The future of office print

Posted on Mar 7 2016 - 8:05am by John Peters
RATING

We asked leading vendors and resellers for their thoughts on office printing in 2016.

Over the next fie pages we consider their answers to the questions ‘What printer features/qualities do you think will be most important to printer buyers in 2016?’; ‘What factors do you think will have the biggest impact on printer and consumables sales in 2016?’; and ‘Do you think the printer industry is ready for a new wave of consolidation?’.

We asked our panel of print experts to rank six qualities of modern print devices in order of their importance to buyers; to explain their choice of Number One (reproduced under the headings below); and to suggest any other feature they thought should be on our list.

Total cost of ownership (TCO) came out as the most important feature overall. The cost of printing has always been a priority for buyers, but whereas in the past decisions were based on the ticket price, today buyers are more likely to look at the total cost of ownership – no doubt due in part to the rise in managed print services and new sales models like Epson EcoTank printers and HP’s Instant Ink subscription service.

After a year of security breaches, it is not surprising to see such a high ranking for security, which has pushed mobility – such a big topic in 2015 – into third place. In addition to the risk of printed documents and electronic data falling into the wrong hands, modern networked devices, many with built-in hard disks, are a potential point of weakness in an organisation’s network defences.

Sustainability has been falling down the agenda since 2008/2009 as organisations have made cost-cutting their priority. Its position at the foot of the table might also reflect awareness that tackling TCO will ipso facto benefit the environment through reduced waste and fewer pages printed.

In the future, PrintIT Reseller expects to see a higher position for ‘Expandability through printer apps’. Modern, internetconnected devices with large touchscreen displays are ideal platforms for highly focused apps. Choice is limited today, but 2016 should see a noticeable rise in the number and variety of printer/document apps offered by suppliers.

– TOTAL COST OF OWNERSHIP

Total: 37

Average ranking: 2.5

Range of rankings: 1-6

Median: 3.5

Mode (most selected ranking): 3

Summary

All contributors bar one ranked TCO in the Top Three of buying considerations.

“Total cost reduction through managed print services and output management solutions for cost control is a perennial priority. While there is on-going price erosion of hard costs, customers are looking to reduce the associated TCO even further by connecting MFP technologies, such as imaging, to improve business processes, thereby reducing process costs and/or shortening cycle times to benefit cash flow and customer service. Incorporating MFPs with video conferencing and document management and turning them into collaboration solutions is another example of how enhancing employee productivity delivers ROI.”

Jason Cort, Director of Product Planning and Marketing,Sharp UK

“Cost is always going to be the main priority for businesses when it comes to print. There’s constant pressure to drive down the costs associated with suppliers and IT. Increasingly, businesses want print services to be fully integrated with their IT estates – something that many print resellers struggle to do.”

Joe Doyle, Marketing Director,Annodata

“Although essential, print is not a business priority. However, it does put a hidden and significant burden on businesses. In 2016, smart businesses will realise this and seek help from vendors to address it. This is a wise move, given that

Francis Thornhill, Product Marketing Manager,Canon

Francis Thornhill,
Product Marketing
Manager,Canon

printers and consumables represent only 10% of the total cost of print. The remaining 90% is hidden, caused by device and consumables management (15%); collating and producing finished documents (25%); and handling, managing and searching for print and digital documents (50%). Data protection and flexible working practices with cloud and mobile technology might further increase these costs. This year, vendors will innovate faster, with new technology, software and services optimised to address the hidden costs of print.”

Francis Thornhill, Canon Product Marketing Manager

– SECURITY

Total: 47

Average: 3.1

Range: 1-5

Median: 3

Mode: 4

A series of high profile security breaches propelled security up the corporate agenda in 2015. This has implications for network printing and ensured that ‘security’ garnered as many Number One placings as TCO.

“Security is a growing concern, yet it is still often overlooked. According to research conducted by the Ponemon Institute in partnership with HP, 56% of enterprises ignore printers in their endpoint security strategy. HP has designed a range of printers that aim to bridge this gap and help customers protect their print environment.”

Gary Tierney, UK & Ireland Printing Category

“Security is now high on the list of priorities for CIOs and IT Directors. More and more are realising that products used in the day-to-day working lives of employees can serve as open gateways if not secure. We’ve made security a core

Andy Johnson, Head of Product Management, Brother UK

Andy Johnson,
Head of Product
Management,
Brother UK

characteristic of our printer models by including features like enterprise authentication, encryption, scanning and workflow security that give peace of mind to IT Directors.”

Andy Johnson, Head of Product Management, Brother UK

“Government mandates and regulations are forcing organisations to re-evaluate how they protect information. From SMEs to enterprises, organisations are taking a closer look at their print and document workflow environments to ensure they adequately safeguard information. At the same time, employee demand for mobile print support has increased the pressure on IT departments to open their networks to mobile devices. The challenge is to achieve this without inadvertently exposing networks to malicious individuals and the operational and brand damage a security breach can bring.”

Simon Hill, Sales Director UK & Ireland, Nuance Communications

– MOBILITY

Total: 53

Average: 3.5

Range: 1-7

Median: 4

Mode: 3

A key trend in 2015, mobility has latterly lost ground to security. Nonetheless, it remains a major consideration.

“Workers who opt to use their own smartphones and tablets for internet connection (BYOD) don’t want to have to return to a desktop PC to print or scan. They want to print web pages, PDFs and photos straight from their mobile device to save time and eliminate inconvenience.”

Jonathan Whitworth, Managing Director, DSales (UK)

“Two thirds of people now own a smartphone, using it for nearly two hours every day to browse the internet, access social media, bank and shop online. Mobile devices are also inflencing working habits. The wider adoption of smartphones

Bernard Cassidy, Head of Marketing, Konica Minolta Business Solutions (UK)

Bernard Cassidy,
Head of Marketing,
Konica Minolta
Business Solutions
(UK)

and tablets, coupled with commonplace mobile working practices, have created a strong demand for mobile printing solutions.”

Bernard Cassidy, Head of Marketing, Konica Minolta Business Solutions (UK)
– EASY OPERATION/SERVICING

Total: 65

Average: 4.3

Range: 1-6

Median: 3.5

Mode: 5

As printers become cloud-enabled document hubs, ease of use is essential if users are to make full use of their capabilities.

Nigel Allen, Marketing Director, KYOCERA

Nigel Allen,
Marketing Director,
KYOCERA

“Having access to documents is a key driver as the Bring Your Own Device (BYOD) trend is becoming more prevalent across organisations.”

Nigel Allen, Marketing Director, KYOCERA

– EXPANDABILITY THROUGH PRINTING APPS

Total: 73

Average: 4.9

Range: 1-7

Median: 4

Mode: 7

Solutions platforms and touch-screen displays enable modern MFPs to run printing apps, bringing new capabilities to end users.

“Total Cost of Ownership will always be a key consideration. However, in recent years we’ve witnessed a shift as buyers look to differentiate their offering and integrate apps into services/devices and create benefits for their business. The benefits of innovation and app integration often outweigh the cost saving that has traditionally been prized.”

Mark Ash, Head of Print, Samsung Electronics (UK)

– SUSTAINABILITY

Total: 79

Average: 5.3

Range: 3-7

Median: 5

Mode: 6

Sustainability is very low down on the list of priorities. No one put it first and only one person listed it in their Top Three. Four out of five gave it a Bottom Three ranking.

– OTHER CONSIDERATIONS

In addition to our list of six features/ qualities, we invited participants to suggest and rank one additional feature. Two thirds took up the offer, with four giving their suggestion a Number One ranking.

Jeremy Spencer, Marketing Director, Toshiba TEC, selected Saas:

Jonathan Whitworth, Managing Director, DSales (UK)

Jonathan Whitworth,
Managing Director,
DSales (UK)

“As more businesses move to cloud-based applications, such as Microsoft 365, Amazon S3 and Google Drive, to produce a more flexible and cost-effective IT infrastructure, the need for all forms of software to be offered as a subscription has increased. I expect to see more capture and document management services being demanded with paid monthly subscriptions.”

Panasonic European Marketing Manager Carlos Osuna gave top billing to Cost Performance – the link between unit price and print speed: “Regardless of the vendor or brand, printer units tend to be very stable from a quality, reliability and operability standpoint. The print buyer is focused on cost as the most important factor, whilst the user is focused on print speed. Finding a balance between the two is key.”

Ziyad Hareshe, BPO consultant, Danwood, prioritised features that aid Digitisation:

“Whether private or public sector, SME or multinational, we are seeing digitisation and a desire to go paperless at the forefront of our customers’ thinking. The overall driver being to free up space, reduce paper storage and ultimately the property portfolio. However, cost is still a key factor, so these solutions need to be

SUMMARY

Businesses still have a need to print and many people like to work with paper. Yet, there is no doubt that the printer industry faces significant challenges that threaten the existing revenue model. Foremost among them is digitisation and the replacement of paper-based processes with electronic workflows. For obvious reasons, more than half of our experts picked this as the Number One challenge facing the printer industry.

In second place are the printing habits of Millennials, who are entering the workplace with none of the emotional attachment to paper (or learned printing habits) of previous generations.

An uncertain economic future – EU referendum, anyone? – continues to prey on the minds of printer suppliers who are still feeling the effects of the last recession in the form of longer replacement cycles, although this could also be a symptom of falling print volumes.

The threat to the status quo posed by business inkjets – a low cost, eco-friendly alternative to laser printers – is shrugged off by our experts, with only HP giving their disruptive potential the recognition it deserves. Third party consumables also get short shrift. This could be due in part to affordable and present a good ROI.”

Steve Hawkins, Group Managing Director, Xeretec, pinpointed Business Intelligence/Analytics as the main factor in buyers’ choices:

“Business intelligence and analytics will underpin many decisions made by companies in 2016. This applies to print, too, as having a better understanding of what is being printed and why will enable organisations to identify how to manage and control the other six important considerations on the list.” many OEM vendors’ participation in the compatibles market (to help them deliver vendor-neutral managed print services).

– Digitisation

Total: 27

Average: 1.9

Range: 1-5

Median: 3

Mode: 1

No argument, digitisation is the greatest threat facing the printer industry. Only one contributor ranked it lower than third place in importance, with more than half selecting it as the Number One factor affecting printer sales.

“As more of us are now consuming our data on mobile devices and smartphones, less and less is being printed. Print will continue to be at the heart of business communications, but it is not always necessary at source. At Toshiba we look not just at how information is printed, but also how it is recorded, shared, managed and displayed. This strategy is at the heart of what we do to support burden removal and process optimisation.”

Jeremy Spencer, Toshiba TEC

“In the education sector, our research shows that digital convergence is a key driver when it comes to buying devices and that 62% of teachers think technology is a key differentiator for them as an institution. On a more general level, we think that providing workflow enhancements with HyPAS apps will be key, as it enables multilocation and improves productivity.”

Nigel Allen, KYOCERA

“Although there will always be a need for printing, with cloud moving from a buzzword to reality, print habits and the need to print are starting to be looked at differently.”

Tony Burnett, Altodigital

“It’s no big secret that sales of consumables and print hardware are on the decline. By Gartner’s estimates, the market is going to drop by 30% by 2019. There are a lot of reasons for this, but digitisation plays a big role. The printed page isn’t going away any time soon, but people are becoming smarter about how they store and access their information. Digitisation of workloads will lessen businesses’ reliance on print, which means that print suppliers need to diversify to cover the entire spectrum of document lifecycle management.”

Joe Doyle, Annodata

“Despite a growing trend towards a paper-less office environment, many organisations are still driven by manual processes and paper. 2016 should see more organisations transform time-intensive manual processes and digitise paper, which is the key to making information more available and more useful. Working in a new way will reduce the cost of producing, storing and distributing content. It will create flexibility, leading to efficiency improvements, increased productivity, improved collaboration and increased profit.”

Bernard Cassidy, Konica Minolta

“I think digitisation will continue to cause transition in the market. I don’t envisage a day when businesses are entirely paperless, but what we are likely to see is a shift from single-function devices to multifunction ones. The colour laser market is already split 50:50 between the two and in 2016 we expect multifunction to take the lead, with the mono market following soon after.”

Andy Johnson, Brother UK

“Our customers’ desire to go digital is the biggest factor likely to impact the industry. They are starting to become more efficient and will be looking for further cost reductions and efficiency gains. Printing is seen as one of the quickest and

Ziyad Hareshe, BPO consultant, Danwood

Ziyad Hareshe,
BPO consultant,
Danwood

easiest ways to do this. At a high level, our customers are looking to become more like Information Brokers, with a strategic vision to make information their main asset. Digitisation allows them to do more business with fewer physical assets.”

Ziyad Hareshe, Danwood

“As organisations look for ways to lower costs, increase productivity and maintain organisational security, they will continue to add, evolve and enhance processes to digitise content. Digital content is easier to access, automate and secure, as it can be better incorporated into BPO and other organisational automation processes. It makes it easier for users to find information and incorporate it into their work streams, while maintaining the ever increasing security regulations and mandates applied to business. This increased automation and reliance on digital content will have a broader and more immediate impact on business.”

Simon Hill, Nuance Communications

– MILLENNIAL PRINT HABITS

Total: 42

Average: 3

Range: 1-6

Median: 3.5

Mode: 2

Many of those who see Digitisation as the main industry threat, put Millennial Print Habits in second place.

“Millennials will make up over 75% of the global workforce by 2020 and already we are nearing the halfway mark. These digital natives have workplace demands that will need to be fulfiled for them to achieve their full potential.”

Jason Cort, Sharp

– ECONOMIC UNCERTAINTY

Total: 57

Average: 4.1

Range: 1-7

Median: 4

Mode: 4

Economic uncertainty continues to trouble industry insiders. Steve Hawkins of Xeretec put it in first place, tied with MPS (see below).

– LONGER REPLACEMENT CYCLES

Total: 62

Average: 4.4

Range: 2-7

Median: 4.5

Mode: 4

No one picked longer replacement cycles as the main challenge facing the industry, but it was seen as a middle-ranking threat by almost all contributors. This gave it a higher overall ranking than factors with a broader range of scores like third party consumables and business inkjets.

– THIRD PARTY CONSUMABLES

Total: 63

Average: 4.5

Range: 1-8

Median: 4.5

Mode: 6

Third party consumables turned out to be the Marmite option. It divided people like no other choice, generating as many Top 3 rankings as Bottom 3 placements.

“For all vendors, consumable sales are the main source of profit. The use of third party consumables can have a big effect on a business model.”

Carlos Osuna, European Marketing Manager,Panasonic

Carlos Osuna,
European Marketing
Manager,Panasonic

Carlos Osuna, Panasonic

“Third party consumables continue to grow with more manufacturers looking to make a quick profit. But the reality is that these companies don’t invest in extensive product Research & Development, as money spent can’t be recovered unless there are genuine OEM sales. As a result, third party consumables are often of poor quality. The public are often unaware of this and understandably focus on getting a cheaper product. It’s our job to educate them on the benefits of purchasing consumables from the manufacturer of the device.”

Mark Ash, Samsung

– BUSINESS INKJETS

Total: 73

Average: 5.2

Range: 1-8

Median: 4.5

Mode: 6

Another threat that divides opinion, though not to the same degree as Third Party Consumables, is business inkjets. These have made big inroads into the printer market in the last two years and further growth is expected. Yet, most vendors are downplaying the threat with twice as many giving them a ranking of 6, 7 or 8 as 1, 2 or 3.

“HP has three exciting technologies that underpin its printing portfolio, and our customers have the option of building a fleet with products from the OfficeJet Pro line up, LaserJets and the new OfficeJet X series products powered by PageWide

Gary Tierney, UK & Ireland Printing Category Director, HP

Gary Tierney, UK
& Ireland Printing
Category Director,
HP

Technology. This choice includes business inkjet options that can transform print costs for many customers. In addition, many businesses are moving their print management to 3rd party providers who can provide the servicing, solutions and support to optimise the way a business prints. These two factors are shaping the way that business print.”

Gary Tierney, HP

– PRODUCT MATURITY/LACK OF INNOVATION

Total: 83

Average: 5.9

Range: 3-8

Median: 5.5

Mode: 7

Product maturity/lack of innovation is seen as the least serious threat, receiving no fist or second place rankings.

– OTHER THREATS

In addition to the factors suggested by PrintIT Reseller,contributors highlighted a few game changers of their own, including MPS. “With the continued evolution of Managed Print Services (MPS), the demands of print-savvy customers are

Steve Hawkins, Group Managing Director,Xeretec

Steve Hawkins,
Group Managing
Director,Xeretec

becoming increasingly sophisticated. They are demanding tighter controls, reduced printing costs and better service delivery, whilst insisting on improved security and mobile print functionality. These requirements, compounded by ever-tightening control of what is being printed, especially in the colour arena, will have a big impact on printer sales and we anticipate that consumable sales will continue to decline. A supplier’s ability to deliver effectively against a customer’s MPS needs will be key to combating declining print and consumable sales.”

Steve Hawkins, Xeretec

“For the smaller sized printer manufacturer, the printer business is no longer a profitable business as the price of the main unit is decreasing, yet development costs are not. The print volumes for the lower speed models are too small to bring enough profit through consumable sales to compensate for this.”

Carlos Osuna, Panasonic

“Absolutely! Today, more and more businesses are looking towards the Connected Workplace to enable efficiency and mobility within the office. Due to this, the print industry needs to adapt its offering to stay up to date with this concept, but in order to do this it comes at a Research & Development cost, which will in turn cause consolidation within the industry. Samsung is well placed to push on with this as we are a leader in mobility, and by using open source technology it means that any device can be connected to our printers, which will help to bring the Connected Workplace to life.”

Mark Ash, Samsung

“Anyone in the print industry who is not willing to adapt to change or embrace new technologies runs the risk of quickly falling behind the times and not being able to fulfil client needs.”

Tony Burnett, Altodigital

Tony Burnett,
Altodigital

Tony Burnett, Altodigital

“Yes – there are a few consolidations happening at the moment, with a shift to contractual print management, which is preventing some of the market competition from staying competitive, as well as new technology introductions that are making some vendors obsolete. There is a huge amount of innovation in the market from HP which puts pressure on our competition to keep up. The challenge is really just how quick any consolidation will be.”

Gary Tierney, HP

“Several of the large enterprise-focused printer manufacturers will most likely continue to lose influence in the office printing market in 2016, as they increasingly become orientated towards workflow and business process services. This will

Jason Cort, Director of Product Planning and Marketing, Sharp UK

Jason Cort,
Director of Product
Planning and
Marketing,
Sharp UK

eventually give way to some degree of consolidation in the market, contributing to a reshaping of the landscape for the office printing industry in particular. So, in short, yes; it is time for a new wave of consolidation, for a focus on cloud adoption and for a more streamlined offering in the printer market.”

Jason Cort, Sharp

“I suspect that we are going to see much more M&A activity over the coming year, driven by the market’s shift to cloud and end users’ preference for providers that can offer multiple services. A lot of print resellers that haven’t developed a cloud proposition yet will find it difficult to maintain their margins and may put themselves up for sale. Similarly, resellers that can only really offer one service are going to start to lose business to multifaceted suppliers, so there’ll be some big changes in the market.”

Joe Doyle, Annodata

“Without a doubt, there are significant forces that are driving change and evolving customer requirements. The resulting pressure on hardware and traditional service revenue and margins means consolidation is round the corner. For those that are willing to innovate, there are significant revenue and margin opportunities from new services, as well as document and business process optimisation.” Francis Thornhill, Canon “2016 will see several Managed Print Service specialists adding IT services organisations and capabilities to their armoury, through acquisitions. Meanwhile, resellers covering the market will continue to consolidate to realise the benefits of economies of scale. This will enable them to further invest in their capabilities to deliver services for a wider market and meet ever more sophisticated customer requirements.

Therefore, coverage of the market will largely fall to independent resellers, with print and multifunction device manufacturers focusing on the largest accounts and developing associated products, services and solutions to meet customer expectations.”

Steve Hawkins, Xeretec

“Current business trends, such as globalisation, and the growth of new technologies, such as cloud computing and mobile, create an environment of increased innovation and competition. As established and up-and-coming companies

Simon Hill, Sales Director UK & Ireland,Nuance Communications

Simon Hill, Sales
Director UK &
Ireland,Nuance
Communications

prove the value of their solutions and increase additional customers, the market will gravitate to those who can provide the best solutions, customer support and innovation. It is only natural that as new technologies and services progress from being disruptors to incumbents, the market shifts and consolidates around them. This process is likely to be accelerated as the economy recovers.”

Simon Hill, Nuance Communications