The Eventual Disappearance of Digital Signage Software Vendors

Does anyone recall a company called WordPerfect? Some will, but since the bundling of MSFT Office into nearly every PC, WordPerfect disappeared almost overnight. They had a great product (some would argue better than the Office suite), but it couldn’t compete with the distribution channel of a “preinstall.”

Unfortunately, I could easily see the same thing occurring in the realms of digital sign software. Here are some of the reasons how and why.

1. Content will rule. As solutions become further commoditized, content will come to the forefront as more important than the solutions that run it. As long as the minimum threshold is met on performance and quality, the majority of future investments (outside of the realm of advertisers at least) will be involved in the content.

2. Advertising will further de-emphasize the SW/HW. And you thought the content itself would steal the show (and the revenues) from the software and hosting vendors. When large ad networks are able to truly provide meaningful targeting, the real “potential” money that everyone in the industry has been speaking of –for a long time– will begin to flow in. When it does, it will impact the solutions in the market. To what extent, it’s hard to say, but in general the emphasis will shift from a solutions perspective to an ad sales one.

3. Embedded/All-in-One Displays. Currently the display manufacturers walk a fine line. On the one hand, they don’t wish to bite the hand that feeds (namely the software/hardware vendors that purchase commercial products at a large scale). On the other hand, they recognize the benefit of including all-in-one digital signage as an option. How difficult would it be to pre-embed software–even if it were non-intrusive and dumbed-down at first? While it seems harmless enough, the reality could be very detrimental for

4. Distributors. Similarly, distribution channels could also offer embedded options, further putting pressure on independent hardware and software providers. It could also be considered biting the hand that feeds, but we’ve learned by sad experience that private-label is the natural evolution for most business models. Does WalMart ring a bell?

We’re always looking for ways to stay ahead of the curve, watch our backs and remain competitive in what has become a very cutthroat and race-to-the-bottom business. More consolidation is coming. Risks remain for some of the would-be industry leaders, but opportunities still abound for potential growth and expansion.