Long Island Tech Business 'Riding A Wave'
By JENNIFER BOSAVAGE
July 18, 2007
As videoconferencing gains wider acceptance in the business community, integrators are seeing sales grow likewise. VARBusiness 500 No. 348 IVCi, an integrator of managed enterprise collaboration solutions -- including video conferencing, audio/visual and managed conference services -- saw revenue grow from $41.7 million in 2005 to $50.2 million last year.
Companies of every size are recognizing the benefits: cost and time savings, as well as environmental benefits. In addition, the quality of today's equipment is vastly superior to that of only a few years ago, which is leading to greater customer acceptance, notes Bob Swing, founder and president of IVCi. Swing took a few minutes to talk with CMP Channel Senior Editor Jennifer Bosavage on the cost savings and communications efficiency that videoconferencing can provide customers.
IVCi reported very impressive 20 percent growth in 2006. To what do you owe that growth?
Bob Swing: IVCi has three units. Video conferencing, a/v integration and managed services. All complement each other. When one grows, the others grow. A big part of the growth is that acceptance around videoconferencing has expanded. That acceptance is driving IVCi's growth. Videoconferencing is the box we can put services around, whether that's speakers, TVs or managed services, for example. Our managed services include setting up the call, taking care of the call, etc. The more widgets we sell adds to the services we can sell. Hardware is a means to an end. We want to put service around the hardware; hardware drives the sale of services.
Why is there more acceptance?
Swing: It used to be that videoconferencing was done over ISDN. That transport was only 85 percent successful. With adoption of IP came a lot more reliability. That adoption has assisted in deployment. In addition, one videoconference system might have cost $50,000 10 years ago, but today you can get five for that same cost.
There's a money saving aspect to it for companies also, of course. That was the big push years ago. Today, the emphasis is on efficiency -- saving time. Executives say to themselves, "I can hold a two-hour meeting and still be in my office." It's a more effective use of the executive's time.
Second, the government vertical is growing. For example, we send equipment to Iraq monthly. It definitely has an application in the military for closed communications. Other areas are tele-education, virtual field trips, training, HR, and financial areas. Different market segments have different applications. It comes down to: What can you see the system doing for you?
What are some emerging areas in the Web conferencing space IVCi serves?
Swing: We are really at the beginning part of the growth curve, I believe. The statistics are that under 5 percent of conference rooms in the U.S. have videoconferencing systems. There's some real opportunity in disaster recovery. Honolulu just spent $300,000 for systems that may never get used. They basically operate like satellite units in briefcases. Cities are purchasing systems and placing them in a secure area, so there will be a central point to communicate. We learned the importance of that and on communicating on one frequency from 9/11.
Aside from the "coolness factor" of videoconferencing, what are you seeing as a big motivator for buying now?
Swing: For one, it's starting to be regarded as a "green technology." I just read an article from Wainhouse Research that had a blurb on teleconferencing as a green technology. It mentioned that not taking three plane trips in a year's time was the equivalent of taking a car off Earth for a year. It does make sense, because if you're not going on those business trips, you're not burning jet fuel. There's something to be said for that.
What challenges may lie ahead?
Swing: Cisco is getting in, trying to change what's already here with something totally different. Cisco's product is called teleprescence, and it's very good. We will ride the Cisco marketing wave. Cisco is able to reach the C-level executive, something the rest of us have not been able to do. We've dealt with telecom, marketing, facilities management. Now C-level is aware, through the efforts of Cisco. Cisco is not a standards-based system, but that will change, I'm sure. One challenge, as far as our company is concerned, is that we are working to be a $100 million company. We want to put some middle management in that we haven't had before. And within our installation arm, we are looking to hire the right skill sets.
What is your company doing to surmount those?
Swing: We use recruiters, tech schools, have industry specific orgs that have training. In house training, trying to develop that. Of course, there's on the job training too.
How are you planning to hit that $100 million target?
Swing: Our growth has always been organic. We've looked at companies in the past. They want $7 million for a $3 million company. What kind of value is in that deal? If I invest $7 million in my own company, then I can make $10 million.
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