Printers Offer Rainbow of Options

VARs are generally happier with their printer vendors this year than last, according to the 2005 VARBusiness Annual Report Card (ARC). Product Innovation, Support and Partnership ratings are up on average, with some vendors making significant gains.

Here's a category snapshot: Xerox maintained another solid lead in the overall ARC for the fourth year in a row, with ratings that remained virtually unchanged since 2004. Hewlett-Packard earned substantially higher marks in all areas of Product Innovation, Support, Partnership and Loyalty categories to finish second, up from last year's fourth place. Lexmark stayed in last place, while OKI Printing Solutions dropped to third.

"The color market is exploding," says Mike Greenberg, president of Denver-based Printelogy, which sells and services HP, Xerox, OKI Printing Solutions and Lexmark printers. IDC analysts project that color laser printer shipments will grow 16 percent annually through 2008.

Just a year ago, $1,000 was the breakthrough point for SMB color lasers. Today, HP's LaserJet 2600n lists for $399. OKI Data's C9600 printer, starting at $6,800, provides functionality that once cost $20,000, according to the company. But while price cuts are driving replacements, they don't do much for VARs.

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"There's not much profit in hardware unless it's leased," Greenberg says. "The aftermarket is where you make money. Customers want a one-stop shop for services and supplies."

To wit, services may be resellers' salvation, as margins on supplies erode as well. VARs can monitor networked printers remotely, keeping track of page print counts and supply levels. Understaffed IT managers value such help and tend to give their service contracts and supply sales to resellers who provide it.

"There's a lot of buzz about a utility model, where customers don't pay for printers but just for usage," Greenberg says.

Still, when it comes to hardware, Product Quality/Reliability are of utmost importance, and Xerox was rated very highly by its resellers for both. Chris McPherson, a printing-solutions consultant with systems integrator Landmark Systems of Madison, Wis., credits the quality of Xerox's printers for helping his company close more sales.

"If you get Xerox in front of a customer, nine out of 10 times they're going to buy it," he says. "It just has a different feel and functionality."

HP held onto second place in the ARC ratings, mainly on the strength of its Loyalty and Product Innovation marks. The company is aggressively pursuing the small office and workgroup market with products such as the $999 LaserJet 2800 series of color laser multifunction printers.

Security is also on printer buyers' minds these days. HIPAA, Sarbanes-Oxley and other regulations have focused attention on unattended printers and their output. So printer vendors have introduced a variety of security solutions.

Lexmark, for example, responded with a barrage of five new printers, including the C920 color laser, that include ATM-style PIN pads, document encryption, expiration of documents stored in memory after a specified time, and support of enhanced document-accounting software.

Other technologies are also gaining ground. Xerox's C2424 solid-ink printer, introduced in March, has improved print quality and ease of replenishing supplies. It can also fax, print, copy and scan both sides of a page simultaneously with good performance, McPherson says.

But don't count inkjet technology out of the office race. HP introduced its OfficeJet Pro K550 in July, boasting 3,900 nozzles on a one-piece print head. The design enables precise alignment of print-head chambers, nozzles and heating elements. Combined with HP's low-cost Vivera ink cartridges, these print heads could give lasers a run for the money.