Controversy over Market Sizing StatisticsBy: John Honovich, Published on Jan 23, 2010
A controversy between a number of US security publications and IMS Research has arisen, demonstrating some key issues in using market sizing statistics.
On January 20th, IMS issued a press release claiming that after acquiring Broadview, "ADT will now account for over half of the residential alarm monitoring services market in North America."
In response, SSN Editor's tweeted that he didn't mean to kick them but IMS was just wrong. The SecurityInfo Watch tweeted back that it was like IMS "just made it up to get a press release out." [Side note: interesting use of social media]
Finally, an SSN blog post provided feedback from IMS explaining that the original numbers "measured the remote monitoring services market for all companies owning and operating a central monitoring station" but now the metrics would be changed to include "revenues generated by independent alarm installation companies who do not own their own central stations."
Update: Jan 24, 2010: IMS has released a new press release clarifying their market size estimate. In response, Securityinfowatch criticized IMS's competence claiming they "forgot that there are independent dealers in North America with residential alarm accounts."
Given what we explained about choices on IMS's VMS market segmentation, this controversy is not surprising. One can argue whether this is a matter of perspective, a mistake, etc. However, the bigger point is that all of these statistics are heavily dependent on choice of segments which can greatly mislead users without the appropriate context.
My favorite example of this is Aimetis announcing that they were the 7th highest ranked VMS company in North America. While Aimetis clearly stated the segment they were in, for most readers it is unclear what that means (see our VMS market segmentation explanation). By excluding 90% of the video recorder/video management providers from the ranking, Aimetis made the top 10. Are they correct? Are they misleading? Almost all of these rankings require understanding the segmentation to appreciate the signification.
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