The typically steady fire and life safety industry saw growth in 2019, with overall global revenues surpassing $7.5 billion, according to David Gonzalez, research analyst, physical security and critical communications, Omdia, London.
Indeed, an overwhelming majority (89 percent) of respondents to SDM’s 2020 Industry Forecast Study found that the fire alarm and emergency communications market was excellent/very good or good in 2019. Many manufacturers and integrators noted either increased overall growth or flat revenue compared with 2018.
Mark Hillenburg, vice president of marketing at DMP, Springfield, Mo., says 2019 growth in the fire space was “better” overall for their company when compared with 2018. He points to continued adoption of cellular and network or dual communication fire communicators as factors for growth, along with the opportunity for upgrades.
Last year, Mountain Alarm, Ogden, Utah saw its best year ever for fire sales in 2019, according to CEO and President Eric Garner. The company does approximately 60 percent of its revenue from fire systems — including installation, monitoring and inspections. Garner says that thus far in 2020, even with an impact from the coronavirus pandemic, the company’s sales are very close to even with where they were at the same time last year.
Mircom Group, Toronto, a manufacturer of life safety hardware and software, saw double digit growth in 2019. Carl Pelaez, senior national business development manager, attributes that growth to a strong economy and an increase in business, hospitality and mixed-use residential space construction and renovations. “It was a great year,” he says. “We saw a lot of growth in live-work-play projects with residential high-rises, and restaurants and businesses requiring complex building requirements for those spaces — particularly shared spaces [among commercial and residential such as stairwells].
In the fire and life safety space, Bosch Security and Safety Systems also performed well in 2019, according to Christopher Miers, regional marketing manager for the Fairport, N.Y. company. “I think the market performed as expected, which is generally an increase over the previous year,” he says. “Especially in 2019, we focused on attracting new relationships and investing in new opportunities.” For example, according to Miers, the company recently re-engaged in selling its products through distribution with ADI in the U.S., an avenue Bosch explored several years ago and decided to focus on again.
For installers and inspection companies in fire and life safety, many are focusing on new avenues for recurring revenue.
In the Seattle area, Shannon Woodman, president and CEO at Washington Alarm, saw a lot of growth in new construction over the past two years. To continue to capitalize on the growth there, Woodman says that the company is looking at expanding testing capabilities to further services such as smoke detector sensitivity testing.
In 2019, Custom Alarm of Rochester, Minn. — which sees roughly 50 percent of its sales from fire installation, modifications and inspections — saw an uptick in new partnerships with electricians and other technicians in the field. “We were successful creating some new opportunities by working with electricians on big projects to help provide the design and equipment installation of field devices,” says Brandon Clig, sales manager at Custom Alarm.
The company is also demoing a product they hope to offer in Q4 that will offer life safety system software connected to the cloud for remote connectivity, troubleshooting and system modifications.
“The idea is that it will lessen the amount of people in the field in a particular inspection, which helps us with reduction of labor and recurring revenue from the end user,” adds Melissa Brinkman, CEO of Custom Alarm.
Fire Monitoring During a Pandemic
When COVID-19 first laid shelter-in-place orders throughout the U.S., many monitoring centers struggled to adjust their 24/7 monitoring services to allow employees to social distance, work from home and more, while maintaining secure connections and without missing events and responses. North America has never quite dealt with a situation similar to this with widespread shelter-in-place orders affecting most of the continent, and current monitoring rules did not address a situation like this previously.
“We worked with the alarm industry to develop reasonable guidelines and alternative operating methods for scenarios such as the current pandemic,” says Steven A. Schmit, alarm services, senior staff engineer, UL. “As the revision process was accelerated to UL 827, the Standard for Central Station Services, CAN/ULC-S301, the Standard for Signal Receiving Centers Configurations and Operations and CAN/ULC-S561, the Standard for Installation and Services for Fire Signal Receiving Centers and Systems, many industry members were left with questions on how to proceed while maintaining compliance in our new normal.”
Together, with industry experts across the U.S., The Monitoring Association (TMA) and UL have been hard at work adjusting current Virtual Workplace Guidelines to allow monitoring centers to have employees work remotely when necessary, tackling ways to back up signals, and ensure efficiency and uninterrupted operations during times of crises such as the coronavirus pandemic.
“The industry has done a tremendous job working together and allowing for remote options for monitoring,” says Shannon Woodman of Washington Alarm. “Together, UL and TMA got committees together to revise rules and allow for these circumstances, and it has been huge to have these guidelines and a collaboration like this.”
While the new guidelines were initially meant to tackle intrusion alarm response, to address the fire alarm monitoring component committee members are working on getting the guidelines into NFPA standards as a temporary interim amendment (or TIA) that will address the issue during the interim until NFPA 72 can tackle the issue in its next couple of standards cycles.
“This is a shortcut that will work in the interim for the 2019 and 2016 editions of NFPA 72 until we can address it,” notes Richard Roux, NFPA 72 staff liaison, Quincy, Mass.
Though the adoption process was in the midst of being finalized at press time, Shane Clary of Bay Alarm Co. says that many central stations across the country have already implemented and are following the guidelines as they continue monitoring while allowing some employees to work remotely.
“This is already happening right now across central stations, but this allows us to have those guidelines of record,” Clary says. “Initially, we all thought the guidelines for shelter in place would only last a few weeks and life would go on, but because it has taken longer and isn’t going away yet, these provisions need to be made.”
Standards, Adoption & Opportunities
Cloud features or cloud-based programming is something that Judy Jones-Shand, vice president, marketing, at Napco Security Technologies Inc., Amityville, N.Y. has seen demand for from dealers and installers in the fire market for easier installations and labor savings.
In addition, the continued retirement of POTS or copper telephone landlines still remains an opportunity for installers to upgrade older fire systems, and for new projects to include cellular or other system technologies, Jones-Shand says. “[POTs] are no longer required by the government to maintain them; we see a large shift of the millions of fire alarms in the market transitioning to cellular communications.” She adds that another opportunity is the upgrade and replacement of current cellular alarm reporting systems to meet the deadline for 3G and CDMA cellular sunset cut-offs over the next year and a half or so.
“The approval of cellular has really been a big game changer for the industry,” says Robert Vezina, president, Life Safety Engineered Systems Inc., Buffalo, N.Y., a fire alarm integrator focused on national accounts with multiple locations. He says one of the benefits to the installer is just how simple cell dialers are to install.
The acceptance of sole pathways of communication with cellular technology by more AHJs gives fire alarm companies the ability to drop the landlines and increase their recurring revenue.
“Cellular technology has enabled the dealer to have full control over the installation, eliminate the cost of the telco and increase that recurring revenue for themselves,” says Daniel Rosales, senior director, technical services, Telguard, Atlanta. “As the trend continues to be increasing recurring revenue for the industry, there is certainly an opportunity there.”
Life Safety Engineered Systems, which does about 80 percent of its business in fire, has noticed a trend, particularly from multi-location customers to invest in recurring revenue maintenance and health checks of their fire systems to ensure code compliance — a space that has been a great opportunity for the company, according to Vezina. “More companies really love the concept and it has started to take off for us,” he says. “We have an all-inclusive plan where we do testing, guarantee compliance and even pay any fines from the AHJ or fire marshal, along with repairing anything that needs fixing, all for a monthly fee.” Vezina adds that interest in such plans has also seen an increase for the first half of 2020, as companies or spaces that have been closed begin to reopen and want to guarantee compliance without adding to their workload.
Another area of growth in 2019 was the replacement of carbon monoxide detectors, and those in the industry expect to see that demand continue through 2020 and into the next couple of years. “Carbon monoxide detectors became commonplace between six to eight years ago in the U.S. and the carbon monoxide sensing element in these has a typical lifespan of less than 10 years … so a lot of these installations are coming up for renewal and that’s definitely an opportunity and it’s definitely new for the industry,” says Jason Falbo, chief technology officer at Mircom Group.
“Smoke detectors that are tied into a control unit can be left in forever as long as their functionality and sensitivity tests are met, but smoke alarms, combination detectors and carbon monoxide detectors all have an end-of-life requirement and we are just now starting to get those phone calls from people and hitting that first batch of the end of life of the products,” explains Rodger Reiswig, fellow and vice president, industry relations, global fire detection products, Johnson Controls, Milwaukee, and the current chair of ESA’s codes committee for life safety systems.
CO detection may be low-hanging fruit for fire alarm installers, but Tom Parrish, vice president AFAA, chair of codes and standards and vice president of Telgian Holdings Inc., Phoenix, says he sees another big opportunity for installing companies in carbon dioxide (CO2) detection/monitoring.
“This is something relatively new that’s going to affect more and more projects as AHJs adopt the new changes to the building and fire code for commercial structures with large supplies of CO2,” Parrish says. CO2 detectors monitor locations with large volumes of carbon dioxide for leaks, a requirement developed after a death in a commercial space occurred from leaking CO2, he explains. Examples would be a fast food restaurant or other location with a high number of carbonated drink machines. “There are also requirements for ventilation in these spaces as well as the monitoring,” Parrish says, adding that just like CO detectors, end-of-life issues with carbon dioxide systems present an additional opportunity for fire alarm companies to gain recurring revenue from annual testing and calibration, along with repeat business at the end of the life cycle.
NFPA Reacts to COVID-19
NFPA took its 2020 technical sessions online.
Among the many seminars, tradeshows and industry events that got canceled due to the COVID-19 pandemic, the 2020 NFPA Conference due to be held in Orland, Fla. in June was one of them. But the National Fire Protection Association (NFPA) didn’t want to let a year of tech sessions and member voting go by for its 2021 editions of standards. Most notably for fire alarm dealers and installers, NFPA 1 standard development and voting was scheduled for the 2020 conference.
“It was important to us to have a dynamic way for participants to debate and participate remotely, while keeping our standards on track and on schedule,” Dawn Michele Bellis, director of standards administration at NFPA, Quincy, Mass., tells SDM.
So a cross-functional team across every corner of the organization got together to create an electronic forum that would allow NFPA members and participants to debate revisions and vote. Initially, Bellis says, NFPA was looking at all different options, including a virtual conference held on a video conferencing platform, but the organization couldn’t find an option that would allow for a live virtual video event for the number of people typically included in the live debates.
“So we decided to figure out a way to look at the essence of what we do and determine how to turn it into an electronic format that would open up the debate, allow people to follow the debate, submit their own motions, and ultimately vote,” Bellis says.
NFPA turned a portion of their website — www.nfpa.org/2020techsession —into a live electronic forum that allowed anyone in the world to access the debates going on for that year and submit motions. Users were able to see a daily report for the two weeks that the open online debate was posted and Bellis says NFPA set up the site so that viewers could easily see comments for a motion and comments against a motion. The organization left the debate open for two weeks to maximize participation. After the two weeks, the online forum made voting online open for one week.
“To ensure accuracy and make sure only eligible voters counted, we cross-checked credentials against our database,” Bellis explains. And in the end, though registered votes were fewer in number than a typical in-person tech session, the organization had more than 200 voters register and participate, and it gave the NFPA a forum to perfect and evolve over time if ever needed again. “It wasn’t quite the same numbers, but we were very excited and encouraged by the participation and the amount of people that let their voices be heard,” she says.
BDAs, Area of Refuge & Systems Integration
In many areas of the country, 2019 was a year in which BDAs (bidirectional amplifiers) gained traction and wider adoption for new and retrofit projects; many expect the demand to continue. BDA systems extend the existing signals of first responder and fire department radios to ensure they work inside and outside of a building.
“There is a movement with AHJs and the fire service to help ensure the functioning of land mobile radios within buildings during emergency situations,” says Bruce Johnson, regulatory services, regional manager, UL, Northbrook, Ill.
Installing BDAs has been a source of growth for DynaFire, Casselberry, Fla., according to Steven Hatch, CEO. “We take the tower network that the fire department uses for its radios and we enhance and strengthen that signal inside of a building. It’s becoming more commonplace as jurisdictions adopt it,” he says. BDAs not only present an opportunity for installations, but also for recurring contracts on inspection and maintenance.
“We have definitely seen more requests for contractors to provide bidirectional amplifiers,” says Craig Summers, vice president of sales, fire and security division at Potter Electric Signal Co., St. Louis, Mo. “Historically radio companies were doing these, but now our traditional customer base is becoming more able to take on [these projects], confidently designing and installing these systems; and we only expect demand to increase.”
Another area where Summers is seeing opportunities is the integration of fire alarm systems with building management systems, as well as integration with other life safety systems including mass notification and shooter detection.
“In Minnesota, a voice system was not previously mandated,” says Clig of Custom Alarm. “It was just audio or visual with strobes. Now, based on occupancy — which usually tends toward school and campuses — pre-recorded voice systems are being implemented.” He says that additional feature sets such as tying the systems into the fire alarm panel, or adding emergency lockdown capabilities, active shooter notification or weather alerts has been a growing area of business in the last year.
Another change that many jurisdictions have adopted is regarding the area of refuge standards, and Reiswig says this is another opportunity for traditional fire alarm companies. “There have been a lot of changes with area of refuge,” he says. “We are seeing requirements for two-way area-of-refuge communication systems that are ADA compliant. I think this is an area a lot of dealers can get into or they are missing out.” He adds that dealers and integrators can be offering area-of-refuge communications, as well as elevator lobby and other stairwell communication systems beyond just high-rise buildings.
Though 2019 was full of opportunities, one pain point for fire alarm installers was increased tariffs passed along from manufacturers to installers. The increase was due to tariffs of up to 25 percent imposed by the U.S. Government on shipments made from China after May 2019, as well as tariffs on goods imported into the U.S. from Mexico. Inflation surcharges (of around 2.5 percent) passed on from manufacturers hit other parts of the installing market as well mid-2019, but many fire alarm companies felt an impact.
“That was notable because a lot of fire projects might take nine months to a year before installation, so we sell the project but don’t buy the equipment right away,” explains Garner of Mountain Alarm. “So we sold several jobs in 2018 and then when these tariffs [or inflation surcharges] were imposed by the manufacturers, by the time we were ready to install in 2019, we lost those margins because we had already quoted a price.”
Proposed Changes to NFPA 72 – 2022 Edition
With the latest edition of NFPA 72 released in 2019, the next cycle for the standard will be published as the 2022 edition. Roy Pollock, committee member on both NFPA 70 and 72, as well as SDM’s 5-Minute Tech Quiz columnist and current director of licensing and training compliance at Comcast, Philadelphia, says that typically committees would be a few months farther along for the 2022 version proposals if in-person meetings hadn’t been canceled this summer, so a lot of potential changes are unclear right now. “We’ve had to break up what would normally be a whole week of meetings, spread out into shorter, virtual meetings, so requests for changes and discussions are still happening right now,” Pollock said at the time of publication.
Two of the biggest changes NFPA72 — which is the standard that covers the installation, inspection, testing and maintenance criteria for required systems — may include in the 2022 edition will focus on survivability and cybersecurity, according to Richard Roux, NFPA 72 staff liaison.
“As more and more things get connected to these networked platforms, there is potential to be compromised or targeted,” Roux says. “If I have a fire alarm signal being sent through the internet to a central station, how do I protect that? In addition, remote programming or maintenance remotely on a mobile device or laptop also open up points of compromise, so there are a lot of things here that the committee has to talk and think about.” Right now, cyber security provisions will be tentatively addressed in a new chapter of NFPA 72, called Chapter 11. But, as Roux notes, what that will include is still in the draft stages. “Chapter 11 right now is very cumbersome and still vague, and there are a lot of manufacturers and others that are not happy with it, so there is still a lot to be addressed,” he adds.
Survivability is meant to address the wiring of a fire alarm system, to ensure that it lasts/allows the system to keep working for a certain period after a fire has started. “Survivability is looking at protecting the wiring of the system if a fire develops,” Roux explains.
Shane Clary at Bay Alarm emphasizes that any changes to the standards, including survivability and cybersecurity, will be debated and voted on during next year’s annual NFPA conference scheduled for the summer of 2021 in Las Vegas. After votes have been cast, the edition is scheduled to be finalized by the committee before the end of 2021 in time for 2022 publication, Roux adds.
COVID-19’s Impact
A generally solid market, the fire and life safety industry has definitely seen an impact from the coronavirus, though due to fire codes and regulations that will always require such systems, the revenue-related impact may be smaller compared with other industries. According to SDM’s 2020 Industry Forecast Study, 48 percent of respondents expected 2020 revenues to increase in the fire space, and another 45 percent expected 2020 revenues to stay the same over 2019. Though the study took place before COVID-19 shutdown the U.S., many industry experts still expect to see an increase or flat revenues for 2020.
Omdia projects that the fire safety industry will only decrease in revenues by 0.5 percent in 2020, though Gonzalez notes that other professionals believe the impact could be even stronger.
Other sources point to scheduling difficulties and a shift in continuing education and training. Perhaps the largest overall impact is issues with building access, delayed or slower-than-normal testing done by certified labs for product approvals, as well as halted or slower inspections and approvals from AHJs.
“It’s hard to keep track as different parts of the country have been very inconsistent,” says Parrish of AFAA and Telgian Holdings Inc. “We have counties where the entire AHJs are shut down or fire marshals are approving nothing or very little. Some areas have worked out limited inspections with local AHJs with the caveat that once everything is opened, they can come in and do a full inspection. It’s a balancing act right now,” he says.
Some are seeing an uptick in work while buildings are vacant. Others have seen limited access to buildings and have built up backlogs of visits that need to be done, creating scheduling chaos.
“We saw a big slowdown in construction in some parts of the country such as New York and Florida,” says Chris Welch, sales manager for the Midwest, Advanced Fire Systems, Auburn Hills, Mich. “But others kept on as they were, so it will be interesting to see how it will continue overall.”
Garner of Mountain Alarm says that Congress’ Coronavirus Aid, Relief and Economic Security (CARES) Act can be a talking point with customers that are in need of fire alarm retrofits, since they could write off the upgrading of a fire alarm system as part of a capital improvement to their building.
UL 217/268 is Coming
The effective dates for the 8th edition of UL 217 Standard for Smoke Alarms and the 7th edition of UL 268 Standard for Smoke Detectors for Fire Alarm Systems were extended from May 29, 2020 to June 30, 2021. The updates will introduce three new detection performance tests for smoke detectors in UL 268, including a flaming polyurethane test, a smoldering polyurethane foam test and a cooking nuisance test — a.k.a. the burger test. Many sources in the industry expect the standards to trigger an opportunity for increased retrofits and upgrades in the field.
“Polyurethane is the real culprit of why these changes are coming, as construction materials in the home and offices have changed over time,” explains Rodger Reiswig of Johnson Controls and ESA’s codes committee for life safety systems. “Today, we see a lot of synthetically made materials used over and over again and this stuff smolders and puts off bad gasses. When the states and municipalities adopt it, we will see growth here,” he says.
“A big conversation that’s been happening and will continue to happen for the next year is this new nuisance test,” says Christopher Miers, Bosch Security and Safety Systems. “First and foremost, it’s in the 2019 edition of NFPA 72 and this will affect every smoke detector manufacturer in the U.S.”
David Gonzalez, Omdia, says he expects the additional requirements to lead to higher than average selling prices of affected alarms and detectors in the short term for companies/countries that are UL compliant.
The Seattle area was hit hard from construction shutdowns in March, and a lot of projects went on hold, Woodman says. “Our sales team changed their focus and offered CARES packages to help close sales.”
Woodman adds that on the inspection side, Washington Alarm has had a lot of access issues, for which AHJs are giving additional time to complete annual inspections. On the fire monitoring side, however, the company has yet to see any attrition because it’s required in many cases. “That’s one of the reasons we like the fire business,” she says. “I anticipate we will eventually have monitoring reductions in the future just based on people not going back and [not] filling their buildings up or downsizing, so I think it may lag for a few months, but then come back and be fine.”
For Shane Clary, vice president, codes and standards compliance at Bay Alarm Co., Concord, Calif., the biggest impact is the lack of in-person networking, tradeshows, technical sessions, etc. due to cancellations.
“That’s one of the biggest issues I see is that we are not able to go out there and see the new technologies,” he says. He adds that he has had some success with virtual meetings and online product demos or webinars, and that the industry is adapting quickly to online engagement, but he misses that in-person education and networking.
“There is a cost savings because you’re not traveling and I think you can do some stuff virtually, but it doesn’t replace talking to people and getting out there to touch and feel [the products].”
