Copier, Printer Solution Providers Join Forces

The convergence of copiers and printers is fast outpacing the business model to support it.

That's the conclusion reached independently by PrinTrax, a veteran player in the copier market, and Sigmanet, an established IT solution provider. Each organization realized it knew its own market well but was flying blind when it came to assimilating the new world created by the convergence of the copier business, printing and IT networks.

• THE COMPANIES: Printrax and Sigmanet • THE PARTNERSHIP: With the coming together of the copier and printer worlds, they couldn't go it alone--so copier player PrinTraz and solution provider Sigmanet forged a strategic alliance.

But with Hewlett-Packard acting as matchmaker, the two companies have pooled the experience gleaned from their respective businesses and formed a strategic alliance to capture the complete networked printing market, including supplies and service.

Daniel Ruymann, senior director of HP business development and marketing at Sigmanet, an Ontario, Calif.-based solution provider, explains that seasoned players such as Ikon, Ricoh and Xerox have ruled the copier world. "They have a very different sales motion than does the IT VAR," he said. "They typically sell on a multiyear lease with a cost-per-page that incorporates service, supplies and profits. Honestly, we tried to go that route, but at the end of the day we couldn't understand the financial models used by the copier industry."

A contract might yield some bewildering figure like 2.145 cents per page, Ruymann said. "We didn't know how they derived those numbers. It was a nightmare trying to understand where the cost models were coming from. We simply couldn't do it. ... It became evident that if we were to take the relationship to the next level and be at the forefront of this new convergence movement in the printer and copier world, we had to partner with someone who had that expertise from the get-go," he said.

Enter PrinTrax. Jon Hafey, PrinTrax co-founder and vice president of service and operations, explains that the copier business is a very relational type of sale and usually goes through a procurement or facilities manager. On the other hand, printers, because they are connected to IT networks, most often go through the IT department. "You have two fundamentally different types of people making decisions," he said. "The print world is operating on constrained margins and can't provide the service and relational type experience you get with copiers. And printer guys can't afford to provide all of the services that you need in the copier world."

Starting this year, PrinTrax and Sigmanet launched a joint venture to bridge the gap between these two business models. Armed with HP's lineup of MFPs, the two companies are mounting a coordinated assault on the new merged environment.

"Instead of treating the market as copiers or printers, we now treat it as the market share of potential pages within a customer," he said.

While PrinTrax brings to the table the copier, price-per-page business model, which includes supplies and service, Sigmanet adds the relationships to the IT departments and a broad customer list of SMB accounts.

Ruymann noted that the copier industry feels threatened because the new breed of MFPs is designed for IT networks and, therefore, it is trying to make its products more network-friendly.

"IT departments don't feel comfortable with these devices that were stand-alone for many years but only recently have become network friendly," he said. "But HP and their printer products have always been network capable and IT knows that if they connect an HP printer to the network, it won't crash it."

NEXT: Taking a consultative approach