The Future of The Imaging Industry Isn't Print

"Please State the Nature of The Medical Emergency"

About a year ago,  the owner of an office equipment dealership rang me up asking for advice.

His largest "managed print services" (toner) account was being threatened by an IT company offering a full range of IT services including supplies and service delivery on 'his' printers.

He was in a panic.

Like dozens before him, he wanted somebody to say it was going to be okay; that what he was doing today, "building long and deep relationships with his customers", providing "the best service at the lowest price", was enough to save the patient - his 20-year-old, $5 Million, family-owned business.

I told him to change.

I told him hope resided in a future with fewer technicians and reduced overhead.  I repeated the "change your business model" mantra, begged him to exit toner delivery and get into the IT side of the world.  I offered contact information at Collabrance; urged him to reach out to a little know company called PrinterLogic and talk to his customer about reducing costs by eliminating print servers.

He fought me.

Of course, I proposed taking a quick look at his operation, giving some basic recommendations, and making the necessary connections for him to explore - all for $2,500.00.  No warranty or money-back guarantee, but for the price of a trip to ITEX, he could have gained a fresh perspective and possibly made some profitable connections.

He didn't.

I have no idea if his business still feeds families or drifts on the waters of denial.

Here we are on the edge of 2016.  The copier industry insists on fooling itself into relevancy as small dealers are gobbled up and bigger ones sell out to investment groups.  The OEMs?  Splitsville.

Today, if you were to ask, "Greg...what the hell can I do now?  I've social media'd up my company, I'm first in google search, but MpS flopped, managed IT services are not working and the only people buying copiers are schools, churches, and the government!"

• You've tried digital signage
• You've looked at water service
• You're not sure about managed services
• Your managed print services program is not delivering 42% GP
• 3D Printing looks cute, but you can't seem to get your head around a profit model

Now what?

One word, kid - "TeleHealth"

I'll let you do the googlitizing.  The fastest-growing area for technology and monthly recurring revenue is the healthcare arena and has nothing to do with printers or copiers.  I'd think about assembling and supporting connected, healthcare devices.

Not heart monitors - think bigger.  Think about this:

It's connected, contains technology components, requires assembly, and clients might pay for 24/7 monitoring and service.  Relevant. Expanding. Service-based.

Curious?

greg@grwalters.com

Xerox Jettisoning Hardware 8 QTRs of Decline:The Death of the Copier

Like those forgotten print jobs, the WSJ reports Xerox will leave their hardware business in the exit tray.

Are you seeing double?  One business for hardware, one for services.  Didn't Xerox just buy their services division a few years ago?

Not only this, but Icahn will be given the seats on the board of the company holding Xerox's services business, the Journal reported.

Tell me again, how the copier is still relevant?

Two of the largest technology companies in the world have now split in two.

From the Xerox announcement:

"Today’s market realities require greater agility and flexibility, the ability to innovate and adapt technology to address clients’ fast-evolving needs, and a more focused and efficient approach to operations and capital allocation.

As a result, it has become increasingly clear that the Document Technology and BPO businesses serve distinct client needs, have different growth drivers, and require customized operating models and capital structures. Thus, the separation of the two businesses will enhance their competitive positions and create significant value creation opportunities, including:

Enhanced strategic and operational focus. Each company will leverage its areas of strength and differentiation to address distinct market trends and opportunities. The Document Technology company will invest selectively in growth areas while ensuring continued operational discipline and capturing transformative productivity. The BPO company will focus on leadership in attractive market segments to deliver differentiated solutions to its clients and drive profitable revenue growth.

Simplification of organizational structure and resources. Each company will be able to adapt faster to clients’ changing needs, address specific market dynamics, target innovation and investments in select growth areas and accelerate decision making processes.

Distinct and clear financial profiles. The separation will enable each company to leverage its distinct growth profile and cash flow characteristics to optimize its capital structure and capital allocation strategy.

Compelling equity investment cases. As standalone companies, both companies will offer distinct and compelling investment propositions with differentiated financial profiles, growth drivers and business prospects."

Xerox also announced today a three year strategic transformation program targeting a cumulative $2.4 billion savings across all segments. The program is inclusive of ongoing activities and $600 million of incremental transformation initiatives. The company expects $700 million in annualized savings in 2016.

Take a look at the graph.

What could this mean? Icahn is satiated for a bit. The hardware business, once separated, may be easier to sell.

The Death of the Copier is, once again, substantiated.

Greg's " Deep Impacts" of 2015: HP Inc., Epson & Sunset of an Industry

"Greg, what were the biggest events or issues from last year?'

...a seasonal tradition.

This year, like last year, my initial reaction is, "Not much."  Which is soon followed by a wave of angst.

Most of the industry is insane.

OEMs keep releasing new models...which aren't all that new...like it's 1999.  Mobile print, document management, managed print services, automatic toner replenishment, managed services, and that fictitious managed network services are all the 'rage'.  Same as last year.

The consolidation continues as dealer after dealer is gobbled up by yesterday's rival or taken over by a capital investment firm.  Same as last year.

Clients aren't making copies and office print is on the decline.  Same as last year.

But there are golden nuggets in 2015; it wasn't simply the "Year of Tears".


1.  HP Split - Jettisoning print

This was no surprise.

I believe the world of print is heading into HP's wheelhouse - smaller devices, low operating costs, and direct supplies management.

Managed print services is not complicated.  When considering the influences, especially MPS automation, there's no need for a dealer. With today's technological advances in M2M, a national company can provide toner and service more efficiently than a 'local' reseller.

Someday, HP will deliver MpS anywhere in the country - without a local service network.  No need for a middleman.

The split is good for HP, not sure if it's good for the channel.

2.  The Sunset of An Industry

Xerox is in decline and Icahn, the Master of Disaster, buys more and more.  He's going to oust Ursula then slice and dice the Big X - another Kodak moment.

Meanwhile,  Lexmark the wallflower, hikes up her skirt, beguiling suitors with promises of MpS, revenue streams.  Multiples are good, but who's going to ask Lexi to dance?

HP's vision, as mentioned above,  is one of continuous transformation.  As business evolves, and technology removes the mundane components, like print, loud, hot, expensive machines designed to make marks on paper,  lose relevancy.

Consultants still place the OEMs in the upper right and tag big spenders as 'visionary' - whoever has the largest marketing budget or the nicest rooms in town, gets the best reviews and accolades.

Elsewhere, offshore concerns are marching to the 'print/copy is relevant' drum, churning out devices like crazy.

All points Terminus.  Like Childhood's End, one day, the memory of a once great paper-making machine will be remembered in song, not substance.

3. Epson: Shining Star, for you to See

Yes, I mocked the hell out of the 'bags of ink'.  But I poke fun at those who attract. You should consider Epson for the following reasons:

1. De-emphasize print - I know it hurts, but the print is not all that important, and the walk-up copy is dead(except for SLED) in the end, print is simple because fewer people print.  Why fight the trend?  You cannot win. Epson takes the complexity out of printing with this device  Just sell it.
2. "Close and forget" mentality - Imagine a device that requires one or two touches a year and one toner delivery every three years.  Quick, do the math.  Get a good chunk of margin up front, put the device on MpS, and forget about it.
3. No technicians, no toner delivery, just monthly billing - That's all.

About this time last year, my advice to independents was to jump on the reduce-print-servers bandwagon.  I told a bunch of dealers to get with a company called PrinterLogic - they didn't.  Today, Printerlogic is banging big deals all over the world.

You could have been part of that movement.  You could have been telling your clients how to reduce the cost of print by decreasing the number of print servers.  You could have elevated the MpS discussion above and beyond toner and service calls. You could have sold a bunch of stuff, too.

But you didn't and now you've lost a bunch of accounts.

Boo, f'n, who.  If you're not retiring or selling out, get on the ink-bag train. Call Epson, now, but it might be too late.

10 Years Out - 

What is the future of print, in the year 2025?  No business print.  Little in education, more in government, and healthcare will be paperless.

The Internet of things will be the Internet of everything - plants will talk with light bulbs which will communicate with coffee tables, the paint on your walls, and your inhaled nano's.  Everything, everyone will be connected, all the time.

Information will finally move at the speed of thought.

How about in the year 2020?  Just like the computer dealers of the 1980s, copier dealers will fade into history. Few copier dealers will remain.


Eric Church - Mr. Misunderstood

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