Nearly all month I’ve been slicing and dicing… no, not holiday fruitcake. I’ve been dissecting and analyzing the results of SDM’s annual Industry Forecast Study to prepare a report based on the results. This mail-based survey has been conducted among 1,750 of SDM’s subscribers annually since 1980. It presents a picture of the security-installing industry that illustrates revenue growth, trends in purchasing and pricing, and much more.

The complexity of any research lies more in how it is conducted rather than how it is analyzed – for analyzing is easy when you know what you’ve measured. SDM’s Forecast is carefully executed to be representative of today’s security-installing market from many different aspects – geographically; by company revenue size; and by business type. In projecting total industry revenue, complex calculations are made that take into account all of these factors.

All of which leads to the point that your business and those of your peers experienced a relatively healthy business year in 2005 – with 6 percent growth – and projections for 9 percent gains in 2006, according to the study. But why is that important to you and how can you use this information?

Specifically, you can’t. Perhaps you will compare your own company’s performance with the industry average, and then say, “So what? It’s just an average.” And you’re probably correct…to a point.

The most important pieces of information to grasp in any research results are the overriding messages – the subtle and not-so-subtle trends that present themselves through the data. The pages in this issue are chock-full of messages that came straight from dealers and integrators like you, about opportunities that are right in their faces – and the challenges that go along with them. The Industry Forecast, beginning on page 52, gives you performance data and purchasing plans and pricing information. The article, “Video Surveillance: State of the Market,” beginning on page 44, examines opportunities just in that one segment; while the article, “Finding Value in Distributor Services,” on page 75, explains the increasingly important influence your distributors can have on your profitability.

The resultant messages are loud and clear: The alarm dealer business model is changing quickly, just as the traditional business model is changing for manufacturers, distributors, and even my own business of publishing! For many security and integration firms, the potential customer base represents low-hanging fruit, but the process of picking it may be rife with obstacles – that is, the risk is greater than in the past of losing your shirt on a poorly planned or badly performed project.

If you take away one highlight from SDM’s 2006 Industry Forecast Study, let it be this: Never has it been more important to hire the right people – those who possess skill sets that can speed you into the world of network-based security equipment and Internet-based business management.


“There are essentially three levels on which standards are developed,” writes SDM’s contributing writer Karyn Hodgson in this issue’s “Card Standards & Laws: Effect on Installers.” Hodgson notes that at each level, “there are key standards or legislative issues that could potentially have an impact on the access control market in general, and the dealer and integrator specifically.” Check out page 67.


Missed the report on SDM’s Dealer of the Year, HSM Security? Visit and search under “National Reach, Local Touch.”