In the summer of 2014, Clover Technologies Group acquired Micro Solutions Enterprises (MSE). It was the latest in a long series of acquisitions by the largest and most powerful player in the aftermarket toner space. Today, Clover Technologies has over 20,000 employees operating in 60 locations. There are seven global manufacturing sites with revenue totaling over $1 billion.
In February of 2016, after months of integration, Clover Technologies Group announced the creation of the Clover Imaging Group (CIG).
Clover Imaging Group Headquarters, Hoffman Estates, IL.
The addition of CIG now makes three divisions under the Clover Technologies Group umbrella. The other two are Clover Telecom and Clover Wireless.
CIG’s core products and services include remanufactured ink and toner cartridges, aftermarket printer parts and kits, refurbished fusers, OEM computer and server parts, and remanufactured postal inks.
Services include core and e-waste asset collection programs, MPS programs under the Axess brand, dealer marketing support under the marketing platform 2.0 brand, and lately, services under the Tech Link 2.0 sub-brand.
Why create CIG? According to Luke Goldberg, EVP, Global Sales and Marketing, CIG, it was to offer dealers unfettered access to the wide selection of products, services, and solutions from one rep and one web site – cloverimaging.com.
“The intention of the Clover Imaging Group was to take all of these phenomenal standalone entities and put them together to provide one point of contact,” says Goldberg. “Even though all these businesses were owned by Clover, dealers were still dealing separately with MSE, West Point Products, Depot International and the other companies.”
Luke Goldberg
Although the purchasing of products in the Clover Imaging Group has been consolidated under one website, MSE maintains a separate website. Goldberg says that this is strategic.
“The MSE brand is still so important to the overall brand strategy of the Clover Imaging Group,” he emphasizes. “Because we are positioning that as our premium brand for OEM conversion, and our premium brand for color, we’re actually keeping it as a brand building website. But you can’t buy anything from that website.”
Alternatives to Commoditization
Over the years the aftermarket has encountered many hurdles. One of the pain points currently shared by suppliers and dealers is the commoditization of print consumables. In order to offset this, many are looking increasingly towards a service-based model.
Goldberg says that services have become an important new part of the company’s offerings. In order to highlight this differentiation, CIG has rebranded its services offerings as Tech Link 2.0.
“We’re taking these products that lend themselves to commoditization and we’re wrapping them around such a high level of value and services that we’re de-commoditizing them,” he says.
The services listed under Tech Link 2.0 include printer service training, help desk support and triage support. CIG has even added a new live chat feature to their website.
“Today somebody can go onto the CIG website, type into the chat function and get an almost immediate response on anything from compatibility and troubleshooting to triage,” says Goldberg. “We have this whole suite of services that we’re offering to dealers to provide them with faster response times, better Service Level Agreements (SLAs), and really to become an arm of their service department.”
The one service area that isn’t included under Tech Link 2.0 is the MPS services offered by CIG. Those are still branded under Axess.
CIG also offers a robust marketing suite for its dealers under the Marketing Platform 2.0 brand. Empower is a web portal where dealers can log on and customize high-level content, such as videos and e-shots.
Towards Adjacencies
A buzzword heard frequently around the office technology space is adjacencies. With the commoditization of the consumable and trends signaling a slight decline in print, dealers are looking to add layers by entering into print adjacent areas, such as managed services or managed IT and Business Process Optimization (BPO).
Although CIG believes that print remains healthy, Goldberg says it would be irresponsible not to prepare for future possibilities. One area that CIG has diversified already is in offering computer and server parts.
“Refurbished servers and computer parts have become a growing product line for us,” he says. “Having the parts and the consumables is one way to dip your toe into managed IT and managed services.”
More companies are looking at BPO and user behavior and CIG is no exception. To explore this more, CIG has teamed up with Print Audit.
“Our partnership with Print Audit is very much about looking how to optimize work flows and understanding not just how much is being printed and what is being printed, but why is it being printed and who is it being printed by,” says Goldberg.
Seat-based Billing
In the world of print, customers are used to being billed per page. But per page billing has become the latest commodity. That is why CIG is also working with Print Audit to change the billing model from cost per page to cost per seat.
“We’ve already talked about how the standalone consumable in the transactional model have been commoditized,” says Goldberg. “Now the page has been commoditized. Dealers are frustrated that what used to be considered the great de-commoditizer – MPS – has now become a commodity in its own right.”
CES Warehouse
Goldberg states that many are already comfortable with per seat billing and that changing the billing model to a cost per seat will achieve a number of significant benefits, including allowing dealers to cluster services.
“If you’re in a contract with somebody at .09 cents, you’re at nine mils for that black page,” says Goldberg. “That’s it. With cost per seat, we can use it and add all kinds of adjacencies to it.”
As an example, Goldberg used PrintReleaf, the sustainability software company and a CIG partner.
“Maybe we add that and it’s another 50 cents per seat,” he suggests. “We can add other adjacencies like security. The point is that it’s not finite. It’s not static. It enables the dealer to layer on different products and services onto that seat.”
Goldberg cites the attitudes of the managed IT and the VAR community as being a positive for seat-based billing.
“They generally don’t like printers,” he states. “They don’t like managing printers. But if we give them a program where we’re taking on all the risk; where we’re taking on the break-fix, the consumables, and parts within that cost per seat that they’re already used to selling, it could be a way to get those managed ITs and VARs into the print space.
“Conversely,” adds Goldberg, “once the traditional BTA dealer gets used to selling print on a cost per seat, it will give them a better understanding of how to offer managed services and managed IT.”
Goldberg says that CIG is currently working with their partners to create a billing mechanism. He is confident that they will have a comprehensive program by the end of April 2016.
Big Data and IoT
Another partnership that CIG recently joined was Technology United.
Technology United bills itself as “companies…aligned in their commitment to drive intelligent, interconnected solutions and innovation forward.” It is an organization made up of some of the leading technology companies in the industry, including such names as MWA, ESP, GreatAmerica, BEI services, LMI, Green Hills Software, Intellinetics, and Intel.
A project that Goldberg and other Technology United partners spoke about at length at the recent Executive Committee Summit (ECS) in Scottsdale, Arizona, was harnessing of data from the joint companies to better utilize Big Data in the Internet of Things (IoT).
“Our industry has its own internet of things,” says Goldberg. “It’s the millions of connected devices. It’s telling us what’s being printed, where it’s being printed and how it’s being printed. We want to create a smart environment when it comes to printer fleets.”
Ultimately, Goldberg and Technology United want to harness this data to change the business model from what is today reactive to a model that is predictive.
Predictive analytics has been used in the consumer space for a long time, but has been slow to adapt in B2Bs. Goldberg says that predictive analytics will allow dealers to foresee issues before they happen and fix them.
“Imagine if you told the dealer they can go to their customers and offer a model where they will have virtually no down time with printers,” he opines. “You’ll be able to make them more efficient and save them time and make their services more efficient too.”
Challenges Accepted
Are there any challenges for CIG?
For one, Goldberg thinks that the industry has overreacted to trends in the world of print. He argues that the decline in print is very subtle and it still represents a great opportunity for dealers. One of the challenges, he says, is keeping dealers bullish and optimistic about the future.
Toner Robot
“We can all recognize changes in print, but the bottom line is there’s still a massive opportunity remaining,” he says. “There’s so much that dealers can do now to add value. The foundation can be print, and they can use the trust they gain in that area to expand into other services and adjacencies.
The second challenge cited by Goldberg is the price pressure placed on the global market by low-priced compatibles that are manufactured overseas.
“Those products are receiving more pressure from the OEMs on an IP standpoint, and it’s our hope that companies that respect the OEMs’ intellectual property will win out in the end,” he says.
Does Goldberg envision disruptive technologies as an issue for CIG?
“Our technology capabilities are second to none,” he states. “Whatever technology challenges come down the pike – be it chip sets or wide format ink – we think we will be able to overcome them.”
CIG is clearly riding a high wave at the moment, but where does Goldberg see the company five years from now?
“It’s our job to be predictive,” he says. “We want to be drivers and innovators and engines of change. We are committed to changing the way the industry does business today.”
With its expansive reach, diverse products and services, the Clover Imaging Group is certainly well positioned to drive this change.
