Communications Tsunami

Communications Tsunami

by R. Randal Riebe

The last 12 months have been an electrifying time for the videoconferencing industry. On the business side, the sector continued to show positive revenue growth during one of the worst recessions since the great depression. We also saw a flurry of acquisition activity that brought new vendors, products, channels, and challenges to our industry. On the technology side, leading chip makers continued to improve and enhance single-chip video codec solutions, providing higher resolution and faster frame rates while substantially reducing the cost.

Based upon these observations it is not difficult to make a couple of predictions. First, as the technology engine continues to become cheaperbetter- faster, we will see additional manufacturers enter the market with products that will bring widespread market acceptance and drive utilization towards the consumer device level. Second, along the way we will see intensified competition and feel greater margin pressure until the video endpoint reaches “commodity” status. So the question is how does a professional AV integrator prepare for this coming tsunami?

Yes, you could ignore it or even make plans to exit from the business; but a more effective solution might be expanding from a conventional hardware, software, and professional services organization to a service provider; in particular a managed service provider. Historically, AV integrators have thrived on complexity and customization, building oneoff hardware and software solutions for each customer, but the high margins, recurring revenue streams, and deeper customer engagement opportunities made available through managed services has already caught the attention of many integrators.

Let’s face it, product sales and service sales go hand-in-hand and generally drive each other while producing a revenue and margin total that is much greater than either individually. But building a managed services practice can be challenging.

Start small with a limited offering that compliments your current product range and market. Your offerings may be built just around video communications or may include managing the total environment. Study your current and potential markets for their demand for tangible and intangible technology products. Consider a variety of model options including on-premise and off-premise management. Look at managed service offerings from your vendors and consider reselling their branded service.

After developing your initial strategy it is time to research, acquire, and deploy the right set of remote monitoring and management tools to effectively deliver your managed service solution. Your goal is to automate the task of monitoring your customers’ systems so you can quickly and easily resolve any issues. There are a variety of solutions currently available that offer powerful capabilities.

Next, it’s time to get your sales staff comfortable with selling a managed service and your technical people comfortable with supporting it. Typically the sales staff in an AV integrator’s business is used to selling the technical features of the total solution but not necessarily the business benefits of a managed service. Topics including minimizing downtime, extending the value of assets, fully leveraging investments, and total cost of ownership should become the focus.

On the technical side of the house, it will require a shift from reactive to proactive thinking. Instead of reacting to a customer’s problem and resolving it, the emphasis is placed on monitoring your customers’ systems, looking for issues before they arise, and resolving them before they impact their business.

Building a managed service offering is a good fit for the AV integrator. A successful service puts you in close contact with the client and their business operations. You will have an intimate knowledge of what technologies they are missing and what needs to be updated. You become the trusted advisor for future technology projects, and when a product fails, you are the resource to replace it.

Randy Riebe ( is the director of AV integrator business development for Polycom.

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