by Jake Fishman, gap Intelligence
I may be young compared to many of my peers in the office imaging analyst community, but my approach to the channels and technologies that I track can be pretty old school. Even as a growing share of my analysis shifts to services and solutions, I’m still drawn to the tangibility of speeds, feeds and CPCs. I remain fascinated by how they play into the sales strategies that have evolved from decades of reps hustling to close a deal or flip a box.
Although a growing portion of office imaging industry veterans have transitioned to developing their own companies’ services and solutions businesses, you can bet that many of these people feel the same way. Slinging printers, MFPs, and even MPS fleets still makes sense, and among basically all vendors, toner and clicks are still what’s keeping the lights on.
However, understanding that the challenges facing the office machine industry leave little room for nostalgia, vendors have increasingly turned away from highlighting traditional MFP features and selling points, shifting their messaging to the device platform and overall content ecosystem.
The trend toward platform-led strategies has gained momentum across the industry over the last few years with notable moves from Canon and Ricoh, among others, but the launch of Xerox’s ConnectKey platform last month provided the industry’s spec and click counters with our most decisive reality check to date.
Xerox positioned the new ConnectKey platform as an “Ecosystem for Simplicity,” integrating traditional hardware functionality with an operating system, controller platform, and solution suite that are collectively intended to address businesses’ evolving needs. In support of Xerox’s ecosystem messaging, the ConnectKey announcement and associated materials consistently focused on the key end user value points of convenience, productivity, security, cost control, and service enablement. And although many of the ConnectKey platform’s capabilities and targeted value points have been seen in Xerox’s previous MFP generations, with ConnectKey, it appears that Xerox was able to better integrate these solutions, reportedly resulting in a simplified user experience.
Xerox has traditionally been among the best in the industry at telling its services and solutions-led story, and deserves credit for keeping its focus on the user experience and driving business outcomes throughout the ConnectKey launch. However, some old school industry watchers likely noticed that that Xerox’s ConnectKey messaging skimmed over a once standard topic for such a launch – the actual MFP. Despite the fact that the ConnectKey launch brought the refresh of Xerox’s two most important monochrome and color A3 MFP families and will be followed by another new ConnectKey-based A3 MFP series in a few months, the new models’ names (never mind their features) barely made it on the press release.
This was no oversight.
In Xerox and some of its peers’ platform strategies, the MFP’s role is to connect its users to all necessary data sources and destinations as simply and securely as possible. Everything else (pages per minute, paper trays, finishing, etc.) are still important, but they are no longer differentiators, especially considering that their print-and-distribute-based value proposition is far from guaranteed in the mobile and digital future. Beyond solutions-enabling features such as the ADF and control panel, and feel-good energy consumption claims, it’s become quite clear that most hardware features no longer belong on an MFP press release.
And maybe that’s a good thing.
There is bound to be myopia in any industry as old as ours, but even the spec counter in me knows that the value placed on most “speeds and feeds” features within the industry is significantly inflated compared to what the rest of the world is looking for from an MFP. Sure, when marketing to the channel or selling to print & copy SMBs, vendors will still have to balance platform claims with more traditional features, but in many cases “speeds and feeds” are no longer competitive metrics, they are commoditizing metrics.
These platform guys get it. The value of an MFP is not in its components. The value of an MFP lies in how it enables workers and companies to access, share, and distribute information. If an MFP is too hard to operate for workers to rely on for anything beyond printing and copying, or if the device does not connect with the right solutions in the right way, the best hardware specs in the world will not demonstrate its value, especially not if we’re still charging $10,000+ per box.
For those of you that have read/watched Moneyball, the platform guys are evaluating VORP, while the spec guys are counting RBIs.
So now that even I am on board with the platform evolution, let’s figure out how to transition from pursuing a platform strategy and pushing a platform marketing message to actually being widely relied on as a platform among our end users.
The good news is, Xerox and the other platform vendors are far from alone in shifting their strategy from products to platforms, and there is no shortage of business cases in other content-driven industries to model this push after. In fact, the path to platform is so established, the following suggestions are modeled after a recent paper from MIT’s Sloan School of Management:
Target an Underserved User Group – At first glance, the MFP platform value proposition appears most relevant to large enterprises with sophisticated workflows already in place. I would still recommend that enterprise clients and prospects should be the first stop on any vendor’s platform rollout tour. However, dealers and their SMB clients are clearly underserved in terms of actually realizing their MFPs’ true capabilities and could prove to be a valuable group to target. It’s hard to argue that the vendor who can get its platform strategy to work through the channel, while also winning-over enterprise clients, will be extremely well positioned going forward.
Leverage Existing Platforms – This one is no mystery to MFP vendors, many of which are essentially building their new platforms through integrating and expanding existing platforms. However, it is certainly worth considering working to support other platforms as well, especially since the MFP is only the center of the enterprise ecosystem in OUR universe.
Differentiate Based on Users’ Emerging Needs – The fact that data sources and destinations have become moving targets may actually prove to be a good thing for some vendors after all. Considering that just about all of the major MFP players are moving towards a platform-based strategy, it’s safe to say that connecting to iOS devices or SharePoint systems will not be differentiators for any platform (connecting easily maybe…). However, the vendors that best identify and work to support users’ emerging needs will enjoy valuable platform differentiation in the future.
Simplify the Partner Business Model – This one is key. Although MIT was primarily referring to third party solution providers (app makers), the simplification of the partner business model will be vital to driving platform adoption in all directions including resellers, clients, and solutions providers, from both a financial and technical perspective.
Know Your Role and Keep Your Intentions Pure – These are not from Sloan, but still need to be said. Businesses are going to have content and information ecosystems in place well into the future, and although they may involve MFPs, they will not exist because of the MFP. Similarly, although the benefits of a successful platform may ensure ongoing demand for clicks and MFPs, vendors that seek to create a successful platform just to create clicks or sell more units will likely get neither.
There is no doubt that the printing world is changing rapidly, but the MFP industry’s shift in focus from the competitor to the client and increased emphasis on simplification, driving business outcomes, and ensuring connectivity with the relevant data sources and destinations can only have positive effects.
Although we may not be at the center of the universe, and because of that most vendors are unlikely to truly achieve platform status, those that execute their strategies correctly are at least positioned to remain a valuable part of the universe. Compared to some forecasts I see, remaining a valuable part of the universe sounds pretty good.
Jake Fishman is a senior market analyst for Gap Intelligence, a San Diego-based independent technology research firm with emphasis in helping product manufacturers and resellers understand current market trends in order to respond to customer demands as they occur. He can be reached at Jfishman@gapintelligence.com.