One sure indication that the digital signage and kiosk space has reached maturity is the addition of a new phase to the typical network's life cycle: the retrofit. Networks that have successfully demonstrated working business models are increasingly finding that the technology they decided to deploy 3-5 years ago is starting to look a bit long in the tooth. While many will simply upgrade and update their kit wherever possible, more and more are deciding to toss out what they currently have in favor of today's state-of-the-art. Wal-Mart has done it, Tesco's getting ready to do it, and if the gossip in the channel is any indication, a lot of other long-running networks are feverishly preparing RFPs for everything from content management software to video distribution systems capable of taking advantage of all that today's modern digital signage and kiosk systems have to offer. In this article, we'll look at what's driving all these upgrades and help you decide if your own network should be next.
Revisiting the make-versus-buy predicament
Even as recently as five years ago, few companies could truly offer a flexible system for managing content, scheduling and delivery for large digital signage or self-service kiosk networks. And since the business models of yesteryear were even more unproven than those of today's "modern" networks, the software, distribution equipment and screens had to accommodate some unique requirements in order to make the business work (or so the then-owners thought, anyway). Consequently, a lot of early networks relied on in-house software built to meet each company's exact specifications. (In fact, we wrote about the make-versus-buy decision in a blog article in mid-2004.) Fast forward to 2007 and the landscape has changed quite a bit. There are literally hundreds of companies that claim to offer full-service solutions for kiosks and digital signage, and a good dozen or so are actually qualified enough to manage a large network.
Unfortunately, this puts some of the longest-running networks in the uncomfortable position of having to choose between sticking with their current in-house software or looking for an outside partner. On the one hand, they've developed a purpose-built solution, have probably invested millions of dollars in it, and have a development team that does nothing but work to meet their needs. On the other hand, they have to bear the full burden and cost of maintaining the software, there are commodity solutions in the marketplace that would probably meet 95% of their needs out-of-the-box, and that army of developers could probably be re-deployed elsewhere to work on tasks that would create more value for the company (assuming they're even still there). Transitioning from a custom-built solution to a commodity one might not be the right answer for everyone, but given a recent spate of curiously-worded RFPs, I'm starting to suspect that the prospect of maintaining a big software project internally is looking less and less appetizing to companies that have finally found their niche in ad sales or merchandising.
Who's buying (and selling) ready-made solutions?
Everywhere I turn, it seems like a new company is changing their strategy to embrace digital signage and self-service. Aside from boutique vendors that cater exclusively to the industry, bigger companies with product lines serving other markets are looking for ways to latch on to the massive hype machine that seems to follow us wherever we go. The good news, though, is there are now many more options for affordable screens and video distribution equipment; networking software has become more robust and full-featured; and cheap, fast broadband options have proliferated to nearly all corners of the globe. As a result, parts of a typical digital signage or kiosk project that used to be hard are now much easier, and items that were once custom are now commodity. This has driven down the price of a typical digital signage installation quite a bit, and has opened the door to many projects that were previously too costly to pursue.
Of course, as is the way with any system driven by market forces, the creation of a commodity environment has forced some companies out of the market, while encouraging others to change roles. Former one-stop shops like RMS Networks and Kyle Private Networks, for example, have decided to turn over software, installation and maintenance responsibilities to third parties, and instead focus exclusively on content creation and strategic execution. Similarly, Adspace sold off its CoolSign software division, and on the flip side of that deal Planar tried to cater to a larger slice of the market with hardware, software and screens by acquiring Clarity, the new owner of CoolSign. I'm undecided as to which approach -- specialization or integration -- is more likely to be successful in the market, since requirements vary so much from deal to deal. But I think it's safe to say that no matter which path a company takes, it's going to allow them to compete for some deals while preventing them from competing for others.
Where's the industry heading now?
The neat thing about working in such a young industry is that things are constantly changing. Of course, the annoying thing about working in such a young industry is that things are constantly changing. But there are a few trends worth noting here. First, specialization is indeed on the rise. Technology is becoming more specialized, and while there are a lot of commodity digital signage and kiosk platforms out there today, there's also a tremendous amount of customization going on. Some companies are focused on a particular vertical market (retail or hospitality, for example), while others are betting that a specific feature will set them apart from others (like POS or workflow integration tools). While a clear leader hasn't emerged for any of the vertically-targeted solutions, I wouldn't be surprised to see one come forward in the next year or so. Second, host venues are opening up to the idea of third parties handling more aspects of the project, which will become increasingly beneficial as more companies with a real expertise in kiosks and digital signage emerge. Industry consultants are seeing more real deals, and more vendors are successfully working together to complete big projects. Finally, data-driven project management seems to be on the rise. More companies are giving thought to measurement and goals before a single sign or kiosk terminal is deployed, and amazingly, a good number of them seem to be acting on their data to improve things as time goes on. Just a few years ago, there was talk of this kind of thing happening, but few were in a position to actually do it.
Taken together, these trends suggest that the success stories will finally start to outnumber the failures in our industry, and that's a very big deal. The combination of more expertise, greater specialization and rational project planning means that new companies will be able to learn from the past mistakes of others, while firms with existing projects should be able to take advantage of industry news and expert knowledge to make their networks even more profitable. And all the while, prices are likely to continue falling, which is only going to accelerate things further. So while it may still seem like we're faced with the same lack of decision-making abilities and projects with never-ending horizons, the industry has actually done a pretty good job of lowering some of the biggest barriers to successfully deploying a digital signage or kiosk project. Granted, we've only lowered them from "impossible" to "challenging." Over the next few years, we need to get them down to "easy". This is no small task, but at least it's finally within our collective reach.