My biggest complaint in the article was that each item that I have read or researched on AVaaS focused solely on the experience of the integrator. Each one was interested in how the integrator could benefit from such a service. Many of the pieces talk about the difference between Operating Expenses (OPEX) and Capital Expenses (CAPEX), and how they need to convince the customer that the thinking needs to change. Again — this is a focus on how to improve the integrator’s bottom line. I also wrote about how I could not make financial sense of how this benefited either party.
A few weeks after my article was published, Jean Pierre Overbeek, who is the CEO of BIS Group and the CDO of Econocom Netherlands, wrote an open letter to me, which was published in rAVe. I loved it that someone was getting into the debate, even if he was disagreeing with me. It was also pretty cool that people all over the world were reading my articles.
Jean, in his letter, says that his company likes to “positively surprise the end user with these AV solutions.” Now this is interesting to me, as it is one of the first references I have seen to benefiting the end user. However, he stops there and does not quite explain what surprising the end user actually means. This is what I want, and I think that all other customers NEED to hear. How is this new model going to surprise us? How is it going to benefit us? Give us some clear, concrete examples.
Jean also makes an argument that I hear regularly about AVaaS. Essentially, the argument is: Everything is going to as a service, so doesn’t it only make sense that AV does as well? My answer is, yes, but only when it makes sense to do so. Music as a service provides me value. I can listen to any song, anytime and not ever have to worry about whether I own it or not. Software as a service allows me to keep up with the latest versions of the software. This provides value when I don’t need to worry about various legislative or security updates with my software. Those make sense because they provide me value.
I think Jean, and perhaps all of Europe is ahead of the U.S. on this. Jean’s company has close to 20 percent of its total revenue from AVaaS. From a curiosity standpoint, I would be interested to know what percent of its profit comes from AVaaS. Is the percentage higher or lower than traditional AV installations? I would assume higher, or integrators would not be moving towards this model. But, again, this is about benefiting the integrator.
Finally, Jean asks in the end whether I believe that AV systems is able to give the same experience seven years from now, or whether I believe that AV systems should last a decade. To that, I have to say, it depends. For an educational environment and most corporate environments, yes, I do think an AV system that was put in seven years ago can provide the same experience as today. I see it every day. Residential installations may be much different, and this is the area that I think AVaaS could have real value.
Finally, let’s move onto the discussion of OPEX versus CAPEX. I believe this is where things get confusing because people use the words to try and confuse people and make assumptions that are not true. For example, a comment on my post said, “But if companies save the money on the front-end, and budget for the term of the arrangement, the money will be there.” This comment was trying to point out that right now we operate on CAPEX, but OPEX funding could do it just as well. Well, hang on a minute. That depends on the term of said arrangement. If I install a $40,000 space, how long will the arrangement be for? And will that arrangement simply be the term divided by the total cost? No, I don’t think so. We deal with this all the time in budgeting, so the concepts are not new.
I am opening up the discussion again, and hoping for even more input on the topic. I would love to see a well thought out presentation on how AVaaS can benefit the industry as a whole, including the consumer. I would love to see if someone would be willing to host a webinar, or some other type of live discussion about the topic. I am not afraid to be wrong on this topic, but I think like most consumers, I want you to prove this concept to me.