There are any number of vantage points from which to observe this multi-faceted industry, where companies might conduct business in audio, video, control, networking and/or security fields. For consulting firm Shen Milsom and Wilke (SMW), which has offices in the U.S., Asia, Europe, and the Middle East, the state of the industry is reported from the global market perspective.
"In recent year years, business at Shen Milsom Wilke has been changing, and today that's truer than it ever was," said Steve Emspak, partner at SMW. "Over the past couple of years we were moving away from single-room projects into the larger globalized campus or city type of projects. So that tends to give you a different perspective."
Working on such a massive scale has spread SMW's efforts to developing regions like Dubai, a place which is currently making headlines not for the tremendous growth and construction efforts that have drawn the world's attention in recent years, but rather for the sudden cessation of that work.
SMW opened an office in Dubai seven years ago, and while locally many projects are now on hold, Emspak pointed out that there are other large projects underway in neighboring countries such as Saudi Arabia. One project of note is the King Abdullah University of Science and Technology (KAUST), for which SMW is working on a master plan and infrastructure design for the campus' 30-plus buildings.
The ongoing development of these large-scale design initiatives, combined with SMW’s continued efforts in a range of more traditional AV markets, produce a positive outlook in Emspak’s mind: "We have some major projects going on which generate a solid backlog with significant fees and personnel commitment that are utilizing our global resources fairly well at this point.
Those global resources include a SMW office in Mumbai, India, which serves as a ‘back-of-house’ production capability for many of the larger of the firm's projects. A glimpse at Mumbai's output shows a pretty robust picture for SMW. "We are at the point of having projects large enough to keep people consistently busy all over the world," Emspak said. "In the Mumbai office, all we have are CAD draftsmen and a manager. The way it works is, people from our offices around the world mark up drawings, post them on an ftp site, and the personnel in India pull them down, pick up all of the changes, and re-post them to the ftp site. Then the people in other offices come in the next morning and take them down to continue with the work. It's like having an office that works 24 hours a day, and the quality of work is outstanding!"
But even if the company’s design work happens overnight, it took a bit longer for SMW to optimize the capacity of this system. "It took a long time to get to this point," Emspak explained. "It's something we've always wanted to do, but you really need to have massive drawing production to keep it cost-effective."
Now the question is whether those large projects will steadily roll along in spite of financing challenges and other economic strains, keeping everyone busy. "We know they're not going to stop, but hopefully the large projects we're working on now will run long enough for the projects that have stopped to start back up again, so we can keep that momentum going," Emspak commented.
Meanwhile, the company added another consulting discipline recently: Medical Equipment Planning. Even if this practice is outside the scope of the AV industry, "of course that equipment connects to other things, so along with the medical equipment planning, we're now getting telecommunications infrastructure and systems, security systems, nurse-call, and AV," Emspak said.
Healthcare is a market that has weathered the economic crisis well, actually. This will be a boon to those able to serve the segment. "There are certain industries that are still busy -- healthcare is huge, and for the most part there's funding available. We know that stimulus money is going to get into the market sooner or later," Emspak observed. "That money appears to be going to go into large scale infrastructure planning. When the federal, state, and local governments actually have that money to spend, they are going to be looking for projects that are ready to go. That's what we're seeing a lot of right now -- the number of proposals we have been receiving and responding to has been huge, huge, huge. More so than last year, and last year was ridiculous; 2008 was our best year ever."
Riding the wave of massive growth over the past 22 years, peaking in 2008, left SMW feeling very secure as the year wrapped up, even as signs of an economic crisis were looming. "Maybe we were totally blind and ignorant and consumed, but we didn't think it was going to be all that bad because of our diversification of consulting disciplines as well as our geographic footprint, but as we all well know, it didn't make any difference! Sooner or later it all tightened up."
SMW has since shifted gears to adopt "recession management strategies", structuring its approach to business differently to be more aggressive in the marketplace than in recent years. "Before, it was fighting off the phone calls, literally, but that's not the case anymore," Emspak noted.
However, after seeing the slow climb of the financial markets in recent weeks, Emspak has a sense of hope: "Even if January and February were terrible, March was on the plus side, and April has been on the plus side. Hey, I'm feeling a bit better about it."