Global integrators come to APAC

• Features

• 17/01/2024

In recent months we have seen Convergint acquire an AV integrator in Australia and AVI-SPL bolster its presence in Singapore after a successful expansion in India. Global integrators are coming to APAC. [The term ‘global integrator’ is a contentious one but for the purpose of this article we will be using it to refer to integrators with presence, directly or through partnerships, and business interests across multiple countries and regions.]

With these developments, the most interesting line of inquiry is around the topic of how APAC fits into the operations of these global integrators. The opportunity for growth in Asia Pacific is undeniable but it comes with its own unique set of challenges and global integrators will need to adapt if they are to succeed.

On the flipside, local and regional integrators as well as AV incumbents have been serving the Asia Pacific market for decades. How will they react to the arrival of global integrators to their market? And is there a possibility for Asian AV businesses to harness the potential of growth and expand outwards instead?

Securing AV

Hailing from the world of security integration, Convergint has acquired Peace of Mind Technology [POMT], an Australian AV integrator based out of Sydney with capabilities to deliver across the country.

While this is a step for Convergint’s AV growth in Asia Pacific, it is not the company’s first expansion into the AV space. Convergint acquired Seal Telecom, a Latin American integrator, in 2021. Success with that endeavour served as proof of concept for the synergy between security and AV and informed the expansion of the AV business in Asia Pacific.

Why Australia? Denis Pozigun, executive director of global AV/UC at Convergint, answers: “Australia, backed by our experience of it, is an innovative market that adopts technology early. Based on our business in the country and our appetite to grow, we were already looking at the AV industry in Australia as a possible avenue for growth. The Australian market will be a significant contributor to the expansion of our AV business in the Asia Pacific region and it is set to serve as a centre of excellence.”

Pozigun further expands why POMT was the perfect candidate for acquisition: “The culture of the company fit in seamlessly with what Convergint stands for and we have shared values. And on Convergint’s side, the acquisition is part of a long-term play. We expect to see the business grow in Australia and hope to leverage their expertise to enhance our AV capabilities across Asia Pacific.”

Further expansion is on the cards as Pozigun says: “Over the upcoming years, our aim is to maintain our position as a prominent player in the security space and be the best service provider for our clients. To do this we need to continue expanding our capabilities across functions and across regions.”

He continues: “And we are going to be very strategic and surgical with our moves. We’re not looking at this expansion from only a bottom-line perspective. Given Convergint’s consistent growth, we have the time to really consider our options and look at the quality of the markets we want to move into and how our business can be scaled. We are looking to take our time when making these decisions because we want to make sure that these decisions are right the first time.”

There is also a clear idea regarding how Convergint’s expansion in APAC will unfold. Pozigun says: “The goal is to go to market and confidently say that Convergint can provide security and AV services at scale for any business, and that is a unique market proposition. That is our focus.”

Pozigun is keen to stress Convergint’s extensive experience and robust capabilities in the region. He says: “Convergint is established in 14 countries across Asia Pacific, and we are present in the major markets. We have business entities, we have boots on the ground, and we have the structure in place to grow and expand. From the security perspective, Asia Pacific is an extremely important market for us with year-on-year double-digit growth. The expansion into the world of AV in the Asia Pacific region is a long-term investment.”

AV is set to become a part of the APAC operation for Convergint. Pozigun concludes: “We do have immediate opportunities and frankly, a substantial part of our business revolves around global accounts. These are large global enterprises with footprints across the world, and a lot of the time we’re doing business with them at scale. And this is where we can grow our capabilities to have conversations with them about being their AV service provider as well.”

Starting with Singapore?

AVI-SPL has ramped up activities at its Singapore office and the move signals rising interest from the global integrator in the Southeast Asian region.

Tim Riek, executive vice president, technology and services at AVI-SPL, says: “I think the opportunity for growth, coupled with the need to consolidate and mature the services that are provided to the region historically make it compelling for AVI-SPL to enter and understand how we can grow and raise the level of sophistication of the offerings in APAC. Looking at AVI-SPL’s business in Asia Pacific, our sales for this year to date through to the end of August are up almost three times than what they were in 2022. We have nearly 200 employees across our different [Asia Pacific] locations, and with the establishment of Singapore we are up to six offices.”

He continues: “And ultimately, our existing MNC and global customers are asking us to deliver for them in more geographies because of the trust they have in us and our working relationship with them. With our expansion in Asia Pacific, we are now able to offer expanded local language support and we’re able to take advantage of lower costs and more points of delivery. We are looking to determine not only how we can better serve the local market by being present in the region, but also how our Asia Pacific assets can enhance the offerings that we have in other parts of the world as well.”

AVI-SPL set up its operation in India two years ago, and if you have been following Inavate APAC (and our sister publication Inavate India) you will be familiar with the success the integrator has achieved in the country.

The obvious question is whether the successes in India are fuelling AVI-SPL’s expansion. Riek answers: “Our entry into India and the success we have had there, which is borne out in the overall sales figure for the year that I have shared, are contributors to the establishment of the office in Singapore. Previously, in India, Hong Kong, and Singapore, we were using a partner fulfilment model. But ultimately, just like in India, our strategy evolved to serve these markets ourselves. Our experience in India is helping validate our continued investment in the APAC market.”

He continues: “We recognise that if we are going to be truly serious in the market, we need to have a formal physical presence that validates our position and helps anchor our operations in that space.”

Riek brings up ‘going direct’ versus working with partners. The shift in strategy for AVI-SPL is being driven by the demands from clients. Riek says: “What we are learning is that the more markets you have an established physical presence in or have established operating entities in the less friction you experience in satisfying your clients’ theatre-based needs for Asia. So, we are looking to continue to strategically invest in our operations and evolve our presence so that they are aligned with the needs of the market.”

At the same time, AVI-SPL is cognisant of the fact that going it alone in Asia Pacific might not be the best option in every case. Riek says: “Partners will continue to play an important role for AVI-SPL because not only do they have the capabilities to help us deliver in markets where we do not have direct presence, but clients might also prefer to transact with a local entity. We do not have that infrastructure established right now to take on the broader regions such as Southeast Asia and wider Asia Pacific. And we are going to be disciplined with how we expand, we are being selective with how we pick our spots. But as it stands, our focus is on the markets where we have chosen to establish physical presence.”

Riek concludes: “We want to ultimately formalise and mature our presence in Singapore and the region, especially with the investment in physical presence and space that we are making. We want to continue developing our team to ensure that the office is self-sufficient within the AVI-SPL ecosystem and continues to serve multinational accounts that we have developed locally as well as internationally. We want to take that momentum and reputation building and leverage that to attract local clients and continue the upward trajectory.”

Asian perspective

While global integrators may be moving into Asia Pacific’s AV industry, it is important to remember that the region is not under-served when it comes to AV. APAC has always had strong incumbent integrators operating both on a local and regional scale.

The growth of Asia Pacific is a boon for them, but Asian integrators have a more nuanced take. Christopher Lim, president of AV at ESCO and APAC regional sales director at GPA, says: “If you bundle up all the numbers from APAC, it shows growth. But if you look a bit more closely, you see that there are developing markets in APAC that are reaching a certain point of maturity. Some of them started from a relatively low base in terms of corporate enterprise spend. So, a lot of the growth is organic. Mature parts of the APAC market, such as Hong Kong and Singapore, have slower growth rates and that is cogent. And then you have India and China, and these markets contribute significantly to the growth numbers in APAC on their own. So, yes, APAC is growing but it is not correct to paint the entire region with the same brush.”

ESCO is an integrator with capabilities to serve clients across Asia Pacific and the ASEAN regional theatre. The business has a developed infrastructure to back these claims. Lim believes that the investment and time taken by ESCO to organically build its business in Asia Pacific mean that the integrator is in a favourable position as global integrators move into the region.

Lim understands that a physical presence in APAC is necessary if you intend to compete in the region’s AV market. He details: “If you want to be taken seriously in the APAC local and regional markets, you need to have the ability to build and deliver locally even if the project is being driven from a central location that might be the US or a different region. From a finance and accounting perspective, doing business locally is the most efficient way whether it is for receiving or sending payments, accounting for tax regulations, or a whole set of other considerations.”

He continues: “A lot of the goods and services for AV installation and integration also need to be procured locally and it helps to have an established local entity. Asia Pacific is different and not homogenous, so dealing with distribution channels comes with its own set of challenges. Manufacturers, depending on their strategy and level of maturity, will be working with the distribution channel in APAC and the ones that go direct are in the minority.”

To resolve the challenges of procuring products and services, ESCO leverages the regional business units and fellow shareholders of GPA. Lim says: “When it comes to ESCO as a business and as a shareholder of GPA we are looking to have a central agreement with manufacturers. We talk with vendors we want to work with about how they can support us in multiple territories and by support I don’t mean just getting goods in the country but working with us to have the right pricing and the right service to meet the needs of our clients. If manufacturers can do this, because not everyone can, they will become the first port of call for us when we are executing projects.”

The conversation turns towards the topic of ‘global integrators’ and whether any AV business can make a claim to it. Lim says: “Integrators of a certain stature have always had international requirements. They have always looked to set up offices and operations in Asia and in other parts of the world because of the limited control you have with the subcontracting model. There is a different level of quality you can display for clients if you have your own entity operating in the market versus not having an entity. But it is important to understand that having an office in a primary market like India, China, or Singapore, doesn’t necessarily fulfil the premise of being a global integrator. Being a global integrator means speaking to your clients in their language and being able to deliver across 200 cities across the world in 100 countries.”

Does ESCO have designs to claim the term for itself? Is it possible that the growth and opportunity available in Asia Pacific can fuel Asian integrators to expand to other regions? Lim answers: “There are different formulas and approaches but at the end of the day it should come down to sustainable business growth. Some Asian integrators may decide to expand into new markets however to do this successfully you need to have staff available and capabilities in major cities of each country you expand into. We are very happy with what we have accomplished in Asia and believe with our global mindset and approach to business with our GPA team members we have the right formula to best serve our customers.”

Lim concludes: “This is why we are so committed to our GPA Southeast Asia brand, and the innovative global organisation and business model we have built. Every single business unit in every country that is part of the GPA has been operating in their market for years as a strong local player. They understand the intricacies and nuances of the market, they know how to conduct business, they have the cultural sensitivity, and more. And with the specific partnerships that GPA fosters, we can make the claim to be a global integrator in the true sense of the word.”