17th Annual Top Systems Integrators Report: The Road is Still Uncertain
For the second year in a row, systems integration revenue fell by 4 percent. Instead of paving their own straight road, integrators are facing sharp curves in adoption of new technology infrastructure and new service models.
Security systems integrators had expected to pull ahead in 2011, but instead they experienced a dismal first half of the year and a better-by-comparison but still “just average” second half. Following a 4.4 percent drop in 2010, systems integration revenue among the industry’s largest security companies fell yet again — by 3.6 percent in 2011 — leaving many wondering what it would take to get back up to speed. Integrators face sharp curves in the need to quickly adopt IP as the primary infrastructure for security systems, as well as to create business models that offer security as a service.
There were some stand-outs among the 2012 Top Systems Integrators, a report which ranks companies by their North American systems integration revenue from the previous year. Among the top 10 companies, Convergint Technologies, LLC, ranked No. 7, reported 17 percent growth year-over-year in systems integration revenue reported to SDM. Stanley Convergent Security also did well with its acquisition of Niscayah, removing Niscayah from the No. 8 spot on the report. And Schneider Electric pulled ahead by about 10 percent. Nevertheless, many other companies continued to feel a hard pinch in an industry that has been historically reliant on new construction, government spending, and big capital budgets.
Projects in 2011 originated from a mixed bag of vertical sectors. For some integrators in some geographic areas, government spending carried them through; while for other integrators, the private sector provided the greatest source of new work. As in 2010, the Corporate market was cited by systems integrators as the No. 1 vertical sector contributing to their 2011 revenue. The Industrial market displaced Education as the second most productive vertical sector — meaning that more companies ranked it higher among sources of revenue than in the previous year.
Clearly, existing infrastructures have risen to the top of the road as a primary source of new business to tap. “The market continues to recover and has moved from weak to average on new builds, while strong on maintaining existing infrastructures,” commented No. 13-ranked NAVCO Security.
Many companies found they relied on their key customers’ expansion programs in 2011. Hand-in-in-hand with servicing existing customers is realizing that large capital expenditures are fewer to be found, making the development of security-as-a-service business models more important than ever. However, not all integrators are moving in that direction with the same speed, some saying that customer demand just isn’t there yet.
“Projects for us in 2011 are up at the moment,” claims High-Tech-Tronics Inc., ranked No. 65. “With IP camera technology getting better — especially with bandwidth requirements — I see the market going up. Cloud-based is still new, but we are starting to get customers asking about it.”
Some integrators, such as Interface Security Systems Holdings Inc., ranked No. 109, are farther along this road than others are. In 2011, only 1 percent of service revenue among Top Systems Integrators came from hosted and managed services.
“Our company’s strategic decision in 2007 to expand into the IP managed services market with both physical security and logical security services, along with IP-based remote video and digital voice services, has proven to be extremely successful. We have more than doubled our RMR in the last four years as a result and expect to add over $2 million of new RMR in 2012 all through organic growth,” stated Interface Security.
SDM’s Top Systems Integrators Report ranks, by reported North American systems integration revenue, the largest companies that contract electronic security projects for commercial, industrial, institutional, government, and other non-residential markets. For ranking purposes, these are businesses that derive more than half of their revenue from the sale, design/engineering, installation and service of multi-technology electronic security systems, such as access control and identification, video surveillance, alarms, perimeter security, and other network-based technologies. Listings begin on the following page.
|2012 Rank||Company & Headquarters Location||North American Systems Integration Revenue, 2011||Number of New Projects, 2011||Value of Largest New Project||Full-time Employees|
Boca Raton, Fla.
Siemens Industry Inc.
Buffalo Grove, Ill.
North Canton, Ohio
Stanley Convergent Security
Johnson Controls, Inc.
Convergint Technologies, LLC
HBE, a Kratos Company
San Diego, Calif.
G4S Technology, LLC
Carter Brothers, LLC
Tri-Signal Integration Inc.
RFI Communications & Security Systems
San Jose, Calif.
AFA Protective Systems Inc.
Tech Systems Inc.
VTI Security Integrators
Allied Fire & Security
SFI Electronics, LLC
Northland Control Systems Inc.
Genesis Security Systems, LLC
Burr Ridge, Ill.
ARK Systems Inc.
SSD Alarm Systems / Kern Security & Fire / Alpha Security & Fire
New York, N.Y.
MSE Corporate Security
BCI Technologies Inc.
Grand Prairie, Texas
Los Angeles, Calif.
Unlimited Technology Inc.
Chester Springs, Pa.
Intelligent Access Systems
SIGNET Electronic Systems Inc.
Low Voltage Contractors Inc.
Integrated Security Technologies
Dallas Security Systems Inc. & DSS Fire Inc.
Advanced Cabling Systems
North Little Rock, Ark.
The Protection Bureau
Midstate Security Company
Advanced Electronic Solutions
College Point, N.Y.
Koorsen Security Technology
ASSI Security Inc.
Security Equipment Inc.
American Alarm & Communications
Operational Security Systems Inc.
Guardian Protection Services
Integrated Controls USA Inc.
Ferndale Electric Systems Integration Division
EO Integrated Systems Inc.
Accent Electronic Systems Integrators Inc.
Bonita Springs, Fla.
Ackerman Security Systems
Firstline Security Systems Inc.
Oklahoma City, Okla.
Fairview Heights, Ill.
Qualified Systems Contracting Inc.
CGL Electronic Security Inc.
Cam-Dex Security Corp.
Kansas City, Kansas
Systems Integration Corp
St. Louis, Mo.
Tele Tector of Maryland
ArCom Systems Inc.
North Little Rock, Ark.
APL Access & Security Inc.
Advanced Control Concepts Inc.
Telenet VoIP Inc.
El Segundo, Calif.
Enterprise Security Inc.
Scarsdale Security Systems Inc.
T&R Alarm Systems Inc.
Simpson Security Systems Inc.
D/A Central Inc.
Oak Park, Mich.
Electronic Security Systems
JMG Security Systems Inc.
Fountain Valley, Calif.
SMG Security Systems Inc.
Elk Grove Village, Ill.
Sentry Communications & Security
Sonitrol of Lexington / Bates Security
TEM Systems Inc.
Per Mar Security Services
Atlantic Coast Alarm Inc.
Mays Landing, N.J.
SecurAlarm Systems Inc.
Grand Rapids, Mich.
F.E. Moran Inc. Alarm and Monitoring Services
Grand Rapids, Mich.
Custom Security Systems
Redrock Security & Cabling Inc.
Sonitrol New England
Rocky Hill, Conn.
Matson Alarm Co. Inc.
Triad Security Systems
Sonitrol of Sacramento & Sonitrol Orange County
Electronic Sales Company Inc.
Life Safety Engineered Systems Inc.
Interface Security Systems Holdings Inc.
Earth City, Mo.
Protex Central Inc.
World Wide Security & GC Alarm Inc.
Garden City, N.Y.
No. 1 – In Oct. 2011, Tyco announced plans to separate Tyco’s businesses, including ADT, into three separate, publicly traded operating companies: ADT North America Residential and Small Business Security, Commercial Fire and Security, and Flow Control. In March 2012, Tyco announced that ADT North America Commercial Security business unit would change its name to Tyco Integrated Security. ►No. 2 – SDM’s 2010 Systems Integrator of the Year. Combined Fire Safety and Security to offer customers a broader portfolio of solutions and services from one source.► No. 4 – SDM’s 2011 Systems Integrator of the Year.Selected to conduct the challenging and intricate integration of sophisticated security solutions at the World Trade Center complex, including the construction site, 4WTC skyscraper, WTC Transportation Hub, and the Situational Awareness Platform Software.►No. 5 – Parent Stanley Black & Decker (NYSE: SWK) acquired No. 8 Top Systems Integrator, Niscayah, which had $200M in North American Systems integration revenue in 2010. Stanley CSS made six acquisitions in 2011.►No. 6 – SDM’s 2009 Systems Integrator of the Year. Turned primary selling focus toward direct-to-the-end-user business versus selling in the unsolicited competitive bid market. Moved to a more vertical market structure by creating vertical market specialists who understand the nuances of a particular vertical market.►No. 7 – SDM’s 2007 Systems Integrator of the Year. Developed automated customer support portal, which provides customers with faster response and complete reporting metrics on all project- and service-related issues.►No. 8 – Acquired Ingersoll Rand Security Technologies early 2012.►No. 10 – SDM’s 2008 Systems Integrator of the Year (Adesta). Record-breaking backlog for seventh consecutive year.►No. 13 – New customer revenues of over $2 million.►No. 15 – Expanded the sales team and hiring leadership to expand into Southern California.►No. 16 – Converted computer operating system to allow it to interface both its operational and accounting facilities for significantly more efficiency.nNo. 17 – Stanley Healthcare Dealer of the Year for two years running.►No. 19 – Deployed ASG Connect, an enhanced service platform in the intrusion category that gives customers the ability to interact with their security systems in real time, including integrated video, lights, locks, and environmental control, via PC, smart phone or tablet.►No. 20 – HSPD-12 integration with nationwide VHA/VBA facilities obtaining $500M BPA.► No. 21 – Restructured and centralized service dispatch. Implemented automated mobile workforce solution. ►No. 23 – Successfully and profitably managed and delivered projects while keeping pace with a 45+ percent increase in project sales volume that began in June 2011 and is continuing into 2012.►No. 24 – Completed a 20-seat global security operations center.nNo. 25 – Sold a campus-wide multi-million-dollar project for a large client. ►No. 26 – Converged what was the old telecom business into a Network Division doing networks on both sides of the company’s businesses. Retraining staff to move in a common direction from what were two separate divisions into a powerful, state-of-the art, network company for security, networks and communication. ►No. 34 – Established a $20 million credit facility.►No. 35 – Opened new office on Madison Ave. in New York City.►No. 36 – For the Chicago Transit Authority (CTA), SDI acted as project manager; managed a team of more than 100 technicians, more than a dozen companies and 16 deployment teams in the installation of new cabling, network switches and servers to support nearly 1,700 IP-based surveillance cameras.The is the second largest public transit in the U.S.►No. 37 – Completed an upgrade conversion of internal systems.►No. 38 – Secured a $1.3 million rehabilitation hospital project including VMS, telecom, nurse-call, A/V, access control, patient handling, life safety, data com.►No. 39 – Addition of a structured cable division and expansion of national accounts group.n►No. 40 – Increase of revenue by 30 percent.►No. 41 – Landed very large pharmaceutical project.►No. 44 – Became more active in sales of IP-based systems. n No. 45 – Named largest alarm company in the state of Arkansas.►No. 46 – Large museum project. Increased managed services from central station.►No. 49 – Evaluated and implemented a hosted/managed access control system solution for clients.►No. 51 – Deployed a number of hosted/cloud services for clients.►No. 53 – New product additions; and better pricing negotiated.►No. 56 – Shifted work processes to handle smaller projects, per market demand. ►No. 59 – Installed more IP and VMS.►No. 60 – Obtained 37th state license.►No. 61 – Completed Pittsburgh Public Schools security network consisting of 56 buildings, comprised of nearly 60 servers, 10,000 cameras and 400 DVRs.►No. 62 – Won significant new client who was purchasing and renovating a number of commercial buildings and has regional offices throughout the country.►No. 63 – Moved from a 12,000 sq. ft. building occupied since 1992 to a new 33,000 sq. ft. facility.►No. 64 – Brought electronic capabilities to field service techs.►No. 67 – Purchase of land, construction and acceptance of new headquarters in Tampa, Fla.►No. 69 – Eliminated business debt. Added customers to base. Developed a technology center at corporate headquarters.►No. 71 – Set up a new classroom-style training center with a resource center stocked with training tools. Set all training classes up online. Became CSAA Five Diamond central station.►No. 73 – Completed deployment of a wireless, IP-based CCTV system for the city of Annapolis, Md.►No. 74 – Arkansas State Crime Lab upgrade and installation for access control system.►No. 75 – Completed Hoover Dam project.►No. 76 – Organized company departments and moved toward achievement of goals set for company’s further growth.►No. 78 – Overhauled the financial reporting and decision-making capabilities of the organization.►No. 79 – Opened new Remote Observation Center for loss prevention services.►No. 80 – Added video verification via third party.►No. 81 – Completion of FCI Aliceville, AL Div 17 project.►No. 87 – Integrating access, surveillance, fire, and alarm system for a large private company in New Jersey.►No. 88 – Expanded technical services.nNo. 89 – Rebranded ADR Security Services part ofbusiness to Bates Security. Completed two acquisitions. Won one of the top four Marketing Excellence Awards and divisional Dealer of the Year at First Alert convention.►No. 91 – Increased RMR by 7.5 percent.►No. 93 – Received the “101 Best and Brightest Companies to Work for” award, and Grand Rapids’ Small Business of the Year finalist for second consecutive year.►No. 97 – Topped $10 million sales first time.nNo. 98 – Completed $1.7 million project consisting of fire, access control, CCTV and intrusion.►No. 99 – Three first-place winners and recognition of many employees at the 2011 Sonitrol National Dealers Association convention.nNo. 100 – Acquisition of HB Alarm in Rhode Island. Won 2010 Sonitrol National Dealer Top Dealer Award (presented 2011).►No. 101 – Developed a sales channel for residential installations of interactive services systems via Web-related marketing.►No. 104 – Awarded largest project in company’s history.►No. 107 – Completed and integrated two significant acquisitions.►No. 108 – Completing all projects at Kalieda hospital on time.►No. 109 – Completed the Dollar General project and increased RMR by more than $1.3 million. Announced merger with Westec Intelligent Surveillance, April 2012.n►No. 110 – Grew RMR organically nearly $20,000 at a reasonable creation multiple.►No. 112 – Contributing significant resources to developing mass notification marketing, sales, and installation effort.►No. 113 – Debt refinancing, acquisition integration, organic growth programs.►No. 114 – Two additional county-wide school systems to add to growing school portfolio. PERs business documented seven lives saved. Significant growth in monitored customer base.
MAIN CHART KEY:
e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate; correctnl = correctional; edu = education; entertainmnt = entertainment and sports venues; finance = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hospitality = hotels and hospitality; indus = industrial; law enforc = law enforcement; retail = retail and restaurants; transport = transportation/distribution/logistics; utilities = utilities.
|Company||Value of Largest Project||2012 Rank|
|G4S Technology LLC||$47,000,000||10|
|Tri-Signal Integration Inc.||$28,000,000||14|
|HBE, a Kratos Company||$18,000,000||8|
|Johnson Controls, Inc.||$10,000,000||6|
|Convergint Technologies LLC||$9,000,000||7|
|Cam-Dex Security Corp.||$6,314,036||69|
|Genesis Security Systems LLC||$5,500,000||25|
|Northland Control Systems Inc.||$4,300,000||24|
|Siemens Industry, Inc.||$4,000,000||2|
|Unlimited Technology Inc.||$3,900,000||35|
|Allied Fire & Security||$3,000,000||21|
|Redrock Security & Cabling, Inc.||$2,500,000||98|
|Koorsen Security Technology||$2,450,000||49|
|VTI Security Integrators||$2,200,000||18|
|Security Equipment Inc.||$1,800,000||51|
|Operational Security Systems Inc.||$1,700,000||57|
|Systems Integration Corp||$1,680,000||70|
|Advanced Electronic Solutions||$1,500,000||48|
|Integrated Security Technologies||$1,500,000||43|
|Midstate Security Company||$1,500,000||47|
|SFI Electronics, LLC||$1,400,000||23|
|SIGNET Electronic Systems Inc.||$1,370,000||38|
|Low Voltage Contractors Inc.||$1,267,000||39|
|RFI Communications & Security Systems||$1,137,280||15|
|Firstline Security Systems Inc.||$1,120,000||64|
|Simpson Security Systems Inc.||$1,100,000||81|
|Enterprise Security Inc.||$1,000,000||78|
|EO Integrated Systems Inc.||$1,000,000||60|
|The Protection Bureau||$1,000,000||46|
|Ferndale Electric Systems Integration Division||$950,000||59|
|CGL Electronic Security Inc.||$890,000||68|
|Tech Systems Inc.||$865,000||17|
|ASSI Security Inc.||$810,500||54|
|Life Safety Engineered Systems Inc.||$800,000||108|
|Accent Electronic Systems Integrators Inc.||$700,000||61|
|Advanced Cabling Systems||$700,000||45|
|Qualified Systems Contracting, Inc.||$650,000||67|
|Telenet VoIP Inc.||$650,000||77|
|AFA Protective Systems Inc.||$600,000||16|
|Ackerman Security Systems||$577,000||63|
|JMG Security Systems Inc.||$560,000||84|
|Per Mar Security Services||$551,000||91|
|American Alarm & Communications||$550,000||54|
|ARK Systems Inc.||$530,000||28|
|APL Access & Security Inc.||$500,000||75|
|D/A Central Inc.||$500,000||82|
|Intelligent Access Systems||$500,000||37|
|Interface Security Systems Holdings Inc.||$500,000||109|
These 66 companies reported having the highest-value projects on their books in 2011. (Note: Projects below $500,000 are not ranked here. Three of the top 10 companies did not report project sizes as requested by SDM.)
Source: SDM Top Systems Integrators Report, July 2012