TOP
STORIES
 1 of 5
Red Thread: Furniture Company or Change Agent?
Born out of an office furniture manufacturer, Red Thread is having different audio-video conversations than any other integrator — and clients like what it’s saying.
 2 of 5
AV, Sports and Beer… with a Chance of Meatballs
Integrator Real Sound uses JBL speakers, Crown amplifiers, Crimson AV and Key Digital cables to send audio and video throughout this unique three-level building.
 3 of 5
Top 40 CI Influencers Under 40
There was no shortage of candidates for our look at some of the young people who are making a difference for their companies and this industry. See who made the cut for 2014.
 4 of 5
The Rise and Reign of Verticalization
Have we reached the age of requiring integrators to become even more vertically focused?
 5 of 5
Medical Simulation Lab Makes All the Difference in Education
CompView Audio Visual helps California community college district build high-tech nursing education facilities.
Not Everybody Wants Unified Communication
The myth is video conferencing is an easy sell because it saves clients money, but it’s not that easy.

Article


Video Conferencing Price Point
For many companies, price points on video conferencing aren’t low enough yet to prompt business owners to eliminate frequent travel.
February 07, 2013 | by Mark Coxon

OK, so whoever first said video conferencing systems are “insulated from clients’ budget issues because they’re considered an investment toward long-term cost-savings” was just wrong. In fact, I’m not sure that insulated markets exist at all.

If your clientele as an integrator is the Fortune 500, then your customers are generally less sensitive to price. Let’s face it though: Most integrators are working in the small- to-medium business sectors and price is definitely an issue. So what is an integrator to do?

I thought it might be appropriate to share a quick summary of a meeting I had in 2011 with a mortgage company. It has three offices - one in Irvine, Calif.; one in Pasadena, Calif.; and one in Chicago. Any time mortgage regulations changed, the owner would go to each office to train the employees to avoid breaking the rules and incurring heavy fines. So what should be a two-hour training instead took four days of his time - one day in the Irvine office to prep and give the training, a second day to go up to Pasadena and back, and two days to fly to Chicago to give the training and get home.

Hard codecs at three locations meant over $40,000 in hardware plus the installs and then bandwidth to feed them.

A proprietary hybrid system, featuring bridge hardware, a codec in one office, and client licenses for BYOD devices came to nearly $30,000 including installation and set up.

The Client’s Response: “Call me When the Price is Half of That”

Why is that? The pundits would say that at $250,000 per year, his time is worth $121 an hour, or three days of time is $2,904. Airfare, hotel and a car in Chicago is $800. Gas to Pasadena is $32. That is $3,750 for one training, and he does that six times a year. That’s $22,500, right? He’ll realize savings at 18 months to two years with either solution. That is a sound investment. Why doesn’t that math (which I employed to try and close the sale) make a compelling case?

Cash is King. Remember?

The real math, for him anyway, is the actual cash outlay. That is $832 for travel and hotel, six times, or just under $5,000. For him as an owner, he needs to see a break-even point at three years to make an investment, and that means a $15,000 solution that covers for all three locations. If he spends the $40,000 and can’t make payroll in a year, I doubt his employees will take the time he saved in lieu of their weekly check.

You also have to consider the “Up in the Air” effect. If you saw the film, they tried to replace Clooney with video conferencing, but found that the handshake of two HD MI sources cannot quite replace the firm grip of a boss or potential business partner. The perceived value of unified communications diminishes some, if the business owner sees their business objective as somewhat personal or social, or enhanced by face-to-face understanding and accountability. It may sound old fashioned, but it is still true for many.

I’m not quite sure who started the rumor about video conferencing and price insulation, probably some great marketing guys at one of the big video conferencing manufacturers, or a coordinated act of misinformation by all of them. All I know is that there is a move to soft codecs; BYOD without licensing is popular, Vaddio’s Easy USB has had success and the MondoPad is gaining steam. There is a movement toward reducing the video conferencing price point to gain market share, and it is either misplaced, or is a well thought out strategy. Your call.

Integrators should explore these solutions as well as financing and equipment leasing options and partnerships to protect their clients’ cash flows and become true partners in their businesses.

A picture is really worth 1,000 words but cash is king, so until the price is right, many businesses will continue to say those words in person.

About the author

Mark Coxon - Sales, Mark
Mark started his technology career at IBM in 2000 before migrating into AV integration in early 2002. He currently works at Horizon Display, an interactive multitouch hardware and software provider. Mark lives in Orange County with Lesley, his wife of 11 years and his 3 children.
View all posts by Mark Coxon
Social Bookmark or Share This
  • Facebook
  • Twitter
  • Digg
  • Del.icio.us
  • Yahoo! Bookmarks
  • Google Bookmarks
  • StumbleUpon
  • Technorati
  • Reddit
  • Windows Live
  • LinkedIn
  • Evernote
  • E-mail


  • Latest
  • Blogs
  • Photos
  • Resources



Recent comments

Thanks for your comment, Derek! While this article was just a brief background about Audinate and Dante, we…

Posted by Chelsea Cafiero on 2014 08 08 · commented on
'What is Dante and Why is it So Popular?'.

Nice Overview Jason!

Integrators should be taking note of these changes and positioning themselves…

Posted by Mark Coxon on 2014 08 04 · commented on
'Stricter California Lighting Standards Take Effect'.

Robert,

It is curious that you just threw in the sentence “Audinate is a member of the AVnu Alliance,…

Posted by Derek R. Flickiinger on 2014 07 29 · commented on
'What is Dante and Why is it So Popular?'.

Casey - another great project! 


Your design and implementation came out a amazing!

Posted by Chanan Averbuch on 2014 07 10 · commented on
'Getting 'Serious' About Boa Lounge Upgrade'.