Trend Watch 2009
Jan 15, 2009 8:00 AM,
By Linda Seid Frembes
Despite the economic downturn, the corporate AV market has overall yet to be impacted due to the long project lead times and the increase of dependency on AV technology. Photo courtesy of Video Systems of the Carolinas. Photo courtesy of Video Systems of the Carolinas.
As the mainstream news indicates, this year will be a challenging one for businesses of all kinds. The corporate market, in particular, has weathered the dual blows of soaring travel costs and the crash of the financial services sector. Looking ahead, many integrators see reduced spending by corporate clients but remain hopeful and positive about the market. Several firms offered tips on how to weather what may be a tough year.
“We expect to see a 20 percent decline in 2009 corporate technology spending; regions like the Northeast may be hit a bit harder due to the number of corporations based here,” says Kevin Collins, VP of sales and marketing at HB Communications in North Haven, Conn. The firm provides custom design and integration for clients in the corporate, education, and residential markets. “Some companies are still spending on technology like enterprise-wide videoconferencing systems, but the biggest technology trend right now is that customers are making do with what they have.”
Bruce Banbury, president of Video Systems of the Carolinas of the Carolinas in Charlotte, N.C., agrees: “There is a wait and see attitude from companies that have money to spend. Projects are also getting scaled back slightly with more focus on mission-critical applications.”
But the mainstream economic downturn can feel incongruous to corporate AV projects due to the long project lead times, often anywhere from six to 24 months from system design to completion. In fact, Banbury’s firm had its best year (with 15 percent growth in revenue over 2007) in the commercial market in 2008 due mostly to the advanced lead times of projects. “That budget money was set aside long ago,” he says. “But we are keeping an eye on Q2, Q3, and Q4 2009—in particular the amount of design work that is happening.”
Others say that, as in any down economy, times are harder for any integrator to get new projects, but there are always exceptions to the rule. “Companies that are reliant on the use of technology will not have a drop-off in spending,” says Gary Zandstra, sales and marketing manager for Parkway Electric & Communications in Holland, Mich., who has seen lower revenues but higher profit percentages this year. “We’ve also been pulling work in on the electrical side due to consolidations. Corporate offices need to have offices ready for the consolidated employees to move into. We’re also seeing corporate clients remodeling boardrooms as opposed to complete overhauls. It’s all about enhancing the maximum value of the AV systems.”
Trend Watch 2009
Jan 15, 2009 8:00 AM,
By Linda Seid Frembes
Parkway Electric & Communications in Holland, Mich., has seen lower revenues but higher profit percentages this year. Photo courtesy of Parkway Electric & Communications.
Is there a hot technology?
“I’m not sure if there is a new hot technology for 2009. The pressure of the down market has put the must-have technology on the back burner,” Banbury says. “I don’t see any new widget to sell, but we will perhaps see improvements to the technology or current technology sold at new price points.”
Banbury, whose firm is a member of the USAV buying group, notes that digital signage is still a hot-button technology but USAV member companies have seen only a few companies nationally that have done large-scale installations of it. “Digital signage is still a slow habit to adopt,” he says, “It was thought that retail chains would quickly embrace it, but the retailers haven’t done well lately.”
Collins says that there is interest in tools such as Crestron RoomView. “Basically anything that deals with saving energy,” he says. “The trend is that AV technology will pioneer how corporate clients can save money by improving energy management.”
Zandstra expects that sales of videoconferencing and telepresence technology will remain stable or even grow due to the continued need for travel and meetings. “Several factors impact this technology trend. First, the younger generation is more comfortable with the technology and, second, the technology is vastly improved,” he says. “Human contact is still desired, in some form or fashion, despite cuts in travel budgets.”
Rodney Laney, vice president of display technology for AVI-SPL in Tampa, Fla., says that ultraportable projectors from manufacturers such as Optoma and 3M is the new and unique technology this year. “There is a wow factor to them. They are smaller and lighter than a cell phone, and perfect for presentations to very small groups,” he says. “For flatpanel displays, the trend is thinner, higher resolution, and higher refresh rates.”
Over the long term, Laney sees full-sized LED projectors as the next technology wave and thinks the corporate market will embrace them as soon as the lumens are within current standards. “LED will lead the way to green technology with 20,000 to 60,000 hour lamps and 50 percent less energy usage,” he says. “It is in the very early stages now, but we will see more of them in the next 18 to 24 months.”
So while integrators may be bracing for a spending slowdown, Zandstra remains upbeat. “There is always more hope for work. People are cutting budgets and staff but outsourcing to get things done,” he says. “It’s time to focus on current clients and realize that relationships matter.”
Banbury says that positive indicators for the AV market will come from architects and consultants. “The strength of our rebound depends on their new design work since AV trails them by about three months,” he says. “It’s time to work your existing client base and look at service contracts that may have gone by. Service and maintenance stands to do well in this economy.”
Collins agrees that it’s a good environment to do more for your customers. He adds, “There will be an increased dependence on service providers by corporate customers. Perhaps offer a free service check on their equipment and make sure that what they have is being maintained properly.”