Solution Providers Sign Off On Digital Displays
Complexity is often a mixed blessing for the channel. Take the digital signage market, where the complexity of networked digital-signage installations has created new opportunities for solution providers. At the same time, it's created a highly fragmented market with a less defined path to success.
One VAR, Dynatek Media, decided that it had to think outside the box to succeed in the digital-signage space.
"We've developed our own hardware, software, network, production studio and an assembly area where we fabricate," says Ron Gross, chairman, co-founder and CEO of Dynatek, Scottsdale, Ariz. "I really didn't want to do all that, but I found that the market was very fragmented and that whenever we would turn over a part of the process to someone else, there would be a loss of efficacy, time and cost."
The solution provider has spent about four years building up its line card. And now, through its network, which is built mainly on the Verizon Wireless cellular system, Dynatek can remotely control all of the signage it deploys. The company can also deploy content it produces itself.
Although the VAR has deployed signage in various vertical markets, Dynatek is primarily focused on driving sales in convenience stores and gas stations.
"Contrary to what the public thinks, convenience stores don't make the bulk of their money at the pump but rather through the products they sell inside the stores," Gross says.
Suppliers, not end users, pay for the ads--a business model some VARs have found to be more lucrative. Also, the stores are typically allotted some space for their own ads, which Dynatek will build for them.
"We found the real money for us was in the advertising relationships and building an advertising model," Gross says. "Everything we do is predicated on justifying the network as it relates to selling a product somewhere."
The VAR is currently running a pilot with Hess Oil Co., deploying digital signage at five of Hess Oil's 1,350 convenience stores nationwide. Participating advertisers include Budweiser, Coca-Cola, Pepsi Cola and Tostitos.
Dynatek has also developed a partnership with Global Alert, the parent company of AmberAlert.com, to push out AmberAlert notifications about missing children to digital signs on its network.
"Delivering alerts on a one-to-one basis to citizens when it matters most is crucial, and our partnership with Dynatek delivers on this," says Jeffrey Rassas, CEO of Global Alert.
Dynatek also has an existing relationship with display vendor Samsung. The vendor provides Dynatek with co-marketing support, and the VAR resells Samsung's displays. Through its resellers, Samsung sells an entry-level digital-signage solution aimed at single-site retail deployments or for corporations with multiple conference rooms that are networked together via a LAN.
"But if it can't fit on one LAN, or if it requires ad support, that crosses the threshold of complexity, and that's where we turn to other partners," says Mark Pickard, senior product marketing manager for display products at Samsung.
But not all digital-signage providers are looking to extend their reach as far as Dynatek. For those players, strategic partnerships are key.
"The market is very fragmented in terms of the supply chain, and there are so many components necessary to provide a turnkey solution," says Jill Miller, executive vice president at The Digital Signage Group, a Poulsbo, Wash.-based digital-signage distributor. "We've taken the position that it takes a team of professionals to accomplish digital signage. It's important to surround yourself with organizations that complement your strength."
Cisco Systems, which last month launched Cisco Digital Signage and announced a partnership with display vendor NEC, is also making an official entry into the digital-signage market.
Cisco's offering is designed for the management, publishing and playback of digital media on networked displays. It includes the Cisco Digital Media Manager, a Web-based software application for creating and publishing digital media, and the Cisco Digital Media Player, a small hardware device that attaches to displays and handles video, graphic and text playback. The digital media player costs about $1,490, with a rollout of about 50 displays in 10 locations costing about $150,000.
Cisco says initial partner recruitment will be limited to a select group.
"We're really matching up with some of the leading content companies and figuring out how we can create an ecosystem," says Steve Benvenuto, Cisco's business-development manager for application networking services, worldwide channels.