Sharp Launches Plan To Woo HP's Enterprise Printer VARs

HP's decision to combine its PC and printing groups couldn't have come at a better time for Ed McLaughlin, president of Sharp Document Solutions Company of America. After nearly two years of planning an assault on the high end of the multifunction printer (MFP) market, Sharp has made its move with a whole new line of MFPs, which McLaughlin says are far superior to HP's. Just as important though, Sharp is launching a partner program targeted at traditional VARs in a move that reflects the trend toward IT management's making purchase decisions on MFPs.

Sharp's new line of MFPs, the DM-3551 and DM4551, are network-based systems targeted at midsize and large enterprises. The systems connect to corporate networks and have built-in security using the standard LDAP protocol, allowing organizations to require users to authenticate themselves via their network logon before sending or accessing a document. The LDAP support also allows organizations to integrate the MFPs with e-mail systems. The new MFPs are a radical departure for Sharp in that they will be offered through VARs rather than the traditional copier dealer channel.

Tech Data will be the exclusive distributor of the new MFP line. Tech Data will help recruit and certify VARs--notably those that want an alternative to HP and Lexmark, according to Sharp executives. Those VARs that are equipped to service the systems can be certified to do so, or go through IBM Global Services (IGS), which Sharp has tapped to provide support. VARs will have the right to sell upgraded warranties and renewals, whether or not they provide the service or use IGS.

Sharp's Feb. 1 launch was planned well before HP announced that it was combining its PC and printing groups into a common organization last month. Sharp's plan--to provide margins in the 17 percent to 23 percent range--is to offer the new networked-based MFP systems, priced in the $11,000 to $14,000 range, only through VARs. In addition to promising that it won't sell the systems direct, McLaughlin said HP's timing is fortuitous in that he believes the combination of the two groups will only help his cause.

"I think it's the best thing that's ever happened to our business," McLaughlin said, during an interview at Sharp's Mahwah, N.J. offices. "They are going to be more focused on computer-related business and less focused on imaging. Their printer business will continue to hide some problems inside HP. Whenever you use anything as a cash cow, it's going to have some redirection of focus away from that industry. I think it's going to dilute its effort."

Vyomesh Joshi, executive vice president of HP's newly formed Imaging and Personal Systems Group, disagreed. In an interview last month with VARBusiness shortly following the announcement, Joshi said the two groups will be better-positioned to provide total solutions with a consolidated supply-chain and distribution system. "We will be able to utilize the assets we have from imaging and printing to the systems group to grow out new categories," Joshi said.

Doug Engberg, Sharp's vice president of distribution channels, acknowledged that his company is not the obvious choice among VARs to partner with, particularly when going after HP partners. "They say we've never thought of you," Engberg said. Nevertheless, Engberg is optimistic about Sharp's promise of significantly higher margins and commitment to selling exclusively through the channel.

This is not the first time Sharp has tried to woo IT resellers. Years ago, the company was unsuccessful in building a channel of VARs primarily because the program created resulted in conflict with the company's traditional network of copier dealers. Sharp officials said they have learned from past mistakes, and this line will be offered exclusively through IT resellers who have a better understanding of network integration.

"The first time, we quite frankly muddled it up by using our dealers as being a support mechanism for the VARs," McLaughlin said. "We clearly learned that was not a good outlet."

Available next month, the systems are designed so that customers can replace consumables. Print and copy speeds will range from 35 to 45 pages per minute with 2,000-sheet capacities. Among other features, the systems can scan two-sided documents in one pass and support hard drives up to 5 GB, allowing for storage of documents. The systems can be integrated with Computer Associates' Unicenter TNG 2.2 or later, and IBM Tivoli's NetView 6.02 or later.