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2016 21 st ANNUAL REPORT 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. 2014 1. Corporate 2. Education/campus 3. Healthcare 4. Government 5. Industrial 6. Retail/restaurant 7. Financial/banking 8. Utilities/critical infrastructure 2015 1. 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. Source: SDM Top Systems Integrators Report, July 2016 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 Source: SDM Top Systems Integrators Report, July 2016 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
2016 21 st ANNUAL REPORT Top Systems Integrators: 8-Year Performance Billions $ (% change) 9 8 7 6 5 4 3 2 1 0 $7.81* (17.1) 2007 $7.86 (0.6) 2008 $8.05 top 100 only (2.4) 2009 $7.14 † top 100 only (-11.3) 2010 $6.91 top 100 only (-3.2) 2011 Year $6.31** top 100 only (-9) 2012 $7.36 top 100 only 17.5 2013 $6.81 ‡ top 100 only (-7.1) 2014 $5.63*** top 100 only (-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 17.34 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 2006. 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 2010. **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 2015 using estimated systems integration revenue, was not ranked in 2016. On the surface, it appears that Top Systems Integrators revenue declined 7.1 percent in 2015. 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 17.34 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). Source: SDM Top Systems Integrators Report, July 2016 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 www.SDMmag.com/Top-Systems-Integrators-Report. 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 630-518-5470 or by emailing fusaroh@bnpmedia.com. 76 July 2016
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