Where Did My Bread and Butter Go?
Revenue from service will crash by more than 50% in 2020 due to the effects of the pandemic
The service revenue business model has long been the foundation for office equipment resellers. As long as I can remember, it has been described as the “bread and butter” of the business. It shapes every dealership and determines the number of staff that will support machines in the field. For the past decade, it has also been the steady portion of the office equipment market that provided the business annuity whilst hardware prices were continuously squeezed.
The pandemic and the resulting forced shift of knowledge workers to the home resulted in a massive drop in office print volume which, in turn, affected the service revenue achieved from each printed page. And whilst we know that some people (at some stage) will return to the office, the likelihood of “office first” as a work location is probably a thing of the past for true knowledge workers.
New terminology is emerging to describe possible new working scenarios. Office first, office-first hybrid, remote first, or remote first-hybrid are all possible scenarios where only the former two provide any demand for the most service rich A3 based devices. Meanwhile, IT departments have scrambled to set people up for remote first and or remote first-hybrid environments. Surveys have shown that if office equipment investment is made in those remote locations, then it revolves mainly around collaboration tools and digital workarounds.
Even before the pandemic, the document industry was going digital—but COVID has accelerated this shift and ironed out many sceptics. Processes are being automated, documents are being signed digitally, shared documents are viewed online, and (although we have all achieved great work arounds in the course of this year) its time to accept that the butter has gone off the bread and now we are all headed for new spreads. Diversification has been the mantra for a number of years, and that is our message to all resellers that are still holding back: there will never be more investment in digital transformation than now.
This is not just about doom and gloom. This is about showing market trends and providing strategic guidance to our customers. Our forecast capabilities at Keypoint Intelligence have immense depth. If you would like more insight on markets around document imaging, based on specific verticals or device based or various regions of the globe, don’t wait get in touch with us today.
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