“What effects do you see from players like Google and Adobe entering the digital signage arena?”
When discussing digital signage solution providers, leaders in the industry have often commented about high numbers of new entrants and exits each year. New startup companies bring innovation directly to the digital signage market year after year. Some are successful while others are not. Turnover and technology always seem to go hand in hand. Likewise, established companies such as Google, Adobe, and Cisco sometimes enter with their own take on our niche industry.
What impact has the entry of these large, established companies had? From my vantage point, virtually none. Some may think that the lack of properly targeted marketing may be holding these giants back. I believe that the issue may be more fundamental. It boils down to one key business principle for these established companies, which is it is not their core business. That simple concept has repercussions.
First, let’s describe our industry in a Venn diagram. In the middle, we have a circle representing the “core” of our industry. If we were starting a new company today, focused on providing an enterprise-level platform that met the needs of potential customers looking to purchase digital signage solutions in any way shape or form, we would call the middle circle home. Digital signage is our core business.
That said, digital signage is very complex. We rely on other tangential industries and disciplines to function. Digital signage could not easily exist without display technology, small-form-factor computing, and digital content creation. We represent these with smaller circles around the edge of our core business. There is nothing magical about the list, and they can become more or less inclusive and more or less granular. I am simply illustrating how the concept of core business applies to the digital signage industry and the question at hand.
When we are working within our core business, we may succeed or fail. We may have a good platform or a bad one. The value of our platform may be measured by how well we leverage those tangential industries; (e.g. how well our platform works with enterprise IT standards such as Active Directory, or how well it integrates with sources of data). The key is that we are working from our core business outward.
When we look at it from the perspective of the established companies, this takes on a different feel. Our starting point is not the large middle circle but rather one of the smaller ones. The circles are not smaller because the industries or companies are small. In fact, they may be enormous. If we take on the role of a display manufacturer, for example, it is natural for us to seek out new business opportunities. Digital signage presents itself as a very interesting one. There are opportunities to add OPS slots for adding internal player and for adding embedded operating systems so signage can become an application just as it is in the consumer market. We can even add network interfaces to our displays to be able manage them online. These concepts are not too far from our core business of displays.
But, from here, we may begin to veer off course. We want to manage the display over the network since our displays have network ports. We need a web application, but we don’t know much about software development. Our monitoring application has a primarily technical audience, so we might be able to develop something simple. But, if digital signage is an app, there needs to be a content management and scheduling system. That is a more complex piece of software for a more sophisticated demographic. Not only are we inexperienced at software, but our core business is not digital signage, which means that we lack subject matter expertise. It is easy to take a step, thinking it will be a small single step, and end up taking a long, time- consuming and expensive walk.
Hopefully, I have made my point, but I will put the final nails in our venture. Since our core business was displays, specifically our brand of displays, our solution was focused on that. That proved to be a challenge for our potential customers who didn’t want to be locked into a single brand of display. That and a host of other issues means that customers are still buying our displays, but may not using the digital signage solution even though it is free. Our hypothetical step into the digital signage market was rough. In the end, endeavors like this may very well end abruptly or be quietly shelved. Sometimes, the best move is to retreat. We are sinking resources into a project that we are giving away and nobody is using.
I am not picking on display manufacturers; it was the most vivid example, and I took it purely south. I could run through any number of hypothetical scenarios. I don’t believe I am negative either. Is it possible for the “big players” to be successful in the digital signage industry? Sure. But is there a business case for them to make such investments outside of their core businesses? Is there cause for them to truly learn the digital signage industry so that the solutions they built were as if they came from industry insiders? Probably not, on both counts. Chances are, things will be what they have been – token efforts with limited functionality intended for very small deployments. There is nothing wrong with that or efforts begun with the best of intentions, but so far, there has been minimal impact on the digital signage industry.