December 2008 Office Technology

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CONTENTS Volume 15 No. 6 G

FEATURE ARTICLES 10

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Industry Forecast: 2009 Manufacturers look to the year ahead

SELLING SOLUTIONS Building Credibility Sell more in a down market by using the Web, etc.

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Compiled by Brent Hoskins Office Technology Magazine

By Corey Smith Dealer Marketing Systems

The new year is quickly approaching. It will arrive with a great deal of hope and, perhaps, some degree of trepidation, given the nature of the year it succeeds.

What will be among the greatest opportunities in 2009?

What should be the dealer’s primary area of focus? Office Technology magazine asked representatives of the industry’s manufacturers to share their expectations for 2009.

Eleven submitted industry forecasts for the year ahead.

The challenge that every business has during a down market is to prove their worth in a way that allows clients to see the value in what they have to offer. Build credibility and consumer confidence in your dealership and sales will increase.

COURTS & CAPITOLS ‘It’s the Economy, Stupid!’

How dealerships can survive the downturn

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Selecting a Manufacturer Assess your needs & align them with future goals

by Robert C. Goldberg BTA General Counsel

Clinton won the presidency by reminding himself that the economy was the most important issue to voters. Obama will enter office facing the weakest economy in decades. Here is a look at how independent dealerships can survive the downturn.

by Ed Carroll Strategy Development

The past two years have changed the demographics of the copier/ MFP/printer industry more so than any other time. It is safe to say the recent acquisitions of IKON, Danka and Global have impacted all manufacturers and many will be forced to move aggressively to fill holes in their distribution and not lose market share. If, through all of this, you have remained an independent dealer, it is a very good time for you to assess your overall business needs.

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PRINCIPAL ISSUES CAC Solutions Keeping networks secure with smart cards

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by Denine Phillips Tech-Write LLC

Network security is a seemingly unbeatable force that IT administrators have to wrestle with on a daily basis. Identifying and addressing MFP vulnerabilities, however, has been made easier thanks to ongoing efforts by manufacturers.

Fall Colors Conference BTA Southeast hosts district event Oct. 24-25

By Brent Hoskins Office Technology Magazine

Focused on providing office technology dealership personnel with a regional education and networking opportunity, the BTA Southeast District hosted its annual Fall Colors Conference Oct. 24-25. The event, which featured three education sessions, the products and services of seven exhibiting sponsors and the BTA Sales Management Workshop as a frontrunner, was held at the Waynesville Country Club Inn in Waynesville, N.C.

DEPARTMENTS Business Technology Association

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Executive Director’s Page

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BTA President’s Message

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Education Calendar BTA Highlights

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Manufacturers Offer Advice for New Year his issue of Office Technolog y features forecasts for 2009 from representatives of eleven manufacturers. Each was invited to share his or her expectations and advice for dealers as we enter the new year.

As I read through the forecasts, I see numerous bits of insight and guidance that are noteworthy. Of course, the “take aways” for everyone who reads these forecasts will be something different. Following is a sampling of some of the content of the forecasts, highlighting a few of the comments I found of particular interest.

Canon: “Customers continue to ask for greater levels of integration at the time of their MFP procurement, and dealers who can offer the combination of the latest software, professional services and technology innovation will be the ones who will shine in the coming year.”

Konica Minolta: “It has been Konica Minolta’s long-standing philosophy that the best growth strategy for dealers is through value-added services and not ‘individual box sales.’ The bottom line is that to prosper, dealers need to develop a holistic approach to the identifying and solving of customer business issues.”

Kyocera Mita: “Generating growth based solely on hardware sales revenue will prove challenging in 2009 due to the reduced capital spending by end-users, but selling more value to existing customers will not.”

Lexmark: “Studies indicate end-users have a broader acceptance of A4 MFPs into business over the traditional A3 device.”

Muratec: “2009 can be a year of growth for

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independent office equipment dealers if they invest in their brand name, diversify product and service offerings with a focus on A4 MFP solutions and managed print services, and continue to study emerging technologies and professional services opportunities.”

OKI Data: “Hardware consolidation will continue to increase with the proliferation of workgroup MFPs as customers seek to reduce their total number of individual office devices.”

Panasonic: “We will be challenged to persuade existing end-users who require product refreshes that delaying their reorder until 2010 or beyond is not the most cost-effective solution.”

Samsung: “Business migration to color and to MFPs may slow in 2009 as replacement cycles are extended and costs are more tightly managed.”

Sharp: “Dealers can help themselves by getting close to th e custom er, understanding their business ‘inside and out’ and demonstrating exactly where managers can save the most money via consolidation and workflow improvement.”

Toshiba: “Dealers are facing the most difficult economic crisis of our time. The industry is consolidating, customer financing is scarce and market instability poses challenges to dealerships of all sizes.”

Xerox: “We expect that within five years 23 percent of all pages printed on Xerox technology will be in color. Technology advances will continue to drive down costs of color devices making ... ‘color everywhere’ a reality.”

I encourage you to take the time to read through the entire Industry Forecast for 2009.

I am confident that the comments shared by these eleven manufacturers will be worthwhile as you, too, look to the year ahead. I — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Ed Carroll, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association Denine Phillips, Tech-Write LLC www.tech-write.biz Corey Smith, Dealer Marketing Systems www.dealermarketingsystems.com

®

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership & Marketing Manager valerie@bta.org Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org ©2008 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material.

However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE ®

Take Time to Learn About Your Industry am going to share with you the best piece of businessrelated advice I have ever received. Spend ten minutes each workday reading a business-related book, magazine, newspaper or Internet piece. Dedicate less than 1 percent of your day to give yourself the gift of knowledge. Spend one-sixth of an hour feeding your intellect with the nutritional information that will fuel your mind for the rest of the day.

This may seem like a pretty simple bit of advice, but learning, like exercise, can be extremely rewarding and is habit-forming.

Identifying useful information has become relatively easy in today’s digital world. Daily, weekly and monthly e-newsletters are common. There is a wide variety from which to choose and there are enough free sources to fill your daily 10 minutes. Also, I personally find it economically worthwhile to invest in a few fee-based e-newsletters.

All BTA members receive a free copy of Office Technology magazine mailed to them each month. They also receive the weekly BTA Hotline e-newsletter (sign up for your free subscription at www.bta.org). Each issue features the latest business news, Office Technology articles, class schedules, special discounts and other opportunities available to BTA members. It is a painless way to fulfill part of your daily 10 minutes of business-related reading.

Another great reading and learning opportunity is BTA’s Web-based The Business Owner newsletter, which is presented bimonthly on the BTA Web site. It contains concise, pertinent reference information and is one of the most respected publications in the imaging

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industry. It delivers valuable information that is easily applied to you and your business.

Each issue contains action alerts and ideas, how-to articles, advisories, case studies and reports that you can start using immediately or save for future reference.

The Business Owner newsletter is password protected, so if you are not sure of your BTA member login and password, simply give Valerie Briseno a call at (800) 247-2176 or e-mail valerie@bta.org. She will verify your membership and provide you with the needed information. You do not need to be an owner to access this informative newsletter. All member readers are welcome.

If you are not a regular reader of BTA’s flagship publication, Office Technology, keep in mind that most of your competitors are.

The mere fact you are reading this President’s Message is a good indication you are a regular reader of BTA’s monthly magazine.

Keep reading. The magazine increases in value each time you read an additional article or advertisement.

Speaking of advertisements, the value we, as member dealers, receive from BTA membership is far greater than our yearly dues. As a long-time BTA member, I have always tried to do business with those companies that help support BTA with their advertising dollars. When you contact them, I encourage you to let BTA advertisers and sponsors know that “I saw your ad in O f f ice Technolog y. It pi qu ed my interest. I would like to learn more.”

Depending on your reading speed, you have already fulfilled a couple of your daily 10 minutes of business-focused reading.

You still have time to read another article or two. Keep turning the pages. I — Ronelle Ingram

2008-2009 Board of Directors President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 ronellei@msn.com President-Elect Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 bjames@wjsenterprises.com Vice President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 rjanecek@burtronics.com BTA East Tom Ouellette Budget Document Technology 251 Goddard Road P.O. Box 2322 Lewiston, ME 04240 touellette@bdtme.com BTA Mid-America Mike Blake Corporate Business Systems LLC 6300 Monona Drive Madison, WI 53716 mblake@corpbussystems.com BTA Southeast Bob Smith Copiers Plus Inc. 408 Chicago Drive Fayetteville, NC 28306 bobsmith@copiers-plus.com BTA West Greg Valen Hawaii Business Equipment Inc. Toshiba Business Solutions - Hawaii 590-A Paiea St. Honolulu, HI 96819 gregory.valen@tabs.toshiba.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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MSE'S PATENTED TECHNOLOGIES PRODUCE SUPERIOR CARTRIDGES The MSE Engineering Team utilizes reverse engineering to make MSE products superior. For example, MSE patented laser cutting and ultrasonic welding technologies maintain the original cartridge specifications resulting in a reliable, leak-free product.

With 24 patents and patent pending technology solutions, MSE has revolutionized the way compatible cartridges are manufactured.

It is just one of the reasons why MSE cartridges are voted the highest quality in the industry - every year.

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Industry Forecast: 2009 Manufacturers look to the year ahead Compiled by: Brent Hoskins, Office Technology Magazine

he new year is quickly approaching. It will arrive with a great deal of hope and, perhaps, some degree of trepidation, given the nature of the year it succeeds. What will be among the greatest opportunities in 2009? What should be the dealer’s primary area of focus?

Office Technology magazine asked representatives of the industry’s manufacturers to share their expectations for 2009. Eleven submitted industry forecasts. Each was asked to address several questions. Among them: What do you believe will be the greatest opportunities for dealers in the new year? What are the best sales and marketing strategies for dealerships in pursuing these strategies? What are the characteristics of the office technology dealership that is best positioned for success in 2009? What can the dealer channel expect from your company in terms of product advancements and market emphasis in 2009?

Perhaps the insight shared in the responses to these and other questions will help you better position your dealership for success in the year ahead.

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Canon U.S.A. Inc. Tod Pike, Senior Vice President & General Manager, Imaging Systems Group The economy may prove to be the most challenging obstacle for dealers and manufacturers in 2009. Despite the economy, we still see tremendous opportunities for dealers leveraging their existing customer bases and building customer loyalty with value-added services and technology innovation. At 10 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8

Canon, we are excited and energized about the future and look forward to working closely with dealers to create a best-of-class distribution channel.

In 2008, we saw several trends or market dynamics take hold, and we expect them to continue and accelerate the market in the coming year.

They include: the continued conversion to and adoption of color from the small and medium business up to the enterprise and into the commercial print market; the transition to digital print as a cost-effective alternative to offset printing; and the need for integrated document solutions and services surrounding hardware offerings.

In addition, we see the digital production and largeformat printing market segments continue their growth in the coming year. Demand for our imagePRESS line of digital presses remains high and a number of imagePRESS programs and offerings that we provide have helped drive interest in digital production printing, including the imagePRESS Workflow Solutions Program, which offers a number of solutions focused on key workf lows in production printing, and the imagePRESS Essential Business Builder Program, which helps printers develop and grow their digital print business. More and more dealers are seeing the potential for digital production printing in their businesses and a growing number are participating in sales and technical training for these revolutionary digital presses.

Also, large-format printers represent a growing opportunity for dealers from a hardware and consumables standpoint. As aqueous-based large-format printers have decreased in price and cost-per-square-foot, as well as the technology becoming easier to operate, placements of largeformat printers are increasing in general office settings. As

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Konica Minolta Business Solutions companies look to reduce expenses, a Going into 2009, U.S.A. (Konica Minolta) is committed to low initial investment in large-format maintaining its investment in both techprinters will allow an organization to do we expect dealers nology and programs to help its dealer more in house, helping to decrease costs who drive new sales community be successful. Over the for outsourcing large prints. Canon through a more coming year, we will be refreshing or offers a full lineup of imagePROGRAF solutions-oriented replacing a majority of our products — models that address the large-format approach will be the including eight new color products — and needs of a number of market segments, most successful. introducing new initiatives that will allow such as CAD/CAM, photography and our independent dealers to customize our graphic arts.

Going into 2009, we expect dealers who drive new sales product lines to meet specific customer needs. We plan to conthrough a more solutions-oriented approach will be the most tinue with our plans to enhance our dealer programs as well. successful. Customers continue to ask for greater levels of The key is to provide the combination of programs, products integration at the time of their MFP procurement, and and services to support the growth of our dealers.

Looking into 2009, we see customers increasingly examdealers who can offer the combination of the latest software, professional services and technology innovation will be the ining how to get more from their investment in office equipment. Whether employing managed print services or ones who will shine in the coming year.

Dealers can expect Canon to continue to invest and integrating their MFP product into their ERP workflow, we advance its technology from where it is today. Each year, think that customers will be looking to our dealer partners Canon invests nearly 10 percent of revenue in the research to provide a more consultative approach to their needs.

This plays well into where we think dealers are moving. It and development of new technologies and innovations.

One of the keys to success for us and our dealers in 2009 has been Konica Minolta’s long-standing philosophy that the will be our new products that are a direct result of the best growth strategy for dealers is through value-added servcompany’s commitment to R&D. By staying ahead of the ices and not “individual box sales.” The bottom line is that to technology curve and offering advanced, high-value prod- prosper, dealers need to develop a holistic approach to the ucts and solutions, Canon will be able to keep dealers sup- identifying and solving of customer business issues. Konica ported with the quality solutions that help keep their Minolta is taking the necessary steps to ensure its dealer partners are armed with the necessary tools to promote businesses prosperous.

Canon is confident in its ability to work with dealers to growth within their organizations. With the rollout of our maintain its strong market position and their positions in bEST (bizhub extended solutions architecture) and Web their respective markets. We are sharply focused on providing browser capabilities, we provide the dealers a portal between the necessary support and technologies to help our dealers the MFP and the customer workflow environment. We are also introducing products that support building services and customers grow their businesses in 2009 and beyond. business models around access control, authentication, cost recovery and workflow customization. Supporting that is an Konica Minolta Business exciting new initiative known as Konica Minolta Business Solutions U.S.A. Intelligence Services (BIS), which will provide our dealer Kevin Kern, Vice President partners with a consultative process that analyzes data from of Marketing Our industry has witnessed dra- various sources in order to provide meaningful information matic changes over the past 18 months that will assist our dealers and customers in making better ranging from Global, Danka and IKON business decisions during these tough economic times.

One of the initial BIS components will be our Optimized being acquired to the economic challenges that currently affect our busi- Print Services (OPS) program, an innovative new managed ness environment. Despite this, we have seen time and time print services offering that will save customers time and money again that dealers are resilient and, more often than not, find while supporting the environment. The fully customized, oneopportunity in challenging times. This is why we see the dealer stop print services solution is an effective strategy designed to help our customers better monitor, measure and manage their channel as a vital segment of our overall market strategy.

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printer assets by: industry, or any market sector, is a prodiPredicting what 2009 Ful ly c ontrol lin g th eir entire gious task w h en you consider th e printing environment; dynamics affecting the global economy. holds for our industry, Conserving resources and ongoing Many manufacturers will be forced to or any market sector, is reconsider current pricing strategies as maintenance costs; a prodigious task when international currencies continue to Streamlining unknown costs assoyou consider the fluctuate. Yet in difficult economic times ciated with all printers, multifunctional dynamics affecting the it is in our best interest to remain aggresproducts (MFPs) and all-in-ones (AIOs) global economy. sive and execute our go-to-market throughout an organization. strategies that take into account the Beyond ser vices, we think there remains significant potential for dealers in production print. challenges our industry faces. We cannot sit back and wait Our experience is that many dealers have become involved in for more stable markets; rather, we have to set a clear focus this market, but not many have gotten past the traditional and implement effectively.

At Kyocera Mita, we are aware of the uncertainties and print-for-pay markets. We see significant room to capture increased CRD and commercial print business, which can many opportunities a new year presents. We are focused offer a profitable mix of volume. Our product line will con- with an optimistic mindset, fueled by the confidence that tinue to expand both in hardware and software to address our new products, our BTA channel relationships and our clear business vision — and the key market differentiators this growth opportunity.

At Konica Minolta, we work very closely with our dealer they create — will prove attractive and well timed for busipartners to tailor solutions to our customers’ needs and to nesses of all sizes and across all industries.

We know consolidation will continue in 2009, as competibecome an irreplaceable part of their everyday business practices. We have recently restructured our approach to tors try to shore up their dealer and direct channels. As a our dealer support programs to ensure more focus on pro- result, many dealers will continue to question the true partviding the specialized capabilities to help dealers build their nership value offered by some manufacturers. Therefore, sell-through capabilities in these expanding market seg- Kyocera Mita America’s primary objective will be to further ments. We have introduced a new major account approach strengthen our existing dealer relationships and provide the to assist with managing this large opportunity. We have also stability they need to be successful in 2009. For our valued developed Konica Minolta Premier Finance, a new leasing independent dealer channel, we will be introducing 15 new program that can help overcome some of the challenges in models next year, including our new generation of color MFPs, the new TASKalfa brand strategy and a vastly today’s tight credit markets.

In these challenging times, customers want more than strengthened business offering that will allow Kyocera Mita the latest information on speeds and feeds — they want to dealers to stabilize and expand their business — all suptrust their dealers to help them think smarter, save money ported by an unprecedented warranty on these products. To and be more productive. A dealer has the advantage of local ensure that we understand and value every aspect of the market knowledge and offers the speed and flexibility to manufacturer/dealer dynamic, Kyocera Mita has established quickly adapt in today’s ever-changing business climate. At a formal dealer council, led by Jim Oricchio of Coordinated Konica Minolta, we are committed to delivering technology, Business Systems. The Kyocera Mita Dealer Council will services and support designed to position our dealers for work with Kyocera Mita’s senior management in the years success with their customers. We ahead to encourage and maintain mutual business objecaim to be our dealers’ number-one tives and understanding, enabling all of us to succeed.

Beyond consolidation of channel vendors, we are seeing a valued partner and are dedicated to helping them achieve their business declining trend in under-featured monochrome sales revenue. These declines, however, are more than offset by objectives in 2009 and beyond. the increased demand for highly productive monochrome Kyocera Mita America Inc. units, color models with faster throughput and the growth Michael Pietrunti, President & CEO of color page output. We believe this trend will continue well Predicting what 2009 holds for our past 2009 and align perfectly with our new TASKalfa color 14 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8

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partners — particularly in such uncerand monochrome MFP series. TASKalfa At Kyocera Mita, we no tain economic times. We recognize that is one of the best-engineered and most our BTA dealers are unique and that our significant series we have launched in longer consider “going past and future achievements are a recent years — and a big reason I expect green” as a passing direct result of their efforts and our 2009 to be the year we will make signifibusiness trend, but a commitment to executing our business cant gains. whole new way of plans in parallel with each other.

We believe demand will continue to responsibly conducting I truly believe that 2009 holds great escalate for environmentally friendly one’s business. promise for Kyocera Mita and its dealers and cost-effective page printers that and will be a time for us to share the work across an enterprise to reduce user expenditures while enhancing productivity. For that growth and success that only the highest reliability and segment, we will be offering new printer solutions that lowest TCO market solutions can deliver year after year. provide yet another way for Kyocera Mita to build market share through its dealers in the coming year. We have been Lexmark International Inc. working hard to launch our next generation of color and Sharon Brindley, Vice President, U.S. black-and-white ECOSYS printers and we continue to Business Channels and SMB witness the tremendous financial advantages that a We are excited to be engaging managed print services sales strategy can bring to the indewith independent dealers through pendent dealer. groups such as the BTA Channel over As I have stated, generating growth based solely on hardthe past couple of years. With the ware sales revenue will prove challenging in 2009 due to Lexmark Business Solutions Dealer reduced capital spending by end-users, but selling more Program, we are seeing growth and value to existing customers will not. At Kyocera Mita, we are excitement from our dealers.

Looking forward, there are great market and product focused on the prominent evolution of software, along with the value-add workflow, security and imaging capabilities opportunities for dealers. Technology continues to improve that solutions can deliver when part of a networked environ- and provide new ways to streamline processes and improve ment. Our existing solutions like KYOcapture, KYOcapture daily workflow for customers. We see vertical markets being an Express and Equitrac are extremely successful, so to further ideal path-to-market. It is with customized vertical solutions increase end-user satisfaction, we have announced our that dealers are truly able to help solve customer problems. At plans to market a unique, customized application develop- Lexmark, we have many vertical solutions that dealers can cusment platform called HyPAS (Hybrid Platform for Advanced tomize based on their end-user-specific requirements. For Solutions). Delivering on the promise of the fully optimized example, in the healthcare space, a solution such as “Scan to MFP through its customizable application features will be Electronic Medical Records (EMR)” is an easy way to help an area of focus for us in 2009 and beyond. healthcare systems enhance their productivity. With this soluAt Kyocera Mita, we no longer consider “going green” as a tion, documents are quickly and efficiently routed to the passing business trend, but a whole new way of responsibly proper network locations for storage and retrieval. conducting one’s business. We will continue our efforts to be We see great product opportunities for dealers with our environmentally conscious in both our products, as demon- newest A4 multifunction printers (MFPs). These devices strated by our ECOSYS printers, and our operational prac- have one of the largest color touch screens in the industry, tices. We are quite proud of our second year of International award-winning ease of use and unique solutions that make Organization for Standardization (ISO) 14001:2004 certifica- for a better customer experience. tion, and our recognition as recipient of the 2008 Excellence Lexmark has engaged with thousands of customers to in Partnership award for Industry Green Contractor from drive significant product innovations. With these learnings, the U.S. Government General Services Administration and we are expanding our dealer training and service support. the Coalition for Government Procurement.

This improved training will help dealers support Lexmark’s In 2009, everything we do will seek to fulfill, and even largest product announcement. These new products have surpass, the needs and expectations of our BTA Channel industry-leading security features, improved reliability, 16 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8

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next-generation customization and ecoMuratec End-users are more friendly extra-high-yield cartridges America Inc. among many other advantages.

Jim D’Emidio, sophisticated than ever, Lexmark has been fulfilling managed President but with so much print services (MPS) for enterprise cusWith th e retechnology in their tomers for many years. With this expericent downturn worlds, they demand ence, Lexmark is well positioned to help in the economy, easy-to-use devices with dealers with MPS opportunities. tightening of the customized solutions ...

Color pages continue to grow. Lexcredit markets mark is bringing higher quality color and increased direct competition from laser products that are well suited for businesses of all sizes. manufacturers, it would be easy to forecast a grim outlook With all new segment offers in color, the independent dealers for 2009. Even with these factors in place, Muratec America will have more choices for cost-conscious customers.

Inc. believes that 2009 can be a year of growth for indeEven though there are great opportunities, we do not pendent office equipment dealers if they invest in their want to overlook the many challenges of the industry. Obvi- brand name, diversify product and service offerings with a ously, the state of the economy puts additional pressure on focus on A4 MFP solutions and managed print services, and an already tight market. With industry consolidation of the continue to study emerging technologies and professional national organizations, we know dealers are feeling com- service opportunities.

Last year we focused on the Xerox acquisition of Global pressed margins. However, it is the independent dealership that provides personalized customer service that will con- Imaging. In 2008, we saw both Danka (Konica Minolta) and tinue to prosper in these challenging times.

IKON (Ricoh) acquired, while Sharp, Toshiba and Canon Studies indicate end-users have a broader acceptance of increased their direct operations by acquiring independent A4 MFPs into businesses over the traditional A3 device. dealerships. We expect this acquisition trend to continue Lexmark MFPs are uniquely positioned to help dealers fulfill through the first half of 2009 as manufacturers look to replace lost distribution. The process of transforming a dealthis end-user request.

End-users are more sophisticated than ever, but with so ership into a direct operation takes time, which gives each much technology in their worlds, they demand easy-to-use affected dealership in the area an opportunity to solidify its devices with customized solutions that address business- customer base, aggressively pursue new business and critical issues. These devices should help them be more pro- promote its brand name. This is a statement that we make ductive. Lexmark offers a variety of customized solutions. each year and it has never been more important than now.

One example that is perfect for the sophisticated end-user is While it is critical that you focus on the A3 color and the “My MFP” configuration. This solution enables end- monochrome MFP solutions that drive high-volume usage, users to have a predetermined device profile on a thumb it is also important to understand, and position yourself to drive. Each user can plug in his (or her) thumb drive into the capture, the workgroup-based print traffic your reps are MFP for his customized settings to appear. This helps with a passing up every time they make the mad dash to the copy better overall end-user experience. room. It is common for reps to pass anywhere from two to Sustainability concerns are hitting all of our customers. ten standalone printers when walking to a centralized The need to provide new products that are more eco-friendly copier-based MFP. Chances are the workgroup users who is now a common requirement. Lexmark’s new products not are connected to those printers have the need to scan docuonly help save the environment through “eco-mode,” which ments to a PC, e-mail address or document management saves energy, and duplex printing to save paper, but also save system. By offering these customers a workgroup-based money with more efficient, productive devices. print/scan solution you can solve a business problem, Independent dealers: Now is the time to accelerate your increase efficiency, add to your MIF and increase service business forward! It is with personalized service that dealers and supply revenue. And you will still get the A3 business! can position themselves not just as trusted advisors, but soluIn 2008, Muratec launched its first color MFP solutions tion experts with tangible hardware and software to address that were built on high-speed A4 engines. The MFX-C4000 end-user needs.

Professional Edition (40 pages-per-minute) and the 18 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8

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MFX-C2500 Professional Edition (25 communication with fax gateways, We ... believe that the pages-per-minute) deliver high-speed increased device management, imcolor output to the workgroup and proved network security and personalindependent office enable a variety of innovative document ized user interfaces. equipment dealership will workflow features. In 2009, Muratec will In 2008 we launched ScanTag, which be the leading candidate continue to expand its A4 product offerenables users to enter metadata (docuto integrate workflow ings by launching a variety of monoment indexing information) on the solutions and document chrome and color solutions. touch screen of the Muratec MFP and cost efficiencies ...

We continue to believe that the indeautomatically transfer and import that pendent office equipment dealership data into a document management will be the leading candidate to integrate workflow solu- system. While this functionality has been available in higher tions and document cost efficiencies into the customer’s segment devices, Muratec was the first manufacturer to everyday business processes. This will require dealers to bring this functionality to the workgroup level to enable identify customer pain points such as document output users to process documents from the convenience of their cost, printer discovery and management, VoIP communi- workspace. We have integrated ScanTag with leading docucation, fax cost and routing, document management, regu- ment management providers such as DocuWare, SentryFile, latory compliance, network security, e-discovery and more. Square 9 Softworks and iDatix, and will be adding more as Muratec is helping to address these areas by introducing the year progresses. new applications on its MFPs designed to enable enhanced As 2009 progresses, we expect manufacturers to increase

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their acquisitions and authorizations to make up for lo st di stri bution , meaning dealers must continue to educate themselves on market trends and technologies, offer a complete lineup of A3 and A4 MFP solutions, embrace managed print services and electronic document management, and become more engrained in the everyday business processes of their customer in order to succeed.

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OKI Data Americas Inc. Mike Garofola, Senior Marketing Manager, Color Products Utilization The most significant issues likely to impact dealers in 2009 will be the rapidly changing state of the economy and increased manufacturerdirect competition in the BTA Channel. As economic conditions continue to heavily impact business decisions, there will be even greater customer deployment of cost-containment measures and postponement of capital expenditures. The impact on the dealer channel will result in a need to create new opportunities with recurring revenue streams through existing customers and prospects.

In 2009, as customers look to minimize equipment operating expenses, dealers can capture ownership of these devices by demonstrating significant cost savings derived from actively managing the document printer fleet. Since customers will only spend money in order to reduce costs, it is critical for dealers to have the means to perform comprehensive and objective assessments of the customer’s environment to identify areas in need of improvement.

Assessment tools will increasingly be used as differentiators to attract new customers and help existing customers improve their overall productivity and gain greater operational efficiencies.

One such solution, RapidScan from OKI Printing Solutions, enables dealers to bridge the gap between hardware and consultative selling by providing a turnkey assessment solution that encompasses data capture, in-depth analysis and presentation of a detailed recommendations strategy.

Offered at no cost, OKI’s RapidScan Assessment can help dealers provide their customers with alternative solutions for realizing significant savings up to 55 percent.

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Dealers are seeing increased competition from manufacturers who are augmenting their direct selling efforts through the acquisition of independent dealerships to expand their reach in the channel. OKI Printing Solutions, unlike many vendors today, remains committed to the BTA Channel and does not sell direct. Its sales strategy is one of partnership and collaboration that drives revenue and profitability for each dealer.

Hardware consolidation will continue to increase with the proliferation of workgroup MFPs as customers seek to reduce their total number of individual office devices. Customers will expect more from their multifunctional products — better integration with existing networks and technology, better color quality output, higher capacity and faster output speeds, greater reliability and overall lower operating costs. Responding to customer demands for improved functionality, successful dealers will migrate their sales to printer-based MFPs. With the majority of documents being captured electronically, the demand for copier functionality is declining as printer capabilities increasingly dominate user demand.

Today’s printer-based MFPs deliver high-quality output, greater media flexibility and increased reliability with decreased service needs and a cost-per-page that can compete with traditional copier-based devices.

In 2009, OKI Printing Solutions remains committed to delivering award-winning products, creative solutions and services, protected revenue streams and margins while providing the best balance of value, cost and performance for your customers. You can expect more when you partner with OKI Printing Solutions, the vendor that is committed to making you feel like a customer again!

... Dealers can capture ownership of these devices by demonstrating significant cost savings derived from actively managing the document printer fleet.

Panasonic Communications Company of North America Nick Miyake, President Ever y n e w year — e ver y n e w month, week and day, for that matter — brings uniqu e challenges and opportunities for our industry, our company and our channel partners.

G o i n g i n t o 2 0 0 9 , t h e o bv i o u s major challenge for all of us is the economy. Specifically, how do we convince new customers that our products will

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produce sufficient ROI, efficiency and In 2009, there is virtually no question ...

We will be challenged productivity benefits to justify making that office systems dealerships are a capital expenditure? Similarly, we going to be fielding almost as many to persuade existing will be challenged to persuade existing questions about the companies behind end-users who require end-users who require product retheir products as about the products product refreshes that freshes that delaying their reorder until themselves. It is not just automobile delaying their reorder 2010 or beyond is not the most costbuyers who shy away from purchasing a until 2010 or beyond is effective solution. car from a company that may be going not ... cost-effective ...

At Panasonic, our emphasis on creout of business. Many office managers ating demand by delivering singleare justifiably leery of winding up with vendor solutions with significantly below average machine a document processing center filled with previous-generadowntime and maintenance, substantial total cost of owner- tion products. ship savings and a highly favorable cost-benefit ratio will We believe our dealers can and will turn this challenge into ensure dealer success in the upcoming year. an opportunity by educating customers about Panasonic — I believe that the issue of confidence is one challenge that about the 90-year record of strength and stability that is our will be unique to 2009. Nothing can exist in a vacuum. All foundation, and about the fact that this $90 billion company enterprises, be they consumer- or corporate-oriented, man- with its 300,000 employees was recently ranked ahead of such ufacturers or dealerships, are affected by the economic envi- icons as Visa, Tiffany & Company, Lexus and FedEx as one of ronment around them. the world’s best-known brands.

Send your revenue sky high.

We can show you how, with the right software.

Daybreak’s eCapture Suite makes it easy for paper documents to be scanned and instantly archived. There’s nothing to bolt on, so connectivity is simple. With eCapture Suite, you can drive additional hardware sales, recurring maintenance income, and also generate more professional services and consulting hours.

Find out more about our Partner Program—with zero upfront costs and no mandatory requirements for enrollment—at daybreakics.com, or call 1-972-668-8300.

Plus, our software can help you make more margin on the original sale. As long as the hardware is in use, you’ll find this software will send revenues soaring.

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Panasonic’s engineering and manuSamsung During this economic facturing expertise, now augmented by Electronics the acquisition of Sanyo’s world-class America cycle we should research facilities, is another extremely Mark Meisberger, anticipate longer valuable demand-creation tool for our Senior Marketing decision cycles, delayed dealers. Panasonic not only designs, Manager, replacement decisions p r o t o ty p e s a n d t e st s it s p r i n t e r s , IT Division and much closer copiers, scanners and Panaboard interThe near-term analysis of ROI ... active whiteboards in its own research business climate labs, but it builds them in its own facwill put pressure on all aspects of our tories, primarily from components manufactured by its business in 2009 as business owners increase efforts to own divisions. control costs. We should expect terms like ROI, TCO and This core manufacturer capability helps insulate PCCNA, acquisition costs to be common terms in product acquisition its dealers and its end-users from consumable or service discussions. Dealers will be well served to review and underparts supply issues that other companies may face if their stand the value proposition and positioning of the products “white box” third-party suppliers or fabricators encounter and manufacturers they represent. Offering a full line of financial difficulties. That, along with our legendary reputa- printers in addition to MFPs makes more sense than ever as tion for durability and extreme customer satisfaction, will small businesses look to simplify and consolidate vendors.

Expect bundled services and solutions to continue be a major source of confidence for both our dealers and gaining popularity in 2009. Managed print service (MPS) their customers in these difficult times.

Beyond this, we see significant growth in several market solutions, cost effective workflow applications and device segments during 2009. In education, for example, our newly management solutions should all see increased popularity released interactive Panaboard with Easiteach multi-dimen- in the new year. Dealers should have in-house or third-party sional Flash-based learning modules are bringing new partners to support these types of value-adding productivity excitement to math, science, English, language arts and solutions. Dealers should also be knowledgeable about their geography students. line’s embedded capabilities, including any open system Likewise, we feel healthcare and transportation will con- architecture features and tools. These capabilities may be tinue to be fertile markets because of the compelling leveraged to differentiate and add value to your offerings. personnel and office-space cost reductions inherent Obviously, many in the industry are concerned about the in converting from paper to digital document filing weakness in business confidence and the effect this will and storage. have on our industry. Issues such as revenue, profitability Unlike some of its competitors, Panasonic does not sell and access to credit will be top of mind for our customers direct. Our network of expert, experienced business tech- throughout 2009. As in past economic slowdowns, we will nology dealers is as integral to our success as we are to surely see attrition and consolidation throughout the indetheirs. Stuffing a channel and walking away from it is not in pendent dealer channel. Dealers who have a solid grasp on our DNA. With the unification of all global Matsushita com- their operations and an accurate pulse of their accounts will panies and divisions under the Panasonic banner last find opportunities that others will not.

October, our channel partners can look forward to increased During this economic cycle we should anticipate longer levels of innovative marketing support and programs tightly decision cycles, delayed replacement decisions and much focused on one goal: maximizing sales. closer analysis of ROI, value-added services and acquisition In 2009, as in every other year, we will marshal our costs. The graying of the lines between servicing dealerships resources and those of our corporate parent, the world’s and value-added resellers will continue as each seeks to grow 59th largest company according to Forbes magazine, to its share of your customer’s IT dollar. Businesses will continue expand our feature sets, enhance product performance, to shop for best-in-class providers, including manufacturers, decrease maintenance requirements and give our dealers online retailers and resellers, as well as independent dealerthe exemplary service and support they need to remain ships. As in the past, a dealership’s local service and rapid heroes to their customers. response capabilities will remain significant differentiators.

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Business migration to color and to last year, I do not think any of us could Dealers are challenged MFPs may slow in 2009 as replacement have predicted the year we have had. cycles are extended and costs are more 2008 has been a truly remarkable rollerwith managing their cash tightly managed. Placement of colorcoaster ride that has presented new flows and inventories challenges, but also new opportunities. capable equipment may gain momenbetter. In this situation, it The market is tightening. Dealers are tum. However, access to color will likely is vital for manufacturers challenged with managing their cash be more tightly controlled. Dealers should to give their dealers flows and inventories better. In this sithave solutions to enable their accounts to confidence ... uation, it is vital for manufacturers to manage color access, including departgive their dealers confidence in their ment-level output reporting.

We also expect an acceleration to printer-based MFPs in ability to deliver what they promise.

At the end of 2007, I said that Sharp would continue to Segments 3, 4 and 5 as a lower cost alternative to more feature-rich copiers. Dealers should be prepared for this expand into new markets and provide continued advanceongoing mix shift with a solid offering and clear value propo- ments for our dealers, specifically through our commitment sition for their sales teams. The TCO of these products can to customization. I am proud to say that we have, once be very competitive and create incremental sales opportuni- again, delivered on our promises.

Demand for increased customization and productivity for ties as businesses migrate from printers to workgroup MFPs. Competition for IT dollars will be fierce and small busi- users will only increase in 2009. Dealers can help themselves by nesses will continue to look for money-saving tools and getting closer to the customer, understanding their business partners. Successful dealers will embrace MPS solutions and aggressively compete to manage the customer’s complete printer and MFP installed base. Tremendous growth opportunities exist for dealerships with cost-competitive service infrastructures and the ability to service a broad range of printers in addition to their own product lines.

Samsung will continue to bring to market value-driven printer-based MFP solutions in 2009. Our new MultiXpress line brings a suite of high performance engines to Segments 3, 4 and 5 as aggressive TCO solutions for businesses seeking best-in-class workgroup MFP solutions. Samsung will continue to build out and expand dealer channel support infrastructure and increase field-based sales, solution and service resources. The independent dealer channel represents a primary path to market for Samsung in the United States.

With feature-rich products, Samsung is well positioned to succeed in the rapidly growing A4 copier market segment. With bundled workflow solutions such as secure print, robust remote device and network management tools, and a new Java-based open architecture, Samsung solutions are extending the power of the MFP into a true workflow solution.

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partnership with MWAi — a leader in “inside and out” and demonstrating Sharp OSA technology enterprise-class M2M (machine-toexactly where managers can save the machine) and M2P (machine-to-people) most money via consolidation and workalso enables our dealers workflow automation solutions — takes flow improvement. to access our new remote it a step further and allows dealers to Delivering on the promise of exfront panel capabilities to manage meter reads remotely. Think of panding into new markets, we have solve problems without the customer service capabilities — and introduced our new Frontier Series: actually having to ... cost savings — that this engenders.

Sharp’s line of A4 MFPs and printers go to the machine.

Aside from our innovations in A4 that will bring office document products products and Sharp OSA technology, to the center of the office and help IT managers consolidate disparate printers. These products Sharp has recently introduced its 23 and 27 ppm Pastel II package Sharp’s document management and multitasking Series. Both units feature Sharp OSA technology coupled strengths in an A4-sized MFP. Frontier MFPs account for with a built-in keyboard and 8.5-inch display. We are the first customers’ needs and over-deliver on their requirements. company to address document workflow and scanning as Our 8.5-inch LCD screen brings a new class of service to this critical, time-consuming tasks on an MFP with a standard category, completely changing how people will view an A4- keyboard and easy-to-read screen that greatly reduces time spent on data entry and menu navigation. category MFP. You will continue to see innovations like this throughout The Frontier Series will give our dealers opportunities to pursue new lines of business in 2009, especially small and our product line, which is our most complete line ever. From mid-size workgroups, and will help end-users streamline our new Frontier line of A4 MFPs and printers, through our and control costs. Every model in the Frontier Series will flagship workgroup systems for the high-volume market, we look and act the same, providing an intuitive interface for have worked hard to ensure dealers can offer their cuscustomers and enabling easier deployment across the entire tomers the right product for almost any job.

As we get ready for 2009, Sharp will continue to roll out organization for dealers. Frontier will enable dealers to do business in both A3 and A4 markets with a product that is the remaining product in its Frontier Series and provide its fully capable of competing with the best color machines in dealers with the most powerful, comprehensive and versatile solution set available. Dealers should have the utmost each category.

I have always maintained that customization is critical to confidence that Sharp will continue to support them in this industry. Never has that been more true. This year, we every possible way and provide products that make them introduced the third version of Sharp OSA technology, a customized solutions providers and not simply box pushers. development platform that brings the power of customization closer to the customer. With a new interface, dealers Toshiba America Business can create customized applications that enable their cusSolutions Inc. tomers to work faster and more efficiently. Dealerships that Mark Mathews, President & COO embrace Sharp OSA technology will have a head start in Looking ahead to 2009, it seems delivering these customized solutions and a distinct advanthe only thing certain is the uncertage when approaching new customers and in retaining tainty of our economy and our existing customers. industry overall. Without a doubt, More importantly, we have introduced a number of dealers are facing the most difficult support features, such as the Sharp OSA Authorized Dealer economic crisis of our time. The Program (ADP), which enables dealers to unlock the full industry is consolidating, customer financing is scarce and potential of Sharp OSA technology and even gain access to a market instability poses challenges to dealerships of all sizes. software library of Sharp OSA applets and enhanced support But with challenges come opportunities, and now more from Sharp. than ever, dealer success lies in partnering with a manufacSharp OSA technology also enables our dealers to access turer that is strong enough to provide the support needed to our new remote front panel capabilities to solve problems continue to compete — including an outstanding and robust without actually having to physically go to the machine. Our product line and the solutions, tools and training required to 24 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8

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Connector for Microsoft Exchange and help dealers set themselves apart in ...

Dealers who confront SharePoint, is the first in a series of conorder to win customers’ business. nectors that Toshiba is offering dealers The greatest product opportunity for these challenges head to help customers streamline office prodealers moving forward will again be in on, invest in their ductivity and enhance efficiency. Look the color market. Toshiba recently introbusinesses and protect for more third-party application integraduced its most advanced color product existing customers ... will tion in the coming months. offering to date, with the e-STUDIO be the ones who ... thrive The obvious balance to the struggling 5520c/6520c/6530c series. Now customers in today’s market. economy and its effects on customers’ can find the perfect color machine to needs are similar to the financial strain suit their specific needs from within a tighter market places on small and mid-sized dealerships.

Toshiba’s full color lineup ranging from 11 ppm to 65 ppm.

Products aside, the greatest market opportunity for While Toshiba firmly believes that the most important step dealers in 2009 is the ability to help customers cut costs. dealers can and must take to survive in this current climate Toshiba has been laying the foundation for this now urgent is to invest in one’s sales force to help them transition to market need for the past several years and, in fact, has been selling solutions, we also recognize that this may seem fisencouraging dealers to make the proactive move to offer cally challenging. However, I cannot stress enough that customers business-enhancing solutions over selling “the dealers who confront these challenges head on, invest in box” routinely. Customers will soon recognize a heightened their businesses and protect existing customers by reducing need for printer consolidation and increased MFP and solu- their costs, will be the ones who not only survive, but thrive tions use as a means of improving efficiencies and, ulti- in today’s market.

Partnering with a strong manufacturer that offers the mately, the bottom line. Toshiba offers three key tools for tools and expertise to help you in this area is key. For dealers to capitalize on these opportunities.

(1) Encompass — Document production, management example, Toshiba has created the award-winning Solution and distribution currently represent a significant expense Selling System (S3), a free training course for sales represenfor businesses, with expenditures reaching as high as 15 tatives. The 10-step selling model includes identifying solupercent of total annual revenues in some cases. Encom- tions that will best help the customer, best practices for pass allows dealers to provide customers with a detailed presenting those solutions and management of the account fleet analysis as well as definitive device management moving forward with professional services.

As we look to the year ahead and the challenges dealers solutions and strategies that directly increase productivity, enhance employee and operational efficiencies and are facing, beyond our lineup of award-winning color and reduce document production and management costs by monochrome products, Toshiba itself is working to improve the partnership solutions we offer you. In this 30 percent or more.

(2) Managed Print Services — Toshiba’s managed print spirit, we are developing a dedicated team of professional services create a single point of accountability for service, service experts, skilled in building professional service supplies and billing, giving customers increased control over groups and growing dealerships’ business one deal at a operations. Print management also provides dealers with a time, to assist dealers in this area. We understand that the solid opportunity for cost recovery as hardware and CPC role Toshiba plays as a partner is more important now than ever before and we are ready to work with you to sustain rates continue to be squeezed.

(3) Software Solutions — Providing customers with an our combined success. array of comprehensive business solutions helps differentiate dealers from their competitors and creates new Xerox Corp revenue streams. This strategy also satisfies the increasing Edmund Guerrero, Vice President, Advanced customer need to achieve multiple business objectives such MFD Channel Partner Program, North American Resellers as security, hardcopy scanning, file conversion and elecFor BTA dealers, 2009 will bring more challenges, but also tronic file management when considering customers’ opportunities. We expect to see dealers thinking differently overall document management needs. about their businesses due to competitive landscape Toshiba’s latest innovation, the e-BRIDGE Open Platform changes and continuing economic pressures. As businesses w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8 | 25

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This fall, Xerox introduced TonerPack, of all sizes strive to stretch their dollars Wrapping services an extension of PagePack. This addifurther, dealerships who assist custional managed print services offering tomers in finding the right technology around the hardware — gives authorized dealerships the ability tools to achieve efficiencies will be well managed print services to offer customers a toner-only cost-perpositioned to weather the storm. It is — will continue to be page contract on select HP monochrome paramount that dealers understand the an area where printers and MFPs. This program profeatures, benefits and advantages of dealerships can grab vides a unique profit opportunity for Xerox multifunction printers (MFPs) as higher margins ... dealers to further expand their busismall-to-medium business (SMB) cusnesses and address the needs of offices tomers are looking for a smarter and more efficient way to maximize document workflow and that have multi-vendor printing equipment. By owning the increase their profits. Partners who understand their cus- customer relationship, dealers can increase customer loyalty tomers’ work environments and understand scanning and and retention while also realizing recurring revenues.

As you have likely heard before, changing a customer networking will be successful in the future.

Specific market opportunities in 2009 include the con- lease or being focused on the pure box sale does not cut it tinued shift to color printing in the office; using managed anymore. Dealerships that leverage the muscle of the MFP print services to drive revenue; and effectively promoting to make work easier for their customers will outpace comthe benefits of MFPs equipped with development platforms petitors who do not. MFPs equipped with Xerox’s Extensible that provide customers with customized electronic docu- Interface Platform (EIP) can be tailored to meet specific business challenges. Dealerships can easily create personalment workflow solutions.

The business world’s adoption of color printing is accel- ized and customized solutions that are accessible right from erating. Xerox research has found that the hardware market the MFP touch screen, automating complex business tasks is forecast to grow $19 billion by 2011 and Xerox expects with a single button press. The value here is ultimately to the color to account for 50 percent of the market revenue by end-user. But there is also value to the seller, because they that time. In fact, we expect that within five years 23 can be seen by their customer as more than a “copier rep,” percent of all pages printed on Xerox technology will be in but rather as an indispensable business partner who undercolor. Technology advances will continue to drive down the stands their unique challenges and improves the way work cost of color devices making the phrase “color everywhere” gets done in their organization.

Xerox’s new Advanced MFD Channel Partner Program a reality. Dealers who educate their customers on the positive impact of color printing stand to increase their will continue to bring the latest color and monochrome revenue, while making the transition to color more afford- MFP products to our partners in 2009 and we will refresh our existing line as new technology becomes available. In able for their customers.

Wrapping services around the hardware — managed addition, we are assisting dealers to promote and sell Xerox print services — will continue to be an area where dealer- by enabling their Web sites to show Xerox products and ships can grab higher margins, distinguish themselves from enabling partners to do targeted e-mail campaigns.

In 2008, the Xerox North American Dealer Channel the competition and provide additional value to their customers. IDC predicts the managed print services market will (NADC) merged with North American Resellers (NARS), grow to be $7.6 billion in 2010 and the growth rate in the expanding our reach and strengthening our value proposimid-market is at more than two times that of large enter- tion. There are increased opportunities for dealers to take prises. Xerox’s successful PagePack program is designed to advantage of new owner/rep promotional spiffs, back-end give organizations peace of mind. Ninety percent of cus- rebates, up-front discounts, demo unit incentives/ tomers do not know their cost of printing and spend 1 to 3 discounts, bid support, deal registration, break-fix propercent of annual revenue on document output. With grams as Authorized Service providers, along with many PagePack, the cost per page is crystal clear from day one. marketing enablers that are right at the partner’s fingertips.

Long-term benefits include a single point of contact with What this means is we simply expect to see continued the dealer for the life of the contract and accountability for growth in the Xerox Buy-Sell Channel and targeted market growth in 2009. service and support.

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Selecting a Manufacturer Assess your needs & align them with future goals by: Ed Carroll, Strategy Development

he past two years have changed the demographics of the copier/MFP/ printer industry more so than any other time. While there were significant changes to distribution (i.e. dealer channel) during the time IKON, Danka and Global were actively acquiring dealerships, this occurred over a longer period of time and did not impact manufacturers as significantly as the past two years. It is safe to say the recent acquisitions of these three companies have impacted all manufacturers and many will be forced to move aggressively to fill holes in their distribution and not lose market share.

If, through all of this, you have remained an independent dealer, this is a very good time for you to assess your overall business needs and align your needs with your goals for the future. One important need is having the correct supplier(s).

This article is not intended to encourage you to change your supplier. It is my experience that many times, changes are made for the wrong reasons; but I do believe, given the recent announcements, you will be faced with new opportunities — opportunities that might not have existed a short time ago. The time is right to review and assess your current supplier in the event you are presented with a worthwhile opportunity to add a new supplier or change an existing one.

A business review should include both internal and external factors that will affect your decision. Knowing your strengths and weaknesses is the starting point, and honestly assessing them is the key to a proper evaluation. Here is a look at the factors you should consider in a review: Financial Soundness of Your Business — Changing or adding a product line is a very expensive venture, so unless those companies courting you are going to provide you with significant resources (tens of thousands, if not hundreds of thousands of dollars) to change or add product lines, the soundness of your business must be very healthy and the

T

outlook for the change very encouraging. Obsolete inventory from old suppliers, training expense for sales and service of new products, demo inventory, parts and supply inventory, initial buy for sales opportunities and retraining administrative support all add to your cost of changing products.

Profile of Current Machines in the Field (MIF) — Knowing the profile of your MIF is one of the most important areas to review. Your best sales opportunities are with your current customers and since you are meeting their needs, chances are you will continue to do so. This assumes that your reputation is very sound and your customers like doing business with you.

There usually are expanded opportunities with your current customers and adding a product segment to expand your “share of wallet” is a valuable reason to change or add to your portfolio. You should evaluate your current customers and try to determine the opportunity before you add or change. As discussed, adding new products is a costly venture, so you want to minimize the risk by understanding your current core business, composition or profile of your current customers and the opportunities you might have to expand share of wallet with those customers.

Capabilities of Your Service Organization — Have you represented your current manufacturer through three to four generations of products? Is the average tenure of employment for your service technicians 10 or more years? The longer you have been with a particular manufacturer, the more difficult it is to transition to a new line. The service team needs to be trained on the new products and this cost can be easily identified. The area not as easily identified is the lost productivity you will experience in changing lines. Service professionals get comfortable and good at supporting your product line over time. If you are contemplating a change in manufacturer, you w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8 | 27

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and your business’s reputation will diffuse need to understand the impact it will ...

Small and mid-size brand awareness and win out in most have on your service team and, possibly, cases. The majority of small and mid-size your customers. businesses prefer to have businesses prefer to have business rela Completeness of the Manufacbusiness relationships tionships with local companies and many turer’s Product Lineup — Today, every with local companies times this is more important than the manufacturer’s technology is sound, reliand many times this is brand you carry. able, well engineered and feature rich. The more important than the differences between manufacturers’ prod Manufacturer Field Support — Do brand you carry. ucts when compared by segment are you hear or see your current supplier’s insignificant and have very little value in field support on a monthly basis? Is it for your decision. The difference in completeness of product the sole purpose of receiving an order from you or communilineup is more significant, but only when a manufacturer’s cating the specials for the month? Does your supplier provide lineup fits a hole in your product offering. Most dealers have training on an as-needed basis for your sales team? Does it products that match their skills and the markets they are pur- provide competitive analysis for you? Is it a reliable, trustsuing. Adding a new product lineup, or changing an existing worthy resource? These are some of the areas to consider when one because your current supplier is not strong in a particular assessing your current supplier. If your manufacturer values segment, is not relative to your decision if you do not have the your business as a partner, it will help you grow, train your staff resources (i.e. finances and skills) to pursue opportunities for and provide positioning tools (i.e. competitive analysis).

Manufacturer National Account Support — While it is this segment. Adding a printer line, where the initial investment is considerably less, is a more relative decision if you are nice to get ship-ins or freebies, they add very little overall looking to expand sales opportunities and your current sup- value to your business. In most cases, you do not have the plier does not meet this need. The important factor in this area resources to win these opportunities. The manufacturer is matching your needs to the supplier’s product offering and “owns” the account and the pricing or compensation is usually having the resources to drive success in the expanded offering. low — almost always lower than your normal down-the-street Manufacturer Market Share — In general, the larger business. It is usually more important to the manufacturer for the manufacturer’s market share, the more resources it has to coverage to entice you to add its line than it is for you in the invest in new technology, new channels, brand awareness and form of compensation you will earn for this opportunity. completeness of product line. Having a large presence does Adding, changing or replacing lines is a very important not guarantee this though. There might be times when the decision for your business. The focus of your review must first manufacturer falls behind the competition, but the norm is be: What makes the most sense for your business? Then, what that if it has a large market share, it has a strong position. This are the manufacturer’s strengths and weaknesses? And, finally, is important when considering what lines to carry, but just as what resources are you being provided to support your important is your market presence and the number of com- current business or support a change? As mentioned, this is peting dealers or branches. Why add a line (brand) that is not an all-encompassing list, but hopefully it identifies some of over-distributed in your area or that has a large, aggressive the important issues you will face as you assess your current branch operation just because of a manufacturer’s strong manufacturers and the opportunities you will encounter as market presence? The likelihood of competing for the same manufacturers look to secure market coverage. deals increases and, therefore, margins decrease in order to Ed Carroll is a principal of Strategy Development, a win the business opportunities. management consulting and sales training firm. From 2003 to Brand Awareness — With the exception of HP, Xerox 2007, he was an executive with IKON Office Solutions. Prior to and possibly Canon, most manufacturers do not have strong IKON, he was CEO of CyLex Systems Inc. Carroll spent 20 years brand awareness. Therefore, brand awareness is not that at Panasonic, serving as president of Panasonic important. The three mentioned brands might open a few Document Imaging Co. and president of more doors, but the soundness of your business plan, the reliaPanasonic Document Systems Co. He can be bility of your service, your responsiveness to your customers contacted at carroll@strategydevelopment.org and your selling skills are much more significant than repreor (703) 722-2973. Visit senting a line with good brand awareness. Good selling skills www.strategydevelopment.org.

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Fall Colors Conference BTA Southeast hosts district event Oct. 24-25 by: Brent Hoskins, Office Technology Magazine

ocused on providing office technology dealership personnel with a regional education and networking opportunity, the BTA Southeast District hosted its annual Fall Colors Conference Oct. 24-25. The event, which featured three education sessions, the products and services of seven exhibiting sponsors and the BTA Sales Management Workshop as a frontrunner, was held at the Waynesville Country Club Inn in Waynesville, N.C. “The Fall Colors Conference is an annual tradition in the BTA Southeast district that proves to outdo itself every year,” said 2008-09 BTA Southeast President Terry Chapman, who is also president of Business Electronics Corp. in Birmingham, Ala. “As in past years, our goal at this year’s Waynesville conference was to provide dealers the opportunity to network with their peers in an enjoyable setting while providing a variety of learning opportunities. It appears that we have achieved our goal. Attendee feedback has been very favorable.”

The event began Friday evening, Oct. 24, with a welcome reception, held at the conclusion of the one-and-ahalf day BTA Sales Management Workshop, taught by Tom Callinan and Ed Carroll of Strategy Development. On Saturday morning, Oct. 25, the agenda included three education sessions: “Exceptional Customer Service” with Lisbeth Ann Marin, a motivational training consultant; “Driving Service Margins Above 52 Percent” with Jerry Newberry of BEI Pros; and “What the CEO Must Know — Raising Sales Performance” with Karl Graf of TrustPoint Management Group. The general registration education sessions were followed by an optional luncheon, hosted by 2008-09 BTA National President Ronelle Ingram.

In addition, attendees had several opportunities to visit with exhibiting sponsors. A representative of each company had the opportunity to speak briefly before all attendees, providing an overview of his company’s products and services. The conference concluded with a banquet at the

F

Top: Attendees listen intently during one of the conference’s education sessions. Bottom: 2008-09 BTA Southeast President Terry Chapman (left) presents the Past President’s Award to 2007-08 BTA Southeast President Bob Smith.

BTA Southeast District event sponsors:

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n earby L aurel “... The day-to-day Countr y Club, w hich provided operations of a company the opportunity to can give you tunnel publicly recognize vision. There is no more several volunteers valuable resource than for their service to to be able to network BTA S outh east with your peers ... ” and BTA National.

As noted , th e event received favorable feedback from attendees. Among the comments received: “Being wholly involved in the day-to-day operations of a company can give you tunnel vision. There is no more valuable resource than to be able to network with your peers — to find that they are experiencing the same issues and challenges that you face — and possibly discover solutions. Vendor interaction is also invaluable. It keeps you on the cutting edge of what is out there and the technology that is on the horizon. Dealers need to make these types of gatherings a mandatory part of their organizational forecasting.” — Brian Jobe, Dean’s Office Machines Inc., Greensboro, N.C. “I have always enjoyed and benefited from attending the BTA Southeast’s Fall Colors Conference. This year it was one of the best ones. The speakers were right on to the kinds of things I wanted to know more about. As usual, the hospitality was quite nice and I think the whole event was a good investment of my time. I think so much of it that I make the annual trip with another local competitor in my marketplace. We both benefit and that makes us better business people.” — Jeff Jehn, Waltz Business Solutions, Crestview Hills, Ky. The BTA Southeast leadership team is busy at work planning the district’s next education and networking event, to be co-hosted by the BTA Mid-America district.

The June 11-13, 2009, conference will take place in New Orleans. In addition to Saturday morning education sessions, attendees will have the option of attending one of several frontrunner programs. They include ProFinance, the BTA Sales Management Workshop and a workshop on managed print services, to be taught by representatives of Digital Gateway. Watch www.btasoutheast.org for more information as it becomes available.

Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine.

He can be reached at brent@bta.org.

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Clockwise from top: Lexmark’s Phil Boatman (far left) demonstrates one of his company’s products to attendees; the Waynesville Country Club Inn; 2008-09 BTA Southeast Treasurer and BTA National President-Elect Bill James (left) receives the BTA Southeast Volunteer of the Year Award from 2008-09 BTA Southeast President Terry Chapman.

Clockwise from top: The agenda included three education sessions on the morning of Oct. 25; 2007-08 BTA National President Shannon Oliver (left) accepts an award honoring his year of service from 2008-09 BTA National President Ronelle Ingram. Education session speaker Lisbeth Ann Marin presents “Exceptional Customer Service.”

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SELLING SOLUTIONS

Building Credibility Sell more in a down market by using the Web, etc. by: Corey Smith, Dealer Marketing Systems

hen the markets are up and businesses are not tight with their budgets, selling large contracts for office equipment, managed print services and document management is not too difficult. When revenues and profits are up, it is easy for budgets to be loose.

The challenge that every business has during a down market is to prove their worth in a way that allows clients to see the value in what they have to offer. Selling in a down market can be a real challenge when the most common objection heard by a sales rep is: “I am sorry, but we just cannot spend any money right now because of the economy.�

In reality, most businesses do not buy because they view your product as a cost and not as an investment. Helping your clients see past the box and understand the solution can be a challenge, but there are some key things that you can do to help build consumer confidence in you and what you have to offer.

When you build your credibility and consumer confidence in your dealership grows, you will find that your sales will increase whether the market is up or down. Following are some strategies to build credibility that I encourage you to consider.

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Write a Blog A blog is nothing more than an online journal of your thoughts. When you have something to share with one client about a business problem or a solution, you likely want to share that with many of your clients. A blog provides you with a forum to discuss your thoughts in a way that can be accessible to all your clients. The goal of a blog is not to pitch product — it is to build credibility in your knowledge base.

This can be a company blog that many contribute to or a personal blog that only you contribute to. The most effective blogs are integrated directly into the company site with many contributors. As you write, you will find that people in your market will begin to take notice and will start to look to you as an expert in your field.

Write Case Studies Only a small percentage of your prospects are innovators.

These innovators are the people who want to be on the cutting edge of all technology. Instead, most buyers are very pragmatic. They want assurances that what you are offering them

has been tried and tested. This is especially true during a down market. They want to know that what they are going to buy will help them solve their business problems and increase their revenues. Writing case studies on your past successes provides documentation and validation in your ability to help them with their needs.

Speak at Local Industry Events Consumers are more likely to buy from people they know can help them. Providing a presentation at a chamber of commerce event or at a leads group is good practice, but in those instances, you are only talking to other salespeople who may be struggling as much as you are. Every industry has local events.

It may be at a business technology exposition or a meeting of the bar association. This is your opportunity to shine. This is your opportunity to establish credibility. As you are making your sales calls, people will remember you from these events and will associate you with the ability to understand their needs and problems.

Use Social Web Your clients are becoming more involved with the Web. They are using the Internet for their marketing and their communication. You need to be where your clients are. You cannot continue to operate without social Web and expect your clients to think you understand technology. Creating an account on LinkedIn or Facebook and adding your clients to your network will help them to start engaging with you more w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8 | 31

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You can forward them case studies to read.

They will never read all your e-mails, but E-mail is an area of they will start to remember you. Do not go marketing that is highly overboard. You do not want to be accused underutilized ... Using of spamming. But e-mail is a great oppore-mail as a follow-up tool tunity for you to share with your clients is much less intrusive and the reasons why you are the logical choice provides you with a to partner with them. unique opportunity.

Web technologies continue to change the way we communicate. Make sure to consider how you can leverage these technologies to capture attention in challenging times.

Use E-mail E-mail is an area of marketing that is highly underutilized.

Corey Smith is the chief Web architect for Dealer Marketing Busy business professionals use e-mail because they can Systems (www.dealermarketingsystems.com), a respond on their own time. They do not want to be bothered firm providing Web design and marketing by a sales rep who is “following-up” on the last sales call. Using services for document solutions dealers. e-mail as a follow-up tool is much less intrusive and provides You can read his blog and find you with a unique opportunity. You can send them a blog post links to his social Web network at you wrote that is related to their current business problems. www.masterthebusiness.com. often. During your communication with your clients, ask them if they are on LinkedIn or Facebook. If they say “no,” tell them that you will send them an invite. If they say “yes,” tell them you will connect with them. Using social Web will allow you to connect with your clients on more than one level. It will help you to be a part of the conversation when you are not talking about business.

BTA Can Help.

Scholarships for use at colleges or accredited vocational trade schools are available to the sons and daughters of BTA retail dealership members and the sons and daughters of their full-time employees.

Scholarship recipients are chosen by an impartial and independent evaluator.

Having trouble finding money for your child’s education?

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Completed applications must be received at BTA by May 1. To obtain a scholarship application form, contact Mary Hopkins at mary@bta.org, call (816) 303-4031 or write to: BTA Scholarship Foundation, 12411 Wornall Road Kansas City, MO 64145. ®

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EDUCATION CALENDAR January 13-14 BTA Sales Management Workshop

Richardson (Dallas), TX Taught by Ed Carroll and David Ramos of Strategy Development, this intense, two-full-day workshop will provide dealership principals and sales managers at all levels a framework and tools so they can develop their sales employees and drive new business and more share of wallet in current accounts. This interactive workshop will help attendees form a business plan that they can implement upon returning to their dealership.

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“The Managed Print Services Opportunity” Free to BTA members, the January “Building My Business” webinar, “The Managed Print Services Opportunity,” will be presented by Ed Carroll and David Ramos of Strategy Development. Managed print services remains one of the most talked about services in the copier/printing industry today — and for good reason. An effective managed print services offering allows dealers to capitalize on this rapidly growing segment by offering customers a single source, single cost-per-page solution. In this webinar, you will learn the components of an effective managed print services offering from an organization that has assisted numerous dealers in launching their own offerings.

20-21 BTA Print Management Workshop

San Francisco, CA Taught by Tom Callinan and Ed Carroll of Strategy Development, this two-day educational workshop is designed to provide dealerships with the tools they need to establish a print management strategy that will allow them to significantly increase the quantity of captured prints, lock in customers, distinguish themselves from competitors and, ultimately, sell more hardware. As a provider of print management services, the dealer can become the end-user’s “single source” for managing printed pages and the hardware used to produce them. By utilizing the services of a dealership that offers a print management program, the end-user company can eliminate the need to deal with multiple vendors and invoices and leverage the benefits of a holistic view of its printer fleet.

February 11-12 BTA ProFinance

Charlotte, NC BTA ProFinance instructors John Hanson and John Hey of Strategic Business Associates will help you understand the strategies required to become more client and employee focused — key strategies toward successfully growing your company, improving profitability and winning against the competition. ProFinance is designed for dealership owners and executive-level staff members who make the critical business decisions that impact their companies’ success.

For additional information or to register for courses or events, visit www.bta.org or call (800) 843-5059.

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BTA HIGHLIGHTS The following new members joined BTA during the month of October:

Dealer Members DTEKS Business Systems Inc., Port Washington, NY Ford Business Machines Inc., Connellsville, PA Graffen Business Systems Inc., Conshohocken, PA Hilyard’s Inc., Wilmington, DE Millennium Business Systems, Cincinnati, OH Think Office Technology, Queensland, Australia Witt Company, Bellevue, WA Service Associate Members WMMW Print Services LLC, Carmel, IN Vendor Associate Members American PrintWare Inc., San Juan Capistrano, CA Daybreak ICS, Frisco, TX Dolbey Systems Inc., Concord, OH MSE, Van Nuys, CA For full contact information of these new members, visit www.bta.org and click on “BTA Hotline Online” on the home page before Feb. 1.

BTA Idea Exchange This online resource is designed to provide BTA member dealers with insight and ideas from their fellow dealers. The comments shared by dealers are in response to BTA surveys or submitted by members via the Discussion Forum on the BTA Web site. Watch for the list of topics and dealer responses to expand over time. Collectively, these dealer responses will serve to further fulfill a core goal of BTA: “To facilitate dealers helping dealers.”

Visit www.bta.org for a current list of topics. Click on “BTA Idea Exchange” in the left menu on the home page.

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For the benefit of its dealer members, each month, BTA profiles two of its Vendor or Service Associate members in this space.

BTA Vendor Associate member Daybreak ICS is a leading provider of enterprise content management (ECM) solutions, enabling the world’s top companies and government agencies to more effectively manage their information.

Daybreak offers next generation content capture and delivery solutions that deliver high value, innovation and usability. As an ECM technology leader, Daybreak provides innovative software products to organizations worldwide. For more information, call (972) 668-8300. www.daybreakICS.com BTA S e r v i c e Associate member GreatAmerica Leasing Corp. is a national lessor dedicated to helping manufacturers, vendors and dealers be more successful and keep their customers. The company originates leasing transactions through numerous vendor and manufacturer relationships and provides financing in all 50 states and some U.S. territories. Founded in 1990, GreatAmerica is headquartered in Cedar Rapids, Iowa, with offices in Colorado, Florida, Georgia, Missouri and Illinois. The company has a staff of more than 270 people. www.greatamerica.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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COURTS & CAPITOLS

‘It’s the Economy, Stupid!’

How dealerships can survive the downturn by: Robert C. Goldberg, General Counsel for the Business Technology Association

ill Clinton won the White House by reminding himself that the economy was the most important issue to voters. PresidentElect Obama will enter the White House with the weakest economy the United States has seen in decades. A day does not go by without a discussion of the economy and the reality of how it has affected everyone. The stock market, a sanctuary for retirem ent funds, has turned against investors who have seen 20 percent or more of their funds disappear.

Although I am told industry sales are level, I am not sure the information is reliable. Businesses are cutting back in all areas.

Budgets are being reduced and there is declining demand.

Mass layoffs of employees reduce the strength of the economy and participation in it. New businesses will not be opening and many will be closing their doors forever. Expansion projects are being placed on hold and sales that existed may not be delivered. With fewer employees and sales, companies will seek to return equipment despite their legal obligations. How can an independent dealership survive in this economy?

The first investment a dealer should make is to join and participate in a peer group. A group of non-competing dealers can compare financial results and best practices for the benefit of all. Operating in a vacuum is not healthy. By establishing benchmarks it will become apparent where your results differ from others. By having participants present, you can learn how the superior results were obtained and what changes are necessary.

Measure all the marketing programs you are pursuing to determine which are providing the best results. Start with brochures, Yellow Page ads, radio spots, Web campaigns and any other direct marketing expenditure. Do not overlook the costs of sponsorships, customer entertainment and club memberships in the evaluation of the best means to generate and sustain business relations. It is never wise to cease marketing, but it is wise to spend marketing funds effectively. If cuts are necessary, make them where they will have the least impact.

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Give up the country club membership if it is not generating business or shift the cost to your personal account.

Tracking which of your marketing efforts is having the best results is not as difficult as it seems. Assign your receptionist to ask all callers how they heard about your company. If the business came from a word-ofmouth referral, send the individual responsible a gift or gift card. Make the “Contact Us” feature on your Web site accessible from every page and easy to use. Assign one individual to respond to every inquiry on a daily basis.

A Web-centric marketing program can provide numerous benefits. Often software is provided by your Web site provider that permits you to monitor and analyze site traffic. The program identifies the most popular area of your Web site, where visitors arrive from (competition), key words and phrases used to find your site and where they travel after your site. This information can be used to strengthen the content of the printed message being conveyed, stress key words used by potential customers and to locate advertisements on sites your potential customers often visit. Establishing a Web site is not a solution, but an opportunity to enhance other marketing strategies.

If activities for your employees decrease, use free time for training. There are a host of online and CD-based training programs that can fill idle hours. In lieu of cutting a position, ask if each employee would be willing to take a day off each week so that all employees may remain with the company. Take time to visit existing customers and verify all their needs are being met and their systems are performing as anticipated.

Difficult economic times require adjustments. Simply waiting for conditions to improve is not the solution. Use this period to strengthen your business for the upturn that is sure to come.

Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com. w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8 | 35

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PRINCIPAL ISSUES

CAC Solutions Keeping networks secure with smart cards by: Denine Phillips, Tech-Write LLC

Editor’s note: In the November issue of Office Technology, Denine Phillips discussed CAC (Common Access Card) authentication and the opportunity it presents within the office technology industry. The article can be found on the BTA Web site at www.bta.org. This month, the series concludes as Phillips focuses on CAC solution providers and trends in smart card development. etwork security is a seemingly unbeatable force that IT administrators have to wrestle with on a daily basis. Identifying and addressing MFP vulnerabilities, however, has been made easier thanks to ongoing efforts by office equipment manufacturers to increase awareness of the issues surrounding MFP security.

In recent years, MFP manufacturers have announced CAC solutions to further support efforts to keep networks secure.

Why? Because 5.5 million CAC smart cards are in circulation today and used as a primary form of identification, allowing physical access to Department of Defense (DoD) buildings, facilities, installations and controlled spaces, as well as to desktop and laptop computers and, increasingly, MFPs. Aboard the CAC are data elements such as name, gender, card issue/expiration dates and, most importantly, PKI digital certificates. These certificates are the keys to the network and how an individual is authenticated (i.e., granted privileges) on the network.

In the November issue of Office Technology, I noted that Lexmark was the first MFP manufacturer to market a CAC solution. Hewlett-Packard, eCopy and Canon followed shortly thereafter. Ricoh rolled out its CAC solution just last month, while Sharp announced a joint CAC venture with Cryptek in October.

When asked where the process of developing a CAC solution begins, Dennis Amorosano, senior director of software and solutions development for Canon U.S.A. Inc., explains. “The DoD has published the CAC Software Developer Kit or CDK,” he says. “The CDK provides a set of guidelines that you must comply with in order to build a solution that meets DoD requirements. Inside of the CDK, you will find the requirement to be able to read and extract specific types of data off the card.”

N

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Using Canon’s MEAP platform, Canon’s CAC application is presently capable of authenticating a DoD user through the DoD’s Windows Active Directory and PKI infrastructure, validating certificates using a CRL (Certificate Revocation List) lookup. “Of course, one of the benefits of our MEAP platform and this particular application is its flexibility,” says Amorosano. “The current design of Canon’s CAC application provides support for many different types of PKI implementations. It also provides us with the ability to easily extend the application, as necessary. OCSP support is a good example of this flexibility, as we are adding support for this type of communication as we speak, although this is not something that we currently deliver to customers.”

All of Canon’s card-based authentication and custom development activities are located in the United States, with a dedicated engineering group designing and customizing products.

“When developing software to address user authentication requirements via CAC or other card types, Canon is working directly with the DoD and other government agencies,” says Amorosano. “Based upon a detailed understanding of customer requirements, Canon’s development platforms then provide us with the capability to tailor our activities to specifically meet a customer’s stated objectives. While this process is followed for Canon’s interaction with federal agencies, Canon also makes these same types of development services available to commercial customers whether working directly with Canon or through a Canon dealer. As a result, Canon is able to provide unique value to end-users, while at the same time enabling Canon channel partners to maintain their traditional transactional relationships with these customers.”

As noted, eCopy is another provider of CAC solutions, though the implementation is different. An independent software manufacturer, eCopy specializes in applications that drive scanning operations on capture devices, for example, Canon, HP, Konica Minolta, Océ, Ricoh, Sharp, Toshiba and Xerox MFPs. “Our eCopy ScanStation is essentially a Windows PC attached to the networked copier,” says Bill DeStafanis, senior

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mail attributes and folder permissions. If director of business development for “I know who was at the configured properly, the CAC certificate is eCopy. “This enables a seamless integration used to digitally sign outgoing e-mail. To with the DoD’s authentication scheme, device, when he was end the session, the user simply removes essentially replacing the MFP’s out-of-theat the device, where the CAC from the reader. box username and password authenticahe sent the document; As noted, Sharp now has a CAC solution tion method with CAC authentication. and ... I can also as well, in conjunction with Cryptek Inc., “At the DoD, there is a card reader next reproduce the document offering the Netgard MFD CAC authenticato every desktop computer,” he continues. he scanned.” tion solution for Sharp MFPs. The Netgard “The user inserts his (or her) CAC card MFD solution combines two products: a into the desktop reader, enters his PIN and the cardholder is authenticated on the DoD network. That Netgard MFD Pin Pad/Card Reader (used for authentication) exact same log-on sequence is what is employed for eCopy’s and Netgard MFD Manager (a small management appliance). A CAC solution. The user takes his CAC card out of the desktop simple Ethernet-in and Ethernet-out connection allows for fast, reader; it logs the user off the network. He walks over to a easy installation to the Sharp MFP and the network. Netgard ScanStation, inserts his card, enters his PIN — just like he did MFD is designed to seamlessly integrate with the existing active at the desktop — and he is logged back on. He has a new point directory and/or PKI infrastructure and is managed via an easyto-use administrative interface. Because the Netgard MFD is of presence on the network.” eCopy’s ScanStation software can also maintain a detailed external to the Sharp MFP, it eliminates the need to re-certify audit trail. “I know who was at the device, when he was at the Sharp system. Additionally, the Netgard MFD can be used the device, where he sent the document and, if you really across both new and legacy Sharp MFPs. want to lock it down, I can also reproduce the document he scanned,” says DeStefanis. “These capabilities are important Trends in Smart Card Development Digital Signature, a feature that uniquely identifies an eto virtually all government agencies. In addition, the monitoring activities do not track copy or print activity, just scan mail sender, is a feature that the DoD will require for all activity. Scanning applications pose the greatest threat to MFP/CAC solutions going forward. The purpose of a Digital network security, so CAC eliminates the potential for unau- Signature is to guarantee that the individual sending the message really is who he claims to be. Furthermore, when an thenticated access.” “ W hat’s important from a customer perspective is entity is issued a digital signature, online transactions are strengthening security around a network’s weakest link, scan- accepted as legally binding. “Most of the agencies are telling to-e-mail and scan-to-folder,” says Enrique Barkey, director of us that Digital Signature will make it into the requirements, so worldwide public sector and education for Hewlett-Packard. you better start planning for it,” says Amorosano. “In all likeli“We have a substantial MFP-installed base in the DoD’s hood, it will be mandatory in the next 12 to 18 months.”

Lexmark engineers are currently in the process of intehighly-distributed network environment. With thousands of DoD employees accessing the network, you literally have mil- grating Microsoft SharePoint capabilities into their CAC solulions of on and off ramps; users are converting paper docu- tion. “SharePoint is a very popular application within the ments to digital files and digital files back to paper. In each military,” says Brian Henderson, industry director of the federal government for Lexmark International. “The scan-to step, you’ve got to ensure that the process is secure.”

HP market development consultant Alan Saxton adds: “The capability already exists, though the CAC authentication comHP CAC solution offers a way to protect resources by control- ponent is not yet available.” eCopy is also staying abreast of DoD directives. “We are ling access to the MFP, either by locking all functions or indiworking on a more secure encryption algorithm,” says DeStevidual functions.”

Technically, the HP CAC solution uses PKI encryption and fanis. “Right now we have 128-bit encryption, which is suffiKerberos authentication to provide users with access to digi- cient for commercial use. The government, however, is moving tally signed e-mail and scan-to-folder sessions. After the user toward 256-bit encryption. The concern is people sniffing on enters his PIN, DoD certificate validation and Kerberos the network and intercepting sensitive communications.”

Rebecca Nielsen, senior associate for Booz Allen Hamilton, a authentication to the DoD network takes place. This provides access to Active Directory using LDAP to obtain the user’s e- strategy and technology consulting firm, notes that the DoD has w w w . o f f i c e t e c h n o l o g y m a g . c o m | D e c e m b e r 2 0 0 8 | 37

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ability is across all federal agencies. For expressed desire to migrate from the RSA“In a constantly example, a DoD user can use his CAC/PIV 2048 encryption algorithm to Elliptical to authenticate to a physical access door Curve Cryptography. “It has some promise changing security to the State Department; a State Departin reducing processing time,” she says. landscape, government ment user can use his PIV to authenticate “Today, it’s largely used in mobile devices. agencies need a to a DoD network.”

The issue surrounding this migration is that solution that can allow “In a constantly changing security the patent on the RSA bit key has expired; them to quickly respond landscape, government agencies need a ECC is a newer, patented technology. So, to new threats.” solution that can allow them to quickly there has been some push back with adopre sp o n d t o n e w th re a t s ,” s ay s H P ’s tion because you have to manage intellecBarkey. “Consequently, we’ve designed the HP Common tual property rights when integrating these algorithms.”

Another move we are seeing is the use of Common Access Access Card solution to employ today’s leading security Card technology in the commercial sector. “ We have a technologies and services while being flexible enough to number of businesses that have standardized on CAC as their adopt next-generation encryption and authentication capaprimary form of employee ID,” says Amorosano. “So where a bilities, such as the PIV standard.” proximity card, which is considered a single-factor authenti“As centralized document processing hubs, it is critical that cation method, enables an employee to access a building, CAC the MFP is capable of supporting security enhancements like is a dual-factor authentication method that requires PIN CAC authentication,” says John Thiessen, product manager of entry. Single-factor authentication may be fine for some cus- secure products at Ricoh Americas Corp. “This ensures that tomers; dual-factor authentication provides them with an these powerful imaging systems do not become unauthorized entry points to our customers’ networks. In short, we now added level of security.”

Perhaps the most significant trend in CAC technology, as a have a tool to increase MFP security and accountability across result of HSPD-12, is the move to PIV (Personal Identity Verifi- the enterprise by authenticating each and every user.”

Denine Phillips of Tech-Write LLC, a New Jersey-based firm cation) cards. “The DoD is migrating CAC to fully comply with providing technical writing and consulting the PIV standard, or Federal Information Processing Standard services to the office equipment industry, can 201 (FIPS-201),” says Nielsen. “The PIV card has the same form be reached at denine.phillips@comcast.net factor as the CAC, but is slightly different in appearance, as or (908) 735-2030. Visit www.tech-write.biz some printed images have different formats and are in difand click “Articles” to download the ferent places. The PKI technology functions for the CAC are CAC Vendor Chart. essentially the same as for the PIV. In addition, interoper-

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