Colour blind

The printing hardware sector is one of the last places to look if aiming for more than modest margin in IT business.

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By  Andrew Seymour Published  September 25, 2007

Let's face it, if you're aiming to make more than a modest margin in the IT business then the printing hardware sector is one of the last places you'd go looking. Resellers have practically been giving away printers for free in recent years, gambling on the prospect that their charitable actions will ostensibly lock them into a relationship where they can become the customer's primary provider of consumables and supplies.

This arrangement has partly transpired as a result of competitive forces, but also because it makes simple commercial sense. Consumables provide a sustainable and lucrative revenue stream that offers stronger financial advantages than a one-off hardware sale. As several printer sources are only too fond of saying, it's more profitable to be the company selling the petrol than the company selling the vehicles.

Yet the Middle East printer channel is at a stage where it must be thinking beyond conventional wisdom. Resellers might not thank for me saying it, but they need to be looking instead at the services that customers will require two or three years from now, or perhaps even further down the line.

I've spoken to a number of imaging and printing vendors in recent weeks who have set out very bold, and yet incredibly specific, visions of the attributes that a successful enterprise printer reseller will need to have in the future. Tellingly, when asked what proportion of their channel partners have already bought into their projections, or are showing a willingness to radically redefine their business, the answer is very few.

Clearly, both parties are coming up against a brick wall somewhere, although that doesn't mean the situation is irresolvable. A vendor's job is to convince partners where they should be investing and what skills they should be developing, but at the same time it has to be accompanied by the right calibre of training and resources - free of charge - for partners. Without that helping hand, resellers will be loath to change, however loud the vendor rhetoric.

I have no doubt that the pace at which the market is changing calls for a level of specialisation that may have been redundant before. Vendors are already registering demand for outsourced printing services, a tremendous opportunity for resellers to become the third party provider for a customer's entire printing infrastructure. Getting to such an advanced level commands a huge investment, both financially and culturally, if only because it requires resellers to make the sort of qualitative and quantitative assessments of things like running costs, warranty support and performance that simply don't exist in standard transactional sales.

As is becoming evident in other areas of the market, there is an increasing need for resellers to adopt a consultative approach and transform themselves into trusted advisors. Those who take time to understand the customer's business will naturally migrate from a pure fulfillment house to a major influencer in the printing purchasing decisions the clients make.

Printing is one of the most cost-intensive processes within any organisation and yet it still receives less attention than, say, security or enterprise applications. It is up to the channel to change that mindset by way of advice and authoritative guidance.

The market is at a point in its development where customer behaviour is changing rapidly. Only a few months ago, HP unveiled its ‘Print 2.0' strategy; a vision based on web content, customer printing habits and software applications rather than cartridge size or toner capacity. And as the regional boss of another printer vendor suggested recently, there will come a time in the not-too-distant future when customers won't actually own printers - or even PCs for matter - but instead purchase a facility from a solution provider entitling them to a certain service level and a fixed number of pages per month. Should this concept materialise, it could well spark resellers into working with multiple vendors to ensure they deliver the most appropriate solution to the customer.

Those who think the argument in the printing channel is about colour versus monochrome, or multifunctional versus single function, are already playing catch-up. The emphasis now is firmly on document management and printing infrastructure management. It is quite clear that a seismic change needs to happen at channel level - in addition to more creativity and support from the vendors - but if you look at the expertise commanded in other facets of the Middle East enterprise market it is only a matter of time before the printing sector follows suit. Start thinking about boarding the bandwagon now before somebody else beats you to it.

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