Special report: All change for the interactive display market
In the past, the education space has been the natural home for interactive displays. But now the enterprise wants in on the action
When you think about the market for interactive displays and associated products, schools and the wider education market may immediately spring to mind. From kids using digital whiteboards to better engage with lessons, to teachers scribbling students' ideas on an interactive flipchart - the opportunity for the kit in the classroom is perhaps as obvious as it is big.
But now, the technology is graduating from the education space into the enterprise, and the chance for the channel to cash in could be significant.
According to figures from Futuresource Consulting, the corporate space is the fastest-growing sector for interactive displays and by 2018, one in five sales of the products will be to businesses. Separate research from the analyst indicates that in Q2 this year, global sales of interactive displays grew seven per cent annually to 300,000 units, making it the largest second quarter for the market ever.
It will come as news to few that the workplace is changing. Traditional nine-to-five workdays where business emails and phone calls are confined to the office are unheard of for many, as employers adopt flexible working approaches to keep staff happy and their own costs down. And it is this trend which is opening the door to interactive displays in the workplace. Why trek into the office on packed public transport for one meeting when you can dial in and participate as usual using the latest technology? So say salespeople pitching the kit to enterprises.
And it appears the argument may resonate a lot more in the future, with research from Virgin Media Business claiming that by 2022, 60 per cent of office employees will work from home regularly. the products will be to businesses. Separate research from the analyst indicates that in Q2 this year, global sales of interactive displays grew seven per cent annually to 300,000 units, making it the largest second quarter for the market ever.
Whiteboards are staple items in classrooms, and have been since chalk went out of fashion. Few lessons go by without a teacher making at least some notes on a board or flipchart, meaning it is perhaps understandable that so many schools have invested in digital displays.
SMART Technologies, the Canadian firm which specialises in the kit, has sold about 3.2m Smart Board interactive whiteboards globally, and 2.8m of those have gone to schools customers.
But according to the firm's head of international business development, Tobias Windbrake (pictured, right), the enterprise is the future for his firm's kit.
"If you think about today's meeting rooms, there are a lot of legacy products in there - like spider phones, flipcharts and whiteboards - which is quite amazing if you think that in the office, the trend goes away from paper as much as possible.
"This creates a number of challenges: at the end of the meeting, how do you share what you have captured? People take their smartphones and take photos and send an email to attendees with an attachment with six different images with cryptic names that are 2MB each in size. You never know what you're doing with this content - do you create a folder, or do you go to Photoshop and create something new with it?
"The other challenge really hindering corporations is that remote participants are isolated. These days, more than 50 per cent of meetings have a remote participant and this is a big gap in the whole collaboration space if these participants are not ‘real' members of the meeting and [have to just] listen."
And it is a desire to overcome these issues which is making the commercial space a priority for vendors of interactive displays.
SMART's regional director for EMEA, Jane Ashworth, said: "We have high expectations for the enterprise piece of the market. That is where we see the demand is coming from. The growth for us is in the corporate and enterprise space."
The commercial market may be beginning to take off now, but that has not always been the case, according to SMART partner Smarter Interactive's head of corporate business development Jon Knight. He said it took a wave of business-focused innovation to really boost the channel opportunity in the space.
"We were aware of companies such as Accenture, PwC and Nokia putting smartboard projects [into corporates] back in the mid-2000s," he said. "So the enterprise market has always shown an interest.
"But the problem [was] that at the time, the products being sold [to enterprises] were education products. And that led to issues with adoption because most of the business applications don't require a lot of the education tools - they don't want smiley faces, rainbow pens and crayons. They wanted something appropriate for business. So the adoption issue was the main reason we saw difficulty with the enterprise market growing. It is really since SMART has developed enterprise-focused products that we have seen an increase in the opportunity."
Supply and demand
According to the latest government figures, in 2015 there are 5.4m businesses in the UK, up a massive 37 per cent compared with the number 10 years ago - perhaps suggesting the opportunity to sell whiteboards into the enterprise locally is huge. However, the government went on to say that of those businesses, 76 per cent do not employ anyone except the business owner, perhaps significantly reducing the chances of selling collaboration-focused interactive displays.
But according to SMART's Ashworth, in certain vertical markets, demand for the kit is huge.
"It very much depends on the vertical you are looking at," she said. "We have a number of priority verticals that we target, based on usage. If you look at some of the big consultancies - such as Deloitte - and the way that they work, it is very much in front of a flipchart, writing things down and brainstorming. It might be in small groups or it might be in large groups. That is the way they work and so the reaction to the products in verticals like that is ‘wow! What you're saying is we can use any pen on this board to brainstorm,capture what we put on the board, and share it with the participants of that group?' That, for them, is efficient and also develops their communication. And that is just one vertical.
"Another example is hospitality. [There are] thousands of chains of hotels around the world, [and] they all rent out space for meeting rooms. They are particularly interested because people use these spaces every day and [they] can increase the charges for these rooms because [they] have the latest technology. And, for a flipchart, if you put a 42in kapp board [SMART interactive flipchart product] in there, which replaces a flipchart, they haven't got the ongoing cost of paper. It is very verticalised and there are real value-adds by vertical so we are trying to prioritise that."
Government data shows that more than 99 per cent of the UK's businesses are SMBs - defined as those employing between one and 249 staff. And it is in this area particularly that some resellers are striking gold when it comes to interactive displays.
Graham Cording, business collaboration specialist at audiovisual reseller Smart Presentations, said smaller companies are just beginning to wake up to the opportunity interactive displays provide.
"The majority of SMBs are yet to adopt methods of improving meeting culture," he said. "Most rooms we find in SMB companies don't support collaboration or the ability to connect your own device."
He added that as today's school and university students - who have grown up with digital whiteboards in schools - enter the workplace, demand for the products will soar across the corporate space.
"I was speaking to a customer the other day who said that by 2020, 50 per cent of their workforce will be millennials," he said. "They are walking into the workplace, having been brought up with interactive whiteboards in education, finding conventional flipcharts and whiteboards."
Few in the channel will dispute that the technology industry is transitioning from its traditional product-sales background towards a services-led model. In fact, according to IDC, the amount spent on traditional technology products will continue to fall in the coming years as customers opt for cloud-based kit instead.
In a market that is moving away from its roots in products, some may believe that vendors and partners placing their bets on physical, on-premise kit are being optimistic at best. But vendor SMART claims to have found a way around the dilemma by packaging up its hardware in a services model, which is attractive to both its partners and end users. The scheme has been rolled out first among schools - the firm's traditional heartland - and is called Classroom-as-a-Service (ClaaS).
SMART claims ClaaS provides schools with "everything they need" to create a connected learning environment through one subscription. The scheme allows schools to trade in kit when they are done with it and spread the cost of IT - which SMART claims helps schools reduce their IT spending by 40 per cent over the products' lifespan.
Although this model has been pioneered by SMART in the education sector, a similar offering for the enterprise is on the way, according to Colin Bosher, its head of software, solutions and services for EMEA and APAC.
"The plan is to extend that capability," he said. "We began with education because clearly education is our heartland. But now, of course, the interactive, collaborative technology we have has incredibly powerful commercial applications as well. So our intention is absolute. We already have the ability to fund [an offering focused on the] commercial business, [but] we've not branded it as anything yet. We have recently put together some packages for our enterprise products. The intention will be to create that reseller management infrastructure... for both the education and the commercial sector."
Bosher said this type of transformation is essential for the channel and pointed to Computacenter as a prime example of the transition the industry is making.
"A lot of the IT industry is moving from a transactional model towards an annuity-based model," he said. "If you look at the likes of Computacenter, in the mid-90s, a lot of the margin fell out of the product - 30 per cent down to five per cent. But it made an incredible transformation to become a services business. If you look at the business today, it has 200 consultants, 600 project managers, hundreds of managed-services individuals who are taking technology and wrapping it with project management... and ongoing managed services."
Although the enterprise is the next frontier for the interactive display space, the schools market will remain an important space for vendors to serve. Futuresource Consulting claims the penetration rate for enterprises in the interactive display market is just 1.6 per cent, compared with 20 per cent in classrooms.
According to the latest government data, in January 2012 there were 8.2m students attending about 25,000 schools in England alone. In the coming years, the number of children entering the schools system is set to rocket too, perhaps presenting a perfect chance to pitch tech products.
SMART's Windbrake said education will remain an important area of focus for the interactive display industry.
"The education market is very important to SMART," he said. "We have more than 25,000 schools in the UK alone and all of them with a decent number of classrooms, so there is a very large market. Even though there is a good installed base of interactive whiteboards already, there is a large amount of opportunity for replacements. That is a significant opportunity even though we have a high penetration in schools - so absolutely it is important to us."
Interactive technology is now commonplace in the classroom, with digital whiteboards and other similar gadgets first entering schools back in the early 2000s as the government's Becta initiative first got under way.
According to distributor Stejes' sales director Sam Baker, the market is far from saturated and is ripe for sales of replacements and upgrades.
"If you think right back to Becta - the body that was put in place to support ICT procurement in schools - that all happened in about 2000. You can imagine that most classrooms are equipped with some sort of interactive device. Those interactive whiteboards which were installed back in 2002 clearly need to be replaced. It has become business as usual for teachers to use interactive devices in classrooms, so actually, there is a massive opportunity in the education sector to refresh those devices."
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