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 user 2006-12-12 at 2:49:00 pm Views: 44
  • #17255

    australia Printing market red hot, distributors say
    best offense is a good defense. That’s the business proposition
    broadline distributors are pitching to solution providers that have
    shied away from actively selling print solutions.That’s the business
    proposition broadline distributors are pitching to solution providers
    that have shied away from actively selling print solutions.Both Tech
    Data and Synnex, based in the US, are building new printing solution
    practices and are recruiting VARs that in the past have been turned off
    by single-digit printer hardware margins. But the fast-growing
    multifunction printer (MFP) and color laser markets have put solution
    providers on a collision course with traditional copier vendors such as
    Canon, Konica Minolta, Ricoh and Sharp Document Solutions Company of
    America.Not only will a robust printing practice help VARs fend off the
    incursion by copier vendors seeking a bigger slice of the IT spend, but
    distributors want to convince solution providers that printing
    solutions can yield healthy double-digit margins.”VARs want to expand
    their relationships with their customers and at the same time control
    the customer,” said Bill Sheldon, senior vice president of document
    management and printing solutions at Synnex. “When you move the entire
    printing solution into a lease model, you can go from low single-digit
    margins to high double-digit margins,” he said, noting that margins can
    be as high as 40 points when the entire process is bundled into a
    cost-per-page lease model.In July, Synnex launched its PrintSolv
    document management solution that combines business processes and
    software tools to help solution providers capture not only printer
    hardware sales but also supplies, installation and management of
    printers.”The VAR used to sell the printers and then walk away,” he
    said. “Now if you go back and capture the service and supplies, you can
    develop an annuity stream.”Tech Data, too, is poised to enter the fray
    with a new printing solutions unit slated to launch 1 February. The
    unit, announced earlier this year at Tech Data’s Business Partners
    Summit, is driven by the convergence of color printing, copying and
    multifunction printers, the distributor said. Clearwater, US-based Tech
    Data formed the unit to go beyond printing supplies to a more
    solution-based approach, adding more resources around services,
    hardware and software for VAR partners.”Document management is a very
    profitable space. This year, we continue to expand and grow that
    particular space by adding ISV software packages that really help us
    offer the total solution, so that we’re not just offering the hardware
    side of the business,” said Jennifer Burke, marketing manager for
    digital imaging product marketing for peripherals at Tech Data.Fueling
    the rush to print solutions is the convergence of the copier business
    and the IT market. No longer are copiers just copiers. And no longer
    are they stand-alone devices. MFPs residing on IT networks have changed
    the printing and imaging landscape dramatically.

    NEXT: MFPs reshape the market.
    Lexmark and other printer vendors fired the first volley with low-cost
    MFP devices that resided on the IT network and usurped the value of
    stand-alone copiers. Now those devices are at the vanguard of printing
    solutions and ultimately at the flash point between copier vendors and
    IT solution providers. For its fourth quarter ended 31 October, for
    example, market leader HP said MFP unit shipments jumped 160 percent
    over the year-earlier quarter.But the copier vendors aren’t standing
    still. They are quickly moving beyond the copier space and mounting an
    aggressive incursion into solution providers’ IT turf.In November, for
    example, Sharp said that it had established a direct regional sales
    operation through its new division, Sharp Business Systems, after
    acquiring Phoenix-based solution provider Davidson Imaging Systems to
    launch Sharp Business Systems in Arizona and New Mexico. The company
    said it plans to establish more than 20 local Sharp Business Systems
    branches during the next few years.Synnex, however, said PrintSolv
    gives VARs an advantage over copier companies coming into the market
    with print solutions because it takes a multi-vendor approach. Sheldon
    noted that HP, Xerox, Lexmark and Oki Data are all partners in
    PrintSolv and the distributor is talking with other MFP and copier
    manufacturers. Sheldon said Synnex is on target to sign 400 solution
    providers throughout North America within a year.Bob Degliuomini,
    manager of print services and workflow solutions at Westwood Computer,
    a solution provider in Springfield, N.J., is currently implementing
    PrintSolv for his clients. “This will help us manage our customers’
    print fleets better,” he said.He noted that PrintSolv is not
    vendor-specific and allows him to view and manage any brand of printer,
    copier or fax machine on a network from a desktop. When ink or toner
    levels are low, for example, he can automatically order supplies and
    ship them to the customer, drastically reducing his SG&A expenses
    because he doesn’t have to manually monitor each device. He’s unsure,
    however, how much his margins will go up as a result of the printing
    solution from Synnex.”We’ll start slow and see how it works. We’ll see
    what happens in the next six months,” he said.Tech Data, meanwhile,
    said its printing solutions unit will be modeled after its 10-year-old
    document management unit, providing VARs with trained resources in the
    field as well as inside sales and field-sales support.Tech Data will
    offer a tool that identifies recommended add-on supplies when a VAR
    looks up a particular printer or part on the distributor’s Web site,
    Burke said, adding that the company also aims to build relationships
    with software vendors in the printing space.”Today, where we have a
    supplies business unit focused on selling print supplies, we’re going
    to take those resources and that team and build upon that, and we’re
    really going to be focused on selling printing solutions,” she added.

    NEXT: Assessing print managed services.
    Gladney, president of Digitek Networks in Louisville, Kentucky, is
    partnering with both Synnex and Tech Data. While Synnex’s move into
    print managed services wasn’t on his radar screen, Tech Data’s new
    division is of interest even though Digitek had previously avoided the
    market.”We’ve never found anybody that’s been able to help us grab a
    hold of that side of the business. We’ve kind of steered clear of it.
    … There’s not enough markup, not enough margin. We have to make a
    decision on certain things to do and we let that one slide, even though
    that was one of my technician’s expertise for a long time,” said
    Gladney.Tech Data has changed his mind. “Any time Tech Data launches
    anything on pushes hard on something moving forward, we made a decision
    that if they want to invest their time and money in it, we have found
    that there is something of value there and we should look at it,” he
    said.Larry Levy, managing member of LevyNet, a full-service IT
    consulting firm in Jacksonville, Florida, said the cost-per-page model
    isn’t a fit, although other companies in his area have offered similar
    services.”There are a lot of copier companies … that are taking that
    approach, so instead of selling a US$4,000 copier/ printer/scanner,
    they’re dropping the device into the customer and they’re charging them
    a per-copy cost with a guaranteed minimum. … I don’t know that
    they’re still doing it. I think it was a model that they’re trying and
    it didn’t work,” said Levy.”I don’t really use that approach
    personally,” he said. “I’d be more interested in the Tech Data approach
    where I can get better educated on the printers and the toners and then
    go off and sell them. … Having the knowledge for both the product and
    sales tools and to go out and let me do the sale and the face-to-face
    just seems like a much more comfortable model for me, because it seems
    like I would be more in control of the sales process.”Synnex’s Sheldon
    agreed that controlling the customer as well as the sales process is
    key to the success of PrintSolv. Synnex offers a USB key sales tool to
    PrintSolv solution providers that lets VARs plug the key into a
    customer’s network and within 30 minutes catalog all printers and
    copiers that reside on that network.”Typically that process was done
    manually and it could take months,” he said. “You’d have to walk the
    floor, open up the device and record the serial number,” he said. “With
    PrintSolv you can do that within half an hour.”Once solution providers
    capture the printer inventory they can start slowly by gaining a
    toehold in the supplies business. From there, he said, it’s easy to
    move up to capturing the maintenance business and ultimately the entire
    printer and document management business using a cost-per- page
    model.”The key is to take a high SG&A model and by automating it,
    drive it down so solution providers can profitably sell high-end color
    and MFPs,” he said.