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The changing face of office printing

Digital photo printing has been the star child in the printer world of late, capturing most of the spotlight. But according to industry experts, the office printer is regaining favour as new feature sets and usage improvements come to the fore.

Epson marketing manager, Mike Pleasants, claims the office market is sexy once again. Resellers are finding new meaning, expanding their selling opportunities, and pitching an array of product improvements, including better print speeds, colour quality to workplace efficiency and productivity. "The office business need has always been there - since the time of dot matrix printers - but it has been overshadowed by digital photo printing in the last little while," he said. "Not anymore."

Pleasants said resellers needed to brush up on the office category.

He pointed out printer costs were a big drain on the enterprise, and there was still often confusion around printer specifications, the value of laser versus inkjet or even printer versus copier or multifunction device (MFD).

"Office printer growth is starting up again. Organisations need help boosting productivity and keeping costs down," he said. "Product prices have come down, networking features are standard, and the rise of the small office, and even home office, is having a positive impact on the overall market. "Where resellers go now is the question. They aren't making as much money in the photo area, so they have to re-learn their skills about selling office type equipment, printers and solutions."

Features plus

One way to retain office printer business was to create deals locking in contracts for the supplies and paper, offer maintenance, training and support or consulting in the form of printer consolidation, Pleasants said.

HP business printer market development manager, Andrew Cameron, said resellers can pitch a number of services and solutions to the office crowd as part of a balanced printer deployment approach. But be wary of too much printer consolidation, he warned, as it can lead to an inefficient, office environment.

"There are hundreds of solutions, depending on a company's business needs, that the channel can offer," he said. "Offer cost-per-copy solutions, a pay-as-they-use model, highlight a host of new security features, high-speed networking solutions, and forms processing or document management solutions. "In the SMB space, understand the total system sale as opposed to dropping boxes."

Cameron said the office crowd continued to exhibit a strong bias towards laser over inkjet.

"The perception is ink is more expensive," he said. "Consumers in the early days purchased inkjets and were burnt by the cost of cartridges."

Other areas that resellers could tackle were ongoing toner and paper sales and extra trays for special output functionality. "Australia has one of the highest attach rates of after-market accessories. It is one of the biggest areas that partners make money," Cameron said.

According to Lyra Research, worldwide office printing accounts for 60 per cent of total hard copy industry revenue, but it's hardly an untapped market. Its maturity poses a distinct set of challenges to industry players. A recent IDC survey of the mid- to large enterprise category found the top three user requirements were consistent quality of product, meeting business needs, and customer service and support. Survey findings also showed customers were still perplexed about overall printer specifications, colour capability, and key features like duplexing and page volume, IDC peripherals market analyst, Rishi Ghai, said.

"It suggests vendors can't afford to position products by specifications alone," he said. "How well vendors are able to communicate pricing and its channel strength is important."

Resellers needed to educate corporate users about the changing face of the office printer market. "When marketing to the mid- and large enterprise, vendors and resellers need to be aware price isn't the sole criteria. So there's a real opportunity here to avoid a price bloodbath, so to speak," Ghai said. On the hardware front, he suggested resellers continue to pitch laser printers into the office environment.

"Lasers were very significant in 2006. Vendors pushed volumes in the entry-level segment," he said. The mono laser single function device, which has reached the sub-$200 level, increased by 43 per cent in 2006, compared to 9 per cent growth in 2005. Colour lasers are the market standout, with sales jumping by 46 per cent last year.

On the MFD front, the market continued to be segmented into two categories: the copier gang, which typically attracted the mid- to large enterprise; and the entry-level laser targeting the small to medium office environment, IDC peripherals market analyst, Katarzyna Czubak, said.

Both ends of the market saw nice gains in 2006, and she predicted the trend would continue. "There tends to be a balance between the two markets, each meeting different business needs of an organisation," she said.

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A splash of colour

One of the hottest selling points in office printing was colour, Czubak said. IDC saw colour printer take-up grow by 50 per cent last year. Resellers could continue to fuel this momentum, she said.

"Help an organisation understand that colour makes a difference," Czubak said. "Prices are down and it's now affordable to do colour in-house for brochures and pamphlets."

Colour laser MFDs, which have hit the sub-$1000 mark, will experience the greatest growth spurt this year, she said. HP was the first vendor to introduce sub-$1000 models with the rollout of the 1015 and 1017 last October.

Oki Printing Solutions national sales manager, Graham Harman, said the entry-level colour laser was a hot market for dealers. Printing-on-demand, incorporating tasks such as business proposals, was changing the office landscape, he said.

"We're seeing a shift away from inkjets," Harman said. "Although initial inkjet costs are low, the high running costs are prohibitive for many.

"The improved speed, memory, paper quality and colour enhancements of lasers means offices are doing short-run printing in-house rather than outsourcing the tasks."

Colour laser MFDs, which are experiencing an industry-wide market increase of 20 per cent, are making colour a reality for many office environments. "We're most excited about this category," Harman said. "It shows colour is becoming more of a mainstream product.

"Now that colour printers in the laser space are affordable, partners can look at pushing a host of different applications. Think of it this way: the machine is a necessary evil to sell the consumables and the different print applications."

A chosen speciality

One area where partners could get traction was by catering to different types of media, Harman said. The Oki 5000 series had been designed to meet various media printing demands.

"Some prime examples are restaurants, in the form of banner printing; small nursery growers, which need to print pot tags complete with photos; and hospitals, which have a high demand for patient wrist bands," he said.

Kyocera Mita Australia printer product manager, Peter Medak, said partners could also ramp up efforts in the area of digital copiers, networkable laser printers, wide format copiers/printers and multifunction imaging solutions.

Businesses can now get high-performance gear for a fraction of the price from single-function machines up to MFDs, he said.

"There's been massive price erosion. Colour, in particular, is much more affordable," he said. But while colour is big, it's not as big as analyst projections, HP's Cameron said.

"Colour is more the way of the future in the office environment," he said.

Oki's Harman said another big opportunity for dealers to take advantage of was the fact that the printer buying decision was now in the hands of the IT person. This scenario made it easier to get a foot in the door and an understanding ear.

"There's a big opportunity for partners because the traditional buying lines are diluting," he said. "The purchasing decision is back to the IT guys for office printing. It is no longer the office manager or administrator, who typically buys the stationary and photocopier."

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To the edge

Some recent product advancements are also set to shake up the office printer market. Market leader, HP, is hoping its Edgeline technology will give resellers something new to talk about. Essentially, the technology puts more ink nozzles on to the print head so units can spray ink faster and at higher densities than seen before. It is being pitched as a real alternative to office printing, producing laser-like image quality and performance at lower running costs.

According to the company, the ink-based printing engine is designed with printheads that span the width of a page, which means the paper moves, not the printhead. For increased printing speeds, edgeline printers use large, stationary printheads - arranged in a line - to dispense ink across the entire width of the page as the paper passes beneath them. The company said the result is more accurate ink-drop placement and fast, crisp, printshop quality output.

HP expects to lower the total cost of colour inkjet printing, compared with department-class colour laser MFPs. With printer costs a big drain on most enterprises, technology advances like edgeline would be good news for users, particularly in the mid-market space, the vendor claimed.

While some analysts say the technology will create even more intense competition in the mid-market enterprise print sector, IDC's Ghai said he was unsure how the strategy would play out in the local market, or what it would mean in terms of local product releases. "It's not a new technology," Ghai said. "It's a new way of doing the same thing. It may be faster and the TCO is good, but I haven't seen any shipments yet, and it's hard to say how end users will react.

"We find end-users are resistant to any kind of new invention attached to the devices, particularly larger places that are on a contract."

He suggested edgeline could potentially cannibalise HP's own entry-level mono laser market.

"It's not a bad strategy to cannibalise one's own product rather than have the competition do it," he said. "Certainly, edgeline is an important strategy, but how it chooses to play with it remains to be seen."

Office workhorse shines

Workgroup printers are also experiencing a revival, according to Fuji Xerox Printers operations manager, Paul Harman.

The vendor recently released a model which caters to the small workgroup environment (the Phaser 3428), along with a colour laser network printer that's designed to be an office workhorse (the DocuPrint C3210 DX).

Harman said some top value-added features of the Phaser 3428 include standard automatic duplex (two-sided) printing, watermarks, N-up, posters and booklets, plus USB, parallel and Ethernet 10/100Base TX at the ready, which translates to quicker turnaround times, improved productivity and low running costs.

In the workgroup space, top of mind concerns were high print quality, a small footprint and low TCO which maximized office resources and efficiency, he said. Workgroups of all sizes would particularly like the new direct transfer imaging system feature for vibrant colour built into the DocuPrint C3210 DX, which provides crisp, accurate documents with the touch of a button, Harman said.

Fuji Xerox is seeing 130 per cent overall growth in year-on-year revenue, which he attributed, in part, to the recent vertical segmentation of the business. Resellers are now urged to position product in five key areas: SOHO, SME, general office, government and graphic arts.

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In the workgroup category, Harman said the technology trend was to offer lean and mean machines in terms of productivity functionality. "User feedback still revolves around offering a smaller footprint," he said.

IDC's Ghai said vendors were rising to meet the demand for workgroup printers in the mid-market. Vendors that typically played on price, and aggressively targeted entry-level users, were now introducing mid-range workgroup gear in a bid to stay competitive and broaden the product portfolio.

Going green

"HP is big and mighty and very aggressive in the entry-level, so vendors will need to build their portfolios. It is a necessity for vendors," he said. A focus on the environment would give resellers something new to talk about, particularly in the government office arena, Fuji Xerox' Harman said. "While the general office and government can be quite close in terms of desired features, there are tighter requirements for environmental initiatives," he said.

In government, resellers can educate users on the use of solid ink, which reduces landfill waste and cuts down on costs. Harman said solid ink fills 2kg of landfill per 100,000 pages, compared to 71kg of landfill for the traditional laser-based product creates.

"It improves the environmental price per copy and general flexibility," he said. "We're working with our partners about solid ink and the messaging. It's a well guarded secret."

Unlike Harman, HP's Cameron said he saw quality issues with solid ink technology.

"When you take a weak technology, and give it an environmental spin, it all sounds good," Cameron said. "In some ways, environmentalism from the printer perspective, for some, is being used as a marketing spin."

Kyocera's Medak said there were many benefits of pitching a going green approach when it comes to printers.

"There's a real burden that business activities can place on the environment," he said. Lightening the load are printer technology advances like long life parts, chrome-free, lead-free materials, and biodegradable packaging (including the use of recyclable, non-toxic ink on the packaging and no foam and use of paper pallets).

Whether resellers beat the environmental drum or tout printer consolidation and specific feature sets, analysts agree the big area of opportunity for partners is in educating office users about what's out there, and the importance of finding the right mix of print hardware and software solutions.