What’s Happenin’ at Toshiba LEAD

By Andy Slawetsky – Toshiba held their dealer conference at the Dolphin Hotel at Disney May 2 – 5. Under the theme Toshiba LEAD, I heard about new strategies, spoke to dealers and had a great sit down with senior executives.

The day began with President and CEO Scott Maccabe taking the stage to welcome us to the event. Scott didn’t waste any time in addressing the elephant in the room – What’s Happenin’ with Toshiba? Most of you reading this have seen or heard the news on Toshiba Corp’s financial struggles.

Scott explained that Toshiba Corp is a different company completely. Toshiba America Business Solutions (TABS) is a subsidiary of a company called Toshiba Tec , a publically traded company (TYO) on the Tokyo Stock Exchange. While they share the name Toshiba, they aren’t the same company.

While Toshiba Corp is in financial crisis, Toshiba Tec has been doing very well as of late. Scott showed us slides comparing Toshiba Tec’s stock performance over the last year to the four biggest A3 competitors, showing a 29% increase while the other brands were all down, some considerably.

In sitting down with Scott and CMO Bill Melo in a private meeting (I couldn’t make the analyst meeting on Friday), I was told that one of the reasons for the swing in stock is that the retail group has turned things around significantly in the past year. They lost millions the last few years and in 2016, turned the ship around, actually increasing revenues to $4 million. That number should greatly increase in 2017.

Back to the General Session. Toshiba America did well last year too, with A3 up 7%, A4 up 14% and MPS up 14%. In a period of decline for many competitors, Toshiba is doing pretty well. Those numbers, especially the MPS figures tell me that their branches, in particular, are more than holding their own. Additionally, Toshiba also experienced 15% growth on POS systems.

Scott went on to describe a new major initiative for Toshiba, called elevate, a new user interface common to the full line of A3 products they’ve recently introduced. elevate offers eight vertical markets custom looks and unique apps for their respective industries that include apps specific to their needs.

This isn’t exactly new. Konica Minolta, Ricoh and Xerox all have vertical MFPs (healthcare MFP, legal MFP, etc.). However, Toshiba took a great idea and made it even better. Where competitors offer a single unit for two verticals, Toshiba has made their entire line able to serve eight verticals. For example, the whole hospital fleet will have the same healthcare UI no matter which model they choose. Pretty cool.

SVP Larry White came on next to hand out awards to Toshiba’s dealers. Companies such as Nauticon, James Imaging, Appalachia Business Communications (accepting the award to the song of Rocky Top Tenn), Kelley Imaging, The Lioce Group, Higher Information Group, and of course, Donnellon McCarthy Enterprises, who was named Dealer of the Year, all won awards. Jim Donnellon gave a great and emotional acceptance speech.

Larry went on to describe an upcoming incentive trip to Jackson Hole, Wyoming in Sept. There is another trip next year to Cape Town for an African Safari wine country. Sell hard people!


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Next, Bill Melo came on stage to talk about elevate in more detail, discussing the reasoning behind this strategy, the vertical markets they will serve and more. He also spoke of Toshiba’s new Eco MFP, announced at the show. This product is an upgrade to the original Eco MFP (erasable toner), building the ability to remove toner into the hardware chassis, rather than requiring customers to buy an accessory, as was the case previously. While this product is definitely not for everyone, there are certain niche customers that want it. Toshiba would not have developed a new one if the predecessor had been a failure. It also gives them a great environmental story unlike any other. Plus, the green and black hardware looks awesome.

Speaking of the black, I still love the look but does anyone out there think of Darth Vader when they see these MFPs? Seriously, they look bad a&&.

Building on the eco story, Bill talked about their PageSmart auto toner replenishment system and how Toshiba’s green strategy has saved over 57,000 trees.

Later, Joe Contreras announced Toshiba’s alliance with FlashGrade, which provides dealers and branches with access to a competitive and theoretically better product than ScanTron, the defacto product in the market right now.

After the general session, attendees (1,300 dealers, employees, partners and customers) visited the product fair and attended the numerous breakout sessions on topics like managed services, customizing MFPs, social media, marketing and more. Toshiba certainly filled the day.

The floor was great with lots of excellent partners for Toshiba dealers to meet with. PSIGEN had a booth, showing document capture solutions.

GreatAmerica and Collabrance were there side-by-side showing dealers the new GreatAmerica app (pretty cool) and HR offerings (PathShare) and Collabrance’s programs to help dealers get into managed services.

DocuWare, a longtime Toshiba partner had a booth showcasing ECM and document management, another strong potential area of growth for dealers.

BEI Services had a table as well. If you don’t know them, they offer a database of service records on a billion assets and have programs that help dealers become more efficient with respect to service. Their products also help dealers get their books and profitability in order to help them down the road if they ever want to sell.

Continuum was on the floor showcasing their managed services MSP information packaged specifically for copier dealers.

PrinterLogic was on the floor, showing serverless printer options. There was a lot of interest in this booth when I walked around.

ACDI and PaperCut had a lot of space and tons of people around their combined booth as well.

ESP was there too, showing power protection, including their new 30-AMP product designed to protect production equipment. #nobrainer!

As Toshiba’s premier A4 partner, Lexmark had an amazing booth that could be seen from everywhere. Lexmark is one of Toshiba’s A4 providers as Toshiba doesn’t offer their own full line of Toshiba-branded products in this category.

Later that evening, we were treated to a typically wonderful networking evening by the pool. The entertainment? It was us as Toshiba hired a band that offered karaoke. You’d be surprised how many people got up on that stage and even MORE surprised at how many of them were GREAT!!! No, I didn’t get up there. I was about 8 drinks short of hitting that stage.

The timing of this event was great and it was important for people to hear Scott’s message on the relation between Toshiba Corp and Toshiba Tec. It is certainly something to keep an eye on and should be noted that Toshiba Corp owns 51% of Toshiba Tec’s stock. If Toshiba Corp does go into bankruptcy and has to sell assets, I would think that the Toshiba Tec stock would be something others will want. Time will tell!

I like the elevate strategy and think this makes the products even more useful to customers. The UI is clean and very simply; another step forward. There was a lot less digital signage and retail solutions on the floor than past events, but this is still a big part of their strategy. Scott mentioned wins in signage during his keynote, such as the Crazy Horse Memorial.

To be clear, there was some digital signage and retail, such as the Brookstone display and others, just not as much as the last show. The giant cube display from past shows wasn’t here this time.

One thing I like about this is that it’s not just for dealers, it’s for customers too. Many dealers brought customers to this event (400+). This is one of many examples of how Scott has made Toshiba more efficient. Combining shows like this saves a ton of money and better yet, there’s an ROI. Larry White told me that Toshiba closed $20 million in business at last year’s LEAD conference and their expectations are high again this year.

In all, it was a great trip. Toshiba has a wonderful group of people, they continue to do a nice job managing their channel and keeping their dealers and branches out of each other’s way and they continue to chug along. Dealers seem happy overall, but there is still a great deal of apprehension among them. The cloud from Toshiba Corp continues to hang over them and while things are clearly great with Toshiba Tec and TABS right now, I have to think that 51% of their stock owned by Toshiba Corp will somehow play into this.

I’m not an economics person, I graduated with a history degree (Go TERPS!). Like most of you, I will have to sit back and watch how it plays out. And it will play out.

A nice job by Toshiba once again.

 

~Andy