Convergence, Nothing – That’s Commoditization!

IT takes square-aim at the AV Integration market. Enough’s enough!

So, the other evening, I’m sitting at home relaxing with my husband-slash-business partner when he looks up from his laptop with an outraged mien and exclaims, “You’ve gotta be kidding me!” (or slightly more profane words to that effect). Of course, I ask, “What’s up?” and he directs me to the Dell website, where, amongst an ever-increasing list of AV products and services being sold by this computer giant, we spied the magic word: Crestron. This morning, a tweet from RAVE news pointed out that CDW, another IT monster, is also selling Crestron… direct to end users… at a single-digit markup. To quote Slim Pickins, “What in the wide wide world of sports is a-goin’ on here??”

 

For the past 5-10 years, the IT/AV convergence has been heralded by folks at Infocomm and NSCA and throughout the industry as a fantastic opportunity to expand our market reach and bring AV to an entire new field of customers. Yet, the first steps in that direction came in the form of Dell and Best Buy and even Staples (!) selling projectors at extremely low margins, direct to end users. This commoditized projectors and drove most AV companies out of competition for projector sales. Few AV companies sell projectors any more, except for the extremely high-end Christies and Digital Projections – the ones out of reach for your average company but not for deep-pocketed government agencies and the occasional corporate headquarters. “Well,” we all said back then, “It’s only projectors. Every one is moving to flat-panels anyways. Besides, the real money is in the integration – all those boxes that live in the rack and make it all work together.” And we let it slide.

Then, IT companies started carrying or manufacturing switchers and other ‘boxes in the rack’ and we all said, “Well, that’s encroaching on our market a bit… but it’s still okay. Our boxes are better than theirs and besides, we’ve got all the experience and the know-how. Plus, it’s all about CONTROLLING the systems. It’s not really a high-end AV system without the slick control aspect. We’ve got this.” And we let it slide.

Now, we’ve got two major IT box sale specialists dipping their toes in the control market and driving down the margins on every piece of equipment we might possibly sell in this arena. Now, I don’t know what is going through the various manufacturers’ heads in this regard, but it certainly cannot be an outrageous concern for their loyal and long-time channel partners on the integration side!

I am somewhat heartened by the fact that the control system components that were listed a few days ago on Dell’s site are no longer there, but will the CDW partnership linger? How quickly will that development result in our industry being put on life support? After all, we already deal with IT professionals and end-users alike who suffer from know-it-all-itis:

  • “Hey, I put in my home surround sound system. I can do THAT.”
  • “Pfft. I installed and programmed the entire mainframe AND I have been programming in six different languages since I was 10. I can handle a simple touch panel.”
  • “Come on! Why are we paying *those* guys to come in and install all this? We have employees that we already pay. Besides they actually want to *touch* our network to install it?? No bloody way!”

As an AV integrator, particularly one from a small firm, this is a huge obstacle to overcome. We’ve devoted years of our lives learning our industry – acoustics, optics, electrical, integration basics, and the endless manufacturer classes on programming, set-up, design, etc – only to have that time-and-money investment belittled and overlooked by the world at large, and particularly by the IT professionals that were supposed to be partnering with us as a result of the oft-hyped AV/IT convergence.

The true shame is that this came to light mere days after the end of AVWeek. Just a few days ago, we were in the midst of a week-long celebration of the AV Industry and our unique place in the world, and now we are looking at yet another sign of a potential end of our usefulness. We need to lobby our manufacturers to take a stronger role in protecting their AV sales channel. We need to be MORE VOCAL as AV Professionals in educating the world at large – and all of our potential clients – about our knowledge and expertise that is unique to AV. And we need to insist that construction industries, architects, consultants and IT professionals acknowledge our industry as distinct and of value, if we want to have any hope of surviving this commoditization and cannibalization of AV by IT.

Otherwise, you all should just start studying now. I hear those CompTIA, Microsoft and Cisco certification exams are tough…

9 thoughts on “Convergence, Nothing – That’s Commoditization!

  1. What kills me is that if i tried to sell Crestron online @ single digit markup Crestron would drop me like a hot potato. But its Ok for them?

    Wait until Crestron realizes how much its going to cost them when they have to hire an army to take end user tech support calls.

  2. @Jeff (whitevan-lifestyle) – I wouldn't know as I haven't been to AMX training in years, but most manufacturers do provide lunch.

    However, if that was a subtle dig that I work for AMX, well you are wrong. I am a small systems integrator that has long-standing dealer agreements with Crestron, AMX and Extron (among many others). While I reference Crestron in my most recent blog by name (since that is the news story that kicked off this particular rant) they are not the only perpetrator of such integration-undermining activities… just the most recent.

    Perusing CDW and Dell can read like a line card from your standard systems integrator – Sennheiser and Shure, Pioneer and Panasonic, Samsung, JVC, Dalite, Clearone, LifeSize – the list goes on and on. My point with this blog post is that more and more often, manufacturers are opening their distribution channels to large computer and IT channels which has a detrimental effect on the AV sales channel for traditional integrators like my own firm.

    We, as an industry, need to speak up and educate IT professionals and (more importantly) end-users about our industry more effectively so they will realize the true value of using a properly trained and certified AV professional for AV projects.

    But thank you for your opinion.

  3. That is exactly where I was going with that comment.
    Dawn, your blog is very well written and there was no dig intended. I'm just a bit heartbroken by Crestrons latest move.

  4. Fair enough… my bad. ^_^ But yes, I too am disheartened by this shift in thought on Crestron's part (and the part of the other manufacturers who dual-channel into the commodity-based IT/computer market!) I just hope it is a soon-to-be-failed experiment on their part! (And no fear! I'm already bugging my friends at Crestron to figure out "WTF, mate??" LoL)

    That said, to answer your query more positively – I know AMX East does lunch at training – at least when I was there last – but all I really remember are the fantastic brownies they served with lunch. Mmmmm… Brownies… ^_^

  5. Now, Graham, that's a fairly defeatist attitude! No matter what we as an industry focus on, eventually it will become commoditized. As I mention in the blog-post, it is time for our industry to stand up and really spread the word about the industry and the variety of advanced knowledges (optics, acoustics, electronics, etc) that are needed by trained, skilled AV technicians.

    Eventually we will be more a service industry than a product industry, and this education about our knowledge and skills, as well as a more prominent respect given to AV certifications will only benefit our companies and give us future business and respect once any old fool can sell our products. Infocomm's education and outreach committees, as well as their standards committee, are making great strides in this arena. They need to pick up the pace, however, and each of our firms need to take part as well. Only by acting together as an industry can we survive as an industry! Keep the faith, brother!

  6. You should watch this Dell space, there is a lot more to come with a move into this AV market for them!!! 2010 will see a major change!

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