There is much optimism and enthusiasm in the integration industry as we enter 2017.
And there should be.
Many integration firms began 2017 fueled by great momentum, according to Commercial Integrator’s State of the Industry survey conducted annually in cooperation with NSCA.
More than half of the 181 surveyed, 56 percent, saw revenue growth in 2016 of more than 5 percent.
A mere 8 percent of those surveyed saw significant dips (5 percent or more) in their 2016 business.
When it comes to the road ahead, two thirds of those surveyed predict growth of at least 5 percent including nearly a third that expect more than 10 percent growth.
I don’t mean to hit the brakes on the enthusiasm. And I won’t.
But let’s pause to consider some of the less touchy-feely aspects of the integration market as 2017 begins.
Join NSCA’s Chuck Wilson and Diversified’s Anthony Cuellar and me as we explore the good and the not-as-good industry trends in the 7th Annual Integration Business Outlook Presented by CI & NSCA.
[inpagepromo]
Among the realities being discussed:
Consolidation Is Running Wild
Sure, it’s great that so many of the 181 survey participants are bullish on 2017, but consider that we were only able to survey those that are still in business. NSCA saw 42 of its member integration firms disappear in 2017, often with larger firms scooping up floundering smaller firms.
There is little, if any, reason to think that consolidation will slow down in 2017.
Big Firms Keep Getting Bigger
If you don’t work for AVI-SPL, Diversified or Whitlock, you are probably noticing that although your competitors are becoming fewer those few are getting bigger.
Fueled by capital and motivation after being acquired by private equity firm H.I.G. Capital, AVI-SPL acquired Anderson AV and VideoLink both within the last couple of months.
Diversified acquired Technical Innovation in 2016 to become the second largest firm in the industry.
Right now it seems like the industry’s largest firms are wielding tremendous power. We’ll discuss how that affects everybody else.
Managed Services Is Taking Off
It’s a good thing, right, if managed services finally take off for the industry?
Well, it’s a good thing if you can look in the mirror and believe that the statement applies to you and your firm.
Some firms are really embracing managed services and are working with their heads down to implement processes and sales strategies to implement it well. In other words, they’re beyond just talking about it.
Others are being left in the dust.
Maybe the IT Director Isn’t Making Purchase Decisions
Again, that would be good news for integrators that have struggled to become more IT- and network-centric and appeal to their customers IT directors making more purchasing decisions.
You’ll see during the webcast that, although IT directors aren’t overwhelmingly the key decision-maker among survey respondents’ customers, they’re still critical. Whoever is making the decision isn’t likely to do so without their IT department’s approval.
Of course, we’re just scratching the surface here.
During the 7th Annual Integration Business Outlook Presented by CI & NSCA we’ll not only break down the numbers but NSCA’s Wilson and Diversified’s Cuellar will help us wrap our heads around all the industry trends.
Join us for the free webcast. Then we can fast-forward through 2017.
