A week ago Wednesday, I attended Toshiba America Business Solution’s (TABS) annual dealer meeting, LEAD 2013, in Orlando. That day was geared primarily to a select group of 250 end users who were invited by TABS dealers to learn about the trends that will be affecting their businesses and about Toshiba’s products, solutions, and services. It’s an interesting concept that TABS has been doing for the past three years and it seems to be paying off with new TABS President Scott Maccabe reporting in the Tuesday morning General Session for dealers that last year’s conference resulted in more than $7.2 million of new business.
The opening day General Session also offered a glimpse at TABS’ present and future. In case you haven’t noticed, since April 2013, Toshiba has introduced 13 new MFPs, including two color models and the e-STUDIO 306LP eco MFP. But Maccabe was quick to point out that TABS will be focusing on a whole lot more than print in the future.
“We’re no longer just leading innovation in the print-based world we started in,” said Maccabe. “We’re building a future in a fully integrated digital world where print is only one part of what we offer.”
Expect to see a growing emphasis on color with Maccabe reporting that Toshiba has seen strong growth in color system sales, up 14 percent year over year from 2012. This is a trend he expects will continue.
“Color now represents 42 percent of our unit shipments, which are up 37 percent from the same time last year.”
Expect those percentages to grow. Bill Melo, TABS’ vice president marketing, services & solutions, told me in an interview with he and Maccabe after the Wednesday General Session that dealers have to push color over monochrome devices. “We ship 40 percent of our products color; it has to get over 50 percent. If the number of pages are going down the value of the page has to go up.”
As one of the pioneers of MPS with its Encompass Program, it was no surprise to hear that Toshiba remains strong in that segment. “Along with our color sales growth, we’ve also grown the Managed Print side of our business, just as we planned,” reported Maccabe. “MPS revenue jumped 37 percent year over year and now represents 20 percent of our total business.”
With many players in the office technology industry embracing A4 like never before, Toshiba is perched squarely on that A4 bandwagon. “A4 units, both Toshiba-manufactured and ones from our trusted partners – Lexmark and Hewlett-Packard, have grown a robust 24 percent year over year—and have helped participating dealers grow their Toshiba branded business,” added Maccabe.
Illustrating its commitment to its A4 partners, HP and Lexmark had their own booths in the product and solutions expo, exhibiting their devices and meeting with dealers. Lexmark even had key executives such as Mike Johnson and Phil Boatman on hand, underscoring not only the company’s commitment to Toshiba, but also its willingness not to miss an opportunity to meet with the dealer community.
Maccabe acknowledged how other manufacturers are moving into IT and storage, but revealed despite his own background in IT, storage, and electronics components, that’s not exactly Toshiba’s vision of the future. “Our plan to touch the future is much more expansive than that,” he explained. “While we understand the IT and storage business better than most, we intend to chart a more innovative strategic direction rather than take a purely tactical approach.”
Enter digital signage, one new strategic direction, which he described to dealers as a “unique ‘blue ocean’ strategy—that we can focus on to expand our business and yours.”
LEAD 2013 found TABS rolling out its Ellumina Digital Signage services, its digital signage brand, along with Virtuoso digital signage displays, and LED signage for outdoor usage to the dealer channel. Prior to LEAD 2013, the products were sold almost exclusively by TABS’s direct channel.
It wasn’t as if dealers didn’t see the signs that digital signage was coming. “We showed digital signage for the first time last year,” noted Melo. “We had a tremendous response from dealers a year ago and then spent the next year not only creating programs for the dealers, but building products that they could sell—providing specific vertical market applications, pricing them right, and [creating] an annuity stream and a margin structure that fit in with their expectations for margins.”
A new product category can be intimidating and Melo did a nice job during the two General Sessions of highlighting applications for TABS’ signage products, which made it easy for dealers and end users to visualize the digital signage opportunity as well as key vertical market opportunities. Even here the focus wasn’t exclusively on hardware, but on content and TABS will provide its dealers with digital signage services, ranging from assessments and site surveys to content development and creation to content management, to design and implementation, to financing and leasing.
End user reaction to the digital displays was encouraging. “Because of the digital signage we’re starting to get people who are building stadiums or building a sports themed destination resort,” reported Melo. “We’re finding people who we would never have gotten [for our other products]. Digital displays resonate well with the dealers and with end users.”
Recurring revenue is important to dealers and with digital signage that will be geared around maintenance agreements, extended warranties, and refreshing content. Depending on the customer, Melo said there’s ongoing additional content that they’ll be paying a monthly fee to the dealer for under a subscription model.
Melo is passionate about this emerging product category and is encouraging dealers not to wait on it like they did with managed print services. He told me in our interview that he’s as excited about this for TABS and its dealers as when TABS first rolled out its version of MPS. “I told our dealers the other day when we came out with our MPS program in 2004 a lot of you sat on your hands for five years. We’re doing great now, but imagine where we’d be if you hit this as hard in 2004 as you did in 2009. I said, let’s not do that again. We’ve put together a program with a lot of the same characteristics as MPS.”
Melo has great expectations for digital signage as long as dealers get with the program. ““We grew our MPS business from nothing to 20 percent of our business; we want to crust it with digital signage.”
Meanwhile back to the Tuesday General Session where Maccabe described TABS as Toshiba Corporation’s pre-eminent business to business channel. “Going forward, we’ll be Toshiba’s first choice to deliver new B2B technologies, in direct alignment with the corporation’s global focus. Our foundation includes our successful brand agnostic approach to managed print products and services. That unique aspect of our business model broadens our catalogue of offerings and drives additional revenue that we all benefit from.”
A key component of this business model—people and services—provides what Maccabe said is a solid foundation to grow and to continue evolving from a Managed Print provider into a provider of Managed Content and Information Services. Going forward, that seems to be the company’s and its dealers’ key differentiator.
The point that was emphasized again and again throughout the event and in the various educational sessions was that TABS’ dealers need to grow their non-print related revenues. “Whether it’s professional services, workflow, security, or digital signage, or all of those, you’ve got to target at least 10 percent of your business from areas that have nothing to do with print,” said Melo in our post General Session interview. “The big opportunities still exist they just might not be in the same old places.”
And those new places are where TABS and its dealers are heading now that LEAD 2013 is history.
