Long-term trends are slowly and steadily reshaping the enterprise printing and copying industry, with consolidation, tech innovation, changing product/service offerings and new pricing models that have implications for procurement departments and spend strategy.
Although the direction is clearly toward a gradual decline in office printing within US companies, the truly paperless office is not yet here. The digital document software company, Foxit, conducted a cross-industry survey of business leaders in March 2018 showing that 44% of respondents said that they use paper in their position on a daily basis, with just 2% saying they never use paper.
Trends point toward a lessened reliance on paper, but the printed page and hardcopy document still remain valuable tools of business. Physical documents represent convenience and utility, especially as sales tools, that digital documents cannot always match.
LAC Group advises its clients that if they haven’t had a consultant independently review their organization’s procurement spend on copiers and printers, they are most likely paying above market and will continue do so for the entire remaining term their company is under contract.
Todd Buckelew of LAC Group observes that “costs are constantly changing in the copier and printer category. If your organization is solely relying on local sales reps to provide a solution and pricing, you are probably minimizing your leverage in the market.” To manage spend in this category, LAC Spend Management recommends that their clients:
- Reduce personal printers, and
- Reduce the amount of different model printers they are leasing
Market consolidation and mergers
The years 2017 and 2018 brought two significant events that point toward increased consolidation of the print market over the next few years. In January 2018, Xerox and Fujifilm Holdings announced an agreement to combine their longstanding joint venture with Xerox, creating an industry behemoth valued at $18 billion dollars.
A Xerox press release announcing the deal said that “the new Fuji Xerox will be well-positioned to lead in growing areas such as high-speed inkjet, packaging, industrial print and workplace automation, as well as future development opportunities in artificial intelligence, machine learning, internet of things and augmented reality.” Although the partnership has experienced turbulence, with Fujifilm filing a lawsuit against Xerox in June, the agreement points toward increased consolidation within the print industry.
In November 2017, HP Inc. acquired Samsung’s print business. “With Samsung, HP now offers the industry’s strongest portfolio of A3 multifunction printers that deliver the simplicity of printers with the high performance of copiers. The fully integrated portfolio…offers opportunities to grow managed print and document services as sales models shift from transactional to contractual,” noted an HP press release announcing the deal.
New varieties of tech partnerships are occurring, with print vendors beginning to partner with a more diverse range of companies in order to incorporate innovative technologies into their products, business models and channel offerings.
Companies looking to accelerate the move toward digitization of paper-based processes will require software expertise, with software becoming a key differentiator in the print industry. As products become increasingly defined by software, vendors will need to be enabled to face challenges that will include safeguarding data privacy and managing cyber security issues.
Increased competition in both the A3 and A4 printer markets, with more vendors participating
A3 copiers are the ones that are capable of printing large-format 11×17 inch paper. These copiers represent a significant market segment, formerly dominated by just two companies, Xerox and Ricoh. With HP’s recent acquisition of Samsung’s printer division, HP offers another vendor choice for procurement professionals to work with in this industry segment.
The A4 (8.27 x 11.69 inch paper) market is seeing increased competition, too, with a new line of Xerox A4 machines being rolled out in 2018, representing more options beyond HP’s lead in the A4 market.
Multi-function devices offer efficiencies, cost savings over older single-function machines
An important trend in printing hardware is a shift away from the older generation of single-function printers toward a new generation of multi-function printers (MFPs). These machines combine printing, copying, faxing and scanning in one device.
MFPs are significant for spend optimization professionals because they increase efficiencies (one device to manage instead of many), and they promise to lower costs by merging numerous capabilities into one device and reducing the number of supplies that need to be regularly purchased. MFPs should help print vendors to grow awareness of their product offerings to small/medium businesses.
So-called “smart MFPs” offer productivity and efficiency features that include failure prediction capabilities promising to reduce downtime, and workflow apps that will simplify the transition from paper to digital processes.
Availability of managed print services for smaller companies, not just large enterprises
Managed print services (MPS) are a type of service offering from print providers that oversee all aspects of a company’s printing-related devices, encompassing printers, copiers, faxes and scanners. MPS promises to optimize devices, leading to cost savings, reduction in paper wastage and increased efficiency.
MPS has been available to large enterprises, and has been gradually moving into the small and medium-sized business (SMBs) market. Many smaller organizations may not realize this service offering is available to them, or may not be aware of the efficiencies it can help them to achieve.
Consumer subscription models moving into the enterprise market
Businesses may see a move away from the more traditional transactional model toward a “print-as-a-service,” when-and-as-you-need-it subscription model, which already exists in other areas of the information tech world. Such a model might function similarly to HP’s Instant Ink consumer printing offering and might begin with smaller companies, gradually reaching upward toward large enterprises.
On the current copier/printer vendor landscape, LAC Group calls out the following trends:
- HP continues to improve their security, lower toner costs and improve reliability of its A3 and A4 MFPs
- Konica Minolta is making a strong push to gain market share with it’s “One Rate” program, which bundles all pricing into one monthly payment, eliminating cost-per-print contracts
- Canon appears to be the leader in the market as of right now
- Most law firms have narrowed their choices between Canon, Konica and Xerox machines
LAC’s Buckelew notes that “most equipment from major vendors such as Ricoh, Sharp and Xerox has become very reliable. It’s more about getting the right equipment based on your needs, not overdoing it with an overkill of personal devices and finding a vendor that delivers on their promise of being a ‘true service partner.’”