Oiling the wheels of progress

When you think of oil nations, often the mind turns to the Middle East. But there’s another place that has built much of its success on black gold, Norway. Chris Fitzsimmons caught up with Rune Jensen, chairman of the board of Viju, which has become not just the country’s but the region’s largest player.

Norway, with its population of just 4.7m might not be your first thought when looking for an AV powerhouse. However according to figures from The Economist, it’s the 4th ranked country in the world in terms of its readiness to receive new technology and with an economy under-pinned by a massive oil and related products industry it’s looking set to emerge from recent troubles much stronger than many other places in Europe.
The Norwegian owned Viju group has been in the headlines this year with the purchase of UK-based videoconferencing specialist CityIS, before that the company has enjoyed a strong growth trajectory, so I started by asking Chairman Rune Jensen for a bit of background to the company.
“Well, I represent the majority share holder and we bought in about four years ago and made a plan to expand the business. At that time they [Viju] had about 80 million Norwegian Krone (NOK) in revenue. We were looking at the market and the players and we saw that compared to the IT community where you have a lot of big companies, in the audiovisual / videoconferencing business there were small family businesses. No one had this leading player role. So we decided we would like to support Viju in developing that position in the North West of Europe.
“Four years ago we only had offices in Stavanger. We analysed the market, the Scandinavian market and the UK, and we saw that there were a few strong players in each market, but none very strong cross-market.
“We started the expansion organically and then with a couple of acquisitions in Oslo. We opened further offices in Bergen and Trondheim, and we expanded into Sweden and opened offices in Gothenburg and in Stockholm.
“We saw last year, based on Norway and Sweden alone, that we had increased revenue from 80 million NOK in 2006, to 400 million NOK in 2009. Only 65 million NOK of that growth was structural growth. The rest was organic, and the reasons why we achieved that were our move to new cities, as well as our strong position in the oil and gas market.
“We then followed our clients overseas, and did a lot of installations in the US and UK, but also other parts of the world, which led us to acquire CityIS in the early part of this year.
“Suddenly we went from being the leading player in the Scandinavian market to being a global player. The pro-forma revenues of 400m from Viju and 150m from CityIS during 2009 make us very large player in the global AV market and maybe the only big  videoconferencing specialist covering both Europe, North America and Asia. Other true global players are IT System Integrators or Telecommunication Service Providers with little focus on AV and integrated videoconference rooms.”
But how has this growth, and the Norwegian market in general been impacted by the global economic crisis of recent years?
“I don’t have specific number available, but my impression is that the Norwegian technology / IT market, and the audiovisual and videoconferencing markets were somewhat hit. We had very, very strong organic growth (more than 60% growth in the spring of 2009) but the forward bookings were weaker. That was a result of the economic crisis, and also uncertainty in the oil and gas market. The end of the year was considerably weaker, and the start of 2010 was down on the same time in 2009.
“However, now we’ve seen the second quarter of 2010 show a very strong increase. Somehow it looks like this international crisis, which has been going on for a couple of years has been somewhat shorter in the Norwegian economy.”
It’s easy to recognise that oil is important to the Norwegians, but how important?
“The price of oil is not only very important for the income stream, but also it’s an important measure of confidence for the future. As you know the oil companies will not invest in new platforms or in developing new fields unless they have certainty about the oil price.
When we last saw the oil price dip, decisions were made to delay projects and so on, but now the price is back up and with a price of $70 per barrel and there’s a lot of very profitable projects on the table.
In other economies it’s possible to diversify your activities and insulate yourself from one badly performing sector. Can you do this in the same way in Norway?
“If you are spread over the whole of Norway then of course you can be affected by the whole economy, but if you’re only in Stavanger then you are going to be more hit by a drop in the amount of investment in the oil & gas business.
“We are spread out, and we are quite a large player in the public sector so we can do well there. The state is very rich, and they have increased their investment levels in different parts of the economy and in public administration. This helps companies like ours.”
Are there any other areas of development and interest in the economy?
“The Norwegian banks have not been hit like the international banks. They are doing quite well, and they are investing in AV technology, and conferencing. It’s something that we’re seeing outside Norway too. Even though they have been hit, the financial institutions are still investing in AV technologies.
“Legal companies, and consultancies are also investing in collaboration technologies – there are many verticals that we are starting to see grow.”
Its geography also seems to lend Norway to technologies such as videoconferencing, due to the dispersed nature of its settlements. Do you think this helps you a lot?
“Absolutely, expertise is not centralised, it’s spread around the country. So the way that most companies structure their projects will involve people from different parts of Norway, and different parts of the world. Collaboration is very important.
“Also, I think we have been faster than others in developing the infrastructure, and the bandwidth is in place.”
That’s certainly true, according to Tandberg, the level of penetration for video-enabled is about 10%. That compares to about 5% with mainland Europe.
“What happens when you have leading companies in the business community using more and more videoconferencing, is that it puts pressure on the others. If you want to have a meeting with us, you have to be able to do VC. It’s not quite what we saw with email and fax, but it’s a snowball that is getting bigger.”
Are Viju concerned by the move towards VC on the desktop, I wondered if it represented a threat to the traditional AV installation model?
“I don’t think so, as people get used to using it from the desktop, they will expect to see it in place in meetings as well. You can’t achieve a multi-participant environment in the same way from the desktop as you can in a real meeting space.
“This is growth is not at the expense of other areas, we actually think it will help – there is certainly a lot of need for infrastructure and additional service support to go with these installations.
“When the economy comes back up, and this mega-trend expands, there’ll be a lot to be done. The question is who is to do all that? Traditionally the AV installation part is not something you learn at school, so having this competence in house will be of value to companies such as us going forward.”
On the subject of competence, I wondered what Viju’s perspective on training is, and specifically the InfoComm CTS scheme? Is it in demand from the customer base, and does InfoComm do enough to promote it?
“It will vary of course – there are some very aware customers, who go to InfoComm every year. But, we have invested in the CTS schemes and in training of our people, not because it’s demanded by the customers, but because it is good for our people, and it’s good for the quality we deliver.
“The customer wants the project to run smoothly, for everything to work and to look good. For that you need competent guys. You need to make your business strong and train your people.
“In addition we also see that the certification part, having something to put forward when you are bidding, is important.
“From our side we don’t mind that you need to be well trained, and that customers put more emphasis on being qualified. That’s something that Cisco put a lot of effort into, and of course now they own Tandberg, we’re qualifying on all of their equipment. It’s great, it’s good for your people and the customer.”
Training new people is going to be key if companies like Viju in Norway are going to be able to service the expected glut in collaboration technology demand in the next few years.
“We definitely foresee a need for more people. Last spring when we had a lot of work on we brought in people from abroad. We had guys from Iceland building racks for us. Once the economy recovers we’ll need more again. You can of course get them from competitors, but that doesn’t grow the total market at all. We have to try to improve the total size of the labour market for AV technologies.”
That’s surely a positive note to finish on – any market in which you are in a position of needing more qualified staff is a good one!

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