20th Annual SDM Top Systems Integrators Report
A broader base of competition, margin erosion, and pressure on end user budgets all played their part on performance, but integrators experienced enough opportunities to counter those impediments to growth.
While there has been no shortage of market pressures and disruptive influences on the security business lately, systems integrators nonetheless performed well last year. As a group, the integrators encapsulated in SDM’s 2015 Top Systems Integrators Report didn’t show much growth — just 0.3 percent. But that had more to do with the structure of the report than with the companies’ individual accomplishments in 2014. For example, 16 of the top 25 integrators for which year-to-year comparisons could be made, as well as many of the lower-ranked integrators, reported significant revenue increases. However, there was one significant change (the removal of Siemens Industry Inc., due to SDM’s inability to obtain reliable financial data for creation of an estimate), which resulted in a shift in aggregate figures for the integrators as a whole, as well as a shift in ranking on the Top Systems Integrators Report for many of them.
SDM’s Top Systems Integrators Report ranks companies by their North American systems integration revenue, which includes solutions such as design, project management, product, installation, programming, start-up, and training sold directly to an end-user customer or through a tier of contractors. Total North American revenue from systems integration reached $6.83 billion in 2014 for the 110 companies ranked on this year’s report. However, a comparison between the top 100 companies ranked this year and the top 100 ranked last year shows a 7.1 percent decline, much of which can be attributed to the omission of Siemens Industry Inc. as stated above.
A broader base of competition, margin erosion stemming from falling product prices, pressure on end user budgets, and other factors all played their part on performance, but systems integrators still experienced enough opportunities — such as the continuing need for end users to meet regulatory requirements — to counter those impediments to growth. And while some justifiably viewed the business climate as average, there were more integrators who viewed it as strong and even robust.
“Business continues to be better and better with new opportunities. Sales volume and profits continue to rise, but slowly,” notes MidCo Inc., ranked No. 35. “We are expanding and investing in our business and skill set. We are 55 years young this year. We started a new data division in 2015. We spent an enormous amount on industry and factory training. New constructions projects continued to increase. A focus on managed services and systems seem to be expanding.”
Top Systems Integrators started 123,003 new projects in 2014, up 5 percent from 2013. The total value of those projects was $2.45 billion — an impressive total considering that several of the largest integrators did not report this figure, which would have added immeasurably to the total if they had. The size of the largest integrated security project was $39 million, reported by Interface Security Systems Holdings. (For the complete list of single project values, see page 54.)
No. 11-ranked Securadyne Systems LLC, which worked integrating its 2013 acquisitions, Advanced Control Concepts and Intelligent Access Systems, into the company, reported systems integration revenue of $75.2 million in 2014, up from $69 million the previous year. “The market continued to expand, allowing us to grow bookings by 17 percent organically. We expect continued strength, growth and demand for our services, especially in market segments facing regulatory compliance challenges such as oil and gas, electrical utilities, and food and beverage.”
Top Systems Integrators ranked the market sectors producing the greatest growth in 2014 as corporate office space, education/campus, and healthcare — the same top three sectors as in 2013. In addition, a wide variety of other sectors were mentioned as ones offering great sales opportunities, including energy, utilities, transportation, industrial, distribution/warehousing, telecommunications, bio-technology, and a wide swath of governmental entities. Several systems integrators commented that demand from the retail sector was down in 2014, however.
“The market is definitely improving overall, driven by pent-up demand, continued migration to IP and network technologies, as well as regulatory changes. However, the growth in institutional markets is not where it was expected to be by this time,” states Johnson Controls Inc., ranked No. 5. “The market is getting stronger but certain vertical markets are lagging, such as healthcare. Some markets that exhibited growth were commercial, education and utilities/critical infrastructure,” the company notes.
“We felt the market was strong. We continued to see growth in new commercial construction as opposed to just up-fits and/or retrofits. All segments seem to be good in our area,” says Sonitrol Security Systems of the Triangle, ranked No. 103.
The quickly evolving world of security technologies, on the one hand, may pose challenges for systems integrators in keeping up to speed, but on the other hand creates opportunities.
From Tutela’s perspective, “2014 saw an increase in the integrated security projects and we were instrumental in driving open architecture within our vendors to fully integrate deployed access control, video and intrusion detection systems. The market was marginally stronger as spending increased, but clients are still managing security budgets very closely,” notes the company ranked for the first time, at No. 49.
“I think there is an increased focus for companies to upgrade their systems to a newer technology. The IP camera market continues to be the leader of the pack,” says Access Control Consultants, ranked No. 79.
Access control and video are the big drivers, indicates Advanced Cabling Systems. End users are embracing systems integration on a much larger scale, contends Security Equipment Inc. Unlimited Technology, SDM’s 2014 Systems Integrator of the Year, believes the economy as well as more technical advances in systems and software had a positive impact on performance. “Customers want more,” the company emphasizes.
Among SDM’s Top Systems Integrators, 81 percent expect revenues to increase in 2015 compared with 2014. And some integrators, such as No. 52-ranked ACT, are looking toward not only continued growth but accelerated profitability, too.
Tyco Integrated Security
Boca Raton, Fla.
Convergint Technologies LLC
Johnson Controls Inc.
Kratos Public Safety &
Security Solutions Inc.
San Diego, Calif.
Vector Security Inc.
Securadyne Systems LLC
Tech Systems Inc.
RFI Communications &
San Jose, Calif.
Santa Ana, Calif.
Entech Sales & Service Inc.
Unlimited Technology Inc.
Chester Springs, Pa.
Los Angeles, Calif.
Dakota Security Systems Inc.
Sioux Falls, S.D.
Genesis Security Systems LLC
Interface Security Systems
Earth City, Mo.
SIGNET Electronic Systems Inc.
F.E. Moran Inc. Alarm &
Integrated Security Technologies
Advanced Cabling Systems LLC
North Little Rock, Ark.
Low Voltage Contractors Inc.
MSE Corporate Security
Allied Fire & Security
Burr Ridge, Ill.
Koorsen Security Technology
Rancho Cucamonga, Calif.
Security Equipment Inc.
ARK Systems Inc.
American Alarm &
SSD Alarm Systems /
Kern Security & Fire /
McNeill Security & Alpha Alarm
Firstline Security Systems Inc.
The Protection Bureau
Security and Data
St. Lous, Mo.
Midstate Security Company
ADS Secuirty L.P.
King of Prussia, Pa.
Ferndale Electric Systems
Dallas Security Systems Inc.
& DSS Fire Inc.
Sonitrol SW Ohio
Alarm Detection Systems Inc.
Sonitrol New England
Rocky Hill, Conn.
College Point, N.Y.
Fairview Heights, Ill.
Guardian Protection Services
Ackerman Security Systems
CM3 Building Solutions Inc.
Fort Washington, Pa.
APL Access and Security Inc.
Per Mar Security Services
St. Louis, Mo.
Grand Rapids, Mich.
Access Control Consultants
Salt Lake, Utah
Engineered Security Systems
Redrock Security &
Bates Security LLC /
Sonitrol of Lexington
Peak Alarm Co. Inc.
Salt Lake City, Utah
Atronic Alarms Inc.
Artel Communications Corp.
Fleenor Security Systems
Johnson City, Tenn.
Custom Security Systems
Matson Alarm Co. Inc.
Redwire / Sonitrol of Tallahassee,
Bay, NW FL, EC FL
Sonitrol of Sacramento &
Orange County, Cybex Security
Sonitrol of Buffalo, Rochester,
Grand Blanc, Mich.
World Wide Security &
GC Alarm Inc.
Garden City, N.Y.
Washington Alarm Inc.
Sonitrol Security Systems
of the Triangle
A-Com Protection Services Inc.
Protex Central Inc.
ArCom Systems Inc.
North Little Rock, Ark.
Acadiana Security Plus
Sonitrol of Evansville Inc.
No. 2 — SDM’s 2011 Systems Integrator of the Year.
No. 4 — Acquired Beacon Security in Europe. SDM’s 2007 and 2012 Systems Integrator of the Year.
No. 5 — In 2014 undertook an organizational change within company’s branch locations across North America. Under a new combined branch model, each location includes expertise in controls, HVAC and security offerings, giving the company a broader footprint in the security space and access to more customers. SDM’s 2009 Systems Integrator of the Year.
No. 7 — 9.2% net attrition; several very large national account customer wins; awarded the USAA Affinity partnership for residential channel; SDM’s 2012 Dealer of the Year.
No. 8 — Experienced significant sales growth. Re-built sales organization to create demand. SDM’s 2013 Systems Integrator of the Year (and 2008 as Adesta).
No. 11 — Company successfully integrated Advanced Control Concepts and Intelligent Access Systems, both of which were acquired in late 2013.
No. 14 — Transitioned to an ESOP (Employee Stock Ownership Plan) to empower employees while maintaining the corporate culture that prioritizes the clients’ needs. SDM’s 2004 Systems Integrator of the Year.
No. 16 — Numerous project delivery achievements and contract wins, highlighted by the contract renewal for Technical Support and Maintenance of the Integrated Safety, Security and Operations Command and Control Systems (ISSOCCS) at O’Hare and Midway International Airports. SDI has provided these services since 1991.
No. 17 — Created a robust Engineering Department to tackle the sales from the U.S. Navy. Relocated to accommodate need for triple the size office space.
No. 18 — Made tremendous strides in monitored video and situational awareness services.
No. 20 — SDM’s 2014 Systems Integrator of the Year.
No. 22 — Crossed the $25 million revenue mark.
No. 23 — Captured two new clients with significant potential for future growth.
No. 24 — Won contract for multiple security / video solutions with 8,000-plus site retailer.
No. 28 — Closed a $1.5 million dollar integrated court house.
No. 30 — Increased revenues from $16.9 M to $18.9 M as well as increased net profit.
No. 31 — Hired a CFO and expanded into Oklahoma City.
No. 32 — Grew by 20% over 2013.
No. 35 — Celebrating 55 years in business as the company trains its third generation of the family in the business.
No. 37 — 40% growth in overall service revenue.
No. 38 — Extended regular Service Department business hours to include Saturday and Sunday, offering 84 hours of regular time per week; experienced significant growth in Security
Service revenue: 67% in 2014.
No. 39 — Rewrote company mission statement and implemented a new customer experience initiative.
No. 42 — Focus on product line management and training.
No. 45 — Increased client base and added office location.
No. 47 — Increased sales and net profits; added several high-profile customers.
No. 48 — Increased revenue by 10%.
No. 49 — Expanded footprint through organic growth. Won several large projects that both increased revenue and increased where the company services customers, on both domestic U.S. and international projects.
No. 50 — Completed the design and implementation of a $6.9 M mobile IP video surveillance system for the Massachusetts Bay Transportation Authority passenger buses.
No. 51 — Opened physical branch locations in four new markets in 2014: Laredo, TX, Corpus Christi, TX, Monroe, CT, and Ft. Lauderdale, FL.
No. 52 — Cross-trained all personnel on the major products the company sells.
No. 53 — Implemented better vertical market approach, resulting in revenue growth.
No. 54 — Closed five acquisitions and successfully integrated them into ADS Security’s operations and used them to expand on organic sales. SDM’s 2014 Dealer of the Year.
No. 58 —Grew 20%.
No. 59 — Company reported a very successful sales year; jobs were installed by newly promoted project managers that had worked their way up through the ranks of the company.
No. 60 — Large fire projects.
No. 61 — Nominated for the BBB Torch and Eclipse Award in 2014.
No. 63 — Implemented new productivity tools including WeSuite as an adjunct to SedonaOffice.
No. 65 — Involved with PPVAR and the coming of age of verified priority dispatch to help combat false alarms.
No. 66 — Awarded the security system project for 432 Park Avenue, the tallest residential building in the city.
No. 69 — 12.3% growth in monthly RMR from the prior year.
No. 72 — 425 NVRs deployed over a five-state region.
No. 73 — Hit a high mark with more than 100 sales representatives on staff.
No. 74 — Company increased its security sales by 25 percent from 2013 to 2014, and expanded into new markets such as gaming.
No. 76 — Cut attrition rate from 7.5% in 2013 to 7.3% in 2014.
No. 79 — Helped some large police departments and small cities improve their security; implemented wireless technology to link problem areas and have been instrumental in crime reduction.
No. 80 — Hired a new CEO with extensive government CEO experience.
No. 83 — Relocated main operations to a new larger building location.
No. 86 — Launched PeakView and experienced high market acceptance of three bundles of leased video surveillance packages for business applications. Central station obtained UL 2050 listing for the monitoring, signal processing, investigation, servicing and operation of alarm systems for which a national industrial security system certificate is required.
No. 89 — Secured several large security/communications systems projects with NYCT and LIRR for the next three years.n No. 90 — Central station underwent a transition to Bold Manitou in early 2014.
No. 92 — Software upgrade to UL-certified central station.
No. 93 — Reduced operating costs, managed net performance; leaner staffing supporting high customer retention.
No. 95 — Expanded footprint from Orange County to all of Southern California.
No. 97 — Focused on key hires, training and process measurement and improvement. Reduced attrition by 2.2% from 2013 figures. Implemented new CRM system.
No. 100 — Enhanced central station to provide interactive video monitoring, managed access control, and video doorman services.
No. 101 — Implemented WeSuite.
No. 102 — Named a Top Workplace in Toledo, Ohio.
No. 103 — Continued to strengthen capabilities with verified alarms.
No. 104 — Expanded managerial infrastructure.
No. 105 — Kept revenues in line and increased RMR.
No. 106 — Created better diversification of sales.
No. 109 — Record sales; lower attrition.
e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; finance = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utility = utilities/critical infrastructure.
|Company||Value of Largest Project||2015 Rank|
|Interface Security Systems Holdings Inc.||$39,000,000||24|
|G4S Technology LLC||$14,459,345||8|
|Convergint Technologies LLC||$14,000,000||4|
|Securadyne Systems LLC||$13,000,000||11|
|Johnson Controls Inc.||$7,500,000||5|
|Advanced Electronic Solutions||$6,000,000||66|
|Security Equipment Inc.||$3,003,220||39|
Ferndale Electric Systems
|Simpson Security Systems Inc.||$2,500,000||70|
RFI Communications & Security
|Unlimited Technology Inc.||$2,100,000||20|
|Midstate Security Company||$2,000,000||53|
|Artel Communications Corp.||$2,000,000||89|
|Security and Data Technologies Inc.||$1,983,429||47|
|Integrated Security Technologies||$1,971,008||30|
|Advanced Cabling Systems LLC||$1,800,000||31|
|Redrock Security & Cabling Inc.||$1,800,000||82|
|Access Control Consultants||$1,542,154||79|
|Genesis Security Systems LLC||$1,500,000||23|
|SIGNET Electronic Systems Inc.||$1,500,000||28|
|Minuteman Security Technologies Inc.||$1,482,000||50|
|Entech Sales & Services Inc.||$1,432,111||19|
|Firstline Security Systems Inc.||$1,400,000||45|
|Sentry Communications & Security||$1,200,000||60|
|AFA Protective Systems||$921,000||13|
|Tech Systems Inc.||$887,368||14|
|Universal Protection Security Systems||$750,000||18|
|ArCom Systems Inc.||$750,000||107|
|Sonitrol New England||$666,962||65|
|Low Voltage Contractors Inc.||$649,000||32|
|Operational Security Systems||$576,000||67|
|Electronic Security Concepts LLC||$565,000||83|
|Dakota Security Systems Inc.||$561,217||22|
|Guardian Protection Services||$558,494||69|
|CM3 Building Solutions Inc.||$528,625||74|
|Allied Fire & Security||$500,000||34|
|Sonitrol of Buffalo, Rochester, Tornonto||$484,000||98|
|APL Access & Security Inc.||$475,000||75|
|Protex Central Inc.||$375,000||106|
|Scarsdale Security Systems Inc.||$350,000||63|
|ARK Systems Inc.||$338,000||41|
|Ackerman Security Systems||$325,000||73|
|The Protection Bureau||$298,636||46|
|American Alarm & Communications||$294,307||42|
|Fleenor Security Systems||$291,034||90|
|Peak Alarm Co. Inc.||$278,211||86|
|Alarm Detection Systems Inc.||$250,000||62|
F.E. Moran Inc. Alarm and
|Matson Alarm Co. Inc.||$200,000||92|
Sonitrol of Sacramento & Orange County,
World Wide Security &
GC Alarm Inc.
|Sonitrol of Evansville Inc.||$123,058||109|
|Acadiana Security Plus||$106,000||108|
SIDEBAR: Top 3 Market Sectors: Office Space, Education, Healthcare
Top Systems Integrators were asked to rank the sectors that provided the most significant portion of their 2014 revenue.
|1. Corporate Office Space||1. Corporate|
|2. Education/campus||2. Education/campus|
|3. Healthcare||3. Healthcare|
|4. Industrial||4. Government|
|5. Government||5. Industrial|
|6. Utilities/critical infrastructure||6. Retail/restaurant|
|7. Financial/banking||7. Financial/banking|
|8. Retail/restaurant||8. Utilities/critical infrastructure|
|9. Transportation/distribution||9. Transportation/distribution|
|10. Hotel/hospitality||10. Hotel/hospitality & airports|
These top 10 market sectors provided the most significant portion of revenues to systems integrators in 2014. For the past several years, corporate/property management, education, and healthcare have steadfastly been among the top market sectors for integrators.
Source: SDM Top Systems Integrators Report, July 2015