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Q&A With Stuart Sykes, Managing Director of Sharp UK

Since its take-over by Foxconn in 2016, Sharp has made two major acquisitions at the corporate level that have given its direct sales business and channel partners the opportunity to diversify into new product areas (i.e. laptops through the acquisition of Toshiba’s mobile computing business in 2018) and/or to expand an existing business area (i.e. displays through its majority 66% stake in a joint venture with NEC).

Sharp has also been diversifying at a regional and national level. In the case of Sharp Business System UK (SBS UK), this strategy has manifested itself in the acquisitions of MFP dealer Midshire in 2017 and, more significantly, that of IT services provider Complete I.T. in 2019.

By its own admission, and mainly down to the pandemic, Sharp has been slow to extend the extra capabilities it has gained through these activities to its reseller channel. However, that is set to change with the launch of a new UK channel partner programme; the unification of the Sharp and NEC display portfolios under the umbrella of Sharp NEC Display Solutions, shown publicly for the first time at ISE 2022 in May; and a greater appetite for diversification amongst Sharp’s reseller community.

On the eve of Sharp’s first pan- European dealer event for four years, Technology Reseller caught up with SBS UK Managing Director Stuart Sykes to find out more about these developments, how he sees the market developing and what that means for Sharp and its resellers.

Technology Reseller (TR): Four years ago, at your last pan-European dealer event, Sharp INSPIRE in Edinburgh, there was a lot of talk about diversification. What impact is that focus having on your operations?

Stuart Sykes (SS): At a corporate level, Sharp have quite distinct views on the future and three broad areas of interest: the SMART Office, the smart home and smart healthcare.

In Sharp Business Systems UK, we work very much on that SMART Office piece. The NEC display acquisition is similar to the dynabook acquisition, but more relevant to Sharp in the UK because it helps us broaden our portfolio of collaboration and visual solutions in a growing area that would have taken us years to do organically.

The NEC integration is ongoing at the moment. We’re bringing in people from NEC, with all their products and their skill sets, and incorporating them into a new business in Europe called Sharp NEC Display Solutions Europe (SNDSE).

NEC has products in areas of the market that Sharp weren’t really in before, like projection and LED, and that is giving us access to a much broader portfolio beyond what we’ve always been good at, which is interactive displays, touchscreen etc.. So that’s really positive. When Sharp Corporation add on big things like that it really makes our jobs easier at a local level.

TR: One of the benefits of having a diversified portfolio is that it enables you to withstand shocks better and, obviously, print has had a big shock over the last two years. Having that display side must have been useful.

SS: The print market has had a tough couple of years, but before the pandemic we’d acquired Complete I.T. (CIT), so we already had a sizeable IT business, and then we’ve got the visual solutions offering as well.

Print was by far the worst affected by the pandemic. Visual solutions was affected, but people’s need for collaboration means that that part of the business, although quiet during the pandemic, has really taken off since. Then, the IT services business performed ahead of expectations. It had a plus to it rather than a minus because people needed more IT. They didn’t need as much print, but they needed more IT. So, yes, having a diversified portfolio really does help you weather changes in the economy and world events.

TR: How advanced is the integration of this broader portfolio with Sharp’s traditional print offering? Are resellers benefiting from these new products
and services?

SS: When I became MD, the one thing I told our channel partners was that I remember my days on the dealer side when a printer manufacturer would come knocking on my door and say ‘This product is going to be amazing for you’ and I’d say ‘Why? Where’s the test? Where’s the proof? What’s the market? What are the margins like etc.?’. Often, they were just a printer manufacturer selling through the channel and they had no real experience of how it was for the reseller and how the reseller could make it work.

What we say to our channel is ‘We’ve now got this really broad offering, including IT services, which we would have brought to you faster if it hadn’t been for the pandemic. For now, we’ll give it to our direct business and work out how, as a print company, to sell it to our existing clients. Once we’ve done that for a while, we can come to you and say, ‘This is how we’ve done it. Is it of interest to you? Do you want to invest in these things that you will have to invest in to make it work? Can we partner on packages?’.

All that is currently in the mixing bowl because we’ve been locked down for most of the time we’ve had CIT, but we are getting to the stage where we’re starting to talk to our channel partners. One size doesn’t fit all; you can’t just go out and say this is it. Instead, you go to your key partners and say ‘This is what we’ve got. How can we make this work together?’. We’re getting close to that stage now because in our direct business we have proved that customers will talk to us about IT services, and we’ve achieved a significant level of cross-selling between the two businesses.

Group of people working in the office

Obviously, progresss hasn’t been as fast as we would have wanted, both for ourselves and for our channel partners, but one thing I’ve noticed is that since coming back from the pandemic, our partners are so much more open to new ideas. Channel partners who in the past treated displays as a nice-to-have product are now looking at how to make them part of their core offering rather than just an occasional tactical find.

Our channel partners are engaging more, and our end user customers are starting to invest in visual displays way more than they used to. Education has always been a major market, and that hasn’t changed too much, but now SMB and mid-size companies are starting to invest in that type of equipment to make collaboration easier with people in multiple locations.

We’ve launched some really good new products recently including a new software solution called Synappx that makes the practicalities of having a meeting with a screen a lot easier. It means you can walk into a meeting and don’t have to worry about cables and where your files are and how you bring them up to screen etc..

TR: Presumably printer resellers are looking for other sources of revenue to make up for a long-term decline in print volumes. The figure I hear is 15-20%. Does that tally with your experience?

SS: It depends on the underlying client base. Our experience is that education has been only slightly affected, if at all. With so many children working from

home and packs being created for them, people might actually be printing more in education. We see SMB being affected by maybe 15-20% and some corporate clients by much more than that.

Our sweet spots have always been SMB and education and, taken together, we’re seeing a reduction of nowhere near 20%. However, resellers or print manufacturers with big corporate customers that really do work from home and are giving up a lot of office space will be affected a little bit more.

TR: Laptops and visual displays obviously present two major opportunities for Sharp and its resellers, but I see that Sharp air purifiers have also recently been added to your offering and I am always surprised to see furniture as part of Sharp’s portfolio.

SS: Traditionally, our furniture business operated very much north of the border. It came from a previous acquisition, and we did fantastic work in Scotland, kitting out schools and county council offices.

We’ve now got that capability south of the border, so we can offer it to the whole of the UK, and we’re testing the water with dealers. If you find an opportunity, we’ll work on it together and then we’ll share the spoils. That’s new.

In addition to major furniture installations, we continue to create bespoke products. For example, we’ve just launched a new interactive table range for nurseries, for education, for care homes and we’ve got a new communicate and collaborate table for group Teams meetings.

And we continue to amalgamate furniture and technology in what we call oven-ready packages to make life easier for channel partners. When we sell something like the nursery tables, we partner with a company called Green Door which produces educational software for young children. We partner with them so that the table already has the education software on it.

TR: You introduced your new partner programme in September. Has that been developed to support and encourage more diversification?

SS: The pandemic, when business levels were low and clients and channel partners were on furlough, was a unique opportunity for us to sit down, take a breath and look at where we were going, where our partners were headed and what fundamentals we needed in place for the future? It was during that time that we designed our new partner programme.

We recognised that everyone would come back in a different position – some would come back wanting to sell up, some would come back wanting just to stay in print, some would come back thinking we need to diversify to survive. And we tiered it so that, based on our conversations with them, we could put partners into different tiers giving them access to different investments and different products and services and different training etc..

Our top-level partners are saying they need to change, they want to invest in wider products and not just print. Let’s work on it together for our mutual benefit.

TR: Has the programme been well received by resellers?

SS: It has. We’re in a really good position with reseller recruitment and are doing better now than we have done in many years. Some of it may be down to stock and the fact that some of our competitors have struggled to get the right stock in. But it’s also down to a mindset of people saying ‘let’s talk to Sharp because they can give us more than just printer equipment’.

We have partners who just want visual solutions from us and people who have already got print partners who say ‘we’re not going to move away from that print partner, but can we tie up with you for your visual solutions equipment?’.

TR: At the moment, your offering encompasses print, AV and IT, including laptops and IT services when they are rolled out to the channel. Is that enough for you to be getting on with or are there more areas you want to move into?

SS: Our SMART Office offering covers every bit of IT (services, infrastructure, cyber security, software etc.), furniture, hosted telephony, MFPs, managed print, AV, displays, collaboration, digitisation and that’s certainly enough for now.

We spent a lot of money on some of these things, at both a corporate level and a UK level, and we need everything to get back to normal. We need the print business back where it was and then we need to make sure that we’ve embedded these new areas before we move on. But with Foxconn behind us who knows what’s around the corner. We don’t want to stand still, that’s for sure.

 

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TechnologyReseller: 2021