Toner News Mobile › Forums › Toner News Main Forums › AUSTRALIA PRINTING MARKET…… "RED HOT"
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AnonymousInactiveaustralia Printing market red hot, distributors say
The
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.
Hewlett-Packard,
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.
Jeff
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. -
AuthorDecember 12, 2006 at 2:49 PM
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