sector. “Our strongest sector is definitely critical infrastructure. We see tons of potential in that market to adhere by NERC/CIP regulations and see ourselves as one of the best providers,” the company says.
No. 59, Stone Security, says the positive marketplace had a constructive effect on its operations. “We felt the market was stronger in 2015 than 2014 especially in education and industrial markets. We were forced to add a number of people to the organization to keep up with increased demand in 2015.”
No. 81-ranked Peak Alarm Co. Inc., affirms that spending on integrated security solutions continues to hold up. “The market in 2015 continued to be strong in security systems sales driven by corporate spending arising from office and warehouse expansion. No specific market exhibited low or no growth.”
In addition to specific drivers in individual market segments, the overall concern about active-shooter situations and terrorist episodes in general is casting its shadow across North America and spreading into the systems integration industry.
“Terrorism in the news, especially domestic terrorism, has led to an increased focus on security. The education segment, in particular, has dedicated a large amount of budget to improving security,” writes No. 43-ranked Redrock Security & Cabling Inc.
“The concern of continued terrorist activity will continue to drive the need for improved security solutions, which will drive increased funding,” asserts No. 3-ranked Johnson Controls Inc.
According to No. 13-ranked Securityhunter Inc., terrorism is a top issue in the security marketplace. “The federal government is investing heavily in securing its people and facilities. A great market opportunity exists in helping to secure the border, and key infrastructure locations like airports.”
Among the top trending issues that Top Systems Integrators think will have the greatest impact on their business in 2016, active-shooters/acts of terrorism, cybersecurity, and the growth of Security as a Service through cloud-based services and managed offerings stand out. The first has the potential to produce devastating consequences, yet provides opportunities for integrators to become a key part of securing America against such atrocious deeds.
Tyco Integrated Security
Johnson Controls Inc.
Kratos Public Safety & Security Solutions Inc.
San Diego, Calif.
Red Hawk Fire & Security
Boca Raton, Fla.
Kastle Systems International
Falls Church, Va.
G4S Secure Integration LLC
Vector Security Inc.
Securadyne Systems LLC
AFA Protective Systems Inc.
RFI Communications & Security Systems
San Jose, Calif.
Entech Sales & Service Inc.
Tech Systems Inc.
Universal Protection Security Systems
Santa Ana, Calif.
Unlimited Technology Inc.
Chester Springs, Pa.
SIGNET Electronic Systems Inc.
Interface Security Systems Holdings Inc.
Earth City, Mo.
Genesis Security Systems LLC
Access Systems Integration
Advanced Cabling Systems
North Little Rock, Ark.
Low Voltage Contractors Inc.
Burr Ridge, Ill.
MSE Corporate Security
Integrated Security Technologies
Allied Fire & Security
NextGen Security LLC
King of Prussia, Pa.
Security Equipment Inc.
Firstline Security Systems Inc.
TRL Systems Inc.
Rancho Cucamonga, Calif.
American Alarm & Communications
Redrock Security & Cabling Inc.
The Protection Bureau
Security and Data Technologies Inc.
F.E. Moran Inc. Alarm and Monitoring Services
ADS Security L.P.
SSD Alarm Systems / Kern Security & Fire / Alpha Alarm & McNeill Security
Midstate Security Company
Advanced Electronic Solutions
College Point, N.Y.
Alarm Detection Systems Inc.
Minuteman Security Technologies Inc.
Life Safety Engineered Systems Inc.
Operational Security Systems Inc.
CGL Electronic Security Inc.
Sonitrol New England
Rocky Hill, Conn.
Dallas Security Systems Inc. & DSS Fire Inc.
Salt Lake City, Utah
Scarsdale Security Systems Inc.
Guardian Protection Services
Vision Security Technologies
Fairview Heights, Ill.
APL Access & Security Inc.
Sentry Communications & Security
Ackerman Security Systems
Tele-Tector of Maryland Inc.
Per Mar Security Services
D/A Central Inc.
Oak Park, Mich.
St. Louis, Mo.
Electronic Security Concepts LLC
Artel Communications Corp.
Atlantic Coast Alarm Inc.
Mays Landing, N.J.
Sonitrol of Sacramento & Orange County, Cybex Security
Bates Security LLC / Sonitrol of Lexington
Atronic Alarms Inc.
Southeastern Security Professionals LLC
Peak Alarm Co. Inc.
Salt Lake City, Utah
Fleenor Security Systems
Johnson City, Tenn.
Strategic Security Solutions
Acadiana Security Plus
Matson Alarm Co. Inc.
Engineered Security Systems
New York Security Solutions
Redwire / Sonitrol of Tallahassee,Bay, NW FL, EC FL
Telenet VoIP Inc.
El Segundo, Calif.
Washington Alarm Inc.
Sonitrol of Buffalo, Rochester, Toronto
Grand Blanc, Mich.
World Wide Security & GC Alarm Inc.
Garden City, N.Y.
Custom Security Systems
Sonitrol Security Systems of the Triangle
No. 2 – Acquired and integrated GS Security and Dakota Security. SDM’s 2007 and 2012 Systems Integrator of the Year.
No. 3 – Double-digit growth in sales volume and ended year with largest projects backlog to date. SDM’s 2009 Systems Integrator of the Year.
No. 6 – Launched KastlePresence; IoT platform available in the App Store. SDM’s 2015 Systems Integrator of the Year.
No. 7 – SDM’s 2013 Systems Integrator of the Year (and 2008 as Adesta).
No. 8 – SDM’s 2015 Dealer of the Year.
No. 13 – Captured Social Security Administration Blanket Purchase Agreement for $210 M for the next 5 years.
No. 15 – SDM’s 2004 Systems Integrator of the Year.
No. 17 – Developed and launched a big data offering. SDM’s 2014 Systems Integrator of the Year.
No. 19 – Closed a $1,890,000 prison security project.
No. 21 – Won contract for multiple security/video solutions with 4,100-site retailer.
No. 24 – Completed management buy-out from MSA Security and began operating as an independent company.
No. 27 – Secured a large state hospital project, which called for multiple disciplines and platforms.
No. 28 – Global international integrated system in the Middle East.
No. 33 – Achieved DHS SAFETY Act Designation for Perimeter Protection Services.
No. 34 – Consolidated from two separate buildings into a new corporate headquarters including moving UL central station.
No. 35 – In process of overhauling all administrative software to a new ERM platform. Opened three new full-service locations: Charlotte, N.C.; Sunrise, Fla.; and Anaheim, Calif., as well as New York City in March 2016.
No. 40 – Acquired a small IT services company.
No. 44 – Celebrated 40 years in business as a family-owned company.
No. 48 – Formally introduced ADS +Rewards Customer Loyalty program, which allows existing customers to earn loyalty rebates towards system upgrades based upon their tenure with ADS.
No. 52 – Purchased Safe Systems Inc., Louisville, Colo.
No. 53 – Introduced TransitSentry v1.5, a wireless mass transit video surveillance platform developed by Minuteman.
No. 56 – Outgrew Norwood, Mass., facility and acquired a 13,275 sq. ft. state-of-the-art facility in Westwood, Mass., which includes a customer training center and a technology lab.
No. 57 – Full integration of Mutualink into central station to help leverage verified dispatch to the PSAP.
No. 59 – Adding another higher-education organization to client roster: Salt Lake Community College, Utah’s largest college serving more than 60,000 students on 10 campuses.
No. 62 – Opened a second central station in Arizona; the centers in Arizona and Pennsylvania will operate as if they are one, while enabling independent redundancy. In addition to Customer Care Operations, Data Services, and Technical Support, the site also will incorporate a state-of-the-art training facility.
No. 73 – Opened 10 new school projects and secured two major NYCT contracts.
No. 77 – Acquired Kentucky Alarm Services.
No. 79 – Joined PSA co-op as an owner company.
No. 81 – Launched PeakEdge, an access control package centered on an affordable entry point with aggressive RMR generation. This is in addition to PeakLink and PeakView, security and video surveillance packages.
No. 82 – In 2015 began the process of converting estimating and CRM system to WeSuite. Also in the final stages of getting central station UL listed.
No. 86 – Recognized as Sonitrol Dealer of the Year at the 2015 Sonitrol National Dealers Association.
No. 88 – Became an exclusive safety and security provider for six NYC public hospitals.
No. 89 – Completed technology and communication infrastructure upgrade.
No. 92 – Design and installation of the IP audio/video intercom system for Marlton School for the Deaf.
No. 95 – Major Georgia theme park facility landed for systems and monitoring.
Footnote from Top Systems Integrators: 8-Year Performance
*2007 figure reflects a correction to reported revenues for Johnson Controls and ADT, following incorrect reporting in 2006. While it appears that there was a 17 percent increase in total revenue between 2006 and 2007, it was actually 4 percent growth.
†In the 2010 report, several notable companies did not participate, including SAIC, Red Hawk Security, North American Video, and National Security Systems Inc., which skewed the results. Among systems integrators for which a year-to-year comparison could be made, there was actually only a 4.4 percent decrease in performance between 2009 and 2010.
**Two major factors contributed to the decrease in systems integration revenue; ADT was not ranked, and Siemens Industry Inc. systems integration revenue was adjusted downward by an SDM estimate.
≠Siemens Industry Inc., which had been ranked in 2014 using estimated systems integration revenue, was not ranked in 2015. On the surface, it appears that Top Systems Integrators revenue declined 7.1 percent in 2014. When Siemens is removed from this calculation for comparison purposes, however, systems integration revenue for the top 100 companies grew very slightly, at 0.35 percent year-over-year.
***A 17.34 percent decrease in systems integration revenue is attributable to the fact that several of the largest systems integrators either did not reply to SDM’s requests for information, could not comply due to restrictions of being publicly held, or were omitted due to acquisition (includes Diebold Security – will report next year as Securitas Electronic Security Inc.; Stanley Convergent Security Solutions; Protection 1; Schneider Electric; SDI; DTT; and Dakota Security Systems, among the top 25).
Source: SDM Top Systems Integrators Report, July 2016
e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure.
|Company||Value of Largest Project||2016 Rank|
|Johnson Controls Inc.||$26,000,000||3|
|Interface Security Systems Holdings Inc.||$14,800,000||21|
|Convergint Technologies LLC||$10,000,000||2|
|Minuteman Security Technologies Inc.||$8,087,960||53|
|G4S Secure Integration LLC||$7,500,000||7|
|Red Hawk Fire & Security||$5,000,000||5|
|NextGen Security, LLC||$5,000,000||33|
|Midstate Security Company||$2,983,555||50|
|Telenet VoIP Inc.||$2,883,232||92|
|Advanced Electronic Solutions||$2,575,000||51|
|Unlimited Technology Inc.||$2,200,000||17|
|Integrated Security Technologies||$2,168,400||31|
|RFI Communications & Security Systems||$2,100,000||12|
|Firstline Security Systems Inc.||$1,940,000||38|
|SIGNET Electronic Systems Inc.||$1,900,000||19|
|Genesis Security Systems LLC||$1,800,000||22|
|Advanced Cabling Systems||$1,750,000||26|
|AFA Protective Systems Inc.||$1,597,000||11|
|Tele-Tector of Maryland, Inc.||$1,568,250||68|
|Universal Protection Security Systems||$1,529,672||16|
|TRL Systems Inc.||$1,400,000||41|
|Strategic Security Solutions||$1,400,000||83|
|Tech Systems Inc.||$1,260,402||15|
|Entech Sales & Service Inc.||$1,247,783||14|
|Low Voltage Contractors Inc.||$1,142,000||27|
|Life Safety Engineered Systems Inc.||$1,100,000||54|
|Scarsdale Security Systems Inc.||$975,000||60|
|Access Systems Integration||$935,094||24|
|Redrock Security & Cabling Inc.||$920,000||43|
|CGL Electronic Security Inc.||$765,000||56|
|Security Equipment Inc.||$663,528||34|
|Security and Data Technologies Inc.||$635,969||45|
|Allied Fire & Security||$600,000||32|
|Engineered Security Systems||$590,224||87|
|Guardian Protection Services||$569,545||62|
|Electronic Security Concepts LLC||$535,000||72|
|The Protection Bureau||$503,170||44|
|APL Access & Security Inc.||$450,000||65|
|MSE Corporate Security||$440,000||29|
|D/A Central Inc.||$433,000||70|
|Per Mar Security Services||$432,000||69|
|New York Security Solutions||$412,682||88|
|Vector Security Inc.||$375,000||8|
|Sonitrol of Buffalo, Rochester, Toronto||$375,000||96|
|American Alarm & Communications||$356,000||42|
|Vision Security Technologies||$342,193||63|
|Sonitrol New England||$317,187||57|
|Southeastern Security Professionals LLC||$295,000||79|
|Matson Alarm Co. Inc.||$275,000||85|
|Peak Alarm Co. Inc.||$225,000||81|
|Atronic Alarms Inc.||$197,695||78|
|F.E. Moran Inc. Alarm and Monitoring Services||$194,590||47|
|Custom Security Systems||$173,000||99|
|Bates Security LLC / Sonitrol of Lexington||$131,000||77|
|Fleenor Security Systems||$108,965||82|
|Sonitrol of Sacramento & Orange County, Cybex Security||$106,598||76|
These 78 systems integrators reported having the highest-value security projects started in 2015. Note: Four of the top 10 companies did not report their largest project size, as requested by SDM. Projects below $100,000 are not ranked here.
Source: SDM Top Systems Integrators Report, July 2016
Largest Project Winner:
New York Power Authority
Johnson Controls will, for up to a two-year term, engineer, procure and construct systems associated with physical and cyber security upgrades in order to maintain compliance with the North American Electric Reliability Corporation’s Critical Infrastructure Protection (NERC CIP), Version 5 Standards. The upgrades consist of physical and cyber security enhancements, including cameras, access controls and methods of preventing and detecting intrusion in Authority substations. The contract includes work at five of the Authority’s generation and transmission facilities and eight remote substations.
|Acadiana Security Plus||84|
|Access Systems Integration||24|
|Ackerman Security Systems||67|
|ADS Security L.P.||48|
|Advanced Cabling Systems||26|
|Advanced Electronic Solutions||51|
|AFA Protective Systems Inc.||11|
|Alarm Detection Systems Inc.||52|
|Allied Fire & Security||32|
|American Alarm & Communications||42|
|APL Access & Security Inc.||65|
|Artel Communications Corp.||73|
|Atlantic Coast Alarm Inc.||75|
|Atronic Alarms Inc.||78|
|Bates Security LLC / Sonitrol of Lexington||77|
|CGL Electronic Security Inc.||56|
|Custom Security Systems||99|
|D/A Central Inc.||70|
|Dallas Security Systems Inc. & DSS Fire Inc.||58|
|Electronic Security Concepts LLC||72|
|Engineered Security Systems||87|
|Entech Sales & Service Inc.||14|
|F.E. Moran Inc. Alarm and Monitoring Services||47|
|Firstline Security Systems Inc.||38|
|Fleenor Security Systems||82|
|G4S Secure Integration LLC||7|
|Genesis Security Systems LLC||22|
|Guardian Protection Services||62|
|Integrated Security Technologies||31|
|Interface Security Systems Holdings Inc.||21|
|Johnson Controls Inc.||3|
|Kastle Systems International||6|
|Kratos Public Safety & Security Solutions Inc.||4|
|Life Safety Engineered Systems Inc.||54|
|Low Voltage Contractors Inc.||27|
|Matson Alarm Co. Inc.||85|
|Midstate Security Company||50|
|Minuteman Security Technologies Inc.||53|
|MSE Corporate Security||29|
|New York Security Solutions||88|
|NextGen Security LLC||33|
|Operational Security Systems Inc.||55|
|Peak Alarm Co. Inc.||81|
|Per Mar Security Services||69|
|Red Hawk Fire & Security||5|
|Redrock Security & Cabling Inc.||43|
|Redwire / Sonitrol of Tallahassee, Bay, NW FL, EC FL||91|
|RFI Communications & Security Systems||12|
|Scarsdale Security Systems Inc.||60|
|Securadyne Systems LLC||9|
|Security and Data Technologies Inc.||45|
|Security Equipment Inc.||34|
|Sentry Communications & Security||66|
|SIGNET Electronic Systems Inc.||19|
|Sonitrol New England||57|
|Sonitrol of Buffalo, Rochester, Toronto||96|
|Sonitrol of Sacramento & Orange County, Cybex Security||76|
|Sonitrol Security Systems of the Triangle||100|
|Southeastern Security Professionals LLC||79|
|SSD Alarm Systems / Kern Security & Fire / Alpha Alarm & McNeill Security||49|
|Strategic Security Solutions||83|
|Tech Systems Inc.||15|
|Telenet VoIP Inc.||92|
|Tele-Tector of Maryland Inc.||68|
|The Protection Bureau||44|
|TRL Systems Inc.||41|
|Tyco Integrated Security||1|
|Universal Protection Security Systems||16|
|Unlimited Technology Inc.||17|
|Vector Security Inc.||8|
|Vision Security Technologies||63|
|Washington Alarm Inc.||93|
|World Wide Security & GC Alarm Inc.||98|
More from the Report
To gain additional information beyond that published in this issue and online, the complete SDMTop Systems Integrators Report and Database is available in Excel format. Included are contact names, mailing addresses, telephone numbers, website URLs, targeted vertical markets, branch office locations, and much more. SDM’s Top Systems Integrators Report and Database contains the information needed to target products and services to the systems integration market.
The cost of the report is $595. It may be ordered by contacting Heidi Fusaro at 630-518-5470 or by emailing email@example.com.