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The electronic and physical security sectors experienced robust demand in 2025, but faced meaningful headwinds from global supply chain issues, setting the stage for a strategic shift toward hosted managed services in the coming year.
The security industry concluded 2025 as a “strong but complex” landscape, according to a senior industry official.While demand for core security technologies – including cameras, access control systems, alarms, and alarm monitoring – remained high as businesses prioritized upgrades to existing infrastructure, external economic factors presented considerable challenges.
“The demand remains strong with businesses investing in upgrading their older systems,” the official stated. “Tho, the challenges surrounding procurement and tariffs on imported products had a detrimental effect on how we, as an industry, managed operations this year.” These disruptions forced companies to innovate and seek more resilient operational models. Looking ahead to 2026, the focus will be on achieving stability, fostering innovation, and maximizing customer value despite ongoing market uncertainties.
Advancing Technology, Emerging Workforce Challenges
Several key trends are shaping the evolution of the security industry. Artificial intelligence (AI) is increasingly integrated into security systems, enhancing threat detection, reducing false alarms, and improving monitoring efficiency. This technological advancement is coupled with a growing migration to cloud-based systems, offering greater flexibility and ease of management as business needs evolve. The convenience of managing security through mobile devices – a trend familiar to consumers in their personal lives – is also influencing adoption rates. Mobile credentials are rapidly becoming the new standard, replacing traditional access methods like badges and fobs.
However, this technological progress is juxtaposed with a growing challenge: attracting and retaining skilled technicians. The industry is struggling to find the right balance between competitive compensation, career advancement opportunities, and employee engagement.
“Hiring and retaining talented technicians is becoming increasingly difficult,” one analyst noted. Industry leaders recognize the need to move beyond traditional performance metrics and focus on fostering a supportive culture that values employee strengths and achievements. Competitive wages, clear career paths, and proactive recognition programs are seen as essential for attracting and retaining top talent. Moreover, training programs must expand beyond technical certifications to encompass essential soft skills and advanced technological solutions, ensuring technicians are equipped to meet the evolving demands of the market.
2026: The Year of Hosted Managed Services
As the industry looks toward 2026, a clear trend is emerging: a significant shift toward hosted managed services. this model,exemplified by offerings like remote view trailers with fixed costs,provides customers with predictable budgeting and eliminates the uncertainty associated with fluctuating expenses.
“2026 will be remembered as the year the security industry fully embraced hosted managed services,” predicted a leading security consultant. “This transition is driven by customer demand for predictable costs and simplified management, coupled with the industry’s need to mitigate supply chain risks and navigate economic uncertainties.”
Why did this shift happen? Global supply chain disruptions in 2025, exacerbated by tariffs and regulatory changes, made traditional hardware procurement unpredictable and expensive. Who was impacted? Security companies and their customers both felt the strain.What changed? Companies pivoted to offering services that minimized hardware dependency, like remote monitoring and cloud-based security solutions. How did it end? By late 2026, hosted managed services became the dominant model, offering stability and predictable costs, and allowing companies to maintain
