Multifunction Product Space Gets More Crowded

CRN: Do you see the office products channel and the IT products channels converging? Krentzman: I&ve heard about convergence of these two channels since I came here eight years ago, and I&m still waiting for it to happen, although there&s more of it [now]. The IT manager is responsible for anything that hangs on a network. The copier guy is usually the guy who is responsible for facilities. He&s a different purchaser. When you come into the lobby of most companies, you have to make two calls. If you want to sell printers, you have to call the IT guy. If you want to sell copiers and MFPs [multifunction printers], you have to go and see the facilities manager. What&s happening now is that as more and more copiers and MFPs are being placed on the network, more IT managers are getting involved. So until it changes and how they purchase the product, we&re going to have two distinct channels.

CRN: A few weeks ago, Hewlett-Packard&s Chief Executive Mark Hurd said the company would take a tougher approach with its solution providers and that he expected them to be loyal—or else. He said HP would use an “iron fist” in working with channel partners. How does that affect, if at all, your thinking and does the transition at HP offer any opportunities for you?

Krentzman: We believe that solution providers are in business to also service the end user, not the manufacturer. Solution providers have to worry about their end-user customer. And the end-user customer in my mind expects the solution provider is going to recommend the best solution for that end user, or that solution provider is not necessary. So if HP feels that they&ve got the best technology in all the classes of product it is offering, then I think they are entitled to take the position they&ve taken.

The solution provider is obligated to serve its end user, not its vendor community. We have an obligation to provide the solution providers with the best-in-class color products, and that&s what their end users expect from them. And if there is someone out there that has got better technology, then that solution provider should be presenting that. But we&re pretty proud of what we&ve got to offer. So if the guys at HP think they have the best blades out there, the best networking systems out there, the best servers out there, the best PCs, and that&s the only thing the solution provider should be bringing to the end user, that&s their point of view. I&m not sure the solution provider community, however, wants to get managed that way. CRN: One thing we&ve also seen is—Lexmark has begun to do this—companies work with their partners on a lot of non-hardware consulting, such as document management. Where do you stand with that part of the business?

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Krentzman: The uniqueness of our [managed service] program is that it is available to the channel to sell. So we make our resources available to the reseller community and the solution provider community to go out and take it forward and come in with our guys and assure the solution provider we are not going to take that business away from them. We&ve got countless examples from AIG to Hallmark Cards, some really premier companies, where resellers have opened the door for us. We&ve got probably a hundred and some-odd million business in our pipeline as a result of the reseller community taking it forward.

CRN: How are things going for Oki Data at this point, in terms of the business, in terms of revenue, pricing? Krentzman: Our business has grown 16 percent last year and it&s up, probably going to be up close to 15 or 16 percent again this year. [That is] all driven by color sales, although our mono business is very strong right now. And our dot matrix business is from a market share perspective, even though the category is still soft. Business is good.