Alarm monitoring companies' end user market can be divided into two segments, commercial and residential.

Commercial Monitoring

Owners and operators of commercial sties equipped with security systems conduct their own monitoring on site, have monitoring done remotely by others, or use some combination of the two. Commercial monitoring companies typically monitor anywhere from 500 to 500,000 remote premises from a single central station.

Residential Monitoring

The majority of residential premises owners and lessees with security systems have their systems monitored by a commercial central station as opposed to having systems directly dial the police, fire department or other party. Monitoring is typically done under a written contract with either a monitoring company or independent security dealers (ISD) that installs security systems and subcontracts the monitoring to a monitoring company. The monitoring business is the most profitable sector of the security industry.

A few large players dominate the industry. ADT, Protection One, Brinks Home Security, Monitronics and Honeywell have at least 45% of the market. Additionally, ADT is a dominant player in the industry accounting for approximately 32% market share. ADT has gained its dominant position through acquisitions and its long tenure in the business.

• The Residential Alarm Monitoring industry will likely continue to be driven by the rebounding economy and new construction market, and is expected to grow 6% annually
• Penetration of the residential monitoring market improved to 21% in 2004
• Technology will continue to drive consumer adoption and product innovation
• New digital technology, networked systems, home automation and A/V integration are increasing revenues from sales and installation
• After finding limited sources of financing from 2001 to 2003, customer acquisitions declined and operating issues were exposed. Residential alarm companies placed a renewed focus on stabilizing their operating metrics and have decreased attrition rates as well as customer creation costs

• ADT Security
• Protection One
• Brinks Home Security
• Honeywell Security
• Monitronics Intl.
• Integrated Alarm Services Group
• Sonitrol