ECi & MWAi - An Inevitable Partnership14 Apr, 2008 By: Sand Sinclair imageSource
ECi & MWAi - An Inevitable Partnership
Acquisitions and mergers are becoming more or less de rigueur in the office
equipment industry, where some equate the changing landscape to a merry-go-round
or game of musical chairs. A good partnership, however, will solidify the
strengths of the companies involved and can even strengthen the channel as a
whole. MWA Intelligence, Inc. (MWAi) and eCommerce Industries, Inc. (ECi)—parent
company of OMD Corporation and La Crosse Management Systems—have done just that,
driven by the desire to provide dealers with an enterprise-class solution suite
that delivers the best service automation, remote asset management and ERP/CRM
system in the world.
As part of the new relationship, MWAi has acquired two of ECi’s wireless
service applications, La Crosse’s Tech Raptor and OMD’s Service-On-The-Go (SeOTG).
MWAi is already a worldwide leader in enterprise-class M2M (machine-to-machine)
and M2P (machine-to-people) solutions and services. The company’s asset and
resource management tools and software enable remote management of mobile
workers, automate dispatch workflow and facilitate the exchange of
As for ECi, most in the industry are well-aware that the company is a premier
developer of industry-specific business operations and e-commerce software for
office equipment dealers. ECi also provides specialized information technology
solutions for small to medium sized businesses (SMB) in a number of other
vertical industries, including office products, contract office furniture and
janitorial/sanitary products A $60 million-plus company with more than 100
developers and over 100 training and technical personnel, ECi solutions are used
in thousands of independent businesses in the USA, Canada, UK and Europe.
Wanting to know more about the important new partnership of these two
companies and how it will effect the industry, as well as their customers,
imageSource Editor, Sand Sinclair, spoke collectively with those individuals
that affect the upcoming changes: Mike Stramaglio, CEO/President of MWAi, Don
Weary, President, ECi, John Brostrom, President, La Crosse, and Laryssa
Alexander, newly appointed President of OMD.
imageSource/Sand: The industry is now aware of this partnership, so
what do you first want the dealer community to focus on?
Don: Sand, we want the focus—both the industries and ours—to be on
what each of us does best. That’s not just Basic Good Business 101, it’s also
the best thing for our customers. Regarding this partnership, we looked at lots
of things, including the entire flow of the buyers/suppliers model. Mike and I
have talked about a lot of different initiatives which will begin to come out in
the near future. Our goal is to tie everything together, from the copier to the
dealer and all the way back to the manufacturer. This adds a lot of value to
the dealer, and these are the things we get excited about.
Mike: Yes, we have to each focus on our initial core competencies. At
the end of the day, we have to make financial investments for resources and
strategically list what we each do best. Basically, we’ll build a strong harmony
between the two companies.
DW: ECi’s strength is the ERP System—the business system; that’s what
we do best. Modesty aside, we are the industry leaders in automating dealers’
supply chains and providing them with technology to drive continued
profitability and growth in their internal operations. That includes a lot of
complementary areas such as scheduling and dispatching where we tee up things
that flow over to the expertise that MWAi brings, which is extending those
efficiencies past the four walls of the dealer’s building all the way to
iS: Who “romanced whom” for these strategic talks to begin? The
DW: Mike has been extremely gracious and he immediately reached out to
me to discuss how to add value to the dealer.
MS: I think the marketplace conditions are such that both companies
had a requirement to grow, be financially solvent, and be healthy-looking five
to ten years down the road. And truthfully, sometimes people and things just
“click”—and the marketplace just “clicked” which ultimately led us to this. As
Don pointed out, we plan on a meaningful and powerful long term relationship.
iS: Will you be promoting each others’ brands?
DW: Obviously ECi and MWAi are going to work together to promote our
products. However, we both have other partners in this industry. While we have
formed a strategic business together, we want our customers to rest assured that
we are also going to be faithful to our existing partnerships. Both of us are
focused on delivering what’s best for our collective customers.
iS: Tell me more about the transition, which will help assure your
MS: There are a number of points. The first one is obviously that ECi
will focus on the ERP. We (MWAi) have gone to the marketplace to address any
anxiety or concern a dealer may have regarding adopting or being forced on to
any (other) platform. The fact of the matter is, we offer multiple platforms,
and the transaction with ECi was such that they would migrate away from their
Tech Raptor and Service-On-The-Go business to our (what we call) MWAi Lite or
MWAi Enterprise platform for the dealer. We made that a pretty easy transition
for them (dealers), and we have a great marketing program for them as well. In
fact, anyone who is on Service-On-The-Go today, or sees the wisdom of this deal
and signs an agreement with us, we will provide our version of Service-On-The-Go
(MWAi Lite) for free. There is no up-front charge, and we will provide training
at no cost. So any anxiety customers might have should be mitigated by: 1) We
have a great program 2) A great product and 3) This strategic partnership will
provide them with significant and more robust products now and in the future.
DW: There really is a common theme here. at the end of the day, it’s a
better product, period. Technology is so important in obtaining all of the
efficiencies that dealers need out there today. That’s what it all comes down
to—delivering a better profit-enhancing product. That’s the number one benefit
dealers will realize.
JB: Before adding more about the transition, one obvious factor is
that, when moving forward, there is only one remote device and service platform
that we offer - MWAi. That is our standard offering now. We will have our La
Crosse backend product, our OMD backend, and MWAi for the front end.
iS: This replaces the La Crosse Tech Raptor platform, correct?
MS: Yes. The logic is that Tech Raptor and Service-On-The-Go will be
phased out over the course of the next 90 days, or perhaps six months, signaling
the end of those platforms.
iS: What else will you do for dealers throughout that time frame to
support the change over?
MS: We’ll continue to support the products in the dealer community
during this transition period. I think it is safe to say that for ECi, MWAi, OMD
& La Crosse, our priority is to assure that all customers are taken care of. Our
customer care & support has & always will be our number one priority. Throughout
this transition we’ll continue to support the product to ensure customers are
iS: The strong partnership between ECi and MWAi actually seems like a
“value-add” solution for many dealers.
MS: For MWAi, one of the key points of the transaction other than the
strategic value, is that we rebranded our products already under MWAi Lite. We
will continue to brand (where applicable) as we continue down this road. MWAi
Corporate is solid and of course ECi has their own rebranding initiatives in
DW: We are creating a “family of branding” that all comes back to ECi.
We want customers to understand the advantages of the size and growth of our
company and the stability that comes with that. It’s the products they want, or
love, standing on the shoulders of this much more stable platform.
iS: Brand recognition along with reputation is key, obviously. You’re
keeping that tact as an overall advantage it seems.
JB: And going back to the question you posed to Mike earlier, any
fears the customer may have are taken care of through MWAi Lite. That product is
equal to our Tech Raptor and OMD’s Service-On-The-Go. And MWAi will provide it
at the same pricing we had already contracted with our customers. MWAi also
offers the Enterprise edition, which gives dealers even more functionality.
And as far as the rebranding and leveraging of ECi’s stability, and yet
keeping the ECi/La Crosse/OMD “identity,” we’re also leveraging the people
(staff) that are still there. This includes Laryssa Alexander, her support and
sales teams, and field personnel. And myself and our support teams, to help make
a smooth transition for our customers in terms of product and people.
iS: Laryssa, what do you seeing taking place now, as the newly elected
President of OMD?
LA: Along the lines of this strategic partnership, we’ve worked
closely with the MWAi staff, making outgoing calls and talking to customers to
keep the lines of communication open so that we are finding the best solution
for the customer. We’ve been in a supportive role to encourage our customers to
attend some of the seminars MWAi is putting on, and having [MWAi]
representatives join us in our booths at tradeshows to do innovative product
demos for the benefit of our customers.
Going beyond the partnership, we’re making a lot of other changes at OMD,
finding ways to work smarter and more efficiently. For example, we used to send
out software updates at six month intervals, whether customers wanted them or
not. Now customers can request an update on their schedule, when they are ready
for it. We’re using fewer materials—which saves natural resources—and improving
customer service at the same time.
JB: We can’t lose sight of the fact, as both Mike and Don have pointed
out, that this is much more than just Tech Raptor and Service-On-The-Go.
iS: What do you think then, is the greatest opportunity as a result of
JB: As far back as 5 or 6 years ago, Mike and I were talking about
supply chain integration. How do we get all the strategic partners in this
industry to come together so that when a machine in the field needs toner, the
manufacturer in Japan knows it needs toner? Other industries have done this
remarkably well, but there is a lot of independence in our industry so it takes
some consolidation, ala ECi. And then it takes integration of a non–competitive
partner like MWAi, etc., & then getting manufacturers involved—and their
suppliers, so there becomes one solid supply chain from end users back to the
original manufacturer. This (deal) is the first step in addressing that
DW: Supply-chain integration is one of the things ECi brings to the
table. We already process somewhere in the neighborhood of $3 billion dollars a
year of these type of supply-chain transactions. It’s been a very transforming
kind of technology which we’ve invested many millions into. This is where, going
down the line, we can bring the might of ECi and all its investments and
connections into this market segment in a way that helps both the dealer and the
iS: Are you planning on more acquisitions in the near future?
DW: Yes. We’re in discussions now on acquisitions both inside and
outside this market space. We’re in a number of verticals (jan-san, lumber and
hardlines, office equipment, etc.) We look to acquire the leading companies
within our existing verticals, in what we call adjacent markets, or in verticals
with similar buying and selling patterns.
MS: We’ll continue to grow our partnerships, taking them seriously to
grow our business. We are about expanding distribution & the product portfolio.
We’ll continue to create new partnerships and manage the ones we have. We’re now
working on some acquisitions to support our goals to ensure we provide the best
M2M solutions, and greater value to the dealer community.
iS: In closing, what else do you want to say to your dealers and
JB: This industry needed this. If I didn’t firmly believe this, I
wouldn’t be here. I have had serious acquisition discussions with other ERP
vendors in this market space, but it took ECi to do this. On the business level,
this is a no-brainer. On the emotional level, well, that’s what we have to get
across to customers; their world really isn’t rocked—it is just a matter of
perception. The premise is rock-solid sound and will benefit them as we move
DW: Change is inevitable. It can bring about trepidation, but it can
also be a good thing. The day of the small independent enterprise-wide software
provider is going away. Let me be clear. I’m speaking of enterprise/ERP systems.
There is a lot of head room for innovators and software companies, but when you
are talking about a product that 90% of your office uses at one time or another
throughout the day, and about the level of sophistication that our customers
require, you have to have a very solid platform. These systems are too
important; they are at the core of the dealer’s business and they have to be
stable. You also have to be able to innovate and keep up with the market.
There’s a big difference when a $60-70 million dollar company like ECi makes
additional investments in marketing or in partnerships such as this one versus,
say, a three million dollar company.
We don’t have to slow down or stop investing in product development and
support infrastructure—the things that directly impact the dealers, which might
be the case for a smaller, less financially stable company.
The stability ECi brings to the marketplace is a huge value for dealers. If
your software company goes bankrupt, what happens then? What happens to the
system that runs your business? This type technology is so critical you can’t
trust that it will just be there; you must ensure that it is. We came in and
looked at the best companies in this marketplace, such as La Crosse, OMD, and
other companies, and we were looking to financially shore up those companies so
they can be more stable and grow to meet industry demands. That is our number
one priority. Not taking the brand away, but keeping current with the software
that dealers know and love and invested in, ensuring that it’s going to evolve
in ways that will help dealers continue to grow their business.
MS: We all know it’s a very small community in the copier world. And I
think a few key points need to be made. Understandably, the dealer looks at
what’s immediately of interest and of concern to them, and rightfully so. Things
happen that they may not at first see the wisdom of, so there is an information
gap that we need to fill in.
There is a courtesy factor as well. However there is about 40 of us vs.
thousands of dealers so we hope to address this as effectively as possible. But
there are other indicators that the industry should be concerned about, such as
key C-level executives leaving companies such as Toshiba and going to a
competitor (Konica-Minolta), or Panasonic escaping from the marketplace, Xerox
buying Global Imaging, and now, what’s going to happen at IKON. All of these
things are not disconnected.
The dealers should not have to worry about infrastructure. Fortunately, there
is strength in ECi and MWAi coming together. This relationship will take us deep
into the inner sanctum of all the OEMs. We must connect with Oracle, we must
connect with SAP. We can no longer expect a dealer in Pittsburg to not somehow
be referencing or made aware of these large enterprise class solutions, either
because the OEMs are failing at delivering and a dealer needs to depend on
someone like us, or Oracle does a phenomenal job but the dealer still needs
someone like us to do the integration.
So with regard to infrastructure, providers should be optimistic about us
because we have the resources and the financial capabilities to keep it all
going. This relationship now helps guide providers to a more logical OEM–or
secure and validate their current relationship with their existing OEM.
iS: That sums up this acquisition quite well. Over time we should see
the synergies of this partnership shape the future for dealers by providing
plenty of opportunities.