D-Tools, a global provider of business management software for system integrators, has announced the release of its 2024 Year-in-Review Market Health Report, offering an in-depth analysis of industry performance, key trends, and strategic insights based on real project data from over 3,000 active integration companies.
Despite economic challenges, D-Tools states the custom integration industry grew by 6.5% in 2024, showing resilience amid inflationary pressures and election-year uncertainty. The report, compiled from more than 175,000 proposals and over 70,000 signed contracts in D-Tools Cloud, reveals the latest smart home industry trends and business insights for business leaders in the year ahead.
Findings from the 2024 Market Health Report
- Industry Growth: The market saw a 6.5% increase in total installation sales in 2024 the average project contract hit $17,535, up from 4.6% in 2023. Growth was stronger in the first half of the year before contract values declined 4.8% in Q3 and Q4, largely due to election-related uncertainty.
- Profitability Insights: The Market Health Reports finds projects valued over $10,000 delivered profit margins of 45%-47%, while smaller projects (<$10K) had lower margins of 30%-39%, reinforcing the financial benefits of targeting larger installations.
- Proposal Trends: Integrators created 10% more proposals in 2024, with an average proposal value of $37,057 (+5.3%). However, the close rate declined from 59% to 53%, signaling increased competition and cautious consumer spending.
- Labor vs. Product Sales: Labor revenue grew slightly, making up 24.1% of contract value compared to 22.2% in 2022. While still lower than other trades (e.g., electrical, HVAC), the trend indicates integrators are protecting labor rates more effectively.
- Top Equipment Categories: Display devices remained the top-selling category, while surveillance cameras climbed from #4 in 2023 to #2 in 2024, reflecting growing demand for security solutions.
“The data from the 2024 Market Health Report provides a clear roadmap for integrators navigating an evolving business landscape,” comments Randy Stearns, CEO of D-Tools. “With rising project values, an increased focus on labor profitability, and shifting demand toward security solutions, this year’s insights highlight opportunities for integrators to refine their strategies, improve margins, and position themselves for long-term success.”
Key Takeaways for 2025
Based on the findings within its 2024 Market Health Report, D-Tools suggest to maintain profitability and to drive growth in 2025, integrators should:
- Prioritize larger projects to maximize profitability
- Enhance proposal strategies to improve close rates and reduce discounting
- Expand into high-growth categories, such as security solutions
- Leverage automation tools to streamline proposal and project workflows
- Benchmark performance against industry growth trends to remain competitive
The full D-Tools 2024 Year in Review Market Health Report is available now for D-Tools users and industry professionals.
