Colour correction

A massive decline in shipments back in the first quarter gave members of the Middle East printer channel a firm indication of the uphill task facing them this year. Now, with the market glancing anxiously towards the final four months of the year for salvation, it is clear that the rules of engagement have changed dramatically.

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By  Andrew Seymour Published  September 15, 2009

"What's important to note is that customers have become more discerning, calculating the total cost of ownership in terms of printer set-up costs, running costs in terms of ink and toner consumption and productivity in terms of speed and energy consumption," said Canon's Verbrugghe.

His colleague Vishal Gohel, LFP product manager at Canon Middle East, reiterates that message, insisting that partners must elaborate on the cost-saving factors of the technology they provide. "Resellers need to capitalise on the solutions available and focus on their existing customers' needs as well as looking for new opportunities," he said. "This financial downturn is a perfect opportunity for resellers to visit their customers and re-evaluate their printing technologies with the view that cost savings up to 40% can be achieved by looking at how they can make changes within their existing environment."

Irrespective of the trends that shape the immediate direction of the printer channel, it seems almost certain that the days of volume and price dictating the market are over. This is reflected in the channel recruitment policies of the tier-one brands, which continue to show an inclination towards working with partners that offer a wide range of support services and consulting expertise.

"It's true that the emphasis on solutions and services has increased mainly due to customers now seeking a greater value from their purchases under the pressure of constrained or reduced IT budgets," agreed Bruce Dahlgren, worldwide VP of enterprise sales at printer giant HP.

"Printing alone does not bring competitive advantage for a company, but the value content of the pages produced does," continued Dahlgren. "So customers are looking for ways to integrate imaging and printing products in their business workflows through solutions. HP and its partners have a wide portfolio of solutions including cost control, security and access control, electronic forms, barcode or cheque printing, and document processing, as well as the services to easily integrate the offerings into the customer environment."

Xerox is equally adamant that the channel needs to get serious about solution selling. Smith insists the economic crisis is prompting firms to seek solutions that increase output and decrease costs.

"This is a growing reality in today's business community to ensure a competitive edge as margins get tighter by the day," he commented. "Resellers need to maintain a strong relationship with their customers, while keeping a watchful eye on both industry and consumer trends. This approach will ensure that there is a healthy business which can generate cash. Looking at recurring or annuity revenue streams will also establish a solid base of operations."

Not surprisingly, most of the top suppliers are putting greater emphasis on multifunctional products (MFPs), which offer improved space utilisation, ease of use, increased efficiencies and added functionality. Declining price points have further fuelled the appeal of MFPs, making it the major battleground for printing suppliers.

"Demand for MFPs is increasing year-on-year and it is taking away market share from single function inkjet printers as MFPs offer more functionally, rich features and competitive prices," said El-Dalu at Epson, adding that the decline in the inkjet market has been particularly pronounced among entry-level products.

Canon's Gohel observes the same trend, but he refuses to sound the death knell for single-function devices. He points to the fact that an MFP may be too expensive or large for a small business, rendering single-function printers as a more appropriate option.

"We are shifting focus over to MFPs due to the advanced capabilities of the products, but demand for single-function devices is still there and we will support and develop these products to ensure that they are at the forefront in terms of specifications," he said.

Dahlgren at HP suggests that the broader migration to MFPs is also being driven by a focus on document life-cycle management as customers look to get the most from their printing infrastructure.

"There is a growing awareness of the management costs associated with a document's life-cycle," he said. "From research conducted on behalf of HP, we found that for every US$1 spent on printing - hardware, supplies and service - another US$9 is spent on managing and maintaining the document throughout its lifetime. This is the major factor driving consolidation projects and the shift to MFPs with our customers."

Printer-focused resellers are undoubtedly going to have to work a lot harder for their money in the coming months and engage in the kind of solutions-based conversations with customers that they would never have envisaged just two or three years ago. If they don't then they could find that the economic downturn leaves a deeper mark on their business than they imagined.

Inking new partnerships

Printer vendors continue to re-engineer their routes to market in the Middle East as they look to gain share in a sector that is struggling to repeat the growth rates it has enjoyed in the recent boom years.

Colour printing specialist Oki, which recently unveiled its new range of MC860 MC560 and C800 multi-function printers, is one vendor that has moved to shore up its regional coverage by striking additional channel relationships. In the past few weeks it has signed deals with PSI in Lebanon and Al-Eqtessad Machines Division in KSA. Al-Eqtessad will provide sales and service for Oki printers, copiers, scanners and fax machines in the Kingdom, according to John Ross, general manager for the Middle East, India and North East Africa at Oki (pictured left with Al-Eqtessad boss Philippe Hussni).

"Al-Eqtessad MD has established a reputation as a professional and dynamic provider of printing solutions with a consistent and impressive track record of business growth. With its market knowledge and understanding of customers' needs, it represents the ideal partner for Oki," he said.

Printing powerhouse HP, which enjoys more than 70% market share in some printer categories, has also expanded its distribution coverage of late by bringing on board Egypt-based Metra in a host of countries including the UAE, Saudi Arabia and Iraq.

Xerox Emirates, the JV between Xerox and Al Otaiba Group, meanwhile, recently made its first foray into the channel by appointing Xeratec Document Solutions as a sales and services partner in the UAE. Xeratek now provides its range of printers, standalone copiers and networked multi-function devices.

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