Panduit’s Surprise Move Pays Dividends
The IT and network infrastructure conglomerate’s eyebrow-raising acquisition of Atlona clearly makes sense one year in, largely thanks to thoughtful research, trend recognition, and post-acquisition execution
The commercial AV industry is thriving, simultaneously driven by disruption and opportunity. The age of AV and IT and convergence has arrived, and along with it new business models and technologies that have sent ripples of change through the AV universe.
The unique nature of this business environment has also driven levels of change previously unforeseen on the manufacturing side. This includes a noticeable rise in mergers and acquisitions. Certainly, mergers and acquisitions have always been a part of AV and virtually every other industry – however, it’s clear that AV’s melding with IT has paved the way for interesting and unexpected pairings.
There is always an uptick of these announcements around the AV industry’s two cornerstone tradeshows: ISE and InfoComm. Several companies leveraged the ISE 2019 show to unveil acquisitions, including Biamp’s purchase of Cambridge Sound Management – two professional sound companies coming together – and Egan Visual’s acquisition of Exact Furniture, which brings the whiteboard manufacturer together with a classroom lectern, desk and credenza specialist.
These acquisitions were natural fits on the surface, and certainly compelling from a business perspective. Of course, it’s the mix of the compelling and unusual that tends to stand out.
It’s for this reason that Panduit’s acquisition of Atlona dominated the news cycle leading into ISE 2019. One year in, it’s clear why the acquisition has made perfect business sense for both companies.
Panduit was not a stranger to the commercial AV industry. Its range of Layer 1 network, cabling and electrical infrastructure products are in fact an essential part of the AV ecosystem. However, these systems have been historically installed by IT engineers or low-voltage electrical contractors well before the AV integrator arrives on the job site.
The age of AV and IT convergence has brought these two installation phases closer together. Panduit’s systems are now often part of the AV specification, and at the opposite end, IT and cabling contractors are receiving more requests to build AV systems into their end user projects.
Executives at both companies had the foresight to stay ahead of this trend. Furthermore, Panduit has resisted the traditional urge to fully absorb the Atlona brand post-acquisition. Instead, the two companies have operated as partners, which has benefited everyone through to the end user.
“Our premise for the Atlona acquisition was around IT’s expanding influence in the AV space,” said Tom Kelly, Vice President, Enterprise Business for Panduit. “AV was clearly becoming more of a network-based technology, similar to how VoIP, security and lighting have. We recognized the need to build our exposure and relevance in AV as customer interest grew.”
Panduit’s long history and global strength in IT physical infrastructure for the enterprise space was likewise of strategic interest for Atlona, which took an aggressive approach to AV and IT convergence since launching its OmniStream AV over IP family in 2016. The company has since been on the leading edge of other IT-oriented innovations, notably the industry’s first IP-enabled AV control solution (Velocity) and switching solutions with integrated wireless BYOD capabilities (UHD-SW-510W and the newly announced OME-MS52W).
When Panduit came calling, Atlona CEO Ilya Khayn was prepared to listen. Khayn saw the same opportunity as Panduit to build a strong and unified value proposition that would differentiate Atlona from its biggest competitors.
“The fact is that one year in, we are talking to a set of customers that we never communicated with in the past,” said Khayn. “We are tapping into new channels, bringing in new strategic partners from Panduit’s network, and having conversations with general contractors and end users at the initial point of construction or renovation. It’s opened up an entirely new era of opportunity for Atlona.”
Khayn emphasizes that it’s not all about Atlona and Panduit – it’s about adding significant value for their common customers. “AV has become an important subset of infrastructure planning, as collaboration is critical to the success of almost any business,” said Khayn. “We’re making it easier for contractors, integrators and end users to build unified plans and interoperable systems across several important layers.”
Strength in Unity
Jamey Swigert has had the most unique perspective through it all. Along with being involved in the initial AV company search and acquisition planning, Swigert was the acting AV ambassador for Panduit during Atlona’s onboarding process. He therefore saw the inner workings of Atlona more than anyone and has since become Director of AV Sales. He remains fully engaged on the Panduit side of the business as well, which has helped him architect a business message and growth strategy moving forward.
“Many of the business case assumptions that we made during the acquisition process have been validated,” said Swigert. “Atlona has an ideal product line that covers the majority of applications across Panduit’s core customer base, which includes healthcare, education and enterprise businesses.
Swigert notes that even though Atlona remains a separate organization, the two sales teams are tightly integrated one year in. “That was our primary first-year goal from an organization standpoint, and we have achieved that. We are also seeing a growing overlap of Atlona integrators and Panduit contractors, which is strategically important to our future success. Both are critical, because as time goes on we find that AV decision makers are often part of the IT organization. It’s important to have that natural synergy as we move forward together.”
Swigert adds that product development is another important long-term strategic element, noting that Atlona’s approach is clearly aligned with Panduit’s philosophy.
“Their product line is not so large that it’s unmanageable, but there is a very strong core that covers a variety of important requirements,” he said. “Atlona takes a similar approach to Panduit by building products that address challenges and desires for customers rather than creating widgets for the cool factor. As an example, the UHD-SW-510W presentation switcher has been Panduit’s best-selling product from the Atlona side, because it covers a growing need for our customers: wireless BYOD.”
Kelly shares the same viewpoint as Swigert, adding that Atlona brings a wealth of history and credibility in the AV space to Panduit. “They evolved from simple point-to-point solutions for signal extension and switching to these enterprise-wide, AV over IP collaboration and control solutions – and have evolved in a way that was well-planned and strategized to address customer needs and industry trends,” said Kelly. “Their product suite resonates strongly with Panduit end users and consultants in the IT space. The fact that we can marry and complement these technologies so well to serve two traditionally disparate sets of customers is a testament to their expertise.”
Atlona, likewise, is feeling the support from Panduit in a way that just feels a bit different than your standard acquisition scenario. That careful approach from Panduit has proven valuable to Atlona customers, who don’t have to worry about the company disappearing tomorrow.
“They are investing in us, we are leveraging their extensive R&D capabilities, and we continue to innovate for the market,” said Khayn. “We launched 20 new products in 2019, and we have as many planned for 2020. They have put us in a position of strength instead of fading in the rearview mirror. Atlona is stronger than ever, which makes this the complete opposite of your standard acquisition.”
Panduit has also taken a more aggressive approach at AV tradeshows with its own products and branding. InfoComm 2019 was something of a coming out party, with a modest demonstration focused on its two-post data rack system, wall-mount cabinets and field-terminated plugs. Panduit is planning a larger presence this year at ISE 2020 (February 11-14, Amsterdam RAI), with a common message for visitors to the Atlona stand (5-T50).
“Visitors will see the continued evolution of our common go-to-market message that is inclusive of physical infrastructure and active AV end points,” said Kelly. “The investments that we have made not only in product development but also in our global sales and support structure will be clear. We will emphasize the benefits of our common engineering, research and development strategies that really allow both companies to excel in product innovation and problem-solving for our customers.”