Our partnership with MWAi creates a comprehensiveMPS solution for you and your customers.Visit our booth for Live Demos of isConnect MPSand Turn-key Website Solutions.888.632.5515 888.635.7479 sales@imagestar.comwww.imagestar.com26 enx magazine
FEBRUARY <strong>2010</strong> We Saw It In <strong>ENX</strong> <strong>Magazine</strong>... 800.850.4949HYBRID DEALER MODEL - REVISITEDBy David B Cameron, Ph.D.It was in the fall of 2008 when Ed Crowley, founder of ThePhotizo Group, recognized the convergence of markets andemergence of a new MPS channel that required the combinedcompetencies of a BTA/copier dealer and ITVAR/reseller. We coined the term 'Hybrid Dealer' to identifythat special group. I think others had probably noticed it also,as the term quickly found resonance in the hardcopy productcommunity of professionals. Certainly by that time the marketgrowth had accelerated based on growing recognition by endusersthat MPS could have significant impact to their business.I guess you could say that the timing was right to recognize agrowing market trend. We'll revisit in this article the originalthinking behind the Hybrid Dealer concept and update the factorsthat were driving the market and defined the model.The hybrid dealer development model below described thebehavior of channel players for MPS model adoption. It is reallya common sense model which Photizo documented, indicatingthe relative levels of commitment and business modelchange that a dealer (or reseller) has to go through to fully adoptthe MPS model. Our data, including hundreds of interviewsand online dealer assessments, has indicated that the vast majorityof dealers today are in the early stage of adoption, eitherFence Sitter or Tester per the chart below. Furthermore, of the14,000 or so North American dealers (including resellers), onlyabout 5% have become hybrid dealers so far. We have continuedto document the MPS adoption rate by channel players andkey factors that are driving it. Additionally, Photizo is launchinga <strong>2010</strong> study to delve more deeply into the MPS adoptionexperience and factors that either enable or inhibit dealer businesstransformation and market success.• Changes in the decisionmaker• Shifts in the channelThe introduction of the A4printer MFP is probably welldefined by the introduction ofthe HP4345, though certainly this was in concert with manyother similar products launches by other OEM's in the sametime frame. The rapid rise of sales and page migration fromcopiers and workstations to printer MFP's has been documentedby Info Trends and Lyra.The phenomenal growth of MPS sales and market opportunity,per the forecast by Photizo Group, is shown in the chart below.The channel growth rate is predicted to be 25.6% CAGR from2006-2013, a significant trend affecting dealer sales and profitability.Assuming that this trend continues, if not accelerates,the size of the business opportunity begs the question about theneed for MPS adoption rate by the channel. The end-user drivenmarket growth will demand competent MPS dealers to providethe services required. This factor alone suggests an urgentneed for dealers to get on board with MPS and drive the necessarychanges within their businesses to serve the growing market.There is little question that dealers of all types will needto make significant changes to move to a value, relationshipdrivensales model, as well as adopt a MPS business model thatreflects the longer sales cycles, infrastructure requirements andimpact to cash flow. One impact for dealers that are FenceSitters or Testers is that being late to the market implies potentiallost sales a significant risk to their business.We thought it would be enlightening to take another look at thefactors behind this business model change and see if they werestill valid. The original research identified the following keyfactors:• Introduction of MFP (A4, Multi-Function Printer) technology• The growth of Managed Print ServicesAnother factor driving the need for dealer transformation to thehybrid dealer model is the shifting of the MPS decision makerresponsibilities within end-user companies from Facilities to IT.The most recent data shows an increasing IT ownership forMPS, from 60-63%, year over year. In order to be successful,executive IT relationships need to be developed over time withthe CIO and team to close the sale. Traditionally, this has beenmore the domain of the VAR than BTA dealer, requiring achange to their sales model.continued on 2827enx magazine
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