Private Security Services

Report Overview

17th Edition

This study analyzes the US private contracted security services market, including providing security for facilities, assets, and personnel. Revenues for private security services are examined by service and market in US dollars. Historical data for 2008, 2013, and 2018 and forecasts for 2023 are presented in current dollars (which are not adjusted to account for inflation).

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Revenues by service include:

• guarding (includes patrolling, monitoring surveillance equipment, and overseeing stationary locations)
• security monitoring (includes planning security systems, performing maintenance and reviews, reacting to events, and providing post-event support)
• private investigations – includes hired personnel to perform such duties as:
  • criminal, credit, and driving record searches
  • verification of social security numbers, educational and professional credentials, previous employment, and property ownership
  • the location of missing persons
  • polygraph examinations
  • undercover operations
  • searches for data for legal proceedings and regulatory matters
  • retrieval of electronic data
  • forensic accounting
  • insurance, internal theft, competitive intelligence, and due diligence investigations
• systems integration and management, including:
  • installation of new security systems, adding new components to an existing system, or integration of security equipment into overall building functions
  • recurring services such as system maintenance, database management, and system monitoring
• cash-in-transit and related services (includes the transport of cash, other legal tender, and valuables via armored transport vehicles, and the provision of ATM management and replenishment, cash management, secured logistics, and other back office services)
• security consulting (includes proactively planning security systems, performing maintenance and reviews, reacting to events, and providing post-event support)
• pre-employment screening (includes the screening of job applicants)
• drug and contraband detection dog services
• training for guards and other security personnel
• sweeping for bombs and surveillance devices
• renting vault rooms for off-site storage of computer data and other valuables
• private airline security services

Markets include:

• nonresidential:
  • commercial (commercial offices and office buildings)
  • industrial (manufacturing facilities and warehouses)
  • government (courthouses, embassies, jails, military bases, monuments, prisons, publicly owned utilities, other government buildings)
  • institutional (includes drug treatment centers, hospitals, nursing homes, psychiatric facilities, and rehabilitation centers, as well as primary and secondary schools, higher education facilities and campuses such as colleges and universities, day care centers, tutoring centers, non-degree granting institutions such as certificate, business, or trade programs)
  • other nonresidential (includes theaters, concert halls, convention centers, sports arenas, stadiums, and other public venues; private utilities plants; nonprofit agencies; and air and nautical ports, bus terminals, train stations, and other transportation facilities)
• residential (includes single-family homes, multifamily homes, and manufactured homes)

Excluded from the scope of this study are:

• public safety personnel (e.g., police officers, public corrections officers, federal agents, and firefighters)
• in-house, proprietary security services, such as guards, detectives, and off-duty police officers on the paid staff of (non-security) business establishments
• equipment installation services (aside from systems integration)
• locksmith activities
• security products distribution and sales
• private correctional facility management

Revenues for private security services in the US are forecast to grow 3.4% annually through 2023 to $80 billion. Private security services are supported by a number of key factors:

• Perceived risk of crime: While reported crime rates continue to fall, highly publicized events are causing consumers to feel an elevated sense of risk.
• Healthy economy and construction activity: As buildings and homes are built or renovated, end users are more likely to install or upgrade security systems, particularly when economic conditions make the costs affordable.
• Advancing technologies: New technology is bringing about higher value upgrades, supporting systems integrators, and enticing adoption of products, particularly in the residential security monitoring segment.

The best opportunities are in service areas where technological innovations are enhancing the functionality and efficiency of the service, thereby raising average recurring revenue per customer and expanding the potential customer pool.

Acquisitions Abound as Market Leaders Expand to New Segments & Strengthen Positions

The private security services industry has experienced a vast amount of merger and acquisition activity in recent years. Allied Universal, a market leader in guarding services, has made acquisitions to both strengthen its core offerings and supplement its services. In 2018, the company acquired US Security Associates and Covenant to expand its guarding position, while, in 2019, the company acquired a number of companies that focus on other services like consulting, systems integration, and security monitoring. Other transactions made by major companies in 2018 and 2019 include:

• Brink’s acquired Dunbar to solidify its position in the cash-in-transit and related services segment, further consolidating this area.
• ADT acquired multiple companies, including Red Hawk Fire & Security, to grow its commercial security monitoring business.
• Convergint made a series of acquisitions to build its range of systems integration services.

Tech & Competition Increasing Residential Security Monitoring Subscribers

The composition of the residential security monitoring market is changing rapidly. Competition from DIY installation products – which are either self-monitored or upgraded to professional monitoring – and multi-service operators, which bundle products with cable and internet packages, is raising awareness and accessibility to security monitoring products. While some users of traditional security monitoring will opt to swap, the overall ceiling of subscribers is expected to increase.

Systems Integration & Security Consulting Continue to Show Robust Growth

As technology and threats continue to evolve, it can be harder for consumers to understand and guard against security issues. As a result, private security service providers are increasingly important in educating and developing security plans. Systems integrators and security consultants stand to benefit from bridging the gap between current technology, consumer awareness, and higher levels of safety and preparedness.