Risks in Projecting Future Sales Growth

Author: John Honovich, Published on Aug 31, 2009

The past year clearly shows the impact the global economy has on the security business. Determining what happens next is clearly dependent on which of two paths the global economy will take:

  1. Gradual Rebound - If the path of the last 6 months continues (China booming, the US Stock market skyrocketing,etc.), the economy will recover, growth will resume and conditions will resume to some level similar to 2005-2007.
  2. Drops Down Again - If the rebound of the last 6 months proves unsustainable (China's boom is a bubble, the US stimulus is not enough, etc.), the economy could drop again with more severe impacts than the initial drop, given the weakened state of the current economy.
It is not sufficient to simply gauge the competitive differences of various products and the value those products deliver. For instance, IP cameras are not 30% less valuable than they were a year ago. Nonetheless, IP camera sales are growing 30% less than a year ago.

Because of the force the global economy has on video surveillance market performance, projections or forecast are essentially irrelevant unless they clearly specify assumptions made about the overall economy.

I could see either of the two scenarios above occuring. However, there are a few issues that will happen:
  • The security market will be slower to recover than the general economy. The security market took a longer time to slowdown (still dropping for most companies in Q2) and will take a longer time to start up. Government initiatives are not favoring security (i.e., no war nor terrorism driving the recovery) and most commecial organizations will prioritize revenue earning projects over security ones (at first).
  • Eventually the bad debt on the books across the world will have to be handled and the stimulus funding will have to end. This may have no practical impact on business for years to come or it could drive scenario 2, the economy dropping down again.
Ultimately, business people should be very cognizant of the role of the economy and discount specific quantified projections for the immediate future.
Comments : PRO Members only. Login. or Join.

Related Reports on Sales

Verkada Salesman: IPVM "Stuck In A The Stone Age" on Apr 25, 2019
Verkada is 'tackling dinosaurs' and battling those, like IPVM, who are 'stuck in a the stone age'. Verkada's recent sales recruiting promotion...
Ex-Integrator Now Growth Strategist Interviewed on Apr 24, 2019
For more than a decade, Scot MacTaggart was a security integrator (at PA-based PSX). In late 2018, he left the industry. He is now a Growth...
19 Facial Recognition Providers Profiled on Apr 23, 2019
IPVM interviewed 19 facial recognition providers at ISC West to understand their claimed accuracy, success and positioning. 9 from China, where...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Arecont Favorability Results 2019 on Apr 22, 2019
Arecont's net negativity remained the same in IPVM's 2019 integrator study, though integrator's feeling became relatively more neutral compared to...
The Fastest Growing Video Surveillance Sales Organization Ever - Verkada on Apr 17, 2019
Verkada has the fastest growing video surveillance sales organization ever. In less than 2 years, they already have more salespeople in the US...
Strong ISC West 2019 For Manufacturers But Concerns For 2020 March Move on Apr 16, 2019
ISC West 2019 was strong for manufacturers, according to new IPVM survey results of 100+ manufacturers, consistent with 2018 results. However,...
Alarm.com Favorability Results 2019 on Apr 15, 2019
The once dot com startup has evolved to become a core provider for home security and is now expanding into commercial. In their first entry in...
ISC West 2019 Report on Apr 12, 2019
The IPVM team has finished at the Sands looking at what companies are offering and how they are changing their positioning. See below for 50+...
UK Installer CCTV Aware - Flat Pricing, No Salespeople on Apr 10, 2019
This is a different kind of company. They do flat pricing, they do not have any salespeople and 50% of their sales are sold and booked...

Most Recent Industry Reports

Verkada Salesman: IPVM "Stuck In A The Stone Age" on Apr 25, 2019
Verkada is 'tackling dinosaurs' and battling those, like IPVM, who are 'stuck in a the stone age'. Verkada's recent sales recruiting promotion...
The HIVIDEO $31 Face Detection DVR Tested on Apr 25, 2019
Face detection in a $31 DVR? That is what "HIVIDEO" (not to be confused with Hikvision, even if the company intends to do that) was promoting at...
Amazon Marketing Pro Installs of Amazon Security Systems on Apr 25, 2019
Is Amazon a threat to conventional providers like ADT, Vivint and Brinks Home Security? Many say no. Now, Amazon is advertising free in-home...
Ex-Integrator Now Growth Strategist Interviewed on Apr 24, 2019
For more than a decade, Scot MacTaggart was a security integrator (at PA-based PSX). In late 2018, he left the industry. He is now a Growth...
19 Facial Recognition Providers Profiled on Apr 23, 2019
IPVM interviewed 19 facial recognition providers at ISC West to understand their claimed accuracy, success and positioning. 9 from China, where...
Locking Down Network Connections Guide on Apr 23, 2019
Accidents and inside attacks are risks when network connections are not locked down. Security and video surveillance systems should be protected...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Speco Ultra Intensifier Tested on Apr 22, 2019
While ISC West 2019 named Speco's Ultra Intensifier the best new "Video Surveillance Cameras IP", IPVM testing shows the camera suffers from...
Arecont Favorability Results 2019 on Apr 22, 2019
Arecont's net negativity remained the same in IPVM's 2019 integrator study, though integrator's feeling became relatively more neutral compared to...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact