ARN: What sort of challenges and opportunities does Toshiba face in the next 12 months?
Ralph Stadus, general manager Toshiba's information systems division: There are some fabulous opportunities. The market continues to move from a desktop to a mobile environment and I think that will accelerate. New offerings like Windows XP will potentially accelerate that further. The price different between desktops and mobiles is shrinking all the time and the workforce is becoming more mobile. So there are great growth opportunities as there is more and more demand for mobile computing. Toshiba is very focused on that. We have some very strong product now and some great products coming over the next 12 months.
One of the things that really impressed me about Toshiba is its expenditure on research and development. Other vendors wait for the technology to commoditise and they may as well be selling toasters. I like working in the technology sector because it has interesting technology, and Toshiba are about bringing innovations to market and helping give customers a competitive edge with functionality.
How do you feel about working with channel partners again?
I am looking forward to it, to be honest. When I was at Digital - which originally did most of its business directly - I changed the PC business so that it was 100 per cent channel focused; And that was highly successful. I enjoyed working with the channel. It delivers a higher level of flexibility, service and support that other models, like the direct model, don't match. I think there is a real opportunity for the channel to further that and to differentiate itself. Some people are satisfied with getting support for a 1800 number and some aren't. Some people want to see a face they know and that they can rely on. The channel has traditionally done that, and done that very well.
How healthy is the channel?
It is in good shape. If you had asked me that a couple of years ago, I would have said there is quite a lot of change coming. You always have unfortunate situations like CHA, that's just the nature of small-to-medium businesses. Unfortunately, it doesn't matter whether it is the IT industry or whether it is One.Tel. There are businesses that are successful and do very well and there are businesses that have difficulty, often with capitalisation. It is just part of the turf. But I think the overall health of the channel is good, particularly if you take people like our five-star resellers. They have a good appreciation of where they make money on product, where they make money on services and how to maximise the value proposition to the customer so that they're profitable. That has probably been happening for five or six years, but that transition haspretty well happened. We are committed to enhancing that further, to enhance their service revenue generation capabilities.
Do you agree vendors cannot offer those service capabilities?
We can't actually deliver service but we can bring channel partners together, form common messages where appropriate and help market those common messages to the market at large. So we can create an environment in which they can charge appropriately for services.
The thing I am excited about in working with the channel is looking at how we service the marketplace in the longer term and have strong, healthy, profitable businesses as well. If you are going to service customers in the long term, you must have a profitable, viable business to do it. That is number one.
Do you think the flat PC market will affect notebook sales?
Notebooks are going to continue to take share from desktops. If you look at notebook penetration of the total market in Australia versus other developed countries, we're last. Some countries are way, way ahead of us. You would expect Japan to be ahead because there is a premium on real estate and space, but even in countries like Spain the proportion of notebooks is higher than here. We're a little later with telecommuniting.
I think the mass-media approach to telecommuniting is false. People working at home all the time, just dialling up without visiting the office is almost non-existent. But what is a very real possibility for a lot of people is offset working hours. I know in the last couple of years I have done a bit of that and I found it highly productive. I don't like working at home for an entire day, but doing a couple of hours at home can be very, very productive. I think once you are into that mode, a notebook becomes highly useful. Personally, I am a fairly recent convert to notebooks. I only started using notebooks as my one and only computing device after 14-inch displays came in. So I think some elements of pure technology will help accelerate the take-up.
The mobile market for Toshiba Australia is its bread and butter. Is that going to change?
We continue to assess other opportunities. It is not so well known in Australia, but Toshiba is a really large corporation - it turns over around $US85 billion. That makes it really viable; and it operates in many different areas with some really, really interesting technology. Some of these technologies we sell locally and some we don't, so we will continue to assess the more interesting products from the corporation to determine whether they have got a market in Australia. I am not a fan of doing a broad-based range. Within the Toshiba range there are certainly some very interesting products and if we work with the channel and they think they are saleable as well, then we've probably got some real winners.
Stadus on the channel
- I enjoyed working with the channel [at Digital]; it delivers a higher level of flexibility, service and support that other models don't match.
- There is real opportunity for [resellers] to differentiate themselves.
- I think [the channel] is in good shape.
- There are businesses that are successful and do very well and there are businesses that have difficulty, often with capitalisation.
- The overall health of the channel is good.
- They have a good appreciation of where they make money and how to maximise the value proposition to the customer.
- Notebooks are going to continue to take share from desktops.
- If we work with the channel [on some new product categories] then we probably have some real winners.
1978-'81 NCR - sales trainee and sales rep in retail systems division - engaged NCR's first ever channel partner.
1981-'82 The Logic Shop - Melbourne branch manager for what was one of Australia's first PC resellers (now defunct).
1983-'99 Digital Equipment Corporation - started as a PC sales specialist for DEC's PC business then channels account manager (handled Computer Power account) * spent six years as a "trouble-shooter" in sales management * in 1991, moved to Sydney to be general manager PC business (saw turnover grow from $3.5 to $180 million and distribution model shift from 100 per cent direct to 100 per cent channel) * in 1997, went US to be vice president marketing DEC North America and then DEC worldwide * took golden handshake soon after Compaq bought DEC.
1999-2001 Dell Computer * general manager, large accounts Australia/New Zealand * saw revenues double.