R.J. Stasieczko
It’s The End Of The Day With Ray! Even Henry Ford had to Modify.
When Will The Imaging Channel's Customers' Run out of Trust?
It's is 2020 in less than 30 days. Yet some in the Imaging Channel still think its 2000. On the other hand, most of the channel's customers are excited about 2025 and will find vendor partners who can deliver 2025 today.
"A company's customers won't be held hostage by those who serve them status quo; today's customers are presented or can find on their own replacements for what they deem obsolete."
Customers are no longer at the mercy of those who currently serve them. The ability for an innovative process to surprise a legacy deliverable is still shocking the status quo. Anytime an industry marketing insist on selling yesterday's relevance; they are entering the journey towards obsolescence.
The Imaging Channel's marketing and go to market strategies resemble much more of the past than the future. Those with customer-centric mindsets who deliver based on marketplace realities will replace those who continue selling based on products and outdated processess.
"A company's Products, Services, and its People will fall out of relevance if they forget it is the customers who determine a company's relevance."
It seems as if the Imaging Channel is betting on the fact that their current customers trust them to deliver constant relevancy. Unfortunately, the customers of all industries are looking on their own as they wait to be presented status quo alternatives from those who currently have their trust. It is in this waiting period where resellers perceive a trusting customer relationship, while their customer's reality is a temporary relationship based on what they currently know.
"You can be the vendor with the greatest relationships in the world and lose to the unknown innovator who delivers a better experience."
For a declining industry to deliver the future to the present they must have the willingness to destruct all that is holding them back from improving their customer's experiences. Regardless of the pain to the comfort of current circumstances, those changes create.
Today the Imaging Channel is too focused on creating customer experiences that benefit the industry's past instead of creating end-user experiences that benefit their customers' future. There is an out of alignment with the realities of customer needs. That is why I started the A4 Revolution with my friends at Lexmark.
The Imaging Channel is living in a bubble of yesterday's circumstances. The channel continues overselling, over specking, has an overconfidence in their relevance and the trust their customers' have in them. This mis-alignment of expectations creates an environment for a severe disruption coming from outside the channel's control.
Innovators look for things the old way is doing, against the common sense of what could be based on what should be. The Innovators then set out on a path to educate the old way's customers in the better way. If all the leaders of the channel looked at the channel's deliverable through the end-users, eyes, they would quickly see a mis-aligned product - centric complacent deliverable.
"Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you off the map" Wayne Calloway CEO PepsiCo 1986-96
The industry's leaders must look at their deliverables through the eyes of an innovator who wants to wipe them off the map. Leaders who do this will then have two choices.
The first choice is listening to insecurities. It will be those insecure leaders which are smart enough to see the future. However, as they examine the future possibilities, they don't see themselves in the vision so, their insecurities will build walls to block what is probable for as long as they can. These leaders will continue delivering with a product-centric mindset and eventually will face the fate of the competitor Wayne Calloway spoke of.
The second choice is beating the innovator in turning those visions of improvement into reality. The leaders who can imagine a better way, and set out on a path in creating it will always focus on the customer, and will consistently deliver with a customer-centric mindset.
"Customer-Centric Mindsets will always defeat Product - Centric Actions"
Today's buyers have no patience in allowing those who serve them to remain complacent. When customers are presented a better way they will quickly leave what they once trusted as the only way.
Disruptive innovators look for misalignments in vendor and customer trust.
"Status quo is the Killer of all that will be Invented."
Ray Stasieczko
I welcome all to subscribe to my YouTube channel, https://www.youtube.com/channe...A?view_as=subscriber
Here’s the link to my LinkedIn profile and I welcome your invite if you wish to connect. https://www.linkedin.com/in/raystasieczko/
Managed Print Services! A 59-Billion-Dollar Business by 2025!!! Is MPS still a BAD INVESTMENT?
It seems like those who benefit from convincing resellers of the glories regarding Managed Print Services. Keep raising the outlook. Are people really buying this nonsense? Well, we do hear the testimonials from those who invest or have temporarily invested in the channel's future, putting a whole lot of faith. In what I describe, as the delusion of MPS 2025.
I recently attended an event for resellers, and yes, there was a Managed Print Services presentation. The presenter seemed to validate my thoughts regarding the absolute failure of MPS in most of SMB customer space. At the bottom of every slide was the word "Return," followed by "To MPS"
My question is, what are we returning too? If MPS is so beneficial to the market's end-users, why would we need to return to the propaganda required to sell it? Wouldn't end-users be demanding an MPS agreement?
"Return to MPS" is still a hope to some, I question the investments in the MPS deliverable based on the fantasy that aftermarket supplies are the winning ingredient in today's MPS marketplace.
I believe the investments in the channel should be about change, innovation, and diversification. Why are the investors doubling down on what isn't working? Yes, my friends, the industry's leaders, or analyst refuse to ask these questions. So, I thought I would ask and share some thoughts for all those who are obsessed with the fantasies of MPS 2025.
It's time to change the game. Who else agrees?
I do believe that there are customers who will buy remanufactured toner cartridges. However, I don't think the glory days of that industry are coming back. The investors who do should read the thoughts of yesterday's investors and then proceed with caution.
Who remembers this quote from an investment firm who bought into the MPS dream in 2018?
Turnspire Managing Partner Ilya Koffman said, "We are delighted to partner with Gary Willert and the Willert family on the LMI investment. LMI is a perfect fit with our strategy of investing in market-leading industrial companies that can benefit from our hands-on operationally focused approach. Gary and the management team have built an incredible company that has become the go-to supplier for MPS dealers, and an engine to drive their growth. We intend to continue building LMI, both organically, and through select acquisitions. We look forward to what we can accomplish together with the talented management and employees of LMI."
"Here's a link to the full article.
https://www.prnewswire.com/new...tions-300700837.html
One-year later, here's what LMI explained regarding their receivership and why Turnspire walks away from their investment made a year earlier, As reported by RT Media.
"Those providing the finance were obviously concerned about a phone call on June 12, 2019, where LMI advised its financial partners that continuing operations "may not be sustainable. They cited the June 2019 business relationship between Xerox Corporation and HP Inc, "whereby dealers in the Xerox Business Solutions network would be mandated to use only HP Products. Members of the Xerox business network included Chicago Office Technologies Group, [LMI's] single largest customer."
"Here's a link to the rest of the article https://www.rtmworld.com/news/...ond-to-receivership/
In 2019 Bloomberg published a report regarding Clover, the world's largest cartridge re-manufacturer; here's a quote from that report.
"The company told debt holders it expects reduced business from two customers, one from wireless and one from imaging, and that pricing for imaging has become more competitive. 4L Technologies also cut the range of its annual earnings forecast to between $87 million and $96 million, from $135 million to $145 million back in March, Here's a link to the article in full."
https://www.bloomberg.com/news...-as-contracts-shrink
Well, it seems Clover got its bailout and will continue as an entity, of course, no real numbers were explained, or the reality of losses were not discussed.
However, as we have all heard before, we hear again. Here's an excerpt from Clover announcing their new investment partners. Provided in part by yet another Private Equity firm NEP (Norwest Equity Partners.)The Imaging Channel published the article.
Tim DeVries, NEP Managing Partner, stated, "We are excited about our investment partnership with Clover Imaging Group — it is a well-run business with a highly experienced, nimble management team that knows how to innovate and execute. We look forward to collaborating with them to leverage the company's strong position in the marketplace and put our capital and resources to work to further expand and grow the business."
Here's a link to the full article found in The Imaging Channel's publication. https://www.theimagingchannel....artners-acquire-cig/
Both LMI and Clover said they were brought to financial stress because of the loss of key customers. Both Clover and LMI sited the agreement between HP and Xerox regarding Xerox using OEM supplies rather than Remanufactured cost them significantly.
So, here's a question.
Does anyone in the remanufacturing business believe that HP is going to change its course and allow the remanufacturing industry to take back that business? Especially now, as we see, Xerox and HP will likely become one organization.
The remanufacturing industry will continue facing challenges from the OEMs as they continue fighting to keep all components of the deliverable as the industry continues declining. The new build industry is also causing pain to the remanufacturers.
The Clover business model of yesterday was the Walmart of the remanufacturing industry, and the new model will be much smaller. It seems as downsizing and cost adjustments will create a whole new environment for its leaders. A question for Clover is, without the revenues and profits from all they once had how will its leaders adjust as they realign, Clover with the realities of a declining marketplace, aggressive competition from new build players and OEM's all fighting for every dollar of the deliverable?
The best suited to capitalize on the remanufacturing business in a declining market are those smaller but stable remanufacturers that have much more control over their cost and can grow to demand rather than decline to demand as Clover must do. We have heard Clover speak many times to the fact they collect more cartridges than they remanufacture. The numbers of sold and collected are included in the report from The Imaging Channel. In that report, it says.
"On a monthly basis, Clover Imaging collects and recycles over 3.5 million cartridges and manufactures over 1.4 million cartridges."
It seems like the cost to collect and then properly dispose of twice as many cartridges as they remanufacture would add significant cost to their deliverable. Well, time will tell on the results of this new investment bailing out the old investment. I would hope a year from now; we don't see a repeat of the LMI story. I, for one, am not confident things will be different.
If the industry continues believing that somehow MPS will save current investments or create new ones, I fear there will be many saying wow what just happen. Soon the swapping of investments will have more security. Until then, I would suggest the potential investors in the glories of MPS listen to the Latin saying. "Caveat Emptor."
The investments should be in delivering the future to the present, not saving a past that appears to need saving consistently.
In Closing: The MPS story is one of great hope to a declining market. I think the industry should stop chasing what they want and rather deliver what the customer wants and how they want it. The investments in yesterday's model should scare investors. The channel should be investing in the future not saving the past. The channel should be investing in E-Commerce, investing in delivering A4 instead of overselling A3, Investing in human capital from outside the industry to help reinvent and realign to today's market realities.
"A Company goes obsolete when they focus on delivering the past to the future instead of delivering the future to the present."
"Status Quo is the Killer of all that will be Invented." Investors don't get stuck in Status Quo.
Ray Stasieczko
I welcome all to subscribe to my YouTube channel, https://www.youtube.com/channe...A?view_as=subscriber
Here’s the link to my LinkedIn profile and I welcome your invite if you wish to connect. https://www.linkedin.com/in/raystasieczko/
Are Master Service Providers Profitable? Isn't it time MSPs Asked?
I have always believed the Master Service Provider business model to be unscalable in providing the MSPs who use them a differentiator. I also believe Master Service Providers have financially unsustainable models without continuous outside investment dollars.
However, If everything is perfect with the Master Service Provider deliverable, it would be an excellent service to the industry for all Master Service Providers to share the financial numbers highlighting their success. I am sure I am not the only one questioning this.
I wanted to share some thoughts on the importance of profit. And ask the MSP community have they seen the financials of those; they trust outsourcing to? Master Service Providers may be successful and profitable. The question is, what if they are not?
It seems as some businesses get sold with little celebration and some have big celebrations. Is the lack of celebration an indication there is nothing to celebrate? I was thinking of the fanfare, which followed the ConnectWise sale to Thoma Bravo. Remember all the great press congratulating Arnie Bellini. Remember the numbers. Not only were they massive, but the world was also made aware of just how successful Arnie and his team at ConnectWise were. ConnectWise was indeed honored, and they definitely deserved all of their accolades.I still say, Congratulations ConnectWise! Job well done!
So, where were the celebrations when Thoma Bravo bought Continuum? There were no revenue numbers yelled from roof tops, and there were no leaders highlighted exiting with millions of dollars. Did Thoma Bravo simply bail out Continuum's previous private equity partner from a questionable investment? It does seem as Thoma Bravo had a plan as we recently witnessed Continuum sold to ConnectWise.
However, again, this second sale of Continuum, still no balloons or real celebrating. Still, no revenue or profit numbers shared. Of, course private companies don't have to share their numbers, and Private Equity is a great place to hide when investments are stalled in reaching their acceptable ROI. It does seem as a decade of investments is long time to go without hitting the home run, and if they did hit a home run no one in the stadium knows it.
Why is this observation of mine important to MSPs? Well, if the reality is, Continuum after a decade in multiple private equity relationships was not profitable enough to brag about or is somehow ashamed of its financial track record. The MSPs on their platform should take note and question why? Bottom Line MSPs should know the level of Continuum's success.
Any organization can grow in size and have massive customer bases if they are void the responsibility of healthy financials and get continuous outside cash infusions. It does seem as Private Equity throws money at things banking on what I call "A hope it works out platform." Was Continuum another hope it works out platform? or, was Continuum a massively successful company?
I think the MSP community members who depend on master service provider platforms. Should demand to know the financial details of the Master Service Providers they trust servicing their end-users technology infrastructures.
MSPs should perform due diligence on their Master Service Provider. It's the answers to questions that are the keys to understanding options.
ConnectWise is a hugely successful business on its own. If Continuum was not, how long will ConnectWise invest in a failing business model? Or, how will ConnectWise change Continuum's model for it to be financially successful? All business leaders realize anything that can't stand on its own will suck the life and profit of the supporting company. I don't see the new ConnectWise leadership destroying what Arie built by dumping money in "A Hope it works out platform."
All MSPs must understand the stability of the Master Service Providers they use. The market is propped up with Private Equity, and it seems there are some investments made on hope over market realities. Unprofitability is the sign the business model is broken. I don't think it's out of line to ask the questions. If Continuum is profitable along with revenue growth, it seems the market would be well served knowing that. And of course, the market should also be aware of any threats to Continuum's stability. Or, the changes ConnectWise may make to bring stability to Continuum if needed.
In these times of buyouts and Private Equity Investments, MSPs should not only question their deliverables, but they should also examine those partners they outsource services of their end-users to.
All MSPs are asked to provide their credit information by every product manufacturer, software provider, and yes, sometimes even the Master Service Providers they outsource. Maybe it's time MSPs demand the credit information on the Master Service Providers they hire.
This due diligence, I suggest is not just regarding Continuum. Any Master Service Provider MSPs outsource to, should share their financial results. Keep in mind the Master Service Provider entity's numbers must be separated from parent companies who own them.
It does not matter if ConnectWise is profitable; it matters if Continuum was on its own. I would say the same regarding Collabrance, which is a Master Service Provider wholly owned by Great America Leasing. If Collabrance is not profitable as a stand-alone entity after nearly a decade, is their model broken? If Collabrance is profitable on its own Its MSP partners should also know that. If its not, what will happen if Great America, through market pressures involving their core deliverable of leasing, needed to adjust cost. Would they continue feeding Great America's profits to Collabrance?
"In business, one's hoped-for outcome will be challenged by market realities"
Maybe both Continuum and Collabrance standing on their own are rock solid profitable businesses. If they are both will welcome the conversation and appreciate the opportunity to share that with their MSP partners. If they are not profitable, the dialogue will allow the industry to understand the facts to the condition of the Master Service Provider deliverable. Maybe it's time to reinvent a better way? Or, is there a better way already?
MSPs the customers you service are responsible to you. If your Master Service Provider goes away, how will you respond? Unanswered questions are where surprises are found. All MSPs will be faced with challenges over the next few years. It will be essential to understand all options and equally important to understand as much as possible of the Master Service Providers to whom you outsource.
Isn't it time the industry's MSPs asked more questions?
“Status Quo is the Killer of all that will be invented.”
Ray Stasieczko
I welcome all to subscribe to my YouTube channel, https://www.youtube.com/channe...A?view_as=subscriber
Here’s the link to my LinkedIn profile and I welcome your invite if you wish to connect. https://www.linkedin.com/in/raystasieczko/