NEC Displays made an announcement this morning that will likely make a number of people in the software start-up side of this industry get up to find a very large coffee. Or drink.
The Chicago-based company is now making its hosted digital signage software solution available free of charge to anyone, regardless of whether they buy NEC panels or projectors or sign up for the company’s ad-serving platform.
In simple terms, that means if you run a small to medium network and want a hosted Software as a Service solution that has a third party managing the servers, you can pay anywhere from $10 to $150 per unit per month using dozens of options out there, or you can get it for nothing through what NEC calls its Content Management System, or CMS.
I’ve had a demo of the system and heard a few other opinions about it, generally putting it on a level with the middle of the pack offers out there. There’s quite a bit more to it than some truly entry-level systems available, and the “ya get what ya pay for” tag that applies to most “free” systems won’t stick all that well on this one. There’s too much going on with it, and I know NEC has put a LOT of resources into the effort over the last two years. Though there was lots of speculation this was just an existing platform bought and repackaged, it was actually built from the whiteboard up by a software engineering company in Chicago.
One thing I really liked was the degree of device management for the display monitors, which I guess makes sense since that’s NEC’s core business. But it’s surprising how many DS software offers out there can’t tell operators if screens are off or do anything about it.
This will be a bit of a jolt for a number of smaller software companies on the market who are scrapping away for market share against other companies who have variations on pretty much the same thing. General capabilities of technology make most of these offers pretty good and stable, so these guys have to compete on little tweaks in what they do, and on price. That was a grind already, and having a multi-national giant like NEC offering the same thing, for free, makes it particularly tough.
We’re already seeing a bit of the survival of the fittest happening in the sector simply because there are too many companies, and this move will undoubtedly accelerate some of that. Smart people would not elect a free or crazy-cheap offer from a small software company because they know there’s no supportable business plan for that, and the service will likely collapse.
But NEC has lots of other lines of business to support this, and it does a few things for them. They have display competitors like Samsung with their own software offer, so this is a strong counter offer. It will bulk up the attention and numbers for NEC’s VUKUNET ad-serving platform, which it launched last fall (since anyone using this software could easily turn on the opt-in ad part). And it will help get the marketplace moving a little quicker, as companies wanting to go SaaS now have an offer that’s pretty hard not to consider.
The VUKUNET Content Management System is a robust Software as a Service (SaaS) solution that is fully hosted, managed and supported by NEC, the company asserts. Developed by NEC, the VUKUNET CMS meets or exceeds the capabilities of dozens of commercial SaaS digital signage solutions, but has none of the start-up or substantial monthly subscription fees that keep many networks from profitability.
”NEC is making it easier for companies to run digital signage networks by empowering them with tools that take out costs and help grow their businesses,” said Pierre Richer, President and C.O.O. of NEC Display. “We are trying to simplify the complexities of the signage market and drive this industry forward with a free CMS solution. The fragmentation of this industry is the biggest obstacle to growth, and those days are finally over.”
Launched in November 2009, the CMS solution is part of a suite of software products that comprise the VUKUNET platform. VUKUNET also includes a universal ad-serving solution with modules that enable network operators to make money through advertising, with no sales effort and minimal technical effort. The VUKUNET solution creates a sophisticated advertising marketplace that bridges ad buyers with networks, and largely automates the ad scheduling, playback and report process across hundreds or thousands of screens and networks.
When VUKUNET was first launched, the CMS solution was made available to networks that registered for ad-serving and to clients buying NEC Display products. Those restrictions have now been removed and any network, regardless of what display panels they use or whether or not they will make programming time available for VUKUNET-served ads, can take advantage of the free CMS.
“We strongly believe VUKUNET helps networks and the industry as a whole to succeed by offering a reliable, free solution that lets networks put their operating expenses instead into critical areas like content development,” explained Richer. “And then we offer a very simple way to generate new ad revenues, with NEC doing all the selling, execution and admin work for them.”
So what does this mean to the software guys out there who do SaaS?
Well, it’s definitely a wake-up call – like a bad bagpipe band coming through your hotel room at 5 AM. If all you’ve got to compete on is your price, you have a new problem. But frankly, you already had big problems. The entry-level price is heading to zero with all the Web services out there and things like Google and Apple TV.
The larger SaaS companies will not be happy, but mostly because this will be a new distraction and speed bump to closing deals. Those companies are chasing the 500 and up node deals with end-user clients that would perhaps have a look at NEC’s offer, but want something more enterprise-oriented and tailored to their needs.
The smaller ones should look at this as a reminder that they need to do what they can to differentiate themselves in the marketplace. They needed to anyway, but now they REALLY need to if they plan to survive and prosper.
There are some really small, really good companies in this space that have chosen a vertical, or a vertical within a vertical, and gone hard at it. They have features, sector expertise and relationships that make them THE guys in something or other, and business will find them.
A general offer like what NEC has will serve many needs, and attract a lot of new users. But there is a lot of business out there that is not price-dependent because it has particular needs.
Interesting decision by NEC, and nice timing considering InfoComm is a week out.
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for some 14 years. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He’s based near Halifax, Nova Scotia, on Canada’s east coast.