Talk about a technology that changed the industry and enjoyed a long life cycle; it is the digital dialer. While not shown on the chart, in 2008 and 2009 more than 80 percent of respondents to SDM surveys used digital dialers as their primary source for monitoring. In 2010 that dropped significantly by 15 percent to 68 percent, which likely is the largest shift away from the digital dialer since its introduction in the mid 1980s. Prompting this change are two factors. (1) Shift from a wired to wireless world, including the near-future phasing out of POTS lines by phone companies and (2) New possibilities being created by the flexibility of Internet monitoring.

Rather than seeing the elimination of digital dialers as a problem to their business, the majority of the dealers surveyed saw moving to the internet as an opportunity and means of creating new recurring revenue and a differentiation in services. In the future perhaps we will see the alarm systems as the add-on service versus the driver for purchasing monitoring and the ability for the market to move beyond the 20% residential alarm penetration rate.

This chart shows what percentage of subscriber accounts were monitored by the specified method.

Source: 2011 SDM 100 and Top Systems Integrator reports. Analysis: Sandra Jones & Company.