Hello security and alarm professionals,
Happy New Year and welcome to 2026. I don’t know about you, but I’m excited about the possibilities the new year will bring.
Below, based on my conversation with Lee Odess, a leading voice in global access control, I break down how the traditional security and life-safety industry is rapidly shifting into an enterprise software and data-driven business. But first, there are a few other things I want to share.
In today’s issue:
Pressure at the Edges
Inevitable Trends
Stop pretending the industry isn’t changing. It is, and that change is inevitable.
Pressure at the Edges
Market pressure rarely shows up all at once. It appears first at the edges.
Deals take longer to close. Margins quietly compress. Customers ask for capabilities that feel adjacent, not core. Requests for data access, integrations, and reporting start coming from people you did not sell to before.
None of these signals feel urgent on their own. Together, they indicate that expectations are shifting faster than the business model.
This is why positioning matters more than product. When a company relies on hardware margin and brand access as its primary leverage, pressure shows up quickly as the market opens. As software and data become table stakes, control points move closer to the customer and away from distribution.
Operators feel this pressure through:
Lost deals where the solution “almost” fit
Increased price sensitivity on hardware-heavy proposals
Manufacturers engaging earlier in the sales cycle
Customers asking for outcomes instead of components
Businesses that clearly define their lane experience fewer of these symptoms. They know who they serve, what problems they solve, and why they win. They carry fewer platforms, speak a clearer language, and design solutions instead of assembling parts.
Over time, that clarity compounds. Sales cycles shorten (they don’t break). Margins stabilize. Customers stay longer because the business is harder to replace.
Instead of defending relevance, the company becomes the reference point as the market continues to evolve.
Security is Becoming Software
The overview: The security industry is shifting from a hardware-first trade to an enterprise software and systems business. What determines long-term winners is no longer who installs the most equipment, but who designs solutions that sit at the center of a customer’s operations.
Cloud, mobile, data, and AI are not features you bolt onto an existing model. They are architectural decisions that change how value is created, how revenue is earned, and how companies are evaluated. Operators who treat these shifts as optional upgrades will feel increasing pressure. Operators who redesign their business around them step into a much larger, more durable market.
The details: For decades, security businesses were built around hardware margin and project work. Software existed to support hardware. That relationship has flipped.
Today, hardware increasingly exists to support software, data, and workflows.
Enterprise software norms are moving downstream into security. Customers now expect integrations, APIs, identity management, reporting, and business intelligence, even in smaller deployments. Security is becoming a utility layer inside broader operational systems, not a standalone product.
This shift changes everything:
Value moves from installation to ongoing outcomes
Revenue pools migrate toward software and services
Vertical-specific solutions outperform generic offerings
Data becomes as valuable as physical protection
Operators who continue to sell boxes and features struggle to articulate business value. Operators who position themselves as systems integrators can justify larger deals, deeper relationships, and longer customer lifetimes.
Importantly, this does not mean every business must chase the same path. There is still room for traditional, high-security, hardware-centric operators. But that is a deliberate choice to compete in a smaller, slower-growing segment. Growth and valuation upside increasingly live where software, data, and recurring services dominate.
Buyers understand this distinction clearly. Businesses built around software architecture, data access, and multi-service delivery are viewed as more resilient, more scalable, and better aligned with where the market is going.
What comes next:
Define what kind of company you want to be 10 to 30 years from now. Decide whether you are a hardware installer, a security integrator, or a systems integrator. Strategy comes before tools.
Re-evaluate your offerings through an architectural lens. If cloud, mobile, or AI are positioned as add-ons instead of foundations, you are already behind.
Narrow your focus by vertical. Deep solutions for specific customer types outperform broad, generic offerings and create stronger differentiation.
Audit where your revenue actually comes from. If the majority depends on one-time installs and hardware margin, your model is exposed to compression.
Build capabilities around software, data, and integration. This may require new talent, new partners, or entirely new ways of selling and delivering work.
Simplify your stack. Fewer platforms, deeper expertise, and tighter integrations matter more than carrying every brand in the market.
Align sales conversations around business outcomes, not security alone. Customers increasingly want efficiency, insight, and operational leverage alongside protection.
Why it matters: This shift determines who captures the next decade of growth in security. Businesses built on enterprise software principles are less cyclical, more defensible, and more valuable. They attract better customers, command higher multiples, and are easier to scale.
Operators who adapt are not abandoning security. They are expanding its role. When security becomes the foundation for data, identity, and operations, it stops being a cost center and becomes strategic infrastructure.
Buyers, investors, and customers already see this future. The only question is whether operators choose to build for it now or react to it later.
The security industry is undergoing a major shift. Keep your eyes on where things are heading in 2026. You need to stay ahead of the curve.
Disclosure: Some of the content and links in this newsletter are sponsored or affiliate links, which means we may receive payment or earn a commission if you click through or purchase. However, all opinions expressed are entirely my own.
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