The CEO of the UK's largest AV integrator, AVMI, is on a mission: to grow globally and to tackle the infamous IT challenge head on. Ed Cook [shown in photo to the left] talks to rAVe EUROPE about the challenges facing the AV industry.
By way of introduction, can you describe AVMI in numerical terms? How big are you today in terms of turnover, annual growth, number of offices, number of employees...and any other Key Performance Indicators (KPIs) you use?
Now 25 years-old as a business, AVMI has 8 offices (including recent openings in Hong Kong and New York), and 450 or so employees. Our main KPI is EBITDA (earnings before interest, taxes, depreciation and amortization). We are owned by private equity and they tell us how we are trending. Our latest fiscal showed we reached 55 million pounds in revenue with an EBITDA result of 4.6 million pounds. Our financial year is end of June and we are expecting a similar result to last year, despite investing in the opening of new international offices. We expect revenue growth of 15-20% a year.
You have talked in other interviews about consolidation in our industry and the big getting bigger. Can you explain the forces at work here? What's different about the AV business today from, say, 5 years ago?
The driver of change is the client. Over the years, the client has changed from the Facility Manager to the IT Manager. Corporate real estate managers are still important, but our clients are mainly in IT-- or controlled by the IT department. Consequently, we see AV following the development of IT.
As a result, we see a need to grow in size, to be big enough to be recognized seriously by these large IT departments.
Under the auspices of IT, AV has gone mainstream—now every meeting room has AV and video conferencing, and the order volumes of AV equipment have gone up. IT departments focus more on regulatory issues and they are accustomed to dealing with big vendors, big suppliers—and the operating mode followed by big entities.
Products need to be reliable, secure and able to meet standards as soon as they roll onto the IT network. The buying is almost more about process than the products.
We need to speak to IT in their language. We need to adapt to them because business is now about bigger clients, bigger contracts and large scale volume purchasing.
You read and hear a lot of talk about how IT and IT integrators are taking over the AV business but my belief is that these IT companies are being invited in by clients; clients who recognize these IT companies because they are bigger and more well known.
The thing to remember is that the required skill sets are right here in our industry. It’s our market to grab. The IT industry is changing and more of what we do is in their sight-- but the business is still ours, if we go out and get it. Companies will come to find us if they know we are here and understand what we are bringing to the party. The history and profile of the AV industry is that we are in the habit of talking mainly to ourselves and promoting to each other.
The reality is that the IT departments that the AV industry is serving can be two or three times bigger in size than AV integrators-- and they can easily overlook us for the larger IT organizations that they are already familiar with.
What crystalized this for me was when a big retailer needed a number of video walls and we were put in touch with the retail executive in charge of the deal. The buyer—and this was an eye-opener for me—had never heard of “an AV company.” He thought video walls were only done by IT companies!
AVMI is structured simply into three divisions, CORPORATE, RETAIL and PUBLIC SECTOR. Which division is growing the fastest and why? Is there any NEW category you are considering for a division?
Retail is our newest and fastest-growing business division. Retail owners and managers have now accepted digital transformation and understand this change requires new technology and new solutions.
Inside AVMI, we will verticalize only if we see that the client demands are significantly different. For example, today retail is different because it is centered around digital signage and data capture (including beacons) linked to stock control and EPOS. This requires a much more integrated offering with different technology—micro signs, shelf edge tech, IoT, mobile—all these innovations picking up data and feeding it back.
In our public sector unit, the Justice sector is one of the most interesting areas for us. There have been many exciting developments, many around the transition to a paperless courtroom. Juries now use tablets and barristers require wireless systems to store and share evidence with the court which has opened up many opportunities for us (e.g. AVMI InQuestor which helps courts move to a paperless trial system using iPads-- shown in picture below).
AVMI leads the way in this area—in any public area where paper-to-digital needs are massive (e.g., prisons, courtrooms) —and where you need to share, conference, or record the legal proceedings.
What's an example of a recent exciting project in your retail unit?
We recently worked with a retail bank to provide them with a content management system and cloud-based portal, which their marketing department can use to upload static and video content across their entire branch network. The content can be tailored depending on time of day and which branch it is.
Is Smart Building a category that interests AVMI?
Smart building is a logical progression from AV. We’ve done a few projects but we are expecting more and more.
All the brands listed on your web site are A brands, industry leaders. We have often heard from integrators they need to also offer alternative (and cheaper) solutions. Is that an industry push-back that you also face? Do you buy from local distributors or direct from the makers?
We do carry and promote many top industry vendors but if a client has a low budget, we must look at the right level of kit. We carry 5000 SKUs at any given time and although we naturally have preferences, we will always specify the right solution that meets the client’s requirements and budget. If the client has a preference for a particular brand or product then we will respect that. We always listen to the client.
At AVMI what is the process by which a new product category might be scouted and on-boarded? For example, lots of interesting developments today in IoT (some of which will be featured at InfoComm).
We have a big business development unit which looks at new territories, new products and services we can offer. Inside this unit sits our Innovation Team. They are responsible for talking to vendors and manufacturers to stay on top of the latest technologies and product releases. They also attend events like ISE and will perform “soak tests” to determine what products and services interact best with other technologies.They then discuss with business development and if all is straightforward, they introduce the vendor to operations to deliver and support. Operations ensures we have all the parts we need, whether it can be controlled by, for example, an AMX controller, what brackets might be needed—all the practical details. Operations then pushes the vendor into the sales department.
We buy from both distributors and vendors. It’s not always about price. The service we get from distributors is often more important.
We notice you have your own OBWAN system. We talked a lot about our relationship with the IT industry, but with the digitalization of broadcasting, do you see opportunities there?
Through our Innovations Team and our work in the justice market, we were encouraged to develop a portable, 100% reliable, outside broadcast system. That system is able to take video statements from witnesses who couldn’t come to court. For example, remote workers, patients in hospitals, or vulnerable children. We developed our own backpack, our own multiplexer for bringing wireless 4G, satellite, wifi, streaming 2-way to the court rooms and remote witnesses.
We rapidly discovered all kinds of usages—streaming video from accidents or riots—via our secure video portal. We’ve sold a number of units to police forces. It’s not mainstream, but we are also renting these units frequently. So we like this AVMI OBWAN wireless broadcasting system [shown in photo below]and intend to develop it further.
How would you describe the AVMI corporate culture? How does AVMI distinguish itself from other integrators?
AVMI has a culture of change. Either you change or you stagnate. It’s not an option to do the same as last year. People get into the AV industry because they are excited about new things. If we want to keep our people, we need to keep them excited. Change is good. It is the sign of a company that succeeds.