EPM Sells Service Business to Kodak Alaris

Just about a year after acquiring Imaging 411 in order to launch its own service business Eastman Park Micrographics (EPM) is selling its service business to Kodak Alaris, its biggest competitor. From what I heard, EPM was not entirely happy with the way its court case against Kodak Alaris was going. EPM had sought to bar Kodak Alaris Document Imaging from marketing its service to EPM ImageLink micrographics customers - but after originally receiving a court order that supported this position, that order was reversed.

Previous to EPM's acquisition of Long Island-based imaging service specialist Imaging 411 in December 2013, Kodak Alaris had been the official service provider for ImageLink equipment through a contract with EPM. After EPM acquired Imaging 411, it took over the ImageLink service contracts and attempted to bar Kodak Alaris from competing for them. From what we understand, this strategy was not entirely working out, which prompted EPM to sell its service business to Kodak Alaris.

EPM had previously signed on Kodak Alaris to provide support for its hardware customers in Europe, Asia, and Latin America. EPM Service and Kodak Alaris were competing in North America.

With the acquisition, Kodak Alaris also picks up a competitor for scanner service. Imaging 411, and then EPM, employed several ex-Kodak DI technicians and had aggressively pursued document scanner service contracts.

EPM will now focus on hardware manufacturing, with Crowley doing the sales and marketing, as well as media distribution.

EPM & Kodak Alaris in Complicated Relationship

So, on one hand Kodak Alaris and Eastman Park Micrographics (EPM) have struck a deal, through which Kodak Alaris is going to continue to provide sales and support for EPM equipment in Europe, Asia, and Latin America. On the other hand, EPM is suing Kodak Alaris for soliciting business from EPM's North American customers, whose service contracts are currently being taken over by Imaging 411, the document imaging service provider that EPM acquired late last year.

Apparently, it's complicated....

Imaging 411 Targets VARs, Offering Higher Margins on Service

Following is an excerpt from an article entitled, "Imaging 411 Pumps Life into Hardware Service Market" that appeared in our July 19, 2013 premium edition of DIR.

There are several components to a document imaging sale. We typically talk a lot about the hardware, software, and professional services associated with a deal, because those items typically produce the big upfront price tag. (Unless of course it’s a SaaS or MPS driven deal—but, while gaining momentum, those are still exceptions rather than the norms in our market.) But, there is also typically recurring revenue that can be earned through software maintenance and hardware service contracts.

One difference between these recurring revenue sales and the upfront sales, however, is that while any number of vendors may be competing for the upfront sales, the number of options for maintenance and service is typically limited. Software maintenance, for example, because of the nature of the beast, is usually offered only by the ISV who developed the software. As a result, the ISV typically gets to set the terms with no questions asked.

Hardware service has historically been somewhat more flexible, and at one time many resellers were actually certified to service scanners, which enabled them to control their own pricing. However, while some scanner vendors like Canon still certify VARs, other market leaders like Kodak and Fujitsu have increasingly encouraged resellers to offer only the manufacturer’s authorized service at a price dictated by the manufacturer. The result has been successful service programs for the manufacturers, which has helped them offset some of their falling margins on hardware sales, but it has also put the squeeze on resellers who also have to deal with falling hardware margins and now have to deal with more restrictive service margins as well.

Imaging 411 is attempting to reverse that dynamic and once again make scanner service an important profit center for VARs. The Long Island, NY-based organization is offering scanner service packages to VARs—advertising significantly higher margins than the VARs get reselling similar service packages from leading scanner manufacturers. Imaging 411 recently brought on board long-time scanner industry sales and marketing executive Don McMahan as its VP of sales to help it drive some aggressive channel growth.

McMahan was originally hired by Imaging 411 as a consultant in 2010 when he launched the service provider’s Maintenance VAR Program (MVP). “One of the big components of the MVP program is that we offer deal registration,” said McMahan. “This signifies that we are not competing with our resellers. In addition, we are offering VARs two to three times the margins they get on service contracts from leading scanner vendors.”

Imaging 411 was launched in 2004 as a VAR, with the value-add of being able provide its own service. Its co-founders, Gary Armstrong and Joe Paradiso, are former Lason executives who helped manage service for a large conversion services and imaging systems integration business. Over the years, Imaging 411 began to increase its focus on service on both microfilm and document scanner equipment.

“In each of the past five years, Imaging 411 has enjoyed at least double-digit growth in terms of revenue and new accounts,” said McMahan. “We’ve landed some major national accounts with more than 100 locations—including Databank, which we publicized last year. We also landed a contract to provide in-house scanner service for one of the biggest office integrators in the U.S.”

A lot of the Imaging 411’s early customers are former Kodak Service & Support customers. “We went after Kodak customers and partners first because the dollar values associated with some of their accounts are so high and Kodak’s programs aren’t very flexible,” said McMahan. “One of our differentiators is that we pride ourselves on being easier to do business with."

McMahan said that Imaging 411 currently has about 20 reseller partners. “We are definitely growing our channel,” he said. “That said, I think 30 partners, that really want to do a good job, would be plenty."

Imaging 411 offers coverage throughout the United States through a combination of its own field engineers and contractors. It also provides Level II support to supplement its field personnel. “Our price book is basically the same as the manufacturers’,” said McMahan. “We match all the service SKUs sold by Kodak, Fujitsu, Canon, etc., and we offer more flexible pricing.”

“The bottom line," McMahan added, "is that even if the service market is shrinking, for a smaller company like Imaging 411, the opportunity is too great to pass up. We think the market is plenty big enough to support another major player.”

Crowley Contracts Imaging 411 for Service

Crowley Company has signed on Imaging 411 to provide service to its image capture hardware customers. Crowley, which is based in Frederick, MD, sells a variety of microfilm- and document-capture scanners. Vendors that Crowley represents include Mekel Technology, Wicks and Wilson, InoTec, Zeutschel, Qidenus, Extek Microsystems and HF Processors. 

Historically, Crowley has serviced its own products, but has expanded to the point where it was beneficial to bring in a third-party provider. "With the addition of the Wicks and Wilson UScan and the Zeutschel zeta to our scanner line this year, our equipment sales have considerably increased, affecting our ability to service maintenance and technical support customers to the degree they deserve," said Chris Crowley, co-owner and president of Crowley.  "From the customer standpoint. The Crowley Company remains the point of contact and the contracting agent. The only difference noticed will be faster turnaround.”


Based in Long Island, NY, Imaging 411 offers third-party service on a wide variety of scanning equipment from almost all leading vendors. Imaging 411 has some federal large government customers and also has a contract for scanner service with national service bureau Databank IMX. Imaging 411 also makes its service available to resellers who are looking for an alternative to vendor-provided service.

"Imaging 411 techs will receive intensive training on all Crowley brands and will be well-qualified to support the units in the field," said Chris Crowley.

Imaging 411 will also act as a distributor of Crowley’s Wicks and Wilson, InoTec and Zeutschel products. Imaging 411 also offer Sunrise microfilm scanners as well as pre-owned scanners and equipment.

NewWave to offer Sharp MFPs

Document imaging-focused value-added distributor NewWave Technologies has added MFPs to its line of products. Specifically, NewWave announced it will be distributing Sharp's Frontier DX Series. To us, Sharp has always been on the cutting edge of scanning from MFPs. It was one of the first MFP vendors introduce single pass duplex scanning on a multitude of devices. It's OSA platform for embedded applications was also fairly revolutionary and has been leveraged by multiple capture vendors.

This is actually NewWave's second MFP-related announcement that we've covered. Last year, it announced an agreement with Pitney Bowes to enable its VAR partners to offer maintenance contracts on HP MFPs. Presumably, Pitney Bowes will also offer maintenance for the Sharp devices through NewWave, as PBI is certified to service some Sharp devices.