Steve Galloway
With 3+ decades in the imaging industry, including 28 years with Xerox, Steve Galloway, has been around. He’s pretty much seen this, that, and the other thing over the years and now as president of ESP for the past five years, he’s intently focused on transforming the company from a power protection powerhouse into an energy intelligence technology company. It’s a daunting task, but one that exemplifies the evolution taking place across all segments of the imaging industry, including the components and peripherals that add value to the higher profile hardware and services that are the lifeblood of the industry. This is the first of a two-part interview with Galloway. The second part will appear in next week’s edition of The Week in Imaging.
I guess to say that business is going well would probably be an understatement?
Galloway: Over the last 18 months we’ve been hitting home runs. We were in a 35,000-square foot manufacturing facility outside of Raleigh, NC on Dec. 31, 2012, we’re now in a 135,000- square foot manufacturing facility in Knightdale NC. We’ve had high double-digit growth rates. If you compare that with the imaging space where you’re seeing maybe two, three, four, or five percent growth, we’re four times that.
After all those years at Xerox, how do you like being in the power protection business?
Galloway: I like it a lot. The biggest job I had in my career [prior to joining ESP] was vice president and general manager, Xerox Supplies North America. I was very familiar with selling accessory type products and building revenue and annuity streams for the company off those products so this was right up my wheelhouse.
Sounds like there’s a lot of symmetry between what you were doing at Xerox and what you’re doing now?
Galloway: There is. The way you partner with the OEMs, the way you service customers is similar, but when you take a step back, and why I was brought into the company by our owners, was to try and take that great technology we had and go into other markets. At Xerox I managed expansion, by extending channels of distribution into the Superstores, wholesalers, IT VARs, and dealers. The base company when I came here was a great company, they had the best technology, but they stayed mainly in the imaging space, and mainly with a product platform that was very good and stayed behind the equipment unseen, saving service expense and increasing customer up-time. But it wasn’t doing anything else of additional value to the customer or our OEM/dealer partners.
What’s new and different about those products now?
Galloway: We’ve been putting a lot of intelligence into the devices where they can be used as a diagnostic tool and for troubleshooting. When I talk to dealers and OEMs, a lot of the service calls they have result in no issue found. With our device you can correlate fairly easy when the customer calls whether it’s a power problem or some other issue. This allows the partner to solve that problem for the customer and increases the customer’s up time. You get a happier customer and the OEM and dealer partner lowers their service expenses and parts replacement. We have a lot of data and a new study going on with BEI Services that shows when dealers use ESP products they experience an annualized savings, over $205 per MFP in Segment 3 and above.
I understand the acquisition of SurgeX has lead to some new opportunities?
Galloway: When I arrived our owners and I were looking to expand ESP’s technology portfolio. We acquired a company called SurgeX which was engineered and designed around the audio video space and is a totally different technology than the ESP technology and it takes protection to another level. The ESP technology is a surge suppression technology with “best-in-class” performance as tested by multiple OEM’s, Industry Analysts and BLI. Our value proposition to the customer is we have the lowest let through energy to the ground and the neutral wire plus the technology we have is multi-stage so the device never degrades over time, enabling a life-time connected warranty. In the imaging space, surge suppression technology doesn’t negatively impact the imaging device or the equipment on that branch circuit. In the AV space it’s very problematic and our SurgeX surge elimination technology completely eliminates surge energy and ground contamination improving acoustics, video and overall system performance.
You’re moving into new markets, what specific markets?
Galloway: In the imaging space, you have large OEMs, large service organizations, companies that let their customers do leases and what came to mind was the server business. There were 2.3 million servers sold worldwide during Q1 and $11.8 billion, which is bigger than the imaging space according to Gartner. We went on a journey to combine the technology of ESP with SurgeX and created an innovative hybrid technology for a SMB in the server space. Not only did we combine the best of ESP and SurgeX technology, we integrated a power distribution unit (PDU) in a single device, saving rack space and eliminating one SKU in the installation.
Dell is now using [our products] and we will be in those small and medium businesses, protecting the UPS unit and servers in a rack, or any free-standing installation. We’ve also taken our server protection technology into people like Ingram Micro and AVNET EMEA because they do a lot of business with the IT VARs and are interested in this technology for SMB’s.
We’ve had that same conversation in the imaging world with many OEM’s and businesses like Ricoh and Konica Minolta Business Solutions who have growing IT services businesses. A lot of dealers also have IT services businesses and we’re getting some good traction now with them using this as part of their services offering when they’re installing servers for their customers.
We’re also taking our expanded technology portfolio to the dealers in the audio visual marketplace and are having conversations with the large digital panel manufacturers that want to use our technology to protect their digital displays and arrays —those large banks of displays that you see in airports. They see a need for our surge and noise protection and we’re about to sign up two of the largest digital display companies in the world.
We’re making an effort to expand into these new markets, IT VARs, security firms and security VARS, wholesalers, while solidifying our efforts with our great partners in the imaging space, office equipment OEMs, and servers with strategic relationships like Dell.
(Editor’s note: The interview continues next week with a rundown on new products for the dealer channel, why dealers should consider partnering with ESP, trends affecting future product offerings, and what the industry can expect to hear from ESP over the next 6-12 months.
