All for one and one for all

21.02.2005
Von Nicolas Callegari

For years the copier and printer markets have been two very different entities, each with their own dynamics, sales strategies and revenue generation streams. However, with the convergence of technologies, growth in areas of the market that was traditionally seen as secondary to the bigger players has prompted both these market sectors to change dramatically, bringing them on to common ground, and into a brand-new market.

Changing needs

Given the growth in the SME market space, the changing printing needs within the enterprise, and the fact that better printing technologies are becoming more affordable for smaller businesses, the traditional deployment of a desktop printer per desk or, conversely, the huge departmental multifunction, may be a dated exercise.

However, there are various printers and higher-end multifunction devices that will cater for the different needs of a business, provided that they are deployed correctly and according to the client"s needs.

According to HP SA"s commercial category manager for imaging and printing, Robbie Johnson, what we are seeing now is that channel partners are encouraged to adopt a balanced deployment strategy, where, taking into account factors such as total cost of ownership (consumables) and printer usage, different printers (or copiers) may be deployed within a single enterprise.

But, whether selecting a multifunction copier that acts as a printer, or a multifunction printer that acts as a copier, Johnson warns that clients need to look at this deployment from both a capex and opex perspective.

"While the copier market will be able to offer a lower TCO per page, the sales model is very different, in that there are a lot of other hidden costs, such as automatic escalations, automatic contract renewals and minimum charges," he says.

Itec chief sales officer, Brett Ludlam, agrees that the sales model is very different, but says that the evolution in this converging market has seen the channel take on much more of a consultative approach to selling printers and copiers, identifying needs and deploying as necessary.

Ultimately, TCO comes down to number of pages printed. Printers have duty cycles, and will only start costing the business more if a printer is bought for the wrong use.

"For example," says Johnson, "business inkjets have a much lower total cost of ownership than lower-end laser jets, but, when deployed correctly, a business inkjet will have a higher duty cycle, and cost less in the long run."

"But the market has become commoditized," Ludlam says, "so the channel needs to identify new revenue generation opportunities in the market. Obviously the need for consumables will always be there, but, at the end of the day, resellers need to offer these value-added services, both to ensure sustainable business in this commoditized market, and also to help to push the brand."

Currently, there is no real definition of where the middle ground is that everyone keeps talking about, or even when the copier and printer markets will bash heads, but the industries agree that the markets are converging at a rapid pace. The printer market sees this as a great opportunity to break into a new market, with the value proposition of offering balanced deployment of a wider range of products.

The copier market, however, has a bit of a challenge on its hands, because its market has been more volume-driven, which will require a change in mindset and sales strategy.

The consumer market

According to Canon product manager, Ashley Botha, multifunctional printers have made some tremendous strides, but it would be presumptuous to assume that it is now the only real option when purchasing technology for the office.

"There is still a reasonable demand for entry-level SoHo printers, particularly in the local marketplace. We are increasingly finding that school children, even from primary school age, need a printer for projects and even recreational activities," he says.

Soon we will find a lot of households sporting a small, inexpensive printer, even if the kids use dad"s expensive laptop from work. "At Canon SA, for example, we have experienced growth in the entry-level/SoHo marketplace for the last two years," Botha says.

Then, and undeniably, there is the growth of the photo printer marketplace. With the advent of the direct printing standard, PictBridge, photo printing has become a force to be reckoned with.

The reality is that there is a niche marketplace that requires superior photo printing that is easy and cost-friendly. Vendors today are all promoting the concept of the "home photo lab" and with good reason.

The global marketplace for digital photography and resultant printing has seen some phenomenal growth. Indeed, the fusion of technologies has created a range of personal printers and digital cameras that offer performance levels and quality capable of meeting consumers" immediate and long-term demands. The digital camera market alone has seen amazing adoption in the last four years, with 100 percent growth rates annually.

An overall perspective

According to BMI-TechKnowledge research analyst, Kerry Hayes, to harness competitive advantage, players in the printer and peripherals scene have to provide "more for less" to retain customers and favorable customer perception.

"To this end," she says, "vendors are aiming for the "complete customer experience", which translates into added value on the basic offering. Therefore, bundling of packages is growing as a competitive tool, where a "total solution package" is offered - for example: printer, cartridge and operational software are all included in a package. In addition to that, after-sales service and maintenance are rising to the positions of a post-purchase "must"."

The printer and peripherals market is extremely dynamic, Hayes adds, inciting vendors in one technology arena to expand their product offerings to serve the augmented markets previously serviced by only specific suppliers, in a desperate effort to retain market share and brand positioning in the market. "In the words of the famed three musketeers: "all for one, and one for all"," she concludes.