Special Focus
Printing Opportunities
 Cost optimization by corporates will drive the demand for managed print services and document management solutions in 2009
By CRN Network
Office printing solutions have evolved over the years, and today they have become a core business process as well as a potential business enabler in every enterprise. The vast amount of information which was earlier being stored in physical files is currently being digitized, thus opening the floodgates of opportunity for print solution providers.
The increasing need for automation in the enterprise has triggered the growth of printing solutions. The different economic factors, regulatory environments and IT maturity in different countries have contributed to varying levels of adoption and knowledge surrounding printing solutions. Moreover, virtualization, integration and compliance issues are driving printing solutions abroad as well as in India.
Copiers, MFDs (multi-function devices) and printers have been a standard component of the infrastructure of organizations of all sizes for many years, thus providing an easy way for customers to display and/or share information.
Market overview
According to AMI Partners, India will be the fastest growing major market in the APAC region with IT spending set to increase more than 20 percent in 2009 to $9.7 billion. Banking, financial services and manufacturing are expected to be the growth engines leading to increased business spending in India. According to several studies in India, almost 10 percent of the IT hardware spending by businesses is toward office printing hardware deployment. Research from Gartner estimates that office printing takes up as much as 1 to 3 percent of a company’s revenues.
The overall size of India’s print hardware market is estimated to be around Rs 3,000 crore, including the consumer and commercial segments.
According to Gartner, total printer shipments in India grew by 4 percent in CY2008 as compared to CY2007. The commercial segment, mainly consisting of stand-alone and MFD lasers, grew by 16 percent, outpacing the overall market growth rate. In this, the A4 MFD laser category grew by 57 percent and the A3 MFD category grew by 16 percent, clearly indicating the increasing interest in MFDs as compared to stand-alone printers and scanners. In terms of units shipped, A4 MFDs comprised 1.5 lakh units, while A3 laser MFDs sold 79,000 units in CY2008.
“With printing being looked at as a strategic area, more companies now want to optimize their print infrastructure by using networked printers to save power and space,” explains Puneet Datta, Senior Marketing Manager, BIS Division, Canon India. “Also, some organizations are going green and want to save paper, and want to recycle and dispose of some of the hazardous components of printers, toners and PCs to safeguard the environment.”
Notes Samir Shah, Director, LaserJet and Enterprise Solutions, Imaging & Printing Group, HP India, “Increased PC and Internet penetration have meant an increase in the sources from where information is printed. Nowadays, everything from tickets to receipts is printed as e-tickets, e-bills, etc.”
Vendors believe the economic slowdown will trigger a change in the pattern of how companies use their printing infrastructure. According to Datta, “Businesses today are more budget-conscious, more carefully scrutinizing office print expenses and attempting to better align printing fleets with their needs—often with the help of print management tools and services. Other factors that are playing an important role are access control management, being able to secure content on print devices, and the need for environment-conscious business and printing.”
Shah agrees. “Companies have become more cost-conscious with regard to their printing and imaging environment. This also means buying more tracking solutions which could help them optimize their costs. In addition, enterprises will look at either upgrading their existing infrastructure or outsourcing such needs to a third party.”
Shift to MFDs
As business demands increase, the printer is morphing beyond its core functions, offering customers more value for money. This is where MFDs come in, redefining office life, helping organizations to consolidate their investment, maximizing the use of space, and simplifying workflow processes.
Says Vishal Tripathi, Principal Analyst, Print Market, Gartner, “Most of the large enterprises are moving toward MFDs as they are increasingly looking to consolidate the fleet and move to centralized printing. They are also looking for various solutions which can help them save money on printing. Organizations are trying to print less and are looking at various methods to eliminate their print output in an effort to save costs.”
Notes Shah, “MFDs simplify the ordering of supplies and minimize maintenance calls, thus saving time, money and critical resources for customers.”
According to Shubendu Mazumdar, Marketing Manager, Sharp, with copy volumes decreasing and print volumes increasing, a full-configured MFD (printer, scanner, duplex, doc management software, etc) is becoming the new mantra for offices, and this trend will continue over the next 12 months.
MFDs today come with features such as security, color access control, a graphic interface and network management. These will be further enhanced, and so will the workflows to meet growing customer needs.
Color printing
Despite aggressive pushing by vendors, color printing in offices is yet to take off in India. According to Gartner, in 2008, out of the total laser printers sold, 97 were mono-color and only 3 percent were color. Tripathi explains why. “Though the prices of color devices have come down, the marketshare of color devices has not really gone up. In the current economic slowdown, companies have become more prudent with color printing, and want to use color only when it’s inevitable.”
Nevertheless, HP is optimistic that color printing will take off. “We have seen a marked increase in the popularity of in-house color printing with the cost of color reproduction falling. Also, businesses are beginning to realize that they can now achieve professional-looking results without having to outsource, or spend a large amount of money,” says Shah. “We see color MFDs gaining momentum among customers. We are bundling our advanced document management solutions with our color MFDs; this allows customers to track and control the use of color printing in the office. For instance, the IT team can decide who prints in color, and when, and which type of documents can be printed in color, thus reducing color toner usage.”
Managed print services
According to a Springboard report, managed print services (MPS) are expected to grow from $392 million in 2007 to $825 million in 2011. The report also states that while India has so far been a laggard in adopting MPS, the economic slowdown is likely to spur demand and the country will emerge as the fastest-growing MPS market in the region with a CAGR of 22 percent till 2011.
According to Gartner, India represents less than 1 percent of the worldwide MPS market. Says Tripathi, “At present, the only MPS opportunity in the country is in fulfiling global contracts that MPS providers have. They are finding it challenging to position the services. MPS providers are primarily focusing on high mid-to-large enterprises because volume is very integral to managed print services and can set-off the investment. Most of the end-users don’t find the whole proposition very attractive, and this is visible in India’s marketshare.”
Agrees Datta, “Most organizations in India still view MPS as an alternative way to procure printers, giving the long-term benefits of the offering a miss. It indicates that there is not much awareness about the same in India. There is a clear need for education among enterprises about the benefits of MPS, more so during this economic downturn.”
However, HP’s Shah is optimistic. “MPS is expected to gain momentum in the Indian market as corporates are under pressure to control their costs and also gain tighter control over what is being printed. For this reason, corporates have started outsourcing their printing needs to cut printing and maintenance costs, as well as protect themselves from investing in printers which might soon become obsolete.”
HP says that its MPS can help companies achieve savings on printing costs by up to 30 percent, allowing companies to focus on their core business and better manage costs while simplifying the management of their imaging and printing environment.
Princy Bhatnagar, Director, New Office Group, Xerox India, is also optimistic about MPS. “We see good potential in the services segment. The overall market is showing some indications which suggest a considerable demand for such services. The government, with its focus on providing e-services, will provide a boost to MPS.”
The increasing adoption of green IT is also expected to play an important role in the adoption of MPS in India. Says Shah, “Case studies of some of our MPS customers have revealed energy savings of between 30 and 80 percent, plus drastic reductions in paper consumption. This could prove a compelling reason for companies that have a green IT agenda.”
The extra mile
With companies being under considerable budgetary pressure in 2009, vendors accept that the market for printing solutions will also be affected, and hence they are going the extra mile to help their channel partners find new opportunities.
Comments Mazumdar of Sharp, “Solutions sales will help our channel partners to be in touch with all existing customers, and help them in upgrading themselves to handle document management solutions. This will be our main focus for 2009.”
Since document management solutions require channels to understand the business processes of customers, Sharp has evolved a training program for its partners for the same.
Xerox too has drawn up a plan to help its partners. Reveals Bhatnagar, “Despite the fear of default in an economic slowdown, we haven’t reduced distribution credit for our partners. They continue to get the same credit as last year.”
To create more opportunities for its partners, Xerox has recently launched its portfolio of document and printing management software for which it is investing in channel training. “We have already identified partners for providing our software printing solutions, and are in the process of training them over a period of 4-5 months,” says Bhatnagar. “We will soon launch a specific channel program for partners selling document management solutions.”
Canon too is doing all it can to grow the market. “We will focus significantly on tier-2 and -3 cities in 2009,” discloses Datta. “We have been focusing on establishing strong infrastructure, and have created world-class showrooms. The company has nearly doubled its sales staff from 400 to 730, hence one of our foremost focuses in 2009 will be to leverage on this investment and enhance the productivity and effectiveness of our people.”
Also read :
Trends that will Drive Demand for Printing Solutions >>
|