A capital one survey conducted at the 2017 Honeywell CONNECT conference, deduced that modern technologies are changing the way that executives perceive the security industry – from the market perspective. The survey also demonstrated that a significant number of respondents (86%) are predicting a better financial performance, in light of worries over reducing margins and the sharp rate of technological change.
In addition, 38% of those who participated in the survey, highlighted interconnected devices as next year’s most impactful technology as against 28% the previous year, emphasizing the increasing impact the “Internet of Things” is having on the industry. Even on the back of rising residential market penetration, the increase in the use of “do-it-yourself” technology now permits individuals to configure and control their own security in their homes. About 19% of those surveyed, representing around one in five security professionals agreed that those technologies recorded the highest impact – a noticeable increase compared to 7% who reiterated the same last year.
John Robuck, Capital One’s Managing Director of Security Finance reckons that “We are seeing rapid change across many segments of the security industry, this transformation is primarily being driven by the growth of new technologies that are revolutionizing the implementation and monitoring of security systems.”
Analyzing the challenges that 2018 may present, 43% of executives highlighted reducing margins as their major worry ahead of the new year, predicting that stiffer competition in an evolving market. Furthermore, keeping up with technology trends were highlighted by over a quarter of the respondents (26%) as the toughest challenge for their business ahead of the new year.
Almost half of those who participated in the survey (51%) were of the opinion that local or regional providers are their main competitors, as opposed to 35% who were of the same opinion last year. Also, only about 12% see the self-monitored system and DIY as stiff competitors.
“While there is clearly growing interest in this technology, DIY is not necessarily being viewed as major competition at this point,” said Robuck. “Established industry dealers view these products as additive and not comparable with professionally-monitored systems.”
For the next 12 months, new lines of credit is expected to remain the basic source of finance for the industry, as echoed by 43% of the respondents, also leveraged buyouts (an acquisition funded partly by borrowed money) will be the primary form of financing for their business according to 15% of the respondents – 50% more than last year.
“Although new lines of credit continue to be the funding vehicle of choice for security professionals, the growth of leveraged buyouts may reflect an increase in M&A activity, with more executives looking to retire or sell to other companies,” reiterated Robuck.