In an effort to provide one-stop shopping for their customers, the nation's largest copier companies are enlarging the scope of their businesses by purchasing systems integration and document services firms. By acquiring firms that can integrate digital copiers into computer networks and service those networks, as well as provide printing services on large projects,
wow gold the firms are hoping to capture business that would typically be outsourced. "It allows us to provide a lot more solutions for a wider range of client applications," says Bob Raymond, sales manager for Ikon Office Solutions in San Antonio. "The goal is to be able to provide a one-stop shop," says Michael Fitzgibbons, president and chief executive officer of Felco Office Systems Inc., a company owned by Tampa, Fla.-_base_d Global Imaging Systems Co. "Instead of being able to provide a portion of their needs, we're looking to provide a whole turn-key program." Several years ago, national business machine firms such as Ikon, Global Imaging and Danka Business Systems plc began purchasing independent copier sales and service companies in an effort to provide competitive prices and technologically advanced products to their customers. But as more copiers have become digital - and more customers are aiming to hook up their computer systems to their digital copiers - copier firms are stepping in to service that market. What's more, since more firms are preparing their documents in-house, business machine firms are working to provide just-in-time printing services - where they are able to print large quantities of documents for their clients on a demand basis. The goal, industry officials say,
wow power leveling, is to have one sales representative selling all the various office equipment services to the company's customers. To that end, Valley Forge, Penn.-_base_d Ikon recently renamed its document services unit to Ikon Office Solutions. Last December, Ikon-Night Rider, Ikon's document services division, acquired Legal Copies International, which owned Alamo Legal Copies of San Antonio. "It's important that we present our solutions to the market in a unified way so that customers can remember a single name for all of their legal and business document needs," Lynn Graham, president of Ikon Document Services, said in a prepared statement released last month. During the second quarter of Ikon's fiscal year 1997 alone, Ikon purchased 24 companies nationwide - nine systems integration firms, six outsourcing and imaging companies, and nine traditional office equipment firms. That brings the total number of companies Ikon has acquired in the first six months of this fiscal year to 47 - 19 in systems integration, 13 in outsourcing, and 15 in traditional office equipment. (Ikon, then known as Alco Standard Co., acquired Texas Copy in San Antonio in the early 1990s.) Bruce Ganger, director of digital and color programs for Danka, says that his firm has grown its systems integration and print-on-demand business internally for several years. However, last September the St. Petersburg, Fla.-_base_d company purchased the office imaging division of Eastman Kodak. That division was already a top p_layer_ in the print-on-demand business. Tom Johnson, CEO of Global Imaging, says the firm has 44 locations nationwide. In the past eight months, it has acquired two systems integration firms, one of which is the 34th largest in the nation. Fitzgibbons says his firm currently is holding talks regarding possible deals with some local firms. John Thomas, president of the San Antonio systems integration firm The Publishing Group, says he has been contacted by some of the major companies about providing services, but has yet to be approached regarding an acquisition. "They do use my services," he says. However, Sam Lorimer, vice president of SabreData of Austin, another systems integrator, says he has seen many of his peers nationwide get purchased or approached by some of the nation's major office equipment service firms. Of those, he says, Ikon appears to be the most aggressive. "I've seen a lot of peers get purchased by Ikon," he says. While digital copiers still make up only a small percentage of the market, industry analysts say it is increasing. Analysts says digital copiers make up less than 10 percent of the installed market. Digital equipment, which digitizes images electronically instead of using a light source, gears and drums, allows the use of one machine for various functions, including faxing and laser printing. However, digital equipment is becoming a larger source of revenues for the business-machine industry. For example, Xerox Corp., which has its own systems integration division, recently reported that digital sales accounted for 34 percent of its revenues, according to an industry analyst. "There's a sense that there's a lot of waste in a business environment by having a printer,
world of warcraft power leveling, fax and a copier," says Kristy Thiese, an analyst with Raymond James & Associates in St. Petersburg, Fla. "The (digital) products are here now and there'll be more coming in a year." But while the digital market is still small, Thiese also notes that systems integration - because it involves servicing equipment - is similar to the copier service business, making it a good business for the business-machine companies to enter. For example, they are able to use the same dispatch system they are already using for their copier service people. "It's a similar business to run to the business they're already in," she says. "It's a good growth business for them." However, Thiese says that as digital copiers do take over the market, independent copier companies could feel financial pressure to expend capital to provide systems integrations and other complementary services. Duane Meehan, president of Office Communications Systems Inc. (OCS), the largest independent business machine firm in San Antonio, says he saw several years ago that digital copiers would create the need for systems integration and formed a division to address the need. He is expecting that division to grow. Indeed, Meehan says he was recently told by a top official of a major copier manufacturer that by the year 2000, no more analog copiers would be developed by the firm. "Everything they are doing is going to be connectable," Meehan says about copier manufacturers. "As a dealer, we've had to be fully prepared to sell and service digital copiers." So far, Meehan says that adding systems integration to his business has helped fuel the firm's growth. OCS has seen its revenues grow by more than 60 percent over the last three years.
Digital propelling copier businesses to broaden scope
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