Copier and printer vendors are closely eyeing the market for network connected medium and high-speed digital printer copiers. How are vendors and resellers dividing their efforts between selling network printers andefficient in-house document production solutions? Tom Allen investigates the emerging mopier marketplace1998 saw the arrival of the "mop-ier" (now a Hewlett-Packard registered printer brand name) into the IT channel. The mopier marketplace is where we are now witnessing the convergence of the office automation and IT channels. But where exactly does the multiple original network digital printer/copier fit into either of these channels?
The mopier-type device prints at around 32 pages per minute and up, and is a worthy replacement for a copier. It is also designed to be connected to a network.
Two vendors have already recognised the need to establish separate sales and distribution channels for their mop-type machines. In November last year, Hewlett-Packard appointed Prion Technology as the exclusive distributor of its 32ppm Mopier 320. According to Prion's Michael Bosnar, the machine offers the channel a tremendous opportunity, both as a printer and copier, in two product markets which traditionally have not offered attractive margins for resellers.
Seventeen Hewlett-Packard Mopier 320 resellers have been appointed from both the IT and Office Austomation channels.
A solutions sell
"In the past, HP has had difficulty selling the cost of copying with regard to its printers," Bosnar said. "However, the Mopiers are more of a solutions sell which will see resellers using demo equipment and developing cost of copying sales strategies."
Around the same time, Dataproducts unveiled the latest in its range of Digital Document Servers (DDS) network printers, along with a program to recruit and train selected resellers with the ability to sell and support the new fast mop-type machines. Paul Press, general manager, Dataproducts Australia and NZ, said: "As well as the 24 page version of the DDS, we're currently shipping the 32 page per minute and the 50 and 62 page starts shipping at the end of February. That will give us four products in this category."
Press said that since the launch in November, he has been demonstrating the product, discussing terms and conditions with resellers and signing agreements.
"We currently have nine resellers trained and with demonstration equipment on the floor, our target number of outlets is 20 by the end of June," he said.
He added that the major criteria they are using is for resellers who have an outbound sales and service organisation. He reported that they now have resellers set up in Queensland, New South Wales, ACT, Victoria and South Australia.
While Canon, Fuji Xerox, Ricoh and Brother, among others, have released new products in the multi-function category, incorporating walk-up copying, scanning and faxing, it is HP and Dataproducts who have stolen the march on their competition by identifying the needs of the mopier segment and establishing dedicated reseller channels in Australia.
That companies like HP and Dataproducts are turning to a dedicated channel is possibly a reaction to the decision of Fuji Xerox to direct sell. Having shifted its focus from being "The Copier Company" to "The Document Company", Derek Balmer, general manager of Fuji Xerox's office document products division, said the company's strategy is simple: "We are rolling out hardware, software and services that will integrate, and network copiers, printers, faxes and scanners that will make the task of managing documents more efficient.
"Devices that are not well integrated into electronic document processes will not survive in the marketplace. The challenge is to provide an efficient bridge between the digital and paper worlds so both can be merged and managed together seamlessly."
Balmer added that over the next two to three years, Fuji Xerox will shift production towards a family of products that print, copy, fax and scan.
Press claimed that Dataproducts is also rolling out a complete strategy for its newly recruited channel. "With these products in the new DDS series, we will also be providing professional support and software services. Over the next six to nine months, we will be outlining our professional services program.
"If you sell a printer that is not only a mopier, but can also hole punch, staple, book-bind and such, in order to get the full functionality out of the device, you need software to compile the document before it is sent to the printer. We'll be providing that software as well."
As part of its channel sales strategy, Dataproducts is releasing two suites of software: business planning and document audit. The business-planning program is a tool it uses with reseller principals to establish what percentage of the sales representatives and sales calls should be dedicated to the Dataproducts range. This is further broken down into how many sales calls per week, even how many demonstrations, and will be the basis of sales forecasting and sales monitoring. "It is then a more complete partnership with the reseller," Press said. Docu Audit is a software sales tool that will enable its resellers to assess the real document requirements within an organisation. "By using Docu Audit, we're trying to provide our reseller partners with the information that makes it easy to analyse and sell the opportunity, and bring their sales force into the convergent world," he added.
Press said that this new channel is not necessarily IT savvy, so Dataproducts is providing CD-ROM-based training cour-ses on the basics of networking and connectivity in the IT environment. This will help them to better understand the IT requirements that these products address.
"Analog copiers are basically dead, and with everything digital, everyone is talking about connecting the products to the network, which means there is a whole new requirement for expertise in the sale."
Another of the issues for the mop market is how it deals with service and consumables. Press explained that the business machine specialists with outbound service organisations have historically dealt with their customers on a click charge basis, thereby capturing the service and supply of the after-market.
He said that a lot of the profit is derived from consumables and services, and if the reseller is not able to capture the after-sales service and consumables, this could seriously impact on them. "All of the consumables in the DDS range are unique to the product, and they will only be sold through the authorised resellers," Press added.
An early participant is Nationwide Digital Products, a Melbourne-based reseller for both the HP Mopier and Dataproducts DDS range. The company was established as Nationwide Business Machines in 1986. According to Robert Dalgleish, managing director, the company made a decision in 1997 to prepare for the arrival of "Intelligent Print" as the new development in the copying business. It had become evident, through the Business Technology Association in the US, that in order to retain viability and regain diminishing copy volume, Australian dealers would have to be familiar with digital technology and become involved in network printing solutions.
Big step forward
"As HP declared its intentions in 1998, we began selling the Mopier 240 into a copier marketplace. Success was limited though, due in part to the 240's lack of a copy module and higher running costs. We see the arrival of the HP Mopier 320 as a big step forward that only helps to expand our range of digital solutions."
Dalgleish is positioning his company to be able to provide the best options. "An independent company like ours can offer a hybrid solution, which is a mixture of copier and printer solutions, to achieve the best result from a point of view of running costs," he said.
Dalgleish described the great divide between printer vendors and copier vendors.
"In the past, printer or IT people have given virtually no regard to running costs, whereas the copier people have focused on cost per copy. This has been much less and it's up to the printer companies to get the consumable costs down if they are to make any inroads into the market. The copier companies quote copy costs of around one and a half cents, and this compares to two and a half cents on a printer. This is without taking capital acquisition or rental into account, purely the service and maintenance costs, and raises what seems to be a pivotal issue - the real cost.
"There seems to have been a lack of understanding [by printer vendors and resellers] about the copy cost which is the primary consideration of administration managers."
Another early HP Mopier reseller is Sydney-based network integrator Coefficiency. Stephen Jones, managing director, believes products like Hewlett-Packard's Mopier could have a big effect on the structure of the copier marketplace, which has seen companies retain high margins on the machines, while the attention is focused on so-called cost per copy.
Network and software features
"The cost per copy does not include the capital cost. Once the traditionally higher cost of printer consumables is overcome, the competition between copier and printer vendors may be fought on the network and software features and benefits."
According to Dalgleish: "All the higher volume copiers are sold on a meter charge, but there is an increasing percentage of sales being rolled into a total cost of ownership, which converts into a monthly cost rated on the volume that the customer decides they will do."
While this charge can be adjusted according to actual use, there is generally one known cost per month instead of the capital or rental cost plus the cost of service, plus the cost of toner. "The simplicity of the sale is becoming more important in the eyes of the customer," he said. The end cost to print is what needs to be established.
Dalgleish warned that a share of the copier market will not come easy. "HP, with selective applications, is not going to win market share with the Mopier just because it's HP. The copier companies aren't lying down - they're becoming more aggressive, and they have a range of faster copiers than the 32 page per minute Mopier.
"However, getting together with HP and Dataproducts gives us another perspective to attack the printer side of the copying business and maintain some independence to allow our clients to choose what suits their needs. This gives us an edge to compete with [direct sellers] Xerox and Canon," he added.
Dalgleish was keen on the software tools being touted by Dataproducts. "It sounds very impressive if you can feed the prospect's document printing information into a computer and produce an analysis of what it's costing across the board based on average costs of the various copier and printer products.
"Recognising some of the differences in selling strategies for mop products, Dalgleish highlighted dealing with and selling to the IT sector, which has meant gaining more knowledge about the network, and a two-pronged approach to the entire sales process. "The sale has become more complex and the sales cycle longer as a result," he said.
The biggest challenge, as Dalgleish sees it, will be positioning the mop device as a "printer-centric" rather than "copier-centric" solution, thereby avoiding the head-to-head comparison with copier vendor offerings.
But the advantages of being an early mopier reseller include having first bite at the mopier pie, earlier training of sales staff and the opportunity to establish an appropriate marketing campaign while the product is still fresh and being largely overlooked by its biggest competitors.
Coefficiency's Jones said that, having established a relationship with HP as an integrator, he was exposed to the Mopier opportunity about six months ago when the vendor was looking to establish a dedicated channel for the product. "We became aware of some of the issues last year when we were looking at replacing our own copier, and we had a few prop-osals from companies just before we decided to look at the Mopier.
"I saw the opportunity as suiting us because the emphasis is on service and consumables. "Our marketplace is in large accounts, and we believe large organisations are more likely to buy Mopiers, either to consolidate their printers, or replacing copiers with a network connected device.
Not a lot extra
"If we sell Mopiers as an HP Laserjet [to the IT manager] and the client is looking for something like an 8100, the high-end 32ppm engine, then it's not a lot extra to pay to put glass on it and have a copier. At that stage, it's in the IT manager's bag. This is one market for the machine, not necessarily the largest market. HP is saying it's not yet competing directly with Xerox, and there are lots of digital copiers being sold at this print speed.
"We have to sell these products to facilities managers. The bulk of them are going to be sold as copier replacements that plug onto the network. The copier companies have not effectively marketed them on networks because in most cases they don't work very well or they're very expensive or cumbersome."
HP market development manager for Mopier, Andreas Diantoro, said the integrated network printer, scanner and copier will compete head on with digital photocopiers. "There is going to be a mighty clash in the network printer/digital copier space. Copiers and printers are converging very quickly."
Hewlett-Packard Mopier 320
A4 simplex: 32 pages per minute (Text and Photo)A4 duplex: 24 pages per minute A3 duplex: 16 pages per minute Copy Quality:
600dpi HP FastRes 1200 with scanning optimised to engine resolution Automatic Document Feeder:
50 sheet single pass duplex input
Paper sizes from A6 to A3 plain, recycled and bond stock Hewlett-Packard Customer Information CentreTel 1800 339 862Dataproducts DDS 32Copying speedA4 simplex : 32 pages per minuteA4 duplex : 15.5 pages per minuteA3 simplex : 16 pages per minute (duplex : 7ppm)Paper handlingStandard 3 input trays and one output tray. Optional 2500 sheet high capacity feeder, envelope feeder duplex and finisherResolution600 x 600dpiDataproducts Tel (02) 9451 3533