Beyond the thumping speakers and other state-of-the-art products devoted to audio and visual, the concept of integration emerged strongly, once again. Sight and sound directly from the National Systems Contractors Association (NSCA) Systems Expo 2006 in Las Vegas confirmed that it is not audio-only, but a host of other hardware, software, systems and services that continue to merge and converge.
The electrical contractor is increasingly involved in integrating the audible side of the business. It’s the total solutions approach they’re after, and that means embracing connectivity and a wide range of products—custom-tailored to the application.
There were 1,000-plus new product launches made at the show, which had some 450 exhibitors. It was also evident from show traffic that an increasing number of electrical contractors are part of this business and want to learn more about it.
Thought plasma screens had nothing to do with your vertical market? Wrong. Now in airports, schools and a range of other commercial settings, digital notification displays alert and direct the end-user, personnel and occupants of the premises. Control rooms, too, are deploying larger displays and forgoing small monitors, making surveillance and facilities management more efficient.
Networking is also popular and allows the contractor and user to leverage off existing systems. Flat-panel LCD and plasma displays from Sampo Professional, City of Industry, Calif., are Ethernet-ready, allowing facilities managers and administrators to monitor, control and schedule tasks for a network of IP addressable displays from a single network computer.
Visual communications for vertical markets continue to evolve. SMART Technologies Inc., Calgary, Alberta, showcased its SMART Board interactive whiteboard and soon-to-launch software. Focusing on the educational and corporate vertical markets, users can create and share digital lessons over the network or globally. Its software is so detailed that it allows users to create their own lessons and education and training formats and select from detailed galleries and other on-board materials as well as from other sources.
In sound systems, technologies continue to gain speed, with digitization, modular equipment and labor-savings high on the list of new product development. TCS Audio, San Diego, was one of many audio demonstrations at the show focusing on new speakers that enrich sound and, also, products that save set-up time and come in a smaller footprint. New loud speakers, subwoofers and other TCS products have been engineered for more efficient use of power, a critical consideration in areas where it is limited.
“Using limited electricity and power is extremely important for the installer and the customer,” said Craig Hockenberry, director of engineering and marketing.
Other areas to watch include digital paging, wireless audio and media streamer video displays, and intuitive software that bridges and converges applications and enables global video conferencing, amplifiers, mixers, and tools and racking solutions.
State of the industry
Integrators were reminded that some markets are growing while others have sharply fallen.
Although it’s not news, gross profit margins in the audiovisual presentation market fell from nearly 35 percent in an NSCA 2002 survey to just more than 30 percent in 2005, challenging integrators to look at other ways to attain or sustain profitability, said Jeff Quint CPA, NSCA, Cedar Rapids, Iowa. Quint was the keynote presenter in the session: “Keys to Profit from the World’s Most Profitable Systems Integrators.”
The session was based in part on the “Financial Analysis of the Industry Report, Fall 2005,” a compilation of data from some 100 systems integration companies.
Quint advised the following:
- Create a matrix for your local market. Which technologies do you want to lead into which markets and how? What is your area of specialization?
- The most profitable companies focus on recurring revenues. Those in the $2 to $4 million in annual revenue were consistently the most profitable, on a percentage basis. Measure your company’s overall productivity against the $175,000 per full-time employee rule of thumb. That is the amount each employee should be bringing in per year.
- Fire alarms and professional sound are up-and-coming product sectors. Religious venues remain strong and the medical vertical market is one of the fastest growing.
- Preventative maintenance agreements may generate more work and additional revenue in the form of new equipment and upgrades. Integrators should train technicians how to sell service and preventative maintenance agreements.
The market continues to move to integration and convergence. The electrical contracting community is taking stock of ways to position itself in the field, and that includes branching out into areas such as sound and other audiovisual services. EC
O’MARA is the president of DLO Communications in Park Ridge, Ill., specializing in low-voltage. She can be reached at 847.384.1916 or firstname.lastname@example.org.