​Toshiba Looks to Build On Solid Foundation at 2013 Dealer and End-User Conference

12/04/2013

Nearly 1,000 professionals convened in Orlando November 13-14 to participate in LEAD 2013, Toshiba America Business Solutions, Inc.’s (TABS) annual technology showcase. Unlike with most vendors, who have similar meetings every year attended by dealers and industry media, Toshiba’s approach is unique in that select end-users are also invited. The approach has paid dividends for Toshiba, as last year’s conference accounted for more than $7.2 million in new U.S. business for Toshiba from end-users.

Positioned for Growth, but from Where?

According to Scott Maccabe, new president and CEO of TABS, the company remains profitable and well positioned for growth. Noting that it was his 132nd day on the job, Maccabe said, “We have seen impressive growth in color system sales, and have also experienced significant growth on the MPS [Managed Print Services] and A4 side.”

According to Maccabe, color system sales are up 14 percent in 2013 from 2012, and color now represents 42 percent of Toshiba’s unit shipments, which is up 37 percent from this same time last year. And on the MPS side, revenue jumped 37 percent year over year, and now represents 20 percent of Toshiba’s total U.S. business. Unit sales of A4 devices grew 24 percent year over year.

With a solid foundation on which to build, the question being focused on during the event was where additional growth will come from going forward. “We are in a business that is fragmented and crowded, with everyone competing for the same opportunities in an era of declining page volumes,” said Maccabe. “Combined with the rising tide of digital electronic information, customers need tools to better manage content, workflow and security.”

Hardware Still Relevant

Clearly, the company has no plans of exiting the “hardware business,” as according to Bill Melo, vice president of marketing for Services and Solutions, and general manager of Toshiba Managed Business Services, it’s imperative to push color system sales to 50 percent of total shipments, up an additional 8 percent from current levels. To get there, the company will continue to introduce new color hardware systems. “While the overall market is growing at the same rate for everyone, our color base is growing faster than the overall market,” said Melo. “We’ll continue to launch new color hardware systems as we look to gain further traction on the color space.” 

Toshiba also launched 16 new MFPs between April and August this year. Among the new hardware is Toshiba’s e-STUDIO306LP, which along with the optional RD30 component, is the industry’s first product to support erasable toner. According to Joseph Contreras, Toshiba’s director of Product and Solutions Marketing, the e-STUDIO306LP has been well received by the market, and plans are already underway for a second generation product. All of Toshiba’s direct branch offices have demo units, as do virtually all of Toshiba’s dealers. According to Contreras, toner from the same sheet of paper can be erased as many as five times, greatly reducing carbon dioxide emissions. And at the same time as data is being erased from a sheet of paper, the data can be scanned and saved to a shared network folder for archival purposes. The device is priced higher than other A3 monochrome MFPs in its speed band, and end-users must also consider the cost of the RD30 component, which is listed for close to an additional $6,000. But according to Toshiba, the higher costs could potentially be offset by reduced paper costs, and there are also additional tax benefits for offices that strive to be more energy efficient.  

 
Additional Growth Opportunities

While the adoption of color systems is on the rise, according to Melo, overall office printing has been declining at about 8 percent per year. Further, whereas the average worker used to produce 1,000 pages per month, that same worker now prints about half of that. This trend makes it crucial to build on the traditional hardware business with additional non-print related offerings for continued growth.

To meet future growth targets, Toshiba’s goal is to have an additional 10 percent of revenue come from non-print related offerings. Toshiba will approach this in a myriad of ways, one being solutions and software tied into the hardware, and another being digital signage. 

Software and Solutions

In terms of software and solutions highlights at the show, all of Toshiba’s latest MFPs now support native AirPrint technology, which includes basic functionality such as printing a PDF or a JPEG, and compressed PDF, via iPad, iPhone and iPod touch without the need to install drivers or download software. Building on that, Toshiba’s latest A3 color MFPs with full e-BRIDGE functionality support the ability of documents to be scanned or printed, with access to all features of the copier from iPad, iPhone and iPod touch devices. The free app includes support for simplex/duplex, staple and hole punch. Documents can also be saved to a private queue or public queue. Further, once the app is set up, Toshiba Re-Rite capability can be built in for users who have purchased this software, which provides users with the ability to scan and convert files to searchable PDF, Word or Excel via these mobile devices. The AirPrint offering will soon be available for Toshiba’s A3 monochrome MFPs.

Other software solution highlights included integration of Fasoo’s digital rights management software with Toshiba’s A4 MFPs. Already supported by Toshiba’s A3 MFPs, Fasoo’s file-based security software offering enables a policy to be applied to a file, and that policy travels with that file wherever it goes. Policy examples include rights to open a file and limits on the number of times it can be opened, as well as control over what can be done to a file once it is opened. 

Also showcased was Fasoo’s Digital Quick software. Currently a free offering for consumers, Digital Quick applies security to shared files stored in the cloud after they have been decrypted.  This may be a future private branding opportunity for Toshiba. A business version that will allow for integration with iPhone or Android platforms is in the works.

OpenText also announced a new partnership with Toshiba for its RightFax fax server solution. Toshiba needed to fill a gap that helps customers standardize fax compliance and security, and this is another solution that Toshiba may eventually brand under its own name.  

Digital Signage

Never reluctant to innovate, Toshiba was one of the first players to fully engage in the MPS space around 2002. And while it took the better part of 10 years, especially for its dealers, to come around, as mentioned earlier MPS now comprises 20 percent of Toshiba’s total U.S. business. The company may now be setting forth on a similar path with digital signage. While digital signage is not unique to Toshiba among MFP vendors, the way the company plans to market it was  one of the major talking points at the show. According to Contreras, after Toshiba’s parent company, Toshiba TEC, acquired IBM’s retail business last year, making it the number one point-of-sale company in the world for digital signage, Toshiba had the first opportunity to introduce digital signage devices to its dealers at last year’s event. The dealer community expressed a lot of interest in what Toshiba could do to open a new solutions and revenue opportunity, leading Toshiba to spend much of the year devising a strategy for it for use both as a sales tool in demo rooms (digital signage is currently being used in 25 dealer demo rooms) and as a product with a “new-age aftermarket” to sell to customers.

Toshiba has created a number of templates for the devices, which include collateral and supporting material for its hardware and software offerings, essentially creating an easy-to follow talk track on Toshiba’s offerings. Similar templates detail the company’s key offerings for each of 10 vertical markets, including healthcare, finance and education.  And for customers in various vertical markets, additional templates can be developed. For example, in the hospitality industry, templates can be provided for hotels to display local information on dining, weather and entertainment.  

Designed to yield high aftermarket value, Contreras explained that the systems are bundled with a maintenance component related to content refresh, with additional content available on a per-hour basis. The first-year cost for maintenance and support includes 15 hours of refreshed content. After that, refreshed content is sold in additional 15-hour block increments. List price for the digital signage devices ranges from $14,995 for a 23-inch screen, to $26,995 for a 70-inch screen, with a very healthy 30 plus percent margin typically built in for dealers. The price will typically be discounted when multiple screens are purchased.

Latest on MPS

On the MPS front, Toshiba is looking to make more of a dent in the small- to mid-size business (SMB) space, which the company believes has great growth potential in MPS going forward. According to Jon Hafey, director of strategic development for Toshiba’s Electronic Imaging Division, while Fortune 1000 companies are marquee accounts, the margins are very aggressive, and while Toshiba gets its share of victories, it also takes some losses. Toshiba’s new MPS LEAN program is targeted specifically to the SMB space, with a sales cycle of 30 days or fewer, versus the typical 90-day sales cycle on larger accounts. “With the MPS LEAN program, there is no need to reinvent the sales process; instead, dealers can leverage existing data that is readily available without first having to do all the heavy lifting,” said Hafey. “The key is getting dealers to understand, and in turn their customers, the value that MPS offers not only in the larger deals, but also the deals that involve five machines running only 1,000 impressions per month.”

 
George Mikolay
Associate Director, Copiers/Production
With more than 11 years of experience at BLI, George is responsible for BLI's coverage of A3 MFPs and production devices. In addition to evaluating products and writing technical reports and articles covering the A3 MFP and Production space, George plays a key role in the analysis and selection of A3 MFP Picks twice a year, and Production Picks once a year.