The 18th Annual Top Systems Integrators Report: Neither Stellar Nor Stagnant
Six in 10 integrators were able to move ahead in 2012 and counted an increase in systems integration revenue; but one-third slipped back — showing that the security marketplace is not yet where it was pre-recession.
A 9 percent decrease in the 2012 revenue for SDM’s Top Systems Integrators is a deceiving number because individual company results did not recede to that extent. By all accounts, systems integrators described 2012 as average to improved — at least moderately better than the dismal results they encountered in 2011. While some companies found it “challenging,” others experienced the opposite. Most were in the middle — financial performance was neither stellar nor stagnant, but “acceptable” compared with the past few years.
“2012 was another challenging year for the larger commercial integrated systems business. It wasn’t worse than 2011 but about the same,” notes No. 25-ranked ASG Security, Beltsville, Md. “There are still fewer projects, less funding and great pressure on margins. However, the low and mid markets performed very well for us again; specifically, a continued great resurgence in residential sales with excitement around our enhanced service platform. Small business was also a continued strong growth segment for the company, led by enhanced intrusion sales and cloud-based video services.” ASG Security reported $20.9 million in 2012 North American systems integration revenue, 6 percent less than in 2011. However, the company simultaneously climbed on the just-released SDM 100, with 12.4 percent better recurring monthly revenue — an outward sign of the company’s comments regarding their stellar residential program.
Revenue classified as North American systems integration revenue fell from $6.91 billion in 2011, to $6.29 billion in 2012 — even though 10 more companies were included in the report. However, for comparison purposes, SDMmeasures the top 100 companies’ 2011 integration revenue ($6.88 billion) against the top 100’s 2012 integration revenue ($6.24 billion). Partly responsible for the decline is the removal of ADT from the Top Systems Integrators Report, as this company was split in 2012 into separate businesses that handle residential and small commercial (ADT) and commercial security (Tyco Integrated Security). In addition, SDMis reporting a modified, but lower, estimate for Siemens Industry Inc. based on new information.
For systems integrators in general, they saw a marked improvement in spending availability in their markets. In most cases, this translated to higher sales, greater revenue, and even better profits.
Business was “BETTER than 2011,” remarks No. 33-ranked MidCo Inc., located in Burr Ridge, Ill. “Business revenue and profits are growing.”
Among the Top Systems Integrators ranked in this report, for which year-to-year comparisons could be made, 62 percent reported increased systems integration revenue. But as many as one-third (33 percent) of integrators reported decreased revenue from systems integration. So, many are still struggling against challenges in the market, such as minimized spending by clients, very little to no new construction in their territories, and heated competition, among other factors.
“The market was flat across all segments,” remarks No. 6-ranked Johnson Controls Inc., based in Milwaukee.
“The market was strong, but much more competitive, with overall gross margins declining,” states Genesis Security Systems LLC, Germantown, Md., ranked No. 34.
While the challenges and hurdles to better growth in systems integration revenue continue, there is no doubt that some improvement was seen between 2011 and 2012, and it continues into the current year. Among SDM’s Top Systems Integrators, 78 percent expect revenues to increase in 2013 compared with last year.
|2013 Rank||Company & Headquarters Location||North American Systems Integration Revenue, 2012||Number of New Projects, 2012||Value of Largest New Project||Full-time Employees|
Tyco Integrated Security, SimplexGrinnell
Boca Raton, Fla.
Siemens Industry Inc.
Buffalo Grove, Ill.
North Canton, Ohio
Stanley Convergent Security
Convergint Technologies LLC
Johnson Controls Inc.
Kratos Public Safety & Security Solutions Inc.
San Diego, Calif.
G4S Technology LLC
Vector Security Inc.
AFA Protective Systems Inc.
Tri-Signal Integration Inc.
RFI Communications & Security Systems
San Jose, Calif.
Tech Systems Inc.
Securadyne Systems LLC
SFI Electronics LLC / Universal Protection Security Systems LP
Santa Ana, Calif
VTI Security Integrators
Entech Sales & Service Inc.
SIGNET Electronic Systems Inc.
Los Angeles, Calif.
Interface Security Systems Holdings Inc.
Earth City, Mo.
Allied Fire & Security
Northland Control Systems Inc.
Unlimited Technology Inc.
Chester Springs, Pa.
Burr Ridge, Ill.
Genesis Security Systems LLC
Intelligent Access Systems
ARK Systems Inc.
Low Voltage Contractors Inc.
New York, N.Y.
SSD Alarm Systems / Kern Security & Fire / Alpha Security & Fire
Koorsen Security Technology
Integrated Security Technologies
BCI Technologies Inc.
Grand Prairie, Texas
MSE Corporate Security
Advanced Cabling Systems
North Little Rock, Ark.
The Protection Bureau
American Alarm & Communications
Advanced Electronic Solutions
College Point, N.Y.
ATCI Communications Inc.
Security Equipment Inc.
Tele Tector of Maryland
Guardian Protection Services
ArCom Systems Inc.
North Little Rock, Ark.
Operational Security Systems Inc.
Dallas Security Systems Inc. & DSS Fire Inc.
Advance Technology Inc.
Ferndale Electric Systems Integration Division
Cranberry Township, Pa.
F.E. Moran Inc. Alarm and Monitoring Services
Minuteman Security Technologies, Inc.
Enterprise Security Inc.
Firstline Security Systems Inc.
Qualified Systems Contracting Inc.
Midstate Security Company
Life Safety Engineered Systems Inc.
Fairview Heights, Ill.
APL Access & Security Inc.
Sentry Communications & Security
Ackerman Security Systems
Advanced Control Concepts Inc.
CGL Electronic Security Inc.
Scarsdale Security Systems Inc.
Per Mar Security Services
St. Louis, Mo.
Sonitrol New England
Rocky Hill, Conn.
Access Control Consultants
Telenet VoIP Inc.
El Segundo, Calif.
Atlantic Coast Alarm Inc.
Mays Landing, N.J.
Sonitrol of Lexington / Bates Security
D/A Central Inc.
Oak Park, Mich.
SecurAlarm Systems Inc.
Grand Rapids, Mich.
Electronic Security Concepts LLC
Redrock Security & Cabling Inc.
Electronic Security Systems
T&R Alarm Systems Inc.
EO Integrated Systems Inc.
Grand Rapids, Mich.
Sonitrol of Sacramento & Sonitrol Orange County
American Security Systems Inc.
Long Island City, N.Y.
Engineered Security Systems
Matson Alarm Co. Inc.
Simpson Security Systems Inc.
Sonitrol of Buffalo, Rochester, Toronto
Custom Security Systems
Yarnell Security Systems
Triad Protective Service
MSA Systems Integration
Strategic Security Solutions
Briscoe Protective Systems Inc.
World Wide Security & GC Alarm Inc.
Garden City, N.Y.
Sonitrol Security Services Inc.
Washington Alarm Inc.
Sonitrol SW Ohio
Protex Central Inc.
All Systems Designed Solutions Inc.
Kansas City, Kansas
No. 1 – First-time ranking on the Top Systems Integrators Report since separating from ADT in 2012. Includes Tyco Integrated Security (revenue estimated by SDM) and SimplexGrinnell (North American systems integration revenue of $949 M reported to SDM).
No. 2 – SDM’s 2010 Systems Integrator of the Year. North American systems integration revenue is estimated by SDM.)
No. 3 – SDM’s 2011 Systems Integrator of the Year. .
No 5 – SDM’s 2012 Systems Integrator of the Year.
No. 6 – SDM’s 2009 Systems Integrator of the Year.
No. 7 – The integration of the Ingersoll Rand system integration division greatly enhanced the company’s footprint in North America, giving it a total of 32 offices and 600 employees..
No 8 – SDM’s 2008 Systems Integrator of the Year (Adesta).
No. 9 – Company leveraged its Security Center of Excellence on complex integrated solutions.
No. 11 – Most significant accomplishment in 2012 was to attain the highest level of national account growth the company has seen to date.
No. 16 – Acquired Microsoft Dynamics AX as RFI’s new ERP platform to support the company’s future growth while gaining workflow efficiencies and overall experience.
No. 17 – Company built its reputation on service after the sale with guaranteed response time and functionality; it is one of the ISO Quality Objectives. In 2012, company had 16,467 service calls; of those, the company missed the guaranteed response time on only 11 calls and missed restoring immediate functionality on 19 calls. That resulted in a success rate of 99 percent accuracy.
No. 18 – Acquired SecureNet Inc. and Surveillance Specialties Ltd.
No. 19 – Record sales and earnings. Opened two new branch offices in California.
No. 20 – Company made its first acquisition of another security integrator (SIC).
No. 23 – Secured a $2.2 million K-12 project including integrated security, AV, telecommunications, intercommunications, and more.
No. 24 – Established a cloud-based portal to aggregate all loss prevention and business intelligence solutions for clients.
No. 25 – Company continued to benefit from increased market penetration and greater sales force adoption across all of its markets with the ASG Connect brand, an enhanced interactive service platform for intrusion systems. Also launched ASG Video, a new hosted video service, in 2012. Sold more than 1,000 channels of RMR-generating video in six months and was recognized by Axis Communications as their Video Hosting Partner of the Year.
No. 26 – Entered the automated vehicle access control market and gained market share within the Department of Defense.
No. 28 – Acquisition and successful integration of Westec Intelligent Video Surveillance
No. 29 – Restructure in 2010/2011 helped facilitate very strong bottom line for company.
No. 33 – Formed Data Division for managed services entry.
No. 34 – Moved to a new headquarter, doubling square footage to 13,000 sq. ft.
No. 35 – 20+ percent growth while developing a new corporate staff team.
No. 37 – Chosen by Minneapolis-St. Paul International Airport to replace their current CCTV system with an airport-wide iVISN surveillance system. Company has a 20-year track record of delivering highly integrated solutions for large airport and public safety clients.
No. 38 – Designed and built a “virtual showroom” that has live interactive systems on all products the company sells and services.
No. 42 – Opened a new office location in Virginia Beach, Va.
No. 44 – Undertook a large, complex project that included 245 doors, 90 video surveillance cameras, Pivot3 vSTAC architecture, Cisco switching and network layer and more than 500 intrusion devices — which helped to showcase the company’s project management, engineering and enterprise IT capabilities and experience.
No. 45 – In negotiations to expand geographically into Midwest region.
No. 47 – Company had an outstanding year for sales and the installation of cutting-edge technologies.
No. 49 – Completed a large $3.2 M project with integrated access and security and data center.
No. 50 – Company was successful in closing two key accounts. Also invested heavily in training of field staff (product and installation).
No. 51 – Increased managed services business.
No. 53 – Compan y was able to ensure minimal downtime (where possible) during a natural disaster and established communications with top clients for emergency response.
No. 54 – Expanded business with Quicken Loans in downtown Detroit.
No. 55 – Refinanced the company and with additional capital bought several other companies, growing RMR significantly.
No. 57 – Acquired great talent and one competitor.
No. 58 – Company expanded its hosted and managed services.
No. 60 – Placed increased focus on customer base by recognizing and meeting the demands of the base for home automation services.
No. 61 – Closed the contract for the Northeast Arkansas Baptist Medical Center in Jonesboro, Ark. for $2.6 million.
No. 62 – Strong business controls allowed the management of cash flow and maintenance of stability in spite of the worst new construction environment the company has seen in decades.
No. 63 – Contracted to install IP cameras viewing the printing process of highly sensitive financial reports. Installed cameras from lifts while machines were in use.
No. 64 – 45 new customers.
No. 66 – Installed more than 70 life-safety solutions in healthcare and one contract for a multi-site customer that consisted of more than 200 video surveillance installations.
No. 67 – Company doubled the number of employees and experienced significant RMR growth.
No. 69 – Continued efforts in the government arena enabled the company to open an office to capitalize on government work.
No. 71 – Enhanced management tools/upgraded software management. Rolled out new accounting software, new service dispatching software, and new project management software.
No. 73 – Become Vendor of the Year for OfficeMax.
No. 75 – Developing an infrastructure for video monitoring stations for remote video monitoring and remote access control management services.
No. 77 – Successfully converted central station software to a new platform.
No. 78 – In addition to double-digit revenue growth, Ackerman was selected by the Atlanta Business Chronicle as one of the Best Places To Work.
No. 79 – Renegotiation and continuance of the company’s GSA schedule for another five years.
No. 80 – Maintained reasonable gross margins, even with a drop in overall annual revenue.
No. 81 – Process improvements and restructuring, rebranding.
No. 82 – Record internal RMR growth year due to an increase in the services provided in the last couple of years. Also saw great increases in financial success, which was due mostly to the growth in integrated projects and larger projects.
No. 84 – 2012 saw the complete integration of IP-based alarm communication within the company. Technicians and sales teams received extensive training and in the central station, IP was embraced not only from a hardware and equipment perspective, but also as far as policies and procedures, and disaster recovery.
No. 85 – Recieved reward for Educational Partner of the Year, from Axis Communications.
No. 86 – Acquired two high-profile projects, MLK Hospital and Rose Bowl Stadium.
No. 89 – Moved to a brand new corporate headquarters, a three-story 14,000 sq. ft. building. This was a very involved project yet the company was able to continue its strong sales growth and maintain a high level of customer service.
No. 92 – Won 2012 Small Business of the Year Award from the Grand Rapids Chamber of Commerce, as well as won for the second year in a row 101 Best and Brightest Companies to Work for (West Michigan and national). Also received an Award of Excellence for Low Voltage Systems from Associated Builders & Contractors for a significant project completed during the year.
No. 93 – Finished the year with 30 percent growth over 2011. Awards from Honeywell CSS included first place in sales for 2012 and Technical Application Achievement Award. Awards from Honeywell HIS included Integrated Systems Southwest Dealer of the Year.
No. 94 – Project at Hyundai Motor Finance Company: 800 CAT6A 10 Gig locations, 600 CAT6 locations, server room build out, sound masking system, access system with badging and video surveillance system.
No. 95 – Installed card access, video, sliding doors, high-security key system, metal detector in a high-end watch manufacturing facility.
No. 96 – Installed an integrated access, fire, video, burglar alarm in a factory that processes gold and silver into electrical ribbon for circuit boards.
No. 97 – Completed the North Carolina Central Prison project that included detention door control, card access, IP video and IP intercom systems.
No. 98 – Central station aided in the apprehension of 1,035 criminals.
No. 101 – Continued to build up the company’s fire division, both installations and “parts and smarts” for electricians.
No. 103 – A 12.7 percent increase in total revenue over the prior year.
No. 104 – Completed Federal Correctional Institution in Aliceville, Ala.
No. 106 – No layoffs; maintaining economic position; minimal RMR net attrition.
No. 108 – Adding more recurring service solutions, including verified video monitoring, managed access control and simplified home automation. Positioned the company as a services business and avoid sales without RMR.
No. 113 – Deployed new integration offices in Houston, Charlotte, Ohio and California.
No. 115 – Implementation of the restructure resulted in the company significantly increasing RMR, landing three profile accounts and secured the highest profile access control / CCTV project in the company’s region.
No. 116 – Installed and programmed a fire alarm system for a 40-story hotel in Manhattan. This is the largest building in which Briscoe Protective Systems has installed a fire alarm system, to date.
No. 117 – Integrated acquired accounts and had organic growth.
No. 119 – Continues to expand monitoring of school systems with seven total school systems now being monitored. Connected services business growing with continued expansion of the “SecurePath” marketing message that includes three connected paths for security monitoring.
No. 120 – Investment in a new building, infrastructure and personnel.
No. 121 – Significant investment in company’s IT plant; switching to a virtual server arrangement.
No. 123 – Implementation of Salesforce CRM to better serve customers and improve communication and efficiencies internally.
e = SDMestimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; finance = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hospitality = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utility = utilities/critical infrastructure.