“The good news is that clients who pulled back on service contracts or on replacing equipment in 2009 will have to eventually do something. That equipment is another year older. The market will have to rebound since the equipment will eventually break or need replacing.”
What’s happening with Corporate AV?
A recent survey of economists showed that 80 percent of them think the recession is over. So after more than a year of cratering housing prices, layoffs, and waves of corporate meltdowns, we can stop worrying and take a breath, right?
That got me thinking about corporate AV and the integrators who service this market segment. They are on the front line when it comes to the whims, wills, and budget pitfalls of the corporate client. Stu Tierney, account manager for IMS AV in Garnet Valley, Pa., tells me, “Before the recession, long-standing clients were committed to working with you and there wasn’t much price shopping if you gave them quality services at a fair price. Now, shopping on price is a higher priority.”
IMS AV provides AV design and integration services to corporate and education clients. “The corporate spend is apprehensive. And to save resources, we’ve come across situations where clients are also pressing internal resources like IT people (instead of hiring an AV consultant) to construct the bid document,” says Tierney. “Overall, there’s been a pull back in corporate AV spending, especially on non-critical technology like digital signage.”
Tierney notes that clients are investing in tried and true technology, but cutting back on travel means more interest in videoconferencing. “Clients are really looking for ROI and we’ve had that discussion often,” he says.
Gary Harling, president of AV TechSource in Illinois, agrees that there’s been an uptick in interest when it comes to videoconferencing because “customers are embracing it more. The technology is easier to use and the quality is improving.” His company provides technology services and support to AV dealers and doesn’t handle selling to the end user.
Harling, who works primarily on corporate and education projects, says that his business has changed a bit this year. “We were doing programming for larger dealers’ overflow on high profile projects. Now there are less large projects but other smaller projects have picked up, such as smaller dealers who are getting more jobs and need us to provide excess capacity. The difference is that the projects are not high profile or new construction.”
Harling’s niche has allowed him to see growth every year since the company was founded in 2006. His company’s strength is that they can be the local support team for dealers, as well as provide the extra skill or expertise on challenging projects. But, he says, “Everyone’s still conscious of the budget nowadays.”
Budgets aren’t the only things that are shrinking. Ashley Mason of Unity Audio Visual in the UK tells me that “In the past year, I've seen the corporate market change in the respect of the overall size of equipment becoming smaller. I noticed that boardrooms and meeting spaces are becoming smaller, also, which may be driving that trend, but it seems that the economy shrinking has meant that more space for working and less space for meetings is required.”
As for her 2010 outlook for the corporate AV market, she says, “I am anticipating a further fall in the corporate AV market over the next year. As technology advances faster than budgets increase, the corporate AV market may well become exclusive to those that can afford it.”
For corporate AV integrator Federico Hugo Petrone in Buenos Aires, Argentina, he’s hoping that the worst of the downturn is behind him. “After an excellent end of year 2008, we had 3-4 months of complete shutdown of work of all types. Corporate-wise, all the proposed AV installations were halted indefinitely. What we saw was that the money was still there but the companies did not want to risk it. They held on to it until they realized that economically and politically things were stable (at least over here). Once they fully realized that, all the on-hold projects were reactivated almost at the same time.”
Now he’s busier than ever, but still says that it’s difficult to make predictions for 2010. “But every day I get new job proposals and budget requests; so far I have taken work for at least 6 months ahead. I don't see a slowing down,” he says.
Tierney agrees that the recession isn’t all bad and that it’s been a nice way for IMS to “up their game” by branching out into building automation, energy efficiency, and green AV. He says that the company has maintained its revenue and size, and they may see small growth in 2009. He says, “The good news is that clients who pulled back on service contracts or on replacing equipment in 2009 will have to eventually do something. That equipment is another year older. The market will have to rebound since the equipment will eventually break or need replacing.”
By Linda Seid Frembes
Linda Seid Frembes is a freelance journalist who covers AV technology, installs, market trends and industry news. Linda has worked with high profile AV manufacturers, trade organization, systems integrators, rep firms and dealer/distributors in the industry including John Lyons Systems, Eastern Acoustic Works (EAW), Northern Sound & Light (NSL), and InfoComm International, among others.