September 17, 2008
Another question answered and oh so many posed...
During an internal conference call yesterday, IKON explained to it's employees that Canon would indeed be de-certifying IKON as soon as the Ricoh deal is final.
Falling back on "Policy" -
Canon expressed that this action falls within their policy on not certifying "competitors".
Indeed, this action is in line with their previous movements after Xerox bought Global dealers who sold and supported Canon.
-- Let the feeding Frenzy begin...
Oh, tough question with this.
ReplyDeleteWith RiKON doing so much of canons buiness, was this the right move?
Ricoh had a difficult supplying sold equipment when they were a $300 million dollar portion of Ikon's business....with Cannon fully pulling the plug can you say "Backorder". It may take weeks to months for them to deliver orders!
ReplyDeleteAlthough some of the back order issues were on IKON's side of the house, Ricoh will need to increase product flow, assuming the demand remains the same.
ReplyDeleteThis would mean that all the Canon customers would want to switch to Ricoh - is this a realistic option?
The bottom line is the IKON we know now will not exist in a year. It's likely they'll lose 20 to 30% staff and probably the same percentage of business. The major area of growth for IKON in the past couple of years was in production/creative color. With the loss of the Canon ImagePRESS products they'll lose the driving force behind the only real revenue increase they had going for them. If Konica Minolta follows suit and IKON loses the 550/650 they'll be in even worse shape. Ricoh is a nice company but unfortunately has some holes in the product line--- in areas where IKON has succeeded of late. This combined with Canon's dominance of national accounts for IKON may be tough to overcome. RiKON will be just another RBS--- a transaction oriented commodity sale company, moving boxes. Blah Blah and ho hum. It was a good run for them, but now they've lost that independence that made them unique. Best of Breed no longer.
ReplyDeleteTrue - IKON is dead.
ReplyDeleteWhat will rise in its stead, is in question.
RBS was transactional, but Ikon had Professional Services - and PS was profitable.
Also, the iMagePress business, if I remember correctly, was 90% conversion, maybe more - meaning not Net New.
Also, if IKON would have reduced staff by 20-30% 3 years ago, perhaps they could have commanded a higher price.
And, "Best of Breed" referred to IKON's focus on being "hardware oriented and hardware agnostic..."
If the RiKON sales force can focus on EDM and use the hardware as a platform, the hardware ends up where it should be, transparent.
The ROI moves from "lower lease costs" to increase productivity, simply work flow and reducing costs.
A tall order for a "hardware" company.
The ImagePRESS C1 business is a lot of conversion. On the other hand, the ImagePRESS 7000 business is all net new--- 200K+ transactions at a time, business that will all completely be gone. So no, the ImagePRESS business from a revenue perspective was largely net new revenue. The two fastest growing areas of the industry for companies like IKON are production color and production and mid-production black and white. Without Canon and KM IKON is hurting. Ricoh doesn't have an answer in either of these areas.
ReplyDeleteI hear you on PS but how much of that PS business was driven through regional and national accounts? Not to mention the amount of layoffs the PS team has seen in recent years.
Greg, I love your passion and your focus on EDM, etc. Unfortunately this sale is a further stumbling block in IKON actually achieving their overarching strategy of making the box sale obsolete. It's one step forward and several major steps back. What in Ricoh's DNA makes anyone think that they'll ever become anything more than a transaction, box sale company?
Yes - Thank you for clearing up the Net New for me...
ReplyDeleteAs for my passion, yes I have passion, please do mistake the passion as a belief that IKON or RiKON can actually DO EDM.
And this is the industry - as manufacturers keep buying channels, the channels continue or even intensify the focus on hardware.
wow..I think there is so much more to come...in the next few days...
Let's face it most posting here are former IKONs who are just hoping for failure. As for Greg... I guy who was an AE who carried roughly a 45k hardware quota and through most of year in FY06 could get to 50% of plan is an industry EXPERT !! OK !!
ReplyDeleteLOL!!
ReplyDeleteI moderate the comments made here and after I stopped laughing, I posted your comment -
I don't care what you think or what you say, but sweetheart, leave a name at least.
Hiding behind "anonymous" isn't very Christian of you...and unfortunately, your adolescent display only reinforces the belief that most copier sales people are neanderthals.
This site has logged 5,000 views today, from all over the world and on networks from Malvern to Tokyo - there are IKON folks that read here, but they are not a majority.
The most negative comment or post on this blog is yours.
LOL!
Keep coming back and commenting.
The problem is much of IKON's PS Solutions in geographic Areas are fluff. Some Areas are better than others, but the strength of their PS team is the elite National PS team. The majority of their PS revenue came from the configuration of RIPs / advanced color / work flow solutions involving CANON EQUIPMENT. The $$ for the SW / Services for RIP / Adv Color Services / Print Work flow is in the general PS revenue bucket. You take those PS transactions out and look at just EDM involving true EDM / Doc work flow, you will find about half of the PS revenue, and most of the margin, is gone. There is no way their general line equipment reps, at their current state, can handle making up that difference, let alone growing it. RiKON will need a major overhaul of it's sales model if they hope to increase margins through PS sales. They are in for a battle. In the meantime, if I were at IKON, I'd join up with a Canon Dealer and continue to sell the C7000's against iGEN.
ReplyDelete