IKON and Steel Partners - How IKON Will Be Sold

Who is this Steel Partners? And what does it mean to IKON or to anyone in the industry?

Here is a time line of press releases:

Friday, March 4, 2005 -Aggressive fund buys into Ikon Office Solutions stock

A New York investor ... has acquired 5.4 percent of the outstanding stock of Ikon Office Solutions Inc.

Steel Partners II LP, a hedge fund run by Warren Lichtenstein, bought 7.55 million shares of Ikon for about $86.8 million between Nov. 11 and Jan. 13. Steel disclosed the purchase in a form investors must file with the Securities and Exchange Commission when they acquire 5 percent or more of a company's stock.

Steel said in the filing it thinks Ikon's stock is undervalued. It also said it intended to talk to Ikon's management and board of directors about the company's business, operations and future plans...

Matthew Espe, Ikon's chairman and CEO, said he's glad Steel invested in the Malvern, Pa., company, which is the world's largest independent distributor of copiers and printers.

"We understand their philosophy and they understand our strategy and we think it seems to be aligned," he said.

...In 1998, a shareholders group headed by Lichtenstein won control of the board of Aydin Corp., a Horsham, Pa., maker of communications and telemetry systems. Lichtenstein was installed as chairman and the next year the company was sold to L-3 Communications Holdings Inc. for $75.7 million.

In 2002, another shareholders group led by Lichtenstein was elected to the majority of seats on the board of directors of SL Industries Inc., a Mount Laurel, N.J., maker of power and data quality control equipment. The board subsequently installed Lichtenstein ...

...Steel has been investing in bigger companies of late. The Business Week article said Lichtenstein now focuses on firms worth around $2 billion.

Ikon fits into that category. And the company has been making the kind of moves Steel seems to like.

Last year, it (IKON) sold its U.S. office equipment leasing business to General Electric Co. for $1.5 billion and used the proceeds to pay down debt. It also began taking steps to improve its sales effectiveness, gain share in markets where it's under-represented and target product segments with rapid demand growth.

Espe said the recent cost cuts weren't related to the investment by Steel...Instead, he said, they were part of his strategy to clean up Ikon's balance sheet, boost its growth and cut its costs. Espe thinks that strategy, and Ikon's success in implementing it, is what attracted Steel to Ikon.

"They see the upside," he said, "and I like having investors that see the same thing I see."

-July 07-
IKON Office Solutions: Steel Partners II Recommends Recap Via $850M Self Tender Offer

The Death of Xerography

One of my installs.  We removed many XRX's.  This was the "Plant Holder".

May, 2008.

One of Corey's recent posts talked about Xerox not selling copiers...

This post talked about how Xerox's Chief Innovation Officer(Sophie Vandebroek) was quoted in a video interview by Scobleizer as saying, "Xerox doesn't sell copiers anymore..." Interestingly enough, I had just posted on my blog regarding an editorial in L.A. Times by Gary Gardner, May 9, 2008, which stated, "...Consider the idea of businesses offering services instead of goods in today's economy. Xerox has shifted from selling copiers (goods) to leasing them (a service), which gives the company, as perpetual owner of the leased machines, a strong incentive to manufacture them to be refurbishable. This greatly extends the life of materials and reduces waste..."

Of course I chimed in with a comments on both the L.A. Times and Corey Smith's board.

What is most interesting is that Sophie responded with a comment of her own on Corey's blog. She said, "...Fact is, our customers rarely want standalone copiers anymore. Our technology has evolved significantly since those analog days. The vast majority of our office products are multifunction devices, they’re networked; they also print, fax, scan, flowport, link to applications via EIP, etc… Maybe my statement was too broad brushed — but the intent was to say that we’re really not a copier company anymore. Our customers demand much more and that’s what we give them..."

And from this article at CW by Gary Anthes, Gary asks Sophie, "What do you say to people who think of Xerox as just a photocopier company?

- Within the research and technology community at Xerox, we no longer do any work on photocopiers. What Xerox really focuses on now is how do customers deal with document-intensive processes, whether it's a lawyer dealing with all the paperwork required to win a legal case or a mortgage company dealing with all the paperwork. There are many document-intensive processes, and in most cases, they are pure digital documents."

Did you see that? Read it again, the RED parts.

No new R&D in photocopiers - Xerography is Dead.

Ok, so I guess Xerox really doesn't sell copiers anymore! Oh and don't forget the 1.4 billion dollar investment HP made in R&D for Edgeline...

Ms. Vandebroek's statements reflect the marketing position that Xerox isn't a photocopier company, it's much much more. 

And there is nothing wrong with that.

Is Anyone Really AFRAID of Edgeline?

From an opinion post on the Print4Pay Hotel Thursday, May 24, 2007 - Here are 15 points reflecting why Edgeline is not to be feared - remember, this is exactly one year ago, today. My responses in RED.


Who's Afraid of HP Edgeline CM8000 Series? ...


"1. No Offset Stacking: I can't believe they made this big of a machine with offset!
2. No 3 Hole Punch: Again WOW! - Big Deal.
3. Limited Card Stock: Only through the by-pass (I think this unit is rated for max 58lb only) - And? So?
4. 11x17: The trays are very slow on 11x17 and the by-pass seems faster! 11x17 is slower, but how often do you need 11x17 in business color environment?
5. Misfeeds: While it doesn't misfeed much at all, if a user leaves a misfeed in over the weekend it will dry out the print heads (ouch!) - Interesting, haven't heard that one.
6. Weight (725lbs): Can not use a stairclimber because there are no stress points! - not true
7. Black cpc: It's not the ink price that will get you but the cost of the maintenance kits! - LOL! service agreement covers that, but there are not any traditional "maintenance kits"
8. Availability for the next six months: slim enough that we are looking to pick up another line! - currently moot.
9. CPP for color: Business .05 and Professional .06 cents per page! - yup.
10. Strangely enough, the letter paper only runs thru the machine in landscape orientation from the LCT (can't even load portrait/speed). - this is true, see my post
11. Standard 1,500 sheet paper supply only! - LCT is 4k
12. VERY slow FCOT (First Copy Out Time) 12 seconds. - yup, 80-90% of documents are printed
13. Ink cartridges load from the bottom of the device (Oh my Back!) - LOL! give me a break
14. To protect the print heads from electrostatic discharge, be sure to touch the
horizontal metal bar to ground yourself before clearing jams that are near the print heads. The print heads are above the print-drum area. - Never heard of this.
15. HP recommends that you do not use this device for printing on sequential paper, such as pre-numbered checks or invoices." - OK, the Edgeline doesn't do MICR.


---
I guess I could further debate the above, but "facts are stubborn things" - it really does take 12 seconds for the first copy to come out. And there is not now, although I hear and friends of mine have actually seen, a three-hole punch option. I recommend pre-drilled paper. This reduces the environmental impact by eliminating "harmful" paper dust and litter(the little paper dots).

If we sweep all the technological advantages and perceived functional disadvantages aside what we have left is a product that is immediately familiar to IT directors. A product that fits quite well "within it's designed parameters".

I caution all my prospects right from the get-g0; "this machine is not designed for anyone who will make their living off of the quality of color output." If the prospect pulls out a "loop", I have failed in the qualification stage begin to pack my stuff and exit.

The point being, Edgeline fits in a specific business space. Not production. Not desktop. Business color - oh and the above points, although a year old today, smell of fear.

The Good, The Bad and The Ugly - for just 73 copiers **UPDATED***

The good people of the Mt. Vernon School District are the victims of a bad sales person and an ugly purchasing agent should go to prison. School Purchasing Chief Indicted For Bribe Receiving
Posted on Tuesday, 4 of March , 2008 at 9:11 pm

MOUNT VERNON—The former head of purchasing for the Mount Vernon City School District has been indicted for bribe receiving, official misconduct and larceny.

Rose, 49, of Pease St., was arraigned Tuesday on two counts of felony third degree bribe receiving, three counts of official misconduct, one count of receiving unlawful gratuities and one count of petit larceny, all misdemeanors.

The Westchester district attorney’s office says that between June 21 and July 13, 2005, Rose agreed to accept and accepted a bribe of $3,500 from a sales representative of Ricoh Americas Corporation for his assurance that Ricoh would receive a five year contract from the Mount Vernon School District for 73 digital copiers, support products and related services.

On Aug. 3, 2005, upon the defendant’s recommendation, the Mount Vernon City School District awarded the contract to Ricoh. The cost of the contract was in excess of $1 million.

Between June 1, 2006 and Sept. 1, 2006, Rose solicited and accepted a bribe in the form of a $10,000 donation to his church, Upon This Rock Ministries, from the owner of a Tri-State Supply Company, a custodial supply company, in exchange for future business which was subsequently awarded.

In a third incident, between March 1, 2006 and Sept. 1, 2006 Rose secured and used a school district gas card for personal use.

The Investigations Division of the New York State Comptroller’s office assisted in the investigation.

Bail was set at $25,000 cash or $100,000 bond. Rose’s next court date will be on March 25. He faces a maximum of seven years in state prison on the felony charge. 3-05-08 - The North County Gazette

This still happens - it's a shame.


UPDATE - ADDITIONAL STORY - IKON

Bad purchasing procedures and "...a trend where capital equipment is purchased or leased without any regard to the operating costs or ability to run the equipment (lack of adequate power capabilities). This is like the Dell computer purchase fiasco at Lake County where they bought Dell computers without including the cost of an operating system, and installing servers in schools that do not have adequate air conditioned rooms for them to run without burning out. School administrators seem to ignore consolidating total system costs into one purchase request for capital equipment. Capital is in one budget and expenses are in another, and total system cost (including a review of environment to ensure the equipment CAN be used as justified) is not combined so it is all researched and disclosed before any equipment or capital expenditure is authorized..."

Dead peoples forged signature, free flat screens, IKON, and no regard to operating costs - a very bad combination...

HP Servers and Joshi - - -

HP now sells more servers then ANYONE ELSE -

"SAN FRANCISCO -(Dow Jones)- Hewlett-Packard Co. (HPQ) has passed International Business Machines Corp. (IBM) to become the No. 1 server seller in the world based on revenue, market data provider Gartner reported Thursday."

From a WSJ blog:

" Joshi’s printing division brought in $7.6 billion for the quarter that ended April 30and now gets about 50% of its sales from its 2,400 biggest customers. He’s increasingly trying to associate H-P services with those machines–a timely theme in view of the company’s $13.25 deal to buy Electronic Data Systems."

While Joshi wouldn’t get into specifics of how his existing print services could be integrated with EDS (which has a long business relationship with H-P print rival Xerox), he said H-P salespeople are trying to show companies how they can save energy costs by getting all their printers onto a corporate network. And about 30% of the clients who have such networks want H-P to run them, he added. “EDS is going to be a big opportunity for us,” he said.

All Print Jobs To Go .PDF

Print system turns everything into PDF I saw this opinion by By James E. Gaskin - He describes a product from Ingenica that converts a print stream into a PDF's and the PDF "...becomes a print job that works on just about any Windows-supported printer. Still, have ink-jet printers on every desk, but can't convince your 5250 terminal emulation program to upgrade the driver and support those inkjets? UniPrint makes it happen..." This piece of information struck me because of a complicated implementation I recommended less than a year ago. When installing a "mini-fleet" of Canon devices( a few 5020i's, 105's, c518i 's, and some 5570's) we ran into some difficulty printing AS400 streams on the Canons. Yes, it can be done and was being done on one of the older Canons but we could not get consistent performance out of one of the newer units. 

 I think we could have used this product.(maybe) Anyway, what I find interesting is the ability to change any print stream or print job into a PDF. I do not know that much about the difference between printing a job out of Word vs printing to a .PDF format and printing the PDF but this sounds to me to be akin to a "universal print driver". More from James, "...Print streams, designed for locally attached printers, look pretty bloated compared with PDF print jobs. UniPrint says a one-page document may be 1MB of normal print-control language stream, but only about 100KB as a PDF file..." 

And now, all is clear to me. What was hanging my Canon up was the copier's inability to consistently interpret the print stream control characters; the copier would hang and wait for end-user intervention. Usually waiting for a paper tray selection. And something more - "...

Pricing will seem high for those companies that have never priced "grown-up" printing support: $3,999 for one Windows server for up to 60,000 printed pages per year. Those companies used to fighting ornery print streams and a lack of printer drivers for AS/400 systems will realize the price becomes an investment in better printing. And if the company has AS/400s or the like, "cheap" as a product description disappears.

It seems odd to charge for pages printed because computer people in small and midsize companies don't see that pricing model often. Yet those same companies pay for copiers on a sliding scale based on copy volume, so it won't be a total surprise..."

Now doesn't the above statement sum up one of the current issues in MPS?