Luke Goldberg: There has been a great deal of change West! One big one that comes to mind was something that happened in 2003. You actually worked with me on this one if you remember. Together we introduced a USB thumb drive to Future Graphics that collected data on network printers. The channel wasn’t ready for remote monitoring of diverse printer fleets back in 2003. Back then the dealer service-techs couldn’t speak enough IT-lingo to be taken seriously by network administrators. A lot of training and years later this is no longer the case and remote monitoring of printer fleets is commonplace. The hard work we all put in has really paid off as MPS is now an accepted means to reduce costs and improve efficiencies the world over. The model has made a lot of dealers and their channel partners very successful.
West McDonald: Has it really been 12 years? I remember it being a lot closer in the rearview mirror than that! When did everything start feeling like it was only 3 years ago? Moving into the present, what have you seen as a big industry change?
Luke Goldberg: I would have to say the mass consolidation at all levels of the industry. Dealers are buying dealers at a frenetic pace this year. The aftermarket imaging supplies market used to have 8,000 to 10,000 manufacturers. That number is dramatically lower now and I actually think that is a positive thing. Sure there are new competitive pressures but that has led to more sophistication and higher levels of service which benefits customers enormously. The days of selling “things” are far behind us in MPS and successful dealers have figured out that in order to get stickiness and good margins they need to keep an eye on updating their basket of services.
“Sure there are new competitive pressures but that has led to more sophistication and higher levels of service which benefits customers enormously.”
— Luke Goldberg, Clover Imaging Group
West McDonald: I agree with you on the prominence of consolidation. Clover has purchased a number of leading competitors over the years themselves. The OEMs haven’t really moved through a consolidation period yet. Do think that’s around the corner?
Luke Goldberg: Definitely. Lexmark recently announced they are looking at making some changes by pursuing “alternative arrangements”, HP has split its company into two separate units and Xerox now gets 56% of its revenues from services. I think it is only a matter of time before we see even bigger changes on the OEM front and some of those changes could come in the form of consolidation. They are not free from market forces anymore than you or I. Again, I think that any changes or consolidations are actually positive and signs of a healthy industry.
West McDonald: Clover sponsored the Top 100 Summit in Park City, Utah this year. We covered a lot of ground in the round table sessions. What was the biggest take away in your mind?
Luke Goldberg: Let’s talk generally first. I think the biggest thing to come out of the Top 100 Summit was an enormous amount of optimism and forward thinking. There was no talk of extinction-level events or the boogie man of the paperless office. Of course print is changing. People are printing less, no question, but all the dealers I spoke to seemed excited by the opportunities that exist through diversification and capitalizing on secular trends like digital workflow adoption. People weren’t focused on things out of their control, but rather on where they can adapt and grow.
More specifically Seat Based Billing (SBB) was a great lesson in the value of creative conflict. Not everybody agreed on the details of SBB but everybody at the Summit seemed to agree that SBB is coming. I agree, but further, I believe that SBB is going to come faster than most dealers realize. It’s exciting because it’s all about moving forward and not getting bogged down with doing things in ways that worked ten years ago but not as well today. Diversifying how we do things is important if we want to grow.
“…Seat Based Billing (SBB) was a great lesson in the value of creative conflict. Not everybody agreed on the details of SBB but everybody at the Summit seemed to agree that SBB is coming.”
–Luke Goldberg, Clover Imaging Group
West McDonald: Clover is no stranger to diversification and growth. You’ve been a company to watch for its numerous acquisitions over the years. Can you tell us more about the more recent acquisitions? They don’t seem to have anything to do with consumables remanufacturing.
Luke Goldberg: Clover started and remains rooted in the remanufacturing of print consumables. That being said, we’re excited to take what we’ve learned about repurposing E-waste for the Managed Print world and applying it to other areas. We can apply the expertise developed in imaging to other E-waste items like cell phones and computing technologies. We know that print volumes per user are in slow decline and are leading the charge by opening new channels of business and exploring new types of customers.
West McDonald: Talk to me more about this new customer. Who are they?
Luke Goldberg: Think of the IT VAR channel. IT resellers that are customers of TechData, Ingram Micro, Synnex and others. They currently use SBB for most of their Managed IT Services. So why not offer them SBB for print? Clover is actively working on ways to help IT VARS to be able to do this. We all need to be thinking about adjacent and complementary sales channels in order to thrive. SBB for print is going to be really important.
West McDonald: MPS for MITs?
Luke Goldberg: Sure! I think we’re going to start seeing a lot more competition between MPS providers and Managed IT Service providers. Who’s going to win? Whoever figures out SBB for print first.
West McDonald: I couldn’t agree with you more and I’m looking forward to your input in the Top 100 SBB Council as the industry works towards a solution here. The dealers at the Summit were all really fired up about SBB for print and I think it’s just a matter of time before we see it pick up steam.
Looking beyond the Managed Print space, what other things have you been paying attention to in the market at large?
Luke Goldberg: I think it’s still about convergence, but convergence on a much bigger scale. Think of Managed IT services and MPS coming together. Customers want a single partner to help them evolve into managed workflow. In the very near future just being able to offer MPS is not going to be an option. Managed document services, whether those documents are on paper or hosted digitally in the cloud, that’s the future. Managed IT Services will meld into this. Clover now has over 500 unique computer and server parts as part of our offering and are HP’s largest distributor in the US for these consumable items. We know that convergence is coming in a big way. We’re ready to meet it head on and our investments and acquisitions illustrate that fact pretty clearly. We know that the first step to helping our current dealer base to profit in the near future is to offer print consumables and computer parts from a single source.
West McDonald: So you aren’t just talking about convergence, you’re actively engaged in making it work for the industry. It sounds like a positive force for growth in the imaging industry.
Luke Goldberg: Definitely. I think all of this energy and change is enormously positive for the industry. Think about it: 12 years ago relationships between the OEMs and aftermarket supplies manufacturers was tenuous at best. Today that’s not the case. Nearly every OEM has adopted some kind of vendor-neutral MPS offering. I have to give credit to Xerox for starting that trend. Instead of trying to crush aftermarket suppliers they took a different tack. 10 years ago they began offering vendor neutral MPS options and have profited from it greatly. Other OEMs have followed suit and it’s been a big win for the industry as a whole. It has been driven by customer demand for a single source provider and there is no going back.
“12 years ago relationships between the OEMs and aftermarket supplies manufacturers was tenuous at best. Today that’s not the case. Nearly every OEM has adopted some kind of vendor-neutral MPS offering.”
–Luke Goldberg, Clover Imaging Group
West McDonald: I remember more tenuous and confrontational days between the OEMs and the aftermarket channel. We live in a much more cooperative market today that’s for sure. Luke, if you had one piece of advice for office equipment dealers as they look to grow their businesses in the next 10 years, what would that be?
Luke Goldberg: One piece of advice? That’s hardly fair given the amount of change in the last 10 years! One thing I would recommend is taking advantage of of business intelligence and data. We live in an age where there is unparalleled access to rich data sets. Access to data for dealers is incredibly easy to get. Device, user and document data provided by people like Print Audit is there and the dealers that decide to harness this data will be in a position to profit greatly.
I have another piece of advice: Evolve your value proposition to meet the needs of the new office. What we do can’t be etched in stone. Ask yourself: Is your value proposition from 10 years ago still valid? I think most businesses would agree that it isn’t. Utilize secular trends like digital transformation, IOT, and Big Data to bring more value to your customers.