Commercial Integrator March 2017 : Page 6

CI Editor’s Note MARCH 2017 IT’S THE BEST, AND WORST, OF TIMES FIND ME HERE: @leblanctom @commintegrator facebook.com/ CImagazine IN OUR 2017 STATE OF THE INDUSTRY REPORT we illustrated a trend. Then Edmonton, Alberta-based Genesis Integration and London, Ontario-based Edcom Multimedia Products acted out that trend for us. During the past year, 42 of NSCA’s member integration firms disappeared. In many cases, the disappearing firm was run by a Baby Boomer-aged principal in the twilight of a career in which they had success with a business model that is now clearly outdated. The acquired com-pany doesn’t necessarily go away. Their owners found their employees continued employment and an exit plan for themselves in the same package. That is pretty much what happened when $40 million Genesis acquired $6.5 million Edcom, says Genesis president Kelly McCarthy who is also president of NSCA. As we argued in our State of the Industry Report, integration firms these days seem to fall into one of two categories: 1.) They’re looking to get out. 2.) They’re ramping up to capitalize on opportunities for well-qualified firms. Count Genesis among the latter. McCarthy will be the first to tell you that Genesis was as traditional as integration firms get when it comes to project-based business models. For the past few years, however, it has arduously turned its ship around, reworking its infrastructure, rethinking its sales approach and fine-tuning a video conferencing as a managed service offering. Not only does Genesis’ managed services business put it in a position to be growing instead of fleeing the integration market, McCarthy says it energizes expansion opportunities. Gene-sis’ video conferencing as a managed service solution allows Edcom’s sales team to go back to their customers with a fresh message and “a different level of services,” he says. Genesis’ goal is to become a $50 million firm by the end of 2018, McCarthy says. It’s around that point, he says, when an integration firm becomes large enough to blur that line between product-and service-revenue. “When you get there you can negotiate some rebates and the product piece becomes more relevant,” he says. As president of Genesis, McCarthy finds himself in a fortuitous position able to grow through acquisition of an embattled firm. As president of NSCA, McCarthy has a different perspective on Edcom and the 42 member companies the organization lost in the past year. He says when he stands back and looks at the number of recent acquisitions, he sees firms that he never thought would be in the acquisition mode. It’s clear that for the well-positioned ones, there is opportunity. Integration firm leaders are at a point where they’re looking in the mirror and asking them-selves if they’re in this for the long haul or ready to step aside, McCarthy says. “I think you’re seeing those two schools of thought right now.” Tom LeBlanc, Editor, tleblanc@ehpub.com That’s My Take What’s Yours? Give us your two cents. Weigh in on commercial integrator.com Not only does Genesis’ managed services business put it in a position to be growing instead of fleeing the integration market, McCarthy says it energizes expansion opportunities. Find Content Like This Tagged … Mergers & Ac-quisitions, NSCA, Managed Services FAVORITE BLOG EXCERPT “The AV industry has a new customer in IT, one that is not interested in the ‘peculiarities’ pre-sented by traditional AV solutions cobbled together from discrete components. We can view this as disruption, or quite possibly the greatest opportunity that we will see.” —Joe Pham, QSC Check out CI ’s bloggers at CommercialIntegrator.com 6 | COMMERCIAL INTEGRATOR March 2017 commercialintegrator.com

Editor’s Note

Tom LeBlanc


MARCH 2017

IT’S THE BEST, AND WORST, OF TIMES

IN OUR 2017 STATE OF THE INDUSTRY REPORT we illustrated a trend. Then Edmonton, Alberta-based Genesis Integration and London, Ontario-based Edcom Multimedia Products acted out that trend for us.

During the past year, 42 of NSCA’s member integration firms disappeared. In many cases, the disappearing firm was run by a Baby Boomer-aged principal in the twilight of a career in which they had success with a business model that is now clearly outdated. The acquired company doesn’t necessarily go away. Their owners found their employees continued employment and an exit plan for themselves in the same package.

That is pretty much what happened when $40 million Genesis acquired $6.5 million Edcom, says Genesis president Kelly McCarthy who is also president of NSCA.

As we argued in our State of the Industry Report, integration firms these days seem to fall into one of two categories:

1.) They’re looking to get out.

2.) They’re ramping up to capitalize on opportunities for well-qualified firms.

Count Genesis among the latter.

McCarthy will be the first to tell you that Genesis was as traditional as integration firms get when it comes to project-based business models. For the past few years, however, it has arduously turned its ship around, reworking its infrastructure, rethinking its sales approach and fine-tuning a video conferencing as a managed service offering.

Not only does Genesis’ managed services business put it in a position to be growing instead of fleeing the integration market, McCarthy says it energizes expansion opportunities. Genesis’ video conferencing as a managed service solution allows Edcom’s sales team to go back to their customers with a fresh message and “a different level of services,” he says.

Genesis’ goal is to become a $50 million firm by the end of 2018, McCarthy says. It’s around that point, he says, when an integration firm becomes large enough to blur that line between product- and service-revenue. “When you get there you can negotiate some rebates and the product piece becomes more relevant,” he says.

As president of Genesis, McCarthy finds himself in a fortuitous position able to grow through acquisition of an embattled firm. As president of NSCA, McCarthy has a different perspective on Edcom and the 42 member companies the organization lost in the past year.

He says when he stands back and looks at the number of recent acquisitions, he sees firms that he never thought would be in the acquisition mode. It’s clear that for the well-positioned ones, there is opportunity.

Integration firm leaders are at a point where they’re looking in the mirror and asking themselves if they’re in this for the long haul or ready to step aside, McCarthy says. “I think you’re seeing those two schools of thought right now.”

FAVORITE BLOG EXCERPT

“The AV industry has a new customer in IT, one that is not interested in the ‘peculiarities’ presented by traditional AV solutions cobbled together from discrete components. We can view this as disruption, or quite possibly the greatest opportunity that we will see.” —Joe Pham, QSC

Check out CI’s bloggers at CommercialIntegrator.com

Read the full article at http://digital.commercialintegrator.com/article/Editor%E2%80%99s+Note/2709448/383304/article.html.

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