In many ways, traveling down a road symbolizes the future — in this case, the future of a changing systems integration industry.

With so many changes happening in the systems integration business today, not surprisingly, the image of a road and all that accompanies that theme emerged as concept for the cover of this month’s issue, which features the 17th annual Top Systems Integrators Report. (See story and listings by clicking here.) The systems integration industry has long since passed the fork in the road that symbolized a new route towards security convergence on IP platforms; this year’s Top Systems Integrators Report provides a glimpse into how well they are handling that new route.

The Straight-Away: Although Top Systems Integrators initially thought that 2011 would be the year they would pull away from the recession and get back to improved revenues, it did not happen. Combined revenue for the 100 largest systems integrators fell 3.6 percent. Most companies reported very difficult business conditions in the first half of 2011, but much better conditions in the second half and continuing into the first quarter of 2012.

The good news is that 47 percent of Top Systems Integrators, compared to only 30 percent one year ago, reported that their net profit margins increased in 2011. Further, 84 percent of the integrators expect revenues in 2012 to increase — a stark comparison to two years ago when only 19 percent expected higher revenues.

The Curves: The systems integration road is curving more and more sharply towards all systems operating on IP networks. A hand-in-hand technology trend is wireless transmission of video and security data, as well as mobile access to that video and data. Are integrators coming up to speed on these technologies? According to research among the Top Systems Integrators over the past two years, there has been a moderate level of progress in the rate of adoption of IP-based systems. Approximately four in 10 integrators (41 percent) reported that at least half of their projects sold last year incorporated IP-based technology — up four points from the previous year. The curve is perhaps taking longer than expected to round, but at least it’s moving in the right direction.

The Pavement: Finally, are systems integrators laying their own pavement for the road towards their future success, or are they following old routes? Laying a new road symbolizes implementing new business models, enacting new plans, creating a new eco-system for their company. In many ways, the emergence of cloud-based technologies fulfills that image — the idea of providing security as a service to be paid for from an operating budget, and not a system to be purchased outright as a large capital expenditure. According to the Top Systems Integrators Report, more than half (69 of the 114 ranked companies) indicated they do offer cloud-based services. Although some are much further along in their offerings than others, most agree that even if demand is not yet present in their markets, it will be eventually and they want to be ready for that trend.

I believe security systems integrators are indeed laying their own road when it comes to optimizing future trends. It may be with some caution, but then, who can fault a cautious driver?

In this Issue

In the article, “In Retail & Elsewhere Analytics Ease Shrinkage, Perk up Profits,” senior editor Heather Klotz-Young explores how security integrators are helping their clients use video analytics to their full potential — both to fight shrink and to provide actionable information for marketing and operations departments. Read the article by clicking here.

Online Only

“How to create high-tech value in retail,” an SDM on-demand webinar, examines how Brown Shoe Company uses security technology in its more than 1,300 locations. This free webinar features speakers Lisa Ciappetta, senior director Marketing, Protection 1, and Jim Shepherd, national account manager, Protection 1, together with their customer, Kevin Darnell, director of Loss Prevention at Brown Shoe Company. To access this webinar, visit: