Pro Monitoring, Smart Homes and the Decline of Traditional Security

The home security industry is steadily pivoting away from equipment-heavy installations toward software-based intelligence, automation and flexible service delivery, according to a new white paper by Parks Associates.

Titled “Home Security Reimagined: Intelligence over Hardware,” the report details a strategic shift that challenges the traditional model of panels, sensors and long-term service contracts. Instead, it highlights growing consumer demand for solutions that offer adaptability, contextual awareness and daily relevance, all at a lower total cost of ownership (TCO).

Fewer new installations, but stable revenues

Parks Associates reports that new acquisitions of professionally installed, professionally monitored security systems reached a nine-year low in 2024. Yet this doesn’t spell doom for the industry. In fact, integrators may find some silver linings.

“The slow housing market, depressed consumer spending, and alternatives like stand-alone smart video devices are having an impact on security system sales,” Jennifer Kent, vice president of research at Parks Associates, explained to SecurityInfoWatch. “But while fewer households bought security systems in 2024, many security providers are seeing very low churn, which is critical for keeping up their ongoing revenue.”

Kent, the white paper's co-author, encourages integrators to rethink their approach to sales and service delivery. “Security dealers need to be ready to offer consumers choice in the products they offer, choice in installation method, transparent pricing as possible, and the ability to purchase online to capture younger homeowners in the way they like to shop,” she said.

Parks’ research further shows that younger buyers — particularly those new to homeownership — value flexibility in purchasing and installation options. This makes online retail channels, app-based support and hybrid install models a high priority for integrators aiming to expand their customer base.

Hardware that matters, and hardware that doesn’t

For integrators, knowing where to invest in physical equipment versus software-defined tools is becoming critical. Kent frames the distinction as a divide between “functional devices” and “informational devices.”

“Devices like video cameras, smart locks, garage door openers and perimeter lighting all provide functional benefits: the ability to see something happening in real time or later, control physical access to the home, and provide better visibility,” she said. These devices remain essential and often expand the value of the system while enabling recurring revenues through services like cloud storage or fire monitoring.

By contrast, many sensors, panels and keypads primarily serve as inputs and may soon be replaced or absorbed into multi-use platforms. “All of the information and inputs retain their value, and become even more valuable with the advancement of AI,” Kent noted, “but pressures of cost and disruptive innovation are likely to move these inputs into software inputs where possible or into multi-sensor devices.”

According to Parks, this shift is already underway. Cameras, smart locks and smart lights are consistently the top devices added to a security system post-installation. These technologies are seen by consumers not just as security enhancements but as tools for greater control and day-to-day convenience.

Navigating the panel-to-hub transition

The transition from wall-mounted security panels to wireless hubs — or even embedded software within existing smart devices — is offering integrators new opportunities for efficiency and competitive pricing. But it’s not without complications.

“As consumers continue to adopt more and more smart home devices, dealers will increasingly come into homes that have existing home automation devices,” Kent explained. Integrators who can incorporate third-party devices — often part of a “Bring Your Own Device” (BYOD) setup — into a unified security system can deliver more personalized, value-rich solutions. However, not all platforms support this level of integration, and the process can be time-consuming.

Additionally, this transition is widening the competitive landscape. Standalone hubs and embedded software are lowering the barrier to entry for non-traditional players such as internet service providers and mobile carriers. Parks notes that these entities are now well-positioned to offer bundled services that combine internet, entertainment and security — all from a single provider.

Still, traditional integrators have one major advantage: expertise. According to Kent, “Dealers are on the frontline of having to set consumer expectations and how new features and devices serve the customer and don’t unnecessarily expose them to privacy or data security risks.”

From deterrence to daily use

The white paper makes a compelling case that the core value proposition of home security is no longer just about emergency response. It’s about home awareness: staying informed about what’s happening inside and outside the home, and responding or adapting as it happens.

Parks’ research shows that 31% of 2024 security system buyers cited smart home functionality as the main reason for their purchase — up from just 19% in 2021. In fact, demand for home automation is now the top trigger for system acquisition, surpassing incidents like burglaries or starting a family.

This is an important message for dealers who still lead with intrusion protection. “Smart security systems are not just intrusion prevent/detection, ‘just in case’ investments,” Kent said. “With home control they are a part of how the household functions with daily engagement.”

For integrators, this means tailoring product and service offerings to support routines, automation, and convenience — not just emergencies.