As preparation for SCN’s annual Top 50 Systems Integrators issue, I’ve been contacting integrators for some more detailed insight into what the business climate has been like for them this year, and what their challenges are. To say that responses were illuminating is an understatement.
One (of many) comments that caught my eye came from Jay B. Myers, president and CEO of Interactive Solutions, Inc. (ISI) in Memphis, TN. He was describing how his firm has pivoted its focus in response to the market uncertainty they experienced in 2013, placing more emphasis on corporate AV applications and corporate, state, and federal government accounts due to the less exposure these markets have to “the highly volatile videoconferencing industry.”
Highly volatile videoconferencing? I’ve been under the impression that this is one of the biggest growth areas in AV. I followed up with Jay to get a little more reasoning behind his point. Here’s what he had to say:
“You are correct that videoconferencing numbers are higher over the past few years for many integrators, but that is when you consider UNITS shipped and not revenue DOLLARS generated. Prices for Cisco and Polycom (ISI’s top two VTC suppliers) codecs have dropped like a rock since 2013. That translates to less money for the same number of transactions when compared to prior years (price volatility).
Also, several new software (not hardware) videoconferencing solutions (Acano, PEXIP , Videxio, High Five etc.) have been introduced to the market over the past two years, which has been exciting for many of our clients and prospects, but has also created additional confusion. Software is also being positioned as a subscription service (OP-X spending) and hardware is being sold as an asset (Cap-X spending). What does that translate to be? Technical and pricing volatility.
To summarize, even as a highly successful video conferencing integrator, since 1996, what ISI found out in 2013 was that ‘people don’t invest in uncertainty,’ which is one of the reasons we had an off year and had to make some fundamental changes to our game plan and let the VTC market settle down a bit. That’s why we pivoted to the AV applications and increased our sales significantly in 2014.”
What are some of your experiences with the shift from hardware to software videoconferencing technology? Share your comments are below or shoot me an email.
