June 23, 2015
There’s no question that resellers of printers, copiers and multifunction peripherals are under pressure to diversify. The reason is simple: Demand for their products and services is on the decline as cloud and mobility continue to chip away at the need to print images and documents.
The move toward the paperless office, fueled by the proliferation of smartphones and tablets, has reduced the need for printed pages. More and more, users turn to their mobile devices to view and share information, instead of relying on images and documents. With printed page counts on the decline, copier dealers need to find new sources of revenue if they have any hope of succeeding – or even surviving – in this changing market.
For them, the most advisable move is to diversify into managed services. Valued at just over 100 billion in 2014, the managed services market is on track to reach $293 billion in 2019, according to research firm MarketsandMarkets.
Managed services offer a natural path for copier dealers because their vast experience in delivering long-term services for a recurring fee can give them a powerful edge over traditional IT-born MSPs. Yet, business-model experience may not be enough, given the technical advances and varying nuances of IT services. Instead of building an MSP practice, then, some copier dealers and manufacturers have opted to buy or partner with an MSP to make it work. Examples include Staples, Konika Minolta and Ricoh.
While copier dealers have much to gain by adopting, or partnering their way into, a managed services model, MSPs can also benefit from such a partnership as they seek to land and expand. For both, it’s not just about revenue. It’s about relevance. It’s about making the right investments in technology, talent and process, and forging the right relationships.
Here are three reasons copier dealers are well positioned to seize the market opportunity around managed services and find new growth working with or as an MSP:
1. They have the right expertise. Copier dealers have mature, solid sales models with dedicated account reps who understand the value of long-term customer relationships. Their customers depend on them to keep office equipment running by providing regular maintenance, delivering toner and other supplies and troubleshooting devices when necessary. Although copier dealers don’t have as much experience with technology as their IT competitors, they know how to install and maintain multifunction devices and keep them connected to IT networks. And it when it comes to cash flow and billing, copier dealers have the upper hand because they’ve been using a recurring revenue model all along.
2. They know how to keep existing customers. Managed services are a perfect opportunity for copier dealers to extend their customer relationships. While customers may have diminishing needs for office equipment and supplies, they are surely facing new IT management challenges thanks to the proliferation of devices and applications. They need solid, cost-effective ways to manage IT, and that’s what MSPs can deliver. Customers also prefer to deal with a single provider, so they welcome companies that can handle both office equipment and their IT needs. And this, in turn, creates the conditions for copier dealers to reinvent themselves as MSPs and position themselves as trusted IT advisers.
3. They know how to win new business. In addition to expanding their foothold with existing customers, copier dealers-turned-MSPs have what it takes to win new business. They can leverage their well-trained sales departments to identify and recruit new customers. With the kind of growth predicted in the managed-services space for years to come, the prospects of winning new business couldn’t be better. And as they expand their customer bases, copier dealers can provide not only managed services to but also their legacy office equipment services, thereby giving customers the single point of contact they prefer. While paperless is coming, it’s not here yet, and some verticals will always need secure and dependable printing at scale.
Adding managed services helps copier dealers future-proof their businesses by fighting commoditization, buffering against economic fluctuations and decreasing their dependence on a shrinking market. Fortunately, because of their experience with long-term sales relationships and recurring revenue models, copier dealers are well positioned to take advantage of the vast managed services opportunity
Mike Cullen brings over 20 years of corporate sales experience to SolarWinds N-able and has assembled an equally experienced sales force. Prior to joining N-able, he was vice president of sales (Ottawa Branch) and interim president of the Québec region for IKON Office Solutions. He grew the Ottawa business to $24 million in just five years, resulting in the Ottawa office’s recognition as the branch office of the year in 2000. Cullen joined IKON in 1995 as a result of an acquisition of Fulline Office Products, an office equipment company he co-founded in 1988. Previously in his career, he held progressively senior sales management positions with Canon and Pitney Bowes.
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