The beauty and challenge of the ‘commercial' market for residential custom integrators looking to broaden their horizons is that it's not really one market at all, but many, with no two segments much alike. Take the education market, for example. In fact, grab it if you can.

"It's a very rewarding market if you become a leader," says ed-tech consultant Robert Martellacci, President of Toronto-based Mindshare Learning. "Billions will be spent on technology in education."

As Norm Ross, Director of Sales and Marketing at audio products distributor Mitek Canada, notes, "Education in a down economy still spends money. It's a good spot to be in bad times."

But even education is not a single cohesive market. There is a clear demarcation between post secondary and K-12, and a fuzzier one between K-8 (primary) and 9-12 (secondary), although there are some overlaps in terms of technology deployed across the gamut.

That said, the range of technologies in even one sub-segment can be mind spinning. Certainly if you have no interest in diversifying out of tried-and-true audio/video, forget the education market. We'll touch on a few of the less familiar technologies as we go along.

The New Chalkboard

More and more school boards across the country, for example, are installing interactive whiteboards. They use data projectors to display the image from a computer on a large touch- or pen-sensitive display surface at the front of the classroom or lecture hall. The teacher or a student can interact with programs on the computer and annotate the screen by ‘writing' or ‘drawing' on the surface using a finger or pen.

Epson, a leader in digital projectors, recently launched a new product, BrightLink, which Martellacci calls "game-changing." Technology in the projector itself, which Epson claims is unique to it, turns any surface into an interactive whiteboard. Teachers and students use an infrared pen to interact with the computer.

It means schools don't have to buy two devices (projector and touch sensitive board) to create an interactive whiteboard, says Rajeev Mishra, Director of Epson America's Projector Division. BrightLink is also more flexible because the same product can be used to create interactive whiteboards of different sizes depending on the surface available in the room.

Rajeev Mishra, Director of Epson America's Projector Division, says the company's new BrightLink projector, which can turn any surface into an interactive whiteboard, helps schools save money since they don't need to buy both a projector and a touch-sensitive panel.

But BrightLink may only be a game-changer for schools that do not already have projectors, and many do, because it will still be slightly less expensive to add a touch-sensitive panel and use an existing projector, Mishra concedes.

Interactive whiteboards are just one of the most innovative examples of technologies used to help teachers present learning materials in new, and not entirely new, ways. Many schools are installing screens or projectors and sound systems in every classroom. The crucial difference is they now often also include computerized central control systems of the sort custom integrators are already installing in high-end homes.

Such projects often involve retrofitting multiple rooms with the same simplified wall-mounted and hard-wired controllers and then integrating different legacy equipment in each room, explains Jean-Marc Langevin, Director of IT and Educational Product Sales at Thorvin Electronics, an audio and computer control specialist.

The object, Langevin explains, is to eliminate multiple wireless remote controls that can be lost or run out of battery power at inopportune moments, to simplify controls for teachers who would otherwise have to learn different tools for every room, and to block changes to some features and functions to prevent sabotage by mischievous students.

In other cases, room controls are being installed during new construction. For example, SonoVideo Inc., a Montreal-based pro A/V dealer, recently wired every classroom and conference room as well as public spaces in Concordia University's newly-opened John Molson School of Business, with flat panels, sound and control systems. The technology allows professors to, among other things, show lecture notes and presentation slides from their computers, amplify their voices, and record lectures for later streaming over the Internet.

Epson's new BrightLink projector contains technology that can turn any surface into an interactive whiteboard. Then, teachers and students can use an infrared pen to interact with it.

Teaching with Technology

The whole notion of online education or e-learning, both in the sense of video conference-based live and interactive classroom sessions with a teacher in one place and students in another, as well as self-paced learning where all the materials are pre-recorded and posted online, is transforming education, Martellacci says.

The Massachusetts Institute of Technology (MIT) recently posted materials for every class online, he notes. "This is stuff no one dreamed about when I was in university in the 1980s." He cites the example of Moodle (Modular Object-Oriented Dynamic Learning Environment), a free, open source program schools are using to create and manage such e-learning materials.

"Colleges are more and more competitive," notes SonoVideo Vice President of Sales and Marketing JP Berrardini. "And students want to be taught with modern tools. They're attracted by the quality of teaching in terms of the technology being used."

Sheridan College, a community college in Toronto, recently undertook a major upgrade of A/V and computer systems in 252 classrooms, installing similar technology. That project was worth "millions of dollars," says Langevin, whose company was involved.

Toronto, ON's Sheridan College recently underwent a major upgrade of its A/V and computer systems that Thorvin Electronics, which was involved in the project, says was worth millions.

The situation in K-12 education is necessarily more constrained by budgets, and as Martellacci puts it, by "the complexity of running a school district, the complex systems of leadership at the district level, and the fact there are many educators who don't have business backgrounds."

"One of the greatest challenges we see is the lack of equity in schools across the country in terms of the technology they have. When we looked at private schools, they've got all the technology they need. But when we looked at publicly-funded education, what we saw was excellent pockets of innovation, but a lot of inequity."

An example of what can be done: Chantal Lafargue, a Spanish language teacher in a New Brunswick high school, recently won a prize in the ‘21st Century Interactive Classroom' contest sponsored by Hewlett-Packard (HP) and MindShare Learning for using Internet-based video conferencing to set up exchanges with students at a school in Colombia in South America. The Colombian students coached the Canadians in their video-based language projects. But that kind of innovation may be rare.

In New Brunswick, though, every teacher has a laptop, Martellacci says. Alberta has also made a huge commitment to educational technology, to the tune of $55 million over three years to acquire interactive whiteboards, data projectors and computers, he says. Other provinces have not been as aggressive.

And the differences aren't just province to province, they're school board to school board. Some, depending on leadership, funding and other factors, are ahead, some behind.

Peel District in Mississauga, for example, is developing a plan for every teacher in the near future to have a computer and a projector. "We're talking over 150 schools," Martellacci says. "The numbers get pretty big."

Robert Martellacci, President, Mindshare Learning, Toronto, ON: "It's vitally important if a company is looking to enter this market that they can walk the talk. Educators are quick to distinguish those who know what they're talking about versus just glib sales people. If you can't walk the talk, you're going to struggle in the education market."

Technology Upgrades 101

Under-resourced and often out-of-touch school administrators may be able to resist pressure from teachers and students to spend scarce resources on new classroom technology that offers uncertain returns on investment. Only 15% to 20% of school budgets are spent on anything other than teacher salaries, Martellacci points out, with the amount spent per student per year on technology typically in the $50-to-$75 range.

In some cases, though, pressure to implement new technology is taking on more urgency. For example, fears about the impact of disasters, terrorism and school shooters has pushed administrators in the U.S. to mandate mass notification systems that may include audio paging, digital signage, and computer-based messaging, increasingly, all integrated on one school- or district-wide IP (Internet protocol) network.

Canada is a little behind the U.S. "But there is a lot of interest in this now on the part of Canadian school districts," Martellacci says.

Edwards Sprinkler, a country-wide pro A/V and fire alarm integrator, recently installed a state-of-the-art IP-based audio paging system at a school in Mark's Bay, Ontario, near Sudbury. What's significant is that the school paid several times what it would have for a conventional analog audio paging system of the kind schools have long used in order to get the compelling, but mostly future-friendly, benefits offered by IP technology.

The system includes computer-controlled digital speakers with clocks and microphones in every classroom that are connected to the school's computer network and are addressable from any computer or even phone with access to the network, including from the Internet. The office can automatically and instantly send emergency messages and change bell schedules throughout the school.

And in future, if the district installs the same technology in all schools, it could send messages to all at the same time, to announce early closing for snow, for example.

"Right now," says Gerry Bourne, a Product Manager at Edwards, "it's a nice convenience, a nice use of the technology. But in three years, every school is going to need to be able to [be notified to] evacuate by phone. There will be lots of money spent."

Similar concerns about safety are also driving sales of flat panels for digital signage in schools, says Chris Marple, Manager of Business Development for Digital Communications Solutions at Sharp Electronics Canada. Once installed, digital signs are used for many things in schools: to post announcements, event schedules, sports news, weather and even homework assignments.

"The uses are pretty much endless," Marple says. "But where we've seen most traction is for emergency lock-down situations. It's coming from the security budget."

Speak Up!

There is also growing urgency among some educators and parent groups to implement "assisted learning" or sound field enhancement technologies; the notion of installing multiple speakers in classrooms and sound systems that allow teachers to amplify their voices by speaking into an RF- or IR-connected wireless microphone.

The Atlas Learn AL-2430 in-classroom sound reinforcement system aids in amplifying a teacher's voice via the instructor speaking into a wireless mic. Norm Ross, Director of Sales & Marketing at Mitek Canada, the Canadian distributor of the line, cites research that indicates assisted learning products can improve grades by as much as 50% because students can hear better and are thus more engaged.

Assisted learning is gaining momentum because, unlike other expensive ed-tech projects, such as putting an interactive whiteboard in every classroom or giving every student a laptop, this one shows a clear and substantial educational return on investment. Research, mainly done in the U.S., where assisted learning outside special needs classrooms is more common, shows that it can improve grades by as much as 50% because students can hear better and are as a result, more engaged, says Mitek's Ross. Assisted learning projects can run from $1,500 to outfit one room, or hundreds of thousands for entire school boards, he adds.

Bottom line: there are enormous opportunities in education, and we've only scratched the surface here of how schools can use, and are using, A/V and computer technology.

Martellacci says constantly falling prices for many of the technologies schools want means they will be buying more, despite tight budgets. "The pace of change is unprecedented," he says. "It's like nothing we've seen before. It's very exciting, but daunting if you're trying to manage it."

For the companies we talked to that are already heavily involved in selling to the education market, it's a significant part of their business. Education represents about 25% of digital signage revenues for Sharp, for example. It accounts for 20% to 30% of Thorvin's sales each year, 10% to 15% of Mitek's, and 25% of pro A/V dealer Sono Video's.

Doing a large volume of business in the education sector may be imperative, some say, because margins tend to be thin, although others say different.

"[Custom integrators] walk in and think they'll make the same money they do on residential," Berrardini says. "They're shocked when they realize they can't do it. I guarantee you they make double the margins in residential. You can make up to 35% or 40% in residential, but more like 12% to 17% in education."

He's talking mainly about margins on reselling equipment. Marple also concedes that hardware margins are "minimal," but points out that integrators typically make most of their profit on installation anyway. Also, much of the technology (but not all) is the same as, or similar to, consumer products, so buyers expect prices to be similar, even when they're buying commercial variants.

Langevin guesstimates that installers reselling his company's more specialized and niche-audio and video equipment, like echo cancellation systems for classroom and auditorium sound systems, see "a minimum of 20 per cent" margin. Ross, whose company sells assisted learning systems among other products, guesstimates 35% to 40% on the hardware, although Bourne, the reseller, says less.

"You've really got to be like Costco or Wal-Mart and sell a lot, because margins are slight," Berrardini says.

Jean-Marc Langevin, Director of IT and Educational Product Sales, Thorvin Electronics, points out that pro A/V specialists are "pretty strong" in the education market, but custom integrators are making inroads in "smaller regional markets as opposed to big cities."

Of course, we've heard this before. Part of it may be scare tactics to warn off potential new competitors. Berrardini claims most residential integrators that dip into the education market give up within a year. And maybe they do.

But one reason pro A/V dealers persist in the face of slimmer margins is exactly because volumes are greater. The average project in education is going to be bigger than the average residential project, which means the profit is going to be fatter on each piece of business, despite thinner margins.

This is not to say that slim margins and entrenched competition aren't real barriers. The competition is certainly formidable. Companies such as Sono Video have a huge head start. And there are many others.

Advanced Presentation Solutions in Mississauga, Ontario is part of the Axis Group Company, which has 12 offices across Canada. Its list of customers includes a who's who of educational institutions in the greater Toronto area: Ryerson University, Sheridan College, University of Toronto, York University, and the Toronto, Halton and York school boards.

Martellacci points out that Advanced hired former educators to help it build its marketing team in this sector. "That has been a huge factor in their continued success," he says.

Nationwide Audio Visual, also in Mississauga, Solotech in Montreal, and Sharp's Audio Visual, with offices across the country, are other major players.

These are companies new entrants must learn to emulate. In fact, their Web sites can sometimes be sources of valuable market intelligence and background. The Sharp Web site, for example, includes news, white papers, listings of educational grants for technology, and even sample wiring diagrams.

But how big a barrier are entrenched incumbents?

Chief Manufacturing makes a wall bracket that is specially-designed to mount a whiteboard over a chalkboard without damaging the board beneath. It can be properly positioned using vertical, lateral, and depth adjustments; and six mounts are offered to accommodate single and dual-stud mounting. Cable management is also included for a clean set-up; and a kit is available that also includes Chief's RSMAU Mini RPA Elite projector mount.

Gaining Admission

"The relationships we've established [in the education market] through the pro A/V channel are fairly solid," says Sharp's Marple. He has seen little cross-over from residential custom integrators so far.

Langevin agrees. "[The pro A/V dealers] are pretty strong," he says. "They have it locked up in a sense. It's hard for small guys just starting." Still, he is beginning to see custom integrators making some inroads in "smaller regional markets as opposed to big cities."

All those we talked to agree that a determined custom integrator could compete. CIs already have the basic skills for much of the work involved, but they will also have to learn a great deal about new technologies and new ways of doing business.

Martellacci stresses the need to acquire an insider's understanding of the market. "It's vitally important if a company is looking to enter this market that they can walk the talk," he says. "Educators are quick to distinguish those who know what they're talking about versus just glib sales people. If you can't walk the talk, you're going to struggle in the education market."

Marple says custom integrators can certainly do the sales and installation part without any problem, but may fall short in not having the customer service ethos or infrastructure in place to provide cradle-to-grave after-sales support that education customers expect, and that will generate repeat business.

Bourne says the same. "Schools are looking for people who can service them when they have problems six months later. We're there for them 24/7. They don't want to get involved with people who can only do the installation and then run away."

The first step, Martellacci and others agree, is to do your homework; go back to school as it were. Learn the new technologies, the applications, the trends, business drivers and barriers that make education markets tick.

Know, for example, that audio systems in schools tend to be 25 volts versus the 70-volt systems often deployed in other commercial sector.

"Residential and commercial are kind of the same, but also very different," muses Berrardini, who has worked on both sides. "On the residential side, it's a little more about HDMI and surround sound. On the other side, they use microphones, so it's more about impedance and mic levels."

Residential CIs will also have to learn about streaming video, video conferencing, interactive whiteboards and other new technologies. Few know much about them now, Berrardini notes.

Certainly this kind of cross-training and learning is do-able. Bourne points out that his company only added it's A/V business in the last few years, and is using cross-trained fire alarm installers to install IP-based paging systems.

There are more practical considerations, which we've discussed in past articles, about such things as building codes, permits and division of labour between engineering consultants, electricians, A/V installers, and so on. These parameters will be similar to other commercial market segments, with some variations.

Winning Straight "As"

Of course, you also need to understand how to find and win the business. As in other commercial sectors, integrators bring in new business in two ways: by bidding on RFPs (requests for proposal) and tenders, or by directly selling and winning commissions to do design-build projects or sub-contracts for system installation. The dealers, distributors and manufacturers we spoke to all say you need to go after both kinds of business.

Hitachi America offers an all-in-one bundle for educators with a tongue-twister of a name (CP-DW10N FXDUO88W Wide Bundle). It includes the company's CP-DW10N short-throw, networkable projector, the FXDUO 88" wide interactive whiteboard, and a custom-designed Premier wall mount.

Tendering for A/V-computer work in education is less common, but becoming more so. "Definitely for new construction, it's mostly RFPs now," says Langevin. With installations in existing facilities, it varies from board to board and institution to institution, he adds. In many cases, a tender or RFP may be the end result of direct-selling efforts by integrators.

"Responding to tenders is a necessity," says Bourne. "But if that's the only route you go, you're not going to be successful. By the time the tender comes out, the customer generally has some idea of what and who they want. So you had better be the person who was there in the beginning to drive the business in your direction. You're too late if you're just chasing tenders."

Others say the same. "Dealers that are doing well are responding to both," Ross says. "The ones not doing as well are just waiting for it to come in."

Berrardini guesstimates that 70% of his company's education industry business comes from direct sales, 30% from tenders. In most cases, Sono Video is selling directly to end customers, but in rare cases, it is selling first to engineering consultants. Using a consulting engineer for such projects is becoming more popular, though, Berrardini notes.

"We're probably answering more tenders now than we should," he says. "But it's the way the industry is going. Anything government, and education is government, has to go out to tender. We bid on ones where, let's say, we helped them figure out what they wanted. We don't pick up a tender we've never heard of before."

Once you've learned the ins and outs of the market, or one segment of it, suggests Martellacci, "Visit the local school district and ask the right questions. Get them engaged. Present yourself to them as a potential partner. You want to show you can work collaboratively with them, and for that, you need to understand the pain points."

One way A/V dealers make themselves invaluable, he says, is by offering training on how to use the technologies; he means, how to teach with new technologies such as interactive whiteboards. This may seem more the province of teacher training schools and professional development forums, but by default, it's often left to system sellers.

"A lot of teachers don't know how to use this stuff," Martellacci says. "And it's expertise that some A/V dealers have and can offer as a value-add. It's about creating a solution."

If you're attacking the local school board, selling direct, your end customer could be just about anybody in the organization: a teacher or teachers, the principal, school board members or employees, depending on the technology you're selling and the business drivers in play.

"It varies from one school to another, but one will generally bubble to the top as a champion," Ross says about the process of selling IP-based paging systems. "But so many people can be involved. Sometimes, the custodial department gets concerned about their jobs, for example, because now [with clocks automatically adjusted over the network by a server], they don't have to change the clocks anymore. It's bizarre."

But on the other hand, Berrardini says, somewhat surprisingly, "Customers are much tougher on the residential side, much more finicky. The difference is that commercial customers are not spending money out of their own pockets. And on the residential side, the big, difficult jobs often go on much longer than on the commercial side. With commercial, you know more exactly when you're going in and when you're coming out."

Can Integrators Delve into Education?

Can residential custom integrators make the transition to selling in the education sector? The folks we talked to say yes, but they don't pull punches about the difficulties to be overcome. An environment as bureaucratic and hierarchical and as varied as this one will inevitably be more complex to learn and work in than, say, restaurants and small retail.

That said, the rewards may also be greater, not just in the purely financial sense, but also socially. Education is vital to the future of the country.

As Ross says in the context of selling assisted learning technologies: "Anything we can do to improve students' overall grades will help society. If we can get Johnny sitting in the back row from a D minus to a C plus, that means he'll do that much better a job when he grows up."

Norm Ross, Director of Sales & Marketing at Mitek Canada: "Education in a down economy still spends money. It's a good spot to be in bad times."

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