{"id":35748,"date":"2019-08-26T02:08:41","date_gmt":"2019-08-26T09:08:41","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=35748"},"modified":"2019-08-28T00:38:19","modified_gmt":"2019-08-28T07:38:19","slug":"amazon-of-things-aot-online-retail-giants-pose-a-growing-threat","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/state-of-the-industry\/2019\/08\/amazon-of-things-aot-online-retail-giants-pose-a-growing-threat\/","title":{"rendered":"Amazon of Things (AoT): Online Retail Giants Pose a Growing Threat"},"content":{"rendered":"\n

It might have been Luke Goldberg who first coined the phrase Amazon of Things (AoT) as a play off the Internet of Things (IoT), which has been slowly but surely gripping our personal and professional lives. <\/p>\n\n\n\n

Amazon, of course, continues on its path to become exactly what analysts, consultants and the trade press preach to the office technology equipment dealers: that one-stop source for everything the customer needs. Obviously, ours is a narrower segment than the mass needs of the entire business and consumer market being targeted by Amazon.<\/p>\n\n\n\n

Yet, what is the impact of Amazon on the office technology dealer space? Customers can source toner, parts and supplies from Amazon. People can order a variety of multifunction printers, but hardly the comprehensive lines available from many dealerships. And a search through Amazon Business Services yields an array of IT, network and phone solutions (printer and server\/firewall setups, cellular signal booster, wireless access point, wireless office network, etc.). Do they rise to the level of a strong managed IT offering? Not at all.<\/p>\n\n\n\n

But this is Amazon in 2019. What will its product and service arsenal look like in five years? Or 10 years?<\/p>\n\n\n\n

Much attention has been garnered by Staples\u2019 acquisition of DEX Imaging earlier this year, accompanied by the requisite hand-wringing over the possible consequences of the latter\u2019s service component being parlayed across the national spectrum. Staples has declined comment thus far, but it\u2019s no secret that DEX is advertising for sales, service and MPS account specialists in a number of areas across the country.<\/p>\n\n\n\n

Impressive Growth<\/h3>\n\n\n\n

But Amazon is clearly the unknown wild card. Its revenues for 2017 and 2018 increased nearly 31% each year, and its latest 12-month stretch (June 2018-June 2019) racked up sales of $252 billion. It\u2019s ranked fifth on the Fortune 500, up three spots from the previous year. It has the wherewithal to direct its efforts wherever the organization sees fit, and dismissing it out of hand can be particularly dangerous.<\/p>\n\n\n\n

\"\"
Dave Clark,
AIS<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cThe real threat is if you\u2019re a commodity provider or a dealer of just output devices,\u201d observed Dave Clark, vice president of sales for AIS, based in Las Vegas. \u201cThose conversations are only about output and features. Then an online platform like Amazon or Staples can compete directly against you for consumables, even the product itself. There\u2019s no value to the customer for a device that just puts ink on a page. The relationship needs to be about the integration of line-of-business applications, workflows and IT service offerings. That\u2019s how the dealer channel can grow. If you\u2019re not doing that, then you should be scared (of Amazon and Staples).\u201d<\/p>\n\n\n\n

There\u2019s no value to the customer for a device that just puts ink on a page. The relationship needs to be about the integration of line-of-business applications, workflows and IT service offerings.<\/p> Dave Clark, AIS <\/cite><\/blockquote>\n\n\n\n

The situation for OneDOC MPS of Oklahoma City is different than a typical dealer\/managed service provider, as it\u2019s a pure-play MPS provider using third-party supplies and service on a national scale. Kevin Morris, president and CEO of OneDOC, worked with DEX\u2019s Dan Doyle back in their days at Danka, and believes him to be a force to be reckoned with, particularly on a national platform.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

\u201cThe biggest concern, especially for a company like DEX, is their buying power is so much stronger than a dealer of our size would be,\u201d Morris said. \u201cDan Doyle is a very shrewd businessman and one of the best negotiators on the planet. There\u2019s no doubt in my mind that they can buy for considerably less than we do just because of volumes.\u201d<\/p>\n\n\n\n

\"\"
Kevin Morris,
OneDOC MPS<\/figcaption><\/figure><\/div>\n\n\n\n

And while Morris is confident in the strength of his service platform, that buying power makes DEX a formidable opponent. \u201cMy fear is that if we get into competitive deals around the country with a situation like that, if it comes down to price and they\u2019ve done a good job in selling the program, they actually have a competitive advantage in that arena,\u201d he said. \u201cThey certainly have a superior advantage from the standpoint of acquiring equipment and reselling it.\u201d<\/p>\n\n\n\n

The fear of becoming branded as merely a copier dealer has thrust many companies into managed services, including Donnellon McCarthy Enterprises (DME) of Cincinnati. The company has made significant investments in its managed network services portfolio as it aims to guide clients along the roadmap of technology via networks and infrastructure. The same holds true for cybersecurity, which has been on the lips of many clients, according to Rich Brandenburg, senior vice president of sales.<\/p>\n\n\n\n

Dan Doyle is a very shrewd businessman and one of the best negotiators on the planet. There\u2019s no doubt in my mind that they can buy for considerably less than we do just because of volumes.<\/p> Kevin Morris, OneDOC MPS <\/cite><\/blockquote>\n\n\n\n

Being able to lead the technology conversation has been priority one in DME\u2019s go-to-market approach. Brandenburg also points to Amazon\u2019s online approach of offering ancillary or complementary products to those selected by the online buyer. It\u2019s the popular \u201ccustomers who bought this have also bought\u2026\u201d virtual upselling approach. The in-person upsell has its obvious advantages.<\/p>\n\n\n\n

\u201cThe client will say \u2018I didn\u2019t think about mailing equipment, I was just considering the 35 ppm color copier,\u2019\u201d he said. \u201cOr if it\u2019s managed IT services, how about cybersecurity? Those are the things that come along with the presentation. It might not be the right time for the client, but we\u2019ve certainly had a lot of success in changing the conversation to be not just about the equipment.\u201d<\/p>\n\n\n\n

Familiar Territory<\/h3>\n\n\n\n

Kevin DeYoung is no stranger to this conversation. The president and CEO of Pompano Beach, Florida-based Qualpath remembers when Office Depot began selling certain office equipment on its shelves, which caused a panic among the dealer community. That led to the realization that this segment of the market was not a viable one to service.<\/p>\n\n\n\n

\u201cYou also realized that particular price points were at a level that the retailer could not treat well, because it required further consideration just based on the economics, the technological sophistication or the service,\u201d he said. \u201cWhat we\u2019re seeing now kind of looks like the same thing. <\/p>\n\n\n\n

\"\"
Kevin DeYoung,
Qualpath<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cI think the threat is always going to be one of scale and the lower pricing that may arise as a result of perhaps some larger entity that has greater scale and lower commodity costs. That could put pressure on pricing or on margins. That\u2019s really typically where you begin to see some type of margin threat.\u201d<\/p>\n\n\n\n

Another industry executive who is well versed on the threats within the industry is Chip Miceli, president of Pulse Technology (formerly DPOE) in Carol Stream, Illinois. Pulse Technology has added office furniture to its dossier of products and services, underscoring Miceli\u2019s view that opportunities can outweigh threats for those willing to take the initiative.<\/p>\n\n\n\n

\u201cWhen clients place price as the top decision in purchasing, online sources can offer, on some occasions, very competitive pricing and delivery,\u201d he said. \u201cThe advantage that traditional brick-and-mortar dealers hold over online competitors is service, having local live people to address concerns and challenges, and the value of dealing with an established entity with a long history in the community.\u201d<\/p>\n\n\n\n

I think the threat is always going to be one of scale and the lower pricing that may arise as a result of perhaps some larger entity that has greater scale and lower commodity costs.<\/p>Kevin DeYoung, Qualpath<\/cite><\/blockquote>\n\n\n\n

The Online Achilles<\/h3>\n\n\n\n

Understanding the obstacles retailers need to overcome to make headway into claiming more SMB business struck us as a healthy exercise to help us appreciate their challenges. So we asked our panel of dealers to speculate on what online retailers need to do in order to become more successful.<\/p>\n\n\n\n

In other words, if you had Amazon\u2019s playbook, what would be your next move?<\/p>\n\n\n\n

\"\"
Chip Miceli,
Pulse Technology<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cRetailers need to demonstrate value,\u201d Miceli said. \u201cThere is more to this business than price, and the \u2018bells and whistles\u2019 of different pieces of equipment. In our industry, being able to understand and apply the principles of managed print services and increasingly managed network (IT) services to become a seamless partner with an organization is what retailers need to do.\u201d<\/p>\n\n\n\n

OneDOC\u2019s Morris believes that retailers are at a distinct disadvantage as long as they completely perpetuate business online without the human element. Just adding telemarketing will not get the job done; the face-to-face element will win the day.<\/p>\n\n\n\n

The advantage that traditional brick-and-mortar dealers hold over online competitors is service, having local live people to address concerns and challenges, and the value of dealing with an established entity with a long history in the community.<\/p>Chip Miceli, Pulse Technology<\/cite><\/blockquote>\n\n\n\n

\u201cWe have quality people, and that gives us an upper hand over that kind of competition,\u201d he said. \u201cIf they don\u2019t know this industry and they\u2019re trying to sell MPS for the first time, it\u2019s very difficult for them. Even a company the size of DEX or an Amazon, though they\u2019re very well-funded and have plenty of money for training programs, how many people do they really have who can effectively communicate this type of business offering? Over time, they will probably do well, but it would be a difficult startup, no question.\u201d<\/p>\n\n\n\n

Sour Support<\/h3>\n\n\n\n

Brandenburg of DME echoed the human-element sentiment, particularly in the case of post-sales support mechanisms. When a client needs to rely on offshore help-desk support for issues that may arise, the differences in approach become magnified.<\/p>\n\n\n\n

\u201cThat\u2019s the last thing the small-business owner wants to deal with,\u201d he said. \u201cThey\u2019re worried about making payroll and keeping the lights on, as opposed to having to be able to trust somebody to talk to them about their infrastructure and network. As a customer, I need to know how the equipment affects my business. How are they going to help me with that?\u201d<\/p>\n\n\n\n

Brandenburg has spoken to many clients who have made bad purchasing decisions that caused them to buy twice. Other times, they\u2019ve made a purchase that seemed like a wise investment at the time, but absent the guidance and support, the software or solution was never implemented and only gathered dust on the shelf. The deeper one digs into the minutiae of a purchasing decision, the more the value of a dealer\u2019s support mechanism becomes evident.<\/p>\n\n\n\n

\"\"
Rich Brandenburg,
Donnellon McCarthy<\/figcaption><\/figure><\/div>\n\n\n\n

There also seems to be a threshold for investment that tends to tip SMBs (and indeed, consumers in general) toward a more-trusted source that can provide perspective on its role within the client\u2019s organization. Qualpath\u2019s DeYoung assesses it to be around the $1,000 mark.<\/p>\n\n\n\n

\u201cWhen it crosses that line, usually people will take a deep breath and want to understand it better, reason through the procurement more effectively and see what other things are important to the investment,\u201d he said. \u201cIn some cases of economic versus intangible evaluation, there\u2019s not a big spread there in terms of price points, so customers have to weigh what would the intangible cost be if they were to jettison the incumbent and go with something larger that appears to be cheaper.\u201d<\/p>\n\n\n\n

They\u2019re worried about making payroll and keeping the lights on, as opposed to having to be able to trust somebody to talk to them about their infrastructure and network. <\/p>Rich Brandenburg, Donnellon McCarthy<\/cite><\/blockquote>\n\n\n\n

Not a Sleeping Giant<\/h3>\n\n\n\n

Lacking the outbound touches of an MSP and managed IT provider truly hampers the online source and closes off avenues for integrating with a customer\u2019s line of business applications and internal infrastructure, notes AIS\u2019 Clark. But does it truly paint Amazon as a commodities peddler?<\/p>\n\n\n\n

Amazon has enjoyed great traction with its cloud services, but it is one spoke in the big wheel of an offering that supports the client infrastructure, network, email and everything else that falls under the managed discipline. Even dealers such as AIS rely on Amazon\u2019s cloud.<\/p>\n\n\n\n

The company\u2019s aim is to \u201cbuild the Earth\u2019s most customer-centric company,\u201d and judging by its 30% annual growth rate, regarding it as a passive source for toner, parts and supplies to satisfy the SOHO and lower end of the SMB market might be a tactical misstep.<\/p>\n\n\n\n

\u201cAmazon is a pretty smart company, and they\u2019re going to figure out how to deliver some of these things,\u201d Clark noted. \u201cWhat\u2019s going to happen is in major cities, Amazon is going to start marketing directly and having sales force and technical staff to be able to deliver that to clients. You really have to stay ahead of the curve.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"

It might have been Luke Goldberg who first coined the phrase Amazon of Things (AoT) as a play off the Internet of Things (IoT), which has been slowly but surely gripping our personal and professional lives. Amazon, of course, continues on its path to become exactly what analysts, consultants and the trade press preach to the office technology equipment dealers: that one-stop source for everything the customer needs. Obviously, ours is a narrower segment than the mass needs of the entire business and consumer market being targeted by Amazon. Yet, what is the impact of Amazon on the office technology dealer space? Customers can source toner, parts and supplies from Amazon. People can order a variety of multifunction printers, but hardly the comprehensive lines available from many dealerships. And a search through Amazon Business Services yields an array of IT, network and phone solutions (printer and server\/firewall setups, cellular signal booster, wireless access point, wireless office network, etc.). Do they rise to the level of a strong managed IT offering? Not at all. But this is Amazon in 2019. What will its product and service arsenal look like in five years? Or 10 years? Much attention has been garnered by Staples\u2019 acquisition of DEX Imaging earlier this year, accompanied by the requisite hand-wringing over the possible consequences of the latter\u2019s service component being parlayed across the national spectrum. Staples has declined comment thus far, but it\u2019s no secret that DEX is advertising for sales, service and MPS account specialists in a number of areas across the country. Impressive Growth But Amazon is clearly the unknown wild card. Its revenues for 2017 and 2018 increased nearly 31% each year, and its latest 12-month stretch (June 2018-June 2019) racked up sales of $252 billion. It\u2019s ranked fifth on the Fortune 500, up three spots from the previous year. It has the wherewithal to direct its efforts wherever the organization sees fit, and dismissing it out of hand can be particularly dangerous. \u201cThe real threat is if you\u2019re a commodity provider or a dealer of just output devices,\u201d observed Dave Clark, vice president of sales for AIS, based in Las Vegas. \u201cThose conversations are only about output and features. Then an online platform like Amazon or Staples can compete directly against you for consumables, even the product itself. There\u2019s no value to the customer for a device that just puts ink on a page. The relationship needs to be about the integration of line-of-business applications, workflows and IT service offerings. That\u2019s how the dealer channel can grow. If you\u2019re not doing that, then you should be scared (of Amazon and Staples).\u201d There\u2019s no value to the customer for a device that just puts ink on a page. The relationship needs to be about the integration of line-of-business applications, workflows and IT service offerings. Dave Clark, AIS The situation for OneDOC MPS of Oklahoma City is different than a typical dealer\/managed service provider, as it\u2019s a pure-play MPS provider using third-party supplies and service on a national scale. Kevin Morris, president and CEO of OneDOC, worked with DEX\u2019s Dan Doyle back in their days at Danka, and believes him to be a force to be reckoned with, particularly on a national platform. \u201cThe biggest concern, especially for a company like DEX, is their buying power is so much stronger than a dealer of our size would be,\u201d Morris said. \u201cDan Doyle is a very shrewd businessman and one of the best negotiators on the planet. There\u2019s no doubt in my mind that they can buy for considerably less than we do just because of volumes.\u201d And while Morris is confident in the strength of his service platform, that buying power makes DEX a formidable opponent. \u201cMy fear is that if we get into competitive deals around the country with a situation like that, if it comes down to price and they\u2019ve done a good job in selling the program, they actually have a competitive advantage in that arena,\u201d he said. \u201cThey certainly have a superior advantage from the standpoint of acquiring equipment and reselling it.\u201d The fear of becoming branded as merely a copier dealer has thrust many companies into managed services, including Donnellon McCarthy Enterprises (DME) of Cincinnati. The company has made significant investments in its managed network services portfolio as it aims to guide clients along the roadmap of technology via networks and infrastructure. The same holds true for cybersecurity, which has been on the lips of many clients, according to Rich Brandenburg, senior vice president of sales. Dan Doyle is a very shrewd businessman and one of the best negotiators on the planet. There\u2019s no doubt in my mind that they can buy for considerably less than we do just because of volumes. Kevin Morris, OneDOC MPS Being able to lead the technology conversation has been priority one in DME\u2019s go-to-market approach. Brandenburg also points to Amazon\u2019s online approach of offering ancillary or complementary products to those selected by the online buyer. It\u2019s the popular \u201ccustomers who bought this have also bought\u2026\u201d virtual upselling approach. The in-person upsell has its obvious advantages. \u201cThe client will say \u2018I didn\u2019t think about mailing equipment, I was just considering the 35 ppm color copier,\u2019\u201d he said. \u201cOr if it\u2019s managed IT services, how about cybersecurity? Those are the things that come along with the presentation. It might not be the right time for the client, but we\u2019ve certainly had a lot of success in changing the conversation to be not just about the equipment.\u201d Familiar Territory Kevin DeYoung is no stranger to this conversation. The president and CEO of Pompano Beach, Florida-based Qualpath remembers when Office Depot began selling certain office equipment on its shelves, which caused a panic among the dealer community. That led to the realization that this segment of the market was not a viable one to service. \u201cYou also realized that particular price points were at a level that the retailer could not treat well, because it required further consideration […]<\/p>\n","protected":false},"author":166,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1641],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/35748"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=35748"}],"version-history":[{"count":13,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/35748\/revisions"}],"predecessor-version":[{"id":35936,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/35748\/revisions\/35936"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=35748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=35748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=35748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}