Product ecosystems: When should you stick with single brand systems?

Vendors are increasingly expanding their product portfolios to offer ecosystem solutions. Tim Kridel explores the trend’s impact on integrators, distributors and consultants.

Is bigger really better? For some pro AV vendors, the answer is yes, judging by how they’re increasingly expanding their product portfolios into new applications. 

When a vendor known for, say, amplifiers and DSPs, decides to offer PTZ cameras, the goal is to provide an ecosystem. Besides wringing more revenue out of each customer, this strategy also can increase brand loyalty. 

Call it “soft” vendor lock in: a nagging feeling that mixing vendors could have drawbacks. A consumer analogy is Apple, whose brand loyalty comes partly from people wanting applications that work seamlessly across all of their devices. 

“For example, you can see QSC, Shure and Extron trying to expand to be a full solution — a one-stop shop,” says Andrea Piemonti, A.L.A. Equipment Co (ALA) managing partner and co-founder. 

In June, Shure added the MXA710 linear array to its Microflex Advance line up, along with the MXA network mute button. The Microflex MXN5-C networked loudspeaker soon followed. 

The ecosystem trend is partly a response to other industry trends.

“It allows for easier sales and installation,” says J. Scott Christianson, a former integrator who’s now a business professor. “Many components have become commoditised, and margins can't be made on highly integrated solutions where the equipment expenses are low and the design expenses are high. 

“The savings from designing an integrated solution are not as clear. It might just be cheaper to give up a feature or two and go with a plug-and-play product from one manufacturer. Also, customers are looking for lower-cost products, and their expectations are set by their own experience with technology at home: low-cost displays, set-top boxes, etc.” 

Sometimes vendors use mergers and acquisitions to expand or plug holes in their portfolio because they’re cheaper and faster than the R&D to create those products from scratch. Partnerships are another option, sometimes leading to a merger.

A recent M&A example is Haivision’s acquisition of LightFlow Media Technologies. Its media cloud orchestration architecture will accelerate Haivision’s cloud strategy of creating an ecosystem of modular video streaming and management technologies.

“We have seen, for a number of years now, manufacturers adding products related to their core categories to win more share of the revenue of a sale,” says Jenny Hicks, Midwich head of technology. “Equally we see many releasing products in different categories when trends show high demand.  

“Whilst some have managed to develop a strong portion of the ecosystem, it is rare still for a brand to offer a complete, end-to-end ecosystem. For example, many digital signage providers offer software, hardware, servers and content management and production services but do not have their own branded displays.”

The eye of the beholder
The ecosystem trend affects integrators and their clients in a variety of ways. 

“It can be an advantage for the integrator if you’re fast moving: basically if you want to get in and out,” says Piemonti, whose firm is a distributor with integration and consultancy divisions. “You need to learn about one ecosystem. It can be an easier life.” 

Learning about one ecosystem can also mean lower support overheads.

“With less brands involved [in] a solution, compatibility of products is less of a concern,” Hicks says. “Should there be any difficulties, there are less support teams to involve resolving them.
Alexander Supertramp Shutterstock
Alexander Supertramp/

“With services, this may be less positive. Whilst being able to resell services reduces pressure on an integrator, it can remove the most profitable portion of a sale. The most important thing to remember is that simplicity of procurement or easier after-sales care should not compromise functionality necessary to meet the required user experience.”

Some end users may prefer an ecosystem because it means one neck to wring when something goes wrong. However, that neck may be the integrator’s rather than the vendor’s, depending on whether the end user just operates the system rather than maintaining it, too.

“There has definitely been a rise in manufacturers looking to embrace the ecosystem approach,” says Simon Druce, CUK Audio sales director. “Whilst there have been some strong advances in this area, I would say not all have offered the integrators the best opportunity to give the end client — the most important person surely in the whole process — the best solution. I feel some ecosystems have compromised the end clients’ ability to have the right product for the job.”

Integration loses its value?
Integrator describes a role that loses some of its perceived value when ecosystems enable plug-and-play systems.   

“There are some obvious advantages to the integrator for a single-stop solution: one brand, one area of failure, assured compatibility of technologies,” Druce says. “However, this does have huge impacts on the role of the integrator and, I would question further, could be argued it devalues the role of the integrator and their ability to maintain the margins needed when something is sold ‘out of the box.’”

The trend’s effect on integrators ripples into the distributor and consultant worlds.

“If you’re a good consultant, the trick is always to put everything together from the best of the best,” Piemonti says.

Of course, every vendor believes its product is the best.

“It is always shocking to hear companies talk about their ‘go-to’ product, as in our experience every application is different,” says Paul Marshall, Recursive senior technology consultant. “So we believe the correct (best-of-breed) product should be selected on its merits and application requirements every time.”

Push sometimes results in pushback.

“We have seen a rise in installers coming to us requesting assistance in system designs due to the fact they don’t want an ecosystem,” Druce says. “They like our ability to offer from a wide catalogue of products to solve their problems. They ask for our advice on how our products can be interoperable with some of their chosen tools. 

“This is especially prevalent with us having the largest Dante-based product portfolio within the UK distribution sector. We have found our technical engineers looking at larger scale Dante deployments and incorporating various products from across the spectrum and advising on how they integrate. This co-operative approach has seen our customer base grow. Integrators see that there are solutions out there that can work as well as, if not better [than], ecosystems and in many cases at a more cost-effective level.”

One big question is how this trend will play out. Will ecosystems become the rule rather than the exception? Will end users increasingly prefer one-stop shops? Or will there always be a lot of demand for multi-vendor systems?  

“Ultimately the world of integration is being simplified as technology becomes smarter, so yes, skills are being lost,” Marshall says. “What we often see is a lack of understanding of basic principles and lateral thinking, though to be fair, there are some amazing integrators/individuals that quickly come to ‘love’ and engage with the aims of the project. The use of so-called ‘rebates,’ whilst a commercial reality, often drives equipment selection in the wrong direction for perhaps the wrong reason.”  

Pressure on distributors?
Another question is whether vendors will expect distributors to focus on their ecosystems, including to the extent that they stop carrying rival products.

“As a distributor, we have successfully partnered with competing brands for years,” Hicks says. “It is unlikely that any manufacturer would demand we change our portfolio. Equally, it is rare two products are exactly like for like. 

“The user experience request dictates product selection 95% of the time. Once that is matched, any remaining choice is with the end customer and the integrator.”

As a distributor, ALA sees advantages and disadvantages in relying heavily on a single vendor.

“For distributors, the situation is a bit ambiguous because to be considered a good distributor, they want the top brands,” Piemonti says. “The more high-calibre brands you have, it means you are a good distributor. 

“Is it good for a distributor to have an all-in-one source? Technically yes, practically no, because you need to move the brands you have. You need to move the stock you have. To find a solution under one umbrella means that you always please one vendor, but you have all of your eggs with that one vendor. You want to be able to diversify.”

CUK aims to strike a balance.

“Manufacturers rightly want the strongest representation they can get within a chosen territory,” Druce says. “If a distributor is working closely with that manufacturer, then the aspect of a portfolio clash can be managed and represented in the market the correct way. 

“Distributors who manage their portfolio and work with their manufacturers to adapt and develop products will always see success over those that don’t. That close management doesn’t require portfolio changes. When CUK purchased Tukans, it was a strategic acquisition to strengthen our offering to the integration market and give our partners the ability to select products from a breadth of globally renowned manufacturers whilst still giving them the opportunity to create their own ‘eco world.’”

Standards play a role
Many IT vendors, such as Cisco and Microsoft, have steadily expanded outside their traditional wheelhouse and into pro AV, with video collaboration being a prime example. So have some AV vendors, such as building automation and other Internet of Things (IoT) applications. A few AV distributors even carry office furniture. 

Standards — or the lack thereof — are among the factors that affect whether one-stop shops are common in a given industry.

“The pro AV market is following a similar trend to the IT industry, with many more plug-and-play or self-set-up products from our main players and a shift towards common standards in signal distribution and particularly AV over IP,” Hicks says. “It feels that this evolution helps drive wider user adoption of AV across verticals. For now, however, there is still high demand for intricate AV systems in larger spaces or complex user requirement environments, which will keep our industry’s skillset essential for years to come.” 

Although AV increasingly uses standards, including from IT, a lot of the industry is relatively fragmented and siloed. 

"Everyone talks about standards in the AV industry, but almost no one practices true interoperability, be it HDBaseT, AVoIP or control,” Marshall says. “I recently put this to the test with a requirement for two types of AVoIP encoders and decoders to work together. But in reality, the risks and compromises in attempting to do so were too great, which makes the sales pitch of interoperability almost pointless.  
antoniodiaz Shutterstock
Integrator’s time on site can be reduced with ‘out of the box’ systems, but it can also impact on the scope to add value. | antoniodiaz/

“Until we are at a point where you can buy model X and get it to work with model Y – like you can Dell, HP and Windows, for example – things will not change.”

It’s also important to note that although IT is much more standardised, it’s nowhere near 100%. For example, vendors always add proprietary features to help differentiate their products from competitors that use the same standard. This is one of the reasons why IT systems integrators are not extinct. 

“When you start to get into server operating systems, databases and ERP systems, there are some standards, but the interoperability gets harder and more expensive,” Christianson says.  

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