Service & maintenance contracts are not only a means for security systems integrators to stabilise cash flow over a long-term period, they are also the most profitable portion of most projects. Margins for service & maintenance can be over 30% while margins for equipment are often lower than 20%.

“The importance of a recurring revenue stream for systems integrators cannot be overlooked.” comments report author and IMS Research analyst, Ewan Lamont. “Companies that are offering a value-added service contract, such as Kastle Systems and Convergint Technologies, are seeing strong growth and greater resistance to the economic downturn than those integrators that do not. Companies with high levels of RMR are also more attractive to investors and acquirers.”

“Additionally, there are major benefits for end-users who can extend the life-cycle of a well maintained system or save money by outsourcing the services that they would have previously handled in-house”, continues Lamont. “One example of this is in the casinos market, where service & maintenance was traditionally handled by on-site technicians, but is increasingly being outsourced, providing new opportunities for security systems integrators.”

IMS Research’s recently completed report, “The Americas Market for Security Systems Integration – 2010 Edition” addresses this and many other relevant topics in detail.