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:
- Alarm monitoring services have enhanced the range and effectiveness of their offerings with the development of low-cost video surveillance systems, wireless internet-based communication, remote diagnostics, and integration of comfort and lighting functions.
- The software in monitored alarm systems, video surveillance systems, and other electronic security products can now be updated remotely, limiting the need for visits by technicians.
- More labor-intensive services such as guarding increasingly compete with high-tech security electronics that can provide similar protection with little human intervention.
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.
Physical vs. Digital Security
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:
- access controls
- video surveillance
- environmental controls
- fire detection and suppression systems
- conventional intrusion detection systems
- other building management systems
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:
- This contributes to the ongoing blurring of the line between cybersecurity and conventional physical security.
- Cybersecurity providers are increasingly emphasizing operational technology (OT), which describes digital systems that control physical devices, in addition to information technology (IT).
- Security providers that offer alarm monitoring or systems integration services are thus increasingly being required to develop cybersecurity competencies.
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:
- Emerging facial recognition technology is boosting the efficacy of video-assisted access control systems, allowing for labor-saving automation and reducing the risk of human error.
- With sufficient data collection, security systems that monitor employee movements can flag unusual behavior, allowing rapid response to potential security breaches.
- Monitoring of traffic patterns can help to optimize placement of security guards in environments like malls.
The proliferation of internet-integrated electronics technology has also significantly boosted the capabilities of electronic security equipment, with a mixed impact on service revenues:
- Equipment providers increasingly offer packages that allow customers to monitor their security systems via a smartphone or tablet computer, which compete to an extent with manned alarm monitoring, particularly in the residential market.
- Customers willing to invest in electronic security systems can still benefit from the attention of a central monitoring station, and these packages often serve as a gateway to the purchase of higher value security services.
- The presence of internet-integrated devices introduces more potential points of failure into systems, raising the value of hiring third-party specialists to analyze and develop security systems.
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:
- Thermal cameras have advantages for nighttime monitoring and are less prone to false alarms, although the detail captured by these cameras tends to be limited.
- In addition, thermal cameras could potentially help to detect people carrying illnesses. This topic has become increasingly popular due to the COVID-19 pandemic, illustrating the potential of security services to serve public health roles in addition to addressing crime.
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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