Feature

From Document Manager Magazine Vol 17 No 02 - March/April 2009

Fujitsu's annual channel conference took place recently in Marrakech, Morocco, where DM Editor Dave Tyler caught up with the company's General Manager of Sales for EMEA, Mike Nelson

Dave Tyler: The logistics of a massive conference such as this, with delegates and partners attending from all over the world, must be horrendous: is it still a justifiable exercise given the current economic climate?

Mike Nelson: There's no question that this is a really big event to organise - we have well over 300 people here each day. We like to think that this conference represents the greatest accumulation of industry expertise that you could find anywhere, in one place. So, why Morocco? We always choose our event locations very carefully. Last year we were in Dubai, because of the very impressive infrastructure that they are building there, and the way that they are developing a global business hub: it's a genuinely exciting place to do business. And here in North Africa there is a similar business infrastructure being put in place almost as we speak: you can see it as soon as you arrive at the airport; this is potentially a huge growth area. And it's important to understand as a business that EMEA is a big place, and not all the regions within it are suffering in the current downturn. While the UK banking sector, say, may be having particular difficulties at present, that doesn't mean the same is necessarily true of the banking sector in, for example, Greece or Turkey, or indeed here in Morocco. Fujitsu has wide reach into all of the EMEA countries, so by choosing to manage events in these growth areas, we can hopefully help our partners here to stimulate their business as well as ours.

DT: You mentioned the difficulties that some sectors are currently experiencing, and obviously a large part of the attraction for your partners to events like these is the chance to find out how the market is faring. How did the downturn in 2008 affect Fujitsu's business?

MN: The scanning market has seen extraordinarily strong growth over the last few years: around 60% in 2006, and around 45% in 2007. And for some time 2008 looked to be similarly promising; a continuation of that very strong growth. Of course, as soon as the current financial crisis hit, it immediately became much harder for companies to invest and expand. The document management and wider ECM marketplace has traditionally been one of the first areas to suffer in a downturn - however it's also one of the first markets to begin to recover when the inevitable upturn comes along!

That said, the whole sector did still see respectable growth, of around 9.5% over 2008 - while some economies were contracting, others are still managing to expand and invest. In fact the year started off very strongly indeed: if we look at all manufacturers' scanners, across all markets, there was growth of over 20% through January and February. Very quickly, though, those sales started to fall off a cliff. So we had a strong first quarter, followed by two relatively weak mid-quarters, followed by a recovery in the last quarter.

DT: Does that mean - given that Fujitsu is far and away

the market leader globally - that your own sales figures for 2008 were badly affected? MN: Despite the bad year for the market, it's worth pointing out that December 2008 was the best month ever for Fujitsu scanner sales, in over twenty years of trading. And most of those scanners sold were not going to distributors; they were going straight out into the marketplace. So there is some optimism that 2009 could still turn out to be a good year for the market. The smart money, I would say, would be on the scanner market as a whole (i.e. not just Fujitsu's business) being relatively flat over 2009 - somewhere between 4% over or under last year.

Overall this might represent not quite as dramatic a decline as some people may have feared, when the credit crisis started to bite back in the later part of 2008. And while the market overall managed around 9.5% in 2008, Fujitsu's growth was 10.5%, so we grew slightly ahead of the total market.

It should be no surprise of course that our figures are very close to the overall market's figures - we have virtually 50% market share within these segments, so clearly our performance will usually reflect quite closely how the broader market performs.

DT: Have you seen particular changes in sales trends in any specific product segments, or is the market overall performing more or less evenly? MN: In volume terms most of the growth continues to be in the workgroup and departmental segments, as you might expect. The workgroup segment grew by around 10%, while the departmental segment did slightly better, growing by around 12%. Mid-volume scanner sales did well then, even though those figures of course represent a relatively low number of scanners sold, perhaps somewhere over 3,000 units, while at the same time the low-volume segment last year saw quite a bit of competition, in terms of new devices and features that created a slight 'squeeze' in that market.

We have plans in place to turn that

segment around by introducing some new and improved scanner offerings this year to address those issues directly. And while the low-volume market appears to have declined slightly overall, Fujitsu again managed to take a larger share of that market than previously.

In revenue terms of course the story looks somewhat different to the volume sales figures. Production scanners, although they only represent around 5% of the total volume of scanners sold, contribute around 43% of total revenue. So there is still significant value for our partners, in revenue terms, in seeking out production scanning projects.

DT: The partner event is an opportunity for resellers, distributors and ISVs to gain a picture of the Fujitsu roadmap for the future. Are you able to give us a sneak preview of some of the plans for the rest of 2009? MN: Over 2008 we introduced 8 new products, and of course we will continue to put huge efforts into R&D in order to maintain our global market leadership. Our new ScanSnap S1500 and S1500M devices are designed to bridge the gap between office desktop and workgroup scanners: they're fast (40 images per minute) and include ultrasonic multi-feed detection unique on devices at this level.

New A6 scanners will be introduced which are perfect for biometric and enhanced passport applications and the like, including RFID recognition. Outside of ongoing hardware innovations, we will also be focusing more than ever on improving how Fujitsu devices interact with capture software and third party applications.

Plans are underway to make it much easier to migrate users from ScanSnap up to bigger models, as well as a ScanSnap API which will allow partners to develop easy ways to route scanned images into their applications. The emphasis for business has to be less on hardware features, and more on how our partners can use our offerings to enhance their solutions. More info: emea.fujitsu.com/felg

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