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Remote AV Management: Good for Business?

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Type: Article, Report or Whitepaper

Topics: Business and Management; Networked AV Systems

Date: June 2012

By Mark R. Mayfield, Special to InfoComm International®

AV systems have become essential tools in the daily operation of almost every kind of business or institution. In the early days, when AV systems consisted primarily of standalone projectors and screens, most users were able to figure out how to operate them without much expert assistance. But even then, support was usually available from in-house AV departments or other technical staff. With the increasing complexity of AV systems and products, organizations found that they needed to expand these support groups and keep them constantly trained on new and evolving technologies. For some organizations, this became a significant operating expense for what was basically a non-revenue producing function.

In the early 1990s, several new business trends began taking shape. Organizations began to focus on cost-saving measures and started to outsource certain functions necessary to run a company but not specifically related to the core business. At the same time, other businesses across all industries began to look to a service model of recurring revenue as a way to secure (and grow) business and establish more consistent cash flow. IT departments played an increasingly critical role in day-to-day and strategic operations. Around 2002, the concept of “managed services” gained momentum in the IT industry, as value-added resellers realized that selling commoditized hardware and software wasn’t a viable business model for the long-term.

It wasn’t until AV migrated to the network that it became possible to centrally manage and operate AV systems on the network. So it was only a matter of time before AV became a function that could be remotely monitored and managed. It didn’t matter whether the control was onsite or off-premises; the network enabled a whole new business strategy for AV firms. Similar to what happened in the IT industry, declining profit margins and the commoditization of certain AV products forced forward-thinking AV companies to evolve their business strategies from box sellers to systems integrators. IP control and the increasing capacity of networks have now made it feasible for AV firms to offer remote monitoring and management as a service, following the lead of the managed service providers that dominate the IT industry. But is it a good business model for AV integrators?

Strategic Evolution

Call it a “paradigm shift,” “crossed chasm,” or “strategy du jour” — making the jump into AV managed services is not for everybody. Core requirements include expertise in AV and networks. Beyond that, there are significant organizational, financial, cultural, technical, and strategic hurdles to overcome.

A focus on services requires that the service department within an AV integration firm be segregated from the installation department, says Rob Gilfillan, president of Malvern, Penn.-based Cenero, a services-focused AV integrator. He believes there are three levels of AV firms, and not all are geared for remote AV management services. “A ‘Level 3’ is a firm that’s been around a long time,” he explains. “They look at AV as a standalone system. Their service department is the same as their installation department and they’re very project-based. The middle-level AV firm will typically do projects on a larger scale. They understand the value of service and may have separated their service department from their installation group, but they don’t offer managed services. The top-tier AV integrator understands that they need a recurring revenue stream and that it requires investing a decent amount of money.”

At the core of any firm’s remote managed-services offering is the network operations center, or NOC. Depending on the number of customers served and area of coverage, NOCs can be centrally located or distributed throughout the service provider’s covered territory.

AV firms considering videoconferencing managed services, for instance, will need to set up a specialized NOC called a video network operations center, or VNOC. The fundamental functions of any NOC or VNOC include:

  • Real-time monitoring
  • Initial problem discovery
  • Documenting and tracking operational aspects of the customer’s environment
  • Basic troubleshooting
  • Coordination and management of other resources
  • Escalation of problems to other parties when warranted

While a VNOC may service a smaller group of customers than a general NOC — participants in a video conference, rather than an entire enterprise — the impact of its service can be great, because the success or failure of a synchronous or real-time communication event can be mission critical. Beyond the general requirements of a NOC, a VNOC must also offer:

  • Proactive device monitoring
  • Device management
  • Conference scheduling
  • Conference management

After the obvious investment in hardware and equipment, the major expense in running a NOC is staffing, since many customers will expect 24/7/365 coverage. And it’s not cheap.

“Everybody loves annuity streams, but to get those recurring revenues, you have to invest a significant amount of money,” says Gilfillan. He estimates that his firm has invested over a million dollars to set-up their NOC, and that’s for a single location in Malvern. But once you get past the initial investment, it’s easier to recoup your investment. “Fortunately, the cost to support your first client and your 100th client are pretty much the same with a managed service,” he says.

The up-front investment necessary to compete on a large scale can be prohibitive for smaller AV firms. But of course, that is not the case for AVI-SPL, the AV industry’s largest provider.

“To really invest properly, you not only have to have a physical VNOC facility, which can cost somewhere between $500,000 and a million dollars to set up, but you also need to have the physical infrastructure,” says Michael Brandofino, executive vice president of video and unified communications for AVI-SPL. “This shouldn’t be at the VNOC, it should be at a co-location facility, which can be another half-million to a million dollars-plus per PoP [point of presence]. We’ve blended our help desks and our VNOCs, and we have about 65 people that are part of the team, working three shifts. So at any given time, there are 18 to 20 people sitting at desks dealing with calls and tickets.”

AVI-SPL has VNOCs at two locations in the U.S., and a PoP in the United Kingdom. It expanded its managed services capabilities when it acquired Iformata in early 2012. Iformata’s key product was a videoconferencing managed service offering called Symphony. A key feature of Symphony is multi-tenancy — it was designed from the ground up to support multiple locations within a single server instance without sacrificing security. AVI-SPL now offers Symphony as part of its Unify ME managed services platform. Although Symphony is currently focused on monitoring and managing videoconference systems, Brandofino says there is a device monitoring component of Symphony. “We’re working on our managed services roadmap, and we’re going to be expanding our capabilities. In fact, by third quarter or early fourth quarter of this year we’ll be releasing AV monitoring capability to the Symphony platform,” Brandofino says.

Differentiate Your Offering

Still, you don’t have to be an AVI-SPL or a Whitlock (which also offers AV managed services) to offer remote AV management, as long as you can offer something different and something that your clients need.

Cenero’s Constant Connect service goes beyond remote monitoring and management of AV and videoconferencing systems. On a nightly basis, the system will proactively test all AV systems. For example, Cenero can remotely inject an audio test signal into an audio system and analyze the signal from in-room microphones. Another test delivers video test patterns to displays, captures the image, and adjusts the projector or video monitor to make sure it’s performing to specification.

And Cenero has redefined the help-desk concept by adopting a model it calls “Audiovisual OnStar.”

“The client basically hits a button, and it goes directly to our call center, and before we pick up the phone we know who is calling, what business it is, and what room it is,” Gilfillan explains. “Then all of the system drawings pop up on the screen for the remote technician.”

The goal is to shave three minutes off the call, Gilfillan says. “When you’ve got a hot CEO in the room, he doesn’t want to wait three minutes answering questions like, ‘Who are you, and where are you calling from?’”

Interoperability Issues

Some of the basic functions of a VNOC can be accomplished through the use of third-party software such as Cisco’s TelePresence Management Suite (TMS), which can support up to 100,000 users and devices. Other firms may choose to develop their own proprietary software, as Cenero has done with its Constant Connect platform. Another option is third-party software from familiar AV vendors such as Crestron’s RoomView and AMX’s Resource Management Suite (RMS).

Doug Hall, AMX’s Senior Product Manager, says that RMS is suited for end-user organizations for in-house use, or for AV firms to build a managed services offering upon.

“We really architected RMS to fit into any environment,” says Hall. “Basically RMS is software for centralized remote management of networked AV equipment and building systems. We designed it to fit into a wide variety of environments, whether you have the basic central servers located in the customer’s environment, or a centralized location off their network. It will work by allowing the AMX system — as appliances — to connect to the server over the Internet.” In most cases, however, Hall says that RMS is installed at the end user’s site, on their servers.

But as in other areas of AV technology, vendors’ reluctance to agree on and observe consistently-applied standards can pose a challenge to those considering AV managed services. "One of the biggest challenges that any company who wants to get into remote AV management faces is all of the disparate products that are out there, and the tools that are relatively focused on an individual manufacturer,” says AVI-SPL’s Brandofino. “There are remote management tools available from Crestron, AMX, and Extron, but they pretty much work only with their own products. And they’re also not multi-tenant. So the challenge that you face is you literally have to put in a server for every customer that you’re going to manage. And you can only manage the breadth of technology that’s available within that manufacturer’s solution.”

Still, despite the costs and challenges of offering remote AV managed services, it can be a high growth opportunity, especially compared to box sales or conventional design-build AV integration and installation projects. Gilfillan says that 65 percent of Cenero’s revenue comes from design-build, which is growing at an annual rate of 5 to 7 percent. But managed services, which currently accounts for about one-quarter of the company’s revenue, is growing at 50 to 100 percent annually.