A recently updated report from IBISWorld shows a stagnant market for security alarm services the past five years. A domino effect from the recession of 2008 led to reduced demand for new construction in the residential and commercial sectors. This resulted in less demand for new alarm service customers as smaller alarm companies were unable to ride out the adversity and either went out of business or got bought out by larger firms like Tyco.

In 2013 the industry has shown some signs of emerging from the doldrums, but not rapidly. Industry revenue was expected to grow 1.4 percent, only slightly better than the 0.0 percent growth the previous five years.

One area where the industry has a great opportunity to make a more significant comeback is in home automation. The recent success of companies like Nest, with its thermostat and smoke/carbon monoxide detectors that can be controlled via a smartphone bodes well for similar automation with security alarms.

Part of this trend is demographic. Seniors, Baby Boomers and Generation X age groups vary widely in enthusiasm for smartphones ranging from total avoidance to moderate use to dependency. Millennials on the other hand, will be a better target market. According to Nielsen, over 80 percent of this age group owns a smartphone, making them more likely to purchase home automation systems, including alarms in the future. 

According to research by Markets and Markets, home automation will increase from a $16.9 billion industry in 2011 to $35 billion by 2016. Controlling security, HVAC, lighting and entertainment systems will all be commonplace. Homeowners will be able to automate homes with services provided by alarm, telecom and cable companies or with do-it-yourself systems that integrate disparate devices into a single environment. 

Although the security alarm industry has been treading water the past few years, things are looking up. The solution won’t lie in hoping for the old market to come back to the way it was before 2008. Selling home automation solutions that the next generation of homebuyers will be looking is the most likely way for the market to come back strong.