Disruptors to Business as Usual: How Innovations are Changing Today’s Imaging Market
- By Ann Priede
- May 01, 2012
“The only constant is change” is a familiar phrase that is bandied about on any number of occasions and is an apt description for today’s imaging industry. Pressured on a number of fronts — the influx of mobile printing devices, the growing adoption of managed print services — the imaging industry is constantly changing. But rather than run around like Chicken Little shouting, “The sky is falling,” imaging vendors should look at today’s changing market as an opportunity, with innovation the cornerstone of success.
Mobile devices have certainly made their presence felt, and the potential impact on the demand for printing is a topic of great interest. The vital question about whether the volume of printed pages from tablets will replace that from PCs is sure to occupy the industry in the months ahead. With Apple’s last quarterly announcement, speculation was rife that the “tipping point” in terms of tablet volumes had been reached. Then, HP missed its first-quarter 2012 numbers, with a supplies revenue decline of 6 percent due to supplies purchase reductions in enterprises as a result of tablet usage and the associated decrease in printing.
Surveying 200-plus workers from small and medium-size businesses who use smartphones or tablets for business calls or emails, Lyra Research found that almost 80 percent of users have not printed a document from a smartphone or tablet for business purposes. Of that 80 percent, 37 percent claimed they do not ever expect they will need to print from a smartphone or tablet.
Some see tablets and printers as a head-to-head rivalry, a battle to the death between electronic and hard-copy viewing of documents, while others can see a more complementary and compatible future. Imaging vendors are increasing their efforts to tap into user behavior and attitudes, especially in the enterprise, and thus are taking advantage of the opportunities offered by the growth in mobility.
The convergence of mobility and the small and medium-size business market for printing and printers is also influencing the imaging market, with managed print services (MPS) an overarching theme, as imaging vendors are motivated by the search for new customers beyond the big corporations that have long embraced MPS. And vendors are looking to move upscale as well, offering global MPS contracts that cover every office of large worldwide corporations. Going in either direction presents a vendor with new challenges — or should we say “opportunities.”
Boosting their value-add is one strategy that a number of MPS vendors are employing to increase their revenue. As imaging vendors go beyond the “P” in MPS, meaning printing, to the “S,” meaning services, they can provide real value in process efficiency. MPS vendors can also use MPS strategically to help customers create a “platform for success” by listening to customer needs. In response, vendors are rationalizing product lines, shifting their focus from hardware to pages, extending product life cycles, introducing solutions and services, and driving the migration to color.
A study of 100 MPS engagements by Photizo Group found that organizations reduce imaging costs by an average of 30 percent after implementing MPS. User-to-device ratios average 2:1 in an unmanaged environment but increase to 6:1 after an MPS implementation. While service is improving and clients are reaping the benefits, the hardware and supplies business is feeling a hit.
Supplies has long been the breadwinner for the printing and imaging industry in terms of revenues and especially profits, and while demand has slipped in recent quarters, many eyes are focused on the businesses of toner, ink and media. In particular, imaging vendors are engaged in opportunities to capture incremental pages, revenue and margin. Although the question, “Why are we still in the print business at this time?” — a frequent conversation-starter — is a good one, imaging vendors are better served by asking more specific questions to obtain answers that will provide some likely directions for the future:
u How can we leverage the cloud and address security concerns?
u How can we move the MPS model down market, grow the business and generate profits?
u How can we maximize margin on MPS contracts, including supplies fulfillment, service levels, and page usage and coverage?
While 2011 was a better year than 2010 for the printing and imaging industry, the market still has a long way to go to return to the happier times of 2007, but most likely it will never fully recover. The recent spate of natural disasters and currency headwinds could account for some recent declines, but these factors may also be masking a secular decline in the imaging industry due to unemployment, MPS and mobility. While the outlook for 2012 is mixed, continued customer engagement — which drives innovation — is critical to the success of imaging vendors. With new technologies interacting with new sets of users coming into the market, listening to customers has never been more important; industry participants can no longer count on the status quo.
This article originally appeared in the May 2012 issue of Recharger.
Ann Priede has broad managerial responsibilities for the various product lines in her group at Lyra Research. Priede is a veteran of the printer industry, gaining experience with Konica Minolta (formerly Minota-QMS and formerly QMS) and NEC Imaging Technologies.