Those who know us well (or regular readers may have guessed), that we do a lot of work for the investment community and the subject of who we’d recommend that investors take a look at, is a question we continually get asked.There are far too many software companies in the space full stop. There are also far too many software companies that don’t have any sensible plan on how to make ‘real’ money.
With that glut of vendors (and very few people making any money), it’s not surprising that we’ve helped quite a few investors take a look at what they could do with USD 50 million or more in this space – proposals, for example, for roll-up strategies etc.
Bottom line though, in the digital signage software world at least, we believe that (roll up) strategies such as this simply don’t work.
I am sure we’ve also all seen those million dollar ‘digital signage’ or digital out of home deals where the software vendor walks away as the poor relation – perhaps picking up a few thousand dollars here and there whilst others pick up the bulk of the monies (even we have been involved in these sorts of deals, picking up more money in consultancy and project management fees than the selected software vendor).
Folks who question that this is the normal way of running a ‘digital signage software’ business need look no further than Scala as an example of a poor business model; a company that Gerard Bucas rescued back in 2002 and has turned over iro USD 20M every year since but has also spectacularly failed to EVER make a profit!
Business models such as this are simply not sustainable and any digital signage software vendor that thinks it can do similar but somehow buck the trend (and make any form of sensible profit) is living in cloud cuckoo land.
Companies that we do figure have got the business model correct are not surprisingly those that we suggest investors go take a look at (note: this doesn’t mean that any of the companies we list below are actively looking for investment nor that we have done due diligence work on any either).
Our lists; ‘Top10 Digital Signage Vendors 2012’ and ‘Top 30 Digital Signage vendors‘ which help the initiated and uninitiated alike weave their way through the maelstrom of 600+ digital signage software products and vendors in the market is only one way to look at what is out there.
Folks to watch going forward are the likes of Ayuda Media Systems, Four Winds Interactive, Hiperwall, Real Digital Media and Signagelive who could easily form the basis for a ‘hot top 10‘ – these are companies that not only have great technology, are staffed by good people but just as importantly they seem to have their business model spot on!