Market Insight

DIY security systems and the future of the professional installer

October 30, 2017

Anna Sliwon-Stewart Anna Sliwon-Stewart Analyst II, Security

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Bottom Line

  • The popularity of do-it-yourself (DIY) security systems is on the rise owing to their low cost, easy installation and smartphone-enabled operation
  • The Americas is the largest market for DIY intruder alarms and is expected to grow at a compound annual growth rate (CAGR) of more than 20 percent over the next five years
  • Professional security installers can stave off the DIY threat by adopting an open ecosystem approach and offering a greater variety of equipment and more flexible monitoring contracts and solutions

Our Analysis

In 2016, the global market for DIY security equipment reached $60 million, with the great majority of gear — 85 percent — sold in the Americas. The American market for DIY intruder alarms is forecast to grow at a CAGR of more than 20 percent over the next five years.

In recent years, the residential security market has seen an influx of DIY intruder alarm system providers from internet service providers such as Deutsche Telekom and consumer electronics companies including Ring and Nest — the latest such providers to offer DIY security systems.

DIY on the upswing

The popularity of DIY systems is on the rise for several reasons.

Self-install systems have no installation costs and can be set up fairly quickly. Equipment usually comes pre-configured, and often only requires a basic understanding of wireless technology. And end users are becoming more tech savvy thanks to the increasing availability of how-to video tutorials on intruder alarm system installation.

Alarms can be monitored through a dedicated smart phone application, bringing the costs down to zero while also freeing users from lengthy monitoring contracts.

Professional monitoring contract options for DIY systems often come at a lower price than contracts for professionally installed systems. Also, with growing availability of pay-as-you-go monitoring, users can opt to have the alarm monitored only a few months a year, further reducing the overall annual cost of monitoring.

In some cases, the cameras used in DIY systems are more affordable when compared to those offered as part of a professional package. In certain DIY systems, cameras can also be offered at a discounted rate if the user opts out of alarm monitoring services for the camera. DIY end users also have more options available to them, as they can choose from a wide range of consumer devices. With professionally installed systems, usually only one type of pre-selected camera is offered. This limits the end user’s choice to accepting the supplier’s camera or not having a camera in the system.

Very often, equipment is interoperable with a wide range of commercially available video cameras, voice speakers or video doorbells, and allows for virtually unlimited expansion and customization. Professional security systems also allow for expansion, but the services of a professional installer may be required to integrate some of the devices, and advanced features are often turned off when a service contract ends. This means that a customer may still be able to arm and disarm the security sensors for a local alarm, but any advanced automation features will not be available to non-active subscriber accounts.

Professional solution providers are under siege

New players have entered the security marketplace from other industries, resulting in increased competition and pricing pressures.

The flexibility of DIY systems has allowed non-traditional security equipment providers to increase the overall penetration rate of homes with alarm systems — something professional equipment providers have long struggled to achieve.

DIY systems are most likely to be chosen by young apartment renters, where there is no previous history of security equipment and the likelihood of annual moves is common.

In regions with high population densities, this will lead to the replacement of the professional install option, leaving DIY as a first choice for newcomers to alarm systems. For new homeowners who are also young families concerned with monthly fees, DIY systems may provide a viable option for securing property without long-term contracts.

The rise of the DIY market poses the biggest challenge to suppliers of professional security equipment.

A blessing in disguise

New players from other industries bring into play additional marketing resources to help educate consumers and drive increased awareness of the benefits of security systems.

DIY systems have helped lower the barriers to acquiring security systems. As the needs of DIY consumers evolve over time (for instance, they become property owners), they are more likely to switch to professionally installed systems, thereby increasing opportunities for the professional market via system upgrades.

DIY systems rely on open protocols and Wi-Fi connectivity that can sometimes be unreliable, creating connection issues. Some of the sensors can become unrecognizable to the system, requiring intervention from the user. In contrast, professional wireless systems rely on UL- or EN-certified equipment and operate on the basis of proprietary frequency, enabling them to work with the control panel much more seamlessly.

Not going away anytime soon

The need for professional installers will not disappear completely anytime soon.

Professionally installed systems provide added peace of mind that when equipment malfunctions, any issues can be addressed immediately by a qualified engineer.

And what’s more, the quality of the equipment is usually higher in professionally installed systems, and professional configuration and setup greatly reduces the potential for connection instability and false alarms.

Although DIY security equipment is in principle very easy to install, it is still relatively new technology. Therefore, software and connection issues are likely to surface in the process of operating the equipment, which will undermine the performance of the system. Dealing with technical support that’s available only online or over the phone could be a daunting process and may not appeal to every consumer. Professional installers are usually located across numerous local offices, making an in-person interaction much more accessible and simple.

The proportion of elderly people in economically developed countries is increasing. Many senior citizens are not tech savvy enough to install a DIY system by themselves, so they tend to rely on professionally installed systems that are usually maintained by a family member. Moreover, in many cases these systems include individual monitors like personal emergency response systems (PERS) that can alert if a vulnerable person is in distress inside as well as outside the home. In addition to PERS, many service providers have been trialing programs that analyze the routines and behaviors of the elderly. This means that instead of an elderly patient needing to wear a pendant, his or her behavior is monitored passively by analytics software that alerts caregivers and family members if something happens out of the ordinary.

Multisystem operators such as Comcast and AT&T have accumulated market share with their home security offerings in a relatively short space of time — demonstrating that there is plenty of demand left in the market for affordable professionally installed alarm solutions.

Mitigating the DIY threat

So how can professional security installers lessen the threat from the growing popularity of DIY systems? For one, they could work more closely with remote monitoring companies to provide flexible monitoring contracts and solutions to their customers.

Service providers could also add more equipment types to their security platforms to help make them more versatile and customizable.  Service providers that expand their portfolio to include indoor and outdoor cameras, video doorbells and energy saving devices such as thermostats will be in a better position to compete against DIY systems.

A more open ecosystem approach could also be beneficial for service providers, as this would allow the addition of a wider variety of equipment types outside the manufacturer’s own brand, including widely available smart home devices. IFTTT (if this, then that) technology could help to enhance integration possibilities with automation devices such as light bulbs, smart plugs and other non-life safety devices, resulting in an enhanced user experience with intruder alarm systems.

As well, professional security equipment providers could focus their efforts on commercial consumers whose installations can number anywhere from a dozen to hundreds of sensors per installation.

Some professional security companies have already released their own DIY systems that come with the quality assurance of a leading provider and security grading while offering similar benefits as DIY systems currently available in the market. These include Honeywell with its DIY Smart Home (to launch on the Indiegogo digital marketplace) and Le Sucre intruder alarm system, Bosch’s Smart Home and Nortek’s partnership with Samsung and ADT.

Research by Market
Security Technology
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