Some of the world’s largest and most successful corporations are turning their attention to AV technologies. Chris Fitzsimmons asks what their strategies are, and how pro AV can respond and take advantage of the inevitable influx of investment.
Intel, HP, Cisco, Microsoft and IBM are household names, massive corporations with global reach and almost limitless resources, and they are all very interested in the AV market.
Another obvious thing these companies share is their roots in the IT market place. For several years AV commentators have written volumes about the convergence between AV and IT technologies. The rise of the network enabled device is complete. You’d be hard-pressed to find a mid-range projector, LCD panel or even audio amplifier these days without an RJ45 connector on the back of it.
However, I’ve got news for you – the IT industry called, it wants its network back.
An inevitable result of the move of AV onto the network is that companies with an interest in network technologies in general now see it as a potential market. This philosophy is most clearly espoused by Steve Benvenuto, senior director of business development at Cisco.
“When looking at new opportunities, we always ask what the network can bring to these markets.”
Cisco’s interest in AV isn’t particularly new either. It has had its own telepresence solution for almost five years, and its acquisition of Tandberg in the spring of 2010 reinforced its position in the video market place.
More recent developments are in the company’s digital media suite (DMS) division. The strategic direction of which was laid out in a webinar held in November 2010. DMS encompasses digital signage (Cisco Digital Signs), Show and Share – Cisco’s online business video portal, and Cisco Cast – the company’s IPTV product.
According to Benvenuto, Cisco Digital Signs has been over three years in the making and was carefully launched at particular sectors in specific markets.
“We first identified the financial services market in EMEA region as a key one. We felt it was amongst the most mature in terms of adoption, and we succeeded in getting good early traction there. We estimate that 60% of the top 100 companies now use our digital media suite.
“Following that success we turned our attention to the K12 education market in the United States before looking at other educational institutions. Now we’re full circle and looking at education in Europe.”
One thing that marks Cisco’s strategy in the video arena is that it wants to deliver an end-to-end solution. That means the network, the endpoints, content and installation all under the Cisco banner.
This, says Benvenuto, means that audiovisual integrators are key to the company’s delivery strategy.
“We know a lot about networks, but not so much about content or video screens. That means we have had to form partnerships to allow us to deliver those things.”
So what are Cisco looking for in such partners?
“Well we want qualified staff with Cisco qualifications, but more than that I’d like to make the point that there are many options for people to work with us as Cisco partners. If companies want to work in a wide range of areas we’ll support that but if they prefer to play to their strengths then we understand that too. We need the niche players, such as the AV installers, just as much as much as the big guys.
“Compared to our standard Cisco VARs they are small / medium sized enterprises, but they bring amazing expertise to the table and we need that.”
Benvenuto presents a vision of Cisco partners, large and small partnering with each other under the aegis of Cisco. This is something he already sees happening, but he anticipates that going forward there will be consolidation amongst partners as things develop.
“Partners will be successful based on the services they are able to offer the market,” he concludes.
Another major IT player with more than half-an-eye on AV is HP. Much like Cisco, its first brush with the market was through telepresence, in the form of Halo. It too has just come to market with a digital signage solution, although in a much more modest way than what Cisco offers.
HP Digital Signage’s initial offering is aimed squarely at the SME market place, and I asked Paul Farrow Another major IT player with more than half-an-eye on AV is HP. Much like Cisco, its first brush with the market was through telepresence, in the form of Halo. It too has just come to market with a digital signage solution, although in a much more modest way than what Cisco offers.
“We will operate via the established partner and alliance models that already exist and have worked successfully for HP. We intend to work with our established distributors, VARs, retailers and system integrators.
“Distributors are particularly important to us as they have to service the resellers. Right now digital signage is actually a hard sell – it’s incredibly difficult to value add in the current immature market. Our offerings will be designed to change that.
“We can leverage the heritage of HP, our service, support and existing partnerships. We will also be giving extensive training to our partners and resellers.”
This hints at something else that HP is doing – rather than going out and finding a whole array of new partners for its interest in signage and AV in general, it wants to bring its existing ones along on the journey. This goes some way to explaining the relatively low-level entry to the market place. However this is certainly just the beginning.
“We are developing a complete, rounded product offering,” concludes Farrow. “It’s a hugely exciting market from every aspect.”
But what impacts will the arrival of these companies and their peers have on the technology itself?
One of the key ones is standardisation. Whether we’re talking about digital signage, or unified communications, or any other network technology, there remains a distinct lack of standards in terms of platforms and protocols.
Intel, as a silicon designer and manufacturer, is one step up the chain from HP or Cisco. Its embedded systems group, which covers “everything outside of the PC market” according embedded product marketing engineer for EMEA, Susan Zabel, has responsibility for developing its products in the signage arena.
“Intel’s reasoning for our drive towards standards is that they lead to ease of design. We believe that hardware standards allow companies to differentiate themselves via software and content, which improves the ROI for customers and reduces the total cost of ownership. The latter is caused by the better future proofing and backwards compatibility that are an inevitable result of design using standards.”
To be specific, Intel is involved, along with NEC and Microsoft, in the development of so-called ‘Integrated Digital Signage’, in which it seeks to be the hardware platform of choice. It is also developing the open pluggable specification (OPS).
Intel hopes that its reference design will be adopted by digital signage player manufacturers, who will incorporate a Microsoft OS and third party digital signage software to build a complete system.
Zabel notes that, ”increasing connectivity and intelligence in systems is a tremendous opportunity for the AV market place. Intel embedded’s investment in it is considerable. We rank it in the top ten out of 45 sectors of interest.”
At the other end of the value chain, is the system integrator. All this talk of hardware standards and gold partners is all well and good, but what are the implications for the professional AV outfit of all this activity?
Keith Morris is Sales director of AVM, a UK-based installer, and he believes much good will come of it.
“Working as a partner to an IT VAR for someone like a Cisco or an HP, is actually considerably preferable to working under a main M&E contractor. They typically work directly with the customer, from a much earlier stage in the project and this means that they are also engaged before budgets are set.
“An M&E contractor has won a contract on a set price, and must deliver on it in order to make any margin. The result currently is that all their sub-contractors get squeezed. Taking a consultative role to an IT firm is a much better position to be in.”
Something else not to be ignore is the benefit to be gained from training. If you work in the IT market place, unless you are a graduate, no one will look twice unless you have the appropriate Microsoft or Cisco qualifications, for example. That means there is a pool of trained staff available, all of whom have undergone similar standardised training.
That just doesn’t happen in AV at the moment. InfoComm’s CTS, for all its ambition, continues to make very little progress outside of the USA.
Big companies expect standards, and working with them naturally results in other companies rising to those standards.
There is a massive opportunity here for AV to complete its transformation from a specialist niche play, even a cottage industry as some have unkindly called it, into a mainstream, expert discipline. If it can do that then pro AV can reap the benefits of the billions of dollars that the likes of Intel, HP, Cisco and their customers are preparing to spend on communications technologies of all kinds. The only question is, are you ready?