Digital Sign Of The Times

However, as many VARs know very well, digital signage is not as simple as sticking a large screen in the middle of a lobby or airport. Along with understanding the technology, solution providers deploying digital signage networks need to be familiar with the nontechnical aspects of the solution, such as content and sign placement, even consumer behavior.

"Ultimately, digital signage is not about technology. It's about communication," said Jeffrey Dowell, sales manager at 3M Digital Signage, Bainbridge Island, Wash.

While the swift drop in prices of flat-panel displays has boosted the market in recent years, and even though display screens—the most visible component of the network—still make up the largest slice of a solution's cost, that's not where the money is, VARs say.

"Screens are a big part of the costs, but we don't make a lot of money on the screen itself," said Brent Brown, vice president and CIO of International Business Systems, Folsom, Calif.

Savvy solution providers have incorporated strategy consulting as part of their digital signage practice, whereby they help the customer identify its objectives for investing in digital signage and then design a road map for achieving those goals. The solution provider and customer first must assess where the screens should be installed to be most effective and what kind of content would drive the message to the desired audience.

Clearly, the key to success for solution providers in this market lies in these kinds of services. International Business Systems, for instance, routinely offers strategy services and content development as part of its digital signage solution practice.

In February, the solution provider finished installing digital signage networks in two Las Vegas buildings for the new World Market Center—a trade show complex showcasing home and hospitality furnishings. The first building, completed in July 2005, has 66 screens spread out over 10 floors. The second building, completed in January, has 54 screens on 16 floors. International Business Systems installed the network in both buildings and linked them together to form one seamless network.

Even though digital signage is not limited to any particular vertical, it is concentrated among a handful—namely retail, financial services, transportation and hospitality. And management and maintenance of these systems mean recurring revenue for solution providers: These networks constantly need to be up and running with dynamic content.

Solution providers and integrators do not need to have all of the expertise in-house. Vendors such as Cisco Systems, NEC and 3M have programs in place offering help in selling and servicing these solutions. But the message is clear—keep the focus on services.