Lexmark Courts Partners in SMB Space

Scott Dunsire, vice president of U.S. business channels at Lexmark, said the Lexington, Ky.-based company plans to run those programs by some solution providers in October before officially unveiling them.

"Over the past couple of weeks, we've done some hard work on evaluating the Profit Plus program," Dunsire said at the recent XChange 2003, a conference sponsored by CRN parent CMP Media and held in Orlando, Fla. "Even though we've seen movement in [the SMB space], I just want things to move a little faster."

The company is girding for a battle in the SMB space as competitors Xerox and Okidata signal their intentions to beef up efforts there as well, Dunsire said.

Xerox, for example, said it will begin shipping its new multifunction printers to the channel through general distribution this fall and will target those offerings at SMBs.

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"If anything, [Lexmark] competes with itself," said Lee Pearlmutter, CEO of Dataco DeRex, a Kansas City, Mo.-based solution provider. "We've run into a heck of a lot of competition from Dell selling their proprietary products [made by Lexmark]," he said. "They're undercutting the price horrendously in some accounts, especially where we have to go in and bid."

As competition among vendors begins to intensify in the multifunction product market, Dataco would like to increase its own sales of those devices, Pearlmutter said.

Dunsire said the changes Lexmark is making to its current channel lineup, which includes the Profit Plus incentive program and the Partner Source Web initiative, aren't major. Rather, the vendor is giving those programs a facelift, he said.

Lexmark has increased its investment in channel sales, said Christopher Froman, vice president of channel and alliance management at Lexmark. In the past year, the vendor has grown its channel sales to 95 percent of its overall business from 85 percent to 90 percent, he said.

Among technology companies, Lexmark has remained among the most formidable on Wall Street.

In the past 52 weeks, the company has seen its stock price jump to almost $78 per share from about $47 per share in August 2002. At the beginning of September, Lexmark's stock price was $67 per share, making the company one of the high-tech sector's better-performing investments this year.