Companies in the security systems services industry sell, install, and monitor commercial and residential electronic security alarm systems. Major companies include US-based ADT and Tyco Integrated Security, along with G4S (headquartered in the UK), Secom (Japan), and Securitas (Sweden).
Demand is driven partly by home sales, new home construction, and new commercial and office construction. The profitability of monitoring companies depends on the volume of customers, as most costs are fixed. Large companies have advantages of scale in operating monitoring centers and in national advertising and brand recognition. Small companies often compete by selling customer contracts to the large monitoring companies, or reselling the monitoring companies’ services, which they buy wholesale. The US industry is concentrated: the 50 largest companies generate about 55% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are the sales, installation, and monitoring of electronic security systems. The industry consists of commercial and residential segments, each of which uses different types of equipment and monitoring. Most companies operate in only one segment. Monitored residential services account for about 50% of industry revenue, while monitored commercial services account for about 30%; security systems without monitoring account for most of the rest. The main components of a security system are door, window and motion sensors, control keypads, alarms, and communications modules.