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Trend Watch 2009

Jan 15, 2009 8:00 AM, By Linda Seid Frembes

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Photo courtesy of Video Systems of the Carolinas.

Despite the economic downturn, the corporate AV market has overall yet to be impacted due to the long project lead times and the increase of dependency on AV technology. Photo courtesy of Video Systems of the Carolinas. Photo courtesy of Video Systems of the Carolinas.

As the mainstream news indicates, this year will be a challenging one for businesses of all kinds. The corporate market, in particular, has weathered the dual blows of soaring travel costs and the crash of the financial services sector. Looking ahead, many integrators see reduced spending by corporate clients but remain hopeful and positive about the market. Several firms offered tips on how to weather what may be a tough year.

“We expect to see a 20 percent decline in 2009 corporate technology spending; regions like the Northeast may be hit a bit harder due to the number of corporations based here,” says Kevin Collins, VP of sales and marketing at HB Communications in North Haven, Conn. The firm provides custom design and integration for clients in the corporate, education, and residential markets. “Some companies are still spending on technology like enterprise-wide videoconferencing systems, but the biggest technology trend right now is that customers are making do with what they have.”

Bruce Banbury, president of Video Systems of the Carolinas of the Carolinas in Charlotte, N.C., agrees: “There is a wait and see attitude from companies that have money to spend. Projects are also getting scaled back slightly with more focus on mission-critical applications.”

But the mainstream economic downturn can feel incongruous to corporate AV projects due to the long project lead times, often anywhere from six to 24 months from system design to completion. In fact, Banbury’s firm had its best year (with 15 percent growth in revenue over 2007) in the commercial market in 2008 due mostly to the advanced lead times of projects. “That budget money was set aside long ago,” he says. “But we are keeping an eye on Q2, Q3, and Q4 2009—in particular the amount of design work that is happening.”

Others say that, as in any down economy, times are harder for any integrator to get new projects, but there are always exceptions to the rule. “Companies that are reliant on the use of technology will not have a drop-off in spending,” says Gary Zandstra, sales and marketing manager for Parkway Electric & Communications in Holland, Mich., who has seen lower revenues but higher profit percentages this year. “We’ve also been pulling work in on the electrical side due to consolidations. Corporate offices need to have offices ready for the consolidated employees to move into. We’re also seeing corporate clients remodeling boardrooms as opposed to complete overhauls. It’s all about enhancing the maximum value of the AV systems.”

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