D-Tools Releases 2024 Year in Review Market Health Report

D-Tools has released its 2024 Market Health Report, highlighting key trends and insights from real project data collected from over 3,000 integration companies. Despite economic uncertainties, the custom integration industry grew by 6.5% in 2024, with project values rising to an average of $17,535. Larger projects proved more profitable, while smaller jobs had tighter margins. The report also shows that while integrators created more proposals, their close rates dipped slightly, reflecting increased competition. Demand for security solutions surged, with surveillance cameras now ranking as the second top-selling category.

To stay competitive in 2025, the report advises integrators to focus on larger projects, refine their proposal strategies, and embrace automation tools to improve efficiency. It also encourages businesses to explore high-growth sectors like security solutions and benchmark their performance against industry trends. These insights aim to help system integrators navigate the evolving market landscape and achieve better profitability in the coming year.

D-Tools, the leading provider of business management software for system integrators, today 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, the custom integration industry grew by 6.5% in 2024, showing resilience amid inflationary pressures and election-year uncertainty. The report, compiled from 175,000+ proposals and 70,000+ signed contracts in D-Tools Cloud, uncovers essential industry shifts and actionable insights for business leaders in the year ahead.

Key Findings from the 2024 Market Health Report:

• Industry Growth: The market saw a 6.5% increase in total installation sales in 2024 with the average project contract hitting $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: 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.

CEO Perspective on Industry Implications

“The data from the 2024 Market Health Report provides a clear roadmap for integrators navigating an evolving business landscape,” says 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.”

Strategic Takeaways for 2025

To maintain profitability and drive growth in 2025, the report suggests 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.