He's taken his company from a pure VC integrator to a broadly based UC company. Ahead of his panel appearance at InstallMarket, avsnet MD Graham Fry explains why the opportunities from AV-IT convergence outweigh the threats.
In 2012, avsnet was created when integrator AV Solution widened its remit from pure videoconferencing to offer a full unified communications portfolio.
Two years on, the strategy has clearly paid off: the company achieved 82% growth last financial year. Managing director Graham Fry has set a target of 50% for 2014-15, and as the end of the first quarter approaches (avsnet’s financial year starts at the end of May), revenues are running ahead of target. He attributes this to “a combination of offering people what they want, and having an excellent reputation, which brings us a lot of repeat business.”
Fry has noticed that projects below the £100,000 mark are getting signed off more quickly these days. “Businesses seem much more willing to part with their cash for these smaller projects,” he says.
Caution remains at the higher end, though: “Larger projects still have a slightly extended timeline, although it’s shortening.” In addition, “we’re seeing more due diligence being put into whether it is the correct supplier and if we are being as cost-effective as we can.”
He is seeing some maturing of the unified communications market, particularly with products such as Lync Rooms. This has advantages and disadvantages: on the plus side, these products are “making companies think about how their people collaborate. They may not be the best solution in my opinion – some customers will buy them but others will listen to what we say and we’ll come up with a hybrid solution that really does work for them”. On the negative side, Lync and similar solutions offer less opportunity to make margin: “The more turnkey it is, the less value the reseller can add – but the cost of sale remains the same. This is something the vendors need to sort out at some point.”
Fry has noticed that “people are more accepting of Cloud-based solutions”, particularly now that major players such as Polycom and BlueJeans offer these. Because it is easy to scale up a Cloud-based UC solution, they provide a means for customers to “dip their toes” and get used to the technology – while avsnet works with them on user adoption programmes (something, says Fry, that other resellers have not always provided).
There does remain some wariness over Cloud solutions – perhaps the biggest issue remains the lack of control when the system goes down. (“Even the largest spenders – Amazon, Microsoft – all their Cloud solutions have had major outages,” he points out.) “The frustration if that service goes down and you’re one of many trying to get an answer – compared with going to your IT director and getting an instant update – that’s still culturally hard for some people to accept.”
Larger companies may start looking at a Cloud solution but then opt for an on-premise solution when they see the costs, says Fry. “At the other end of the scale, small to medium-sized businesses wouldn’t be able to afford it any other way [than Cloud-based].”
Fry will be one of the speakers on the panel on AV-IT convergence at InstallMarket on 4th September. Does he see convergence as an opportunity or a threat for AV integrators? “It’s definitely an opportunity – though it’s a threat if you ignore it.” The company rebranded itself two years ago and acquired new skills to provide a combined AV-IT offering and “it has really enriched the conversations we have with customers.”
Having a wider portfolio has dramatically increased the value of some projects. Fry gives the example of a project that the company worked on two years ago, for which the AV/VC part was worth £150,000. “When we spoke to them recently, we talked about refreshing their LAN, their wireless and their telephony – and what two years previously would have been a £150,000 project became nearer a £1million project and we delivered it all. That’s why I think it’s a massive opportunity, because network telephony budgets tend to be much larger than AV budgets.”
He also sounds a note of caution: “If you don’t embrace AV-IT convergence, you could become marginalised within some of your accounts where you’ve been well respected for years. If you don’t take it all on and take complete responsibility, there’s a risk that another company – a IT company or whatever – will take on the AV and the VC as well.”
InstallMarket is a one-day conference and networking event that takes place at the Business Design Centre. To register to attend this FREE event, go to www.install-market.com/registration.