While having closed conversations with colleagues from our AV/UC supply chain, it became distinctly clear that the ProAV market is experiencing a significant slowdown, and a complete halt in some cases. The AV integrators, who are in direct contact with end-user decision-makers and with the various manufacturers, report longer cycles, some due to the customer's inability to decide which hardware to choose.
Why is this happening? Several reasons; global instability comprised of economic uncertainties, wars amongst others affecting the way we work (remote/office/hybrid) and there is no right solution visible on the horizon, just look at one of the most powerful companies in the world such as Amazon, which are trying to bring the workers back to the office. The global economy brings challenges related to the future of many players within diverse sectors and global trends such as UC-as-a-Service are not yet present in Israel.
I reached out to Gary Kay, co-founder and managing director of rAVe Agency for some global insights.
Kay: "I think the market is still trying to find its way in regards to the "return to work" – the decision on the mix and the actual return of the employees to the office. I can't speak for the global market, but in North America office occupancy has been around 60-65% consistently for almost two years .This means that over 35% of the workforce simply does not return and does not intend to return to the office. In Europe, this number is closer to 75% and for now we are almost done with what we had to do to improve the work environments and equip them with adequate UC tools.
This has a huge ripple effect on the UC market for the ProAV field – we are at a point close to UC saturation. I don't think we'll see the growth numbers that everyone expected in sales of UC products in 2024 or even 2025. In fact for 2024 I expect that number to be lower than 2023 and 2025 doesn't look any better right now."
Surprisingly optimistic
On a positive note, some systems integrators sell UC-as-a-Service. It is evident that companies tend to invest more in UC, both in the office space and in the challenges of working from home, when it comes to OpEx and not CapEx, so I would recommend companies dealing with large scale or global integration to consider adopting the AVaaS model. I think Logitech's Ghost announcement is a model worth following. I'm attaching a video I took of it at ISE this year."
"Although I do not see our market rushing to adopt the solution, this is a glimpse into the future of Pro AV. I believe selling a solution like the Ghost Project for $30,000 per unit is more likely to be purchased and implemented at a cost of $800 or $1000 per month. This will allow the customer to integrate more of the solution while retaining the payment over time.
In 2024, Microsoft took the lead when it came to UC in the ProAV space. Zoom dropped into second place and Google Meet remained static in the world, with the exception of the education sector where there is little funding for investment in AV infrastructure. I assume it will remain so in the near future expect these companies will head the same direction they did with meeting rooms in the classrooms as well; to Zoom Classroom and MTC (Microsoft Teams Classroom), which will impact profitability margins.
Hardware, Services and Global Changes
"I believe AV integrators that sell services could continue and prosper thanks to the global trends that will allow them to work more accurately. After all, an integration company provides services and should profit mainly from its areas of expertise rather than hardware.
Companies like Xyte (with CloudAV), organizations like IPMX (with AV-over-IP standards), and technology like NDI are all leading the market and turning it into one where services will eventually dominate. I want to be clear on one thing: hardware will always be sold, but the entire market must adapt to the trends that increase profitability margins, of course, adopt management and provision of services remotely; AVaaS and network delivery platforms as ways to continue selling services and providing value to customers. It's important to remember that when you provide a service to a customer, you become an internal AV company, and thus, in the long run, you own the relationship".
