Almost three years after the public sector IT procurement world was shook-up when Ricoh Canada vaulted onto the National Master Standing Offer (NMSO) list for monochrome standalone page printers, bumping off incumbents such as HP Canada (NYSE: HPQ), the latest NMSO list is out and it’s making waves as well.
The NMSO is a list of pre-approved vendor suppliers from which federal government departments can purchase a specific product at a pre-set price. The latest NMSO for monochrome standalone page printers sees HP Canada back on the list again, along with Oki Data Americas, Kyocera Mita Canada, Xerox Canada and Dell Canada. While they’re the winners, vendors not making the cut (inactive) this year were Lexmark Canada, Sharp Electronics of Canada and the surprise newcomer on the last list, Ricoh Canada.
Making it onto the NMSO is no guarantee of business, but it does mean the opportunity to carve out a chunk of the lucrative federal government printer buy. Getting on the list involves a competitive and thorough RFP process by Public Works and Government Services Canada (PWGSC). Once on the list, vendors and their partners need to market their wares directly to the department heads within organizations across the federal government.
For vendors such as HP Canada and OKI Data, getting a spot on the NMSO is a big win. David Varricchio, business development manager, public sector with HP Canada, said while it remained on the NMSO in other categories it’s excited to be back on the monochrome standalone list to be able to offer a wider selection of HP options to its customers.
“We’re excited by the news and certainly for our customers, given that many of them have standardized on HP in the past. We’re glad to be back,” said Varricchio. “I can’t speculate on what we expect to see in sales or revenue, but it gives us a greater opportunity to have more HP solutions available for government to consider.
There is a pent-up demand in the public sector said Alec Milne, president of Printers Plus, an Ottawa-based HP reseller. Many government departments have standardized on HP and aren’t keen on managing multi-vendor environments, so they’ve been waiting for HP to come back to refresh. And while the government year-end doesn’t see the sales volume it once did, there is still a ramp-up of activity during this season.
While HP is a veteran of the public sector market, Oki Data Americas is a relative newcomer. Mario Pallotta, OKI Data’s general manager for Canada, said the vendor has been on the list before but only for one product, and it didn’t do that much with it. This time, though, he said Oki is ready to seize the opportunity.
Pallotta said they began the process of competing for the NMSO about a year-and-a-half ago, and made it a company priority. They assigned a team to the project that met regularly with PWGSC, and worked over the weekend right up to the RFP submission deadline to make sure everything was complete.
“The potential really varies for us. The first step is to get on it, and now the work really starts,” said Pallotta. “We’ve been meeting with departments, and now the work is to get them to understand Oki and what we can do. It represents a huge opportunity. On a yearly basis it’s a very large buy, and to take 10 to 15 per cent would be pretty good for us.”
Oki is working to get its channel partners enabled to tackle the opportunity, and is preparing seminars and brochures to help them with training and marketing. They’ve already ramped-up inventory through distribution for the expected increase in demand, and Pallotta said orders are already coming in.
What happened to Ricoh?
While Ricoh made a splash three years ago, shooting onto the NMSO with a very competitively-priced bid, observers say their absence this year may be an indicator that the most recent NMSO was based on more than just the lowest price.
“There are a number of factors the government has in qualifying offer holders, and price is just one of many contributing factors to what’s import to the federal government,” said HP’s Varricchio. “Service becomes a much higher criteria, and that positions HP very well with its extensive service network and channel.”
Oki’s Pallotta confirms this NMSO wasn’t focused just on price, but on a blend of service, deployment cost, consumables and other factors.
“They wanted a good, sustainable product. Last time it was basically price, but this time not as much,” said Pallotta. “The (government) had a very good knowledge of the industry and they wanted to make sure they got the best value, not just the best price.”
Milne from Printers Plus added he doesn’t think Ricoh was particularly successful in the public sector. And while he doesn’t want to single-out Ricoh as the only offender, he said it’s not enough to just try to buy business with the federal government.
“It’s now always a price takes it all environment; a lot of other factors come into play,” said Milne. “My sense is manufacturers that have tried to do that haven’t been as successful as they’d have liked.”Follow Jeff Jedras on Twitter: @JeffJedrasCDN.