Kramer Control’s hardware costs are said to be as little as about $1,000 per space, with a monthly fee for the data and analytics, which will be reported through a dashboard the client accesses in conjunction with Kramer’s network enterprise management software. Hoffman expects quick traction for the service, which integrators can offer as a white-label product, because cloud-based collaboration management and data analytics requires a vastly lower upfront capital cost than installing conventional AV control technology platforms.
He sees it as a three-way win for Kramer, integrators and their clients, one whose nickels and dimes, relative to the cost of traditional hardware, will not only add up but provide a much higher level of revenue predictability for integrators through volume but still with opportunities for some custom systems integration, and cost reductions for their customers.
“I’ve never been more excited than I am about this,” he says. Zdi’s McArdle won’t go quite that far yet; he says cloud-based collaboration isn’t as simple as it’s often presented. “To create something that simple you have to hide the complexity somewhere,” he cautions. “That means there will be a lot of unseen layers to manage, either by the integrator or the [product developer].”
Apple and other mobile device makers upgrade their products on their own schedules, which are unlikely to be the same as those of cloud systems developers, meaning there will be considerable opportunities for interoperability and other issues. “We’re going to need standards that everyone can work with,” he says.
Near-Term Concerns, Long-Term Gains
The introduction of cloud-based, as-a-service products could rattle other fundamental aspects of AV integration as a business. Gabriel Gely, executive vice president of Edmonton-based Genesis Integration, has already experienced the hiccups that embarking on an as-a-service sales strategy can induce in a company’s own enterprise resource planning (ERP) methodology, with everything from inventory to invoicing potentially affected.
“We’ve had to go back to our ERP provider and ask, ‘Is this even possible?’” he recalls.
In the near term, Gely foresees establishing two distinct sales channels with unique personnel: one for traditional AV systems sales and the other for as-a-service sales. “You can’t expect someone who’s used to pursuing a $2 million project to care about a $25,000 service contract,” he says plainly. “It’s going to require a second sales team, with its own account executives, dedicated to as-a-service to sell it.”
That’s because, he explains, there is a deeply embedded sales routine that will see a customer on a five-to-seven-year cycle to replace collaborative and communications AV system, versus going to customers on a regular and often basis, learning what they need from an ongoing service model.
“You have to learn their changing needs, and how updates in software affect how they do business, to understand their rate of adoption and how to help them increase utilization,” he says.
Gely concedes there is a chance for some unnecessary redundancy in that strategy, but that the cultural differences between the two already create their own distinct environments.
For instance, he points out, typical AV integration sales points of contact tend to be with department heads, versus occupants of corporate C-suites, which are the natural turf of those selling video conferencing or room control/automation as a service, as CEOs and CTOs seek to implement visions.
“I think we’ll see this all migrate to the cloud within five years. We’re now at a point where the technology and the cloud are more convenient for our customers.”
Aaron McArdle, Zdi
Compensation for each sales team would have to reflect those cultural differences, as well, with larger front-end rewards for selling recurring-revenue products, like Genesis Integration’s IndabaCall, an enterprise-class video conferencing-as-a-service platform that allows a range of clients, from SMB through to large enterprise, higher education and various levels of governments, to experience the high-quality video collaboration from any standards-based hardware or software endpoint.
That platform, which is built atop Videxio’s cloud video conferencing service, was launched in late 2015. [related]
Gely says the company is still feeling its way around how it will integrate both as-a-service and traditional AV into a streamlined whole, but he expects it will at least initially have to take the form of two parallel sales propositions, and they may sometimes even be approaching the same customers with different products.
“Traditional AV integration has a very Viking type mentality — ‘raid, pillage, repeat; raid, pillage, repeat,’” he jokes. “The conventional AV mentality is psychologically disconnected from the idea of servicing clients on an ongoing basis. We have to learn to incentivize that.”
Ultimately, Gely believes that integration revenues will stabilize and likely increase over time from both domains.
“We may have to give up some margin in the meantime to achieve that,” he concedes, but adds, “The opportunities are huge, and the AV integrator is uniquely positioned to take advantage of this change in the industry.”
