by Peter Kusnic
May 18, 2022
The private security service market has become increasingly technology-driven over the past several decades. Advances in technology – especially electronics, computer hardware and software, and sensors – have altered not only the type of security products available to service providers, such as alarm monitors, consultants, and systems integrators, but also the competitive environment within the private security service sector itself.
These changes have impacted various segments of the security services market in different ways. For instance:
The Freedonia Group forecasts global security services revenues to increase 4.4% per year to $295 billion in 2026. Below, we highlight four key technology trends affecting market growth, and what companies are doing to capitalize on them.
The primary difference between manned and electronic security services is that humans can be more obvious as a preventive security element and can adapt more readily to unforeseen circumstances, while electronic systems can be a less intrusive security element and can provide a better record in the event of an incident. Still, even in labor-intensive security segments, technology can be complementary and can make operations more efficient and effective.
In particular, services such as security consulting and systems integration have strongly benefited from this changing environment. Systems integration vendors are often called in to update existing security systems with new technologies or to create whole systems with updated components, including:
Growth in systems integration has given security service providers an incentive to acquire and develop new technological competencies. Greater integration of physical and digital security systems continues to broaden the scope of ways in which security service providers can add value.
Security consultants – who are often employed to recommend the use of specific security equipment and systems and design complete systems – have also benefited from the growing complexity of security technology, as it has made their expertise more valuable.
As a result of these trends, large firms increasingly emphasize integration and consulting services in their marketing. In addition, the desire to increase expertise in these specialized segments has been a driver of acquisition activity.
Building automation systems often incorporate occupancy sensors, which can automatically turn on or off lights or heating based on whether a room or building is occupied. These sensors can also be used for security purposes, triggering alarms when areas are occupied outside of normal hours or without proper access procedures. As a result, security systems providers are increasingly being asked to integrate their offerings with broader building automation systems.
Access control can also be managed by building automation systems, with doors locking automatically at certain times or based on occupancy. In secure environments where access to certain areas depends on credentials, these systems can dynamically update based on the individuals present.
The increasing breadth of building automation systems also poses security risks, creating a larger attack surface that can be vulnerable to hacking:
Systems integrators serving commercial customers are using smart technology to enhance the value of their offerings. In particular, commercial security systems increasingly boast features incorporating data analytics:
The proliferation of internet-integrated electronics technology has also significantly boosted the capabilities of electronic security equipment, with a mixed impact on service revenues:
Greater penetration of smart home systems and internet-integrated devices are also providing opportunities for systems integrators to provide services targeted at the residential market. For example, ADT’s ADT Control smartphone app allows remote management of home security systems and can be integrated with popular smart home systems.
Improvements in video monitoring technology represent an important trend in the alarm monitoring segment and have increased the ability of these providers to offer value-added services with high profit margins. In particular, cost reductions in the transmission and storage of data have made it more feasible to offer video monitoring as a remote service, rather than merely as an element of an in-house security system.
Many jurisdictions require verification of alarms before authorities can intervene, and the need to physically verify intrusions has historically created a lag in response that limited the value of entirely remote security monitoring. Video monitoring allows for quicker verification, boosting the value of the service by reducing police response times.
Video monitoring systems also incorporate features like thermal cameras in addition to traditional video:
While video monitoring services hold strong growth potential, they compete to an extent with manned guarding services, and widespread adoption of video monitoring could lead firms to eliminate guards in an effort to reduce labor costs. However, the presence of manned guards serves important deterrence purposes, which are not matched by the presence of video cameras.
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