Toshiba LEADs at 2017 Dealer and End-User Show

Key Takeaways from the Three-Day Event



Toshiba Americas Business Solutions, Inc. (TABS) invited their dealer partners, end users, and the analyst community to the Swan & Dolphin Resort in Orlando, Florida for their annual LEAD event. According to Toshiba’s President and CEO, Scott Maccabe, LEAD is more than just a meeting theme; it is an acronym that emphasizes their commitment to their channel partners (Learn, Engage, Act, and Deliver).


The three-day event consisted of breakout sessions, a technology fair, and a two-day general session geared toward their dealers and end-user partners. Over the course of the three days, Toshiba and its key executives addressed everything from the success of last year’s enormous hardware line launch to concerns about the rumored $6 billion write-off for Toshiba’s nuclear arm, Westinghouse. An update on the company’s relationship with Lexmark was also discussed. Also highlighted were public launches of the new Elevate user interface and the new hybrid eco-MFP as well as an update on digital signage and barcode printers.


Big Product Launch Pays Dividends

One of the most prolific product launches in Toshiba’s history occurred last year with 23 new devices introduced. Dealers took very well to the new products despite some supply chain issues early on. “We had set expectations internally that the growth trajectory was going to be at a significant level, and in the last two quarters with unlimited supply that level is back to where we thought it was going to be,” said Maccabe.


TABS still has very loyal dealers, continuing to manage the direct seller and dealer conflict as well or better than anyone. According to Chief Marketing Officer Bill Melo, 38 percent of TABS’ revenue comes from single-line dealers.


TABS will also be looking to get back into the dealer acquisition mode this coming year according to TABS Senior Vice President of Sales Larry White. With very good distribution throughout the U.S. already, TABS will be looking to support dealers in their acquisitions and also make some direct acquisitions.


“We’ve spent a great deal of time reviewing our analytics to map out where we can strategically acquire dealers from both offensive and defensive positions,” said Maccabe. Dealer sales make up about 54 percent of TABS’ revenue while direct sales make up 46 percent (in wholesale dollars). Maccabe also sees opportunity in some of the current disruption in the market.


Addressing Westinghouse Concerns

TABs also addressed the pending rumors and financial difficulties at Toshiba Corporation and the impact (if any) they will have on TABS’ business moving forward. Early this year, Maccabe wrote to clients and customers reassuring them that Toshiba Corporation’s troubles do not necessarily affect TABS. Toshiba has since said it plans to write off more than $6 billion and withdraw from the business of building nuclear power plants. The trouble stems from Toshiba’s management of Westinghouse Electric Company.


TABS is majority owned by Toshiba Tec Corporation (TTEC). TTEC is publically traded on the Tokyo stock exchange and has over 17,000 employees worldwide. According to Maccabe, the company’s share price has risen since the Westinghouse news, showing that the market really distinguishes between Toshiba TEC and Toshiba Corporation. Maccabe further emphasized that, in the last 12 months, Toshiba Tec’ stock has risen 29 percent where fellow Japanese competitors stocks have faltered during the same period. In addition, over the last 6 months, Toshiba’s A3 Color units grew 7 percent year-over-year and their A4 units were up 14 percent as well. Their managed print services (MPS) business also showed strong growth (up 14 percent during the same period).


“I am completely confident that the company will become flush very quickly and put this behind them,” Maccabe said. In a worst-case scenario, Maccabe explained that TABS has its own bankers, is very flush with cash, and could potentially buy back its own stock.


Latest on Lexmark

TABS also spent a fair amount of time re-emphasizing their relationship with Lexmark for their A4 product fulfillment in a breakout session titled “Bridging the Gap, a Portfolio for Success,” along with show floor coverage at the event. Lexmark and TABS’ relationship goes back to 2001 and has had significant partner growth for eight consecutive years with coverage across nearly 100 Toshiba dealers and TABS sales operations in North America. Lexmark’s Strategic Business Alliance Manager, Phil Boatman, said both companies have unique synergy with color and key verticals, such as retail and education. During the Q&A session, Scott Maccabe said there is a high possibility for further integration with Lexmark’s device and their new Elevate solution. The pending Apex announcement was also discussed, and the goal to further expand into China is seen as a win-win for Toshiba, who has been number one for A3 MFPs in the Chinese market for 17 years in a row.


Toshiba Looks to “Elevate” Hardware Platform

This year TABS’ focus was on further expanding their new product reach into key vertical markets with the introduction of their Elevate solution. Elevate, an embedded platform engineered for use with Toshiba’s e-STUDIO multifunctional peripherals (MFPs), works as a customizable operational panel designed to simplify everyday user operations with one-touch key solutions aimed at eight strategic vertical markets. According to Toshiba, this is a breakthrough solution that will transform MFPs from a commodity device into a highly customizable solution for the office.


Similar to what we have seen with Xerox’s ConnectKey solutions, Toshiba’s Elevate solution is designed to focus on workflow rather than function. For example, a typical copy or scan job may take seven or eight steps to implement; with Elevate, that process can be shortened to a one-step touch of a key. In the past, the MFP was a one size fits all solution. Today, it can be customized for any environment. For example, with Elevate, a doctor’s office can now easily scan prescription orders to a pharmacy on the MFP: a process that previously required several steps can now be boiled down to a one-touch key solution and customized for that particular market.


Elevate is free to channel partners and integration will go through their professional services division for design and implementation. Elevate content is delivered via Toshiba’s e-Bridge Cloud Connect for device deployment and proactive maintenance. Currently, Toshiba has roughly 89,000 devices maintained via e-Bridge Cloud Connect. According to TABS Vice President of Product and Solutions Marketing Joseph Contreras, when the opportunity arises for dealers to develop further customoizable apps, Elevate will then become a fee-based service. “We’ll scope the opportunity and come up with a cost, then sell it to the dealer who in turn can sell it to the customer,” Cotreras said. Product availability for Elevate is scheduled for July.


New e-STUDIO 4508 Eco-MFP

TABS has long been committed to environmental sustainability, and their new e-STUDIO 4508 Eco-Hybrid MFP is just another example of this commitment. The new hybrid MFP is their next generation solution of the e-STUDIO 306LP MFP. According to Contreras, this new product is unique in that it is the first to print in conventional black toner and provides all the features and document finishing found on Toshiba’s conventional MFPs. In addition, it provides the unique ability to print erasable blue toner, allowing paper to be re-used repeatedly. According to TABS, the blue print is ideal for draft copies, e-mails, and any other temporary-use documents while black is utilized for finished distributed documents. TABS said the most popular verticals for this device include logistics, manufacturing, and the education market.


As TABS Product Manager Robert Covington further explained, the e-STUDIO4508 Eco-MFP incorporates rules based printing. For example, the device can be programmed so that every time a user prints from Outlook, the device uses erasable blue toner, 2 sided, without a staple. If printing from Word, the device can be set up to print black, staple, and hole-punch documents. Blue toner also requires a lower heat fusing setting than typical black toner. The device now supports all paper sizes versus just letter-size paper. Product availability is scheduled for June with a suggested retail price of $13,768.


FlashGrade Brings Unique Offering to Education Market

FlashGrade, a cloud-based testing and grading solution for the education market, was also showcased. Toshiba is the first vendor to offer integration with FlashGrade. The partnership was just launched this year. FlashGrade software allows teachers and educators to see real-time analytics, increase instructional time, and improve student performance. The testing reports can easily show in-depth results to help teachers gain valuable insight into the student’s comprehension of the tested material. FlashGrade is currently available and is backward compatible with the prior generation of e-BRIDGE devices and new models.


While it won’t be a standard feature in the Elevate Education vertical, the icon will be available as part of the platform in the event that a user wishes to purchase the solution. FlashGrade is sold independently or as an annual license based on the number of teachers using the application. Graded results are seen on a machine and data is pushed to the cloud. Therefore, a teacher can use any scanner, not just Toshiba MFP. The results are scanned to a PDF and uploaded into the cloud. Unique to the solution is the ability to grade tests using a mobile app. The company has three patents on the mobile capability.


Dialing Up Digital Signage

There was quite a lot of floor-space dedicated to their new retail and interactive digital signage displays, a market into which Toshiba continues to expand. Today, roughly 10% of their dealers are actively selling digital signage solutions. Nevertheless, they believe this number will grow as training and services around products such as Upsell and CrossSell increases. Toshiba’s UpSell is an interactive display that displayed different models of a specific product. Once the customer lifts up one model, the display will show the various specifications along with several other models of a similar product. TABS’ CrossSell for the retail clothing market offers a truly interactive experience for the shopper.


According to Maegan Lujan, Marketing Strategy Manager for Solutions and Professional Services at TABS, digital signage is estimated to be a $20.3 billion market by 2020. As she explained, in order for dealer to be successful in digital signage they must sell not just the hardware but also the content that goes along with it. Further, that content must be updated on a daily, weekly, or monthly basis.


“For digital signage, content services is the aftermarket,” said Lujan. “We deliver the hardware, software, and three years of content management with a buy-out program and technology refresh as a one-line item to dealers so they don’t experience any of the back-end complexity.”


Barcode Printers Show Potential

Another accomplishment announced was the company’s 15 percent growth in barcode printer placements. According to White, the majority of Toshiba’s growth in this area has been with reps calling major accounts directly. “As our success continues to grow in barcode printers directly, I think you’ll see more dealers start gravitating towards this,” said White.