Print 2011: margins and opportunities

Printers are not on the way out. It's as simple as that. MATTHEW SAINSBURY looks at how the sector will shape up in 2011 - and where the opportunities lie.

As much as we’d like to think we’re headed towards a paperless office (for the environment’s sake, if nothing else), printing will still be a significant part of normal office life in 2011. Documents at work, photos at home, guilty pleasure or absolute necessity, the explosion of content and data on the Web and elsewhere has meant printers will be as important to organisations and individuals as ever.

Within that context it is amusing that some customers are looking at being ‘green’ with their printers acquisitions by purchasing less energy. Vendors such as Dell are happy to oblige.

Dell software and peripherals brand manager, Ben Guthrie, said 2011 would be a year in which LED technology took off for this reason.

“We’ve recently launched a whole range of LED printers that are laser class, but by utilising LED technology it’s enabling us to have few moving parts, quite a reduced space and footprint in terms of the physical size of the unit itself, and more importantly the device itself is using less power," he said.

“I think for years now people have been speaking about the paperless office. If you actually look at the consumption rate of paper and those kinds of things it has only really skyrocketed even as the level of computerisation across the industry has become higher and higher.”

Eventually, we will get to a situation where the paperless office is a genuine possibility, Guthrie said, but not in the short, or even medium term.

“Not within my working lifespan, I would suggest,” he said. “The amount of value that businesses and people are putting in that information becomes higher and higher, and a hard copy is still a hard copy.”

So with printing firmly established as a part of life, the question becomes what are the various vendors in the industry looking at bringing to market over the next year? And, just as importantly, in a margin-starved industry on the hardware side, what are the vendors doing to encourage and develop their channels?

Hardware developments

Loss leading is an apt way to describe the hardware sell in the printing space. If you are a vendor that offers a margin on the hardware side to resellers, it’s hardly going to be sufficient.

It’s a fact of life that the money for the channel in printing lies with the consumables and services story.

But the good news is that there is plenty of new hardware coming through that can either open up new conversations with existing customers, or pull new customers away, perhaps, from competitors.

Konica Minolta is reckoning on a increase in colour and printing speeds on the lower end of the spectrum, and on the higher end the introduction of a inkjet printer that would be quality enough for the kinds of documents that we would receive in the mail as correspondence from various organisations, and this will cannibalise away part of the colour toner monopoly.

So between inkjets, LEDs and toner printers, there is going to be plenty of options for the customer – and leading opportunities for the partner that are backed with an increasingly varied range of services to provide the profit.

“We just need to be in a position where there is margin left in it for the resellers on the consumables that are bundled in with the equipment,” Konica Minolta national marketing manager, David Procter, said.

Page Break

“We have an operation within our business called Optimised Print Services, which is a traditional MPS structure. We’ve only recently entered the market with this form of MPS, but its providing everything from the most elementary level of it, all the way up to a full-featured fleet management reporting, invoice consolidation and consumable ordering.”

An increasing interest in the mobile print space and cloud computing is also helping to give the reseller a new carrot to dangle to the customer. Previously a tricky proposition, a number of vendors are offering the ability to print directly from smart phone devices.

There’s an explosion of smart phones in the Australian and New Zealand landscape, according to HP vice-president and general manager, imaging and printing group, south pacific region, Richard Bailey.

“Most of those phones have email services and they want to be able to print off those documents they receive but on a mobile basis,” he said.

“ePrint is simply the capacity for a printer to have an email address, and people can email a document to that email address, the document will go to the cloud and turned into a printable file, and it can be printed very easily without the need for a driver.”

HP has also extended this functionality into the large corporate environment with an application for Blackberry phones allowing users within the firewall to print to any printer in the network with mobile printing enabled.

And it seems to be that application play that the partner community can get most excited about, simply because it enables a host of service opportunities. Take Upstream for example – the managed print provider is banking on the applications proving the best solutions into the future.

“Smart phones are an integral part of business now and it’s the apps that are the great thing behind those phones,” Upstream Solutions general manager, Theo Popescu, said.

“The big thing for us is things like ‘follow me printing’ – swipe card solutions integrated into existing proximity cards, building passes and the like that allow dor departmentalised billing, carbon footprint analysis and the like.

“Other things can be like barcode recognition, document recognition for verticals such as logistics and manufacturing that integrate into archival systems, and document management systems.

“The success from Upstream’s POV is moreso from a device agnostic perspective – not so much on the hardware, it’s finding a holistic approach and finding the right device for the right job.”

Where the margin’s at

And those resellers that embrace that services approach do find very healthy end margins, according to Lexmark.

“I think more and more, solutions are a very generic and broad sort of term, but at the end of the fundamentally a good solution drives some sort of value and people are still prepared to pay for that,” Lexmark channel and SMB manager, Stephen Bell, said.

“If you bring it down to a commoditised transaction where someone is just looking for a box at the cheapest price, then obviously the margin opportunities at that end of the scale are significantly less.”

So 2011 should be a good year for printers, both from an end user, who will have a whole new range of products and applications to choose from, and vendors and their partners, who will have a whole range of new topics of discussion to have with those end customers. It might be almost to the point of loss-leading in terms of hardware, but resellers need not hang up those boots just yet.