Solutions for shrinking margins

Sales of networked, interactive AV may boost reseller coffers this year

Networkable projectors are tipped to make money for the channel for the rest of the year

Digital signage, networked projectors or displays and interactive education solutions are shaping up to be a few of the juiciest margin opportunities in the audiovisual (AV) space for IT resellers.

Jon Sidwick, managing director of Maverick, said end users are increasingly seeking a single supplier for a complete solution, which in many cases now includes AV. Corporate communications, networked video, education and retail are all areas resellers can gain good margin by offering AV-related solutions.

“Often, the start point for any solution is the IT side: [for] structured cabling, networking, comms upgrades, new-build situations and so on. End users are asking the IT supplier to add the AV side,” Sidwick said.

Networked AV solutions such as digital signage and videoconferencing have fallen right in the IT specialist’s ball park. IP-addressable kit these days often happens to have a display device attached. Quality of service, knowledge and deliverables ­ rather than box price ­ are key.

“Margin-rich areas are based around solutions and are widespread, in areas such as installed network projectors, installed network large-format displays, digital signage for retail and internal corporate communications, and interactive solutions in education,” Sidwick said.

“Local IT resellers are now seeing opportunities with devolved local education spend.”

Projected success
Projector specialist Optoma has just entered the digital signage market to take advantage of some of these opportunities, which it sees in many verticals, such as education and hospitality.

Bob Johnson, the company’s digital signage product manager, said it planned to work through specialist AV, a high-end digital signage distributor and an IT distributor for the range.

“You need IT for digital signage, because the IT part has become quite complicated,” Johnson said. “The margins could be up to 30 or 40 per cent.”

Opportunities are as varied as the customers themselves, he added, from the high-end, multi-platform, large corporate systems ­ about 20 per cent of the market ­ down to single-screen, single-player installations with customer-loaded content.

Trusha Shah, data projectors product manager, said: “Probably about 30 per cent of our projectors, from short-throw through to 4,000 lumens, have networked capability, with very simple software.”

Steve Nicholson, AV sales manager at Optoma, said the popularity of projector networking has risen over the last couple of years due to reduced costs, “with margins for the dealer from 15 to 35 per cent”.

But it is all about the solution sell, rather than pushing hardware or even bundles. “Last year, the buzz was about digital signage; now everyone is talking about solution selling, Nicholson said.

Many corporate account resellers are now promoting the whole package, including speakers, amplifiers and installation.

Darren Lewitt, divisional director for AV at Midwich, said IT resellers with networking skills are finding their expertise increasingly relevant with AV solution sales ­ and product margins are higher.

“Digital signage has emerged as one of the most lucrative prospects,” he said.
“DisplaySearch has forecast that shipments of displays for use in digital signage will grow 44 per cent in 2009, but the real money spinner is the software powering the network.”

He pointed to cloud-based solutions ­ such as signagelive.com’s software as a service for digital signage ­ that have lowered the barrier to entry.

“With a display, it is possible to significantly increase the value of a digital signage sale. Typically, resellers will look to maintain a minimum 30 per cent margin on the signagelive element, which will generally be considerably greater than the margin made from the hardware.”

Ongoing support and services will always increase margin at the same time as building customer relationships ­ which also can boost the potential margin.

Meanwhile, wireless or pico projectors bundled with notebooks suit mobile workers.
“On another note, the Building Schools for the Future initiative is fuelling demand for high-end solutions,” he said.

“Wide-screen, short-throw, networking and wireless projectors are all better options for replacement sales than entry-level units.”

Visualising the future
Many schools already have interactive whiteboards, which rarely go wrong, but resellers can focus on new projector technologies.

Graham Wylie, product marketing director at Steljes, confirmed that complementary AV products such as visualisers and interactive voting systems are taking up the slack.

“The focus is moving towards the interactive classroom, with a full range of solutions,” Wylie said. “And there are interesting developments around software and support.”

The Budget is believed unlikely to have a great effect on education sales. “There are still opportunities for partners to add value,” he said.

Making the best of both worlds
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