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December 16, 2006
A Case of Channel Obsolescence?
Interesting article in the December 4, 2006 issue of CRN titled "Printing Market Red Hot, Distributors Say." In it, the authors talk about the rapidly emerging interest of the traditional VAR channel for higher-end multifunction printers/copiers.
The copier/MFP market was once the domain of the BTA (Business Technology Association) dealers. That dominance is quickly fading as the 140,000+ tech industry VARs muscle into the increasingly technology-driven printing market. It is a fascinating transition to watch, as the old "box pusher" mentality that dominated the copier business is replaced by a solutions-oriented focus.
Just as with auto dealers, book sellers and travel agents, technology is reshaping the structure, purpose and focus of a channel. In the tech sector, a typical "solution" is comprised of 10 or more brands of product (e.g. IBM hardware, HP printers, Oracle databases, Cicso network gear, Hubbell wiring devices, etc...) The VARs are the dominant brand to the customer who turns to the VAR for single point-of-contact support for the final integrated solution.
Perhaps more critically, the majority of successful tech VARs create profit from services, knowledge and skills...and use product margins as a secondary source of revenue. For existing copier/MFP dealers, survival means rapidly growing a professional services skill set and a solution-sales strategy. The window of opportunity will not remain open long.
In an essay in InformationWeek Online written back in July of 2000, consultant and author Michael Hammer predicted, "The notion of a distribution chain is becoming obsolete; in its place is arising the notion of a distribution community, a group of companies that collectively create value for the customer. There's room in this community for many companies besides the manufacturer, as long as they are ready to rethink their roles in customer value terms." How right he was. Those are words of wisdom for dealers in the traditional copier industry. Rethink your role and rebuild your value proposition. Or, face the ignominious fate that many travel agents, bookstore owners, and auto dealers have already been dealt.
Posted by jcioban at December 16, 2006 1:11 PM
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