There are some tangible indications out there that some separation is starting to show between digital signage software and services companies that intend to play in the big leagues, and medium to small companies with more modest aspirations.
This summer there was news of Stratacache buying Scala, but also buying a massive distribution centre and data center/NOC facilities in Dayton, Ohio (albeit probably for a song). CEO Chris Rigel is getting very vertically integrated, doing pretty much all aspects of a signage job in-house.
Denver-based Four Winds Interactive is somewhat going down the same path. The company has, for some time, had a very large services team, but it’s largely relied on partners for dealing with hardware and logistics on large jobs. Now the company has a large warehouse facility, on the other side of downtown from its flashy three-storey head office, there to take most of the work in-house.
I’m in the city, speaking at the company’s Forward conference, and yesterday got a lift over to see the new space, which was leased a year ago but got formally built out and opened in recent weeks. It’s a big step up from cramped, very limited quarters in the old brick factory building that was world HQ until this time last year.
Now the company has a cavernous 26,000 square foot space, with office space for a dedicated hardware procurement team, hardware design, hardware testing, and even a CAD guy to build virtual environments that show customers where screens might go and how they get mounted and fed by cabling.
The back area has multiple loading docks, forklifts, manlifts, equipment cages, and tons of testing space for screens, player devices and mounting solutions. They can pull apart, test, image and consolidate shipments on-site, put them on pallets, and ship out of the back.
There’s a training facility and a small NOC upstairs on a mezzanine level.
And they have a dog. :-]
I note all this because the great majority of the software companies in this industry are purely in commercial office spaces, have limited or no warehouse capacity, and test and stage equipment where they can. I have been in numerous offices where storage was a spare room, and lab testing was a free desk.
Most companies in the business also have, usually, something like 20-40 staff, versus the 360 now on FWI’s payroll.
The digital signage business seems to be moving more and more to turnkey solutions and services, because that’s the “ask” from a lot of end-users. That CAN be stitched together by a tight ecosystem of partners, but it’s going to be a lot more seamless if the work, the people and the facilities are all in-house. It also means most of the revenue on projects stays in-house.
All that may not matter much for companies focused on the SMB market, but the bigger the client, the more it does.
I’ve had numerous tours with different kinds of companies in this business who say the ability to show potential clients they really can do something, by walking a lab or a warehouse, versus just talking about capabilities in meetings, is very powerful.
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.