EDITORIAL AND PUBLISHING

Frank G. Cannata Editor-In-Chief and Publisher fgcannata@cannatareport.com

Carol C. Cannata Senior Vice President, Client and Creative Services cccannata@cannatareport.com

Charles J. Cannata Senior Vice President, Brand Strategy and Development cjcannata@cannatareport.com

Doreen Borghoff Design Director dborghoff@cannatareport.com

Sharon Tosto Esker Story Editor sesker@cannatareport.com

Walter Geer III Consultant I Digital Media, 3rd-Geer

Karen Stewart Executive Producer I Shadow Productions

Charlene Piro Agent and Producer | Agent Oliver

Matt Stauble Photographer and Producer I Matt Stauble Media

Sheri Fitts Social Media Consultant I Shoefitts Marketing

CONTRIBUTORS

Scott Cullen Correspondent At Large

Robert Ingoglia Chief Marketing Correspondent

Bob Sostilio Chief Technology Correspondent

Tetsuo Kubo Japanese Correspondent

EDITORIAL ADVISORY BOARD

Keith Allison President and CEO I Systel Business Systems PO Box 35910 I Fayetteville, NC 28303

Paul Hanna President I Blue Technologies 5885 Grant Avenue I Cleveland, OH 44105

Steve Reding President I C.A. Reding 4352 North Brawley Avenue, Suite 101 I Fresno, CA 93722

Andrew Ritschel Owner/President I Electronic Office Systems, Inc. 330 Fairfield Road I Fairfield, NJ 07004

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Mark Steadman President and CEO I Stan’s Office Technologies 1375 South Eastwood Drive I Woodstock, IL 60098

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THECANNATAREPORT (ISSN: 0889-5880) is published twelve times yearly by Marketing Research Consultants LLC, P.O. Box 180 Hamburg, New Jersey 07419. Phone: (973) 823-6314; Fax: (973) 823-6316; email: fgcannata@cannatareport.com. Editor and Publisher, Frank G. Cannata. All rights reserved. No part of this periodical may be reproduced in any manner in any language without the consent of THECANNATAREPORT. The information set forth herein and on its complementary website,THECANNATAREPORT.com, has been obtained from sources believed to be reliable but is not guaranteed by THECANNATAREPORT and may be incomplete. THECANNATAREPORT’s expressed views and opinions are based on the foregoing and should be viewed in this context. Printed in the U.S.A. SUBSCRIPTION RATE for THECANNATAREPORT and THECANNATAREPORT.com is $495 for one year. Subscribe at THECANNATAREPORT.com/Register. POSTMASTER: Please email address changes to cjcannata@cannatareport.com.

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COVER STORY

13 I Live from Japan 2014Senior Manufacturing Executives on Strategic Direction, Sights and Sake

CANON Broad Strokes .......................................14

TOSHIBA TECOne-Stop Shop .....................................18

KONICA MINOLTAProduction Management ......................22

RICOHCovering All Bases ...............................26

SHARPSigns of the Times ................................30

KYOCERAAdvancement in A4...............................34

FEATURES

10 I The Intelligence of IntelliCloudIntellinetics Fills Document Management Void for SMB

9 I 2014 Dealer Profile SeriesProfile No. 1: PERRY proTECHRegional IT Leader Supplies 40 Years of Superior Service and Counting

DEPARTMENTS

8 I Japanese HeadlinesNew Shades of ColorEpson Challenges Japanese Market with Latest Injet MFP

9 I Personnel ManagementAirwolf3D Appoints New PresidentFormer Toshiba CEO Mark Mathews Tasked with Building Internal Infrastructure and Distribution

8 I CJ’s SpinThe Royal TreatmentTHE CANNATA REPORT Takes a Walk Down the Japanese Red Carpet

46 I Up NextTHE CANNATA REPORT Acknowledges Women Influencers Across the Industry, Concludes 29th Annual Dealer Survey and Prepares for CDA Meeting on Michigan’s Mackinac Island

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Visit TheCannataReport.comQuote:“The world is in the midst of a paradigm shift and just being new is not enough. We [have to] capture what our employees and customers are thinking...to work in this new world.”

Haruo MuraseChairmanCanon Marketing Japan, Inc.

July 2014

Inside

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No. 8: Mixing Business with Pleasure in Japanese

On May 11, 2014, CJ and I began a nine-day tour through Japan. The plan called for meetings with Canon, Toshiba, Konica Minolta, Ricoh, Sharp and KYOCERA. We landed in Tokyo and met with Canon and Toshiba on Tuesday, Konica Minolta on Wednesday and Ricoh on Thursday. We traveled to Nara on Thursday evening to meet with Sharp on Friday. Needless to say it was a very busy week. In between, we had lunch on Wednesday with Tetsuo Kubo who is the President of OA Life, an office automation periodical published in Japan. After a weekend of sightseeing, we took the train from Nara to Osaka for our meeting with KYOCERA.

Our gracious hosts at every stop along the way extended every courtesy, with great attention paid to our comfort and schedule. We had a chance to experience true, traditional Japanese hospitality and even received customary gifts from each of the manufacturers. We are truly grateful for their kindness and consideration.

Thanks to these wonderful hosts, we learned a great deal in our travels. Our hosts gave us every opportunity to ask as many questions as we liked. To boot, senior executives were present at every meeting to provide valuable insight, sharing their strategic directions and overall views of the global market, including their rationales and areas of concerns.

This was my ninth trip to Japan, and it was by far the best. CJ experienced firsthand a strong sampling of the relationships we have built with our friends in Japan. We also had a couple of surprise guests who joined us for either lunch or dinner, which made it all the nicer.

I purposely left the weekend open to do some sightseeing in Kyoto. As the cultural center of Japan, it is a beautiful city. I have been there many times and I knew CJ would enjoy it very much. It was a fun way to break up the trip and for us to catch a breather.

I have been fortunate to work in an industry that has given me a chance to see the world. I have traveled from Brooklyn to Tokyo and visited many cities in between. My work has brought me to Berlin, Dusseldorf and Hannover, Germany; Acapulco; Amsterdam; Florence, Milan and Rome, Italy; Hong Kong; London; Madrid; Majorca; Paris; Rio de Janeiro; San Juan; and Vienna. And my sidekick Carol and I have covered the United States from one end to the other.

In many of these cities, I have made presentations to dealers and manufacturers, and I have always been treated with the utmost respect. My journey is far from over. While I do not know where my work will lead me next, I do know that it will always be with one goal in mind: a desire to learn more about our business and attempt to uncover information I can relate to our readers, especially the independent dealers who have made this all possible.

By the time we flew home from Tokyo on May 20, we were dog tired, but I could not have been more pleased to see how much CJ learned about our business, meeting such special people and getting to know a culture that is steeped in rich tradition — one we can all learn from.

Sincerely,

Frank G. CannataEditor-In-Chief and Publisher

HARDCOPY From the Editor’s Desk

Charles J. Cannata (CJ) Senior Vice President, Brand Strategy and Development

Charles J. Cannata (CJ) is a partner at Marketing Research Consultants LLC and THE CANNATA REPORT. After graduating from Tufts University with a B.A. in international relations and Russian language and Eastern European area studies, Cannata

transitioned to communications. With over 15 years of media, branding and marketing experience, Cannata has

served in senior roles at Time Warner Inc. and Martha Stewart Living Omnimedia, Inc. Cannata contributed to creating the Emmy Award-winning “Book Obsessed” digital web series for Barnes and Noble and won two integrated marketing awards for Levi Strauss and MillerCoors initiatives. Cannata’s responsibilities at CR include brand strategy, business development, creative direction, advertising sales and editorial, including his monthly “CJ’s Spin” column, launched in February 2014. An avid music collector and film and television enthusiast, his favorite band, film and series are Fleetwood Mac, The Godfather, Part II, and Six Feet Under, respectively. Cannata currently resides in New York City.

Scott Cullen Correspondent At Large

Scott Cullen has covered the office products and workflow solutions industry since 1986 when he began his career as an editor at OfficeSystems and OfficeDealer magazines. Between his tenures with those publications, Cullen was Editor at The Office magazine. Adding to his experience, Cullen also spent

two years working in the public relations sector where he simultaneously represented clients in the office equipment

and entertainment industries. He has been an independent writer and editor since 1997, and is currently editor and publisher of The Week in Imaging and a frequent contributor to both THE CANNATA REPORT and ENX magazine, as well as media outside of the office products and workflow solutions industry. A music and sports enthusiast, Cullen can usually be found at a concert or sporting event somewhere between New York City and Philadelphia when he is not writing or editing. Cullen curently resides in Ewing, N.J.

Robert Ingoglia Chief Marketing Correspondent

Robert Ingoglia began his career at Xerox in sales management. He later moved to Ricoh, serving as Vice President of Marketing and Corporate Communications for 26 years where he significantly expanded brand awareness through substantial initiatives, such as

sponsorships of the Olympics, USOC teams and The PGA of America. Ingoglia was behind the development

o f a multi-million dollar integrated sales promotion web portal used by thousands of salespeople, transacting over a million individual orders. Ingoglia also created and managed co-branding standards, websites and integration strategies for Ricoh’s acquired companies. Ingoglia established Ricoh University, creating and conducting numerous educational programs, including sales and management training across the United States, for over 25,000 students. Ingoglia graduated from Villanova University, received his M.A. in history at NYU and attended Officer Candidate School at Ft. Belvoir, Va., and later served in Vietnam. Ingoglia spends much of his free time with his four children and seven grandchildren and currently resides in Flanders, N.J.

Robert Sostilio Chief Technology Correspondent

Robert “Bob” Sostilio, a 46-year veteran of the office products and workflow solutions industry, is the President and CEO of Sostilio & Associates International, Inc. based in Florida. Sostilio’s product expertise stems from years of strategic planning, product development, product assurance management, manufacturing and

product marketing worldwide for Ricoh, Panasonic, KYOCERA and Saxon Industries. He has held positions of

Director of Strategic Planning, National OEM Manager for Panasonic Industrial Company’s Office Automation Group, Senior Product Manager at Kyocera Mita, National Copier Service Manager for Monroe Systems for Business, Copier Service Manager for Cybernet International (a wholly owned subsidiary of KYOCERA), International Service Manager for Saxon Export Corp., and Product Assurance Manager for Saxon Copystatics. A more detailed bio can be found in Who’s Who in America and Who’s Who in Industry and Finance since 1993. Sostilio currently resides in an Ocala, Fla., with his wife.

Sharon Tosto Esker Story Editor

Sharon Tosto Esker brings over 15 years of impressive education and experience into the fold. Esker began her career at Fidelity Investments, where she spent eight years serving in various roles in legal, marketing and sales. She left Fidelity in 2006 to serve as the editor of The Cerulli Edge, U.S. Edition, a monthly

publication that covers the most pressing issues and trends across the asset management industry. Esker then

returned to Fidelity and worked hand-in-hand with portfolio managers to write in-depth interviews for shareholder reports, marketing materials and other related publications. Esker graduated from Tufts University with a B.A. in international relations and French. She also has a Masters of Liberal Arts in Extension Studies in the field of journalism from Harvard University. When not cruising the AP Stylebook, you are most likely to find her whipping up a gourmet meal or at a yoga class. Esker currently resides in Hamilton, Mass. with her husband and two children.

Tetsuo KuboJapanese Correspondent/President, OA Life Co., Ltd.

Tetsuo Kubo is currently President of OA Life Co., Ltd. He publishes OA Life, a specialized monthly magazine for the office products and workflow solutions industry, specifically covering MFPs and printers, among other related emerging industry topics. Kubo’s company publications also include Data Books, the Color Copier &

Color Printer Guide and OA Life Document, each of which a r e published bi-annually. Kubo began his career in April 1970 at Dempa Shimbun, a publisher of the daily newspaper, Dempa, which caters to the home electronics and information equipment industries, while simultaneously covering the computer and copier industries as an independent journalist. In May 1973, he joined Jimukiki Shimbun, publisher of the weekly newspaper Jimukiki Shimbun, covering office products and solutions. After diving into the copier and printer industry as an editor and a journalist at Jimukiki Shimbun, he led the media company’s monthly Copy Machine magazine as Editor-in-Chief. In July 1988, he founded OA Life Co., Ltd., and published the first edition of OA Life. Kubo currently resides in Tokyo, Japan.

STAFF WRITER AND CONTRIBUTOR BIOS

THECANNATAREPORT

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W ith 44 years of covering copier manufacturers in Japan under my belt, I

am excited to have this opportunity to introduce industry trends in Japan to the readers of THE CANNATA REPORT, which is well-known in the copier and printer industry in North America.

As you know, OEMs that provide copiers globally are concentrated in Japan. In the copier market environment in Japan, the latest news I have to report is that Epson has announced a copier based

upon its inkjet printer technologies. Even though Epson has been selling laser-printer-based MFPs for more than 10 years, the company has not enjoyed much success because its equipment combining the printer and scanner did not effectively provide integration between functionalities like A3 copiers do.

This time around, Epson has announced a new MFP with a price that comes in at about half that of the traditional copier/MFP price with a

New Shades of ColorEpson Challenges Japanese Market with Latest Inkjet MFP

JAPANESE HEADLINES BY TETSUO KUBO

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THE CANNATA REPORT Announces Notable NewJapanese Correspondent

In our travels to Japan, we met with Tetsuo Kubo, President of OA Life, a publication that addresses the copier/print business in the local Japanese market. Kubo is well-recognized in Japan and has many years of experience.

As six of the major manufacturers are based in Japan, we thought bringing Kubo on as a contributor would provide our readers with a better understanding of the focus and dynamics on the ground on the other side of the world. We are also hoping that Kubo can shed some light on the influences that cause manufacturers to enter certain markets.

In Kubo’s first article for THE CANNATA REPORT, he highlights a new strategy being used by a Japanese A4 maker that has entered the A3 market, departing from the more common laser market. If this strategy works in Japan, we think it will eventually find its way here.

Epson PX-M7050 with “Full Set” Configuration

Signage Translation from Top:

Backside MP tray: 80 sheets

Front manual tray: 1 sheet

Paper cassette: 250 sheets

Paper cassette: 500 sheets

Paper cassette: 500 sheets x 2

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On June 1, 2014, we heard from Mark Mathews, who is now heading up a 3D printer manufacturer. His new title is President of Airwolf3D in Costa Mesa, Calif. We had been following Mathews since his departure from Toshiba in May 2013, and we’re glad to be reconnected. We knew he had been doing some extensive research on 3D printing, and now we know why.

Airwolf3D is an early stage, high-tech company that designs, manufactures and distributes desktop 3D printers for corporations, educational systems and other professionals. According to Mathews, the company’s proprietary technology allows customers to print in a wide range of plastic print materials and gives Airwolf3D a competitive edge. In addition, these 3D printers allow customers to produce a large print volume of very durable, high-quality professional-grade products.

Mathews is working alongside Airwolf3D’s founders, Erick and Eva Wolf. Mathews has been tasked with engaging outside investors and partners, as well as building the internal infrastructure and external distribution to build on Airwolf3D’s success and leverage the company’s strong brand reputation.

“Feel free to contact me regarding investment and business opportunities, to discuss the 3D printing and additive manufacturing market, or to schedule

a facility tour,” said Mathews. “I would love the opportunity to see how I and Airwolf3D can help you.”

We are really looking forward to seeing and tracking what Mathews does as he tackles his newest assignment at Air. We’re especially interested in watching an executive who understands the “copier dealer” roll out a 3D product. If his tenure at Toshiba showed us anything, it is that he will dedicate himself to making it come out right. We wish him every possible success.

Airwolf3D Appoints New PresidentFormer Toshiba CEO Mark Mathews Tasked with Building Internal Infrastructure and Distribution

Mark Mathews President of Airwolf3D

Personnel ManagementBy Frank G. Cannata

low running cost. In addition, the new product provides superior functionality integration between scan, facsimile and print.

The company has labeled its new print service with zero introduction cost “Epson Smart Charge.” With the “Epson Smart Charge” system, based upon the business inkjet MFP, Epson has set forth its strategic pricing for the all-in-one services that comprise a certain number of monthly prints, free consumables and maintenance services for a monthly payment of 10,000 yen to 12,000 yen (approx. US$100-120) for a 5-year contract. The basic model includes 2,000 black and white prints and 600 color prints per month for 10,000 yen.

You may already be aware of a similar sales strategy such as the one HP offers for its inkjet MFP sales. The main difference is that HP products revolve around the A4-size engine, while the Epson products can print on A3-size paper. In the copier market in Japan, A3 machines are the mainstream so Epson’s announcement that it has entered the copier market with an A3 engine carries significant meaning. Epson is seriously trying to establish its position with inkjet copiers in the copier market in Japan.

Business-inkjet MFPs have proliferated into SOHO (Small Office/Home Office) use for low-cost color printing, but they did not become good contenders in the copier market, seeing that the print quality has been evaluated as inferior to the traditional toner based copiers/MFPs.

We are carefully watching to see if the “Epson Smart Charge” can establish itself among the business inkjet MFPs in the copier market in Japan. The new product is currently scheduled to ship in August.

CRCR

• 10 •

Document management (DM), or scanning and retrieving software, has been prevalent

in our industry’s market for 10 to 15 years. However, no DM solutions had been specifically designed or were well-suited for a critical market segment across the dealer channel — SMB — until Intellinetics developed IntelliCloud for the industry.

IntelliCloud targets SMBs that want to capture documents and connect them to business processes, reducing costs and increasing information accessibility, security and compliance. It enables dealers to sell these capabilities as a device feature and/

or as a managed services value-add to increase sales velocity and volume within their core businesses.

In the past, it has been difficult for dealers to sell DM solutions because of all the variables involved in the transaction, such as the number of licenses, variable software components and settings, and the potential need to hire an in-house engineer to install and support.

Manufacturers, independent dealers and direct operations view IntelliCloud as a game-changer. The software allows the office products and workflow solutions distribution channels to

shift what is often a price-driven, transactional sale into a value-driven process that helps build momentum with prospective and existing customers, without the complexity associated with other offerings.

IntelliCloud is pre-configured, includes 1 GB of data and allows for support remotely. Dealers can field calls from clients themselves and leverage Intellinetics to troubleshoot piror to getting back to them or bring the solution provider directly into the support process if desired.

What we find particularly attractive for dealers — and all of those with whom

The Intelligence of IntelliCloud Intellinetics Fills Document Management Market Void for SMBBy CJ Cannata

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we spoke concurred — Dealers can sell the software based on traditional techniques. Customers pay one price, $2,495, for the “box,” and dealers bill for additional data usage, which mirrors a CPC model.

Articulately and succinctly put by Matthew Chretien, President and CEO of Intellinetics, IntelliCloud is a “usable,

affordable, enterprise-level document management platform.” Chretien also added, “While the bigger dealers figured out how to sell document management, [many of the] smaller dealers struggled with the investment of building or partnering with a DM solutions provider, as well as with finding customers willing to spend $70,000 to $100,000 on something like DocuWare.”

IntelliCloud launched at Business Imaging Expo in December, 2013, and found its first partner in a substantially significant independent dealer, Atlantic, Tomorrow’s Office, in Q1 2014. Most recently, the highly versatile Intellintetics partnered with the well-regarded manufacturing team at Muratec. Announced on April 29, the effort is part of Muratec’s ongoing commitment to helping its smaller dealers remain competitive.

“We’re constantly looking for ways to serve our dealers’ needs,” said Lou Stricklin, Director of Marketing at Muratec America, Inc. “That’s why we’re so excited to partner with Matt and the folks at Intellinetics. They’ve built a usable, affordable, enterprise-level document management platform for our dealers.”

Other industry insiders have also bought into IntelliCloud and Chretien’s leadership. We spoke with representatives from two independent dealers, Patti Kanner, Managing Director at Atlantic, Tomorrow’s Office and David Cathers, Director of MPS and Software Solutions at ComDoc, Inc. In somewhat of a departure for us, we also interviewed a representative from a direct operation, André St. Pierre, Director of Professional Services/Senior Business Analyst at Toshiba Business Solutions, Inc. (I felt the latter helped provide a more comprehensive

Matthew Chretien,President and CEO, Intellinetics

Lou Stricklin,Marketing Director, Muratec America, Inc.

André St. Pierre, Director of Prof. Services/Senior Business Analyst, Toshiba Bus. Solutions, Inc.

David Cathers, Director of MPS and Software Solutions at ComDoc, Inc.

Patti Kanner, Managing Director,Atlantic, Tomorrow’s Office

view of IntelliCloud’s broad appeal to dealers and customers.)

Having met Chretien, I concur with the consensus of this story’s participants. Chretien has an infectious personality, passion and a true entrepreneurial spirit. Kanner said it best, “Everybody wants Matt to succeed.”

DM’s New Deal

There are three major areas where IntelliCloud is helping to expand upon the DM services area of our industry: simplicity and pricing (referred to above); marketing and packaging; and on-boarding.

With regard to simplicity and pricing, St. Pierre of Toshiba supported my, Chretien’s and Muratec’s Lou Stricklin’s contentions and commentary about the product. “IntelliCloud is an affordable integrated document management offering that looks very much like it is an optional MFP feature. This definitely sets them apart from their competition,” St. Pierre said. “What Matt and Intellinetics had was an excellent price point.”

In terms of marketing and packaging, Chretien has and will continue to work directly with dealers and end-users on how to optimally market and package IntelliCloud and related future products. The higher-end, more established DM systems remain more rigid.

“Packaging and marketing is paramount,” said ComDoc’s Cathers. “While there may be an incredible need for DM services, we have to make it easy for clients and there

couldn’t be a more willing partner [than Chretien] to work with dealers. I [also] deal with the DocuWares [of the industry]. Some of those other organizations have a more defined marketing approach, but what Matt’s best at is taking a defined product and [helping to specifically] package and sell it [for dealers].”

On the subject of on-boarding, IntelliCloud has made a significant dent. As many SMBs are reluctant to continue upgrading their technology, they do want to try the solution because their internal industries (e.g., financial, legal and medical) are running electronically. IntelliCloud provides these types of customers with a viable entry point with its simple interface.

“Not everyone can start with a DocuWare, [so] we were looking for something smaller to help those that can’t, before on-boarding them onto bigger systems,” said Kanner of Atlantic, Tomorrow’s Office. “My opportunities have grown substantially — more than 10% — on DocuWare.”

The Next Hand

Response to IntelliCloud has been overwhelmingly positive, with only a few comments regarding improvement. Most significantly, IntelliCloud is a local, fixed client. This is both a positive and a negative. The benefit is that all documents are safe and secure, as local, fixed client offerings provide an additional layer of security. The deficit is that end-users cannot access data via IntelliCloud on mobile devices or via Mac operating systems. However, Chretien and Intellinetics are in the process of migrating towards a solution.

However, positioning the product correctly appears to be an effective way to win. For Toshiba’s St. Pierre, “[pushing that] extra layer of security is the key.” Additionally, the company successfully markets the “Toshiba IntelliCloud” as “the integrated

document management functionality at the touch of a button — it feels like the document is right at your finger tips,” according to St. Pierre.

Definitive Prospects

As for going to market, I will leave you with two specific approaches from Kanner of Atlantic, Tomorrow’s Office. The first: “Instead of getting a meter read, get a scan read. If the scan read is higher than the meter read, that client is a good candidate.” The second: “All you need to do is ask three questions: Do you scan? Do you scan to email or a shared drive? Can you find your documents? If the answer to the first two questions is yes and the third is no, you have a definitive prospect.”

In this case, the definitive prospect appears to be IntelliCloud, as well as targeted end-users themselves.

About Intellinetics

Since 1994, Intellinetics has been building powerful solutions, making it easy to securely capture paper and/or digital documents and connect them to business processes to save time and money, and improve performance. The IntelliCloud program enables dealer-partners to add cost-effective document-centric workflow solutions to devices and/or services for a strong selling advantage and revenue growth.

Contact IntellineticsMatthew L. ChretienPresident and CEOOffice: 614-921-8170Mobile: 614-406-5317Email: matt@intellinetics.com

www.intellinetics.com IntelliCloud:www.intellinetics.com/video

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CR

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Live from Japan 2014 Senior Manufacturing Executives on Strategic Direction, Sights and Sake By Frank G. Cannata

May can bring high temperatures to Japan, and we were fortunate that things did not become uncomfortable until our departure at Narita (Tokyo) Airport where the air conditioning was set at a much lower

temperature than usual. The fact is the weather was perfect for almost the entire trip.

The primary purpose of our trip was to meet with senior executive teams at each of the “Big Six” Japanese manufacturers. While I can’t dive too deeply into the specifics of our conversations, I will say we learned a great deal from the answers we received and that those answers will lead us to new analyses, opinions and a greater understanding of the rationale for many of their decisions.

We also encouraged the executives we met with to visit us when they next come to the U.S. Many seemed to like that idea and we look forward to hosting them when the time comes. We feel we owe it to all the manufacturers who gave their time, provided us with a great deal of information and did all they could to ensure we were well treated during our entire stay in Japan.

For now, let’s just say visiting Japan was a very informative trip, and we hope you will glean some fascinating facts from it as well.

CANON TOSHIBA TEC

KONICA MINOLTARICOHSHARP

KYOCERA

• 14 •

CANON

Broad Strokes

Haruo Murase Chairman

Masami Kawasaki President

Keizo Go Senior Vice President, Group Executive, Information Technology Headquarters, Digital Marketing Center

Takeshi Iwaya Executive Officer, Group Executive, Business Solution Marketing Management Headquarters, Business Solution Co.

Yoshiaki Nozawa Senior Staff, Global Services Division, Corporate System Product Planning Group, BS Marketing Management Headquarters

Masahiro Sakata Director, Senior Vice President, Company President, Business Solutions Co.

• 15 •

We hit the ground running with a very pleasant dinner with Haruo Murase,

Chairman of Canon Marketing Japan, Inc., and Sam Yoshida, now a Deputy Director for Canon in his homeland. It was a wonderful way to begin our trip and consistent with Murase’s thoughtfulness, he insisted that CJ choose the type of food we would have that evening. “Charlie,” as Murase likes to call him, smartly requested Japanese, obviously a very good choice.

The next morning brought us to Shinagawa, a subsection of Tokyo. Murase was joined by the following executives from Canon Marketing Japan, Inc.: Masami Kawasaki, President; Masahiro Sakata, Director, Senior Vice President, Company President, Business Solutions Co.; Keizo Go, Senior Vice President, Group Executive, Information Technology Headquarters, Digital Marketing Center; Takeshi Iwaya, Executive Officer, Group Executive, Business Solution Marketing, Management Headquarters; and Yoshiaki Nozawa, Senior Staff, Global Services Division, Corporate System Product Planning

Group, BS Marketing Management Headquarters. It was impressive to gather with such an array of executive talent to learn more about Canon’s latest updates.

Throughout our visit, Murase answered most of our questions, even chiding me a little for not being more aware of what Canon has been up to over the last 15 years. To begin

with, Murase emphasized that Canon is no longer just a manufacturer. Today, this company has evolved to include a new production printing group built around the acquisitions of Océ and Showa Information Technology. In Japan, it is easy for a Japanese businessman to become a dealer since all he has to do is sell the hardware while Canon services it. We have seen this business model

Canon Offices

Acquisitions Across Production Print

From a global perspective, Canon is striving to gain market share in production print via private labeling where possible. However, when Canon acquires companies to achieve strategic goals, it has shrewdly employed divergent, appropriate strategies when it comes to leadership in different parts of the world.

With Canon’s 2012 acquisition of Japanese high-end print manufacturer Showa, Canon was able to employ Showa’s nucleus of talent and client base to expand

its capabilities in production print. Post acquisition, Showa’s name integrated into Canon’s, and the MIF gradually shifted to Canon’s production print products.

However, Canon deftly took a different approach in Europe and the United States when it acquired Netherlands-based Océ in 2010. In that case, Canon tapped the former executives of Océ to lead the company’s production print efforts in Europe and the United States. While the Océ brand did not have that same traction in Japan, I think that the decision in those markets was very wise, given Océ’s established, broad reach in those markets.

• 16 •

before, and it appears to work quite well in Japan. Major accounts are also taken care of by Canon direct. Customers are differentiated by size and divided by industry. In speaking with Canon’s top brass, it was inferred that Japanese dealers sell MFPs to small businesses, except for a group of 300 who are considered more active.

Canon has targeted manufacturers — or manufacturing facilities — for Canon direct, as Murase views them as future customers. For example, one area where Canon plays in is robotics, which are used in manufacturing of all types and are applicable prospects for the sensor technology Canon’s camera division developed.

In line with its company history, Canon continues to place medical equipment high on its list of verticals for providing products. Its mammography x-ray is a category leader in this area.

To provide some sense of history across the medical vertical, let me take you back Canon’s inception. In the 1930s, Dr. Takeshi Mitarai was a gynecologist without access to a domestically manufactured x-ray camera in Japan. Dr. Mitarai, along with two other partners, went on to develop the first one, which led to the creation of Canon with Dr. Mitarai as the company’s first president.

Turning to another focus area, IT Solutions is a Canon company that Murase refers to as “different,” or separate. Half of all IT revenue for IT Solutions comes from the U.S. Murase seemed puzzled that I did not know this. To my defense, it is difficult — at least for us — to track what Canon is doing in the United States, seeing the company has had no desire to share any meaningful information about its IT efforts and emphasis on services-type operations.

The only information Canon has ever given us was that Joe Adachi, President of Canon USA, and Seymour Liebman, Executive Vice President, head up IT Solutions in North America. Canon has revealed very little about the structure, strategy and overall direction here. In fact, one of the reasons we went to Japan was to learn what we have been missing.

Canon has long been involved in the IT business. One of its primary footholds in IT has been through its partnership with Apple, which began in the late 1980s and early 1990s. Additionally, Canon acquired a subsidiary of Sumitomo Heavy Industries, Ltd. — Sumitomo Metal Systems — in 2003 to form an IT company. In a matter of three years, Canon software grew to include 4,500 systems engineers.

Today, Canon has 19,000 employees with four very modern data centers.

Computer Products Showroom

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The focus on IT does not end there. Canon Marketing (Direct Japan) created another new IT solutions company in April 2014. Murase left no doubt that he will continue to spearhead Canon’s aggressive acquisition strategy.

Overall, our discussions about Canon Marketing Japan, Inc.’s strategic direction were informative. With Fujio Mitarai and Murase at the helm, I have no doubt that it will achieve its goals. At the same time, we were left to wonder who will lead the company in the future. While we didn’t explore this during our meeting, I did note the executives surrounding Murase were all relatively young. It isn’t a far leap to assume Murase has taken steps to ensure a leadership conversant with current and leading edge technologies is at the helm for Canon Marketing Japan, Inc. for years to come.

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Production Systems Center

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TOSHIBA TEC

One-Stop Shop

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Our Japan road trip continued on with a visit to Toshiba TEC Corporation. Toshiba

employees often call the company TTEC, a name few people outside of the Irvine headquarters use. For dealers and industry press, the company is simply known as Toshiba.

At the close of the 2013 fiscal year on March 31, TTEC had net sales of $4.29 billion worldwide. In the United States, TTEC has a $700 million operation, with an eye on reaching $1 billion. Toshiba is a 50.2

percent shareholder of this company. Considering that Toshiba is a $61 billion company, you can appreciate the overall relationship between the two. TTEC has 200 locations globally, with the most recent addition being the former IBM barcode business.

Once again, we were privileged to hear from the Toshiba Global Solutions Business Group’s most senior executives who shared the company’s current business and mid-term strategies. Led by Toshifumi Matsumoto, Vice President, Deputy

• 19 •

Disaster Management

Known as the GE of Japan, Toshiba remains preoccupied with the disastrous effects of the 2013 Fukushima earthquake and tsunami that devastated the country’s power grid. No matter where we went, images of the brave engineers heading into the reactors to prevent a nuclear meltdown were still fresh in everyone’s mind. Scott Maccabe reminded us at a Toshiba dealer council meeting that Toshiba employed many of those workers.

Toshiba TEC Showroom: Retail Solutions

Toshiba TEC Showroom: Medical Solutions

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Managing Director, the executives presented an interesting view into a company that continues to enjoy very strong relationships with its independent dealers.

Joining Matsumoto were Noboru Sawada, Deputy General Manager, Printing Solutions Operations; Sachio Koyama, Senior Manager, Americas and Oceania Department, Printing Solutions Operations; Kazushi Koike, Group Manager, Sales Group 1, Americas and Oceania Department, Printing Solutions Operations; Toshihiko Minato, Senior Manager, Marketing Department, Printing Solutions Operations; Yosuke Tamai, Deputy Specialist, Sales Group 1,

Americas and Oceania Department, Printing Solutions Operations; and Nori Nishimura, Deputy Specialist, Sales Group 1, Americas and Oceania Department, Printing Solutions and Operations.

Toshiba’s mid-term strategy is to become a one-stop solution company by leveraging all its assets. It maintains strong business in point-of-sale retail products and also provides printing solutions bolstered by new business development, operations streamlining and human resources optimization.

In terms of new developments, Toshiba is introducing “scented toner” that is created by rubbing nano

capsules of various scents. Where this technology can go is anyone’s guess. On the vertical side, medical solutions, followed by hospitality and education, are viewed as important elements of Toshiba’s overall business objectives. Toshiba envisions itself playing a key role in the National Retail Federation.

Technologically, Toshiba is working on inkjet print heads that can serve many of the company’s respective business units from POS to barcode to printing. Toshiba plans to sell through a dealer/direct combination with a strong emphasis on dealers in North America. Short-term, the company wants to expand sales horizontally at retail. Toshiba plans on improving its MFP

Toshiba TEC Showroom: Office Solutions

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Toshiba TEC Showroom: Financial Solutionslineup where necessary. Eco products, education and broadening its MPS programs are primary focuses over the next two years. Digital signage is also playing a role in education and retail, and supports Toshiba’s objective of moving horizontally through areas it is already well-entrenched.

Our lively conversation with Toshiba’s executives continued through dinner, where CJ first tasted and thoroughly enjoyed shabu-shabu (thin slices of boiled beef). We are extremely grateful for everything our Toshiba colleagues did to accommodate our schedule and genuinely appreciate their very kind efforts.

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KONICA MINOLTA

Production Management

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When we’re traveling in Tokyo, we like to stay at the centrally located Imperial Palace

Hotel. It is close to Tokyo Station where you can get the Shinkansen (bullet trains) to Kyoto and Osaka — rail travel at its best. The hotel is also close to the Konica Minolta (KM) headquarters, which makes it easy to get to one of our company visits.

Seeing Jun Haraguchi, Senior Executive Officer and Senior General Manager of Konica Minolta Marketing Headquarters is always a pleasure, and we appreciate the candid discussion we had. He went to great lengths to ensure that CJ and I had an enjoyable evening with KM representatives while in Tokyo. I am not going to repeat all that he revealed, but let me just say he is very happy with KM’s business in North America. He brought in Koji Yoshida, Manager, North American Department, Sales Division 1 of Konica Minolta’s Marketing Headquarters, to participate in our conversation. They responded to all of our questions and gave us a pretty good idea of where KM is heading on a couple of fronts.

Our primary discussions revolved around production print, where KM has made some very aggressive moves over the last few years. Most recently, KM previewed the KM-1/IS29 Inkjet Printer at the PRINT 13 show in Chicago. This large, state-of-the-art color digital press processes cut-sheet pages up to B2 size and is set to be beta tested in the second half of this year.

In Japan, KM has a strong foothold in production print business with a 50 percent market share. Commercial printers are driving the majority of these sales, which is identical to the same trend in our part of the world. It is clear that Konica Minolta is looking at a broader range of technology to provide some solutions for its future. However, in Haraguchi’s opinion,

some of the company’s product research developments may never evolve into any new products.

We asked about super-wide and Haraguchi indicated KM is actively discussing it. As Haraguchi simply put it, “Where do you go with it?”

“Every year is becoming different. We can survive for three years with our current business model,” Haraguchi said. When we probed a little deeper, he talked about print and information management. KM is approaching that area through the IT side, and All Covered has obviously provided some answers there. Haraguchi also emphasized the very low CPC in Japan, which is a growing problem begging for a solution. And, perhaps, solution is the right word.

Haraguchi sees the business as undergoing a dramatic change that will affect even the core of KM’s business, and will eventually lead to a different business model. KM’s current emphasis on R&D is focused less and less on hardware, with even

Konica Minolta Showroom

Jun Haraguchi Senior Executive Officer and Senior General Manager

Koji Yoshida Manager, North American Department, Sales Division 1, Sales Operations

Koyu Osawa North American Department, Sales Division 1, Sales Operations

• 23 •

• 24 •

the office environment not getting as much attention from the company’s design engineers as it once did.

For Haraguchi, he views determining how the products will fit in terms of downloading from the cloud and how Konica Minolta will adopt mobile technology as two of the most important issues he is facing today.

Meanwhile, production print — which has played such a big role in KM’s current position — is yielding more and more short runs rather than

the volume previously anticipated. Engineers are looking to improve long-run reliability and improve the overall hardware technology.

After a dynamic, interesting and educational two-hour discussion and an extremely lively dinner, we came to a very salient conclusion. Konica Minolta is facing the same challenges we all are. The rapidly advancing technology is giving most of us fits. Murase says Canon has got its house in order, while Haraguchi says we have questions to answer.

What is certain is that we are all looking for solutions to address the same challenges imposed on all of us in the industry by the growth of content platforms, mobile printing and a host of other issues. There certainly are questions that need to be answered, and it is easy to see we may be asking the wrong questions. We at THE CANNATA REPORT are in the same boat and we may not have all the answers. But, we do have a vision for our future and frankly, that is good enough for me.

Konica Minolta Offices

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View from Reception Area

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Covering All BasesRICOH

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• 27 •• 27 •

Icoordinated our Ricoh visit with Hede Nonaka, Corporate Senior Vice President, Network

Appliance Business Group. We were once again swept away by a company car that picked us up and brought us to Ricoh’s Ginza headquarters, a beautiful, impressive facility.

Steve Burger, General Manager, International Business, Technology Innovation Center, Business Solutions Group, was also present for the duration of our meeting. Burger is in the throes of a two-year stint in Japan and he appears to be enjoying every minute of it. Burger delivered a cogent presentation of Ricoh’s current business position with a look toward tomorrow. In a simple and concise manner, he identified the following areas where Ricoh is placing its strategic focus:

1. Ensure customer and dealer satisfaction;

2. Provide innovative Ricoh solutions and partners;

3. Support the new work style;

4. Deliver best-in-class technology;

5. Provide a value proposition for SMB and SOHO; and

6. Maintain cost competitiveness.

A manufacturer could accomplish every goal on this list by making the MFP an information portal that is cloud-enabled. A manufacturer could also make the MFP cloud-enabled with an operation panel that is as smart and effective as a tablet device. On the manufacturing side, it is always necessary to find ways

Ricoh Welcomes Frank and CJ Cannata

Peter Takata Corporate ExecutiveVice President

Hede Nonaka Corporate SeniorVice President, Network Appliance Business Group

Akira Oyama Corporate SeniorVice President, Corporate Division

Yoshinori Yamashita Director Corporate Executive Vice President, Business Solutions Group

Yutaka KanekoGeneral Manager, Corporate Communications Center, Corporate Division

Steve BurgerGeneral Manager, International Business,Technology Innovation Center, Business Solutions Group

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to support the devices in the field with practical solutions to common problems. Another answer would be to create a single-parts bin that can support up to nine machines, increasing smart device usability and giving Ricoh’s broad line a common user interface. And then, a complete scan and capture service could be added.

Rounding out Ricoh’s high-level overview is workflow consulting, enterprise content management, printer-copier management and an improved remote diagnostic capability.

Burger also touched on production print, highlighting products that we will cover at Graph Expo this fall. I’d like to highlight that Canon, Konica Minolta and Ricoh each covered production print in our meetings. These industry leaders seem to be covering all the bases with their broad array of products and services —those existing and those in the works.

We were also joined by several additional key members of the Ricoh leadership team at the meeting, including Kiyoshi Hashimoto, Deputy General Manager, PR Department, Corporate Communications Center, Corporate Division; Akira Oyama, Corporate Senior Vice President, Corporate Division; Yutaka Kaneko, General Manager, Corporate Communication Center, Corporate Division; Kazu Sakai, Senior Specialist, CF Products Marketing Section, Marketing Center, Production Printing Business Group; and Seiko Suganuma, Manager, Global OS Business Planning Support Department, Finance and Accounting Division.

At lunch, we were pleasantly surprised to find Peter Takata, Corporate Executive Vice President, waiting for us. It was good to see him again after all these years. Takata is now handling the solutions side of the business and

provided an interesting perspective similar to what Burger shared during his presentation.

As we concluded our meeting, I encouraged Burger to deliver a similar presentation at the next Convergence. I believe it serves dealers well when they are offered a strategic overview that clearly spells out the corporate direction. It makes things a lot easier for dealers when they can get a glimpse of the efforts their major suppliers are making to meet the ongoing challenges that technology brings to the forefront.

We offer special thanks to Hede Nonaka for arranging transportation, engaging Steve Burger to contribute to the discussion and having Takata join us for lunch. Nonaka even had the company car drive us to Tokyo Station to catch the train to Nara. It does not get better than that.

Ricoh Offices

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Ricoh Showroom

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SHARP

Signs of the Times

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Our first week ended in Nara with Sharp and representatives from the

company’s Document Solutions Division. We again received a warm welcome that included a tour of the company’s R&D center. We also had the chance to visit the Sharp Museum that memorializes Sharp’s consumer-products orientation and all the advances Sharp has made in bringing them to market.

After the campus tour, we were taken to a factory where several senior executives presented Sharp’s view of the present and future. Our meeting there was led by Hiroshi Kataoka, Executive Officer and General Manager, Business Solutions Division. Also present was Jun Ashida, General Manager, Global Sales and Marketing Department; Toyoaki Nanba, Unit General Manager, Document Systems Unit; Koji Yakushiji, Department General Manager, Product Planning Department, Document Systems Unit; Takashi Yamanaka, Manager,

Product Planning Department, Document Systems Unit; Eiji Itoyama, Manager, Global Sales and Marketing Department; and Sae Hiroki, Global Sales and Marketing Department.

Yakushiji delivered a presentation that included Sharp’s position on the market and business in general. He also shared some new (2014) product introductions in both monochrome and color.

Additionally, Yakushiji spoke of A4 expansion and where it was likely to go. Sharp continues to address security with its SRDM Dashboard. Power management is also on everyone’s hit list as a result of the Fukushima tragedy. CRM, Cloud Portal, digital signage or LCD Smart Communication, as it was called, were also emphasized. We saw impressive demonstrations of a dynamic white board and high-speed office devices still pending release.

Conversely, we provided all the manufacturers a copy of our most

Sharp R&D Center and Showroom

Hiroshi Kataoka Executive Officer and General Manager, Business Solutions Division

Jun AshidaGeneral Manager, Global Sales and Marketing Department

Koji Yakushiji Department General Manager, Product Planning Department, Document Systems Unit

Toyoaki Nanba Unit General Manager, Document Systems Unit

Takashi Yamanaka Manager, Product Planning Department, Document Systems Unit

Eiji ItoyamaManager, Global Sales and Marketing Department

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recent issue of THE CANNATA REPORT. As a result, Kataoka had several interesting questions, which led to a rather lengthy business discussion. In fact, we continued right through dinner. While I am not at liberty to share all that was discussed, I will say that Sharp is exploring all technology-related avenues and segments of the business.

Our day with Sharp ended with an enjoyable dinner at a hotel in Nara Park. The sake flowed as we talked about so many facets of the business. As we wrapped up our business in Nara, we looked ahead to our next location — KYOCERA’s Osaka.

Sharp Museum

Historic Nara Hotel

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Sharp Museum LCD Exhibit

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KYOCERA

Advancement in A4

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KYOCERA’s Toshimasa Kawasaki, General Manager, Global Marketing Communications,

graciously acted as host for our last tour of the “Big Six” Japanese manufacturers. His charismatic personality and extensive knowledge certainly made it memorable.

Our meeting included two executives from KYOCERA’s Corporate Strategy Planning Division: Ron Morita, Member, Board of Directors and Managing Executive Officer/Senior General Manager; and Shigenaka Kanemitsu, General Manager, Strategy Planning Division, who

developed the KYOCERA HyPAS platform for solutions.

Morita gave us an update on KYOCERA. Fully 20 percent of the company’s revenue is derived from MFP plus printer, which has a strong influence on corporate investment. KYOCERA closed out its fiscal year on March 31, 2014, with $13 billion in revenue. When KYOCERA acquired Mita 15 years ago, the company was bringing in $5 billion.

KYOCERA has 31 sales companies with distributors in 142 countries. Interestingly, 30 percent of MFP and

printer revenue comes from emerging countries and Russia. Morita indicated that this area of the business would continue to grow.

KYOCERA’s focus this year is on A4 business with more solutions being provided for that segment. KYOCERA continues to maintain that the SMB space is not a direct business and the company will continue to take advantage of independent dealer distribution to sell solutions for that segment. Morita also stated that dealers are fully capable of developing their own solutions for their customers.

Osaka River

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At KYOCERA’s April meeting in Las Vegas, Nori Ina, President of KYOCERA in the Americas, advised the dealers in the audience that the plan for this fiscal year was to grow 14 percent. I asked Morita why KYOCERA seems to set such aggressive growth targets.

“We are always stretching,” Morita said. “I don’t think it is impossible.” He cited that Russia and Africa could realistically grow 20 percent, while Europe and the United States deliver 9 percent, which would help yield the desired goal.

Morita emphasized that KYOCERAs commitment to A4 was not an indication that it was giving up on A3. “KYOCERA will continue to sell A3,” he said. “A4 devices sold in MPS-type installs must be solutions-oriented.”

We can anticipate seeing an increase in major accounts in both the United States and Europe. Morita indicated that global accounts are very difficult to support and we would not likely see KYOCERA launching any broad initiatives in this area.

KYOCERA also fully intends to produce production print products. However, it is not sure if they should be laser or high-speed inkjet. KYOCERA is exploring both areas

in R&D. In the interim, we may see KYOCERA engaged in some alliance for production print.

In services, KYOCERA reported 8 percent of revenue in 2013 and 10 percent in 2014. Considering that KYOCERA did not enter this business until 2008, the company is playing catch-up. I asked Morita about call avoidance, and he responded that it is important and that Germany leads in that area with as high as 80 percent of all calls being closed on the telephone. “Of course, these are mainly printers,” Morita said.

Acquisitions of IT companies are a possibility, especially software developers. KYOCERA has tried in Europe without success. The company also examined similar acquisitions in the U.S., but North American solutions companies are too large to buy. In Europe, they are much smaller, which could offer a greater opportunity.

IT services are not a current focus for KYOCERA but could be in the future. It could come down to a regional decision, which is a distinct possibility.

Our morning’s discussion continued into lunch at the majestic Taiko-en, and we found it to be a very pleasant way to conclude our visit with KYOCERA.

Below and Right: Taiko-en Grounds and Gardens

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2014 DEALER PROFILE SERIES By Frank G. Cannata

Profile No. 1: PERRY proTECH

In the past, we’ve profiled several dealers across the country. From our experience and from what we’ve heard from our audience,

these profiles provide valuable insight into what successful dealers are doing and why.

To make these profiles more of a regular feature in our pages, we’ve decided to roll out a series of four dealer stories over the remaining months of 2014.

For our first profile, we turn our attention to PERRY proTECH, headquartered in Lima, Ohio. We

were pleased to have a chance to talk to the company’s CEO, Barry Clark. While we do speak with Clark on a regular basis, as well as run into each other at CDA and Konica Minolta meetings, the profile gave a us a nice opportunity to sit down and really gain an understanding of his business.

Perry Portrait

Established by Rex Perry in 1965, PERRY proTECH is recognized today as one of the leading dealers in our industry. While PERRY proTECH’s dominant reach is

limited to the north and western Ohio, northeastern Indiana, and southern Michigan region, we view the company as an overall leader. The company is successful in employing solutions for key verticals such as financial services, health care, manufacturing, education, telecommunications, utilities and municipalities.

On the road to achieve this level of leadership, in 2007, Perry Corporation purchased SMS proTECH, a regional leader in information technology services with highly qualified engineers. This

Presented by LMI Solutions

• 40 •

staff is part of a larger strategy to stay ahead of technology changes. The combination of these resources have allowed them to expand its capabilities to include new document solutions, enhanced service offerings, new formats in printing solutions, security technologies, managed IT services and a private cloud offering. As SMS proTECH and Perry Corporation merged together, the companies combined their names and since the end of 2012, the unified firm has been known as PERRY proTECH.

Today, PERRY proTECH’s stated mission is to help its prospects and existing clients achieve a competitive advantage by maximizing the integration of technology with their practical business needs. The company is 100 percent employee-owned and is a member of the ESOP (Employee Share Ownership Plan) Association and Community. Given that PERRY proTECH’s employees have their own skin in the game, it is clear why the firm’s more than 200 employees have a high degree of involvement in work-level decisions, are dedicated and have a true sense of ownership in their company.

PERRY proTECH’s primary A3 MFP supplier is Konica Minolta Business Systems. In addition, the firm carries Lexmark. Through an acquisition, the company picked up Sharp and began integrating the acquired MIF into Konica Minolta (KM). In CEO C l a r k ’s

Banking on Barry

I have known Barry Clark for the better part of 10 years. When it comes to Clark, I know that when he tells me something, I can take it to the bank. I have reached out to him to seek his advice and his assistance (such as when he

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PERRY proTECH Service Vehicle

PERRY proTECH believes it is uniquely positioned in Business Technology Solutions. And we have to agree. The company offers what we believe are all the solutions a business really needs to compete in today’s world. The company focuses on covering four distinct areas that customers can use either alone or interconnected, depending on what they want and need.

DOCUMENTS: This is considered the original Perry Corporation model, and includes copiers or multifunction systems, document management, and wide format printing.

NETWORKS: This area comprises the addition of the IT/Networking division of SMS, which had been in the IT business since 1988 and was acquired by Perry Corporation in 2007.

SYSTEMS: The company is a long-standing Microsoft Gold Partner and is skilled at licensing and managing maintenance contracts. Systems can be linked to the cloud, network management, data center virtualization, back up and disaster recovery.

SERVICES: PERRY proTECH provides complete managed IT solutions, managed print services and IT staff augmentations on a regular basis or as needed. The Digital C.O.P.S. division provides secure technologies designed by law enforcement officers including surveillance monitoring, alarm systems, access control, video verification, fire alarm services and mobile video.

• 41 •

opinion, KM products require 10 to 15 percent less to support than the

competitive brands he has

experience with. Clark is also very bullish on the KM leadership.

PERRY proTECH has taken a leadership role in transitioning to a services orientation. According to Clark, the services side of the

business represents 29 percent of the total imaging revenue for

PERRY proTECH. The total imaging revenue represents 70 percent of its business with 30 percent in IT. The company’s primary objective is to make PERRY proTECH a company that can bring

in 60 percent in hardware revenue and 40 percent in

services. There is no break-and-fix and all income is contractual service revenue.

participated in a focus group at my request). He is always available. I thought it was time we let our audience know a little bit more about an individual who is widely respected in our business, along with the company he leads.

Rex Perry started his business back in 1965 and over a 13 to 14 year period, he became widely known as an extremely experienced and savvy Savin dealer to do business with. In 1978, he was diagnosed with cancer and was told that he had 18 months to live. However, he subsequently went into remission, altering the course of his life.

Perry decided he wanted to devote his life to talking to terminal cancer patients. As he started to look at his options for his personal life, he took a step back to consider the offers to buy his business. In his research and due diligence, he learned about the Employee Share Ownership Plan (ESOP), which simply dictates that employees own the business. In 1986,

he herded all the employees into a meeting and asked them what would they prefer: for him to sell the business or for Perry Copiers to become an ESOP. Every employee elected for the ESOP. For eight years, that is how it worked. But, Perry realized the need for a succession plan and he started to look for someone to replace him.

Around this same time, Barry Clark was working in the trucking industry with a company named Roadway. His job was to fix bad operations, which included entire districts. One of his coworkers left Roadway and went to work for Rex Perry in Lima, Ohio, as a sales representative. That person then recommended Clark to Perry. It must have been a very strong recommendation because Perry tracked Clark down in 1994.

According to Clark, Perry was fascinated by the concept of an ESOP and what the plan could do for his employees. The concept is great, but it requires the corporation to contribute 20 percent of payroll to the ESOP — a

company has to be very profitable for it to work. The hook was that Perry wanted to move on, and he felt he found his successor in Clark, thanks to his friend’s recommendation.

Perry held meetings every Thursday after 5:00 p.m. and he would keep his employees there until midnight. As he considered his future, Perry asked his employees (more like fellow owners) who they felt would be good enough to replace him. That is when Barry Clark’s name was tossed in the ring.

Perry started out by appointing Clark as the company’s Corporate Service Manager because Perry wanted him to learn about the most profitable side of the business first. Clark’s approach to the business was pretty simple: excel at what you do, surround yourself with good people and prioritize the customer first.

Today, Clark is serving as CEO and he recently tapped Jeff Boate about nine months ago and appointed him to serve as President.

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Acquisitions are an important part of the company’s growth plan, especially as the company is working towards reaching $100 million. PERRY proTECH is currently just north of $60 million, growing at a rate of 10 percent a year. Of that $100 million goal, $20 million would come from acquisitions. Clark claims it is getting harder to find imaging companies to buy. The problem seems to be that a lot of those remaining dealers do not have the culture PERRY proTECH is looking for or the work ethic.

At the same time, the company keeps its doors open for the right opportunities. For example, PERRY proTECH’s headquarters is in Lima, which is located in Ohio’s Allen County. The local government sought to create a cyber or forensics capability on hard drives and started an independent company to accomplish just that. Over time, that company became very attractive to Perry proTECH.

Additionally, all of these people are cyber detectives and they have to be available to testify 18 hours a month. However, the rest of the time they are working for PERRY proTECH. Clark firmly believes that PERRY proTECH gives the company a great

deal of credibility, particularly when it is attempting to sell to local law enforcement over its six branches.

Together, they provide cameras for security, along with a system that automatically locks and unlocks doors in schools. They are also very good on data security. When necessary, the certified sheriffs go back to the sheriff’s office and work with their counterparts. On the MPS front, the business continues to grow nicely. There is a document solutions team that has also performed well, mainly selling storage and retrieval, as well as workflow solutions.

When a strong and influential independent dealer like PERRY proTECH combines a shrewd acquisition strategy, a strong background that is anchored in technology expertise and employees who are fully committed, the path to success can almost seem easy. But the reality is in a field of constant

competition, even companies like PERRY proTECH are forced to thrive at the edge of innovation to pave a road to success.

When asked what he believes is PERRY proTECH’s competitive advantage, CEO Clark responded, “Our technology expertise is our competitive advantage.”

Clark’s emphasis on technology truly sums up what this company is all about and enables industry colleagues to surmise a great deal about the man at the helm.

Editor’s Note: All stories featured in the 2014 Dealer Profile Series were individually selected, written about and edited at the Publisher’s sole discretion without influence from any of THE CANNATA REPORT’s partners.

Barry Clark stands beside PERRY proTECH’s core values

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PERRY proTECH’s impressive wall of commemorative plaques

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As an avid traveler who truly enjoys regularly jetting from one place to the next, there are few places I wouldn’t entertain visiting. I view most trips as an opportunity for adventure, learning and ultimately, broadening my overall perspective in my own personal and professional life.

In terms of target destinations, Japan has been on my hit list for longer than I can remember. Not only did I grow up (along with many of my younger colleagues in the industry who work for family businesses) meeting my father’s Japanese friends and business acquaintances, but two of my closest childhood friends were Japanese-Americans who shared several aspects of traditional Japanese culture that I absorbed and grew to appreciate. In addition, Japan has long held an allure for me due to its economic significance in both the American and global markets.

When I actually had the opportunity to visit this past May, Japan did not disappoint. The trip was truly a life-changing experience, second only to my experiences as an exchange student for a month in Ukraine in high school and during my college studies abroad for four months in Moscow.

Aside from having the opportunity to experience all I had heard and learned at home about the culture firsthand, it was a tremendous honor and privilege to meet and sit down with senior executives from the six big “traditional” Japanese manufacturers that treated us with a superior level of respect. As Frank alluded to in this month’s edition of “HARD COPY” on page 5, each company essentially rolled out the red carpet for us with precise consideration and genuine sincerity that I have rarely experienced here at home.

Thanks to how tremendously generous our hosts were with their time, I had the opportunity to take some of the most beautiful photos featured in this issue.

Each company took a slightly different approach to meeting logistics and with its tone, which only enhanced my overall experience. The following are some highlights of what I appreciated most about each meeting, featured in the order in which they occurred.

Canon presented the most informal, conversational and relaxed meeting with a large group. This may partly be a result of the long-standing friendship between Frank and Haruo Murase, Chairman of Canon Marketing Japan, Inc. The two met at while working at Canon together in Long Island back in 1974.

Meeting Murase for the first time was a unique experience. With Murase, I truly

CJ’s S P I NBy CJ Cannata

The Royal Treatment

Canon’s Office Equipment Showroom

• 45 •

felt as though I was in the presence of royalty — not just because of his local notoriety but also because of his warm, inviting and graceful manner. Given this was my first business meeting in Japan, I was somewhat apprehensive, but Murase immediately set me at ease with his genuine personality — that, and his penchant for calling me “Charlie,” a nickname only my father and maternal grandmother use for me on a regular basis.

Toshiba TEC, led by Masato Yamamoto, Senior Vice President, Managing Director, Global Solutions Business Group, showed us the most noteworthy set of retail business solutions outside of those currently embraced by American dealers. These included a wide array of point-of-sale materials such as self-check-out kiosks and complementary applications, communication tabletops, and digital signage.

Additionally, the whole Toshiba team took us out for Frank’s favorite Japanese meal, shabu-shabu (featuring thinly sliced beef boiled in water), during which my sake glass must have been graciously refilled at least 10 times. While my mind may not have been functioning at optimal capacity the following morning, the previous evening’s experience was well worth it.

Konica Minolta arranged the most intimate meeting, which began with just two members of KM’s Marketing Headquarters: Jun Haraguchi, Senior Executive Officer and Senior General Manager; and Koji Yoshida, Manager, North American Deparatment, Sales Division 1, Sales Operations. Our time ended with Haraguchi taking us on a

tour of the Konica Minolta offices before escorting us to his own private office where we resumed our discussions with him alone.

Haraguchi was also extremely animated upon receiving our gift to him — a collection of CDs by various American musicians. The gift prompted an extremely enjoyable conversation about our shared passion for music over dinner that lasted well into the evening. I hope we have the honor of taking Haraguchi to a rock concert the next time he travels to the U.S.

Ricoh appeared to have done the most preparation prior to meeting with us, and Ricoh was the only company where we met with an American executive, Steven Burger, General Manager, International Business, Technology Innovation Center, Business Solutions Group, who played a pivotal role. His comprehensive presentation addressed all current key areas, including big data, BYOD, mobile printing and security. In speaking with Ricoh representatives back home, we confirmed that Ricoh indeed put a tremendous amount of thought, time and effort into what to address with us in the meeting and how to present it.

As if that wasn’t enough, Ricoh also gave me the most unique gift — a Ricoh Theta 360, a camera that takes 360-degree photos. This generous gift was obviously a big-ticket item, and most notably, the product is not available currently in the U.S. Thanks to Hede Nonaka, Corporate Senior Vice President, Network Appliance Business Group and the team at Ricoh, I now

Toshiba TEC Showroom

Konica Minolta Showroom

Ricoh Theta 360 Camera

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have this amazing piece of technology that very few people — if anyone — has here at home. I can’t emphasize enough how much I appreciated the sincere thoughtfulness behind such a gesture.

Sharp and its Document Solutions Division team hosted the most dynamic meeting, which began with a tour of the Sharp Museum on its Nara campus. There, we learned about the company’s amazing history and the myriad of products it invented. These included the seatbelt buckle, the mechanical pencil (the first incarnation that was branded the Ever Sharp mechanical pencil from which Sharp Corporation took its name) and the world’s first hand-held, battery-powered electronic calculator. The museum also included exhibits of other areas where Sharp is a global leader, including solar energy and LCD panels.After an extensive mutually productive dialog, led by Hiroshi Kataoka, Executive

Officer and General Manager, Business Solutions Divison, the executives took us on a tour, complete with live demonstrations, of the company’s R&D center and showroom. To top off our time with them, several members of the Sharp team took us for a delicious 12-course dinner at the beautiful historic Nara hotel, where the royal Japanese family and revered American culture icons such as Audrey Hepburn had dined before us.

KYOCERA hosted the most culturally flavored meeting overall, led by Ron Morita, Member, Board of Directors and Managing Executive Officer/Senior General Manager. After our meeting, which largely focused on the manufacturer’s global A4 strategy stemming from demand in various developing countries, the team presented us with traditional Japanese ceramic knives made by KYOCERA.

Afterwards, Morita and team treated us to an eight- to 10-course lunch at the historical Taiko-en, whose grounds include nearly six acres of Japanese gardens. While dining at the landmark, we also had the opportunity to witness part of a traditional Japanese wedding.

Overall, the trip was one of a kind, and I look forward to returning to visit my new Japanese friends and colleagues.

On June 26, THE CANNATA REPORT held its first-ever photo shoot for the cover story subjects of next month’s “Woman Influencers Issue” followed by dinner with the ladies and other honored guests. I don’t think I am speaking out of turn by saying it was truly one of the most enjoyable series of events all parties involved have spent in this industry. Most importantly, the setting provided me with the opportunity to really get to know these high-accomplished women in a manner that would have otherwise not have been possible.

In other news, we have concluded our 29th Annual Dealer Survey and are in the process of analyzing the results. Later this month we head to Michigan’s Mackinac Island with CDA.

UP NEXT By CJ Cannata

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Sharp invents the word’s first seatbelt buckle, mechanical pencils and hand-held, battery-powered electronic calculators.

KYOCERA Ceramic Knife

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