Zipcar is the world's largest car sharing and car club service. It is an alternative to traditional car rental and car ownership. Share Zipcars in Atlanta, Boston, Chicago, London, New York, Philadelphia, Pittsburgh, Portland, San Francisco, Seattle, Toronto, Vancouver and Washington DC. Zipcars also live on campus at universities across North America.This morning I saw a potential game changing business model from my weekly email from Print21 in Australia. It seems the Australian division of HP is renting Indigos to PSPs for 18 months. If they work for them, the PSP can buy them. If they don't, the PSP can give the boxes back. see my earlier post
This puts the risk of obsolescence where it belongs - with the vendor. It also aligns incentives by getting the vendor and the OPM/PSP focused on making the box profitable. For the vendor, it also eliminates the disincentive of cannibalizing existing box sales every time there is an upgrade. Plus it moves box inventory instead of having them trapped and being financed somewhere in the "channel." Given the low margin on boxes every day capital is tied up in boxes is a hit to the bottom line.
No OPM/PSP wants to own a box.
That's why it's hard to sell them. Who wants to invest a gezillion dollars or even a hundred dollars unless you feel comfortable about the risk of owning a new box that might not turn out to work. "To work" means making a living, not being able to do beautiful prints. That's why the best sales come from business that already have an addressable market. It's only common sense.
In Brazil, this is the standard MPS model. Pay for clicks, not for boxes. From what I hear it's working out just fine. I assume in that case, the MPS assumes the risk, but given what Ricoh has been doing lately, I'm not positive that I'm right about that.
In any case, "try it, you'll like it" has always worked. It's exactly the right way to do business in a user network economy. The under appreciated resistance to sales is the fear of making a long term commitment that means you might wind up with a lease on a box that could actually put you at risk of bankruptcy. The money every month might be manageable. But how does one put the number on obsolescence insurance?
I'm sure every vendor has a similar problem, but big X is my home team. So what's the upgrade path from the iGen3 to the iGen4. Different toner, online spectrophotometer and all the other really cool things the engineers invented. Great improvements. But imagine if recently bought I the iGen3, and you told me at the time it was the greatest ever. Until the inevitable new greatest ever.
But, if I were renting an Igen for say 18 months that means I'm probably less than year to get in on the improvement. Being locked into a lease makes me feel frustrated. Getting the new stuff as it is invented makes me feel happy. Happy is always better for everyone.