Two years after selling the solution provider business he founded to Xerox, LaserNetworks president Chris Stoate has left the company.
Stoate started up LaserNetworks in 1987, foreseeing a shift of pages from photocopiers to the then-nascent laser printer market. The problem customers faced with that shift was that printers were typically though of, both by customers and solution providers, as IT accessories, and not allotted a lot of specialized attention of expertise by the VARs of the day. He sought to change that by creating a solution provider that brought the best of the photocopier service and support model into the laser printing world.
The big break for the company came in 1993, when it started to develop what would become widely known as managed print services – a simple contractual relationship that aims to take print concerns out of the customer’s hands and outsource responsibility to the solution provider. At that point, laser had started to take over photocopying’s page count and “there was a lot of growth but a complete lack of infrastructure to support that growth.”
The print channel at the time was more used to slower, more specialized, low-volume dot matrix and daisywheel printers, and wasn’t ready for the copier-like volumes that laser printers were producing.
“The channel that delivered them was a computer channel that treated them as a peripheral device and was not set up to repair, support, or even manage the costs of a device that was essentially a mini-photocopier,” Stoate said. “The photocopier model needed a lot of adaptation to fit into this mold, but its better for it than the computer VAR model, so we built a specialized VAR that developed a number of processes, software, talents and staffing to provide managed print offering.”
The idea took off quickly. Customers who were quite averse to any cost-cutting risks when they held responsibility for that risk found themselves quite in favor of those same risks when the responsibility was held by Laser. As a result, Laser was able to reduce the cost per page of printing substantially.
At the time, it was a unique idea. Stoate believes at the time that Laser stood alone along with Utah-based Printelligent, a company he would not get to know personally until nearly five years later. And while Printelligent never quite reached the scale that Laser did, it was the first to be acquired, being picked up in 2011 by HP. Today, Printelligent’s systems and technologies are being used to form the backbone of HP’s efforts to enable managed print across a broader swath of its channel partners.
“They had a good backbone. If HP is successful in transferring that knowledge to its partners, it will turn out to have been a good acquisition,” Stoate said.
Still, Stoate said he believes managed print isn’t something that’s gong to work for every VAR or MSP. The game is simply different than most aspects of dealing with technology – more about moving parts and less about software and configuration.
“We used to say to customers, ‘You’d never ask the guy who fixes your computer to fix your photocopier. So why should he fix your laser printer?’” Stoate recalled. “The marketplace has determined that IT VARs are just not as good as it as specialized print VARs are.”
Things changed significantly in the beginning of 2012, when LaserNetworks was snapped up by Xerox. Stoate said that came at a time when Laser was considering its best approach for growth. He was seriously considering getting financing to purchase other local managed print solution providers, creating a series of hubs across North America as a way to build critical mass for the company and its managed print message. But then Xerox came calling, and Stoate said it was an opportunity too good to let pass.
“Laser will grow much faster [as part of Xerox] than it could have on its own,” he said.
The deal gave Laser access to a very unique combination – the ability to sell both HP printers from the desktop to the workgroup, and to sell Xerox production units, both of which dominate their respective markets. But Xerox’s strategy around production products is a direct-only approach.
“There was no way to come to market with the right combination. The only way to be truly seamless was to be acquired by Xerox,” Stoate said. “Canadian customers have the unique offering of both Xerox and HP under the same roof.”
As with any acquisition, there was some difficulty in getting the combination just right to maximize potential, but Stoate said he believes they’ve got it figured out, and that the evidence supports that.
“Once the formula with Xerox was figured out, we’ve signed more new agreements with new customers in the last several months than we have in any comparable period in our history,” he said.
So what’s next for Stoate?
“That’s a great question. I wish I know the answer,” he quipped. Stoate said he intends to ramp up his community and charity involvement, and left the road open for a return to the business world in the not-so-distant future.
“If there’s somewhere I can add real value and make a difference, I might leap back in,” he said.
But for the very short term, his plan is simple. “For the next month, I’m going to be completely off the grid, and mostly on mountains,” he said.
He said he leaves the company confident of its future under new managing director, former director of sales Mike Tulk. When the Xerox acquisition happened, he said he committed to sticking around long enough to see the company through the transition, and that now is the right time for him to step aside.
“I was ready. The business needs to move to another level, and now that things are on the right track, I’m comfortable in leaving knowing it will have a bright future.”