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I started in this industry in 2006. Sooo…I’m not quite the newbie, but I can say I’ve been in the combined print/managed IT services (MITS) space for longer than I’ve known it simply as the print industry, at least traditionally speaking. That’s because right after the calendar flipped to 2011, Konica Minolta announced the acquisition of All Covered—a shot across the bow of not only the other vendors but the industry at large, too.
It was progressive thinking, which I value. Coming just a year and a half after the conclusion of The Great Recession, the move was bold. Konica Minolta was growing share at a nice clip back then, but I’m not here to say if the All Covered transaction has worked or not. Opinions vary. People have preconceived notions. Politics come into play far too often. And, of course, you have schadenfreude. But if you’re a writer who interviews two dealers in short order and walks away from both conversations with a common thread, it’s time to flip the script and make the work happen.
Advanced Imaging Solutions
A competitive mindset is a must for any athlete. Now imagine the combined competitiveness of a family of athletes, only the game they’re playing isn’t golf or softball.
It’s business.
“My dad founded this company in 1998,” said Stephanie Keating Phillips, Director of Production Print & Solutions at Advanced Imaging Solutions (AIS). “We would’ve been out of business long ago if we weren’t bringing that competitive fire every day—especially in the Minneapolis area, where we routinely face off against some of the larger dealers. But we’ve definitely carved out our slice of the pie and continue to grow, which for a single-location, 50-person operation is something to be proud of.”
The education vertical is a stronghold for AIS. It currently manages print for over 20 Twin Cities school districts (many private elementary/high schools, too), remaining very active in the sector throughout the year, not just in bid season. On top of this, AIS can boast that it was the third highest selling Konica Minolta production dealer (by devices; 2022 ranking) and it was the first in the world to take on the manufacturer’s industrial wide format AccurioWide 160 Printer. The crossover point here is that six of the school districts have adopted a centralized approach to document output, with production print a big part of that picture.
AIS entered MITS seven years ago, so it had already dipped its toes in this pool a couple of years before the COVID-19 pandemic hit—in retrospect, a huge decision. The dealer had the usual list of issues staring at it like some stoic sentinels from another dimension: AIS needed specialists and had to figure out new payment structures, all while managing the print-to-IT mindset conversion throughout the organization.
“All Covered made a lot of sense because it could help us overcome the immediate obstacles in managed IT services, but also steered us on a path forward and will continue to do so,” Stephanie said. “The benefit has been amazing for us and our customers, and we realize we need to scale it by bringing more people into our company to drive better and deeper relationships through MITS. The fact that IT represents a nice portion of our $20 million revenue should show other dealers that this is a partnership that allows you to realize the transformation you’ve wanted for your business.”
The Swenson Group
Dean Swenson, President of The Swenson Group (TSG), is an early adopter of technology. For instance, while standing desks have been around for hundreds of years, it was only in the last decade or so that I started seeing them more frequently in offices. Dean has used one for longer than that—he’s definitely not from the 15th century, when standing desks were first invented—and he says it helps him get some of his daily core work in.
The company was also among the first channel partners of All Covered, with Dean assisting in the creation of the IT services provider’s dealer program. Both businesses are headquartered in the San Francisco Bay Area, where work from home is still very strong four years after the outset of the pandemic.
Which makes MITS all the more critical.
“What’s very nice about managed IT services is that the margins are predictable,” Dean said. “We’re a 24-person company with $10 million in revenue, and IT claims 26% of the pie (including some project work). Upping our customer’s minimum managed IT services spend to $1,500 a month was a recent, integral step in our evolution. We just closed our largest IT contract ever, for $40,000 a month, which is heavy on items like compliance and cybersecurity. All Covered has enabled The Swenson Group to do what we do best—that is, sell technology—and, in turn, All Covered does what they do best, which is implementing IT products and providing the service.”
TSG is in the minority of the channel as it’s a single-line dealer, for Konica Minolta. Net-new business is always the priority, and Dean’s experience with the BTA Select Dealer Group (SDG) has given him and his peers a haven to help develop strategies for new products and services. And as any dealer principal would, he keeps a watchful eye on the activity of the directs (it’s not news that they’re struggling).
“Every day I realize how fortunate I am, to have great people around me who just want to deliver,” Dean said. “Our operation has to be efficient given many factors, and every person has to know their role for us to have stellar teamwork, and that’s something The Swenson Group has experienced with Konica Minolta and All Covered for many years now.”
Keypoint Intelligence Opinion
Sam Errigo, President and CEO of Konica Minolta Business Solutions U.S.A., said at a briefing earlier this year that the company had no thoughts of selling All Covered. As 45% of surveyed dealers believe that managed IT services is the biggest revenue opportunity outside of print, I’d agree that it’d be an unwise decision to unload the property. Further proof is that MITS was 8% of dealers’ revenue in 2019, but it now stands at 13% (obviously higher in many organizations).
The need to partner is only becoming more important—to diversify, yes, but also to specialize. With 81% of surveyed dealers saying they would have to develop or hire IT talent to make managed IT services a reality inside their business, the power of partnership becomes that much more ideal and realistic. This is another reason why All Covered could be the right solution, as it did and continues to be for Advanced Imaging Solutions and The Swenson Group.
Over 50% of dealers claim they have full managed IT services today. That’s pretty impressive, I can’t lie, but it means there are still many that should strive to get there. Don’t listen to the rumors that MITS isn’t profitable or that you’ll lose your shirt. Remember: Revenue growth is critical…profit will come later. The idea, like I always say, is you just need to put yourself out there, then you’ll be seen. Once you’re seen, that’s when conversation will happen.
After that, it’s on you to close the deal.
All research results from the Keypoint Intelligence 2024 State of the Channel study.
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