Toned for success

There's a common perception that selling printing hardware into the enterprise segment is the IT industry's version of a not-for-profit activity.

  • E-Mail
By  Andrew Seymour Published  October 10, 2007

Irrespective of whether it's multifunctional products, large format printers or single function devices, any reseller addressing the enterprise sector will admit that customers drive a hard bargain when it comes to price. In fact, the policy of almost giving the printer away for free and attempting to make the money back on consumables has become a way of life for the channel. After all, as printer industry veterans are fond of saying, it's more profitable to be the company selling the petrol than the company selling the cars.

But with margins on consumables also coming under pressure and rapid advancements being made in printing technology, this school of thought is in danger of becoming outdated. As the Middle East IT market matures, it is clear that the winners in the enterprise reseller space are going to be those with a business model that is more sophisticated than shipping a load of cheap boxes in the hope it will lead to a flow of cartridge and toner sales.

The channel will sell lower volumes of networked products than the current volume of standalone products, which will mean having to make more margin per box to survive.

To comprehend where the opportunities lie for Middle East resellers, the channel needs to understand the challenges that enterprises in the region are facing when it comes to their printing environments. With enterprise companies loosely defined as organisations with a network containing over 1,000 terminals, often distributed across several locations, the demands of serving this sector are rarely conventional.

"In the SMB market it is still just the workload you are looking at because you are not looking at too many complications as far as the software requirements are concerned, but when you are talking about the enterprise it is a completely different platform because there are more users, more shared networks and each network might have multiple printers," explained Varsha Katara, marketing manager at Epson Middle East.

In many enterprise organisations, expectations of what a printing infrastructure should deliver are rising dramatically. Customers aren't just demanding complete compatibility with their operating systems and ERP packages, but assurances that their printing hardware is adaptable to any future software additions they may be planning. Investing in a varied printer fleet, while still keeping the SKUs of consumables as minimal and simple as possible, remains at the forefront of their agenda, while security is also shaping purchasing behaviour.

"Enterprises are clearly concerned about the security and reliability of the hardware," said Ranjit Gurkar, general manager of the printing and solutions division at Brother Gulf (main picture). "And when it comes to security I even mean things like data encryption because it's common knowledge today that when you send a print command to a printer on a network it can, if required, be intercepted by a hacker."

Other printing concerns, such as return on investment, maintenance, consumables availability and even whether buying printed pages as a managed service is a feasible alternative to printer ownership, are all areas that resellers need to have answers for.

Amr Hassan, general manager of HP's Imaging and Printing Group (IPG) in the Middle East, says the enterprise sector is expanding in line with the 20% to 25% growth being seen in the broader regional market, creating a pressing need for the channel to move from transactional selling to value delivery where printing solutions are integrated within the overall IT infrastructure. "We are talking about the IT network and software capabilities, including how it integrates within the overall business structure," he explained. "This is where we are spending most of the time with the channel. We are training our partners to understand the business model of the end-users within the different vertical industries to find out which other HP IPG solutions would satisfy the needs of the enterprise customers."

The notion of adding value and developing services is a concept that all imaging vendors are now trying to instill in partners that for years have regarded printing as little more than a hardware sale. Gurkar at Brother insists resellers need to get to a position where they can comfortably perform qualitative and quantitative assessments of a customer's needs. "They need to be able to provide an optimal solution, sit down across the table and explain the benefits to the customer," he argued. "At the same time, they should be able to provide written acquisition and running costs, make a commitment to the end-user and offer a detailed warranty and post-warranty commitment," he said.

The sheer breadth of printing hardware available in the market has also created a need for the channel to be highly educated when it comes to articulating the different technology on offer. The rise of multifunctional products (MFPs) might be the major trend defining the printing market, but with many companies still inexperienced in procuring such products, the channel has a role to play in explaining the differences between true network scanning and doing it through a dedicated PC or why certain archiving software could benefit their business, for example.

"The role of the channel going forward will be to understand these needs. They will sell lower volumes of networked products than the current volume of standalone products, which will mean having to make more margin per box to survive," predicted John Ross, Middle East boss at Oki. "They will have to justify this margin through offering better service and support, demonstration units and the ability to fully understand the needs of the target organisations regarding throughput and workflow practices."

The message from vendors is that successful resellers in the long term will be those who are prepared to put in the leg work now, even if the immediate return on their investment might seem minimal. That means instead of just telling a customer that a product has a one-year warranty, resellers should be detailing response times and clarifying whether they provide standby equipment. And if they are serious about client retention then they need to consider providing performance reports to the customer - whether they want it or not - at least once every quarter.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code