Once upon a time there was a multifunctional device (MFD) shared by 20 users in a split-level office on the outskirts of a metropolitan CBD somewhere in Australia.
Inspired by the Jetsons, the managing director had bought the device because it replaced a series of stand-alone devices and fitted neatly into the newly networked office structure. However, the fairy tale doesn't end there. Within a month, the queues for print-outs, faxes, copies and so forth rivalled those at the local doughnut shop. The upstairs staff complained about the extra exercise associated with transferring information, and when the MFD broke down everything came to a standstill.
The whole situation was worsened by the office "know-it-all" crowing about the specs of the latest printers/scanners/faxes and the like, which could have been bought instead of the by-now-much-maligned MFD.
Muttering the curse of all early adopters, the company's technology purchaser bowed his head and shuffled back to his local reseller for a series of stand-alone devices.
Overcoming the negative experiences of some of these early adopters of MFD technology is one of the challenges facing vendors and channel players alike.
A series of market factors have lead to the re-emergence of MFD offerings. Armed with the right sales approach and services strategies peripherals, resellers should be positioning themselves to take advantage of this promising market space.
A new approach
The key to a MFD sale, according to George Nawa, director of imaging vendor Brother International Australia, is knowing the customer's requirements.
"These days MFDs can be tailored to anyone's needs," Nawa says confidently. "The only things that are left to develop are improvements to the speed and colour technology, but all the major humps have been overcome."
According to Nawa, the price-points on MFDs are not at a stage where entry-level devices present significant value to the SME sector. And if product lines are anything to go by, Brother is certainlypositioning itself to capture a significant share of the MFD SME market place, with one sub-$900 MFD, and another at sub-$1500.
While freely admitting to his status as a MFD-nut, Graham Harman, CEO of office supplies and IT retailer Office National, explains how the MFD market has moved into the mainstream.
"We are finding more and more people are looking at buying a single device," Harman said. "There is still a role for large stand-alone devices. In the SME sector, however, businesses are looking for the most efficient way to transfer information, and when it comes down to it MFDs are just that."
Harman believes selling MFDs involves the type of skills associated with selling perpherals rather than PCs.
"We are looking at a very different type of salesperson," Harman said. "A lot of people focus on the PC and forget that peripherals are key to the functionality of the machine."
According to Harman, the frequently offhand nature with which computer sales staff refer to peripherals is costing them dearly. "They will spend all their time talking up the features of the computer, then wave towards the peripherals and say, and you'll need a printer with that'," he says.
Jeremy de Silva, marketing director for the IPL group at OKI Australia, has noticed the market focus shifting as MFDs became increasingly loaded with features.
"We have traditionally divided our copier and fax resellers from our channel partners that focused on printers, scanners and so on," de Silva explains. "As the MFDs become more complex, there is an increasing need for integration and technological skills in order to sell these devices."
As a result, OKI is investing in a reseller education campaign designed to assist resellers in both camps to make the cross-over required to tap into the MFD market.
"It is not an easy curve to take," de Silva says. "Resellers who have focused more on copying technology need to improve their IT skills and offer customers the support they need in order to make the sale."
However, it is not only complicated by a lack of technical skills, de Silva agrees with Harman's belief that many resellers need to be trained in how to close a multifunctional sale.
"They need be able to focus on total cost of ownership issues, and know the relative values and roles of the different types of office peripherals the MFDs are designed to replace," de Silva said.
Combating the cringe
Chris Herbert research director at analyst group Inform believes the MFD market is feeling the effects of a series of converging influences which should lead to significant growth in sales, especially in the SME market.
"At this stage we are seeing the tip of the iceberg. Increasing interest in the development of MFD technology reflects the convergence of technology generally," Herbert said. "It is inevitable that these types of devices will become more integrated."
However, in order to become all pervasive MFDs will have to overcome a stigma placed upon them in the early days of the technology's development.
Office National's Harman believes end users are finally waking up to the idea that MFD rollouts are most ideally suited to small work groups in SME environments.
"End users are finally realising how to position MFDs," Harman said. "Part of the sell is explaining how to fit MFDs into the office in a way that improves efficiency."
Herbert, on the other hand, believes there are still some conceptual hurdles which also need addressing.
"They were generally seen as jack of all trades, master of none' devices'," Herbert said. "In order to buy in to the technology, end users would often have to compromise on the quality of at least one of the features."
Nonetheless, Herbert believes all this has changed in recent years as high-quality scanning, printing and faxing technology becomes more accessible and easier to integrate into a single solution.
"We are no longer seeing MFDs where the scanner is a gimmicky attachment. MFDs are increasingly master of all the technologies they have on offer."
Not only has Herbert observed a change in the movement integration of the different technologies, he believes there has been a change in the approach of printing and imaging vendors. With printer sales hitting the skids, he believes imaging vendors are increasingly remarketing themselves as document management systems vendors.
"[MFD vendors] are wanting to change their image and appear more niche and specialist in what they do," Herbert says. "We are also seeing IT spending in the SME area increasing, and MFD solutions are perfectly suited to that market segment."
Herbert's observations ring true with OKI's de Silva, who explains how the approach to the technology has changed in recent years.
"We are looking at building more and more capability into the machines," de Silva said. "Our MFDs now consist of a mixture of software and hardware capabilities that offer a total document management solution."
MFD resellers and vendors are joining the ranks of fax software vendors in pointing out the continuing dependence of faxing technologies in the modern office.
"There is this idea that the fax is dead, but that is just not true. Not only are faxes still widely used for the transfer of information digitally, there is still a need for this information to appear in a high-quality print out."
De Silva believes MFD resellers need to focus on the flexibility offered by a multifunction device, and how this slots in with work practices in the office environment.
Harman has also had to contend with sales staff who cut their sales teeth on PC and the digital transfer of information.
"They are not helping themselves when their attitude is who uses faxes nowadays'. That kind of attitude is common among wholly IT-focused companies, but it is simply untrue," Harman says. "When we service machines, invariably it is the ax component that people miss the most. They can hold off on much of the printing and so forth but the fax is still central to the transfer of information."
Harman also believes resellers of MFDs need to tailor their support networks to the mission-critical nature of the products in order to reassure end users.
"You are selling them a product which takes on a significant part of their communications," Harman says. "Your support services have to reflect that."
Office National, for example, offers replacement models for all their MFDs that require servicing. Although Harman hastened to add the failure rate is extremely low, he believes end users need to be reassured that they will not be locked out of their mission-critical communications because of a machine error.
"On-site repairs and replacement devices are a standard part of the service we offer on MFDs," Harman said.
A colourful future
While much of the industry is tipping MFDs as being on the cusp of major growth, there is still room for advances in the technology, although much of this can now be described as cosmetic.
Michael Xie, marketing manager for peripherals distributor Galas, is convinced end users at the low end are looking for products which do significantly well on an overall cost-benefit analysis.
"Even at the low end, users are looking for features such as speed and colour. These features will make up the next phase of development in the MFD market," Xie said.
Similarly, OKI's de Silva is looking at speed as an important element in the next phase of product development.
"Most of the integration issues have been overcome. Now it is a matter of focusing on improving individual features," de Silva said.
Xie believes the vendors should be putting more energy into selling what he sees as mature technologies.
"The technology is good, but end users still don't perceive them as replacements for a range of devices," Xie said. "There is ample opportunities for further market penetration. We are seeing sales increase quite a bit, especially in the SME area, but the vendors need to put more energy into sales support."
Nonetheless Xie believes MFDs offer significant opportunities to smaller resellers because of the heavy service component, not to mention the benefits in terms of margins.
"Margins are just too low on cheap ink-jet printers for most resellers trying to compete with big retail chains, but the MFD markets are perfect for smaller resellers," Xie said. "End users will buy these sorts of products from people they feel they can trust."