From point products to providing value, peripherals have become less, well, peripheral.
In just a few years, 23-inch desktop displays have expanded from the province of 3-D designers and engineers to near-ubiquity. The capacity of PC storage on the desktop is now so large it could make a data center blush. Printers have become more colorful and moved into the domain of the CIO from that of the property manager.
State Of Technology: Peripherals
Peripherals are now crucial to a total solution, integral to an end user's return on investment and vital to the growth plans of forward-thinking solution providers. In an industry economy that places profit margins and pricing under constant pressure, many VARs now look to storage, displays, projectors, desktop storage and printers as critical to growth and value-delivery.
In this year's CMP Channel State of Technology: Peripherals survey, almost half of the VARs polled said the greatest growth opportunity in the peripherals business is the ability to upsell customers. The box is out. The solution is in. And as more VARs look to peripherals as an opportunity to go deeper into a customer's enterprise and add value, there are some approaches that may work better than others.
One idea is to get more cozy with the manufacturers of peripheral products, said executives. After all, for VARs to be successful selling peripherals, it's incumbent on their vendor partners to provide support, said Ann Moser, senior vice president of Ricoh Co. Ltd.'s Printing Solutions Division, Pine Brook, N.J.
Vendors have to spend time with the VAR—"develop a relationship, meet their sales force, train their sales force. Do whatever [the VAR] needs to get up to speed," she said.
If the vendor isn't doing that, it might be time to look for another vendor that will.
"In the end, it's all about partnership," Moser said. "We can't expect people to start selling Ricoh if they don't understand our programs. They need to look for manufacturers who are going to help them with personnel, programs that will bring them profits and are easy to follow, easy to get reimbursed for. If [a VAR] doesn't want to do service, does the manufacturer have good service, a help desk?"
Jessica Ottesen, a national account manager at US techdisplay, a Gambrills, Md.-based solution provider that specializes in digital signage, said her company has succeeded by forging a close relationship with a vendor—Samsung Electronics Co. Ltd., San Jose, Calif.—and by knowing her customers. The key, to Ottesen, to building a solutions practice that includes peripheral devices is to start out by sticking close to home. Build on skills already honed.
"My advice to a VAR thinking about getting into the market would be to initially go after what you know," Ottesen said. "It's not something I think you should start, completely, from scratch. You should look at who your current customers are and where your offering may fit for those customers."
After all, she said, "You know that hometown market so well, it's really the perfect place to start."
Over time, it becomes more profitable to the VAR and more valuable to the customer to deliver printers and MFPs that attach to networks; LCDs that improve efficiency or deliver a revenue-generating service; power supplies that save on energy costs.
US techdisplay includes Samsung displays with media boxes and server software to deliver multimedia messages—advertising, business information. For example, the solution provider may install a digital signage display in a tavern that plays a multimedia advertisement offering a coupon for a drink special via an SMS text message. The customer gets a return on investment and the solution provider has closed a larger, more profitable deal, Ottesen said.
The example illustrates a key finding in the State of Technology: Peripherals survey—that advances in technology are helping driving sales of peripherals around a solution. This year's survey looked at five categories: displays, printers/MFPs, projectors, power protection and external storage.
Next: Lovin' Those LCDs
Lovin' Those LCDs
Bandwidth, video compression and remote management continue to drive early adoption of new signage solutions—all newer technology helping to drive sales of a time-tested peripheral: the monitor.
When it comes to displays, there are several ways solution providers can position themselves for success and growth, said Dan Schwab, vice president of marketing at D&H Distributing Inc., Harrisburg, Pa. "One nice thing about the display market that has created an opportunity for resellers is wide format," Schwab said. "People, from home usage, are now used to wide format. More and more people at work like the wide format as well."
Schwab also said that powerful desktop display configurations are becoming more widely integrated throughout the market. "A lot of our resellers have gone back to [providing] dual displays, just like you'd see in the financial markets," Schwab said.
Often, dual display technology has the benefit of being relatively easy to integrate out of the box. But there are potential flourishes that can be provided by software and integration, with opportunities to add value, upsell and spark that "wow" factor from clients that dual display has become a key opportunity.
Several solution providers said that attractive new LCDs, in and of themselves, have led to a solid refresh trend in the market. While it's not unheard of for PCs to produce a 7 percent margin, that number can double with a new display and increase even further in dual-monitor solutions. That's in addition to the opportunities with signage or kiosk rollouts.
In the survey, ViewSonic Corp., Walnut, Calif., was chosen as the most recommended pure-play display vendor by VARs, followed by Samsung, Sony Corp. of America, NEC Corp., LG Electronics Inc., Sharp Corp., Philips Electronics and Panasonic Corp.
Props To Printers And Scanners
From major advances in print technology and ink, to a renewed focus on return on investment through more efficient workflow, to managed services, the document imaging sector has been experiencing a renaissance.
In digital imaging, advances in energy efficiency, device consolidation and consulting in workflow efficiency have worked as a sales and profit driver throughout all segments—from small businesses to the enterprise. It's also become more competitive, with vendors including Xerox Corp. and Oki Data Americas Inc. rewriting their channel programs over the past year and providing incentives for VARs to sell workflow solutions instead of just hardware and ink.
Solution providers are also getting more green. When asked to select from a list of reasons for choosing a printer or scanner, a whopping 88 percent listed "energy savings/'green' technology." In previous years, the issue was barely noticed.
Efficiency, Energy Star ratings and environmental friendliness are components of the solution approach that VARs have increasingly embraced the past couple of years.
"Look at it in terms of the entire business model," said Jim Fall, vice president of strategic planning at Cannon IV, an Indianapolis-based solution provider. "For a reseller like us, who has taken a solutions approach, the hardware component may represent 30 to 40 percent of the value of the entire project. The software, supplies, services, the glue that brings all of the other technologies together, is the other 60 to 70 percent of the entire value of the transaction."
There is a significant opportunity in driving growth and profitability through device consolidation among printers and scanners, said Jackie Paralis, senior marketing manager of channel development and programs, at Oki Data, Mount Laurel, N.J.
Deploying MFPs can be critical to that end, but solution providers may need to move beyond any reticence to develop additional skills, she said. "It's not a risk, it's a fear factor because these guys know printers," Paralis said. "When it gets into scanning, archiving, integrating with DMS systems, they know nothing about this. And they're scared. [They'll ask], 'Will your sales guy come with us on a call?' I say, 'Yeah, that's no problem.' It's a little bit of hand-holding until they get over that hurdle."
Paralis said both vendor partner and solution provider need to understand that there is more of a time investment, in many cases, than a cash investment, in developing skills to upsell document imaging peripherals into the enterprise. "The two things they don't have are finances, and the time for their sales reps to get educated," Paralis said. "They're not going to take them out of the sales field to come in for all-day training. They want something that's flexible. It needs to be simple enough so they can understand it without someone standing in front of them without teaching it to them."
Oki Data is in the midst of a pilot program—Oki University—that provides partner training and education in some solutions. "Anything but color, we could train online," Paralis said.
In the printers/scanners category in the survey, Hewlett-Packard Co., Palo Alto, Calif., was chosen by respondents as the most recommended vendor. Lexmark International Inc., Lexington, Ky., has stumbled in its growth and earnings over the past year, but its commercial sales through the channel have remained steady, executives of that company have said. Along with Oki Data and Xerox, other vendors to receive marks include Brother International Inc., Canon Inc., Ricoh, Konica Minolta Holdings Inc., Epson Corp. and Dell Inc.
Next: Projectors Point The Way
Projectors Point The Way
Peripherals such as projectors have a tremendous presales and postsales opportunity that VARs should consider when building a solution practice around a peripherals category, said Wendy Linsky, vice president of peripherals, supplies and accessories product marketing at Tech Data Corp., a Clearwater, Fla., distributor.
"Look at projectors, for example. We do a great business in light bulbs that go with the projectors. It's obviously the biggest margin-builder in that opportunity," Linsky said. "All of the products we sell, in all peripheral products, we encourage one strategy: attach, attach, attach."
In the survey, solution providers listed ViewSonic as the projector vendor whose brand they would be most willing to recommend, followed closely by InFocus, equal numbers for Samsung and NEC Mitsubishi Electric, Toshiba America Inc., Epson, HP and BenQ America Corp. During the past year, the projector segment was marked by strong moves by vendors toward increasingly smaller and more mobile form factors—a trend that doesn't appear ready to slow down during the coming 12 months.
Hot Tickets: Power Supplies
The power supply space was among the most turbulent in 2007, as Schneider Electric acquired American Power Conversion Corp. and energy prices worldwide caused IT planners to rethink strategies for their energy and efficiency needs.
Power protection in small and midsize businesses has gone from afterthought to priority, given the number of catastrophes worldwide in recent years, as well as increases in energy costs and lower pricing segmentwide.
When it comes to selling power supplies, VARs should begin any discussion around the idea of business continuity, Linsky said. "Think about the total solution," she said. "That's been our mantra, and it continues to be our mantra."
In the survey, American Power Conversion, West Kingston, R.I., was listed as the vendor whose brand VARs would be most willing to recommend, by almost 3-to-1 over the next company on the list, Liebert Corp. Those companies were followed by Tripp Lite and Belkin International Inc. and MGE UPS Systems.
External Storage On The Rise
In the first year in the survey, desktop external storage from manufacturers including Seagate Technology LLC, Scotts Valley, Calif., and Western Digital Corp., Lake Forest, Calif., have shown themselves to be a factor. Almost two-thirds of solution providers say the products are easier to sell than a year ago, and almost three in four say the capacities now offered are a key factor in how they deliver the products.
Schwab noted that in desktop external storage, added capacities and pricing now allow VARs to begin a compelling conversation with customers and that, along those lines, network attached storage is gaining traction as a network peripheral.
Seagate was listed as the vendor whose brand they would most be willing to recommend, followed very closely by Western Digital, and then HP, Hitachi Ltd. and Lenovo. The year 2007 was the first, full calendar year that Seagate operated following its acquisition of Maxtor.
Find Your Peripheral Vision
There are opportunities for increased profits and revenue in all five categories, said solution providers. In fact, 77.5 percent of respondents said they are in the peripherals space because it "lets me address new technology or industry-vertical markets."
But it may take effort to find the right partner. Jay Tipton, vice president of Technology Specialists, a Fort Wayne, Ind.-based solution provider, said profitable partnerships with peripherals vendors aren't a given. "You've got to be choosy," Tipton said. "Especially in the printer market. You can't make money selling HP, period. But you can find companies that will allow you to make 15 points, 20 points." On the printer side, Tipton said, his company has found good partnership with companies including Xerox, Minolta, Brother and Samsung. And, unlike with LCDs or other devices, printers provide the ability to make additional postsales profit on consumables.
Tipton isn't alone in feeling price pressure. More than two out of three in the survey said they found DMRs or retailers to provide the largest competitive threat to their peripherals practice.
Debbie Enockson, president of SoftNet Services, a Plymouth, Wis.-based solution provider, said it's not so much which brands sell the best, or which vendor has the best program. "With LCDs, I'm also competing against the Best Buys and the Office Depots. Sometimes, customers will go around and buy a cheaper model. That's not what I recommended," she said.
The key, she said, is to keep the customer's needs at heart. "I sell my customers what they need, whether they are replacing something that's dying on them, and not doing the job, or whether I'm designing a whole, new solution," she said.
Next: A Selection Of Peripherals Vendors You Should KnowA SELECTION OF PERIPHERALS VENDORS YOU SHOULD KNOW
LOCATION: West Kingston, RI
PHONE: (800) 877-4080
KEY CHANNEL CONTACT: Marc Sherman, Director of Worldwide Channel Programs
COMPANY: Brother International
LOCATION: Brightwater, N.J.
PHONE: (908) 704-1700
KEY CHANNEL CONTACT: Eric Nordby, Director of Sales
LOCATION: Round Rock, Tex.
PHONE: (512) 338-4400
KEY CHANNEL CONTACT: Greg Davis, Vice President and General Manager of Dell's Americas Channel Group
LOCATION: Palo Alto, Calif.
PHONE: (650) 857-1501
KEY CHANNEL CONTACT: Adrian Jones, VP/General Manager, HP Solution Partners Organization
COMPANY: Hitachi Data Systems
LOCATION: Santa Clara, Calif.
PHONE: (408) 970-1000
KEY CHANNEL CONTACT: Karen Sigman, VP Global Channels
LOCATION: Wilsonville, Ore.
PHONE: (800) 294-6400
KEY CHANNEL CONTACT: Bob O'Malley
COMPANY: Konica Minolta Printing Solutions U.S.A.
LOCATION: Ramsey, N.J.
PHONE: (201) 316-8200
KEY CHANNEL CONTACT: Yoshinori Koide, Director of Channel Marketing
COMPANY: Lenovo International
LOCATION: Research Triangle Park, N.C.
PHONE: (868) 458-4465
KEY CHANNEL CONTACT: Stephen Mungall, VP of Worldwide and Americas Channels
COMPANY: Lexmark International
LOCATION: Lexmark, Ky.
PHONE: (859) 232-2000
KEY CHANNEL CONTACT: Sharon Brindley, VP, US Business Channels
COMPANY: NEC Display Solutions of America
LOCATION: Itasca, Ill.
PHONE: (630) 467-3000
KEY CHANNEL CONTACT: Clark Brown, VP of North America Sales
COMPANY: Oki Data Americas
LOCATION: Mt. Laurel, N.J.
PHONE: (800) OKI-DATA; (800) 654-3282
KEY CHANNEL CONTACT: Greg Van Acker, VP of North America Sales
COMPANY: Panasonic Computer Solutions Co.
LOCATION: Secaucus, N.J.
PHONE: (201) 348-2000
KEY CHANNEL CONTACT: Steve Abend, Director of Sales
COMPANY: Ricoh Company Ltd.
LOCATION: West Caldwell, N.J.
PHONE: (973) 882-2000
KEY CHANNEL CONTACT: Ann Moser, Senior VP of Printing Solutions
COMPANY: Samsung Electronics America, IT Division
LOCATION: Ridgefield Park, N.J.
PHONE: (201) 229-4000
KEY CHANNEL CONTACT: Christoper Franey, VP of Sales and Marketing
COMPANY: Seagate Technology
LOCATION: Scotts Valley, Calif.
PHONE: (831) 438-6550
KEY CHANNEL CONTACT: John Teeple, Director of Americas Maketing
COMPANY: Sony Electronics
LOCATION: San Diego, Calif.
PHONE: (800) 467-7669
KEY CHANNEL CONTACT: Jim Dallas, General Manager B2B IT Sales
COMPANY: Toshiba America Information Systems
LOCATION: Irvine, Calif.
PHONE: (949) 583-3000
KEY CHANNEL CONTACT: Jerry Lumpkin, VP, Business Channel Sales
LOCATION: Walnut, Calif.
PHONE: (909) 444-8888
KEY CHANNEL CONTACT: Jeff Volpe, VP of Marketing, Americas
COMPANY: Western Digital
LOCATION: Lake Forest, Calif
PHONE: (949) 672-7000
KEY CHANNEL CONTACT: Matt Rudledge, Senior Director of Marketing
LOCATION: Stamford, Ct.
PHONE: (877) 362-6567
KEY CHANNEL CONTACT: James A. Firestone, President, Xerox North America