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NATIONAL CONVENTION AND EXPO
March 18-19, 2009 • North Hall 4 • Las Vegas Convention Center
Register at www.itexshow.com now!
CONTENTS Volume 15 No. 5 G
FEATURE ARTICLES 10
‘Leading the REVolution’ Ricoh hosts national dealer meeting Oct. 13-16
The Rise of Color Are you ‘on board’ for B2C’s ascent?
by Brent Hoskins Office Technology Magazine
Primarily focusing its presentations on such milestone topics as a new selling strategy, its agreement to acquire IKON Office Solutions and various leadership changes, Ricoh Americas Corp. recently hosted VISION 2008, the manufacturer’s annual national dealer meeting.
by Brent Hoskins Office Technology Magazine
Virtually every office technology dealership has pursued the color market to some extent. It cannot be avoided. Color MFPs are at center stage within the manufacturers’ product lines. Competitive pressures compel dealers to persevere in the market. Are you “on board” for B2C’s ascent?
HP’s Priorities Vendor hosts worldwide press & analyst event
PRINCIPAL ISSUES CAC Authentication Technology & trends in MFP/smart card integration
by Denine Phillips Tech-Write LLC
by Brent Hoskins Office Technology Magazine
Network security is the 800-pound gorilla, 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.
Sharing a detailed look at the expectations for its growing product line-up and progressive plans to further boost captured page volume, executives of Hewlett-Packard hosted the company’s annual Imaging & Printing Conference Oct. 6-9 in San Diego, Calif.
Connect, Compare, Compete BTA East hosts executive summit Sept. 11-12
COURTS & CAPITOLS Office Equipment Leasing My perspective — second in a two-part series
By Brent Hoskins Office Technology Magazine
by Robert C. Goldberg BTA General Counsel
Providing office technology dealership principals and senior managers with a regional eduction and networking opportunity, the BTA East District hosted “Connect, Compare, Compete: An Executive Summit” on Sept. 11-12. The event was held at the Ritz Carlton-Westchester in White Plains, N.Y.
On the ‘Fast Track’ BTA West hosts district event Sept. 19-20 By Elizabeth Marvel Office Technology Magazine
Held at BTA member dealership MWB Business Systems, the BTA West District hosted its “Fast Track to Recession-Proofing Your Business” event Sept. 19-20 in Cypress, Calif. The event included five education seminars, a networking reception and an evening at the quarter horse races. 4 | www.of ficetechnologymag.com | November 2008
In 2008, equipment return rates continue to grow, wholesale values continue to decline, fees are flat and bad debt and delinquencies are at record levels. With increasing profit pressure, the effects will have long-term implications on your business.
DEPARTMENTS Business Technology Association
Executive Director’s Page
BTA President’s Message
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EXECUTIVE DIRECTOR’S PAGE
Survey Results Show Level of Color Focus ach November since 2002, the cover story in Office Technology magazine has focused on the topic of color output in the workplace and the market opportunity. Today, virtually all office technology dealerships are selling color-enabled MFPs to some extent and, increasingly, color printers as well. Yet, while significant strides have been made in the product category since 2002, the ascent of color continues. Are you “on board,” taking full advantage of the opportunities? In order to better identify the degree to which dealers are actively selling color devices, I conducted a brief e-mail survey on the topic in late October. Ninety-three dealer readers responded to the survey. Below are some of the questions and the percentage of respondents who selected the various choices listed with the questions. I am certain you will find the results of interest. What percentage of your MFP placements each month are color-enabled devices? 20 percent or less, selected by 16% of the respondents to the question; 21 to 30 percent, 20%; 31 to 40 percent, 26%; 41 to 50 percent, 18%; 51 percent or more, 20%. What percentage of your printer placements each month are color printers? Less than 5 percent, 19% of the respondents to the question; 6 to 10 percent, 13%; 11 to 20 percent, 17%; 21 percent or more, 42%; we do not sell color printers, 9%. Do your general line sales reps generally lead with color as they call on current and prospective customers? Yes, 83%; No, 17%. Does your sales rep compensation plan pay reps, in part, on the aftermarket
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revenues from color MFPs and/or printers? Yes, 41%, No, 59%. In the e-mail survey, the previous question was followed with this request: “If you responded with ‘yes’ to the question above, please explain how you compensate sales reps based on the aftermarket revenues of color devices.” Here is a sampling of the responses: “Eight percent of the new click revenue paid up front off the first year minimum on the contract.” “Our reps get paid 10 percent on the gross service agreement amount and the same on supplies sold.” “Rep is paid 5 percent of the year’s contracted revenues.” “We pay the rep 2 percent of the maintenance and supply revenue from his or her territory.” The survey also included this request of respondents: “Please explain how you address color output in your MFP CPC contracts.” Here is a sampling of the responses: “We look at samples of the customer’s work, estimate coverage and price accordingly.” “We bill for scans with four scans per color print.” “We charge a CPC for black and white at their anticipated volume and usually include [this] in the contract. For the color clicks, we get their actual copy count each month and [send them] a separate invoice for those clicks.” “We do a straight CPC starting at .07 with annual increases of 10 to 15 percent.” Additional responses to these last two questions and several other questions from the survey can be found on the BTA Web site, www.bta.org. Just click on “BTA Idea Exchange” on the home page. — Brent Hoskins
Executive Director/BTA Editor/Office Technology Brent Hoskins firstname.lastname@example.org (816) 303-4040 Associate Editor Elizabeth Marvel email@example.com (816) 303-4060 Contributing Writers Robert C. Goldberg, General Counsel Business Technology Association Denine Phillips, Tech-Write LLC www.tech-write.biz
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 firstname.lastname@example.org Mary Hopkins Database Administrator email@example.com Teresa Leerar Bookkeeper firstname.lastname@example.org Brian Smith Membership Sales Representative email@example.com ©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 ®
BTA Hosts Learning, Networking Events TA continues to have the goal of helping its members accomplish what they cannot do for themselves. The current series of BTA “Educating U ” events is an example of how BTA is bringing needed information directly to its members. In recent months, “Educating U” events have been presented on the East Coast, West Coast and at the base of the Great Smoky Mountains. In each case, dealers joined together to learn from industry experts and from each other. As a champion of the employee, I made certain that the BTA West event offered multiple levels of opportunity for learning. We had several sessions structured to be of specific interest to employees, dealership principals, OEMs and our sponsors. Each educational offering was designed to help make the jobs of those who deal directly with your dealership’s clients easier. Ann Barr, Darrell Amy, Tricia Judge, Brenda Merrill and Greg Tennyson each shared their specific expertise with those who form the policies, direct the daily work and actually accomplish the tasks that are required for completing a sale. BTA General Counsel Bob Goldberg explained the latest legal entanglements that can affect the unprepared business owner. Each of these presenters shared fresh ideas and business experiences that were of great interest to attendees. From the number of notes being taken and the questions asked, it was apparent that the concepts being presented were of interest and taken seriously. The sophistication of the attendees was expressed by the challenging questions that
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were asked and the opposing opinions discussed. There was often laughter and a “been there, done that” expression of camaraderie. Part of every BTA group meeting is also being exposed to and learning from our sponsors. New products were on display and the most current equipment, software offerings and new services were of interest to all those attending. We are grateful for the ongoing support of our vendor members and all those helping to support BTA events. One of the most enjoyable parts of each BTA gathering is the time set aside for old and new BTA members to talk with one another. During breaks, lunch, a reception and at a dinner at the Los Alamitos Race Course, talk of friendship, business ideas and life in general could be overheard. Laughter, the exchange of business cards, the sharing of photos of children and a few partnering deals are all part of a typical BTA event. For those of you who were unable to join us for this round of “Educating U” events, make a personal commitment to take part in future BTA offerings. Watch the BTA Web site for details on coming BTA events. Our next big event will be the BTA hospitality suite held at the ITEX show on the evening of March 18, 2009. (At the 2008 ITEX show more than 300 BTA members and friends joined us for lively talk, great food and drink in the BTA hospitality suite.) We encourage all those attending ITEX to stop by the BTA booth and pick up your invitation to drop by our suite and review all the benefits our members enjoy. We will also have great giveaways and several drawings for cash and prizes. I — Ronelle Ingram
2008-2009 Board of Directors President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 firstname.lastname@example.org President-Elect Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 email@example.com Vice President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 firstname.lastname@example.org BTA East Tom Ouellette Budget Document Technology 251 Goddard Road P.O. Box 2322 Lewiston, ME 04240 email@example.com BTA Mid-America Mike Blake Corporate Business Systems LLC 6300 Monona Drive Madison, WI 53716 firstname.lastname@example.org BTA Southeast Bob Smith Copiers Plus Inc. 408 Chicago Drive Fayetteville, NC 28306 email@example.com BTA West Greg Valen Hawaii Business Equipment Inc. Toshiba Business Solutions - Hawaii 590-A Paiea St. Honolulu, HI 96819 firstname.lastname@example.org Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 email@example.com
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Cover Story Nov 08:Cover Story Nov 08
The Rise of Color Are you ‘on board’ for B2C’s ascent? by: Brent Hoskins, Office Technology Magazine
irtually every office technology dealership has pursued the color market to some extent. It cannot be avoided. Color MFPs are at center stage within the manufacturers’ product lines. Workers in the general office are increasingly seeking color output. Competitive pressures compel dealers to persevere in the market. Are you “on board” for B2C’s ascent? One does not have to look far to see the emphasis on color. This month, for example, Sharp Imaging and Information Company of America has begun shipping the first products in its new Frontier Series, the MX-C311 and the MX-C401, providing 31 page per minute (ppm) and 40 ppm color output, respectively. And in December, Kyocera Mita America Inc. (KMA) will begin shipping the first of its new mid-range B2C color MFPs under its new brand mark, TASKalfa. The color output for the first four MFPs in the line will range from 25 to 40 ppm. Sharp and KMA are but two examples. With few, if any, exceptions, all of their full-line competitors demonstrate a similar level of emphasis on color MFPs. The numbers tell the stor y. Market research firm InfoTrends reports that in 2007, U.S. unit placements of color MFPs (A3 and A4 models from traditional copier vendors that sell through the BTA Channel) reached 283,244. Through 2012, the compound annual growth rate (CAGR) for the product category is projected to be 16.9 percent. Mike Marusic, vice president of marketing at Sharp, says the level of performance among Sharp’s dealers supports the growth trend reported by InfoTrends. “Virtually every one of Sharp’s dealers has a good color business,” he says. “In almost every case, well over 20 percent of their business is color. This includes even the smallest dealerships.”
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Peter Hendrick, vice president of marketing for KMA, shares a similar observation. “From a color-enabled MFP standpoint, I would say that the company’s expectations are being met and, to some degree, even exceed what we expected we would be able to sell,” he says. “That’s even without the new TASKalfa line coming onto the horizon.” An e-mail survey of dealers conducted for this issue of Office Technolog y further confirms the BTA Channel’s embrace of the color MFP market. Of the 93 respondents to the question “What percentage of your MFP placements each month are color-enabled devices?” only 16 percent indicate the number is 20 percent or less. In fact, 20 percent indicate that 51 percent or more of their monthly MFP placements are color enabled. The remainder of the respondents selected the following choices listed with the question: 21 to 30 percent of placements, 20 percent of respondents; 31 to 40 percent of placements, 26 percent; and 41 to 50 percent of placements, 18 percent. Despite the numbers, some dealers still may be content to lead with monochrome MFPs in the selling process. After all, these dealers would contend, the product category continues to claim the lion’s share of the market. “I think there are dealers that are still leading with black and white,” says Marusic, noting that they do so primarily with existing customers. “They may be thinking, ‘Why upset the apple cart, especially in today’s tough economy?’” It is true. The monochrome MFP market is significantly larger than the color MFP market. InfoTrends reports that in 2007, U.S. unit placements of monochrome MFPs (again, A3 and A4 models from traditional copier vendors that sell through the BTA Channel) reached 1,180,466. It is also true
Muratec ad Nov 08:Layout 1
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Cover Story Nov 08:Cover Story Nov 08
that th e p erc ent a ge of ser ve a solid pur pose. If â€œFrom a color-enabled mono chrom e MF P unit you donâ€™t need color, you MFP standpoint, I would placements as compared to shouldnâ€™t pay for it.â€? say that the companyâ€™s color MF Ps may remain Nevertheless, between the greater than some would two product categories, only expectations are being have expected by now. â€œIf the color MFP market is met and, to some degree, you go back a few years, expected to grow going even exceed what we analysts and manufacturers forward. InfoTrendsâ€™ proexpected we would be were saying that 80 to 90 jected CAGR for monoable to sell.â€? p ercent of thi s busin ess chrome MFPs is -9.4 percent â€” Peter Hendrick would be color in five years,â€? through 2012. Given the Kyocera Mita America Inc. says Marusic. â€œWeâ€™re now in placement trends, it is incumyear three or four and we bent on dealers to ensure are nowhere near that number.â€? they are actively pursuing their marketsâ€™ potential for color Of course, no one is questioning the long-term viability of MFPs, says Marusic, noting that if they do not, â€œit may be shortthe monochrome MFP. â€œThere will always be a place for sighted for their longer term business.â€? Why? â€œBecause you are black and white,â€? says Marusic. â€œAnd, frankly, manufacturers leaving the door open for a competitor to come in and say, â€˜I have developed a lot of competencies and reliability in our agree that you mostly need black and white, but you do need to black-and-white products. So, they are reliable and they consider color as well. Hereâ€™s how a total mix would work.â€™â€?
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Cover Story Nov 08:Cover Story Nov 08
Lou Slawetsky, CEO of toner that is consumed for “... You are leaving the Industr y Analysts Inc., a color documents. “The toner door open for a competitor market research and prodconsumption curve is expoto come in and say, ‘I uct testing firm, cites annential, it is not linear,” he other compelling reason for explains. “We had one maagree that you mostly need dealers to aggressively sell chine in our lab, for example, black and white, but you color MFPs. “Almost every where we increased 5 perdo need to consider color color device is connected to cent coverage to 6 percent as well. Here’s how a total a workstation or a network; coverage for one color and mix would work.’” this is not true of black and the total toner consumption — Mike Marusic, Sharp Imaging and white,” he says. “So, if the increased by half — by 50 Information Company of America Inc. dealer is tr ying to gain a percent.” foothold into the network How could this small and into the IT community, he is going to do it with color, increase in coverage (20 percent in relative, not absolute, not with black and white.” terms; that is, 5 plus 20 percent of 5, which equals 6) increase Despite the color MFP’s ability to “crack that glass wall” into toner consumption by 50 percent? “It relates to the number of the IT community, which can lead to the placement of addi- dots you are putting down per square inch when you increase tional products, Slawetsky says there remains one key down- the coverage,” says Slawestky. side for dealers in the color MFP arena that the industry needs In addition to the difficulty in anticipating toner conto address — the difficulty in making an acceptable profit on sumption, there is the initial difficulty in determining the the aftermarket. The problem, he asserts, lies in the amount of average coverage on a color document, says Slawetsky. “The
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Cover Story Nov 08:Cover Story Nov 08
d at a that mo st vendors What is the solution to “The data that most supply dealer service dethe problem? It is often sugvendors supply dealer partments assumes an avgested that only the black erage coverage of 5 percent toner pages be included in service departments per color, or a total of 20 the CPC contract with the assumes an average percent,” he says. “We think color toner sold separately. coverage of 5 percent per it is closer to 36 percent.” The risk with that strategy, color, or a total of 20 W hat e ver th e average says Slawetsky, is that the percent. We think it is coverage is, dealers must customer then may purcloser to 36 percent.” also recognize that in some chase color toner elsewhere. — Lou Slawetsky w ork env ironm ents, th e In order to resolve the Industry Analysts Inc. color toner coverage and color page price issue, Slapage volume will be higher wetsky contends dealers than anticipated. Consequently, dealers often include an must begin by insisting that manufacturers provide them escalator clause that will allow them to raise the rate 10 to with the toner consumption rates associated with the per15 percent per year, says Slawetsky. Unfortunately, because centage of page coverage. Only then, he says, can dealers of the higher coverage and the exponential consumption of work toward correctly pricing color pages. toner, even with the 10 to 15 percent escalation, he says, While the industry may continue to grapple with the “they are unable to raise their prices quickly enough to issue of the cost of a color page for some time, as noted, virrecoup the losses of the first year.” tually all dealers are pursuing the color MFP market to
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Riso Ad Nov 08:Layout 1
Cover Story Nov 08:Cover Story Nov 08
varying degrees. What are says, successful dealerships “When sales reps go out the traits of the dealership embrace the practice of conto customer locations to that is doing particularly ducting needs assessments. promote a color solution, well with color? Marusic “It is a 360-degree approach cites two distinguishing to sales,” he says. “It is looking they can follow one of two traits — successful dealers at the whole picture — tracks. They can just sell a lead with color in the sales looking at everything the cusbox or they can provide process and th ey do not tomer does. When sales reps customers with what they have color specialists. “All of go out to customer locations need based on their requirements.” their salespeople are selling to promote a color solution, — Bill Cassidy color,” he says. “If the dealer they can follow one of two Kyocera Mita America Inc. is still relying on a color spetracks. They can just sell a cialist in business color, box or they can provide custhen he or she is missing a lot of opportunities. You need to tomers with what they need based on their requirements.” walk into the customer location with the mindset of, ‘You Along with the needs assessment, successful dealerships need color in your office.’” are also ensuring that customers are taking advantage of Bill Cassidy, associate director of product and solutions mar- the various tools and utilities that are available to help keting at KMA, agrees, noting that in successful dealerships, them control color output, says Danielle Wolowitz, product “every rep is knowledgeable about the product.” In addition, he and solutions manager for color MFPs at KMA. “These tools can help administrators see who is printing what and when or even just allow them to set a monthly limit for somebody,” she says, noting that the concern about the output of unnecessary, excessive color pages persists. “When employees reach their color page limit, the tools can either lock them down or send a notification to the administrator indicating that they have printed their monthly allotment.” Fortunately, says Marusic, the selling process for color is easier than in the past. “People understand the value of color,” he says. “It is different than a couple of years ago when reps had to explain to customers why they would need color output. Back then, everyone had slides and training materials talking about how color in documents helps with retention. I think we are past that stage now. That part of the sales process is not difficult any more.” The color MFP is “no longer an exotic product,” adds Marusic. “Every manufacturer has a color line-up now, whether through an OEM relationship or by their own production. So, sales reps aren’t going to work each day considering color as something ‘additional’ to think about. And talking about color is not an uncomfortable conversation to have with an end-user. In fact, the end-user is much more receptive these days because, in most cases, they may have at least one color MFP in the building.” Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at email@example.com. 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 | N o v e m b e r 2 0 0 8
HP Nov 08:HP Nov 08
HP’s Priorities Vendor hosts worldwide press & analyst event by: Brent Hoskins, Office Technology Magazine
haring a detailed look at the expectations for its growing product line-up and progressive plans to further boost captured page v olum e, exe cutive s of He w l ettPackard hosted the company’s annual Imaging & Printing Conference, Oct. 6-9, in San Diego, Calif. At the event, the company unveiled a range of Vyomesh Joshi printing and imaging solutions, services and strategic initiatives. Vyomesh Joshi, executive vice president of HP’s Imaging and Printing Group, opened the event by explaining how HP is seeking to grow its market share in today’s economy. “Clearly, it is a tough market,” he said. “In a tough market, innovation becomes very important. In a tough market, cus- David Murphy tomers have very few dollars to spend and so they will focus on who will create value for them.” Going forward, that value will be seen, in part, in HP’s ability to facilitate printing in previously untapped markets, said Joshi. Today, he emphasized, digital communication is proliferating through e-mail, blogs and social networking sites, as well as through online newspapers, magazines and books. Consequently, he said, HP has its eye on “this phenomenal explosion of content.” Demonstrating HP’s pursuit of the opportunity, Joshi announced a new relationship with MySpace, through which HP will integrate its printing technology across multiple areas of the social network. The intent is to enable millions of consumers to easily print photos, personal profiles, blog entries, comments and messages stored on their MySpace profiles. Joining Joshi onstage, MySpace CEO Chris DeWolfe said MySpace has more than 120 million users
worldwide storing four billion images. While the event focused primarily on the consumer side, the agenda included a presentation by David Murphy, senior vice president of LaserJet and Enterprise Solutions. In his presentation, he listed the six strategic priorities that he said will drive HP’s ability to outperform the enterprise market. They are: aggressively target emerging markets; fuel color page growth; extend MFP line-up; expand software position and assets; leverage and drive Halo momentum; and increase environmental responsibility. “The proof point that we are on the right path is if you pull the MFP unit growth rates out of last quarter’s results, you will see that the unit growth rate was 29 percent,” said Murphy, as he addressed the “extend MFP line-up” strategic priority. “We’ve extended the MFP line-up from the high teens, something like 19 products, to today’s 55 products and, after today, you will see a continuation of that.” In his presentation, Murphy showed a slide indicating HP’s plans to add to its Segment 4 product line-up and enter into the Segment 5 arena. “One of the things that we’ve done in addition to driving the usage of the HP brand has been to build out the portfolio,” he said. “As we move to higher and higher enterprise performance needs, then you should expect that we will continue to build our portfolio.” As noted, during the event, HP announced several product launches. Among them: the $2,499 Color LaserJet CM3530 MFP, the company’s first legal-sized desktop color LaserJet MFP; the $599 Color LaserJet CP3525 printer for the general office, offering print speeds up to 30 pages per minute; and HP High-Performance Secure Hard Disks (two versions at $549 and $599), providing advanced security features that enable companies to protect sensitive data that is stored on HP printers and MFPs. Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at firstname.lastname@example.org. 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 | N o v e m b e r 2 0 0 8 | 19
BTA East Nov 08:BTA West Nov 08
Connect, Compare, Compete BTA East hosts executive summit Sept. 11-12 by: Brent Hoskins, Office Technology Magazine
roviding office technology dealership principals and senior managers with a regional education and networking opportunity, the BTA East District hosted “Connect, Compare, Compete: An Executive Summit” on Sept. 11-12. The event, which featured five education sessions, was held at the Ritz Carlton-Westchester in White Plains, N.Y. “Our intent was to help attendees ‘connect’ with vendors, industry experts and other dealers, ‘compare’ their dealerships’ efforts to current strategies for success, and find new ways to ‘compete’ more intelligently to grow their businesses,” said BTA East President Tom Ouellette, president of Budget Document Technology, Lewiston, Maine. “Based on feedback from attendees, it appears that BTA East delivered. It is our hope and expectation that the district can host a similar event in 2009.” The event began the evening of Thursday, Sept. 11, with a presentation by BTA General Counsel Robert Goldberg, “Why is Everybody Always Picking on Me?,” followed by a cocktail reception, featuring sponsor tabletop exhibits. On Friday, Sept. 12, the agenda included the tabletop exhibits and four additional education sessions: “Growing Market Share and Profits” with Tom Callinan of Strategy Development; “Moving From Boxes to Solutions” with Jon Reardon and Randy Dazo of InfoTrend s; “Shifting Service From Reactive to Proactive” with Jack Duncan of Jack Duncan Consulting; and “The Case for Page-Based Compensation” with Lou Slawetsky of Industry Analysts Inc. The event’s five education sessions provided details on proven business strategies, advice for prudent employee management and specific metrics for business planning. A brief sampling of some of the information shared demonstrates a sense of the content’s scope: From Callinan, on revenue: “Your top 50 accounts will produce more than 35 percent of your revenue. These same
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Top: Attendee Chad Alkire, director of inventory and marketing for Cws...The Document Solution, Parkersburg, W.V., asks a question of one of the speakers. Bottom: Tom Callinan presents “Growing Market Share and Profits.”
BTA East District event sponsors:
BTA East Nov 08:BTA West Nov 08
50 accounts are “The recent BTA East your competitors’ top 50 prospects.” event gave us a great From D unopportunity to discuss can , on ser v ic e the latest news within the technicians: “We industry ... Overall, the shoul d get 7.5 event gave us some hours of producvaluable tools ... ” tive time per day p er t e ch , w hich would total out to 150 hours in a 20-day month.” From Reardon, on the size of the U.S. installed base: “Device proliferation has led to higher output costs and complex fleet management issues; there are 8.6 million copiers and 24.3 million workgroup printers currently installed in U.S. businesses.” The agenda concluded the evening of Sept. 12 with a visit to the (now closed) historic Yankee Stadium. While the New York Yankees vs. Tampa Bay Rays baseball game that evening was postponed due to rain, attendees had the opportunity to enjoy the stadium itself and tour Monument Park. Located in left center field, Monument Park contained a collection of monuments, plaques and retired numbers, pertaining to the Yankees — memorials to such legends at Babe Ruth, Mickey Mantle and Lou Gehrig. As noted, the event received favorable feedback from attendees. “Overall, the event gave us ideas that we’ve already incorporated into all aspects of our business,” said Mike Steinhoff, president of Rhyme Business Products, Portage, Wis. “We specifically enjoyed Jack Duncan’s presentation … His information has stimulated some research that we feel will bring us some improved results.” David Hart, president of Heaster-Hart Office Equipment of Clarksburg, W.V., offered similar accolades. “The recent BTA East event gave us a great opportunity to discuss the latest news within the industry,” he said. “It also allowed us to meet multiple vendors in one location and to speak to and learn from other dealers. The speakers at the event were outstanding and allowed us to see how other dealerships are handing the changing dynamics of our industry, from print management to better and more effective ways of managing the service department. Overall, the event gave us some valuable tools on how to improve and protect our business.” Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at email@example.com.
Clockwise from top: Helene Waldman of sponsor Greater Bay Capital addresses attendees between education sessions; Rob Brodeur of sponsor SYNNEX Corp.; the Ritz Carlton-Westchester, located in downtown White Plains, N.Y.
Although rain resulted in a postponement of the Sept. 12 New York Yankees vs. Tampa Bay Rays baseball game, attendees had the opportunity to “say goodbye” to historic Yankee Stadium as the end of its final season drew near. 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 | N o v e m b e r 2 0 0 8 | 21
BTA West Nov 08:BTA West Nov 08
On the ‘Fast Track’ BTA West hosts district event Sept. 19-20 by: Elizabeth Marvel, Office Technology Magazine
eld at BTA member dealership MWB Business Systems, the BTA West District hosted its “Fast Track to Recession-Proofing Your Business” event Sept. 19-20 in Cypress, Calif. The two-day event included five education seminars with topics ranging from the compatibles market to document management, a networking reception and an evening at the quarter horse races at Los Alamitos Race Course. “I was really pleased with the turnout for the event,” said BTA President Ronelle Ingram, who kicked off the event on Friday afternoon, welcoming attendees. “I think it was a great success and brought dealers together to learn more about our industry and the changes that are happening within it.” After her welcome, Ingram introduced the first speaker, Tricia Judge, executive director of the International Imaging Technology Council. Speaking on a somewhat controversial subject, Judge’s session, “Dissecting the OEM vs. Compatibles Market,” covered cartridge remanufacturing and its pros and cons. “Know who you’re dealing with and if someone comes to you with a $10 cartridge and tells you you are going to make a lot of money, show them the door,” said Judge, addressing the subject of counterfeit cartridges. BTA General Counsel Robert Goldberg ushered in the second education session of the day after short presentations from the Select Dealer Group and event sponsors Toshiba, Lexmark and Image Star. Goldberg’s presentation, “Why is Everybody Always Picking on Me?,” focused on the state of today’s office technology market and how dealers can protect dealership business. “Your dealerships have never been worth more because there are fewer and fewer independent dealers,” said Goldberg. “But, ‘why is everyone picking on me?’ Because things are getting more difficult ... Things are getting better but they are getting more competitive. The profits are not there. Everyone is getting squeezed.”
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Top: Attendees listen to an education session presented by BTA General Counsel Robert Goldberg; Bottom: Lexmark’s Phil Boatman (left) gives a demonstration of a Lexmark product to BTA West District event attendees.
BTA West District event sponsors:
BTA West Nov 08:BTA West Nov 08
Following Gold“I was very impressed berg’s education session, sponsor with the quality of the MWAi gave a speakers at the BTA shor t presentaWest event. I felt that I tion b efore Inreceived a great update gram adjourned on current programs attendees for an that are happening ... ” evening networking reception. On Saturday, attendees began the day with an education session by Brenda Merrill, director of marketing and business development for MWB Business Systems. Her session, “The Genesis of PrinteGration,” covered the howtos of establishing a print management strategy in a dealership, including print assessments and TCO analysis. Following Merrill’s session, attendees took a tour of the MWB facilities and heard a presentation about the BTA Leasing Program from event sponsor, Greater Bay Capital. Next, MWB’s Greg Tennyson, director of solutions and technology, took the f loor for the fourth education session. Tennyson discussed document management and imaging, showing attendees that they use document management on a daily basis. He gave examples of potential customers who could use document management solutions and explained how to capture that business. For the final education session of the day, “How to Maximize Your Leasing Profitability,” Merrill spoke to attendees about bundling service and maintenance agreements with leasing, as well as adding service revenue clicks for existing printers onto lease agreements. Saturday evening, attendees, sponsors and speakers congregated at Los Alamitos Race Course for dinner, networking and quarter horse races, wrapping up an educational and fun weekend in Southern California. Attendees had positive feedback of the event. “I was very impressed with the quality of speakers at the BTA West event,” said Edy Seaver, president, Tangerine Office Systems, Henderson, Nev. “I felt that I received a great update on current programs that are happening in the market. Hearing from Bob Goldberg opened my eyes to issues to watch out for in my day-to-day dealings and also acquainted me with many values that BTA offers that I was not fully aware of as a member. Thanks for a well organized and executed weekend.” Elizabeth Marvel is associate editor of Office Technology magazine. She can be reached at firstname.lastname@example.org.
Clockwise from top: Attendees take a tour of MWB Business Systems’ facilities; BTA President Ronelle Ingram ( far right) poses questions during an education session; Greater Bay Capital’s Kathy Curtin introduces her company to attendees.
Clockwise from top: BTA West District event sponsors stand in the winner’s circle with the winning horse from the BTA race at Los Alamitos; Toshiba’s Steve Rhorer addresses attendees; MWB Business Systems. 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 | N o v e m b e r 2 0 0 8 | 23
Ricoh Nov 08:Ricoh Nov 08
‘Leading the REVolution’ Ricoh hosts national dealer meeting Oct. 13-16 by: Brent Hoskins, Office Technology Magazine
rimarily focusing its presentations on such milestone topics as a new selling strategy, its agreement to acquire IKON Office Solutions and various leadership changes, Ricoh Americas Corp. recently hosted VISION 2008, the manufacturer’s annual national dealer meeting. The meeting, drawing approximately 300 dealer attendees, was held Oct. 13-16 in Orlando, Fla. The meeting’s theme, “Leading the REVolution,” provided a reference to a new value-based selling strategy announced during the opening General Session by Hede Nonaka, Ricoh Americas Corp.’s executive vice president of marketing and DSSD. “Real Enhanced Value — or REV — comes from our ability to create complete hardware, software and service packages that address our customers’ most pressing business issues,” he said. “So, instead of selling on price, we intend to provide solutions with ‘Real Enhanced Value.’” Nonaka noted that the REV strategy addresses five key issues identified as priorities for most businesses: process improvement, information security, total cost of ownership, regulatory compliance and environmental issues. “For each of these five areas, we have developed a Ricoh value proposition,” he told dealers. “Our value propositions provide compelling descriptions of how we can help customers address their most urgent business issues. And, for each of the value propositions, we are creating value packages that can be easily configured by you to meet the customer’s exact requirements.” For example, explained Nonaka, Ricoh is developing its “Green Value Package.” It will include software that enables version controls and encourages duplex printing, he said, noting that it also includes equipment that minimizes both power and supplies consumption, an aggressive recycling program and intelligent color management. “This is just one of our Value Packages,” he said. “As you can see, they will help us turn economic difficulties into new selling opportunities.” For some dealer attendees, perhaps the most important
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Top: Attendees evaluate Ricoh’s latest products in the meeting’s Technology Expo. Bottom (left to right): Kirk Yoshida, chairman and CEO, Ricoh Americas Corp.; Martin Brodigan, president and CEO, Ricoh U.S.; and Hede Nonaka, executive vice president of marketing and DSSD, Ricoh Americas Corp. topic addressed during the meeting was Ricoh’s definitive agreement to acquire IKON Office Solutions (now complete), announced on Aug. 27. Kirk Yoshida, chairman and CEO of Ricoh Americas Corp., explained the reason for the acquisition and strove to allay any concerns about how the acquisition will affect the dealer channel. “Our decision to acquire IKON is no doubt at the top of your minds, which is why I want to address it myself right now at VISION 2008,” he said. “Our acquisition of IKON was a bold move to secure distribution we were in danger of losing. To use a Wall Street
Ricoh Nov 08:Ricoh Nov 08
term, IKON was a company ‘in play.’ If thinking you’ve heard that before, let me “If Ricoh didn’t buy Ricoh didn’t buy IKON, someone else tell you what’s different this time. This would have. We were not willing to be time, I’m here. IKON management will IKON, someone else put in that position and we were not report directly to me, so I will be able to would have. We were willing to put you in that position. control their actions as never before.” not willing to be put in “If we lost such a sizable piece of our Beyond the new REV selling strategy that position and we distribution, we would lose significant and the agreement to acquire IKON, a were not willing to put market share, we would lose the scale third significant change highlighted at you in that position.” and scope to manufacture at competithe meeting was the recent promotion of tive prices and we would lose the ability Martin Brodigan to the position of presito invest heavily in new technology,” he continued. “None of dent and CEO of Ricoh U.S. Brodigan, who most recently these outcomes were acceptable.” served as CFO of Ricoh Americas, had served as president of Upon the finalization of the IKON acquisition, in markets Ricoh Canada for the prior eight years. “Martin’s new role is where authorized Ricoh dealerships and IKON locations co- one of many changes that we have made or will make in exist, the same rules of engagement applied to Ricoh Busi- order to strengthen our company,” said Yoshida. “We want to ness Solutions (Ricoh’s existing direct sales operation) will be better partners for you.” Brent Hoskins, executive director of the Business Technology apply, said Yoshida. “IKON operations will not disrupt your Association, is editor of Office Technology magazine. ongoing sales, and they will protect and respect your existing He can be reached at email@example.com. customer relationships,” he said. “And, for those of you
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Highlights Page 2008:Member Page 2008
BTA HIGHLIGHTS The following new members joined BTA during the month of September:
Dealer Members Automated Business Machines, Warwick, RI Digital Office Equipment Co. Inc., Statesboro, GA Electro Imaging Systems Inc., Livermore, CA NAMOS Inc., Madison, AL Office Automation of Gainesville Inc., Gainesville, FL Saulisbury Business Machines Inc., Charleston, SC Seeley Office Systems Inc., Glens Falls, NY Sissine’s Office Systems Inc., Jacksonville, FL Service Associate Members 1st Choice Accounting Group, Atlanta, GA BEI Pros, Wesley Chapel, FL Strategy Development, Bryn Mawr, PA Vendor Associate Members Ames Supply Co., Lisle, IL Bradshaw, Richardson, TX Color Imaging Inc., Norcross, GA Nexent Innovations Inc., Mississauga, ON, Canada For full contact information of these new members, visit www.bta.org and click on “BTA Hotline Online” on the home page before Jan. 1.
2008 BTA Finance Report Results of the 2008 BTA Finance Report compare key income statements and balance sheet indicators of BTA members to the recommended benchmarks of the BTA Business Model for Success as taught in BTA’s ProFinance. Industry employee productivity, profitability, expense and asset management ratio performance is provided and compared. For additional information on the BTA Finance Report, visit www.bta.org and click on “Research” and then “Benchmarking Reports” in the left-hand column of 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 Bradshaw is a leading provider of fullrange computer output solutions including printers, parts, supplies, logistics services, technical support, training and maintenance services. They distribute replacement parts for OEMs such as Hewlett-Packard, Lexmark, Xerox, IBM and Océ. Additionally, they are an Authorized Parts Reseller for Hewlett-Packard and are one of the largest providers of genuine HP printer parts in the country. In order to provide the highest quality product possible, they maintain an onsite repair operation where highvolume printer parts are repaired. www.bradshawgroup.com B TA S e r v i c e Associate member Prosperity Plus Management Consulting Inc. was established in 2001 with the goal of helping office systems dealers improve their operations and attain their personal and professional goals. Prosperity Plus offers three distinctly different services: consulting to help dealers improve operations, cash flow and profits; marketing programs to grow sales; and consulting for acquisitions and mergers. Are you looking to increase your prosperity? Give Prosperity Plus a call at (631) 382-7762. www.prosperityplus.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.
Phillips Nov 08:Phillips Nov 08
CAC Authentication Technology & trends in MFP/smart card integration by: Denine Phillips, Tech-Write LLC
etwork security is the 800pound gorilla, 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. These sophisticated digital imaging systems, with copy, fax, scan and print capabilities, are entry points to invaluable network resources, thus posing a unique challenge. As a result, a plethora of embedded features and optional products have emerged in recent years — hard drive encryption, hard drive data overwrite, removable hard drives, auditing/tracking software, SSL encryption and secure LDAP, to name just a few. Best implemented in multiple layers, these technologies can help safeguard information from theft or loss, providing an enterprise or government agency with what is called “information assurance.” The term “information assurance” was once used only in government circles; now it is common parlance. Essentially synonymous with information security, information assurance means measures have been taken to minimize risks, ensuring the confidentiality, integrity and availability (C.I.A.) of information. The C.I.A. concept is the foundation of policies set forth by the Information Security Management System (ISMS). Why strive for information assurance? Besides meeting strict federal security compliance requirements, such as HIPAA and SOX, security-conscious enterprises are cognizant that deploying strong security measures protects their most valuable asset — information. And in the post-9/11 world, secure information management is critical, as all sectors of our economy generate, share and distribute sensitive documents — personnel reviews, medical records, patent applications, building blueprints, satellite photos and classified reports. To keep this high-value information safe, administrators are increasingly turning to smart card technology to fortify their installed based of network-connected MFPs. While many other
tools of the security trade are available, smart card technology has only recently emerged as a method to provide stronger authentication at the MFP. Common Access Cards In 2001, the U.S. Department of D efense (D oD) b egan i ssuin g Common Access Card (CAC) smart cards to all active duty personnel, civilian employees and eligible contractors. With 3.5 million in circulation today, the credit-card size CAC is used as a primary form of identification, allowing physical access to DoD buildings, facilities, installations and controlled spaces, as well as logical access to DoD desktop and laptop computers. According to Frank Jones, director of the Personnel Identity Protection Solutions Division at the Pentagon’s Defense Manpower Data Center, “If a person is a federal civil servant or a member of the military, he (or she) has to have the DoD Common Access Card as a condition of employment. I’m involved with the production of that card and verification of the individual’s identity; we call it identity proofing and vetting, so that an individual is confirmed to be who he says he is.” Digital Certificates — Keys to the Network 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. “CAC is the name of the form factor; it’s not really what the technology is,” says Rebecca Nielsen, senior associate for Booz Allen Hamilton, a strategy and technology consulting firm. “The DoD is really focused on using public key technology or PKI. PKI is based on the concept of cryptographic keys that are used to do the authentication and these keys are stored on the chip embedded in the CAC, which is a much more secure mechanism than storing them on a workstation.” Nielsen explains that the digital copier/MFP with CAC capabilities must have a protected area in the firmware where 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 | N o v e m b e r 2 0 0 8 | 27
Phillips Nov 08:Phillips Nov 08
into network-based applications,” says the cryptographic keys can be generated, Henderson. “As such, we anticipated there used and stored. So, the device itself is ... The digital copier/MFP would be a need to have MFPs secured issued a certificate. “That means there are with CAC capabilities with the same type of authentication two processes at work,” explains Nielsen. must have a protected requirements as DoD computers. We got “ Th e user must auth enticat e to th e area in the firmware sponsorship from the Army in order to machine and the machine must authentiwhere the cryptographic purchase test cards to make sure our solucate to the network. During user authentikeys can be generated, tion worked in their environment. Today, cation, the cardholder enters the PIN to used and stored. we have a robust CAC solution that supunlock the PKI cryptographic functions. ports card validation through Active The PIN is never sent over the network. Furthermore, the DoD’s Online Certificate Status Protocol Directory or OCSP for Tumbleweed or CoreStreet. “To upgrade an existing MFP with CAC capabilities, the cus(OCSP) server validates that the certificate has not been revoked, i.e., supports authentication. This is a key issue in tomer orders the CAC kit, which includes application files, firmware upgrade, card reader and USB cable,” says Henderson, PKI; PKI provides authentication, not authorization. “Federal agencies are trying to prevent the bad guys from summarizing the installation process. “The software wizard walking in the door and plugging a device into the network,” walks them through the configuration process. Essentially, they says Nielsen. “They want to be able to validate that all con- are setting up which functions are locked or unlocked, identinected devices, and the people using those devices, are fying the domain controllers, certificate server, etc. They can authorized. And since the certificates do not come preloaded set these parameters at the MFP itself or from software tools on a device, the machine must be able to accept a new certifi- that allow configuration in a central location; the settings are then pushed to all CAC-enabled MFPs on the network.” cate and manage the cryptography used by the DoD PKI.” Though CAC solutions utilize complex processes on the back end, authentication at a CAC-enabled MFP is very simple. The Presidential Directive After the DoD established CAC as the required form of John Thiessen, product manager of secure products for Ricoh identification, the rest of the federal government followed Americas Corp., explains. “The cardholder inserts his governsuit. Specifically, the Homeland Security Presidential Direc- ment-issued card into a NIST-compliant card reader attached tive-12 (HSPD-12), issued in August 2004, mandated that to the MFP,” he says. “After entry of his Authentication PIN federal government employees and contractors must use a from the device’s control panel, the user is either granted or common identification credential for physical access to gov- denied access to device functions. If an incorrect PIN is ernment facilities and logical access to information systems. entered three times, the user is locked out. What’s nice is that This formal policy to establish a government-wide standard the system can be configured to provide open access to copy for secure and reliable forms of identification presents office functions, while only network scan functions are locked — that equipment manufacturers and dealers with an opportunity to is, require authentication. If preferred, all functions can be partner with the DoD as they work toward a common goal — locked until the user is successfully authenticated. More often, securing scan-to-email is the DoD’s primary concern.” secure information capture and distribution. In the December issue of Office Technology, I will continue to discuss CAC solution providers and how they are incorporating CAC Solution Providers Lexmark International Inc. was the first MFP manufacturer this technology into MFPs. I will also discuss some of the recent to market a CAC solution. Hewlett-Packard, eCopy and Canon trends in smart card development, including digital signatures, followed shortly thereafter. Ricoh is also preparing to launch a more secure encryption and the use of CAC technology within solution for its Aficio line of digital copier/MFPs. Often the commercial sector. referred to as a “CAC authentication solution,” manufacturers Denine Phillips of Tech-Write LLC, a New Jerseyoffer this capability as a hardware upgrade. based firm providing technical writing and Working on the CAC frontline is Brian Henderson, industry consulting services to the office equipment director of the federal government for Lexmark. “The DoD industry, can be reached at recognized that our MFPs, being network devices, required firstname.lastname@example.org or information assurance, due to the device’s ability to scan data (908) 735-2030. Visit www.tech-write.biz. 28 | 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 | N o v e m b e r 2 0 0 8
Goldberg Nov 08:Goldberg Nov 08
COURTS & CAPITOLS
Office Equipment Leasing My perspective — second in a two-part series by: Robert C. Goldberg, General Counsel for the Business Technology Association
Editor’s note: In the October issue of Office Technology, Robert Goldberg discussed the history of equipment leasing, the connection between dealerships and leasing companies and the impact on dealers. The article can be found on the BTA Web site at www.bta.org. This month, the series concludes as Goldberg focuses again on the impact of leasing on dealerships and what dealers can do to protect their dealerships. Impact on Leasing Companies In 2008, equipment return rates continue to grow, wholesale values continue to decline, fees are flat and bad debt and delinquencies are at record levels. With increasing profit pressure and many leasing companies choosing to “shrink their way to greatness,” the effects will have long-term implications on your businesses. Decrease in Sales/Customer Support — As margins compress, so does sales compensation. As turnover ensues, many leasing companies are eliminating positions and collapsing territories. Assuming that the salesperson brought value to the dealer, the overall service levels have declined. Many leasing companies have chosen to close or consolidate offices, making it challenging to maintain service levels and relationships with the dealer channel. Technology “Time Out” — Successful partnerships are rooted in data-sharing/integrated systems, online reporting and other technological solutions. Since these solutions come with extraordinary price tags, they are the first to be abandoned when leasing company profits are slim. Being fully committed to the office imaging market, leasing companies must continue to invest in new technologies. Declining Ethics — To the OEM and dealer, there is no greater asset than the end-user. However, most leasing companies do not see the lessee as your customer — but as theirs. So it follows that many leasing companies and even OEMs have engaged in behavior that has had a devastating impact on the dealer: (1) Compromising customer lists: The industry’s lowest behavior is giving your confidential customer lists to competing dealers or OEM branches and it is happening far too often. (2) Neutralizing the “upgrade advantage”: Most leasing organizations offer a significantly lower upgrade figure as an incen-
tive to keep the customer. Unfortunately, many leasing companies are willing to give this advantage to other dealers or branches; aiding the loss of a valued customer. (3) Disabled access to data: Most offer online reporting tools that include customer maturity reports, upgrade/buyout figures, etc. It is commonplace that a dealership’s access to such vital customer data is shut off if it ultimately parts ways with the leasing company. What Should You Do? Get Everything in Writing — Just like your business, leasing companies need to make a reasonable profit to stay solvent. In an effort to maximize short-term profits, dealers and OEMs have squeezed leasing organizations in their pricing and seemingly pushed them into their offensive behavior. By focusing on a long-term profitable relationship, it is essential to agree to an operating agreement that clearly spells out how the leasing company is going to make money and how it is going to serve and protect your valued customer. These master agreements must include: (1) Specific upgrade and buyout formulas: Include language that prohibits access to this information by anyone other than the originating dealers. (2) Credit/documentation/collection policies and procedures: How are they going to treat your customer? (3) Guaranteed residual values (4) End-of-term process: Include a guaranteed allowance to 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 | N o v e m b e r 2 0 0 8 | 29
Goldberg Nov 08:Goldberg Nov 08
return equipment prior to the expiration Consult an Expert — There are of the original term — without penalty. many dealers and OEMs that have en... In stark contrast to (5) Define all fees: documentation, tergaged in this model — one I would call a the way they themselves mination, restocking, CPC billing, etc. value approach. Those dealers, or any of make money, they There must be a prohibition on new fees our industry’s consultants, will not only choose their lead without your consent. offer you sound advice, but also a road leasing company based (6) Access to online tools: It is essential map (best practices) for getting to your on rates (at sale) rather to contract for uninterrupted access to desired goals. than the overall cost ... your customers’ data until the last lease is terminated. Tomorrow is a New Day (7) Confidentiality: Your customer information must be Virtually all dealers and OEMs share the same economic confidential and remain confidential. model — a small percent of the profits at the time of sale and (8) Survivorship: You can secure your operating agreement the majority of profits over time. Yet, in stark contrast to the language in the event you decide to move away from your way they themselves make money, they choose their lead relationship with your existing leasing company. All terms of leasing company based on rates (at sale) rather than the the operating agreement shall “survive” and apply to the port- overall cost over time. Do not chase rates! It is essential that these two models come into alignment, folio of transactions. (9) How lease payments during a renewal period will be producing a consistent and repeatable model based on longterm relationships and profitability. Understand that in a threeshared. Bundle Everything — Bundling (including your service, party transaction, all three parties must consistently win or the parts, supplies, professional services as a pass-through) has model is not sustainable. Dealers have consistently brought always offered significant advantages to dealers that include: value and service to end-users. If those end-users desire to reduced administrative expenses, increased service contract finance their equipment through a lease, dealers must estabretention rates, increased customer retention rates and addi- lish a lease relationship that both benefits the dealer and the tional fee income opportunities. end-user. Choose your leasing company carefully and establish Unfortunately, only a small handful of leasing companies the terms of the relationship in writing — up front. BTA can have a reputation of providing a quality bundling program. It help through educational programs presented is essential to get a long list of references that demonstrate at district events, a peer group such as SDG, or their successful experience and investment in bundling. through calling the Legal Hotline. When you find that lease company, write a comprehensive Robert C. Goldberg is general counsel for the agreement with the company and enjoy the benefits of longBusiness Technology Association. He can be term, non-cancelable service contracts. reached at email@example.com.
ADVERTISER INDEX 18 • Ames Supply Company
12 • Duplo
16 • International Laser Group
(800) 323-3856 / (630) 964-2440 / www.amessupply.com
(800) 937-2880 / www.ilglaser.com
(800) 843-5059 / www.bta.org
(800) 255-1933 / www.duplousa.com 7 • Equitrac (800) 327-0183 / www.equitrac.com
15 • Color Imaging
32 • FIX: Cost Management for Service
11 • Muratec America Inc.
(800) 783-1090 / (770) 840-1090 / www.colorimaging.com
(469) 429-3481 / www.muratec.com
25 • Daybreak ICS (972) 668-8300 / www.daybreakics.com
(800) 843-5059 / www.bta.org 14 • IBPI (480) 393-1694 / www.ibpi.net
5 • DocuWare (888) 565-5907 / www.docuware.com
13 • Image Star (888) 632-5515 / www.imagestar.com
31 • BTA ProFinance
30 | 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 | N o v e m b e r 2 0 0 8
2-3 • ITEX 2009 www.itexshow.com
17 • RISO Inc. (800) 876-7476 / http://us.riso.com 9 • TechData (800) 500-0101 / (800) 237-8931 / www.techdata.com
ProFinance thinker full pg:31OT0406
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Published on Apr 19, 2011