Will H.P. Uber the Imaging Channel

by ray stasieczko September 14, 2016

Well, with recent events everyone finally got to see some of the future. The news of Samsung selling their Printer line to H.P. defiantly captured my imagination. As I read the comments and listen to the chatter I am reminded of how Status Quo thinking is so attached to one's emotions. The title of this post is what the Imaging Channel should fear most, this article will lead you to my titles definition. As you read this give your imagination power over your perceived reality. This will spark things you might not want to think about but probably should.

I have argued the point that it’s not about how many pages experts say are printed. The disruption coming quicker well it’s here. This disruption is based on how many manufacturers can survive the consolidation, how technology will reshape the printing device, allowing alternatives to their delivery, and the way they are serviced. Some manufacturers, are barely hanging on, rumors spread on their sale or not. Manufacturers, where print represents such a small part of their overall deliverable, will see more value in an exit strategy, than a growth strategy. More than likely their executives are eating lunch at the H.P. cafeteria listening to their Samsung friends explain how good the food taste. The industry has too many players, and the customer base simply does not care about print like they used to. The facts are that most organization spend less than 2% of their technology dollars on print. Ok, I am not talking about the mega church who pounds out the Sunday bulletin in a particular sales representative territory or Bill's print shop next to the Kroger. I am talking about the world of print inside the SMB market as an average, the market the Imaging Channel calls home.

I wrote an article once where I mentioned that Samsung really did not care about the BTA model. They just needed it at the time. They started a revolutionary disruption in the industry others will finish. Samsung is a manufacturer which goes directly to the consumer through VAR's. They never could understand the Imaging Channel and frankly I seriously doubt they wanted to. Samsung is a manufacturer which sells its goods by the train load. The model of selling five or ten machines to a particular dealer in the middle of nowhere, was just too mind-numbing for them to grasp. History will recognize Samsung as the manufacturer who started the thought process of building copier’s and printer’s which would eliminate much of technical hands-on service. Samsung understood the importance of pricing aftermarket supplies aggressively enough to keep out the third party vendors. Those of us who sold Samsung will recognize the power of that. When I was a Samsung reseller Samsung was the only product we never considered third party parts or supplies for. Samsung had great yields and aggressive pricing. If H.P. or any manufacturer adopts that strategy the third party parts and supply companies are more threaten than the resellers. Everyone should think about how Samsung actually benefited the market while they played in the Imaging Channel. They were the forefront of A4 and caused many to scramble their products lines to compete. Samsung may have failed in the eyes of some. Samsung is a corporation which kept emotion from business, they see a better more profitable role in the future of print. After all - the world reads and distributes more documents on their phone than from the printer, MFP, whatever it’s called today, or will be called tomorrow. Samsung visualizes the future and they are reacting in the manner more manufacturers will follow. Especially those where print is such a small part of their overall deliverables, or those smaller manufacturers who will never be able to compete as demand continues declining. Small companies thrive in a growing markets creating competition. However, when an industry is in decline the little guys sell or simply disappear. This is also the case regarding the dealer companies which make up the Imaging Channel. The good bad or ugly - H.P. is the multi-billion pound gorilla and could be the biggest last one standing. Everyone in the Imaging Channel should focus on business possibilities in a changing world. This can only happen when you keep the emotional baggage containing your product prejudices’, your spreadsheets prepared by some analyst describing the growth of print as a reason not to change, or having the attitude that H.P. can only survive if the Imaging Channel cooperates. Lockup these thoughts in that emotional baggage and leave it at the train station as you get on the train to the future.    

Ok, let’s talk about how the Industry gets UBERED. H.P. is the catalyst in this thinking. For decades actually, since the two fellas known as Hewlett and Packard decided to clean out an old garage and start a printer company. H.P.’s model was always closer to the end-user than any particular channel. This is not a debate it’s a fact. H.P. will disrupt the way end-users not only obtain products, they will create an environment which will disrupt the way a majority of print products are serviced as well.

OK, I hear those with deep emotions yelling this. “BOTH H.P. AND XEROX TRIED TO SELL SEGMENT ONE, TWO, THREE, AND FOUR - DIRECT TO END-USER AND IT WAS A FAILURE” (remember the H.P. Mopier, remember the Xerox full systems segment 1-3 sold at office depot). I would simply say it was the first try and the market, or the equipment wasn’t ready. But my how things have changed. That change started when manufacturers increased their footprint of direct operations. This forced them to make better products, with longer lasting consumable yields. Products which could be set up by guys or gals with my technical skills, which those who know me would attest are not very technical. After all the manufacturers had to be profitable selling print clicks at .0000001 or whatever it took to beat the competition which in some cases was their dealer partner. As manufacturers delivered and serviced more and more of their goods through their direct model, they realized the reason so many of the legacy dealers were using third party parts and supplies. When Manufactures had larger dealer distribution the parts and supplies business was extremely important creating large revenue and profit centers. When Manufactures had larger dealer distribution toner and replaceable parts with too high of yield cut into aftermarket sales revenue and the profit they generate. However today manufacturers must not only make equipment more reliable, they must also increase supply yields, parts yield and reduce the number of replaceable parts - eliminating as much onsite technical work as possible. Kind of like Samsung and H.P.

Remember when people bought their own toner and paid for service and parts when they needed them. Remember when Xerox had drums, along with toner all replaced by the end-user in all their machines through segment 5, remember when Xerox and all the other manufacturers had no click charges. Well, guess what! That is where the industry is heading back to. Here’s why that model worked in the beginning, and why it will carry the remaining players in the end. In the beginning, there was a small customer base who printed small volumes, and for the most part very little competition. Today we have declining unit placements this is – fact, and most defiantly have reduced print volumes again - fact. Neither one of those categories will grow. Growth will only come to those who take it from others until their no more to take.     

All these improvements to the products, the New H.P. shown in Boston has only seven replaceable parts. Products of the future some of which are here today will have lower than ever operating cost. These new products will lead end-users to the conclusion caring about or managing something when it’s 2% or less of their technology spend is a waste time. MPS is not a future - it’s a slogan. So the supplier of print equipment who will reap the rewards will be the one who can deliver to the consumer by the simplest approach. Utilizing VAR's or the thousands of resellers spread across the world, and delivering the most dependable device. So those who argue against H.P. being that company, look in your customer’s office and ask them how long they had their 4si or the 4050 sitting on Betty’s desk. As the market continues to constrict H.P. will clearly define what is needed by its customers. H.P. will bring to market what makes sense for the customer. They will do this without the emotional baggage of what makes sense to the current Imaging Channel. H.P. had 13,000 resellers at their Boston meeting when they talk Channel they are not talking about the 2,000 or fewer copier dealers. H.P. does not see a border in service providers the way the Imaging Channel does. When Dion Weisler talks about disruption he sees a different vision of who delivers and services the equipment. Some will most surely be from the Imaging Channel, although H.P. won't care.

 If it's H.P. for that matter any print manufacturer who delivers a service friendly device with high consumable yields the customers won't care who delivers or services it. History will prove what happens, one thing is for sure somethings will change, and betting things will not, or believing the current way can only be improved, instead of re-invented is a recipe for disaster.

 So, what’s the Uber connection? Go to the google machine as I affectionately call it, and type in Field Nation, or Work Market. These are just two examples of many companies like them. Then simply use your imagination. These two organizations and others like them probably don't even know yet, how they could disrupt the service deliverable of the Imaging Channel. Or is there an organization being created specifically to disrupt the service delivery of not only the imaging Channel those in the direct channel as well. The future will not be the same even if we insist on it. All of us reading this understand that customers or lack of them determine the fate of all things sold, manufactured, and serviced.

This article is intended to provoke thoughts, tapping imaginations, exploring things and concepts which are different. Driving discussion based on reality, not emotions. If the actors in the theater of the Imaging Channel can look past what is in front of them, and leave their emotional baggage in the past they can win.

I will close with my favorite quote. “Status Quo is the killer of all that will be invented”.

R.J. Stasieczko

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