The author is the vice president of business development for Cilutions Inc. Any views or opinons are those of the author.
The prevailing myth around digital signage continues to be that it is one of those costly applications only targeted by large enterprises and major display-needy environments. However, as the cost of flat panel displays — a major component in the total offering — continue to tumble, digital signage is becoming a more ubiquitous solution.
Various digital signage solution vendors have begun to penetrate the small-to-medium business (SMB) segment in different vertical markets, such as strip mall retailers, independent store owners, suburban medical offices, community businesses, local family restaurants, etc. However, vendor solutions for this SMB segment vary in cost from the cheap to very expensive, as summarized below:
1. Digital signage-as-a-service using the Software as a Service (SaaS) model means SMBs do not have to commit to buying any hardware or software. If the SMB has access to the Internet, they can find and advertise on third party digital signage displays through a reciprocal advertising program. This “free” digital signage for the masses concept was launched in 2006.
2. The Application Service Provider (ASP) model assumes that the SMB has a PC and/or LAN with the required number of display monitors. The ASP model then allows the SMB to access a digital signage application via the Internet for a monthly fee.
3. The complete managed digital signage solution where a network operator/systems integrator brings together all the required hardware, software, technologies and services, including the managing of the day-to-day operation of the SMB’s digital signage network.
Nevertheless, there are a large number of SMBs who would prefer a solution that lies somewhere between the ASP model and a complete managed digital signage offering. Unfortunately, the Value-Added Reseller (VAR) channel, which might be able to step into this void, is still in a nascent stage. VAR programs are useful for providing neophyte prospects in the digital signage space with assistance in the content creation and management aspects of the total solution. Consequently, the SMB market for digital signage solutions is wide open to the smaller application system integrators in this space. It is a classical case of SMBs helping SMBs.
When it comes to emerging technologies, a majority of SMBs tend to be conservative, typically falling into an early majority category as opposed to an early adopter category of the product life cycle. In the past few years, digital signage has passed its “emerging technology” status and the time is now ripe for SMBs to dive into the industry. In order for SMBs to be able to do this, they are going to need the help of digital signage solution vendors that are also SMBs themselves.
When it comes to a complex solution that involves the integration of hardware, software, networks and services, SMBs also prefer a total solution from a one-stop shop. However, they are often reluctant to hand over kit-and-caboodle and go for a completely outsourced “managed service.” This is primarily because these managed services come at a price premium that is not cost justified by their business. Also, these managed services are typically offered by large businesses and a lot of SMBs would rather deal with other SMB vendors, who understand the vagaries of SMB cash flow.
It is apparent that to penetrate the SMB market, digital signage solution vendors at an advantage have the following characteristics:
1. It is small or medium business
2. It is able to play the dual role of a one-stop shop and a systems integrator.
3. It can hold down costs by leveraging the SMB’s existing hardware and network infrastructure, where possible.
4. IT is able to provide a proof-of-concept pilot that convinces the SMB of the technical and financial viability of the total solution.
5. It provides the SMB with assistance on the content creation and management aspects of the total solution.
Finally, it always helps when a digital signage solution vendor has sufficient and necessary subject matter expertise of the vertical market in which the digital signage solution is being offered. Per government estimates, there were approximately six million SMBs in the United States in 2006. Even if a small percent of those companies were in need of a digital signage solution, that still presents a huge opportunity for vendors. The time has come to put another digital signage myth to rest.
