Top Systems Integrators Report 2023: Pivotal Performance

This year’s top systems integrators are largely in agreement on how they fared in 2022. Unlike their security dealer counterparts on the 2023 SDM 100 the security integration companies — and sometimes even the integration side of the same company ranked on both lists — had no trouble coming to a consensus that the market was mostly strong, especially in verticals such as healthcare, financial, utilities and education, among others.

But all was not perfectly rosy in 2022 and going into 2023. There were plenty of challenges, not least of which are continuing supply chain headaches, along with the added pressures of rising inflation rates, a critical workforce shortage and the possibility of a looming recession.

Still, much of what this year’s top security integrators have to say is positive.

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“In 2022, the market for security systems sales and integrated systems projects was strong — driven by the expanding need for more digitally advanced and highly customized security systems to protect facilities from evolving threats,” writes No. 1 ranked Convergint. “Convergint saw significant advancement across verticals in 2022, including the healthcare, financial and utilities markets. Despite ongoing supply chain disruptions, Convergint successfully maintained its growth and commitment to being its customers’ best service provider.”

No. 4, Pavion (formerly CTSI), described the 2022 market as “average” but with “pockets of strength in video surveillance and monitoring,” noting as many others did as well, the supply chain headwinds and delays in critical chip supplies.

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While the theme of supply chain issues was repeated over and over again, many of the top 100 security integrators reported banner years in spite of it.

“Overall the market in 2022 continued to be strong with bookings and overall demand, vastly outpacing 2021,” writes No. 8, The Cook and Boardman Security Integration Division. “Projects for integrated security systems within our organization increased by 119 percent. Education continued to have strong demand along with state and local government agencies due to increased funding for security. Our organization also saw growth with commercial/enterprise clients and critical infrastructure.”

No. 21, Preferred Technologies LLC, writes: “We grew substantially using our own cash, all while strengthening our culture. Sales increased 75 percent; revenue increased 50 percent; and our staff grew by almost 15 percent. The 2022 market for security systems was stronger than 2021.”

Enterprise Security Inc., No. 30, attributes its strong performance to the after-effects of the pandemic. “It was our biggest year of sales bookings — we booked over 35 percent more in 2022 than we did in 2021. … We are seeing huge demand in a post-pandemic setting. Customers are now breaking loose on budgets. Our biggest challenge remains to find qualified technicians. We experienced significant growth in the government sector. Supply chain issues persist.”

No. 35, Vision Security Technologies, echoed that sentiment very closely, writing: “We sold our largest project ever $4.5 million dollars to a county. … We grew over 30 percent in 2022 and 2021 was a record year so the market is strong. Government and education were high growth verticals. Supply chain has been and is still a major issue. We are extremely proud of how we’ve been able to manage it and still grow.”

Collectively, the top 100 systems integrators performed exceptionally well in 2022, amassing a whopping $6.58 billion in North American integration revenues — a 47 percent increase over last year and the second highest reported number in the past decade (the highest was in 2014, at $6.81 billion). Part of this was due to the addition of some large integration companies this year, including Paladin Technologies, ranked, No. 6; MCA, ranked No. 11; and Prosegur, ranked No. 20. Securitas, ranked No. 2 and LVC Companies, ranked No. 22, also returned to the report this year.

Profits were also up 5 percentage points over last year, though some report that was a greater challenge to achieve than in the past.

“We were able to increase revenue over 2021, keep all our employees and gain some new clientele,” writes No. 55, Telenet VoIP Inc. “The market showed some signs of growth. Larger projects came to the market; however, competition is extremely high and margins are low. Supply chain and increases in material costs have definitely been a factor in lower profit margins and prolonged completion schedules.”.

No. 75, Titan Alarm Inc., summed up the market this way: “We increased our RMR and IR by 20 percent organically last year. The 2022 market was just as strong as the 2021 market. The key difference between the two was the inflation that hit during this year. This raised prices, slowing the purchase of goods and services.”

Pivoting to Meet Challenges

While some of the exceptionally strong performance can be attributed to new companies joining the rankings, that is not the only reason. Many of the top security integrators tell a similar story of how they met the challenges of 2022 and the start of 2023.

There is no question there were tough obstacles in 2022. No. 71, CTCI, notes that it did experience weaker revenue compared to 2021, specifically because of supply chain issues. “We found that our largest external issues were related to the supply chain. We are still waiting for readers that were ordered over a year ago! While this constraint seems to be relaxing slightly, it is still a large concern. As a result, we were either forced to pivot to whatever products were available or wait for delivery of specified material, causing completion delays and customer dissatisfaction.”

No. 6, Paladin Technologies, writes: “Throughout the ongoing recovery of COVID-19, we were impacted significantly with supply chain through 2022, both on the client and construction side, as well as our manufacturer supply chain. Further to supply chain, growing our workforce organically has been a challenge. Like many, we have struggled to recruit and retain people — we are always in need and it’s hard to forecast resourcing needs when supply chain delays then impact our project timelines.”

This was the case for the majority of companies ranked this year. However, several shared specific ways they had changed their approach to keep customers happy, projects on track (as much as possible) and money flowing.

For example, No. 8, The Cook and Boardman Security Integration Division, writes: “We continue to see supply chain disruptions specifically related to video surveillance and access control manufacturers, which resulted in project delays. However, we have adjusted how we work with our solution partners to mitigate the impact internally and for customers. Our purchasing strategy has also changed to minimize impacts and we are working closely with manufacturer and distributor partners to source products that are more readily available. Furthermore, we have seen improvement on correct forecasting of delivery dates despite these impacts, which has allowed us to improve our customer experience and schedule project resources more accurately.

No. 29, Advanced Electronic Solutions, shares: “Changes in the market and the consistent issue with obtaining supplies created problems completing jobs. AES was able to think outside the box to finish jobs (albeit sometimes beyond the original completion date).”

Wilson Fire, No. 62, notes it had to find alternate available products due to supply chain issues, along with purchasing from non-dealership vendors to get products in time.

Kevin Santelli, vice president – commercial and national accounts business, for No. 45 ranked Guardian Protection, writes: “2022 was also a year of ongoing labor and supply chain shortages, requiring us to be more accurate with forecasting in all parts of our business. We made significant investments in stock inventory to guarantee we would be able to meet the needs of our customers on time and on schedule.”

And Peak Alarm, No. 46, says that its greatest accomplishment in 2022 was “being able to rise above the one-two punch of inflation and workforce shrinkage to come out with stronger than expected financial results. We accomplished this through aggressive pricing strategies, allowing us to retain margins and deleveraging so that the cost of interest was not an anchor dragging us down.”

Top 2022 Systems Integration Projects

In addition to top-ranked Paladin Technologies, with its $19 million project, a number of companies from the 2023 SDM Top Systems Integrators Report shared their most successful projects completed in 2022. Here are a few of the stand-out projects that helped these companies achieve their top-ranked status.

Convergint, ranked, No. 1, worked with an industry partner to replace a legacy physical access control system and video management system with a modernized security management platform that simplifies and improves physical security operations while delivering tangible ROI and maximizing performance, enabling new levels of security collaboration, automation, and response. After deploying this solution, the customer, an energy company, experienced returns from the custom integrations of perimeter detection solutions that enabled the categorization of alarm inputs, automation of incident response workflows, and faster investigation of security events.

RFI Communications & Security Systems, ranked No. 16, completed a video system upgrade for a large retail store. The project was initiated by happenstance when a sales member tagged along on a service call for a bad camera. Always looking for opportunities, the sales executive noticed the current video system consisted of an outdated and unsupported analog CCTV system with over 200 cameras. At the time, RFI only provided local service work for the customer due to the national size of the retailer. With the OK from the customer, our sales team reached out to the national integrator to propose an elevated solution to upgrade their video and camera system. After much back-and-forth discussion, RFI received the go-ahead to move forward with the proposal. With the hard part out of the way, RFI faced another challenge from the state licensing board. In order for RFI to complete the installation, they would need to work directly with the customer, removing the national integrator from the equation. The integrator was understanding and continued to offer support where they could. RFI worked with the retailer over the last year on eight different design renditions before settling on a completely new state-of-the-art video system consisting of 266 cameras, four client stations and all new cabling. The project is now 95 percent complete and the customer absolutely loves the end product and the new features have surpassed their expectations. The best feedback we’ve received is, “The Fisheye cameras are a game changer!” RFI is continuing to work with the customer on a service plan to protect their investment in the future. In addition, the customer is nestled in the middle of a large retail mall. The mall’s management team has been so impressed with the system they invited RFI to work on a solution to upgrade their systems as well.

Stone Security, ranked No. 18, is helping one of the nation's largest self-storage companies transition to cloud VSaaS. What started out as a pilot project will be rolled out to 2,000+ locations nationwide. // IMAGE COURTESY OF STONE SECURITY

American Direct AccessNsite SCS Avalon, ranked No. 23, recently worked with the Houston Museum of Natural Science (HMNS). The permanent exhibits span astronomy, space science, Native American culture, paleontology, energy, chemistry, geology, seashells and Texas wildlife. HMNS also houses three other venues: the Burke Baker Planetarium, Wortham Giant Screen Theatre and Cockrell Butterfly Center. HMNS is experiencing an exciting and transformational period. Permanent exhibit galleries either have undergone or are undergoing major renovations. The museum’s strategic plan includes providing guests greater access to the collections, to both the physical objects on display and in-depth scientific and historical information through enhanced virtual options. In order to provide the best guest experience and also provide the museum with the most secure infrastructure, the museum’s design team turned to American Direct, DBA Security Control Systems (SCS). SCS Operations Manager Matt Fry consulted with HMNS to understand that any museum access control system needs to have a delicate balance. A world renowned museum like HMNS needs to be inviting to all, yet secure — open, yet protected. The SCS team suggested a full rip and replace of access control product and provided a multi-layered access control system including one video management system and an intrusion system. SCS provided the installation team and handled all IT structure and data drops, ensuring that all systems were integrated and configured correctly to effectively work together. Prior to installation, the SCS team walked through the museum to identify any potential challenges and they stayed in constant communication with the on-site project manager to coordinate installation schedules. HMNS stayed open during renovation, but sometimes closed certain exhibits until renovation was complete. As HMNS proceeds with renovations, SCS is supporting them with a totally integrated security system.

Custom Alarm, ranked No. 38, worked with The Landing MN, a new location in Rochester, Minn., whose mission is to provide assistance, guidance and support for those facing homelessness. The non-profit organization was built upon the premise that all are welcome and arms are open as they serve those in need. The group works to bridge the gap between those in need and the services within the community, such as housing assistance, medical needs, and much more. Custom Alarm was contacted by Knutson Construction directly in July of 2022 to be brought in to the project. During the next few months, the Custom Alarm team worked with the ownership group from The Landing MN as well as the general contractors in order to design a system. The first part of the process was designing a fire alarm system that would meet today’s standards and fire codes. In Rochester, Minnesota the local jurisdiction has put in place additional ordinances in order to keep our community as one of the lowest for fire related deaths in the region. This building had a sprinkler system that Custom Alarm monitored via a Notifier Fire Warden 50 Fire Alarm Control Panel. In addition to monitoring the sprinkler points, the Custom Alarm team monitored the kitchen Ansul hood system as well as provided notification in the main corridor. Custom Alarm was able to install a Napco Starlink wireless communicator onto the fire alarm system in order to monitor the system 24/7 via our Monitoring Response Center. One of the main concerns from the development team was for providing sufficient video surveillance coverage in order to provide a sense of security to those that were coming to The Landing. The complete Hanwha Video Surveillance system included 15 Hanwha cameras with Wisenet Wave licensing. On the perimeter of the building, Custom Alarm installed Wisenet 5MP Vandal Proof Dome Cameras and on the interior 5MP dome cameras. The 8TB Wisenet NVR has provided up to 30 plus days of video recording footage and we are also utilizing notifications with smart analytics on the majority of the cameras. It was important for the staff to have “eyes” on and around the building and property and also show visitors and residents the protection they had there keeping everyone safe and minimizing or eliminating any potential for trouble on the site.

IP Systems Inc., ranked No. 40, is currently on the tail end of an 18-month long, $5.3 million, juvenile justice center and corrections facility security takeover and upgrade. This involved the adoption of the existing video surveillance and access control system while simultaneously integrating an entirely new system with new devices. We have, independently, designed the new system to the client’s requirements by demonstrating a functional specification, which allowed the client to view, test, and approve all aspects of the scope of work prior to installation. This was achieved by IPS creating a fully operational “mock jail” where all devices were integrated within the touchscreen software. In addition, IPS has procured, configured, and installed over 1,000 new IP cameras, IP intercoms, and card readers with minimal disruption to the overall day-to-day operations of the facility. // IMAGE COURTESY OF IP SYSTEMS INC.

The Ollivier Corporation, ranked, No. 59, installed a regional command center for a major real estate company, utilizing a hosted version of Immix and bringing in multiple access control systems and video monitoring systems for event-based monitoring. // IMAGE COURTESY OF THE OLLIVIER CORP.

Visionary Systems Inc., ranked, No. 65, worked on the Lake County Sheriff’s Office Jail Project in Florida, completely replacing an existing mix of old analog CCTV and mismatched IP cameras. Floor plans were, in part, non-existent and heavily outdated, so the design team had to undertake several site walks to establish the base design. Visionary Systems’ installation teams had to work under strict conditions with extensive tool management as we were working in an active jail. Some cameras had to be paint matched to help blend in with the exterior of the building. The office team worked hard navigating the county procurement processes. This was a real team effort and something we are very proud of. The county has signed an additional contract for us to complete many more sites for them. // IMAGE COURTESY OF VISIONARY SYSTEMS INC.

CTCI, ranked No. 71, worked with CSG Law’s new headquarters in Roseland, N.J., spanning across 120,000 square feet. Features include a dedicated conference center with 16 rooms named after historical county courthouses, celebrating the firm’s Garden State heritage. Additionally, the layout was designed to maximize the wellness and productivity of the team by providing access to natural light, advanced HEPA air filtration systems and sound masking technology. // IMAGE COURTESY OF CTCI

ISO Network LLC, ranked No. 76, completed a city-wide surveillance system design and installation in downtown Birmingham for the World Games event, adding 94 cameras to the previous deployment of 150+ IP Camera systems and installing an all-new fiber network underground as well the City Walk SOC integration.

Advanced Security Systems, ranked No. 100, worked with Danco Communities to design and install a life safety system and a surveillance system as part of a new construction with the help of a grant through the Affordable Housing & Sustainable Communities Program (AHSC). These systems combined are designed to protect the building and its residents without compromising the lifestyle of the people that live there.

2023 Predictions

Looking ahead, confidence remains high in 2023 — with caveats. While 79 percent expect revenue to increase, up slightly from last year’s predictions, comments do show some uncertainty, though many are tempered with positive predictions and proactive plans to handle any obstacle.

“Labor shortages and inflation will negatively impact business in 2023; we also expect a weaker economy,” writes No. 87, Valley Alarm. “On the positive side, we expect RMR sales to remain very strong.”

Region 6 Security Integration, No. 92, is one of several companies that are already seeing supply chain woes easing: “Supply chain is obviously a disaster for everyone, but we are starting to see things normalize.”

No. 25, American Alarm & Communications, writes: “Inflation and interest rates will be the biggest threat to our business in 2023, combined with the escalating wage rates caused by a shortage of licensed technicians. COVID-19 has become less disruptive to the business. Cybersecurity is still a big concern for companies as is crime/active shooters which will continue to bring demand for security solutions.”

TRL Systems Inc., No. 28, believes we are already in a recession: “The economy will have the biggest impact in 2023. We are in a recession — no doubt. We are already seeing companies looking to reduce cost and we are seeing projects/sales that we were expecting in early 2023 get pushed to end of year or 2024.”

But just as they faced the challenges of the past year (and the COVID years prior to that), the top security integrators are by and large optimistic about their ability to adapt and overcome them to succeed.

No. 16, RFI Communications & Security Systems, is developing some ideas to help mitigate the talent shortage: “The biggest impact for 2023 is the lack of skilled labor and continued impact of rapid inflation on margin. Distinguishing ourselves by focusing on the basics through operational metrics, customer service and providing a positive culture will aid in attracting and retaining strong talent. Continuing to provide opportunity for professional development will allow us to invest in the next generation integrator.”

No. 46, Peak Alarm, plans a similar approach: “Two factors will impact our business in 2023, continued inflation and its effect on the workforce; and pricing to customers and the shrinking labor market in our region, which has the lowest unemployment in the United States. To combat this we have to continue to be the employer of choice in our area, attracting and retaining top talent who in turn can give excellent service to our customers.”

Fortress Security, No. 79, writes: “Rising interest rates will have the greatest impact operationally as well as dimming the sales forecast. Operational efficiencies created from implementing technology enhancements will improve our speed to closing sales and serving our existing customers, creating higher margins.”

LVC Companies Inc., No 22, sums the coming year this way: “The economy and continued supply chain challenges will remain uncertain. Strategizing on successfully navigating these issues will be the key to success. There are economists that have varying opinions on if we are headed for a recession, the FED is trying to curb inflation and the markets have been volatile. Big Tech companies have eliminated positions and cyber is a high focus that is costly, difficult and increasingly challenging. Manufacturers are not holding prices very long and the costs are very unstable during various stages of a project, specifically when the products are available and ready to ship. Education and communication will remain an essential, along with following the data to ensure and manage customer expectations while managing margin stability. Recruitment and retention are at the forefront for everyone and require constant and consistent evaluation, to position ourselves at a high level to build and maintain our strong workforce.”