Results from a recent channel survey help solution providers determine which peripherals offer the most potential for "attach" strategies.

If the 1967 cult-classic film "The Graduate" were remade today for a solution-provider audience, an adult might pull young Benjamin Braddock aside and instead of whispering "plastics" amend his advice about finding future riches with the imperative, "Attach."

Attach, of course, is the strategy of bundling related technologies and services within a basic package of new color laser printers or multifunction products (MFPs). Using the only modestly profitable hardware as a starting point, solution providers can increase revenues with higher-margin add-ons that extend a successful sales pitch with piggyback products.

Some solution providers say the potential returns for a successful attach strategy can be significant, noting that a printer or MFP may represent only 30 to 40 percent of a project's value, with software, supplies, and services garnering the rest.

But not all attach options are equal, according to research into peripherals trends by VARBusiness in its January 2008 "State of Technology: Peripherals" article. The magazine recently published its examination into what peripherals offer solution providers the most bang for the attach bucks and concluded that the top performers include storage, networking, and power-management resources.

Pumping Up Peripherals
Saying that the value of peripherals has become "less peripheral," VARBusiness noted that color printers have become strategic IT tools in many organizations that also scoop up related technologies like storage in ever-increasing volumes. "Peripherals are now crucial to a total solution, integral to an end user's return on investment, and vital to the growth plans of forward-thinking solution providers," VARBusiness said in the latest CMP Channel State of Technology: Peripherals survey.

The research also validated the attach-selling idea by determining that about half of the VARs surveyed considered the ability to upsell customers offers the greatest growth opportunity for peripherals business.

Which add-ons are the easiest to match with printers and MFPs? Attach veterans say solution providers should first sell a managed-services contract based on a cost-per-page arrangement and the sale or lease of new MFPs and printers. Because these tried and true opportunities commit customers to buying consumables and maintenance services for three to five years, solution providers receive what in essence is an "annuity" that keeps delivering revenues.

Detroit solution provider LaserComp moved to this selling mode in 2002 when shrinking hardware margins and a volatile local economy clouded chances for future business growth. In return for accepting lower hardware margins, LaserComp owner Dale Fulkerson promoted three-year service and supplies contracts and cost-per-page agreements to customers. Today about 80 percent of the company's new printer and MFP sales are under contract, which has cushioned LaserComp from the area's economic problems and fueled the company's growth. "If we didn't make this change we wouldn't be here today," Fulkerson says.

For Fulkerson, the benefits of teaming MFPs and long-term contracts aren't only about boosting margins. "In addition to going from zero to 20 percent with an annuity contract, you are going to retain more customers and create new opportunities for the bundling technologies like security and storage sales," he says. "That creates an economic ecosystem that just simply doesn't exist when you are in a transaction relationship with customers."

Software Building Blocks
The next step is to add document-management and workflow applications, which can take advantage of the paper documents that MFPs transform into electronic content. A handful of hardware OEMs, including Hewlett-Packard, Oki Data Americas, and Xerox now offer channel-program incentives or ties to third-party ISVs to make it easier for solution providers to add document-management and workflow programs to MFP and consumables sales.

"Managed-print services sold with document-management and workflow systems offer selling synergies with networking, security, and storage services," says Gary Gillam, vice president of channel operations for Xerox's North American Reseller Organization.

About 60 percent of the solution-provider respondents said it's easier to sell storage technologies today than a year ago thanks to higher-capacities. Network-attached storage is increasing in popularity, they added.

Power Selling
Power protection, a sometimes overlooked peripherals area, is also gaining traction among end users seeking additional ways to reduce costs, increase business continuity, and further environmental initiatives. The fit with MFP sales is a tight one since solution providers can easily discuss power-management considerations as they outline the fuel savings possible when customers consolidate multiple standalone printers, fax machines, and scanners with workgroup MFPs.

Solution providers might consider adding a green-printing component to the standard assessments to perform for customers to determine usage patterns and the optimum size of the printing fleet, says Todd Gregory, marketing manager for global enterprise business in Hewlett-Packard's Imaging and Printing Group. "We are seeing a cascading growth in considerations about environmental policies and awareness," Gregory says. "From our research and through our conversations with analysts and the press, one of the top trends this year is a heightened, collective awareness about how to be green. I wouldn't be surprised to see environmental assessments as part of the consideration for purchasing, employing, and maintaining fleets of imaging and printing devices."

Expertise Advantages
Although an increased emphasis on selling "attached" peripherals may offer new profits, selling them isn't necessarily a slam dunk. The multiple sources available to buyers for storage devices and power-protection equipment mean intense pricing pressure from distributors and retailers. Two thirds of the VARBusiness survey respondents named these two groups as the biggest competitive threat to their peripherals strategies.

Fortunately, solution providers can distinguish themselves by cultivating a role as their customers' trusted technology advisor. That means leaving the days of competitive cost cutting behind, in favor of discussions about how the right solutions can help customers lower costs, increase efficiencies, and create effective business processes. To do that, solution providers must take time to understand each client's market and the competitive challenges that require the most attention.

"There are business opportunities for solution providers to deliver a service to help customers become aware of the various inefficiencies within their environments, and find areas for improvements," Gregory says.