InfoTrends - It's All About the Solution

And it's Deja Vu all over again.

I found this excerpt from an Infotrends article in Europe.

Very interesting but not all that surprising.

— InfoTrends —

Solutions Capture More Pages and Fuel the Office Equipment Market

In years past, InfoTrends has written documents regarding the adoption rate of solutions within the office equipment market. At that time, solutions were really in the early stages of adoption, and OEM vendors and ISVs were in their initial posturing stages as they were trying to determine how best to take advantage of solutions and how they would eventually fit into their overall marketing and sales strategies. While solutions are still in the early stages of technology adoption today, we have seen significant growth in this category over the years and believe that solutions have yet to reach their full potential for penetration within this market.

Although many dealers understand that solutions should be an integral part of their strategy, most are still in the process of figuring out how to incorporate them into their range of offerings. Their propensity to fall back on the hardware products they are used to selling is hindering them from migrating to the next level and fully embracing the true solutions sale.

One of the biggest issues is sales cycles. Hardware sales cycles have traditionally been shorter than a solutions sales cycle. Another problem is that many companies set monthly quotas and sales people are usually trained to focus on hardware as they can bring the numbers in at the end of the month. In reality, a sales person would not be able to push a solution in 30 days; the cycles are getting shorter, but it still may be impossible in such a short period of time. A solution sale is like creating a good bottle of wine. It is a slower process that needs a certain amount of attention and caring before it is ready to be consumed. Nevertheless, within the office equipment market, hardware is becoming more difficult to differentiate as vendors are bringing to the market devices with equivalent functionalities and performances.

There have been some disruptions in the market with HP’s Edgeline and Xerox’s solid ink, but it seems that these technologies need more time before they gain great acceptance in the industry.

One trend is for sure: hardware is becoming more difficult to differentiate.

It is becoming more of an easily replaceable commodity or accessory, and vendors are dropping their margins at a consistent rate to remain competitive in this saturated market. Hardware revenues are expected to plummet in the next five years and, as a result, some vendors have already started to realign their sales focus from “hardware placed” to “pages captured,” from “printers” to “printing.”

Solutions and professional services have been welcomed as the Holy Grail of the office equipment market as they can be a huge differentiator in a hardware sale.

According to Clayton Christensen’s terminology, solutions can be defined as “the disrupting innovations” capable of changing the dynamics and evolution of value in the office equipment industry.

On the wave of Web 2.0, end-users are also increasingly changing the way they create, manage, and digest documents and information. Customers are sitting in the driving seat and they are inevitably looking for a tighter control over their document workflow. They require effective device utilization, reduced costs, and a single-source supplier for their equipment needs. They want to drive their entire document life-cycle and decide how to consume the originated contents and information.

As a consequence, solutions have been deemed strategic in addressing these customers’ requirements as they can help capture more pages, reduce Total Cost of Ownership, and enable a seamless and effective document management. On top of that, InfoTrends has been talking about solutions as a key driver in pulling hardware sales and professional services engagements. The popular chart below shows very clearly the European solutions crossroads, predicting that by the end of 2009, the roster of hardware only players would be cut down to 50% of the field.

The preceding is an excerpt from a report entitled Western European Network Document Solutions Forecast: 2007 - 2012. To learn more about this report, visit our online store or contact Robyn Wuori at 781-616-2100 ext. 103 or via e-mail at robyn_wuori@infotrends.com.

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European report, but the phrase remains the same - All copiers are the same, all of them, every single one.

Be Brave, Be Bold

TIPS FROM THE FAST GROWTH 100

I ran across this article, by By Jennifer Bosavage, ChannelWeb and it seemed pretty relevant -

She mentions three points, the second struck me -

2. Don't Overstrategize

"... some organizations' cultures lead managers to discuss goals and strategies ad nauseum. At some point, action needs to be taken. "We devote 10 percent of our time to strategizing and 90 percent to execution..."

Well. Ok.

Seems to me, that a bunch of Sales Managers and Managers in general should take a look at the way they manage.

And the Selling Professionals too - do we plan our week, all week?

Is it all planning and little execution?

Click to email me.

The Impact of IKON Being Acquired by Ricoh

2008-11-12 17:11:39 - On 27th August 2008 it was announced that IKON Office Solutions had agreed to be acquired by Ricoh,

which was then given clearance from the European Commission on 24­th October 2008. This deal was then made final on 31st October 2008 when shareholders agreed to the acquisition. As a result of this merger, IKON is now a wholly owned subsidiary of Ricoh.­ ­ ­ ­
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It has been said that Ricoh have had a long standing relationship with IKON. With the amount of area coverage that IKON already have, Ricoh will be able to expand their US distribution ne­tw­ork by a substantial amount. The European Commission, upon deciding that there were enough competitors for all the products concerned, were able to give clearance for the acquisition of IKON by Ricoh. They found that no competitors of Ricoh are dependent on IKON's distribution.

However, IKON is a substantial company, with around 24,000 employees in more than 400 locations throughout North America and Western Europe, so ­the acquisition of IKON by Ricoh is bound to have some effect o­n the industry.

Before the merger, IKON sold and leased a range of products from manufacturers such as Canon, Ricoh, Konica Minolta and HP. It seems that Canon could be the manufacturer that is hit the hardest, as, according to Reuters­ (uk.reuters.com/article/innovationNewsTechMediaTelco/idUKT3216620 ..)­ 60 percent of the products handled by IKON were Canon machines, where as only around 30 percent were Ricoh before the acquisition.

Ricoh have said that they will replace all Canon machines with their own printers, photocopiers and multifunctional devices within 3 to 4 years.

This acquisition may leave some IKON customers in a difficult situation, because, although Ricoh have said they will continue to service other manufacturers of machine, they will eventually be replacing all their machines with Ricoh devices. This means that any customers using Canon machines will either have to change suppliers or manufacturers if they require a new device. For some customers this could be a difficult decision to m­ake as they could be loyal to Canon and very ha­ppy with the machines they already use, but see changing their supplier as a daunting task, especially if they have a large number of devices.

Fortunately there are some Canon suppliers that are prepared to make the transition as easy and as hassle free as possible. Some Canon suppliers are already seeing the effects of the merger, with an increase in the amount of enquiries coming from current IKON customers, perhaps indicating that some customers who already have Canon equipment are willing to stay loyal to Canon, even if this means changing their supplier.

The acquisition of IKON by Ricoh (­http://www.marketwatch.com/news/story/Ricoh-Completes-Acquisition-IKON-Office/story.aspx?guid={E4612AE5-D69D-4EC5-B735-AFA902F9197B})­ is bound to have some effect on the photocopier industry as I­KON is such a large company, covering a substantial area of North America and Western Europe. What will be seen ­is the effect this merger will ultimately have on Canon.

Already it has had some ­positive effect on some Canon dealers, especially those, such as Falcon Copiers, that already have a large customer base and are an established company with many years experience specialising in Canon equipment, making the transition from IKON to a new supplier seem an easy choice to make. Jon Tribe from Falcon Document Management says "Many IKON customers with a mix of Canon and Ricoh equipment will see a transition period where Ricoh service base takes president over canon. This is where a Canon specialist dealer can save the day." It is suppliers like these that will not only give existing IKON customers the chance to keep using Canon equipment, but also help lessen the impact on Canon. ­