Net-centric AV Hopes and Fears

3/23/2011 6:31 AM Eastern

Net-centric AV Hopes and Fears

Mar 23, 2011 10:31 AM, By Randal A. Lemke, Ph.D., Executive Director and CEO, InfoComm International

A few months ago I wrote about the need for our industry to embrace and get serious about the role of IT and AV. The long-ago-promised convergence of AV and IT has taken place, as far as technology is concerned. The still-promised—or some would say, threatened—convergence of AV and IT business models is well under way.

Since writing about net-centric AV, I have made some presentations at meetings, given some interviews, and seen the term “net-centric” being picked up in the industry. While almost everyone agrees it is going to happen, different people react to it according to their hopes and fears.

The biggest fear is that product margins will erode as the IT business model would lead you to think. Even more concern is expressed when you see big IT companies such as HP, Intel, and Cisco come into our market, bringing with them their traditional distribution channel.

The second most expressed concern is the race to the bottom rung for projects as more IT and telecommunications companies bid on AV jobs, and especially on the less complex jobs. Anyone in our business that is focused only on these lower-end jobs that require little design work or sophisticated solutions does need to worry. Enough products are being sold as a commodity and are available to everyone that many companies can make smaller projects work, even at a reduced margin level.

The biggest hope is that the market is going to experience double-digit growth as new customers come to the market to take advantage of the AV/IT merger. The AV industry is already a sound producer of growth—in developed markets where the demand is for more sophisticated and ubiquitous systems, and at the same time in China, India, Brazil, and other markets where you see global companies and local buyers buying the same AV technology. The IT focus will probably bring even more customers to AV both in the developed and developing markets.

The second biggest hope is that net-centric AV will be able to take advantage of this demand for products and services and begin to create new streams of revenue. The hope is that the blended margin for product and services will equal the old margins of a few years ago. Managed services contracts and other new streams of revenue can be added to revenue generated by design and engineering. Companies that can serve the customer’s high demand for quality communications—solving problems that very few can do—will be rewarded. Even in the IT world, the people working at the top of the pyramid of complexity are also at the top for profitability.

InfoComm is working on its strategic plan to help make the hopes come true, and mitigate the fears. It is doing so by following its strategic plan adopted in December of 2009. At that time, it revised its mission and vision.

InfoComm Mission: To advance audiovisual communications globally.

As an industry association made up of all the various elements of our industry from all over the globe, InfoComm has this straightforward mission to help move the industry forward. It is not just here to help our members fight a rear-guard action to keep other industries out of our industry. It is to help our members advance and prosper in the growing industry. The InfoComm board is taking a leadership role; it wants to help the industry transform itself to be ready for the future and to help create it.

InfoComm Vision: Audiovisual is recognized at the center of the integrated communications environment.

The future the InfoComm wants to help create is born of our situation today and our ideas where we can go. How many times have you heard that AV is the last one in and last one out of a project? Nobody likes this position, as its confines what we can do to meet customer needs and leaves us vulnerable to value engineering. The InfoComm vision is to move us to the beginning of a project so we can be an equal partner of the construction and technology team. We make no claim that we should own the center, lead all technologies, or anything other than wanting to be an equal player.

To help lead our industry to the center, InfoComm is working on several fronts that are based in two acts: (1) dig in and find out what is happening so that the association works from reality, not from rumor; (2) share with our members and the industry what we know and think about the future.

As InfoComm looks to help the industry move to the center of the integrated communications environment, it sees the strengths its members bring to the table. Our connections to architects, facility managers, and other gatekeepers of the building space will be our advantage. We know how to make technologies work in rooms, and while IT will be the master of the network, we are at the end point in rooms where people communicate. As to our knowledge of visual and aural group communication, we are already ahead of most, but we need to know even more than we do now about visual and aural perception, how our images and sound are processed, and how groups interact and collaborate with information. In the end, we are selling technologies and solutions that are used by people to communicate within a room and with other rooms where ever they may be in the world. Our focus on making those rooms work so people can communicate will put us in the center of the integrated communications environment.

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