Alarm monitoring is one of the oldest security businesses. When away from one's home or business, alarm monitoring offers the reassurance of knowing someone is vigilantly standing by. Should the worst happen — fire, broken window or intrusion — professionals will have taken the appropriate response. The right authorities will be notified by alarm monitoring operators, providing peace of mind.
Global security monitoring revenues totaled about US$40 billion, according to First Research in a July report. This encompasses residential and commercial alarm monitoring. Europe and the U.S. are the largest security system markets, dominated by ADT Security Services, Securitas and G4S.
Effective alarm monitoring requires a stable infrastructure, robust enough to not miss a single signal. However, wired or wireless transmission media provide unique benefits and drawbacks. Redundancy depends on multiple technologies. Signal priority makes sense of which alarms are most important. The majority of alarms are false, wasting the time and resources of law enforcement and other first responders. Newer systems have the infrastructure to support audio or video monitoring as secondary verification. However, these systems require more bandwidth or a complete system overhaul, as more customers rely on mobile devices.
Our coverage explores alarm monitoring for commercial and residential applications. We explore the market potential for each, along with key technology developments, usage issues and challenges. While there is no single solution, a successful one combines people, processes and technology to solve problems quickly.
For business owners, alarm monitoring offers unbeatable value for securing assets. a&s examines the market conditions for commercial monitoring, as well as technology trends and usage issues.
The commercial market dominates the alarm monitoring landscape . “Growth rates are highest for commercial applications where there are more significant cost savings to be made by outsourcing monitoring services or replacing or augmenting guard services with monitoring,” said Ewan Lamont , Market Analyst at IMS Research. “Overall market growth, for residential and commercial services combined, is forecast to be approximately 4.2 percent CAGR.”
Alarm monitoring is largely concentrated in the U.S. and Europe. The security systems services industry in the U.S. includes about 5,000 companies with combined annual revenues of US$15 billion, according to First Research. However, the 50 largest companies generate 60 percent of the US industry's revenue. China issued alarm-monitoring regulations in 2010, but monitoring centers are largely operated by the police, except for private centers run by Secom in Beijing and ADT in Shanghai.
Growth in the commercial sector is driven by new office construction, which has slowed due to economic conditions. “On the commercial side of things, new businesses are opening at a slower pace, which hurts that market,” said Gary Perlin, Director of CCTV Products, Tri-Ed/ Northern Video Distribution.
“There is still a healthy market for retrofitting existing systems with new technology like IP-based systems.”
Commercial accounts had less attrition compared to residential ones, said Morgan Hertel, VP and GM for Mace Central Station. Its business is split 65:35 between commercial and residential alarm monitoring.
Demand remains strong for alarm monitoring, as customers look for higher levels of performance, convenience and simplification of technologies. “This industry has been on a very consistent growth path for around 20 years, even performing well in difficult economic times,” said Rich Hewitt, Director of Commercial Sales for Protection One. Commercial monitoring offers more options beyond fire and security alarms. Some businesses monitor crucial equipment, such as freezer temperatures or power supply to industrial air pumps for fish farms or aquariums, said Tye-San Yap, GM of Certis Cisco Security, a Singaporean security service provider. If alarms are triggered for equipment, operators will notify the customer, saving on downtime.
Remote Video Monitoring
As monitoring stations improve their infrastructure, video is becoming more accessible. This helps for secondary verification of alarm signals, reducing the number of false alarms. Video monitoring is one of the fastest growing services in remote monitoring, worth nearly $250 million in the Americas and EMEA in 2009. “Everybody is a winner with remote video monitoring services,” Lamont said. “Alarm dealers can make bigger margins on remote video services compared to alarm monitoring, as well as generating revenue from increased equipment sales, installation and maintenance.”
Xtralis recently acquired German HeiTel Digital Video for its remote video monitoring, demonstrating its potential. Xtralis' annual growth in the video monitoring market is expected to exceed 10 to 15 percent in the years to come, said Kim Loy, Deputy GM of Global Security, Xtralis.