Software, it’s a hard market

Beware the pitfalls of jumping into the digital signage market unprepared. Anna Mitchell talks to digital signage software developers who explain the market is not as easy to enter as it might look.

Digital signage has been hailed as the golden child of the industry in recent months as the recession takes its icy grip on traditional revenue streams, leaving distributors and resellers clamouring for products they can sell with sweet promises of return on investment.

But, whilst it is an interesting, attractive and potentially lucrative business to get involved in; how many audiovisual resellers, distributors and integrators actually understand the market, its needs or even the products?

Chris Fulton, managing director of Future Software, manufacturer of digital signage software DigiShow, has been providing software for the signage market since the late 80s. He has a warning for audiovisual companies operating in, or attempting to enter, the area. “A lot of digital signage software companies have actually shifted away from audiovisual companies to sell and provide their products. They see digital signage as more of an IT solution than an AV one because the vast majority of digital signage systems are PC based.”

He argues that if you’re selling a solution into an IT department you have a significant advantage if you work in and understand that discipline. “The only part that relates to AV is connection to the screens,” he adds. “We’ve seen a big shift away from AV companies because of problems associated with them. For example, they don’t understand all the security pitfalls.”

Fulton’s advice to the audiovisual based companies working in digital signage is to change their business model to be more IT centric and get some IT people on board who understand the market and terminology. He warns that in the IT world, companies are already making the move. “The IT integrators are learning. They come from a very technically oriented environment where putting a screen on a wall and putting a cable from the screen to the PC is very straightforward. They’re used to cabling up huge buildings – an IT company has no trouble cabling 100 PCs per floor – if you want to put an extra cable in for a screen an IT company wouldn’t break out in a sweat over that. They have the skill base and understand the security aspect.

Darren Colclough, general manager for Europe at software platform provider, Nexus, says he sees a lot of pro-AV guys selling signage software but agrees there will be a shift in the market towards IT resellers. He puts the change down to the software converging more and more with IT systems such as databases and adds: “Typically IT guys have the head start on the infrastructure side of things. A lot of these signage platforms are delivered via IP. Larger IT networks are set up in a certain way with, for example, private networks and firewalls. You sell through IT guys and they understand that. They are able to mitigate the issues that AV guys have when they stumble into departments with digital signage.”

However, he notes that Nexus doesn’t expect the professional audiovisual companies to know everything. “We are here to support them and we’re starting to see them use us as a kind of outsourced arm. Rather than, given the current economic climate, them taking on more staff to have an in-house capability, they have the ability to outsource to a digital signage partner. The more complex and more financially attractive a deal is, it’s good to be able to pull in a digital signage partner and say ‘these guys have x-years experience in the digital signage marketplace – they can answer all your questions and architect a system’. I think partnerships are going to be important in this climate and they are going to make or break companies.”

Jason Cremins, CEO of Remote Media – the company behind web-based signage software platform, signagelive echoes the benefits of a partnership approach. “We work with the reseller, we work with the end user,” he begins. “We take a brief and we sit down with the reseller and say here’s the bits we can deliver for you in terms of the software and how it’s going to operate. But, in addition to that, here are all the other component parts that you may want to consider to put in as part of the overall proposition. With some of the big resellers deals we’ve worked on we’ve been really successful. We’re finding that’s being required more and more.”

David Oades, managing director of digital signage provider, Sedao also ensures it’s the solution that is sold and not the individual components. He only works with dealers, not resellers, and is deliberately selective about the partner companies, requiring them to fully understand his software in order for them to implement it effectively. “It’s more trouble than it’s worth to sell our stuff to somebody who doesn’t know what they’re doing with it. It just hurts us in the long term. Digital Signage is all about the solution. One of the most annoying things about the market is people who say I just want to sell digital signage. That’s crazy. You have to create solutions.”

“To be frank anyone can offer a screen,” adds Bjorn Pieper, international marketing and sales manager of Net Display Systems, the creator of PADs digital signage software. “But, if you enrich it with software you have the capability to present a total solution. Our partners are still working in AV but they’re not traditional box movers, they’re value added resellers. We want our partners to be able to provide first, and maybe even second, line support to the end user.”

And Jeff Porter, executive vice president of the experts group at Scala, a software and services company, notes the importance of diverse partners. “We have about 500 partners around the world of various shapes and sizes,” he explains. “So we have pure professional audiovisual companies, network operators who run advertisement based networks and partners more in the hardware business who integrate our software.” He says that because Scala is simple to deploy many different partner types can take advantage of the software’s capabilities and implement it in many different markets.

“I don’t see there being room for everyone in the future,” he warns. “I think consolidation is going to happen and the economy is going to help. Do you really need 50 people running software for digital signage in the world? Probably not, it’s not sustainable.”

A good example of the type of technology integrators would implement alongside signage solutions is software from VBrick Systems. The company offers live and stored streaming feeds, usually as a component within a wider solution. Paul Reeves, director of the company’s EMEA operations says VBrick works with an equal number of audiovisual and IT integrators. He adds: “The prerequisite for this kind of technology is they’ve got to have a good understanding of the AV and IT worlds. I think in this day and age it’s impossible to survive without talking both languages and you’ve got to have the skills and relationships within your company, or with third party companies, that can help with the technologies. Particularly in the signage market the end user is looking for seamless interoperability. The key for us is to make sure our products are standards based and sit alongside other technologies."

Harris, primarily a software provider, comes to the market with a full featured, end to end solution, according to the company’s Jim Oehler. He also says Harris benefits from being a large media communications organisation. “We can provide not only the product but supplement it with various Harris services. Like financing through our Harris financial services or our IT services and support group. We combine solutions and services to provide a complete solution.”

He feels very positive about the signage software market in the future. “The things that we would see contributing to [more business] would be more favourable pricing for the basic equipment, like screens and PCs, that is used for digital signage networks. Added to that we’re seeing the migration of advertising investments away from traditional media and we think that will fuel growth in digital signage.”

David Wilkins, president and CEO of X20, claims his company’s approach is a little different to other digital signage software providers in the marketplace. “A lot of people come from the web side of things and have a very strong IT background,” he asserts. “Our approach is a little different to that. We come from the broadcast television side of things. We launched X20 as a spin off to focus specifically on digital signage but took the concepts and ideas we pretty much pioneered in broadcast. Our approach is we are primarily a software and services company. We built our platform to be very open and to run on industry standard hardware platforms. We didn’t want to tie our customers to a specific black box and force them to use our hardware.”

Hydravision, digital signage management software, was launched a year ago and CEO, Kevin Cooke says he is currently looking for AV integrators who would be interested in the product. “We go to IT resellers,” he adds but says, “The reason we particularly targeted audiovisual resellers is people who want to install this product contact audiovisual companies not IT companies because it’s a visual product.” Good news for audiovisual integrators but, if they don’t understand the product they’re selling the business will be short lived. “Although it’s an AV product you do have to have IT skills,” agrees Cooke. “At the end of the day you have to go into a customer’s site and more often than not they’ll expect you to connect products up to their LAN or WAN and they’ll expect you to show them how to operate the system.”

C-nario specialises in digital signage software solutions, from content creation, to distribution, management and display through to control and monitoring. The company sells through channels, partners, distributors and resellers. Yael Elstein, vice president of marketing at the company, says: “We go through AV integrators but now also IT. We have partners that offer our products on a SAAS (software as a service) basis. We don’t offer it ourselves but we let our operators, our managed service providers, offer out software on a monthly fee basis.”

Eyal Rom, vice president of business development at C-nario agreed with Elstein, adding: “We see our role as the glue or the driving force behind out of home digital signage or media. We are talking with audiovisual integrators or IT integrators to try and integrate new technologies that are mostly separated.”

There’s a lot of scope for audiovisual integrators, distributors and resellers to get involved in digital signage. But, particularly from a software point of view, if a company doesn’t understand the product they are using, or understand how to implement it they can’t provide a useful integrated solution. On the other hand if they do have the skills to implement these solutions then they stand to enter a lively and potentially lucrative market.

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