Both the 2025 SDM Industry Forecast Study (published annually since 1982), and an industry panel made up of three security dealer and integrator companies of varying sizes and geographic locations, agree that the outlook for the coming year seems positive. After several years of upheaval between the pandemic, supply chain issues, economic uncertainty and inflation, security companies have found their footing and are excited for the new technology and service opportunities they can offer their customers.

Respondents to this year’s Industry Forecast, published in January but conducted in November 2024, are definitely more optimistic about 2025 than they were this time last year, with more than 2/3rds (70 percent) expecting their company revenue to increase over 2024 — last year just 58 percent of respondents said the same.

Looking at what actually happened versus their predictions, respondents were right to be more cautious last year, with exactly half of them reporting an actual increase from 2023 to 2024. Of those predicting revenues would stay the same, 35 percent predicted it and 40 percent experienced it. Those whose revenues went down were three percentage points higher than anticipated (10 percent total).

However, according to this year’s panelists, whether 2024 was good or just average, the expectation is things are looking up for 2025. With the election behind us — and a new administration coming in — the rise of AI and increased as-a-service offerings, and solid customer interest in these and other solutions, panelists are confident they are on the right track, and in the right industry, at the right time.

The SDM Industry Forecast Panel: 2025

Kathleen Ford is co-owner and CEO of ScDataCom, a nationally recognized security integration company providing physical and electronic security solutions to commercial clients in the Southeast, and to public sector clients throughout the U.S. Ford has overseen ScDataCom’s explosive growth, achieving recognition on the Inc. 5000 list for 2022, 2023, and 2024 and recognition on the Vet100 (100 Fastest Growing Veteran Owned Companies in America) in 2024.

Prior to joining scDataCom in 2014, Ford spent almost three decades in the U.S. Army Nurse Corps, retiring in the rank of colonel. She holds an electrical (low voltage) contractors license in both Florida and Georgia. She has a Bachelor of Science degree in Nursing from University of New Hampshire, Master of Science in Nursing from the Medical College of GA, and a Master of Strategic Studies from the U.S. Army War College. Image courtesy of ScDataCom

Chuck Petrusha, the 2022 George A. Weinstock Award Recipient, is a long-time industry veteran and successful alarm company owner who has provided leadership and service to the alarm, electronic security, and fire alarm industries. He is currently the president and CEO of Advanced Security Systems, ranked No. 58 on the 2024 SDM 100 and SDM’s 2021 Dealer of the Year. Serving Northern California and Southern Oregon since 1971, Advanced Security Systems is a full-service alarm company for both residential and commercial customers.

Petrusha has been an active participant, holding various leadership roles in several industry associations and organizations including the California Alarm Association (past president and sargent of arms), California Automatic Fire Alarm Association, WBFAA Apprenticeship Program, and the Electronic Security Association (ESA), among other industry organizations. Petrusha was also the founding president of the Redwood Alarm Association, a chartered chapter of the CAA. Image courtesy of Advanced Security Systems

Greg Parker is a business leader with over 25 years of experience in product management, strategic planning, service portfolio management, channel excellence, and engineering. Parker joined Johnson Controls in 2020 and currently serves as global vice president, security and fire, life cycle management.

Prior to Johnson Controls, Parker was at Trane Technologies as portfolio director for building services. Image courtesy of Johnson Controls

Our service business grew 8 percent in fiscal year 2024 and orders were up 10 percent for service. That indicates a continued growth and this is a very important and strategic part of our business.

A Pretty Good 2024

“We’re a security dealer here in Northern California and basically our geographic footprint is from the golden Gate Up through Central Oregon and focused mainly on the West Coast,” says Chuck Petrusha, president and CEO of Advanced Security Systems, Eureka, Calif. “Last year our gross revenues were just over $10 million, which was about a 5 percent increase over 2022. If all goes well through 2024, we are going to show about a 7 percent increase in our top line gross revenues and almost equally in our monitoring.”

Petrusha continues, “The attritions have been tough for us the last few years and so just maintaining our monitoring income at that level has been a challenge. But we’ve been able to not only maintain but also grow it, so we’re very proud of that. And we’re looking at 2025 as a good year and we expect the economic forecast to change slightly in California and hopefully tick up a couple notches.”

Kathleen Ford, CEO and co-owner, scDataCom, a Savannah, Ga.-based integrator specializing in the government sector, says she is actually trying to slow her company’s growth down a bit. “About 75 percent of our business comes out of the federal sector, so … we’re trying to remain small. There are some advantages in the federal sector to remaining small, although we’re approaching that threshold pretty quickly. Our year-over-year growth from 2022 to 2023 was about 112 percent and our growth from 2023 to 2024 was another 52 percent. So I think we’re going to slow down a little deliberately between 2024 and 2025, but we’re still looking at probably a 23 percent or so growth projected for next year.”

The third panelist, Greg Parker, global vice president, security and fire, life cycle management, for Johnson Controls’ integration side, Glendale, Wis., says his company is primarily focused on the smart building market. “We’re really focused on healthy, safe, sustainable buildings, and smart building innovation,” he says. “In terms of revenues and bookings, we grew 4 percent organically in fiscal year 2024. However, in Q4 we had 10 percent sales growth.

“If I break that down one level further, our service business grew 8 percent in fiscal year 2024 and orders were up 10 percent for service,” Parker continues. “That indicates a continued growth and this is a very important and strategic part of our business. And then one more layer down for fire and security … we expect those businesses to grow low single digits in fiscal year 2024 because our indications are the new construction market was a bit softer throughout the year.”

I think our challenge as integrators is closing the knowledge gap between the potential the systems we’re now selling have and what the end customers are actually able to do.

Technology Changes & Impacts

This year’s Industry Forecast— illustrated in the charts and graphs here and on SDM’s website — did not contain too many big surprises, but did reflect some of the larger trends in the industry. For example, video analytics/artificial intelligence overtook the general category of video surveillance systems as the technology expected to bring the biggest revenue changes in 2025, with nearly three-quarters anticipating an increase in growth in that offering. The fire alarm category also jumped 8 percentage points over last year’s report, along with smart home and perimeter security.

Some of these technologies were also touched on in our panel discussion, particularly AI.

“I think that we are on the dawning of the artificial intelligence or AI revolution,” Petrusha says. “The ability to have true AI integration into our products like our surveillance systems is just mind-blowing when you consider the possibilities and the offerings that we can make as alarm dealers to the consumer for products and services that we can’t even dream of today.”

Parker says JCI is absolutely utilizing AI in their smart building offerings. “We are leveraging artificial intelligence to make sure that we’re giving our customers a very clear picture of the health of their building and how sustainable it is, and how well that building is performing,” he says. “Basically we’re paving the way to an autonomous building.”

Ford also says AI is having a big impact on the industry. “I think our challenge as integrators is closing the knowledge gap between the potential the systems we’re now selling have and what the end customers are actually able to do. There’s so much at their fingertips now, we just need to make sure we’re keeping that gap as small as possible for them so that they’re using what they can. And if they are, there are incredible efficiencies that could be a result of that. … So AI and deep learning are really game changers for us. It’s been around for a while, but what we’ve seen even in the last 12 months is pretty incredible.”

While AI as opportunity is never in doubt, the rapid pace of change is definitely being felt, with both “keeping current with technology” and “training employees” rising 6 and 10 percentage points respectively in the list of top challenges for 2025, according to Industry Forecast respondents. Finding and retaining employees remains No. 1, however, a perennial challenge.

All of these trends are combining to form a changing landscape for security dealers and integrators — something the Security Industry Association has identified as the top megatrend for 2025, according to its recently released report. The evolution of the channel, from AI and cloud technology changes, to squeezing margins, new competition and changing customer expectations are creating a challenging wave of change, according to the SIA report.

The Panel Talks New Administration Expectations, AI & More

SDM spoke with our panelists about their expectations for the new Trump administration, tariffs, AI and what keeps them up at night as well as what excites them about the security industry. Listen to what they had to say here.

Listen to more from SDM Editors' Podcast.

Outlook for 2025

Despite these new challenges, both Industry Forecast respondents and our panel are quite optimistic looking ahead to 2025.

Concern about economic conditions is still under 30 percent (down from 44 percent in 2023 and up just one percentage point from last year) when asked what will have the most impact on sales in 2025.

Panelists are also quite bullish for the coming year.

“2025 looks like a year of optimism for Advanced Security Systems,” Petrusha says. “We see strong growth in our commercial products — everything from our security, access control, life safety services and surveillance products — and we are an integrator as well, so coupling those together will give us a strong offering for our commercial sector. Residentially it is still a struggle for 2025, and I’m not sure exactly why that is, but we’ve got some changes that we’re implementing and new offers for the residential sector of our business that we feel really confident about.”

Ford is equally positive on the coming year. “I am optimistic as well for 2025,” she says. “We are deliberately pumping the brakes a little bit on growth as I said, so what we’re trying to do is modify what makes up our revenue into some more profitable areas, the most pressing being the service of maintenance. So we’re trying to grow in different ways, trying to grow that recurring revenue business. And in our world, that’s not the monitored accounts; it’s the service and maintenance contracts. We are forecasting about a 20 percent to 23 percent growth for the year, which sounds like a lot, but we’re still a scaling company, so we have some runway there. I feel very confident that we can do that, based on our performance in the past. So overall the outlook is rosy.”

JCI is optimistic, though Parker adds it is more sector and vertical dependent. “Obviously, we are optimistic about the growth opportunities. As I mentioned before, we were forecasting a low single digit growth, but again, that’s across fire and security across the board, not in any one particular segment. I do think that certain segments could be bigger versus others, but it’s a bit early to predict right now where. … And as all of us know, conditions could change, particularly in a post-election year.

2025 looks like a year of optimism for Advanced Security Systems. We see strong growth in our commercial products — everything from our security, access control, life safety services and surveillance products.

For more on this year’s panelists’ outlook on that, technology changes and what keeps them up at night, listen to the podcast. And be sure to check out “The Panel Talks” sidebars to learn more about what our panelists have experienced in 2024 and anticipate for the coming year regarding RMR, 2025 sales, growth opportunities and competition.

But the big take-away from both the panel and from the numbers reflected in the Industry Forecast, is that 2025 is likely to be an exciting year for the security industry, no matter what happens with external pressures.

“We do have an administration change and there is talk of a continued economic recession looming, but despite all that, I think we’re in an industry where we are selling a needed product with ever advancing technology that puts us in a real good place to continue to meet the needs of our customers,” Ford says. “We just have to keep doing it better and better to meet their ever-evolving needs.”

Parker echoes that, while giving a nod to the workforce shortage faced by everyone in the security industry. “I think my parting thought is that if anyone out there gets excited about change, technology, working on really cool things that are relevant in all of the world, and takes pride in keeping people safe and secure and saving lives, then this is the industry to come work in. That really is what gets me excited and why I love my job.”

Petrusha concludes, “We are in the right business at the right time. I am excited in a multitude of ways from the technology to the new generation of security leaders taking over, to the evolved array of services and products that we can use to make people’s lives better, driving home peace of mind for the people that use our services.”