Last week in Los Angeles Konica Minolta Business Solutions (KMBS) held its annual dealer meeting. After sitting through the general sessions, witnessing the variety of educational sessions available, and walking the showroom floor as well as reading between the lines, it’s safe to say that KMBS continues in its transformation into a company intently focused on solutions and services, that, oh by the way, sells hardware too.
That may run counterintuitive to some OEMs whose mission is still moving boxes. But let’s not assume for a second that’s not important to KMBS even as management within the organization here in the U.S. and the home office in Japan have come to the realization that the only way to survive and prosper in the future document imaging environment is to think outside the traditional box.
And thinking outside the traditional box could just as easily have been the theme of the meeting as “The Art of Disruption,” the actual theme of the event and a theme that some of my peers in the press and analyst community have gone gaga about over on Twitter. You’d think they’d never heard or used the word “disruption” before even if it is an analyst’s go-to word when talking about emerging technologies, services, and solutions. “Oh, what a disruptive technology!”
I’ll stay away from the disruptive hype for now and focus instead on what I observed along with what a few dealers and exhibitors also observed at this event.
A New Strategic Alliance
Let’s start with a couple of the big announcements made last week, announcements that have already hit the media, including ENX/The Week in Imaging. One of the big announcements was Konica Minolta’s strategic alliance with MWAi to bring the AP FORZA ERP to its dealer channel.
This relationship allows Konica Minolta to offer the first and only open-architecture, true ERP solution, MWAi FORZA, a solution designed specifically for the imaging channel. According to the press release, “MWAi FORZA with SAP Business One provides a single sign-on, single database business-management platform designed for office dealers and resellers. The system is designed to help dealerships unify, manage, and control their entire business across financials, sales, customers, and operations.”
According to MWAi President Mike Stramaglio, dealers seem to like the fact that it’s a true ERP and integrates not only with Konica Minolta, but other data points such as the leasing companies, for example. “It’s a true robust working system,” he told me. “Big data works, it’s more cost effective, and it’s truly automated. So when you start talking about meters, it’s automated. It’s not a flat file, it’s actually built in.”
This solution has been embraced by some big dealers although Stramaglio added that it can easily benefit dealers of any size.
MWAi is also signing up dealers to resell this solution to their customer base as part of their network services offerings. “It’s a revenue generator and a significant business model change,” added Stramaglio.
Additional Announcements
Another big announcement coming out of Los Angeles was an expanded relationship between EFI and Konica Minolta. Under the expanded agreement, Konica Minolta and its authorized dealer network will service and sell EFI Wide Format LED and UV inkjet printers. The non-exclusive agreement expands the market presence for EFI to KMBS’s customer base of North American digital-printing providers. EFI’s hybrid roll/flatbed wide-format printer, the EFI H1625 LED, will be the first printer available in KMBS sales channels through the new agreement.
Earlier this week I spoke with Charles Grace, vice president of sales for EFI for another article I’m writing, who told me that this wide format machine and Konica Minolta are a good fit. “That’s our lights out machine in wide format and we’ve sold out of this product for three quarters in a row,” he says. “Now we’re picking up Konica Minolta and that’s just going to be a win-win all the way around. I can’t remember if there’s been anything this revolutionary in this segment of the market. It’s a big deal.”
Getting back to how KMBS is moving beyond the box, look no further than the continued expansion of its All Covered network as well as its acquisitions of ECM companies (Look for an interview with All Covered’s Nick Pegley next month). That doesn’t sound like a box mover does it? Rhetorical question aside, it sounds more like a company that is making itself increasingly relevant in a changing document imaging environment.
At KMBS’s 2014 dealer meeting they alluded to a prospective partnership with 3D Systems. That partnership became a reality the end of last year. This year 3D printing was front and center in the General Session presentations, in the breakout sessions, and on the showroom floor, underscoring the relevance of 3D printers to the traditional office technology dealer channel.
JIm Loffler
Konica Minolta’s dealers are taking notice.
Jim Loffler, president of Loffler Industries in MN, was impressed by the investments Konica Minolta is making into the business for their dealers. “Take 3D for example, “he says, “it’s been on our radar for a couple of years and we’ve done deep dives on it. They’re putting together a program that will enable a dealer a dealer to get into the business. You almost need an engineer or a high-end technical person to do that business. They’re helping dealers along the way. We’re bigger than most and are capable of doing it ourselves, but it’s nice when you have a partner that can help.”
KMBS’s 3D printing initiatives also made an impression on Becky Offutt of Komax Business Systems in West Virginia. “We were impressed with the 3D Printing Opportunity discussion and are looking forward to more information,” she says.
She and her business partner Bob Maxwell also found the seminars on educational, legal and healthcare vertical markets helpful.
Two other strategic alliances of note announced at the meeting include one with Clover Technologies, focusing on recycling and remanufacturing of consumable imaging supplies. Plus, to support the relationship with Clover, KMBS has made a major investment with Ariba to provide order entry, processing, and tracking.
If you can judge a person by the company they keep, you can do that with a company like Konica Minolta as well. And when you look at some of the partnerships they’re engaged in along with the new acquisitions they’re making in the Managed Services and ECM segments, they seem to be making all the right moves to maintain their perch in the upper echelon of OEMs. And when you look at some of the dealers in attendance, they’ve got some elite ones there as well.
No wonder they’re doing so well from a financial perspective. It’s difficult not to be impressed by the company’s performance over the past year and when things are going well, that’s heavily touted in the General Session. When not, it’s often ignored or buried behind hyperbole.
By the Numbers and More
During the Monday General Session, President and COO Rick Taylor reported that Konica Minolta with the help of its dealers had another extremely successful year. “We have substantially grown our revenue, profits, units, and page volume in our core business.”
He added that KMBS’s production print and enterprise print business continue to grow dramatically and new businesses are flourishing. “All Covered will bill $200 million in Managed Network Services revenue this year,” said Taylor. “And the new Enterprise Content Management practice will reach $40 million in the coming year.”
Taylor expressed how proud he is of growing Konica Minolta’s revenue by $800 million over the last six years. “Just our growth in total revenue exceeds the total revenue of three of our competitors in the MFP business in the U.S. in their entire history,” he observed.
Rick Taylor
The company clearly takes pride in disrupting the market as well as disrupting the comfort zones of its dealers, many of whom are willing to embrace that challenge. “With such clearly documented success, why look for any disruptive change?” Taylor asked his dealers. “Because disruptive innovation is how we’ve grown at such an impressive pace. Our choice today is to disrupt or be disrupted. Because our core business is changing, the infrastructure, workflow, technology, and workforce are demanding that we adapt with them. Today, the riskiest thing we can do is play it safe. We will successfully disrupt our market by investing and exploiting opportunities that others don’t see the results will be exponentially greater returns.”
What’s New?
During the two-day event Konica Minolta unveiled new products, software, and services that Taylor said “will create change today and into the distant future.”
Focusing on traditional technology, Konica Minolta introduced scalable firmware architecture that was displayed at 72 workstations in the showroom, compared to 43 last year. “That shows how far we progressed in vertical markets and solutions,” noted Kevin Kern, senior vice president marketing.
Konica Minolta now offers greater mobility support with capabilities to support iOS and Android print, AirPrint, Google Cloud Print to go along with Konica Minolta’s own PageScope mobile app that’s had more than a quarter million downloads to end users so far. Meanwhile, coming this summer is Near Field Communication Print and Bluetooth LE (Low Energy) to allow for printing and authentication with authentication transmitted from a phone to the printing device.
The new scalable firmware architecture will be common to Konica Minolta’s A3 and A4 products over the next 18 months. “This means every product is running a version of the same software,” said Kern. “The second benefit is internal Web services and API support will now be standard. No more separate kits to install the APIs or internal Web services.”
Dealers can expect to see new products with this architecture this summer, including new 30- and 36-ppm color devices. Also on tap are new Segment 2 and 3 A3 offerings, both in color and mono.
Kern explained that these products fill the gap between higher end A4 and entry level A3 products. Key features include the new firmware architecture, a 7-inch touch screen, and the same solutions capabilities as higher end products in the line. Also standard are Inter-Web services support of API and a more compact engine design. The first products are 22- and 28-ppm monochrome devices that will be sold in parallel with 28- and 36-ppm bizhub-e Series products. Between late this year and early 2016, new products based on the same concept, sold with upgrade D series color products are scheduled for release.
Kern also reported that Konica Minolta’s A4 sales are growing and that the company will add new products that fill the gap in the product line, notably the bizhub C3850FS. This device includes a standard 50-sheet stapling inner finisher for customers who require light stapling capability.
When one talks about production printing of late, Konica Minolta is becoming increasingly part of that discussion. Consider that its Segment 5 and 6 sales are up 22 percent over the prior year as is its growth in color aftermarket sales. Worth noting as well is that Konica Minolta is the only manufacturer providing EFI and Creo controllers on its new generation products. Whereas other manufacturers have dropped the Creo, Konica Minolta continues to meet the needs of those customers who still see value in the Creo controller.
At the high end of the production segment is the KM1, an inkjet press developed by Konica Minolta and Komori. The first prototype was displayed at Graph Expo in 2014. It’s a B2 size press that does six up, letter size in a single pass. “What’s exciting about this product, going to beta test in first half of year in U.S. and limited sales later this year,” reported Kern.
Konica Minolta dealers will have access to this product once available.
Science Not-So Fiction
Looking beyond the traditional productions, solutions, and services, KMBS is on the verge of getting all Blade Runner. With the document imaging industry’s focus on security, KMBS is taking that to the next level by adding EyeLock identification to its MFPs. This replaces passwords and access cards with retinal scans, which offer, not so surprisingly, greater security.
Delving deeper into the disruptive theme is a partnership with Robin Powered, a company focused on sensor-based technologies and workplace automation. The company’s aim is to build a smart office, and among its software’s features are shared calendars and responsive conference rooms that sense an employee’s arrival and “push” that information to fellow employees (a team member who may have forgotten a meeting, for example). The company has products in development that range from an employee’s favorite song playing when they walk into a room, to the practical, such as specific-to-a-person phone chargers popping out of desks when the person arrives in the office.
What’s also interesting in a progressive way are potential partnerships with other tech companies. One is Knightscope, a company that makes robots that can reportedly see, hear, feel and smell and “watch over” corporate campuses and neighborhoods. The robots are fully autonomous, and are used to predict crimes in schools, businesses, and neighborhoods. The K5 robot detects crime using a variety of sensors including video camera, thermal-imaging sensors, laser-range finder, radar, air-quality sensors, and a microphone. If the K5 robot detects abnormal noise and temperature change, or known criminals, it will alert local authorities. Although you may not be seeing KMBS dealers selling these alongside traditional MFPs just yet, Taylor pointed out that somebody will have to be responsible for servicing this technology some day. What channel is better equipped to do that than the office technology dealer channel?
More innovation is happening at KMBS’s Stanford Innovation Center that will also be finding its way into future products and as new products and solutions, but that’s a story for another time. However, that, along with 3D printing, most impressed David Scibetta of Copier Fax Business Technologies in Buffalo, NY, one of the younger, progressive dealers at the meeting who has no hesitation about embracing new opportunities.
This is science not so fiction and a long-time successful dealer like Jim Loffler certainly understands the importance of embracing new opportunities. He’s keeping an open mind about these outside of the box opportunities that may present themselves to the Konica Minolta dealer channel down the road. “We always have to be investing in the future,” acknowledges Loffler. “We’re over the top of the bell curve on imaging. People are starting to print less and it’s still an amazing business and we’re growing like crazy, but what are we going to replace that with? It’s hard to be an early adopter; the pioneers, they’re the ones with all the arrows in their back.”
I’ve only scratched the surface on what went down at the KMBS dealer meeting last week. Expect to read more about what KMBS is doing, or should I say how they are “disrupting” the document imaging industry throughout the year in ENX and ENX/The Week in Imaging.
