It’s tough to keep Clark Bugg penned up for long. The director of North America channel sales for Lexmark International compares himself to a fenced-in dog running around the perimeter of the yard, angling to bust through to the other side. And as the pandemic slowly recedes and customer events begin to pick up again, Bugg is back in his element.
Truth be known, Bugg works his best magic in front of a crowd and also thrives in one-on-one scenarios for the Lexington, Kentucky-based manufacturer. He has a story to tell, and while it won’t be sugar-coated, there are some bona fide opportunities for the OEM’s Business Solution Dealer (BSD) channel that he’s keen to share. Bugg and Lexmark thrive on relationships, and they’re willing to make the investments of time and resources necessary to elevate the manufacturer to most-favored-nation status among partners.
Bugg sat down with ENX Magazine to discuss Lexmark’s role as a trusted advisor to the BSD channel and provide insight into the distinct advantages he believes have been attained in the A4 realm. Cloud Services has paved the way for Lexmark and its partners to take advantage of IT spend growth, and the new Optra IoT Platform enables the manufacturer to stretch its wings into data and device management.
Provide some insight into Lexmark’s financial performance during 2021. What were some of the variables that played into how the company performed?
Bugg: Obviously, we had some suppression going on with the supply chain shortages, but everyone was experiencing the same market dynamics. In the first half of the year, our hardware demand was greater than it had been in many years, which was challenged by some of the things we were experiencing from that supply chain perspective. If we look at it from a pages perspective, our volumes have started to come back. Even with the headwinds we experienced, we’re still optimistic about pages rebounding. On the performance side, we’re really pleased by how our partners are working with us to grow new business. Collaboration is the key for us. We’ve talked over the years about how our partners are vital to growing new business, both SMB and enterprise. We saw that this year with some logo wins that were tied into partner engagement. If we’re winning new business, we’re doing that in connection with our partners, and we think that’s a real differentiator for us. The key performance indicators are very positive for the future.
What were some of the highlights for Lexmark during the past year, particularly in the Business Solution Dealer (BSD) channel?
Bugg: Partner engagement, especially with the BSD channel, was really encouraging. One might think with all the supply chain challenges, sales reps might not be able to meet all the demand opportunities with their customers. But our partners were truly engaged in the events and activities that we had going on, such as our Lexmark Industry Advantage Program, which we introduced a couple years ago and continue to gain traction with in 2022. We had some focused events for our partners such as a health care virtual experience, winning in state or local education and how to utilize the cloud by industry. These events resonate with our partners. Participation was high, and we’re seeing the results of that within our funnel. Our tracking tools show the effectiveness of these programs and we can tie that back to an ROI.
Lexmark has always had a strong industry message, but we needed to package that into engagements our partners could take and sell independently. We want to be able to bring the resources to the table that help them win larger engagements, and we can support them with those value-added tools. The results have been extremely positive.
Obviously, supply chain shortages continue to be a major talking point. What’s been the impact on Lexmark?
Bugg: We were out there earlier than some OEMs in communicating what we were seeing in the marketplace. We worked closely with our advisory board, which has been critical in providing that information and insight. It can be difficult at times, but we’ve found some of our relationships have become stronger through the adversity. We’ve been highly transparent with our partners. In terms of how we’re managing business and securing components, we set up an escalation process—a priority ranking of how orders get out—all the way down to making changes and redesigning our products to accommodate multiple components. I think that’s a real advantage in owning our technology. Sometimes there are engineering changes that can be made to use components in a different way. Those are things our R&D team has focused on, such as spot buys in the marketplace to get needed products. It’s been a learning experience for us, but despite the challenges, we’ve enjoyed some really strong results.
How has Lexmark been able to balance the needs of its clients during this time?
Bugg: We want to continue to be in that trusted advisor role. As such, we’re taking more of a data-driven approach to refreshing fleets. A lot of partners can do their own data discovery; there are plenty of tools at their disposal. However, we try to take a smart refresh approach into how devices are being used and how they can be redeployed, and look at extending some of the contracts. I think the partners have learned a lot through this as well. They can be of the mindset they’ve followed for a number of years when contracts come up and make sure they get renewed. We’ve been able to work with them through this data-driven approach on smart refresh by using tools such as Microsoft Power BI. This enables us to take that data and organize it in a way that we can be smart about how those refreshes are executed on. If we can leverage our experience in managed print services and provide guidance to our partners from a smart refresh approach, it can be quite valuable.
How would you characterize the market for A4 devices and the ongoing demand for work-from-home solutions?
Bugg: We see the hybrid work environment as being here to stay, although I think it’s going to continuously evolve. With our dealers, we know there are options out there related to A4 and the hardware provider landscape, but given how we listen to our dealers, we feel like we’re in a good position. We deliver on having world-class technology and top-notch sales and support. Plus, owning our A4 technology is a key differentiator. Our engines are certainly sought after in the marketplace. If there are unique customer challenges that arise and we need to pivot or make technology changes, we’re able to do that. We continue to monitor the marketplace and announced some lower-end, BSD-specific A4 models last year that expanded the addressable market. We’ll reveal some more in the second half of 2022 as well. We want to put our dealers in a position to win new business and be a leader in this hybrid work environment. That’s only going to continue to grow.
Tell us a little about the growth in your core Cloud Services offering for print and fleet management.
Bugg: I’ve been with Lexmark for 23 years, since we started the BSD program back in 2007, and this has been one of the most exciting aspects. What we’ve done around cloud fleet services has probably changed the game more than anything we’ve had in terms of conversations with our partners. Obviously, winning in A4 is really important to us. But when we can walk in the door and talk to service managers and sales executives about how our cloud can position them as a dealer of the future, it provides a significant advantage. More than ever, our partners are looking for ways to service and support their customers remotely as opposed to them rolling a van out on every call. Our Cloud Services platform gives them the ability to service remotely and do things such as firmware updates, which are vital to addressing security. This gives dealers the ability to streamline those processes.
Forbes reported that 90% of CIOs say their companies are leveraging a cloud solution in their business today, and nearly half of those IT budgets are directed to the cloud. It’s really relevant to the conversations that our partners are currently having with IT in the field. Obviously, the post-pandemic business looks a little bit different with a workforce that’s more dispersed than ever before. In using these cloud services tools we make available to them, dealers can support customers not only in their back yard, but wherever that employee may be working. We’re excited about the feature technology and capabilities we have with Cloud Services. We’ve always been strong in global managed print services, and as we look to win new business with our partners, these cloud tools provide yet another opportunity for them to execute on. In 2021, we doubled the number of devices that are loaded in our cloud print fleet management platform. Our partners see value in these tools and how they can use them to manage their businesses.
Last year, Lexmark unveiled its Optra IoT Platform. Who will benefit the most from its core offerings?
Bugg: In a nutshell, we’re taking the IoT platform and the software we’ve used to really run a global managed print services business around the world, and we’re packaging them for customers to use externally. If you think about the Internet of Things and how many devices are connected today, the challenge customers have is managing them. We’ll be able to use this platform to truly manage and offer management of other devices, not just print-related devices, for the future. This gives partners and customers more data, more access and the ability to support it.
We see that as such a huge market opportunity to parlay our expertise in managing devices. We have more than 20 years of expertise in managing devices all over the globe. So why not utilize that platform to manage other connected devices?
We’re focused on winning in imaging, but we want to support these other adjacent technologies. We want to harness that power and those tools for a broader customer base. We’re really excited about that, and you’ll hear more about how our partners will be engaged.
What can we expect to see this year from Lexmark in terms of new product rollouts?
Bugg: We’ve got some new product announcements coming toward the back half of 2022 for both imaging technology and the cloud. Addressing key segments around color is so important to us. From a cloud perspective, we want to put more tools in the hands of our partners. From the cloud fleet management side, we’re focused on areas such as predictive alerts that indicate when a device needs service or toner, along with added functionality around supply levels and how our partners can customize what they see on the screen. Things such as the ability to do firmware updates that can be scheduled to run unattended. We can provide even more functionality to our partners to manage their fleet remotely.
Is there anything new on the horizon, from a program or partnership standpoint?
Bugg: We’re constantly looking for ways to stay engaged with our partners in the field. We’ve had some pretty cool events this year; we took some top partners to the Daytona 500 as well as the PGA Championship. We’ll also host some regional events that focus on how we differentiate from both the cloud and imaging perspectives. Lexmark invests heavily in its relationships. Through all the experiences we’ve been through, from COVID to the supply chain, we’re making sure we’re staying engaged with our valued partners. We’ve talked with our advisory board about trying to accomplish this more regionally. We can spend a lot of time with partner executives, and that’s always an important piece of our strategy to make sure they understand the direction we’re taking as a company. But we’re also engaged all the way down to the individual sellers who have choices on what OEMs they quote in the field and the products they choose to focus on. Partners have a broad range of offerings in their portfolios, and we want to be in a position to win with our partners well into the future. Dealers are making important decisions as to who they want to align with long-term, and that’s the reason we continue to invest heavily in these cloud services offerings and A4 imaging.
What are Lexmark’s primary goals for 2022?
Bugg: We’re really focused on new account growth. We’ve seen the success that’s possible when working side by side with our partners. With other technology providers, you can’t tell whether they’re partnering or competing. For Lexmark, the strategy is aligning with partners around collaboration and winning. We’re always looking at those value-added elements that we can bring to the table and position us to win new business. Much like we’ve done with the Lexmark Industry Advantage program, we want to be able to share with our partners the success that we see in those industries and put them in a position to win. As our partners are making the determination as to who they want to align with, we’ll continue to make those relationship investments that will set the stage for success over the long term.