By Corey Moss
For those that know me, they know that I’ve been on a margins mission.
Let me explain.
For years I was in commercial integration sales, in which when I sold a projector, screen, display, interface, switcher, cable (you name it) – I would look to achieve at least a 15-20 point margin, could be more. If it had to go down to 12 that was ok in certain circumstances, however below that it would really have to be a special circumstance.
Now when it comes to installs, there was margin to be made for sure – the same in equipment, and a lot more in labor and materials. There were no “gives” except for top clients – meaning freebie services, these were chargeable, and at top margin.
There were few special services offered by third parties, including distributors, it was up to the integrator to figure out how to get all done, and determine margins as such – however they were definitely there.
Now the story of course goes that margins have eroded, equipment (“box”) sales are much less profitable, and even install margins have lessened. Back in my integration sales days service contracts were certainly profitable, nowadays it’s likely not – unless you’ve gotten in the full managed services game. And even at that, there is strategy to it – and even should be modeled as an SLA (service level agreement), detailing what will be provided, and what will happen if expectations are not met. It’s easy to provide service contracts, SLA’s are in depth agreements, finely detailed – and will no doubt impress the client if outlined properly, no doubt leading to more business.
I will be doing more writing, as well as coverage concerning managed services and SLA, however here I want to focus on what is not a box, or “not about the box” – a statement that was made by myself and others at InfoComm 2015 in a conversation with QSC.
I have been talking about solutions that are not hardware-based for quite a while now, they can be software, cloud and services. There are of course situations where hardware is involved, but it should not be the centric focus in certain instances, again referring to the statement “it’s not about the box.”
I have seen many excellent – call them “non box” solutions, recurring monthly revenue (RMR)-based, profitable — high margins.
As I had attended the Almo Professional A/V E4 AV Tour event in Boston this past week, I stopped at two booths which presented excellent solutions and had discussions:
The first is with Rob Voorhees, Business Development Manager at Almo Professional A/V – nobox Business Communications and HARMAN Professional Solutions as we discussed nobox. There is AV as a Service (AVaaS) discussion here too.
The second is with Justin Miller, Director of Operations at Centricity as we discussed managed services for the commercial market.