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PRINTERS/SCANNERS
For every assurance that the paperless office has arrived, research houses like Gartner suggest that $96 billion of the world print market spend is still going to office document printing. And while you'd find nary an IT executive who'd disagree that print solutions, like all peripherals, can't just be boxes and must be part of overall solutions, that idea of the solution could mean anything from smart multifunction products (MFPs) to document management.
Document management itself is the area surveyed solution providers see, definitively, as the greatest opportunity in print and imaging to attach services. The technology continues to attract serious VAR attention, as well as attention from HP, Oki Data Americas and Xerox Corp. to Laserfiche, eCopy and newcomers like GoScan. The paperless office? Not such a myth after all.
"The No. 1 thing that these guys and end users are looking for is how can they save money in their operation," said Oki Data's Paralis. "People are going to shop around a lot and when they do spend money, they're going to spend it wisely."
"People look at their print and imaging fleets as the last unaudited costs in IT," said Tom Codd, director of marketing, worldwide sales and services, Imaging and Printing, at HP. "But you have a new breed of workers coming in for whom printing isn't second nature. We have to look at more energy-efficient devices."
A few things VARs can agree on: Price, functionality and margin opportunity remain the most important considerations when choosing printer/scanner products, and yes, MFPs, more than any other products in the space, are claiming the limelight. Solution providers see some of the greatest sales increases and the best profit opportunities over the next 12 months in this category in networked multifunction printers and networked color printers.
"Three years ago, it was the move from black-and-white to color. Now it's the move to MFPs," said Vincent DiSpigno, co-owner of Webistix, a Holbrook, N.Y.-based solution provider. Xerox and Ricoh remain his preferred vendors.
"With Ricoh, it's the value product line, and Xerox, the high-end quality product line," DiSpigno said. "I look at others from time to time and they promise this and that, but we're an Apple specialist, and both play well with Macs."
Both Xerox and Ricoh ranked in the top four preferred vendors when solution providers were polled as to how willing they were to sell or recommend specific brands. Oki Data, which in 2008 waved goodbye to retail sales, is also up there. But it's still a matter of HP dominance: Seventy-four percent of VARs polled described themselves as "extremely willing" to sell HP printers--nearly twice the number of "extremely" votes for any other vendor. HP was also tops in the brands VARs said offered the best profit opportunity, at 56 percent vs. Xerox (19 percent) and third-place Canon (18 percent).
It was Xerox that outscored HP in the printing category in Everything Channel's Channel Affinity index in November--measuring what VARs see as important to channel business.
"[Xerox is] definitely putting resources into the channel and providing us with the tools we need," said Kevin Morse, senior partner at Deerfield Beach, Fla.-based solution provider Questing House Technology Partners. "They allow us to open up a lot of opportunities." As for Xerox's ability to siphon some of HP's print market share in 2009, "It wouldn't surprise me a bit," Morse said. "In fact, I expect it."
"HP is our biggest, but that has nothing to do with whether we want that or not--the name sells itself," said Keith Donnagin, president of MCO Computer Supplies, a Glen Burnie, Md.-based solution provider. "Xerox treats us right, and they treat their customers right. Everybody's selling HP, so they don't need to do anything special for the small guys out there."
"We do have an opportunity to leverage this channel to grow market share, particularly in SMB," said Gary Gillam, Xerox's vice president of North American channel operations. "We're encouraged that a lot of these partners are saying we've got to make the move now--the economy seems to be driving a sense of urgency to embrace and transform business."
For its part, Gartner's print analyst team sees a lot of consolidation in the segment for 2009 and beyond. At Everything Channel's 2008 Print and Imaging Summit in Bonita Springs, Fla., in December, Gartner research director Don Dixon suggested Canon had the most to gain by M&A, and that its channels were being "attacked" by its competitors.
"I've advocated some kind of [agreement] between Canon and HP, modeled off the Fuji-Xerox venture. They have complementary product sets," Dixon said at the time.
One to keep an eye on, Gartner analysts agreed, is Lexmark, which cut ties with some of its channel leadership in 2008.
"We need to ensure our organizational structure is aligned with our business goals. In today's economic environment, we need to be vigilant in optimizing operations," said Marty Canning, Lexmark vice president and president of its Printing Solutions and Services Division, in a statement to VARBusiness. "In regards to our focus on the channel, we believe that these changes protect our ability to cover and service existing and potential customers, while at the same time improve our efficiency."
"There's going to be another major acquisition in the next couple of years, unquestionably," Dixon said. "I've advocated for Lexmark to be acquired. They're over a barrel, if you will, and in a precarious position."
It was Ricoh that made the big M&A splash in the second half of 2008, acquiring Ikon Office Solutions Inc. in August. In an interview, Ricoh executives said its channel commitment is as strong as ever, despite the fact that recently consolidating its printer divisions meant the forced exit of former senior vice president and channel chief Ann Moser--one of the most visible channel veterans in the printing and imaging space.
"Our direction never changed even if there were organizational changes," said Matt Sakauchi, head of the Office Printer Business Group and Ricoh's de facto channel chief. "We're going to reinforce our channel support this year. Nothing has been changed."
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