To say 2020 was a bit of a roller coaster ride is perhaps an understatement. At this time last year, most security integrators anticipated a strong 2020, only to be thrown into turmoil late in the first quarter by the emergence of the COVID-19 pandemic. This year’s SDM Industry Forecast Study (a report published every year since 1982) certainly reflects that, with more than 30 percent anticipating finishing 2020 with a decrease in revenue. However, this year’s forecast — illustrated in the graphs on the following pages and on SDM’s website at — underscores the resilience of the security industry and a continued sense of optimism. Despite a rocky year that saw a series of shutdowns and slowdowns, there was still double-digit growth in both total annual revenue and recurring monthly revenue (RMR) for integrators and dealers who participated in the study. Their total annual revenue increased by an average of 17 percent, while RMR grew by 23 percent, on average — one percentage point up and five percentage points down from 2019, respectively.




OUTLOOK: Majority of Security Companies Expect Growth This Year charts-1 Respondents to SDM’s Industry Forecast Study were slightly less optimistic this year after a rocky 2020 that saw their expectations not met. However, 60 percent still expect double-digit revenue growth in 2021, versus 65 percent last year. Among those, the expected mean increase is 23 percent, which is up from last year’s mean increase of 19 percent.
Integrators Rate the State of the Market charts-2 Security integrators indicate that video surveillance was again the most rewarding market segment for producing sales in 2020, giving it an average of 3.6 out of 5, down just a tad from 3.83 last year. Following video surveillance was access control, then fire alarm, also down just slightly from last year.
Average RMR Increases 23 Percent Chart 3 Among companies that generate recurring monthly revenue, more than half noted an increase in their RMR in 2020 over 2019, down 11 percentage points from last year. Average 2020 RMR growth was 23 percent higher than 2019’s. This table shows the distribution of RMR in various dollar ranges, comparing 2020 with 2019. About half of the companies who responded to the study have $25,000 or less in RMR.
TOP BUSINESS CHALLENGES: COVID-19 & Increasing Sales Chart 4 Not surprisingly, a large portion (50 percent) of respondents said that COVID-19 impacts will be their biggest challenge in 2021. Finding/retaining employees fell from the No. 1 spot last year to No. 3, with just over a third saying this will continue to be a challenge faced by security integrators. Forty-two percent of survey respondents now say increasing sales will be their second biggest challenge after the pandemic fallout, when asked to indicate the three greatest challenges their business expects to have this year. “Keeping current with technology,” “competing effectively” and “generating RMR” all fell in the list of top concerns by double digit percentage points.
Managed/Cloud-Based Services Currently Offered Chart 5 Managed access control surpassed remote video monitoring as the top managed/cloud-based service currently offered by SDM Industry Forecast respondents, although 67 percent noted they plan to offer remote video monitoring in the next few years, the highest percentage of planned offerings overall. VSaaS, cybersecurity and network health monitoring all grew percentage point-wise over last year, with network health monitoring growing the most at 6 percentage points higher than 2020.
COVID-19 & Economic Conditions Will Have the Greatest Impact on 2021 Sales Chart 6 Security integrators have consistently ranked “economic conditions” and “capital spending by business” as the top two factors they think will significantly affect their sales, but this year, COVID-19 eclipsed both of those, with nearly 30 percent listing it as the top factor for 2021. A few factors that were higher on the list last year will be less of a concern, according to respondents, including sales and marketing, and purchasing decisions shifting to IT. The factors in this list could have either a positive or a negative effect on sales.
Revenue Change Expectations for 2021 Chart 7 Revenue is expected to increase for over half of respondents in the next year for video surveillance systems, access control systems, and video analytics. Managed services/cloud-based services and monitoring services are also expected to see revenue growth next year by a majority of respondents.
External Capital Usage Chart 8 Over one-third of integrators say they currently use external capital or plan to for the first time this year. This question was included in the Industry Forecast Study for the first time this year.
5-YEAR REVENUE BREAKOUT BY: Type of Service Chart 9 SDM’s Industry Forecast Survey tracks how integrators’ total revenue is distributed among types of services. Together, 47 percent of revenue comes from sales and installation — across both residential and non-residential segments, with the non-residential portion increasing 2 percentage points over last year.
REVENUE BREAKOUT BY: Type of Product Chart 10 SDM’s Industry Forecast Survey tracks how integrators’ total revenue is distributed among types of products. The 2021 results show a 6 percentage point increase for video surveillance, which continues to top the chart for the fourth year in a row, while intrusion alarms fell 6 percentage points to its lowest percentage in five years. Access control was the only other category to increase its share over last year, by 3 percentage points, while integration held steady at 18% for the third year in a row.
STRONGEST RESIDENTIAL MARKET: Middle-Market Homes & New Construction Chart 11 The results of SDM’s 2021 Industry Forecast Study show that security integrators continue to look to existing middle-market homes for their residential sales. New construction remained the second most likely sector, but closed the gap to just 3 percentage points, versus 13 percentage points last year, with a net gain of 7 percentage points over 2020.
STRONGEST NON-RESIDENTIAL MARKETS: Industrial, Commercial, Education Chart 12 The integrator channel expects its top three most prolific segments in 2021 to be industrial/manufacturing/distribution — up 5 percentage points from last year — commercial office space — down 9 percentage points over last year but still in second place — and education. Hospitals and healthcare are a close 4th place after a dip out of the top five last year.
Average Monthly – Residential: $86 Chart 13 The average monthly monitoring price of residential systems among respondents to the study was $86; however, the median price of $30 is likely more realistic. Just over half (52 percent) of security integrators report their average residential price is $30 or less.
Average Monthly – Non-Residential: $336 Chart 14 The average monthly monitoring price of non-residential systems among respondents rose sharply this year, with integrators reporting an average monthly price of $336, versus $161 last year. While a median price of $48 is likely more realistic, that is also up $8 over last year. Due to the broad nature of types of conditions that can be monitored for a non-residential subscriber, the prices charged by security companies are distributed across a wide range of categories.


What’s more, they remain optimistic for 2021. More than half (60 percent) of integrators expect their total annual revenues will increase in 2021; of those, the anticipated increase is 23 percent, up from 19 percent last year. Only 4 percent expect revenues to decrease this year. This largely tracks with this year’s Industry Forecast panel, made up of four security integrators from different parts of the country.


The SDM Industry Forecast Panel: 2021

Melissa BrinkmanMelissa Brinkman prides herself on putting the customer first and finding ways to be the trusted security provider of choice. After a career in the hospitality world, she began her career at Rochester, Minn.-based Custom Alarm in 1998 in sales and worked her way through various departments in the company before her promotion to CEO in 2014. Custom Alarm ranked No. 83 on the 2020 SDM 100.


Brent DuncanBrent Duncan joined Earth City, Mo.-based Interface Security Systems in 2019 as chief revenue officer and was promoted to President and COO in 2020. Brent leads all revenue and operations functions including sales and marketing, solutions engineering, field operations, NOC and SOC, governance and customer experience. Interface Security Systems is a leading managed services provider delivering business security managed network, UCaaS and business intelligence solutions to distributed enterprises. Interface ranked No. 7 on the 2020 SDM 100


Eric GarnerEric Garner is the President and CEO of Mountain Alarm, headquartered in Ogden, Utah. Mountain Alarm is a third-generation family business with more than 300 team members and over 50,000 monitored customers. They currently operate out of fourteen locations across Arizona, Colorado, Montana, Nevada, Utah, and Wyoming. They are focused on growing organically and through acquisitions in the Intermountain West. Mountain Alarm ranked No. 25 on the 2020 SDM 100

John LoudJohn Loud is president of LOUD Security Systems, Atlanta. LOUD Security ranked No. 87 on the 2020 SDM 100.



“We started 2020 forecasting low double digit growth,” recalls Brent Duncan, president and COO, Interface Security Systems, Earth City, Mo. “We had a really strong January and February, then obviously everything went sideways starting in March. The second quarter was very slow and we focused on reaching out to our customers and figuring out how to support them as they were navigating the shutdowns. Things were flat through July, then we saw this big whipsaw in the third quarter as things opened back up. There was a lot of pent-up demand. In the third quarter we saw a 300 percent increase over the third quarter of 2019 and things have stayed steady since.”

Melissa Brinkman, CEO, Custom Alarm, Rochester, Minn., reports ending 2020 up, but by less than anticipated. “We finished the year up from 2019 about 4 percent and RMR was up about 2 percent,” she says. “We actually had a strong first half of the year before we really starting seeing [the effects of the pandemic] in early April. In Minnesota the slower times are typically November through February, but last year we didn’t experience that. We were thankful to get a nice cushion for when the bottom fell out.”


The Panel Talks Revenue Expectations for 2021

SDM: What is your revenue forecast/expectation for 2021?

Brinkman: We are expecting and budgeting for a 7-8 percent increase and of that about 10-15 percent growth on installations. Some of that is pent-up demand and the needs of customers that are changing from the standpoint of access and video surveillance, coupled with a lot more cloud and remote services. Customers are upgrading in order to have the capacity to do that. Honestly, our sales team is really hitting their stride, and that is also a factor.

Loud: The second half of 2020 has been incredibly robust. I don’t see a change of that in our forecast whatsoever. We are just dealing with organic growth, not even acquisitions or other pieces we have on the radar. We are looking for healthy and robust sales. In talking to our manufacturers and other dealers I don’t have many that have had that bad of a financial struggle. For us, being about 60 percent residential and 40 percent commercial, even the folks that had stacks of paper on their desks of proposals from us and many other companies that didn’t push the button and say let’s move forward, they did eventually get through that stack of papers and say, “Hey those cameras and access control do make sense. It is over time for me to upgrade that fire system or do a revamp of that.” So we are looking for a strong, healthy 2021.

Something else I’ll share is that just prior to COVID-19 we got our trademark for life safety facility manager. When you deal with sprinklers, NFPA 72 system tests, hood systems, we put a full program together to basically say you have known and trusted us for 25 years now; give us the opportunity to be your partner so you have one call to put all this together. As we have gotten to the 4th quarter we see our sales team lighting up about this.

Garner: We did two acquisitions in Reno, so that will be primary driver of our growth. Our backlog is consistent with where it was a year ago. Sales and bookings remain strong. We are not breaking records like Loud is, but we are forecasting about 10 percent growth in 2021, largely driven by acquisitions.

Duncan: We are forecasting 20 percent growth. Some of it ties to how we have significantly scaled our go-to-market structure, sales team and some additional technologies we are using, partnerships, product enhancements, particularly around interactive video, and personal protection monitoring. I talked about this whipsaw effect with all this pent-up demand that we saw swing back dramatically in the third quarter. So our expectation is that we are going to probably see Q1 slow down as people wait for things to calm down, but I think we will see the same Q2 whipsaw as organizations become more comfortable with the state of the economy. That is really in line with what was our 2020 forecast. We view this as being a temporary situation and we can see the light at the end of the tunnel, and the expectation is that any gap in Q1 we will see made up over the course of 2021.

From a product standpoint we have seen a significant change and shift and with that comes increased opportunity. There are several factors like crime and the perception that it is higher, and the social unrest behind it; so I think the desire to protect customers, assets and employees is just being highlighted. We have developed a number of different products like personal protection monitoring that an individual can wear, including audio and video, audits and voice downs. These are products that fit this new environment and should represent opportunities for us to drive revenue.


Geography seemingly played a role in when and how big the impacts were for many security dealers and integrators. “We are geographically focused in the Intermountain West,” says Eric Garner, president and CEO of Ogden, Utah.-based Mountain Alarm. “It was very interesting. Everyone shut down for a couple weeks in March; but most states with Republican governors weren’t locked down very hard. Now we have crazy high cases, but we are still not shutting down much. It really only lasted two to four weeks, then we were able to get right back to work [with precautions in place]. We had a little lull for the month of April but bookings remained really strong. We expect our 2020 revenue to be up about 6.4 percent and a lot of that is install revenue. We also did a lot of acquisitions during the pandemic. It would probably be lower if we hadn’t done that.”

Atlanta-based LOUD Security Systems also experienced growth in 2020, says John Loud, president, who adds the election year and demonstrations to the mix of reasons why. “The second half of 2020 has been incredibly robust. I don’t know if it is the uncertainty with the elections or riots and the social unrest that has gone on around Atlanta, as well as our state being relatively open, but there are a lot of folks sitting at home pondering the safety of their environments and our organic growth starting in the month of June, we had never seen numbers like that. But the best news was July made us look like we didn’t even know what we were doing in June. September was even better than June. October was a freeze/hold moment and November has been far greater.”


The Panel Talks COVID-19 Impacts

SDM: What impacts has COVID-19 had on your business and your customers’ businesses this year, and what do you anticipate will be the impact in 2021? What products and services are doing better than expected this year, and how has COVID-19 influenced that?


Whether their 2020 was decent or great, one thing it wasn’t was predictable. Loud and the other integrators on this year’s panel all anticipate 2021 getting back to, if not precisely normal, then at least “new normal” and being the year they had hoped 2020 would be. But they realize that may not happen overnight.

At the time of the roundtable discussion in early December, the U.S. was experiencing a rise in COVID-19 cases in nearly every state. Duncan says that as cases rise, some customers are having to pull back again, but there is a lot of optimism around the vaccine. “Hopefully as we move into second quarter it will correct,” he says. “I think the second quarter of 2021 will look a lot like the third quarter of 2020 and we are preparing for that.” Duncan is forecasting a healthy 20 percent growth this year, which is in line with what the company had predicted for 2020, he says.

“We are expecting and budgeting for a 7 percent increase and of that, about 10-15 percent growth on installations,” Brinkman says. She cites both pent-up demand as well as changing customer needs as reasons for optimism. Cloud and remote services in particular are technologies that Brinkman anticipates driving growth.


The Panel Talks Recurring Monthly Revenue

SDM: How did your company’s 2020 recurring monthly revenue (RMR) change compared with 2019? And how do you expect 2021 RMR will change compared with 2020?

Garner: In 2020 we grew our RMR 28 percent. A small percentage, probably 3-5 percent of that was organic and the rest was through acquisition. In 2021 we are probably just going to be focused on digesting those two large acquisitions. Our organic estimate is once again between 3-5 percent organic RMR growth and that is all we are shooting for in 2021.

Brinkman: We had about a 2 percent growth in 2020 for RMR. We are anticipating  probably about 3-5 percent in this coming year plus looking at some acquisitions. We are focused on not just traditional alarm monitoring but the interactive automation as well as really ramping up our ability to do more cloud services. We in the game now at least so we are hoping that number is conservative as we get more traction both from an access and a video standpoint.

Loud: The month of October was the lowest attrition month we have had in a given month in probably five years. Everyone was just frozen. As we look at what is coming down the road, we will hopefully see a reduction in the attrition factor. We have done one acquisition this year and I think we will have the opportunity to do one or maybe two more this year, which will certainly be a nice rise in our RMR. I mentioned earlier our Life Safety Facility Manager program. Our organic RMR from June to now has been a strong and steady increase. I doubt we will stay at that pace, but if we can blend that normal organic growth with some reduction of the attrition and fill in the life safety and some acquisitions we will certainly be north of 20 percent. I don’t have a hesitation with that number.

Duncan: We have a legacy interface business that has a regional alarm company that operates in California and the Midwest with a big presence in the Southeast and Central South. Then we have our group of consumer facing distributed enterprise like retail, restaurants, both dine-in and quick serve.


Indeed, 64 percent of Industry Forecast respondents said they currently offer managed access control, while 62 percent offer remote video monitoring. A whopping 67 percent plan to offer remote video monitoring in the next 12 months. More integrators also planned to offer video surveillance as a service in the coming year (60 percent) than currently offer it (56 percent). Sixty percent of respondents who offer it predict an increase in revenue coming from managed services and cloud-based services this year.

Loud echoes the pent-up demand prediction. While there were customers that had stacks of papers and order forms that sat on their desks, they did eventually get through those and turn to the future. “They see those cameras and access control do make sense; we are looking for a strong and healthy 2021,” Loud says.


The Panel Talks Opportunities for 2021

SDM: What are the biggest growth opportunities you see for your business in 2021?

Duncan: For us it is a lot of these new products that tie back to interactive video, talking about crime, policies around COVID-19, the new store formats where you have employees working outside of the four walls doing curbside, and doing personal protection monitoring when they are moving outside of the typical store format. The whole interactive video suite along with all the integrated audio to be able to voice down into different environments represents a huge opportunity. Then also there is this business intelligence video analytics opportunity. For example, if social distancing isn’t being adhered to in a store we can do voice talk down to remind them of store policy. All of these uses of video and business intelligence and analytics are very apropos for where we are going in 2021. I think  this has just accelerated the adoption for these products. There is just a much higher awareness of how organizations can use technology to secure assets, and protect their employees and customers.

Garner: I think there are really two areas of focused growth in our marketplace. Small and medium business I think there is a huge opportunity to upgrade customers to a better platform, that being cloud video and cloud access control. Our manufacturers are finally catching up to the demand. But if you think about how many businesses are out there that maybe are not even our customers yet that are still using Vista or other older technology there is a a lot of opportunity to sell to small businesses. We can say, hey you can unlock or lock or disarm remotely now.  You can see if your employees are showing up on time. That is not totally new or specific to COVID-19, but there is definitely demand for it. They wanted it before, but it was a luxury and now they kind of need it because you can’t always have everyone at the office. That’s one area that I think we are going to see some good growth. Then, we are historically very much a fire alarm company. About half of our revenues come from fire alarm installation and inspections and service. We see huge opportunity to continue to grow in that space. We are still very focused on the fire alarm but more so on the retrofit than new construction. We see that as a potentially big growth driver for 2021 as well

Brinkman: I would say all of us are having to look at how to be more effective in our businesses, and that goes for customers as well. We have been thrust into this different way of doing business and trying to be as profitable as possible while dealing with all the unknowns, especially the uncontrollable ones. We see an opportunity in 2021 to continue to leverage the remote ways businesses can be effective and how they can manage their businesses a little better by leveraging technology put it in the palm of their hands. Where before it was more of a luxury and now we have all had to do things like this remote video call. Now you have fewer people in office, but you still have to have a lot of controls in place, probably now more than ever, because there are fewer eyes on site. There are more vulnerabilities to brick and mortar businesses with more people who aren’t supposed to be there trying to get in fewer people on site to make sure they don’t. So leveraging the technology is something we are really good at doing, and educating our customers on how they can do that in a very cost-effective way. Also I see that our customers — because there have been a lot of stops and starts — people are a little gun shy about capital expenses so we are looking at how we can have more managed services. Goes hand in hand with how they are running their business smarter, with leveraging technology and remote services.

Loud: I think growth opportunities, obviously we are aggressively going after cellular updates. The communication factor that we have going on with subscribers, from systems upgrades and enhancements for interactive services. We undertook this pretty aggressively starting back in February. But certainly I hope the biggest will be our Life Safety Facility Manager aspect. We have been far more focused in the last two or three years on the promotional side of everything and we have been seen substantial movement on the commercial piece of it, which was a defensive play from DIY and the bigger residential competitive factors. From the growth of Life Safety Facility Manager, we will certainly look for the right acquisition piece of the puzzle if that presents itself along the way and interactive solutions commercial, which for us is primarily access control, and certainly fire solutions is a key piece of our business also.


Garner says Mountain Alarm is forecasting about 10 percent growth in 2021, largely driven by acquisitions such as the purchase of Reno, Nev.-based CEI Alarm that was announced in Mid-December.

(To read more about the strategies of each of these security professionals, see the sidebars throughout this article and on SDM’s website, “The Panel Talks,” at

These anecdotal responses align with many of the survey responses from the Industry Forecast Study, where integrators were asked both about their top business challenges as well as what will have the greatest impact on their 2021 sales. Not surprisingly, half of respondents listed COVID-19 as their top challenge this year, while 29 percent listed it as having the greatest impact on sales, followed closely by economic conditions. Interestingly, the question about impact can be either positive or negative. Only time will tell which is the case here.


The Panel Talks DIY & Other Competition

SDM: What or who do you view as your company’s greatest competition in 2021? Is it DIY, or something else?

Loud: For the four of us on this call, when you look at the effects of DIY and what we thought three and five years ago, when we thought about Comcast and AT&T, we thought the world was over as we knew it. But when you look now at where some of those are and you look at the effect of what it is doing to you on a monthly basis, I would have to guess in all of our cases it is minute relative to where it was say, two or three years ago. We have a huge Comcast presence here and they have stopped all their marketing quite some time ago. I thought they would have done more.

My personal take on DIY is that in the telling of time over the last few years, that is not our typical customer. We even tried to get into a partnership and I spent a lot of money and we literally got five customers. We turned the marketing spicket on and we never got there. Did we lose some customers to SimpliSafe along the way? Absolutely. But it’s just not near the numbers we thought.

Garner: Denver is a test market for Comcast and we were hit pretty hard when they came in, but we are not seeing anything from them right now. For us, it is other local and regional companies and Ring on the residential side.

Brinkman: For us it is the unknown how the pandemic is going to continue to negatively affect our customers in certain market segments. What we have seen over the past nine months and the impact to many of our locally owned businesses has been significant. We are watching and waiting to see how they will all come out of it.

Duncan: As a large commercial security and network integrator, we always have had to take on well-known challengers, but that’s nothing new for Interface. As businesses change their models to adapt to the significant changes in consumer behavior and regulations, managed service providers like Interface are well placed to help steer enterprises through these choppy waters with innovative technologies, customizable solutions and superior customer experience.


If the panelists are any indication, it seems as if many security integrators feel they have their feet under them, are prepared to weather any lingering pandemic issues and are firmly looking ahead to new opportunities.

“Our expectation is that we are probably going to see a Q1 slowdown as people wait for things to calm down, but I think we will see the same Q2 whipsaw we saw [in Q3 2020] as organizations become more comfortable with the state of the economy,” Duncan says. “We view [COVID-19 and its impact] as being a temporary situation and we can see the light at the end of the tunnel.”


The Panel Talks Supply Chain

SDM: Did you experience any supply chain issues as a result of COVID-19?

Brinkman: We had some challenges. But we got in front of some things early on when we thought we might have an issue with some big jobs we had coming up. Throughout the fall we had significant backlog with one manufacturer in particular for basic devices, which caused a huge backlog with our residential and small commercial customers who are usually just expecting a one to two week turnaround and it was weeks into months.

Loud: Same for us. For me personally, I don’t think we had any pandemic or COVID-related supply chain issues. I was forecasting it, but my fear never became a reality. We were purchasing based on what we knew we would consume throughout the year. We went far beyond just the cellular devices in buying ahead. 

Garner: I didn’t see any impact. Our manufacturers did a good job. There were a few items from every vendor that occasionally were tough to get throughout the year, but we were either able to find a substitute or go with a different product offering to make it work. We didn’t wait for product; we would adjust on the fly and go a different route.

Duncan: We had some minor ones but we got creative to work around them. We had a 1200 site video integration project and we had to get creative and clever but it was nothing that caused any real disruption and generally all related to the manufacturing.


Editor’s Note: This article is based primarily on a report produced by Clear Seas Research, “SDM Industry Forecast,” produced in November 2020. To learn more about the report or to purchase, visit

Clear Seas Research is a full service, B-to-B market research company focused on making the complex clear. Custom research solutions include brand positioning, new product development, customer experiences and marketing effectiveness solutions. Clear Seas offers a broad portfolio of primary, syndicated research reports and powers the leading B-to-B panel for corporate researchers, myCLEARopinion Panel, in the architecture, engineering, construction, food, beverage, manufacturing, packaging and security industries. Learn more at



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For more of SDM’s Industry Forecast Study data for 2021, see the rest of the tables and graphs from the Forecast Study online at