The AV world– including digital signage– is going through a major transformation. Historically, we have used a bewildering array of interfaces to connect the end-points, including Composite, S-Video, Component, VGA, DVI, HDMI, DisplayPort, SDI, 1/4” phono jacks, 1/8” phono jacks, RCA and XLR. These cables are used to connect endpoint devices that generate, store, modify and play content. In addition to the cables, an even more confusing array of switches, hubs, converters, adapters and extenders are used to complete the connectivity infrastructure.
The need for these endpoint devices and the functions they provide will continue to grow. However, the infrastructure is undergoing significant change as many of the devices are being updated to exist directly on the IP network. Frequently referred to as the convergence of AV and IT, this is really more of a relayering. The AV devices will continue to provide critical capabilities as part of an AV application layer, but instead of running on a rat’s nest of specialized cables and devices, everything will sit on the same type of IP network that has been used for years in general computing.
This trend is not without precedent. Years ago, printers were connected to sources via SCSI, Centronics, Parallel and Serial cables. Specialized A/B switches, spoolers and wall plates were also part of the infrastructure. These have now given way to Ethernet and WiFi connections. The printing devices provide the same functions (and more) as always, but now they do it on the IP network.
Another example is voice communication, which was originally provided by AT&T phones connected via RJ-11 cables to the POTS (Plain Old Telephone System) network. Switchboards, PBXs, splitters and other devices added to the complexity of the infrastructure. Today, these are being replaced by digital endpoints that natively run on the IP network.
Working with the Network Layer
One of the primary advantages of the layered model is the reduced cost of an IP infrastructure as compared to the cost of an A/V infrastructure. This is due to the following characteristics:
-Infrastructure devices like switches and routers are produced in extremely high volume which has commoditized their cost
-Cabling is usually Cat 5e and Cat 6, which is much lower cost than specialized A/V cabling
-Field termination of Ethernet cabling is a relatively simple task, which reduces installation costs
-Extensions can be easily implemented by connecting multiple network switches together via Ethernet cable for short runs or Fiber for longer runs or when higher bandwidth is needed
In addition, the IP network layer provides location independence for the AV devices on the network. Most traditional AV cables are limited to 3-5 meters (without using extenders.) Since this proximity requirement has been eliminated by IP networks, it is possible to design systems where many of the endpoint devices can be relocated to racks in wiring closets or server rooms. This can provide additional cost reduction while significantly improving serviceability.
A final advantage of the IP infrastructure is unlimited scalability. There is no practical limit to the number of devices that can be connected to an IP network. This makes it much easier to design systems that can easily accommodate future growth requirements of the client, without requiring over-provisioning at initial deployment.
It should be noted that complex AV systems can have multiple infrastructures. Audio and video content might be delivered over one infrastructure that consists of HDMI cables, matrix switches and extenders. Displays might be managed by infrared repeaters to enable source selection, image adjustment, and to manage other hardware settings. System control might be implemented using a Crestron or AMX system operating via RS-232 signals on DB-9 cabling. When deployed on the new IP infrastructure, all of these signals can be combined on a single unified network, providing additional opportunities for simplification and cost reduction.
The most significant impact of all this on the AV integrator is a potential reduction in revenue and margin, due to the commoditized nature of the infrastructure. But this does not mean you should abandon the infrastructure end of the business. It is still important to offer these capabilities so you can provide turn-key solutions to your customer and so you can limit the number of other vendors that might try to penetrate your account. Remember that this commoditization makes it easier for traditional IT integrators to start selling AV solutions, so you need to defend against these possible incursions.
Another impact on the AV integrator is a change in required skill sets. In addition to all of the traditional AV skills, your staff now needs the ability to design, sell, install and support IP networks. Even though these skills are not part of your traditional core competency, they are rapidly becoming part of the minimum necessary skill set for continued business success. Certification for these skills are available through organizations like Microsoft, Cisco and CompTIA.
Working with the AV Layer
While the infrastructure layer has become commoditized, the same is not true for the A/V application layer. You still need to select the endpoints that will provide the functionality needed by the client, including sources, storage, displays, amplifiers, speakers, lighting and control systems. You still need to design how these endpoints will communicate. You still need to install and configure these endpoints. You still need to be provide service and support for these endpoints. If you think about it, this has always been where your true valued added capabilities were delivered. Nothing about that has changed. The only difference is the commodity infrastructure on which the AV application layer rides. Certification for these AV skills are available through organizations like infoComm CTS and the Digital Signage Experts Group.
In response to this transformation, manufacturers are modifying their products to ride natively on the IP network. 2008 was a pivotal year in this evolution. Jupiter (now part of InFocus) released their PixelNet system, which uses a series of adapters to connect traditional AV sources and displays over Cat 5 cabling. That year, Hiperwall (the author of this article was a founder) unveiled its software system that used ordinary PCs connected over an IP network to connect sources and destinations. 2008 was also approximately when Intel, Microsoft and NEC began work on the Open Pluggable Specification. Released in 2010, OPS defined a common interface for the incorporation of single board computers into displays, enabling the displays to natively sit on the on the IP network.
In addition to the devices, you will continue to be able to provide a variety of non-commoditized services, starting with installation. Unlike network integrators, you should have a deep understanding of heat loads, weight distribution, sound design, line of sight studies and control systems. You should be familiar with the large variety of choices available in mounts, such as articulated mounts, full service mounts, video wall mounting systems, weatherproof enclosures and the variety of available floor, wall and ceiling systems available. Proper selection and installation of these devices will help you provide extra value to your customers while continuing to differentiate you from potential IT integrator competition.
An additional non-commoditized revenue source is service and support. This is particularly true in the context of today’s trend toward managed services. While the end user wants insurance against system failure, the integrator can amortize the cost of this service across many customers, enabling them to provide security to the end user while providing ongoing revenue and margin opportunities to themselves.
The bottom line is that commoditization is occurring in the infrastructure layer. You must continue to offer these capabilities to be a full service provider, but the real margin opportunities will continue to exist in the AV application layer– in digital signage that is the user-interface layer that includes displays and all of their peripheral gear including mounting systems, content management systems, and more. Emphasis in these areas should help maintain margin for years to come. As they teach in business school, “Know your core competency, and stick to it.” For the successful evolving AV integrator, this competency has been and will remain in the AV application layer. But understanding the AV/IP revolution will enable you to speak the language of the infrastructure suppliers and operators and provide them with more well thought out solutions that are both future-proofed against surprises and scalable as the IP infrastructure morphs and evolves.
Jeff Greenberg (email@example.com; 949-544-1930) is an industry consultant, serial entrepreneur, professor and author who began his career as a software engineer, working for large enterprises like McDonnell Douglass and Xerox, as well as startup Dayflo. Over time, he transitioned to a technical marketing role, then through product management, brand management, strategic planning and eventually into general management. In 2000 he shifted his focus to the world of hi-tech startups. Since that time, he has worked exclusively for emerging companies as a consultant, employee, advisor or founder. Greenberg is an adjunct college professor, teaching start-up skills to would-be entrepreneurs. He holds multiple granted patents, with additional patents pending, and is a published author whose work has appeared in preeminent publications such as PC Magazine, U.S. News & World Report, PC Computing and Digital Signage Magazine. Greenberg’s educational background includes a bachelor’s in computer science from Rutgers University, a master’s in computer science from U.C. Irvine and an MBA from the executive program at Pepperdine University.