Riding the convergence wave

Riding

the convergence wave

The Printer

market is in the throes of change in more ways than one. When Inkjet Printing

technology star­ted making its presence felt in emerging markets like India, in

the early 1990s, the print techno­logy landscape slowly changed. Then came

laser printers and now MFDs. Over the years, prin­ters, from being just

peripheral document output devices, beca­me a key compo­nent of the enter­prise

IT spend-driven by escalated print costs due to ever-growing print and copy

volumes.

Convergence, from a buzz­word,

has now become a reality. It's happening across domains-through devices like

notebooks, mobile phones, et al. Printers too are riding the convergence wave

with the offering of Multi Func­tional Devices (MFDs). Popularly called

All-in-Ones (AIOs), the MFDs are ushering in a new print paradigm. This is so

because after ages of inattention enter­prises across the world are taking a

closer look at increasing print costs, and are grappling with ways to contain

them. It is a wake up call for CIOs who were so embroiled in larger IT issues

that they failed to keep tab on print management. However, that's changing

now. And a look at the scheme of things over the last one year shows the growing

stature of print management, as a result of which 'RoI on Print' is gaining

attention.

Market dynamics



MFDs have matured into a definite and hot segment in the peripherals space

in the last two years. When we look at the adoption of these converged output

devices by enterprises, it is Laser MFDs that rule the space. A closer look

reveals the market segmentation of Laser MFDs across four types of output

speeds, measured in 'pages per minute' (ppm): The entry-level Laser segment

is characterized by 1 to 20ppm; segment two starts with 21 to 30ppm speeds;

while the higher segments are MFDs that cater to 21 to 44 ppm and 44 to 60ppm. A

typical entry level Laser MFD starts from Rs 14k, and the high end models can go

up to Rs 2.5 lakh. On the technology side, vendors offer two kinds of products:

printer-based and copier-based (also called digital copiers).

The Indian printer market is

unique in many ways. For one, the technologies used are diverse and range from

Impact to Thermal printers. Though the impact printing market in the West has

become smaller over the years-it is on a growth path in India-thanks to

players like TVSE, Epson and WeP. Standal­one Inkjets are a volumes seg­ment,

and during 2004-05 India consumed around 689,391 Ink­jets and 258,512 Lasers,

against 226,508 Inkjet MFDs and 52,513 Laser MFDs. There is still a huge gap

between standalone and MFD device shipments. But MFD volumes are ramping up fast

and in the days ahead will make a dent into the standalone printer market.

However, some in the industry say it is too early to talk about this

cannibalization effect. According to Samir Shah, Country Category Manager,

shared printing and connectivity, HP India: “MFDs will play a bigger role in

the coming years and other technologies will also co-exist. MFDs have given more

freedom of choice in terms of technology and they are clearly value enablers in

an enterprise's output device management strategy.”

Kuldeep Malhotra, General

Manager, Volume Products, Xerox India, has some predictions: “The A4 MFDs,

which can be catego­rized as low end MFDs, are growing at a fast rate and are

expected to grow at more than 100 percent.  The mid range category is also

growing at 30-40 percent. The Inkjet market should see negative growth in the

future, and would evolve to stan­dalone Laser prin­ters and A4 MFDs.”

One company that set the MFD ball rolling was HP, domi­nating the Laser MFD

segment with a market share of over 55 percent.

The Enterprise edge



The fact that MFDs are rapidly ramping up indicates a positively reacting

market. And much of this action is polarized on Laser MFDs, on the enterprise

side. Let's look at some key drivers hastening MFD adoption: New buying is

happening from mid and large enterprises, which already have a good number of

standalone print devices. These are going in for print consoli­dation by making

way for MFDs, overhauling outdated and aged print devices. With this they are

cutting costs by scaling down the number of printers, without cut­ting down on

productivity. Fewer printers also means less consu­mables and AMC costs. Reflec­ting

on that Vikram Negi, Coun­try Product Manager, Multi Function Printers, Samsung

India says, “MFD is a product whose time has come. Its value propo­sition

over single function laser prin­ters is evident, and it is quickly gaining

acceptance. The conveni­ence aspect, which also saves time, will probably drive

the next surge in MFD purchases in SMBs and large enterprises.”

Experts believe that the

starting premise of a 'print management strategy' would be to study the

print demand patterns, on any given day, for a defined time-say a minimum of

three months.

The second part is to take

stock of the print devices used across the enterprise. Some would be over used

and some not so-and some never at all. The third study's premise is in

determining which print technology to imple­ment to contain costs.

A study of all the parameters

would help the CIO evolve a comprehensive print manage­ment strategy. Says Som

Gango­padhyay, Head, Office Systems and Solutions, Canon India, “The biggest

challenge the CIO faces today is in establishing, maintai­ning and upgrading

the IT infra­structure. At one side costs rela­ted to document manage­ment

are escalating and on the other, one needs to manage the fast obsolescence of

technology platforms.”

In the print paradigm, where

do MFDs create the value propo­sition for the CIO, and bring in cure to

document management challenges? A simple answer would be-wherever multitas­king

is required. A larger view would be, by studying the acquisition cost of

single-function devices. For instance, an entry level Laser printer will cost

around Rs 8k. Add to it an analog copier at Rs 30k, an entry level basic scanner

at Rs 4k. In all it adds up to Rs 48k. This, when contrasted to an A4 Laser MFD,

which costs around Rs 14k or less, clearly makes the MFD the winner on the TCO

front-and that would be the key in driving more volumes in this space.

Moving forward



At the enterprise level, the affordability factor will nudge CIOs to go in

for MFDs whenever there is a printer purchase re­quire­ment. Vendors also

believe that mid-size enterprises will drive much of the A4 MFDs. Large

enterprise will adopt higher speed MFDs-20ppm and higher. However, analysts

point out that despite the MFD value proposition, it does have its limitations.

MFDs, hence, are seen as a

complimentary print technology rather than a competition to stan­dalone

devices. Most ven­dors agree that volumes for copier-based MFDs will slow­down,

as A3, as a segment, becomes niche-given that the market is getting more

polari­zed towards A4 printer-based MFDs. That's more good news for the CIOs

as the A4 MFD market will become extre­mely competitive and vendors will resort

to more price cuts to push more feature-rich MFDs. Says Arun Gupta, CIO-Pfizer

India, “MFDs offer value for money, while saving the clutter in a compact

size. As the price point keeps dropping, they will end up cannibalizing low-end

Laser printer markets. Pfizer, in India, has deployed these devices for its

regional offices, some home users, and remote, clinical trail locations, which

need more than just a printer.”

At the end of the day, the

evolution of MFDs as a key area in printers can be correlated with enterprise

applications-MRP blossomed into ERP, which is a multifunctional solution; then

ERP got supplemented with SCM and CRM. In a similar fashion MFDs are ushering in

more con­verged options for the enterprise to consolidate and optimize on their

document needs.

Shrikanth G


(shrikanthg@cybermedia.co.in)