Expanding. Their Scope of

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1 SDM EXCLUSIVE REPORT 2016 Expanding Their Scope of Services Security systems integrators are taking on a much greater role in our connected world through their offerings of cybersecurity and added network services, as evidenced by the 21st annual Top Systems Integrators Report. By Laura Stepanek, Editor Security systems integrators lauded the state of the market in 2015, yet their revenue was down 1 percent overall and among those integrators with which a year-to-year comparison could be made, a significant number 34 of 82 companies reported decreased North American systems integration revenue. (See table on page 76 for more information about revenue deviations due to the omission of certain companies from the report.) SDM s Top Systems Integrators Report ranks companies by their North American systems integration revenue, which includes solutions such as design, project management, product, installation, programming, start-up, and training sold directly to an end-user customer or through a tier of contractors. Total North American systems integration revenue which is not the same as total annual gross revenue reached $5.63 billion in 2015 for the 100 companies ranked on this year s report. One of the reasons revenue growth did not match the commentary given by systems integrators could be that projects secured in the latter part of 2015 will not be on the books until 2016 contributing to flat financial performance, but elated forecasts by the integrators. In my opinion the security market made a comeback last year and it is looking even better in 2016, says No. 30, Sound Incorporated, which reported $20.2 million in 2015 systems integration revenue, up 2.6 percent over While there were some who experienced a flat or downcast market, a larger number of systems integrators say the market expanded in They cited several factors as having influenced that growth, including a higher level of new construction and the need to upgrade timeworn systems especially given the greater benefit that digital-based technologies offer saw a strong market for security system sales. In large part the market was driven by increased customer focus on upgrading legacy systems to newer digital technologies. Clients continue to gain a higher level of understanding that digital technologies can drive efficiencies within their security operations and provide more value to their corporate stakeholders, reports Tutela Inc., ranked No. 35. The company saw strong growth in the logistics and transportation vertical market last year. Security as a service, managed offerings, and cloud-based solutions are gaining traction in the marketplace, the integrators observed. Continues on page 63 More Integrators Saw Profit Rise in 2015 Top Systems Integrators were asked, Did your company s net profit margin increase, decrease or stay about the same in 2015 compared with 2014? 60% 50% 40% 30% 20% 10% 0% Decrease Stay the Same Increase A greater percentage of systems integrators saw their net profit improve last year (58 percent in 2015 compared with 53 percent in 2014). It was a welcome change following a slight dip in the prior year. *percentage of Top Systems Integrators indicating each answer; based on 92 responses July

2 North American Number of New Value of Company & Headquarters Systems Integration Non-Residential Non-Residential Top 3 Markets Full-time Business Rank Rank Location Revenue 2015 Projects, 2015 Projects, 2015 Contributing to Revenue Employees Locations 1 1 Tyco Integrated Security Boca Raton, Fla. 2 4 Convergint Technologies Schaumburg, Ill. 3 5 Johnson Controls Inc. Milwaukee, Wis. 4 6 Kratos Public Safety & Security Solutions Inc. San Diego, Calif. 5 Red Hawk Fire & Security Boca Raton, Fla. 6 Kastle Systems International Falls Church, Va. 7 8 G4S Secure Integration LLC Omaha, Neb Vector Security Inc. Warrendale, Pa Securadyne Systems LLC Dallas, Texas VTI Security Burnsville, Minn AFA Protective Systems Inc. Syosset, N.Y RFI Communications & Security Systems San Jose, Calif Securityhunter Inc. Baltimore, Md Entech Sales & Service Inc. Dallas, Texas Tech Systems Inc. Duluth, Ga Universal Protection Security Systems Santa Ana, Calif Unlimited Technology Inc. Chester Springs, Pa Intertech Ci Pittsburgh, Pa SIGNET Electronic Systems Inc. Norwell, Mass Mountain Alarm Ogden, Utah Interface Security Systems Holdings Inc. Earth City, Mo Genesis Security Systems LLC Germantown, Md GSI Troy, Mich. $3,054,000,000e na na na 10,000e 200 e $471,000,000 11,260 $350,000,000 na 2, $314,000,000 3,330 $225,000,000 govt, corp, edu $144,700,000e na na na 500e 31e $100,000,000 3,900 $119,000,000 corp, health, hotel 1, $80,500,000 na na corp $77,875, $48,856,979 na $74,910,250 5,692 $75,000,000 retail, transport, health 1, $70,000,000 na $70,000,000 utilities, edu $59,442,000 na na utilities, financial, health $45,350,000 6,109 $42,175,000 retail, airport, corp $44,975,048 1,498 $42,382,000 na $42,800, $42,800,466 govt 39 1 $39,780, $39,780,000 na $36,680,941 1,300 $36,405,462 health, financial $34,116,944 1,336 na na $32,409, na na 77 5 $31,177, $23,574,000 na $30,700, $30,700,000 govt, edu, health 63 3 $26,854,919 3,500 $17,956,101 na $24,511,035 15,000 $33,400,000 na $23,500, $18,000,000 corp, utilities, financial 61 1 $23,400,000 na $23,400,000 industrial, financial, utilities 87 2 No. 2 Acquired and integrated GS Security and Dakota Security. SDM s 2007 and 2012 Systems Integrator of the Year. No. 3 Double-digit growth in sales volume and ended year with largest projects backlog to date. SDM s 2009 Systems Integrator of the Year. No. 6 Launched KastlePresence; IoT platform available in the App Store. SDM s 2015 Systems Integrator of the Year. No. 7 SDM s 2013 Systems Integrator of the Year (and 2008 as Adesta). No. 8 SDM s 2015 Dealer of the Year. No. 13 Captured Social Security Administration Blanket Purchase Agreement for $210 M for the next 5 years. No. 15 SDM s 2004 Systems Integrator of the Year. No. 17 Developed and launched a big data offering. SDM s 2014 Systems Integrator of the Year. No. 19 Closed a $1,890,000 prison security project. No. 21 Won contract for multiple security/video solutions with 4,100-site retailer. e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure. 62 July 2016

3 Continued from page 61 In general, we participated in a strong market in 2015; good economic trends in many of the markets we serve helped to drive strong sales performance, notes ADS Security, ranked No. 48, reporting 14.1 percent higher integration revenue. While we saw growth across the board, we especially saw strong growth in our commercial segment and, in particular, with our cloud-based services such as SecureDoor (managed access control) and our family of RemoteView video (cloud based video storage). Integrated Security Technologies says, We are still looking to see the cloud services end of the business take off. It has been discussed more frequently but we anticipate some activity taking hold in Other integrators also commented on factors that contributed to a strong marketplace: Telenet VoIP Inc. (No. 92): Overall the market seemed to be healthier, margins seemed to stay flat but more opportunities were available for bidding. After structured cabling, and network upgrades, CCTV and access control seem to continue to be the focal point of educational entities. Advanced Electronic Solutions (No. 51): 2015 was a strong year for AES. We had many upgrades to IP systems as well as a number of new major projects. Profits increased as opposed to Sentry Security (No. 94): Market was strong in Integrated systems dominated. Security Integrations (No. 40): The market was strong, fueled by upgrades from analog CCTV to IP-based solutions. Tele-Tector of Maryland Inc. (No. 68): The market was strong in the area of upgrading analog systems to IP base. Perhaps most telling about the direction that things are heading in comes from an observation by MidCo Inc., ranked No. 28: There is a need for more network-savvy systems integrators like MidCo. Not only are offerings of cloud-based and managed security solutions growing, but the market is desiring and demand- Continues on page 68 Guide to Reading the Top Systems Integrators Report Top Systems Integrators: 2015 Performance Statistics Total North American systems integration revenue: Total North American revenue from systems integration for the 100 largest integrators reached $5.63 billion in 2015 from solutions such as design, project management, product, installation, programming, start-up, and training sold directly to an end-user customer or through a tier of contractors. It does not include recurring revenue from service and monitoring, as integrators were asked to report that amount separately in order to be ranked on the SDM 100, a report based on RMR in the security industry. A comparison between the top 100 companies ranked this year and the top 100 ranked in 2015 shows a percent decrease in systems integration revenue. This can be attributed to the fact that several of the largest systems integrators either did not reply to SDM s requests for information, could not comply due to restrictions of being publicly held, or were omitted due to acquisition (includes Diebold Security will report next year as Securitas Electronic Security Inc.; Stanley Convergent Security Solutions; Protection 1; Schneider Electric; SDI; DTT; and Dakota Security Systems, among the top 25) $6.83 billion $5.63 billion New systems started: 123, ,352 Total full-time employed: Business locations operated: 39,971 27,785 1, The 2016 Top Systems Integrators Report ranks North American companies by their security systems integration revenue. This ranking is based on data provided to or, in a few cases, estimated by SDM. Ranked companies were asked to submit either an audited or reviewed financial statement, or a copy of their income tax return showing total gross receipts for the stated period. The vast majority of the firms ranked are privately held. The main table, which begins on page 62, ranks 100 companies by their North American revenue in 2015 from their security system integration projects. Integration includes solutions such as design, project management, product, installation, programming, startup, training, and time-and-materials-based service sold directly to an end-user customer or through a tier of contractors. This includes revenue related to security, such as: access control, ID/badging, video surveillance/analytics, intrusion alarms, perimeter security, electronic gate entry, intercom/communications, fire protection, etc. It does not include recurring revenue, as that is counted towards ranking on the SDM 100 ( SDM100Report). Note: an e following the figure indicates it is an SDM estimate. To find a company by name, use the alphabetical index on page 78. July

4 North American Number of New Value of Company & Headquarters Systems Integration Non-Residential Non-Residential Top 3 Markets Full-time Business Rank Rank Location Revenue 2015 Projects, 2015 Projects, 2015 Contributing to Revenue Employees Locations 24 Access Systems Integration Eatontown, N.J Security Corporation Novi, Mich Advanced Cabling Systems North Little Rock, Ark Low Voltage Contractors Inc. Minneapolis, Minn MidCo Inc. Burr Ridge, Ill MSE Corporate Security Branchburg, N.J Sound Incorporated Naperville, Ill Integrated Security Technologies Herndon, Va Allied Fire & Security Spokane, Wash NextGen Security LLC King of Prussia, Pa Security Equipment Inc. Omaha, Neb Tutela Inc. Brunswick, Ga ACT Clifton, N.J KST Security Indianapolis, Ind Firstline Security Systems Inc. Anaheim, Calif CTSI Chantilly, Va Security Integrations Albany, N.Y TRL Systems Inc. Rancho Cucamonga, Calif American Alarm & Communications Arlington, Mass Redrock Security & Cabling Inc. Irvine, Calif The Protection Bureau Exton, Pa Security and Data Technologies Inc. Newtown, Pa RAE Security Houston, Texas $23,002, $19,687,594 na 80 1 $22,824,416 na na na $22,819, $22,800,000 corp, edu, financial $22,630,743 1,179 $18,292,158 financial, govt, health $21,125,410 3,150 $20,000,000 corp, utilities, edu $20,400,000 na na retail, health, entertainment 84 6 $20,200, $19,912,117 edu, corp, financial 77 1 $20,180, $20,180,000 govt, health, edu 83 2 $20,000, $15,800,000 corp, health, edu 81 3 $19,137, $19,137,505 utilities, industrial, health 58 3 $18,029,072 2,483 $14,744,687 edu, health, corp $17,600, $16,115,671 na $16,965, $12,000,000 health, edu, financial 39 2 $16,343, $13,415,607 health, industrial, corp 63 4 $15,750, $11,500,000 utilities, financial, corp 58 3 $15,055, $11,285,592 govt, health, edu 48 1 $14,986, $12,000,000 law, utilities, industrial 37 3 $14,967, $14,967,269 na $14,889,368 4,534 $14,934,718 property mgmt, govt, financial $14,874, $14,874,642 apartments, corp 45 2 $14,850,000 1,300 $7,810,128 retail, corp, edu $14,021, $12,887,952 na 95 1 $13,314, $13,000,000 na 45 1 No. 24 Completed management buy-out from MSA Security and began operating as an independent company. No. 27 Secured a large state hospital project, which called for multiple disciplines and platforms. No. 28 Global international integrated system in the Middle East. No. 33 Achieved DHS SAFETY Act Designation for Perimeter Protection Services. No. 34 Consolidated from two separate buildings into a new corporate headquarters including moving UL central station. No. 35 In process of overhauling all administrative software to a new ERM platform. Opened three new full-service locations: Charlotte, N.C.; Sunrise, Fla.; and Anaheim, Calif., as well as New York City in March No. 40 Acquired a small IT services company. No. 44 Celebrated 40 years in business as a family-owned company. e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure. 64 July 2016

5 Largest Project in 2015: $26 Million Company Value of 2016 Largest Project Rank Johnson Controls Inc....$26,000, Interface Security Systems Holdings Inc....$14,800, Convergint Technologies...$10,000, Minuteman Security Technologies Inc....$8,087, G4S Secure Integration LLC...$7,500, Security Integrations...$5,400, Securityhunter Inc....$5,211, Red Hawk Fire & Security...$5,000, VTI Security...$5,000, NextGen Security, LLC...$5,000, ACT...$3,956, RAE Security...$3,200, Midstate Security Company...$2,983, Telenet VoIP Inc....$2,883, Advanced Electronic Solutions...$2,575, Unlimited Technology Inc....$2,200, Integrated Security Technologies...$2,168, MidCo Inc....$2,147, RFI Communications & Security Systems...$2,100, Mountain Alarm...$2,000, Sound Incorporated...$2,000, Firstline Security Systems Inc....$1,940, SIGNET Electronic Systems Inc....$1,900, Genesis Security Systems LLC...$1,800, CTSI...$1,763, GSI...$1,750, Advanced Cabling Systems...$1,750, AFA Protective Systems Inc....$1,597, Tele-Tector of Maryland, Inc....$1,568, Universal Protection Security Systems...$1,529, TRL Systems Inc....$1,400, Value of 2016 Company Largest Project Rank Strategic Security Solutions...$1,400, Tech Systems Inc....$1,260, Entech Sales & Service Inc...$1,247, Intertech Ci...$1,200, KST Security...$1,200, Low Voltage Contractors Inc...$1,142, Life Safety Engineered Systems Inc....$1,100, Tutela Inc....$982, Scarsdale Security Systems Inc....$975, Access Systems Integration...$935, Redrock Security & Cabling Inc...$920, CGL Electronic Security Inc...$765, Security Equipment Inc....$663, Security and Data Technologies Inc....$635, Allied Fire & Security...$600, Engineered Security Systems...$590, Guardian Protection Services...$569, Electronic Security Concepts LLC...$535, The Protection Bureau...$503, Will Electronics...$500, APL Access & Security Inc....$450, Kimberlite Corp....$449, MSE Corporate Security...$440, D/A Central Inc....$433, Per Mar Security Services...$432, PASS Security...$425, New York Security Solutions..$412, Vector Security Inc....$375, Sonitrol of Buffalo, Rochester, Toronto...$375, American Alarm & Communications...$356, Vision Security Technologies...$342, Stone Security...$341, Sonitrol New England...$317, Largest Project Winner: Johnson Controls Customer: New York Power Authority Johnson Controls will, for up to a two-year term, engineer, procure and construct systems associated with physical and cyber security upgrades in order to maintain compliance with the North American Electric Reliability Corporation s Critical Infrastructure Protection (NERC CIP), Version 5 Standards. The upgrades consist of physical and cyber security enhancements, including cameras, access controls and methods of preventing and detecting intrusion in Authority substations. The contract includes work at five of the Authority s generation and transmission facilities and eight remote substations. Company Value of 2016 Largest Project Rank Southeastern Security Professionals LLC...$295, Sentry Security...$290, EMC Security...$280, Matson Alarm Co. Inc....$275, SCI Inc...$250, Peak Alarm Co. Inc....$225, Atronic Alarms Inc....$197, F.E. Moran Inc. Alarm and Monitoring Services...$194, Custom Security Systems...$173, Bates Security LLC / Sonitrol of Lexington...$131, Sonitrol Pacifi c...$111, Fleenor Security Systems...$108, Sonitrol of Sacramento & Orange County, Cybex Security...$106, Sonitrol Tri-County...$102, These 78 systems integrators reported having the highest-value security projects started in Note: Four of the top 10 companies did not report their largest project size, as requested by SDM. Projects below $100,000 are not ranked here. July

6 North American Number of New Value of Company & Headquarters Systems Integration Non-Residential Non-Residential Top 3 Markets Full-time Business Rank Rank Location Revenue 2015 Projects, 2015 Projects, 2015 Contributing to Revenue Employees Locations F.E. Moran Inc. Alarm and Monitoring Services Champaign, Ill ADS Security L.P. Nashville, Tenn SSD Alarm Systems / Kern Security & Fire / Alpha Alarm & McNeill Security Anaheim, Calif Midstate Security Company Wyoming, Mich Advanced Electronic Solutions College Point, N.Y Alarm Detection Systems Inc. Aurora, Ill Minuteman Security Technologies Inc. Andover, Mass. 54 Life Safety Engineered Systems Inc. Buffalo, N.Y Operational Security Systems Inc. Atlanta, Ga. 56 CGL Electronic Security Inc. Westwood, Mass Sonitrol New England Rocky Hill, Conn Dallas Security Systems Inc. & DSS Fire Inc. Dallas, Texas Stone Security Salt Lake City, Utah Scarsdale Security Systems Inc. Scarsdale, N.Y AVS Technology Totowa, N.J Guardian Protection Services Warrendale, Pa. 63 Vision Security Technologies Birmingham, Ala PASS Security Fairview Heights, Ill APL Access & Security Inc. Gilbert, Ariz Sentry Communications & Security Hicksville, N.Y Ackerman Security Systems Atlanta, Ga. $13,150,482 1,693 $14,571,930 retail, financial, hotel $12,800,224 4,375 $6,491,100 retail, corp, industrial $12,281,070 na na na na 12 $11,741, $11,493,165 correctional, health, retail 78 1 $11,535, na na 75 3 $11,228,103 1,024 $6,624,966 na $11,170, $11,170,235 na 46 3 $10,211, $5,965,746 na 72 4 $9,664, na edu, financial, health na 2 $9,302, $8,536,027 na 43 1 $9,254,435 1,236 $7,534,241 edu, corp, industrial 97 5 $8,140,330 2,500 $8,140,330 na $8,126, $4,860,721 edu, govt, transport 24 2 $7,828,922 1,206 $7,304,651 retail, corp, airport $7,750,000 na na na 60 3 $7,574,579 4,223 $7,574,579 retail, health, edu 1, $7,200, $6,200,000 edu, govt, health na 2 $7,179, $7,179,516 na 48 1 $7,056, $5,000,000 corp, govt, health 40 2 $6,900, $5,800,000 corp, transport, health na 1 $6,610,393 2,120 $5,024,665 retail, health, govt No. 48 Formally introduced ADS +Rewards Customer Loyalty program, which allows existing customers to earn loyalty rebates towards system upgrades based upon their tenure with ADS. No. 52 Purchased Safe Systems Inc., Louisville, Colo. No. 53 Introduced TransitSentry v1.5, a wireless mass transit video surveillance platform developed by Minuteman. No. 56 Outgrew Norwood, Mass., facility and acquired a 13,275 sq. ft. state-of-the-art facility in Westwood, Mass., which includes a customer training center and a technology lab. No. 57 Full integration of Mutualink into central station to help leverage verified dispatch to the PSAP. No. 59 Adding another higher-education organization to client roster: Salt Lake Community College, Utah s largest college serving more than 60,000 students on 10 campuses. No. 62 Opened a second central station in Arizona; the centers in Arizona and Pennsylvania will operate as if they are one, while enabling independent redundancy. In addition to Customer Care Operations, Data Services, and Technical Support, the site also will incorporate a state-of-the-art training facility. e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure. 66 July 2016

7 Integrators Sales Revenue By Product Category Top Systems Integrators were asked to break out their 2015 revenue by type of product. The majority is earned from integrated non-residential systems that combine two or more different technology solutions. No significant changes were recorded from 2014 to 2015 in the percentage of revenue from these types of products. Badging 1% IT hardware/ software 1% Intercom/ communications 2% Integrated residential systems 3% Continued from page 63 ing solutions that deliver big data. There is also a greater emphasis on cybersecurity, say the integrators of their clients. ITO and big data will continue to be a focus of our goforward strategy. The industry is way behind other industries in the use of data. Video analytic metadata is going to become very valuable, claims D/A Central Inc., ranked No. 70. Therefore, the need for security systems integrators to become more network-savvy is greater than ever. When asked what percentage of projects sold in 2015 incorporated IP-based technology, 45 percent of systems integrators noted that between three-fourths and 100 percent of their projects incorporated IP. WHICH MARKETS ARE SPENDING? A handful of vertical segments stood out as front-runners in spending on integrated security products and services: education (especially higher-ed), healthcare, utilities/critical infrastructure, and transportation/logistics. Integrators also mentioned: Energy Retail (especially multi-location) Banking 68 July 2016 Other 1% Fire protection 9% Intrusion alarms 10% Integrated non-residential systems 42%* Video surveillance 18% Access control 13% *percentage of Top Systems Integrators 2015 sales revenue; based on 89 responses. Multi-unit residential Hospitality Government Banking Integrators Sales Revenue By Service Category Top Systems Integrators were asked to break out their 2015 revenue by type of service. The majority is earned from system sales and installation. No significant changes were recorded from 2014 to 2015 in the percentage of revenue from these types of services. Equipment leases 1% Sales/installation 58%* Hosted/managed services 2% Test and inspection 3% Non-contracted service 7% Service contracts 11% *percentage of Top Systems Integrators 2015 service revenue; based on 93 responses. Monitoring 18% No. 2-ranked Convergint Technologies emphasizes the broad-reaching application of video technologies: The market for security systems sales and integrated systems continued its strong growth in Video sales continue to dominate as customers begin to look beyond traditional security applications and start looking at using video for manufacturing, process improvement, regulatory compliance, etc. The best growth came from the utility segment as these customers continue to be concerned about the security of their infrastructures. With the downturn in the price of oil, petrochemical has been hit the hardest in terms of being weak in 2015, Convergint says. No. 7-ranked G4S Secure Integration LLC, calls out critical infrastructure as a leading sector. Our strongest sector is definitely critical infrastructure. We see tons of potential in that market to adhere by NERC/CIP regulations and see ourselves as one of the best providers, the company says. No. 59, Stone Security, says the positive marketplace had a constructive effect on its operations. We felt the market was stronger in 2015 than 2014 especially in education and industrial markets. We were forced to add a number of people to the organization to keep up with increased demand in No. 81-ranked Peak Alarm Co. Inc., affirms that spending on integrated security solutions continues to hold up. The market in 2015 continued to be strong in security systems sales driven Continues on page 76

8 North American Number of New Value of Company & Headquarters Systems Integration Non-Residential Non-Residential Top 3 Markets Full-time Business Rank Rank Location Revenue 2015 Projects, 2015 Projects, 2015 Contributing to Revenue Employees Locations 68 Tele-Tector of Maryland Inc. Columbia, Md Per Mar Security Services Davenport, Iowa 70 D/A Central Inc. Oak Park, Mich Will Electronics St. Louis, Mo Electronic Security Concepts LLC Scottsdale, Ariz Artel Communications Corp. Plainview, N.Y. 74 DynaFire Inc. Casselberry, Fla. 75 Atlantic Coast Alarm Inc. Mays Landing, N.J Sonitrol of Sacramento & Orange County, Cybex Security Roseville, Calif Bates Security LLC / Sonitrol of Lexington Lexington, Ky Atronic Alarms Inc. Lenexa, Kan. 79 Southeastern Security Professionals LLC Norcross, Ga Select Security Lancaster, Pa Peak Alarm Co. Inc. Salt Lake City, Utah Fleenor Security Systems Johnson City, Tenn. 83 Strategic Security Solutions Raleigh, N.C. 84 Acadiana Security Plus Broussard, La Matson Alarm Co. Inc. Fresno, Calif Sonitrol Pacific Portland, Ore Engineered Security Systems Towaco, N.J. 88 New York Security Solutions Brooklyn, N.Y Kimberlite Corp. Fresno, Calif SCI Inc. Albuquerque, N.M. $6,518, $6,286,200 health, govt, corp 88 1 $6,516,917 5,023 $19,946,615 na $6,382, $6,632,000 industrial, financial, health 42 2 $6,043,266 na $4,731,430 na 26 1 $6,008, $4,500,000 govt, health, edu 32 1 $6,000, $6,000,000 na 10 1 $5,885, $5,878,000 na $5,821,709 na na govt, health, edu 33 3 $5,323, $5,296,129 corp, govt, industrial 49 2 $5,310, $3,244,624 edu, corp, industrial 54 1 $5,267, $2,893,178 corp, hotel, retail 53 1 $5,261, $4,533,151 na 31 1 $5,117,000 na $5,117,000 retail, financial, hotel $4,731,871 1,366 $3,100,000 corp, industrial, retail 88 4 $4,563, $2,772,076 industrial, health, corp 54 1 $4,342,717 1,086 na health, corp, edu 12 1 $3,651, $1,222,667 govt, industrial, corp 80 1 $3,155,762 1,114 $2,109,730 na 68 4 $3,061, $3,006,422 edu, corp, govt 82 5 $2,940, $2,620,471 na 48 4 $2,875, $2,875,608 na 13 1 $2,868, $2,843,000 edu, law, govt $2,814, $1,932,461 govt, utilities 13 1 No. 73 Opened 10 new school projects and secured two major NYCT contracts. No. 77 Acquired Kentucky Alarm Services. No. 79 Joined PSA co-op as an owner company. No. 81 Launched PeakEdge, an access control package centered on an affordable entry point with aggressive RMR generation. This is in addition to PeakLink and PeakView, security and video surveillance packages. No. 82 In 2015 began the process of converting estimating and CRM system to WeSuite. Also in the final stages of getting central station UL listed. No. 86 Recognized as Sonitrol Dealer of the Year at the 2015 Sonitrol National Dealers Association. No. 88 Became an exclusive safety and security provider for six NYC public hospitals. No. 89 Completed technology and communication infrastructure upgrade. e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure. 70 July 2016

9 North American Number of New Value of Company & Headquarters Systems Integration Non-Residential Non-Residential Top 3 Markets Full-time Business Rank Rank Location Revenue 2015 Projects, 2015 Projects, 2015 Contributing to Revenue Employees Locations Redwire / Sonitrol of Tallahassee, Bay, NW FL, EC FL Tallahassee, Fla. 92 Telenet VoIP Inc. El Segundo, Calif. 93 Washington Alarm Inc. Seattle, Wash. 94 Sentry Security Wheeling, Ill EMC Security Suwanee, Ga Sonitrol of Buffalo, Rochester, Toronto Buffalo, N.Y Sonitrol Tri-County Grand Blanc, Mich World Wide Security & GC Alarm Inc. Garden City, N.Y Custom Security Systems Lacey, Wash. 100 Sonitrol Security Systems of the Triangle Raleigh, N.C. $2,810,323 na na na 73 6 $2,741, $8,355,120 edu, corp, industrial 52 1 $2,715, $1,403,031 edu, corp, industrial 53 2 $2,645, $2,395,000 hotel, financial, industrial 25 1 $2,600, $2,886,999 edu, corp, utilities $2,475, $4,151,771 industrial, corp, transport 78 3 $2,255, $2,181,000 corp, industrial, transport 60 3 $2,101,113 na na hotel, edu, corp 53 2 $2,060, $2,060,910 edu, corp, utilities 99 3 $1,749, $1,750,000 corp, health, industrial 25 1 No. 92 Design and installation of the IP audio/video intercom system for Marlton School for the Deaf. No. 95 Major Georgia theme park facility landed for systems and monitoring. e = SDM estimate. na = not available. Abbreviations to markets: airport = airports; corp = corporate office space; correctional = correctional; edu = education/campus; entertainment = entertainment/sports venues; financial = financial/banking; gaming = casinos/gaming; govt = government; health = healthcare; hotels = hotels/hospitality; industrial = industrial; law = law enforcement; retail = retail/restaurants; transport = transportation/distribution; utilities = utilities/critical infrastructure. Top 10 Integrators By Total Revenue Among companies ranked on the Top Systems Integrators Report, these businesses reported (or were estimated by SDM) the highest total revenue in 2015: Johnson Controls, Tyco Integrated Security, and Convergint Technologies are the top three. Company Total Revenue Johnson Controls Inc. $4,443,000,000 Tyco Integrated Security $3,879,000,000 Convergint Technologies LLC $471,000,000 Vector Security Inc. $300,800,000 Red Hawk Fire & Security $220,000,000 Guardian Protection Services $187,406,066 Interface Security Systems Holdings Inc. $149,400,000 Kratos Public Safety & Security Solutions Inc. $144,700,000 G4S Secure Integration LLC $136,521,182 Entech Sales & Service Inc. $102,000,000 Integrators Predict Performance in 2016 Top Systems Integrators were asked, How do you expect revenues in 2016 to compare with revenues in 2015? Decrease 1% Stay the same 13% Increase 86%* Nearly nine in 10 Top Systems Integrators (86 percent) expect their 2016 revenues to exceed 2015 s. These results exceed the expectations systems integrators had in *percentage of Top Systems Integrators indicating each answer; based on 91 responses 72 July 2016

10 Top 3 Market Sectors: Office Space, Education, Healthcare Again Top Systems Integrators were asked to rank the sectors that provided the most significant portion of their 2015 revenue Corporate 2. Education/campus 3. Healthcare 4. Government 5. Industrial 6. Retail/restaurant 7. Financial/banking 8. Utilities/critical infrastructure Corporate 2. Education/campus 3. Healthcare 4. Government 5. Industrial 6. Retail/restaurant 7. Financial/banking 8. Utilities/critical infrastructure 9. Transportation/distribution 9. Transportation/distribution 10. Hotel/hospitality 10. Hotel/hospitality & Airports (tied for this position) These top 10 market sectors provided the most significant portion of revenues to systems integrators in 2015 and the top 10 list is almost exactly the same yearover-year. For the past several years, corporate/property management, education, and healthcare have steadfastly been among the top market sectors for integrators. Integrators Give Thumbs up to Funding Top Systems Integrators were asked, Do you think funding for security projects was generally better, worse, or about the same in 2015 as it was in 2014? Don t Know 1% Worse 5% About the same 40% Better 54%* Top Systems Integrators have a positive outlook on the state of funding for their clients security projects, citing conditions such as an increase in crime and concern for employee safety. One respondent said the economy is on the upswing, and fear of current events, such as active shooters, is helping to keep security projects active. Among the 5 percent who see funding as worse than the previous year, they cite frozen state funds, among other reasons. *percentage of Top Systems Integrators indicating each answer; based on 89 responses Average Percentage of Jobs on an Integrator s Staff This chart, which you can use to compare job titles in your own company with industry averages, shows the average percentage distribution of job titles among Top Systems Integrator companies. More than two-thirds of jobs (36 percent) are comprised of installation and technical service positions. *average percentage distribution of staff titles among systems integrators; based on 91 responses Source: SDM Top Systems Integrators Report, July 2016 General management 4% Executive management 2% Administrative 9% Customer service 6% Finance 4% Central station 7% Sales/marketing 12% Other 8% Installation 21%* Project management 7% Technical service 15% Engineering/ design 3% IT 2% 74 July 2016

11 Top Systems Integrators: 8-Year Performance Billions $ (% change) $7.81* (17.1) 2007 $7.86 (0.6) 2008 $8.05 (2.4) 2009 $7.14 (-11.3) 2010 $6.91 (-3.2) 2011 Year $6.31** (-9) 2012 $ $6.81 (-7.1) 2014 $5.63*** (-17.3) 2015 North American systems integration revenue (as reported to or estimated by SDM) reached $5.63 billion in 2015, based on reporting from 100 Top Systems Integrators. This amount registers a percent decrease, which is attributed to the omission of several large integrators from the report (see footnotes below and chart on page 63). For integrators whose revenue could be compared year-over-year, total systems integration revenue actually decreased 1 percent. *2007 figure reflects a correction to reported revenues for Johnson Controls and ADT, following incorrect reporting in While it appears that there was a 17 percent increase in total revenue between 2006 and 2007, it was actually 4 percent growth. In the 2010 report, several notable companies did not participate, including SAIC, Red Hawk Security, North American Video, and National Security Systems Inc., which skewed the results. Among systems integrators for which a year-to-year comparison could be made, there was actually only a 4.4 percent decrease in performance between 2009 and **Two major factors contributed to the decrease in systems integration revenue; ADT was not ranked, and Siemens Industry Inc. systems integration revenue was adjusted downward by an SDM estimate. Siemens Industry Inc., which had been ranked in 2014 using estimated systems integration revenue, was not ranked in On the surface, it appears that Top Systems Integrators revenue declined 7.1 percent in When Siemens is removed from this calculation for comparison purposes, however, systems integration revenue for the top 100 companies grew very slightly, at 0.35 percent year-over-year. ***A percent decrease in systems integration revenue is attributable to the fact that several of the largest systems integrators either did not reply to SDM s requests for information, could not comply due to restrictions of being publicly held, or were omitted due to acquisition (includes Diebold Security will report next year as Securitas Electronic Security Inc.; Stanley Convergent Security Solutions; Protection 1; Schneider Electric; SDI; DTT; and Dakota Security Systems, among the top 25). Continued from page 68 by corporate spending arising from office and warehouse expansion. No specific market exhibited low or no growth. In addition to specific drivers in individual market segments, the overall concern about active-shooter situations and terrorist episodes in general is casting its shadow across North America and spreading into the systems integration industry. Terrorism in the news, especially domestic terrorism, has led to an increased focus on security. The education segment, in particular, has dedicated a large amount of budget to improving security, writes No. 43-ranked Redrock Security & Cabling Inc. The concern of continued terrorist activity will continue to drive the need for improved security solutions, which will drive increased funding, asserts No. 3-ranked Johnson Controls Inc. According to No. 13-ranked Securityhunter Inc., terrorism is a top issue in the security marketplace. The federal government is investing heavily in securing its people and facilities. A great market opportunity exists in helping to secure the border, and key infrastructure locations like airports. MORE ONLINE To find this article online, as well as previous years editions of the Top Systems Integrators Reports, visit Among the top trending issues that Top Systems Integrators think will have the greatest impact on their business in 2016, active-shooters/acts of terrorism, cybersecurity, and the growth of Security as a Service through cloud-based services and managed offerings stand out. The first has the potential to produce devastating consequences, yet provides opportunities for integrators to become a key part of securing America against such atrocious deeds. More from the Report To gain additional information beyond that published in this issue and online, the complete SDM Top Systems Integrators Report and Database is available in Excel format. Included are contact names, mailing addresses, telephone numbers, website URLs, targeted vertical markets, branch office locations, and much more. SDM s Top Systems Integrators Report and Database contains the information needed to target products and services to the systems integration market. The cost of the report is $595. It may be ordered by contacting Heidi Fusaro at or by ing fusaroh@bnpmedia.com. 76 July 2016

12 Alphabetical Index to Companies Company 2016 Rank Company 2016 Rank Company 2016 Rank Acadiana Security Plus Access Systems Integration Ackerman Security Systems ACT ADS Security L.P Advanced Cabling Systems Advanced Electronic Solutions AFA Protective Systems Inc Alarm Detection Systems Inc Allied Fire & Security American Alarm & Communications APL Access & Security Inc Artel Communications Corp Atlantic Coast Alarm Inc Atronic Alarms Inc AVS Technology Bates Security LLC / Sonitrol of Lexington CGL Electronic Security Inc Convergint Technologies CTSI Custom Security Systems D/A Central Inc Dallas Security Systems Inc. & DSS Fire Inc DynaFire Inc Electronic Security Concepts LLC EMC Security Engineered Security Systems Entech Sales & Service Inc F.E. Moran Inc. Alarm and Monitoring Services Firstline Security Systems Inc Fleenor Security Systems G4S Secure Integration LLC Genesis Security Systems LLC GSI Guardian Protection Services Integrated Security Technologies Interface Security Systems Holdings Inc Intertech Ci Johnson Controls Inc Kastle Systems International Kimberlite Corp Kratos Public Safety & Security Solutions Inc KST Security Life Safety Engineered Systems Inc Low Voltage Contractors Inc Matson Alarm Co. Inc MidCo Inc Midstate Security Company Minuteman Security Technologies Inc Mountain Alarm MSE Corporate Security New York Security Solutions NextGen Security LLC Operational Security Systems Inc PASS Security Peak Alarm Co. Inc Per Mar Security Services RAE Security Red Hawk Fire & Security Redrock Security & Cabling Inc Redwire / Sonitrol of Tallahassee, Bay, NW FL, EC FL RFI Communications & Security Systems Scarsdale Security Systems Inc SCI Inc Securadyne Systems LLC Security and Data Technologies Inc Security Corporation Security Equipment Inc Security Integrations Securityhunter Inc Select Security Sentry Communications & Security Sentry Security SIGNET Electronic Systems Inc Sonitrol New England Sonitrol of Buffalo, Rochester, Toronto Sonitrol of Sacramento & Orange County, Cybex Security Sonitrol Pacific Sonitrol Security Systems of the Triangle Sonitrol Tri-County Sound Incorporated Southeastern Security Professionals LLC SSD Alarm Systems / Kern Security & Fire / Alpha Alarm & McNeill Security Stone Security Strategic Security Solutions Tech Systems Inc Telenet VoIP Inc Tele-Tector of Maryland Inc The Protection Bureau TRL Systems Inc Tutela Inc Tyco Integrated Security Universal Protection Security Systems Unlimited Technology Inc Vector Security Inc Vision Security Technologies VTI Security Washington Alarm Inc Will Electronics World Wide Security & GC Alarm Inc July 2016