Rise of ‘Mega Integrator’ Leaves Room for Middle-Sized Systems Integrator to Grow

There’s a place for small- and medium-sized systems integrators to thrive as their larger peers become mega-integrators, like our Integrator of the Year.

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Rise of ‘Mega Integrator’ Leaves Room for Middle-Sized Systems Integrator to Grow

Our 2017 pick for Integrator of the Year was a bit of a contentious choice — after all, rather than choosing one specific firm, we instead gave a nod to the “Mega-Integrator,” or the systems integrator company which inches closer every year to the $1 billion revenue mark.

A systems integrator like AVI-SPL or Diversified reaches that point by facing acquisition by investment capital and continually offering customers more services.

The age of the Mega-Integrator seems to spell trouble for companies that aren’t exceptionally large, or niche companies that address specific needs for a specific subset of customers. But NSCA executive director Chuck Wilson doesn’t necessarily see it that way.

“Companies between 50 and 200 employees have to figure out what footprint they need and work with partners to compete nationally and globally,” says Wilson.

He sees integrators that aren’t exceptionally large or especially small as finding opportunities with the projects the companies acquired by mega-integrators stopped doing because their new parents are focused on bigger projects.

So, those who are expecting a void between the Mega-Integrator and its tiny counterpart are likely to be surprised at how much work remains for mid-sized companies.

“Integrators have to be thinking about the next move,” says Ari Fuchs, director of The DAK Group, which is an investment banking firm specializing in the middle-market.

“Once you get comfortable, that’s when you start to lose footing. We’ll continue to see consolidation and the big keep getting bigger, but that means there’s room for the middle market to accelerate and become the next Integrator of the Year.”

AVIXA senior director of market intelligence Sean Wargo still sees a place for small and medium-sized integrators to thrive as some competitors become mega-integrators.

“As large integrators get acquired, it creates an opportunity for people to move up,” he says.

“All these mergers and acquisitions don’t mean there won’t be small-and medium-sized companies that serve local needs or a specialized market.”

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About the Author


Craig MacCormack is the former executive editor of Commercial Integrator (2011-2021). He's a veteran journalist with more than 25 years of experience covering local and national news and sports as well as architecture and engineering before joining Commercial Integrator.

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  • Bob Romano says:

    Small projects generally are lower margin than even the ‘bid’ larger projects unless unique in some integration design. There is competitive conditions on the very small projects also let’s not forget. Bottom line is finding value added margin, I don’t see it.
    In Education might do it internally, or enterprises will find new companies (bottom feeders) plus it still takes 2 people to hang the display, if faculties does it, how hard is what’s left and more how much do you really think you can get adding an IC ( install coordinator or PM) to the cost. Small AV rental shops to Electrical Contractors, Furniture resellers, on and on will drive margins down. Small integretors will confront clients saying, this is easy stuff to do why does it cost so much to do?
    I am over simplying in this short comment but from my lens:
    1) Acquisition of smaller integretors is to gain market share is ok as an offensive move (in a historical cottage industry) but it rarely adds to profit margin and that’s all that matters. Larger integretors are better to just say no to more jobs.
    2) From my lens acquisition of small symentric Companies just delays long term failure and makes more complex the extremely challenging AV construction business even harder to manage.
    3) Find a value proposition and service that matters to be successful, small acqusistions, any Merger or Acqusistions for that matter, eat up intellectual capital and leaderships time that should be focused on finding your recurring revenue secret sauce.
    4) This is hard to understand unless you have been there, but trying to change the process for ” small jobs” not only finds resistance in pricicing, but those easy jobs somehow are the ones that go bad, ( broken process) take more time from your B team and remain not worth the energy unless for your best clients , which in case, should get the A team.
    5) Yes a new wave of 550k- 2M AV Companies might sprout from all this. The ones that grow up to think they want to be like you, and the cycle starts over.

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