Imaging Channel, Let's Become the Innovation Channel!!

Imaging Channel, Let's Become the Innovation Channel!!

by ray stasieczko July 11, 2017

I was getting ready to publish this article as the news broke Amazon was adding At-Home Tech support to their deliverable. This development is important to the future of commodity technologies and how they will be supported whether in the home or the office. As the print equipment becomes less and less expensive, and less and less service intensive. The buyers will be presented options. These new options were unimaginable a decade ago. Today defeat will come quicker to the unimaginative, and to those too “Suborned to Modify”

Imaging Channel I for one believe it’s time to change the Game and your Name.

Let’s Change the Name of the Imaging Channel to “The Innovation Channel” and let’s start innovating our customers and ourselves.

It is more important now than ever in the history of the Imaging Channel. For its members to seek out that which allows them a Future. It’s time to embrace the reality that the sweeping changes to our current circumstances have begun. The Imaging Channel must become “The Innovation Channel”. The independent dealers, and the manufactures throughout the world have built great businesses. Their customers can benefit from many things outside of print, and transitioning while there are still assets from print only makes sense.

The Innovation Channel must look in places the Imaging Channel refused, or ignored.

Today technologies involving things like: Artificial intelligence, who will be the first dealer to sell, deliver, and support IBM Watson for small business? Who will be the first dealer, or manufacturer to partner with Amazon, UberTech? (Well UberTech doesn’t exists yet) Who will be the first dealer or manufacturer to add home office support to their deliverable? Who will be the Manufacturer, or dealer that forms a partnership with Google fiber, or any ISP carrier? Can you imagine the possibilities that would bring the Imaging Channel excuse me “The Innovation Channel”? I can, from what I learned selling managed IT Services. As we all look ahead we must without hesitation use our imaginations. For all those who need help awaking their Imagination just give me a call.

Here are my thoughts on what is as I see it, and what could be as we enter the second half of 2017.

Last year in Boston HP, promised they would disrupt the 55 Billion dollar Industry, Today Konica Minolta gets “IT” and is reinventing their deliverable, Ricoh disrupted or as some say “destroyed themselves” Toshiba is running from their parent, Sharp is at the mercy of Foxconn, Kyocera is ringing the bell as they grow in market share, but the market isn’t growing. Canon after dating HP for years is wondering why HP married Samsung, Lexmark lost in court and now lives in China. Xerox introduced more models than people buy. So yes the Print Copy Channel is changing.

Ricoh their recent big news was to return control of their distribution back to dealers (a desperate decision, or a strategy). Is Ricoh just shredding legacy sales and service liabilities while they consider alternatives to both delivery and service? Would Ricoh ever by-pass the Imaging Channel if Innovation afforded them the opportunity? Of course they would.

Kyocera seems to be gaining momentum, of course, they are just replacing the Dealers customer base as dealers turn to them - while they unravel old manufacturer relationships and begin new ones. I don’t think I need to say this, but I will. “The industry of print and copy is not growing it is just shifting to those who can perform the functions of selling, delivering, and servicing at the lowest cost.”

Toshiba is struggling under the massive weight of bad decisions by their parents, declining print markets, and depending on the outcome of their parents’ financial crisis they could easily become a victim of market consolidation. Maybe Toshiba will be the first Manufacturer to sell to an organization outside the world of Print. After all if E-Commerce Software companies are buying Grocery chains, and movie studios, and Car manufactures are flying rocket ships isn’t anything possible. Yes it is for those who can imagine what can be from what is.

Sharp’s Printer/copier division accounts for less than two percent of Foxconn’s total revenue. Foxconn’s plans for Sharp Print/Copy could change quickly, as Foxconn’s priorities to its core businesses take more precedent than temporarily propping up a division with-in a subsidiary which represents a declining market space. Foxconn may see more value in an exit strategy from print rather than a growth strategy in the way Samsung did.      

Konica Ok I admit to everyone I like Konica here’s why. They are the only print manufacturer who can imagine themselves void of print, they understand that in declining markets you can buy your competitors, but only if you continue looking for substitutions to replace what will become irrelevant. Rick Taylor, Konica Minolta’s CEO is the one Leader with-in the print channels direct operations who can give a speech and never mention print. I believe Rick understands Konica’s continuous success will not be about delivering the past to the future, it will be a result of bringing the future to the present, and doing it while everyone else stays lost in the glory of what was. Just this week we all heard the news of Konica Minolta acquiring U.S. Based Ambry Genetics in a Billion dollar deal. I don’t know of any Print Clicks in Genetics. It will be interesting to watch as Konica continues looking where most of its competition is not.

‘When you stop looking for absolutes is when you discover the excitement of the unknown.”

HP’s CEO Dion Weisler last year in Boston was excited to talk about the HP vision. A vision which would shake up a decade's old sales-and-support model, which believe it or not many are still in denial of the vulnerability of this decades old business model. Some members of the Imaging Channel believe growth through acquisition will be what allows them to prosper in a dying industry, however, without a change to your deliverable you're only buying more of what’s dying. I call this “The Sears Kmart Syndrome”, two dying deliverables becoming one who eventually without reinvention just dies bigger. The distribution model of direct sales or via dealer sales is mature. The only change will be how distribution changes. These changes will be caused by both manufacturers and dealers exiting the industry through acquisitions or liquidations. A new approach to Printer/Copier Sales, their Delivery, and Support - most definitely will arrive, and in the minds of some imaginative people and organizations they already have arrived.  

 “Industries do not grow during their decline in consumer acceptance; they merely shift from one actor to another until the market has choked out all but a few temporary survivors.”   

As HP announced its intentions to acquire Samsung, the industry began immediately to discuss how HP would fail. How HP would never gain traction distributing through the dealers of imaging channel. You could hear the echoes of the phrase, “remember the Moper.” HP’s failed attempt at delivering an MFP during the early 90’s, and yes I did sell one. 

HP is a different company than it was before the split. Today HP is once again the printer company who intends to disrupt the marketplace entirely, and they are easily the best poised to accomplish exactly that. Of course if the Dealers and other manufactures disrupt their deliverable and transition while they still have the resources it won’t matter to their business if HP wins the race to the bottom. Some should be congratulated on beginning their transitions, so if your organization can visualize more than print sales and their services congratulations. For those who can't visualize this, you should immediately drive to an abandon Blockbuster stores parking lot, and reflect on the causes of a “Stubbornness to modify.”

Over the last decade plus Managed Print Services took its toll on HP’s aftermarket supply business. HP was being challenged, and this challenge was reflected in their financials. The razor-and-blade model stops providing benefits when the consumer uses someone else’s blades. Those who found success in managed print services understood it was never about the hardware; it was about controlling and capitalizing the service, and the supply annuity. The successes in MPS were a result of disrupting HP’s dominance. Competitive manufacturers and their dealers had the serviceability advantage over HP. HP wasn’t a service-support model it was a Razor-and-Blade model. If HP had the vision twenty years ago to lower their supply cost and built a service network, they would have more than likely stopped the momentum of their competitors print management programs, and there would have been no reason for the birth of the many toner remanufacturers. Today as the Managed Print Service deliverable continuous being commoditized along with the decline in print itself we are witnessing much consolidation in aftermarket companies as well.

The big question will HP learn from the past? And can they comprehend delivering their blades at a price the end-user can accept? Or will the Lexmark Apex relationship allow Lexmark the ability to provide OEM Supplies at remanufactured prices,(think about that for a second) This strategy is much easier to except when the end-users volumes are decreasing, rather than increasing like they were the 1980’s and 90’s. Whoever intends on being the biggest last one standing will have to change their thinking it’s not 1990 anymore. We are quickly approaching the reality that the race to be the top print equipment provider, can only be won by winning the race to the bottom price.     

So today we are fifteen years or so from the birth of managed print. The imaging channel is going through consolidation. Some manufacturers who distribute both directly and through dealers are bleeding profits in their attempt to continue without change.

 ‘When you stop looking for absolutes is when you discover the excitement of the unknown.”

HP, when discussing one's vision of the future, imagination is required. So let’s imagine how HP can accomplish Dion Weisler disruption. Imagine Xerox as a tool for HP’s distribution. Yes if HP bought a controlling interest in Xerox they would ultimately disrupt, and change the decades-old status quo of the Imaging Channel. Since both Xerox, and HP split from their services business units, this acquisition strategy is feasible it only takes fifty one percent to get control, and HP has the resources. Think of the synergies, here’s a couple: Both HP and Xerox live in the big annuity revenue world of enterprise print shops. Xerox with their Docutech, I- Gens, and HP with their Indigo. Both HP and Xerox will continue developing and perfecting this vertical market. Together they would be a force for disruption. Xerox would also gain access to the HP Computer and IT peripheral portfolio. This would allow Xerox a broader Managed IT Services Deliverable. The combined total revenue of the two organizations would most definitely make them the highest line on the revenue graphs the industry likes to monitor. Of course we don’t see too many Profit charts I guess everyone knows why.  

Global Imaging, HP needs distribution through the Imaging Channel Global Imaging footprint gives them what they seek. Of course, they would also be getting the thousands of agents and Xerox dealers across the world. So I guess before anyone counts out HP they should just use their imagination, and everyone in the Imaging Channel should always refrain from saying this “That will never happen” especially without exploring how it could happen. If HP took control of Xerox, HP would DISRUPT AND COMPLETELY CHANGE the Imaging Channel, forever!  and not in the way its unprepared members would appreciate.

So I agree with Dion Weisler, HP can completely disrupt a decade's old deliverable its Dealers, and the remaining Manufacturers, along with all those who support the legacy model. Leasing Companies, Software Companies, and Supply Companies. Many things would change, and everyone should be ready. Disruption is caused when imaginations and fortitude collide. Oh and HP isn't the only one that wants to disrupt the Imaging Channel. Who are the others? well use your imagination.

In closing: “Without the ability to understand how we could be defeated we are at the mercy of those who plan and execute our defeat.”

R.J. Stasieczko




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