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Sixty-four percent of integrators predict corporate growth, but curb your enthusiasm when it comes to market momentum in 2013. Many obstacles remain.

Article


State of Corporate AV Market
Several surveyed integrators cited “Obamacare” and “taxes” as major hurdles in the corporate market.
January 22, 2013 By Tom LeBlanc

Describing the state of the corporate integration market is tricky. On one hand, there is much reason for optimism. Two-thirds of corporate market integrators surveyed by CI Research expect revenue from that sector to be up at least a moderate amount in 2013 versus 2012, a year in which 52 percent of that same group said their corporate revenue climbed.

On the other hand, the opportunities to provide technology to corporate clients have several mitigating factors. Those two consecutive growth years are relative to the tough recession years that preceded them. The economy is still sluggish, which means corporate clients remain extremely budget conscious, resulting in less than cutting-edge solutions and limited profits for integrators. 

The kicker is that corporate clients appear more concerned than ever about the impact of government regulations, making them all the more cautious about purchasing decisions.

So there’s good and bad. The state of the corporate market is perhaps best described by Advanced AV president Michael Boettcher’s 10-year-old daughter, Claudia: “Middle-ish.”

That, says her dad, is how she describes something that isn’t too hot or too cold. “Defining a market that has money but isn’t spending is a bit of a quandary,” he says, before leaning on his daughter’s term.

‘Middle-ish’ Market Opportunities

“Corporate is coming back,” says NSCA executive director Chuck Wilson, citing his expectations based on construction data trends which he deems a good indicator of commercial integration trends. Indeed, American Institute of Architects forecasts that office-related construction spending will jump 8.7 percent in 2013.

Corporate A/V Ready for Recovery


Click the image above to download our special report on the corporate AV market

That moderate growth follows 4.3 percent spending in office building in 2012, according to the U.S. Department of Commerce. Here’s the thing though: Office related construction spending was -8.5 percent in 2011, -27.1 percent in 2010 and -25.3 percent in 2009, so two years of moderate growth doesn’t signal high times.

A slow recovery, however, is better than no recovery, and Wilson says he has also heard positive projections from the consulting community on the corporate market’s momentum.

Roberta Perry of Edwards Technologies agrees. “I expect to see growth in that marketplace this year,” says the VP of business development for the El Segundo, Calif.-based integration firm. “We work with a lot of consultants, a lot of business comes in from them and we’re seeing a healthy increase on that for 2013.”

In many cases, clients are starting to spend money on technology after holding back for a few years. “So many companies were holding off on making purchase decisions until after the [U.S. Presidential] election,” says Greg Augspurger of Elmhurst, Ill.-based Pentegra Systems. “Hopefully, now that the election is over, decisions will finally be made one way or the other.”

Several integrators, however, tell us that although corporate clients are spending money on systems they are doing so conservatively. The corporate market, more so than any other vertical, reflects the still-slow economy’s effect on technology spending, according to Human Circuit’s Bruce Kaufmann. “The negative has been that the overall investment in technology appears to be down and that it’s more cost-conscious than any other vertical,” says the CEO of the Gaithersburg, Md.-based integration firm.

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About the author

Tom LeBlanc - Editor-in-Chief, CI,
Tom has been covering electronics integration since 2003. Prior to being named editor-in-chief of CI, he was senior writer and managing editor of CE Pro. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Follow him on Twitter @leblanctom.
View all posts by Tom LeBlanc
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