IMS Research: American Service and Maintenance to Pass 33 Percent of System Integration by 2014

According to a new report on the American market for security systems integration, IMS Research has found that integrators are increasing their recurring monthly revenue (RMR) through service and maintenance contracts. IMS forecasts that service and maintenance will account for 33.4 percent of the total American security systems integration market by 2014.

Service and maintenance contracts are not only a means for security systems integrators to stabilize cash flow over a long-term period, they are also the most profitable portion of most projects. Margins for service and maintenance can be more than 30 percent while margins for equipment are often lower than 20 percent.

“The importance of a recurring revenue stream for systems integrators cannot be overlooked,” said Ewan Lamont, IMS Analyst. “Companies that are offering a value-added service contract, such as Kastle Systems and Convergint Technologies, are seeing strong growth and greater resistance to the economic downturn than those integrators that do not. Companies with high levels of RMR are also more attractive to investors and acquirers.”

“Additionally, there are major benefits for end-users who can extend the life-cycle of a well maintained system or save money by outsourcing the services that they would have previously handled in-house”, Lamont said. “One example of this is in the casinos market, where service and maintenance was traditionally handled by on-site technicians, but is increasingly being outsourced, providing new opportunities for security systems integrators.”
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