Imaging Channel, It’s also about a Lease-less Future!


Over the last year or so those in the Imaging Channel or as I believe it should strive to be called “The Innovation Channel.” Have realized many shifts within the marketplace. Everyone associated with this industry realizes that printed pages are decreasing, and Printing Equipment is becoming less and less as important to those who use it. The world around Print is most definitely changing and shrinking. We all heard the “Paperless argument” some agree and some disagree. So let me say this loud and clear it’s not a Paperless Argument. It’s a coming storm called “Annuity-less” which is beginning to beat against the shores of The Imaging Channel. I base this storm alert on the soon to come - much less service intensive equipment. HP is determined to produce copiers/printers with as few as six replaceable parts. When successful all printer manufacturers will emulate, or will another manufacturer beat HP to that goal. The future of print equipment will be most definitely be less service intensive. There were once armies of T.V. Repair Technicians, Things always get better it’s a fact, and today improvement timelines are much faster than ever in history.     

Today I want to discuss another reality coming to the Imaging Channel. I call it “The Lease-Less Future. This doesn’t mean people will stop leasing printing Equipment. It means that the current circumstances of print equipment leasing will not be able to continue, and some of the smaller leasing organizations will find themselves disrupted beyond repair. That is if they don’t prepare themselves and start now.

Here are my thoughts:  

For decades around 80% of all print equipment sold through the Imaging Channel was leased. The monetary value is enormous, meaning when the market decides to stop upgrading, or simply pays cash based on the low price which will be attributed to manufacturers chasing the ever declining customers. Ok, I am not saying that everyone will stop leasing copiers and printers. What I am saying, “Is "everyone" becomes a minimal number in comparison to yesterday’s number, as the market shifts to alternate distribution and equipment acquisition methods.”

When a deliverable reduces in demand, while simultaneously the consumer is provided a different means to that deliverables achievement. The current circumstances of the old ways are destroyed. For instance, we don’t see any typewriter stores or service centers, and yet people still type, Well Tom Hanks anyway.

The storm on the horizon for the Leasing Companies in the Imaging Channel, (or as I believe it should strive to be called “The Innovation Channel.”) Is this. Customers engage in 3-5 year lease terms, and based on this fact when the innovative new way for customers to acquire, have delivered, and receive service on print/copy equipment is accepted by the market place, and- not if but when, and I would add by who knows who. The old leased customers will all be gone five years from the new ways acceptance, and with-in three years of the new ways acceptance the fallout will be enormous, and some will perish. If this disruption is sooner than I even imagine the potential for these smaller Leasing companies to sell or merge becomes challenging. Who wants to buy a book of leased assets which the majority of won’t even be renewed, and what about the back-end residual value since most leases are FMV. There won’t be any way to recover even the smallest percentage of that Fair Market Value. Small Leasing Company’s with the majority of their booked assets in Print equipment should sell now or start innovating, and if they started yesterday, it might be too late.

My friends, that company value question also applies to all the third party software companies. Those Channel Partners who sell print related software. How many of them can survive as the Manufacturers begin consolidating, and the end-users reduce their dependence on printed pages so drastically they stop caring to even count pages printed or managing its activity.

Back to leasing, HP provides In-house equipment financing, so does Dell and Xerox. So if HP, or Xerox win the battle of the last one or two standing regarding equipment that would be problematic for small leasing companies. The small Legacy Print Equipment Leasing Companies wanted too long to embrace the thousands of IT resellers. They tried to get in the IT leasing business through the Print business. This strategy failed those smaller leasing companies for the most part. Some will argue they lease IT equipment I would argue as a percentage of their print portfolio it’s less than 15%. Remember I am talking about the Small Leasing Companies.

The large global players such as DLL, Wells Fargo, US Bank, and EverBank, have enough diversification to survive. However, Wells Fargo may decide to stop providing capital to smaller leasing Companies as they compete for a shrinking market. Time will tell the fallout, and Innovation will tell us who the winners, and those less fortunate will be. In my vision, new actors enter the theater. Actors who are more technical and more open to alternative funding options. Organizations who have enormous cash reserves. Organizations who live and breathe with their Imagination to explore what could be, will always surprise those organizations who only focus on the way it is, or are obsessed in needing absolutes to even begin exploring the unknown. Today there are many threats to the Imaging Channel and those who feed off its boarders. Competition will come from places the un-imaginative did not see on their path called sameness.   

Here are a few examples: Will Apple decide to stop outsourcing Apple finance and begin funding competitive products as well, will Google Business Apps create Google Business Equipment finance, or does Amazon Cloud Services develop Amazon Cloud Finance. Many possibilities in an ever changing technology world. 

 An industry becomes unstainable to feed the engine of current circumstances. When Innovation destroys the majority of what created the environment for those current circumstances.

The Smaller Leasing organizations to the Imaging Channel must seek out new avenues for continued success. In my vision of the New “Innovation Channel.” Leasing as we know it today regarding print equipment will be obsolete. As the legacy deliverable and the legacy mentalities are defeated by innovation. The leasing companies must themselves become innovative or perish.

As Example:

Who will be the first leasing company to partner with a manufacturer or a dealer to fund a service platform with no physical assets? Who will be the first leasing company to fund Equipment for home offices, and Dispatch service Techs.? Oh, Amazon is close to doing that today. Who will be the first leasing company to have contracts for equipment based on hours used? Well Actually DLL does that today. Who will be the first leasing company to have an app its end-users can use to acquire more equipment on a coterminous contract- even if the new equipment comes from a different vendor? Who will be the first Leasing Company that will lend monies to pay for IT security classes which are bundled in a Managed IT Service offering with no equipment assets? Who will be the first Leasing Company to buy a Muti Vendor Technology Distribution Center? Who will be the first Leasing Company to fund multiple collaborative companies on the same deal? 

Last Question

Who will be the Leasing Companies’ to stop looking for absolutes so they can discover the excitement of the unknown?

There is one thing we all should know by now, and most definitely should all agree to. That is; just how stupid the saying “That will never Happen” is.   

Many changes are coming to the many actors in the theater of the Imaging Channel print, its equipment, its delivery, its services, and all those software and services which rely on prints continuous relevance. Some will take the journey in the Bus of Status Quo down the road called irrelevancy, and some will get on the Highway to the Future. A Highway I named The Innovation Channel.” and drive towards the place called continuance relevancy.

“Without imagination and a desire to look where your competitors are not, you’re doomed to the temporary mediocrity of current circumstances.

 In closing: My Passion for sharing my thoughts are reflected in my Quote below.

 “Without the ability to understand how we can be defeated, we are at the mercy of those who plan and execute our defeat.”

R.J. Stasieczko

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