The Security Alarm Services industry is expected to grow 2.4% per annum by 2016, at a CAGR of 6.8%. Some of the major players in this industry include ADT (ADT Security), Reliance Protectron Services, and Devcon Security. Other companies have joined the industry through acquisitions, such as Devcon Security and Reliance Protectron Services, which were acquired by ADT in 2013. In February 2016, ADT was acquired by Apollo Global Management (ASG) and merged with Protection One. Other players have entered the industry because of the emergence of smart devices and digital home features.
Cost structure of security alarm services industry
The cost structure of the Security Alarm Services industry in the U.S. differs from the average in several ways, and costs are generally higher than the sector average. While the cost of goods sold represents the largest part of the average company’s cost, costs for labor, depreciation, and marketing are also significantly higher than the sector average. In addition, firms incur higher costs for administrative, legal, and accounting expenses. Rent and utilities represent 2.2% of industry revenue, while marketing and administrative costs are 4.4% of industry revenue.
By 2021, security alarm services will generate $5.4 billion in revenue, according to IBISWorld. Equipment and installation will make up most of the remaining revenue. As a result, many national and regional firms are buying up smaller companies and smaller accounts, and cash-rich utilities, powerhouse retailers, and Wall Street investors are investing in the industry. However, as the home security industry remains an amorphous, overpriced market, and the rise of the do-it-yourself sector, companies are focusing less on this sector.
Regional market size of security alarm services industry
The Regional Market Size of the Security Alarm Services industry is affected by a number of factors. The size of a region’s population and the number of security alarm services establishments in a given area is directly related to the number of people in the region. The largest share of the industry is found in the Southeast, where Florida represents over 9.7% of the industry’s total establishments. The Mid-Atlantic region is second, accounting for just over half of the regional market.
The Security Alarm Services industry is affected by changes in construction activity, especially in the nonresidential sector. With the influx of commercial construction, the demand for security systems will increase. The value of private non-residential construction is predicted to increase by 2022. The market will be impacted by technological developments that are changing the way we live. The industry is expected to grow at a rate of 2.4% annually over the next five years.
Competitive landscape of security alarm services industry
The Security Alarm Services industry has experienced strong growth over the last five years, generating revenue of $22.5 billion in 2016. Factors driving this growth include changes in per capita disposable income, the rate of crime, and level of residential construction. Competition has increased the level of product differentiation and industry consolidation. There are now six main players in the industry, with ADT claiming the largest share of the overall market with 15.1% of revenues.
In addition to labor, industry expenses also increase. Most security alarm services operators incur costs based on labor and hire technicians and monitoring staff to perform their duties. Industry costs are higher than the national average, with utilities and rent representing nearly two-thirds of revenue. Marketing expenses represent nearly four-fifths of industry revenue. During the forecast period, labor costs are projected to increase modestly. The security alarm services industry is expected to see steady growth in revenue through 2020, due to heightened government investments in security systems.
Employee demographics of security alarm service companies
The Security Alarm Services industry has seen steady growth over the past five years, and is expected to grow at a moderate pace through 2027. While the sector is primarily driven by residential demand, companies in the Commercial Market provide installation, maintenance, and monitoring services. Businesses install security alarm systems to protect their property and employees, and to reduce their insurance rates. To learn more about this growing industry, read our latest report. Employee demographics of security alarm service companies are included in the following sections.
The average age of employees at a security alarm service company varies. On average, employees at Executive Security Systems, Inc. make between $25k and $40k per year. On the other hand, employees in this industry are rarely eight or ten years old, and are typically over the age of 18.