Australia: AV down under

It is no secret that Australia is one of the most mature and forward thinking markets when it comes to the professional AV industry in Asia Pacific. Hurrairah bin Sohail reports.

Stuart Craig, CEO Asia Pacific at Crestron, gives a rundown of how the Australian AV industry has been performing: “Most people are saying that the Australian AV industry is coming off of a high, but if you look around at Melbourne and the amount of construction going on you are likely to think the opposite is true. Crestron has a vested interest in both the residential and commercial sectors and there are a lot of mixed development projects going on in the city. The reality for us is that in Melbourne and in Sydney, we’re well up in both markets because there is a lot of construction happening. There is a lot of refurbishment happening in universities as well. The market is still healthy.

“In Sydney, a lot of people have moved into Barangaroo and there is a domino effect which is being felt across the major parts of the city. Previously, we saw a lot of people decentralise out of the CBD [central business district] and now we are seeing them recentralise back into the CBD. We are also heavily involved with the Crown Towers project in Barangaroo, which is going up at the moment. Crestron is involved across multiple facets of the project and Barangaroo has been good for us.”

Sydney and Melbourne remain the centres of Australia’s AV market. There is work to be had in other cities but certain challenges still need to be addressed. Craig says: “Perth is struggling. There have been a lot of big projects undertaken in the city, but the reality is that the dealers have been having a tough time because there is a real lack of medium-sized projects. We’ve seen a couple of really big, marquee projects which have been terrific, but Perth is coming off from an artificial high from a mining boom which had persisted for a while. The market moves in cycles and this lull was expected.

“The government had been driving the projects in Perth but we’re starting to see some of the big miners reinvest and the cycle of growth is starting again, and we will begin to see the impact of this over the next 12 to 24 months.” Shifting to a broader and more global perspective, how has Australia been weathering the volatility of the world markets? Craig says: “The turbulence in the global markets has and hasn’t had an impact. Economic growth has slowed down. But we have had it really good for a very long time. Australia has not had a recession since 1991. So, while the economy might be slowing down, it is still healthy and there is business out there for us to be growing and for a lot of other people as well.

“You’ll definitely hear the dealers talking about margins that are definitely being crunched at the moment and that statement is true, especially for Melbourne more than anywhere else. But the work is there, it is just harder to come by and so you have to compete on price. However, I’m optimistic because as far as I’m concerned, there is still growth to be had.”

Looking towards the future, Craig says: “I don’t see anything but positives moving forward in Australia. Education is still booming, and international students are still coming to Australia in big numbers and I don’t see that changing. The New South Wales government has come out and announced AUD 90 billion worth of infrastructure projects. You have to remember that there was a real estate boom in Australia for 10 years and every time a house was sold the government collected stamp duties and taxes which went into their coffers and they are using it to keep the economy growing.”

Different paths, same goal

Australia’s distribution landscape underwent significant changes a few years ago as a number of manufacturer partnerships shifted. While the market might have reached a point of stability at present, with no more drastic shifts in product portfolios, Australian distributors believe the future holds more changes.

Graham Evans, CEO and managing director of avt, says: “I think there is a lot more market consolidation that is yet to happen and more movement on the chessboard for Australia and New Zealand. There is performance pressure on a lot of manufacturers, everyone that used to just do audio now does video, control and even lighting and vice versa. I think there will be mergers, acquisitions, consolidation and sadly, probably a few failures.”

Michael Broadbent, managing director of Midwich APAC, says: “I think the musical chairs will continue. Yes, there will be consolidation through mergers and acquisitions, and obviously Midwich plays a part in that. The reality is that we are under pressure to perform, whether you are the vendor, the distributor, the manufacturer or any other role. And while you are under pressure, you will continue to look for your best go to market strategy. Sometimes that might be direct, sometimes that might be through distribution.”

What impact will the predicted consolidation have? Will global distribution behemoths take over the market?

Broadbent says: “As long as you are adding value to the supply chain, I think there is opportunity for behemoths and for players in the niche markets depending on what value you are adding, whether it is volume, logistics, training or a focus on a particular vertical.”

Another interesting evolution of distribution in Australia is the change in how the businesses operate as software components appear in traditional AV stacks. Evans from avt details: “I think, to a large extent, the core networked AV systems have been hardware. In the future, I would suggest, that there is a large opportunity with regards to software. There is more algorithm capability and software has the potential to eat into what has been a very lucrative hardware play for the industry. I see banks, government agencies and universities all looking to standardise and simplify. Where they had 30 bespoke rooms in the past, projects that we have been involved with, they now have hundreds or thousands of such rooms. You have to bring scale and you have to be compatible with their integrated platforms or you have questionable relevance.”

The emergence of software requires distributors to change how they operate. Evans adds: “There needs to be a different approach for hardware and software which is not a big, multi-million dollar sale at the outset. Software platforms, take Office 365 and Zoom for example, are consumption based. So, the budgeting is different. The renumeration model for your staff is different the procurement process via end customer through the integrator to ourselves as the distributor is different. But that’s not foreign to the folks that have come from that world and we deliberately brought on some executive talent and board capability from the software world that can help take avt and the AV industry on this journey.”

However, across the board there is acknowledgement that all aspects of AV cannot be turned to code and brought into the software realm which means that value-added distribution will always have a place in the market. Broadbent concludes: “In our opinion, the IT world will still have to look after the servers and the networks and the distribution on the network, which means there is still relevance in hardware. You still need cameras, you still need displays, you still need audio, whether it is for digital signage in retail or a classroom at a university level. My view is that we find it easier to add value to hardware as opposed to software.

Going global

Globalisation seems to be dictating how integrators operate as they seek ways to serve clients across regions and territories. This exact impetus led Diversified to acquire Rutledge AV, an Australian integrator, to expand its footprint across regions. At the same time Pro AV Solutions has been an important member of the Global Presence Alliance which seeks to achieve the aforementioned aim through teamwork.

With globalisation comes standardisation as end users seek to develop a way to ensure consistency of experience and operation across their facilities. Ben Daffy, a founding partner of Unified AV and now director of Pro AV Solutions Victoria, says: “Globalisation for us has been a fantastic opportunity to benefit from a huge amount of research and development and also the data that comes with it. Once you start standardising solutions they can be delivered on a serious scale and we have customers that are deploying meeting rooms in the tens of thousands. The data that you pull out from such deployments can inform future decisions regarding planning across those organisations and the industry in general.”

Tim Arrell, engineering team leader for Victoria at Rutledge AV, a Diversified Company, says: “Standardisation has two sides. There are the international type of standards, driven by the client, which deal with and are regarding interoperability between the different systems and how they work. But I think the biggest impact of global standards has been in the UC and VC space, systems for collaboration. If you look at what Cisco and Microsoft are doing in this space they are basically changing the whole landscape.” The aim of all these changes is to enhance the user experience.

Daffy from Pro AV Solutions Victoria says: “At the end of the day, when you walk into a meeting room, whether you have got Crestron Flex or Logitech there, the button that you press is the same and you still expect to get into your meeting in two or three seconds. That is the critical part, not so much the tools that deliver the AV. It is about the experience.”

Arrell from Rutledge AV says: “The user experience has to be familiar across all the devices, all the offices, whichever city in the world they find themselves in. Users want a holistic system that regardless of the device, whether it is a mobile phone, meeting room, touch panel, laptop or traditional PC, feels and works in basically the same way. There will still be the people that want a customised, niche AV system but on the whole standardisation and consistent UX will be the way forward.”

Daffy from Pro AV Solutions Victoria concludes: “What is the benchmark for technology right now? It is your personal device. You need to be able to pick it up and use it without a guide. If you have an A4 laminate on the table, you have already failed. We are finding that a simplification of the spaces helps, we have to really define the intent for each space. It is not about having rooms with all the bells and whistles that do everything but about creating spaces that can enable a function. Then you can really design a quantified user experience."

AV and education

Australian tertiary education’s appetite for undertaking complex and breathtaking AV projects should be evident to all our readers. From the ‘Superlab’ to the ‘Cube’ and most recently the ‘Sphere’, Australian universities are willing to invest in AV.

Nikesh Kapadia, AV delivery manager for RMIT University, explains: “Australian universities really try and set themselves apart from a lot of the other universities and really try to get students in and saying, ‘I’m really excited about these spaces and I want to go and study there’. We really consider our spaces to be a point of attraction for students and that is why we are willing to invest in AV and our facilities.”

Kieran Parboo, services coordinator at Victoria University, says: “It is all about the teaching and learning experience for the student at the end of the day. We’ve embarked on multiple projects where we use the latest and greatest technology, but it is really about finding a way to use the AV to engage the students and making them want to come and study at a particular university instead of the others.”

Scott Doyle, AV manager for Swinburne University, adds: “AV has changed from us providing a service to the students to now also providing a service that will attract students.”

In addition to these eye-catching displays, Australian universities also rely on AV systems and solutions to help their spaces function. All technology however needs to deliver a return on investment, which it does.

Parboo from Victoria University says: “We’ve gone for the full collaboration style approach, with pods at desks, wireless presentation, cable connections and more. For us, the return on investment is student retention, we really struggled in the past with student retention rates, and also individual marks of students. The average scores for Victoria University were quite low in the past and as we move towards this collaboration style approach, we’re finding that we’re retaining a lot more students and the median scores have gone from a pass right to distinctions. That’s where AV has helped engage the students and create team environments and collaboration style learning.”

Universities are also preparing for the generation of digital and tech natives who are walking through their doors. Kapadia from RMIT says: “We have a lot of spaces at RMIT and we have to have an idea of what those spaces will look like in the future and then have a plan to uplift them. Children today are just swiping screens like it is the most natural thing in the world and once they grow up and get to higher education what is their expectation with regards to technology going to be? How do we plan for that? That is the real challenge.”

Australian universities are aware of the role they need to perform, and Doyle believes that AV plays a critical part: “We have to get our students ready for the digital workspace and there is a real drive to ensure that our graduates are ready for the corporate world. The only way to get them ready for the digital workplace is if we can get them acquainted with similar spaces in our universities by deploying the right AV systems.”

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