16.05.17

Benelux boom: Dutch AV market in good health

view of amsterdam, the netherlands from canal

Political opinion in the Netherlands may be increasingly polarised, but markets are thriving thanks to a steadily improving economy and positive growth outlook. Charlotte Ashley reports.

The  Netherlands  is  one  of  many countries  carefully  treading  new waters  in  the  political  landscape in  post-Brexit  Europe.  Although reportedly  only  a  quarter  of  Dutch people  feel  optimistic  about  where  the  country  is heading politically according to a SCP (social and cultural planning office) poll taken prior to the March election – economically, the country is thriving.

Unemployment has been falling since 2014, is at its lowest since 2011, and is declining by an average of 8,000-a-month in the past quarter, (according to Statistics Netherlands - CBS), and the Dutch economy grew by 2.2% in 2016 across all sectors.

The benefits of returning consumer confidence – hitting a 16-year high last April – that  had alluded the country a few years ago are evidently being felt in the AV world. “We had a  growth of  about  between  15%  and  20%  over  the  last year so I can’t complain,” says René Schaddelee, managing  director  Avex,  one  of  the  largest companies  working  in  the  Benelux  region. The  integrator  and  consultant  completed  the acquisition  of  another  large  Dutch  integrator with a focus on rental, Hulskamp Audiovisueel, in October 2016 and recently expanded into the “growing” UK market to now employ over 250 people across Europe.

Joop Noordman, sales director at distributor-turned-integrator Inter Visual Systems agrees; “The economic development of business is back to the level of a few years ago. In the last 12 to 18 months, long-cyclic markets caught up again. In the past year especially, the delayed investments of the recent years have been rising again.”

What market demand is fuelling growth for integrators?  “We have seen development across different verticals, but we are constantly involved in the transformation of traditional AV distribution into streaming distribution,” says Noordman. He adds, “Video over IP is an important topic in almost every segment, but in healthcare the last 200 operating rooms we’ve completed have been built with video/IP distribution.”

Schaddelee says the evolving nature of corporate communication is bringing in business, as AV systems to facilitate different ways of working become increasingly prioritised. “We’ve seen a large increase  in  demand  for  a  simple and standardised solution, ranging from huddle rooms  up  to  the  more  luxury  boardroom  or executive  meeting  room  systems.”  But  market demand  is  also  coming  from  less  expected sectors;  “It’s  a  slightly  niche  market  at  the moment but we are seeing a lot of investments coming from government. We’re increasingly seeing the digitisation of courtrooms and the police looking to modernise communication.”

“Business recently has been different than expected but very, very good,” says Jeroen Helms, sales manager for Benelux, France and Iberia at Milestone. “Although in the Netherlands it is more difficult to grow organically, we have managed to do so, particularly in the last 18 months.”  Although  the  quantity  of  sales  of  Milestone’s projector screen product lines are down due to the rise of LCD panels, the quality of screen (e.g. incorporating  4K-ready  technology)  is  bringing new value to the market. A growing LCD market has also given a “significant” boost to its mount offerings – a win-win scenario that the company is benefitting from throughout Benelux. “We’ve seen the same trends in Belgium and Luxembourg happen compared to some markets where there’s still a lot of opportunity for growth, like France.”

Helms pinpoints increasing openness in the market as the key to fuelling recent growth. “Now the industry is very open to education. Two or three years ago it was really difficult to make appointments with sales teams especially to educate them on our products and the trends in the market.” He adds: “In the last year that really picked up again, so I think the economic side has obviously really helped a lot. The crisis is a little bit more behind us.”

Although companies like Avex have managed to spread across Europe, the list of companies that have done so successfully is short, and few are coming into the Netherlands to compete for projects. “Going out we see a little bit of competition there, but coming in, not yet,” says Helms. Schaddelee adds:  “Most  consultants  stay  working  in  the Netherlands  at  the  moment,  but  we  are  seeing larger consulting firms from the UK and US that are expanding and working on specific global projects here.” Inter Visual Systems recently moved into the German market – a move Noordman notes took extensive planning to navigate – and expansion into the UK could be on the horizon, dependent on the impact of Brexit.

“As we are now increasingly dealing with the added demands that come from working in IT domain, it’s  important  for  clients  to  realise  the  cost  of us  having  the  knowledge  and  resources  to  do this.”

Although  expansion  into  the  Netherlands may  not  be  that  prevalent,  Schaddelee  has noticed that the face of the industry is changing locally. “We are seeing a lot of value platforms developing  in  all  directions, so platforms where  the  manufacturers  unite  with  customer-collaborating  companies  like  manufacturers  of furniture for example. They create one platform to try to build complete solutions for the market.”

All agree that the perpetual industry issue of recruitment is a problem in the country, and like many other markets, new recruits are coming from the IT world. “Finding well trained and qualified staff is extremely difficult,” says Noordman. “The Dutch technical training institutes provide almost no qualified technicians. Just a few years ago 50-100 graduate electrical engineers came into our business from school each year. Nowadays there are less than 10 electrical engineers.” Noordman and Schaddelee both state the company’s individual training academy, as well as resources from InfoComm, GPA, manufacturers and IT courses are essential for staff development.

Although there is plenty of cause for optimism in the industry, many see room for  change, whether it be in the nature of how business is conducted in dealer-direct operations, or in the professionalism of integrators pitching to clients. “With the knowledge of AV/IT technology, we think that the Netherlands is far ahead, based on investment in development of modern technologies. I think we have huge additional market potential by joining the international market.”

Schaddelee  says  it  is  essential  for  integrators to maintain higher levels of professionalism; “As we are now increasingly dealing with the added demands that come from working in IT domain, it’s  important  for  clients  to  realise  the  cost  of us  having  the  knowledge  and  resources  to  do this. And that’s still difficult to show if a larger number of your competitors still just  compete on price.”