The first two years of this new decade haven’t exactly been smooth sailing — to put it mildly. January 2020 began with a very rosy outlook, both for the security industry and business in general, but quickly turned upside down and sideways with the emergence of COVID-19 in March. Last year, 2021 started out with a lot of hope that the emerging vaccines would by now have made the coronavirus an issue of the past.
Of course, as we all well know, that didn’t exactly happen as planned. Things were definitely better in 2021 but life as we knew it didn’t come back as we wished it would, and the virus continued to play a role in everyday life as well as the security industry. Yes, there were trade shows again, but they were smaller, less populous events. Many security industry organizations either returned to online activity as the delta variant ramped up this summer, or put increasingly stringent requirements on attending, from proof of vaccinations to mask wearing. But business continued to happen, projects put on hold in 2020 went forward, and the industry soldiered on, incorporating new information, technology advancements, and challenges.
In many ways the results of the 2022 SDM Industry Forecast reflect these same trends. Security dealers and integrators did have a better year in 2021 than in 2020, and more are hopeful that things will improve even more in 2022.
Indeed, 67 percent of respondents are predicting an increase in revenue this year. Forecast respondents are generally optimists — it is rare for a majority to expect bad news — and the survey also tracks the actual numbers from the previous year, versus the predictions. In the 2021 survey a year ago, 60 percent of the respondents predicted an increase in revenues, while in reality just 41 percent of them realized that increase. Still, that was up significantly from a mere 28 percent experiencing increased revenues in 2020 (65 percent of them had predicted an increase, but of course they were surveyed in November 2019 before the pandemic was widely known about).
Considering that 2019 was a very good year and more respondents this year are hopeful for increased revenues, that is indeed a positive outlook!
There are also new challenges, however. This year was the first time we added supply chain issues to the list of potential business challenges for survey respondents. Asked to pick their top three, 47 percent chose supply chain issues, with finding/retaining employees in the No. 2 spot in the wake of the “great resignation” and ongoing COVID-19 challenges still a top issue for one-third of respondents.
One technology trend also continues to emerge, possibly helped by the pandemic: there was an upswing in sales of several different managed services, particularly access control and video as a service and managed access control.
As we have done in recent years, SDM also put together a panel of four different security dealers and integrators to put some names and faces to these trends. In addition to their input in the article, don’t miss our podcast with three of them, which touches on supply chain issues, employee shortages, and the uptick in M&A activity this year.
Speaking of M&A, contributing writer Joan Engebretson delves into that in more detail in her story, “Dealer M&A: A Return to Fundamentals” (link). And we round out the features with two stories on some of the technology trends that really emerged in 2021: Touchless access control solutions and body-worn cameras.
As we sit here in December of 2021, a new variant of concern — omicron — is on the horizon and no one knows for sure whether it will be as difficult to tamp down as delta or a sign of a virus that is weakening and allowing for true “normalcy” to return. But at this point, it remains to be seen what “new normal” will actually look like. Hopefully we get to find out this year.