Development into a video brand
Rik, you are about one year in your new position as the CEO of the Riedel Product Division. Looking back, what would be in your view the most important events and developments in your area of responsibility during that time?
The most important event was definitely the supply chain disruption, which was not exactly what we were looking forward to. But that obviously was a very, very big challenge to handle from day one. Luckily, this problem is a bit like in Formula One: if it rains on the race track, it rains for every driver! That was exactly the case for the supply chain problem here. All our competitors had exactly the same problems.
The very good thing is that we were able to manage our way through this challenge and still overachieved our projected targets for this year. There are huge increases in the cost of goods, because of brokers in the middle, which drive prices up to absolutely crazy levels. For example an item which usually costs one US-Dollar dollar a piece is now sold for 250 US-Dollars. That‘s literally what happens. And then you have the choice to either stop supplying and let down your customers or you continue to supply your customers and take the hit, because you cannot charge the total increase in cost to your customers. So, we decided very early to share the pain and carefully managed expenses, and still ended the year with a significant overachievement in revenue while being able to ship everything our customers wanted.
What was, besides the supply chain issues, your main agenda as the new CEO of the Product Division?
I started this new position with some context, because I have known Riedel for quite some time. In my previous company, I was the Riedel distributor for a few regions in Europe since 2003 and joined Riedel 10 years ago and have worked in several roles since then. So there has been a long relationship with Riedel.
Nevertheless the first thing I did was listening to a number of people, leaders in the company as well as people on the shop floor. Which issues would they like me to work on and what would they want to see handled differently moving forward? You try to get an understanding of the status quo and continue to work from there.
We are in the middle of big changes. There is a lot of disruption in the industry, from the way viewers consume content up to the war on talent and the supply chain disruption, with vendors either experiencing big problems or disappearing altogether.
But also also there is a change in technology, for which we need to prepare our customers. What does that mean in particular for Riedel? Riedel used to be a hardware-centric company, and is evolving into a much more software-centric company, both on COTS as well as cloud-native, still with a decent amount of own hardware in the future. This change is not just a technology change, but also requires the organization and our customer centric end-to-end processes to change. The change process is embedded in a digital transformation project, which is led by the group CFO, Frank Eischet and myself.
Personally I’m someone who loves change but change may also create uncertainty. It’s one of my main targets as Product Division CEO to implement those changes, with respect for each and everyone in the company who has contributed to the success of today. That needs to be honored and continued to be built on for the future. It's a bit like with the US Marines: we leave no one behind. That’s my main set of targets.
How would you describe the situation of the Riedel Group at the moment?
I would describe our situation as amazingly good! After the Covid 2020 year, we have had two very strong years. Obviously the market is picking up, some of that will be down to investments being done now that had been delayed previously. For 2023 the order backlog and pipeline are very strong
Riedel has still a lot of growth potential worldwide. First of all, from a geographical or lateral point of view, there are regions in which we are not yet present to the right extent and where we don’t have a large team yet. But also then from a vertical point of view, we we are growing our video business worldwide. This has significantly increased over the over the past years already and we are taking further steps, one of those being the acquisition of two new companies in order to to further fuel our software strategy on one hand while also investing in a broader video product portfolio.
You are referring to the acquisition of SDNsquare and SimplyLive which both happened last September. Could you expand on what you hope each company to contribute to your strategy?
Let's start with SDNsquare, a technology start-up based on university campus in Gent, Belgium, which started as a spin-off and developed a lot of know-how about SDN orchestration. With broadcast production going increasingly IP, the orchestration of these IP networks is a core ingredient and it was thus also an important building block identified in our product strategy.
When the opportunity came up to acquire a core competence center which had experience and had provided already the biggest productions worldwide with their technology, we acquired the technology and the core people in that team.
The focus of the team is now to take that product from where it is today, enrich it to where it is needed for the future and integrate it into our ecosystem.
With SimplyLive we had a very different reason for our acquisition. Like I said, we intend to grow our portfolio of video products and to grow Riedel, well known for its Artist and Bolero intercom, SmartPanels and MediorNet TDM and IP business, to a main video brand. In doing so, we were looking for user-centric, software solutions, used in the heart of live productions, which can be deployed on-prem, in datacenters or in the cloud and are offered with a variety of business models, from perpetual to SaaS. SimplyLive checked all the boxes and covered quite a few new domains for us, including slo-mo/replay up to vision mixing and VAR solutions – which then fit perfectly with our Bolero S system. Simplylive was founded by former EVS people in 2016 and developed into a well recognized player in the sports market.
With both acquisitions we are able to speed up on the delivery of our 5-year vision, with many own new product launches to follow in the coming years.
What else do we need to do? We are operating in a turbulent environment if we look at what’s happening in the world recently, with the the war in Ukraine, inflation and a potential recession. There is also a lot of turbulence from technology changes which then drive big changes with the manufacturers in terms of how they need to reorientate themselves.
However, in my view the changes that happen on the customer side are far more important because after all manufacturers only build products for customers. Therefore we have to carefully find out where our customers are going, what the problems are they need resolved, and which solutions we can offer them to solve these problems.
In the past, these issues were mainly centered around technology problems. Customers were and are seeking to improve and simplify workflows. But today, it is increasingly important to also address the business problems for our customers.
Our clients businesses are in a complete transition. They need to reorientate themselves and that is the point where technology and new business models come into play, assuring that they can choose the right elements which are in line with their business needs. So what does that mean for us as a manufacturer? We need to offer different deployment models, from on-prem solutions over data centers – where customers can choose to work either with an external data center or with one of their own to host their equipment – up to cloud solutions. But also hybrid solutions, which combine on-prem and cloud in one solution. It all depends on what they actually want to do, what their core business is and optimizing utilization.
It’s key thus to not only offer a choice of deployment models, but also offer a choice of business models. There is not one which fits all. It’s not any different in different industries. If you need your car all the time, it‘s probably wise to buy a car. If you use it a few times a year, then you might rather choose to rent a car. But you might also want to choose for mobility as a service, such as Uber. All these models exist in other industries and it’s about time we offer the same choice to broadcast customers.