Our March Virtual OEM Panel responds to the second of two digital edition bonus questions.
In our second Virtual Panel Series of 2018 in our March issue, the OEMs responded to our questions about the dealer of the future, the challenges facing dealers in preparing for the future, and the initiatives that have them most excited for 2018. Because of space limitations we were could not include all of our questions in the print edition. Here the OEMs respond to a question submitted by a member of our Dealer Advisory Board about their Managed IT strategies.
Participants include Doug Albregts, President & CEO, Sharp Electronics Corp. of America; Darren Cassidy, president, U.S. Channels Unit, Xerox; Jim Coriddi, vice president, Dealer Division, Ricoh Americas Corp.; Yukio Ikeda, president & CEO, Kyocera Document Solutions, Inc.; Toyotsugu Kuwamura, executive vice president and general manager, Business Imaging Solutions Group, Canon U.S.A., Inc.; David Laing, vice president and head of A3 and Services Future Product Marketing, HP, Inc.; Bill Melo, chief marketing executive, Toshiba America Business Solutions/Toshiba Global Commerce Solutions; Rick Taylor, President & CEO, Konica Minolta Business Solutions USA.
It seems as if each of you have taken different strategies or views on the future of the industry and have chosen different ways to go about things. Some of you are all in on Managed IT, others are using a third party for this offering, and some don’t have any initiatives in this space. Why have you chosen the path you have selected and why?
Albregts: I love this question. When you say, “some of you are all in on MIT,” what you’re saying is those OEMs choosing that path have decided to own the entire ecosystem from beginning to end. I hope our competitors continue that strategy because it’s flawed by its very nature. First of all, no one size MIT strategy fits all dealer and customer needs. Providing flexibility and options is the only way. Second, many large and small companies provide solutions that far exceed anything the document OEM’s can recreate, copy, acquire or piece together. Why fight that?
As a matter of fact, not having any initiatives in this space is better than trying to own the entire thing. At least you’re not wasting resources on a flawed strategy. Sharp has chosen the concept of facilitating Managed Services to our dealer partners. By facilitating, we mean providing options, whether Sharp branded solutions, that of our third-party partners or a combination of both. Our move to Tech Data was entirely predicated on the idea of having the ability to bundle integrated network solutions. Sharp dealers use one portal to order a fully integrated solution and can have it delivered within one to three days. They wrap a service contract around it, throw it under a lease, and away they go! We’ve chosen this path because this what our dealers were asking for. They told us having options, customization, flexibility, and the ability to meet their customers’ requirements is what they want. Sharp’s heritage was built on partnerships. That’s not going to change.
Cassidy: We don’t offer managed IT services, but we recognize the value they can bring, so we are actively pursuing IT-based dealers, and we provide offerings that can complement managed IT services. One is managed print services. As the MPS global leader, we see an opportunity for dealers to sell our MPS to their SMB customers, which is underserved market today.
We also complement managed IT services with our MFP apps. For dealers with sophisticated IT capabilities, they offer another development platform for adding value to their product and service offerings. And dealers with limited IT skills can reap similar benefits by using off-the-shelf apps available in our Apps Gallery.
Coriddi: More than anything the path Ricoh has used is a balance of the two. Have we acquired an IT platform and IT capabilities, yes we have—one of the more successful ones in the United States with Mindshift. But we have also continued to develop and invest heavily in our own capabilities. We think the best answer is that balance. Ricoh’s strategy has been more of a balance between the two and to be able to beat the competition you need unique ways to go to market and while some have chosen to go purely third party, it tends to be more of a “me too.” With Ricoh, the balance we have between the two, we feel we can do a lot of the basics, but we’re also more able to leverage a lot of the home grown more unique capabilities.
Ikeda: Our path for growth in emerging business has been very deliberate and bold. Although not in MIT, DataBank is a perfect example. We started with an alliance, tested our ability to work with them, shared learning, and we made a bold move to make them a part of our company. We take the same practical yet aggressive approach to our own internal development, as we continually innovate and expand business domains into other areas; we invest strategically in our people and our own resources to support them in the same way. Kyocera has been doing this since 1959, in every line of business it enters, and it’s proven to work. And it’s how we will approach other areas of business in the future.
Kuwamura: The goal is to make our clients lives easier – to help them automate workflow processes so that more time can be spent on creative initiatives. Therefore, the ultimate idea of the OEM is to design and manufacture solutions with open software architecture, and that are also capable of advanced diagnostics through artificial intelligence and other emerging technologies. It is imperative to strategically partner with third-party software and solutions providers in markets where the OEM is trying to gain a greater share of the competitive landscape. No one company is the expert in every field. In order to diversify and expand the customer base, strategic partnerships and alliances, as well as a strong strategic sales arm through dealerships, are crucial.
Laing: HP has always been an IT company and has been driving across our business for Managed IT. HP’s Device As A Service (DAAS) program is enabling many of our partners to sell managed PC services on a seat-based model using HP’s tools to efficiently manage multi-vendor PC fleets. HP has one R&D team building tools and systems for HP’s Managed IT (DAAS+MPS) offering, enabling seamless management of IT environments with a single toolset in the near future. HP believes that as customers look to outsource more, customers and partners will value the synergy of an integrated HP set of Managed IT devices and tools.
Melo: Any initiative that we undertake [and evaluate] whether it’s digital signage, managed print, 3D printing or Managed IT, the criteria is three-fold. The first is can we be successful? Is there a competitive advantage that we bring to the marketplace that Toshiba and its dealers are going to prosper doing this thing? If the answer to that is no and if we’re not positioned for success, it doesn’t matter how big the market is, how attractive the market is. We feel we need to be able to bring something to the table that will make this a sustainable business.
Second, if we have that position, are the economics of the business favorable? Can we make money at it? Just because a market is growing doesn’t mean it’s profitable to enter at the given time. For example, we passed on 3D printing, which wound up being a pretty good decision in hindsight because we didn’t see where we were bringing any value to the table, and frankly, even if we had somehow convinced ourselves that we could, the profitability wasn’t there for us for the long term.
You can only take on so many initiatives at a time. There are a lot of things that may be attractive and pass tests one and two, but then you have then you have to stack rack them. To be successful in something that is truly different from what you’re currently doing, particularly across such a far-flung enterprise that we have and any of our competitors has, it takes a lot of effort and you can’t just do two or three of things in a big way because the channels can’t just absorb that much change at one time. I’m a firm believer in be smart in what you’re doing, do it well and don’t try and do too much. I’d rather be good at one or two things then mediocre at four or five things.
Taylor: We compete with companies in different situations. If I couldn’t afford to build my own internal data centers to attack the cloud opportunity, then I would partner. When you can afford to invest, which we’re very fortunate to be able to do and take advantage of hugely increased margins when you run your own data center, that you can be much more competitive with, when you have that luxury of being able to invest, then you invest. If you can’t afford to invest, then your only choice is to partner. I’m not saying you should always own your own technology, but most of the people who say we are partnering don’t have the choice. We’ve been able to decide whether we should buy or build or whether we should partner and where the obvious margin benefits are getting in the business ourselves that’s really helped us improve our profitability and expand the business. Many people would like to take a more integrated leap into these technologies than they have, but they just can’t afford it.
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