Is The Workgroup Copier Business Model at Risk? The A4 vs. A3 Tipping Point

Transcription

1 Prospectus Is The Workgroup Copier Business Model at Risk? The A4 vs. A3 Tipping Point Focused Focused Competing Technology Platforms Vie for Valuable Pages Looming Shifts in Purchasing Preferences and Channels Adoption and Attitudes in Small, Medium-Sized, & Large Firms Copier & Printer OEMs Face off at the Convergence Point Headquarters 97 Libbey Industrial Parkway Weymouth, MA Europe Sceptre House, 7-9 Castle Street Luton, Bedfordshire, United Kingdom LU1 3AJ Asia Hiroo Office Building Hiroo Shibuya-ku Tokyo Japan info@gsm.to

2 Introduction A major and dramatic shift may well be underway in traditional A3-size (11 x 17 ) office copier console placements, and their supporting OEM and dealer business models. These familiar office stalwarts are under attack from aggressive printer OEMs and their placements of low-cost, A4-size (Letter or 8.5 x 11 ) monochrome and color printer-based MFPs (multifunctional peripherals). This latest generation of printer-based MFP devices typically offers very low entry prices, full function convenience/walk-up copying, flexible document feeding designs, desktop laser printer reliability traits, and eroding cost-per-page ratings particularly for high-value color pages. InfoTrends focused research and forecasting reveals that pages are migrating from Workgroup and Departmental-level copiers to this growing MFP population. In addition, InfoTrends forecasts show that monochrome Workgroup prints peaked in 2004 as pages are shifting to more graphics-intensive and image-enabled color laser and inkjet devices. Printer-Copier Page Mix 2,000 1,500 Pages, Billions 1,000 Copier Pages Printer Pages Year To date, the industry s traditional copier vendors have responded with few lower-cost A4-sized printer or MFP offerings and have de-emphasized outright hardware purchase channels and policies, preferring to concentrate on strengthening the capabilities of their traditional equipment dealers. While very successful in their familiar IT and retail channels, printer/ MFP vendors have also not assembled an effective or cohesive alternative to the account-level sales reach and local service model perfected by traditional copier equipment channels. Copier makers and their channels are presented with a potential growth opportunity to offer a full suite of A3- and A4-sized hard copy devices to their account base, along with the enabling services, supplies and solutions software tools. It remains to be seen if these businesses will seize this opportunity. For all participants in the hard copy supply chain, it is the Workgroup printer and copier segment that represents the largest slice of the overall prints pie, and the segment that will inevitably stage the most intense and determined competitive battles among manufacturers, products, technologies, dealers, and consumables makers.

3 Evolving User Preferences In companies ranging from small, 20+-employee firms to large enterprises, IT and corporate administrative buyers are questioning and carefully analyzing their copier and printer fleet populations and capacities, as well as their associated service, support, and supplies costs. Businesses are facing unprecedented challenges due to the quickening pace of the marketplace, and they have an array of competing choices for hardware, brands, channels, purchasing options, and technologies. Users recognize that a single and monolithic printer or copier solution does not fit everyone s needs and that the underlying precept today is flexibility. For example: Small businesses need flexible, multi-function devices and the capacity to support growth for less money Medium-sized businesses want a balanced mix of devices to speed up administrative processes and boost productivity Large enterprises have a mandate to optimize operating and support costs for their printing and imaging fleets The Aficio is just one example of Ricoh s ability to provide best-in-class color laser printers that incorporate the latest technology and capabilities. - Ron Potesky, VP of Product Marketing, Ricoh Triggered by heightened printer vendor marketing efforts and an organic growth in the demand for in-house and Workgroup-level color output, businesses are rethinking fundamental office hard copy purchasing decisions, including: Direct pricing and cost comparisons among low-cost printer/mfp offerings and traditional copier-based products Quantifying printer and copier fleet sizes and their asset utilization rates Applying various cost-per-page and cost-of-operation yardsticks to printer and copier buying decisions Questioning the need for A3/11 x 17 paper handling capability based on actual usage rates Optimizing workgroups through the consolidation of printer and copier devices Implementing strategies to manage total print and copy volumes and costs Planning and managing shifts from monochrome to color output capabilities Examining lease vs. purchase alternatives as well as the flexibility of typical contract terms Using network software tools to measure, manage, and optimize printer and copier fleets Making new placements of color hard copy devices to address emerging on-demand marketing collateral print needs and distributed inventory management What is at stake for the industry s key vendors? InfoTrends estimates that over 2.8 million U.S. Workgroup copier placements will be made between 2007 and 2010, accounting for nearly one trillion pages of output. [HP] hires hundreds of new sales consultants [selling] over 200 imaging and printing solutions within its portfolio to build industry-specific offerings for major vertical markets in the public and commercial sectors. Source: HP.com, Security Analysts Presentation

4 The Tipping Point? InfoTrends believes that the hard copy hardware market is rapidly approaching a tipping point as shifting buyer preferences and manufacturer-driven product and channel strategies converge to alter the office equipment landscape as we have known it. We believe that the next several years will present a critical window of opportunity as well as great risks to office equipment vendors and distributors. These businesses must adapt to the mega-shifts in technology, products, and revenue/business models. InfoTrends study will provide companies with the in-depth research and analysis to guide their product development, pricing, marketing, and distribution strategies. 1, , , Mono/Color Page Mix Pages, Billions 1, Color Pages Mono Pages Year Critical Questions Answered as Part of this Study InfoTrends study will answer many of the critical questions that are currently facing your organization in terms of your product development, sales, and marketing initiatives, including: Are office decision-makers questioning or changing their A3 copier fleet deployments in the face of low-cost printerbased MFP options? What types of companies and industries are considering or deploying A4-sized printer/mfp alternatives to copiers? What decision-making factors are coming into play, and how and why will companies make these decisions? o Price/cost o Purchase vs. leasing o Service requirements o Copying and scanning requirements o Page format (A3/A4) requirements o Channels and buyer preferences o Flexible purchasing options vs. bundled solutions o Actual page volumes

5 o Color/monochrome o CPP (cost-per-page) vs. budget plans o IT controls/support o Finishing options o Application factors o Reseller/dealer relationships What will the office copier-printer A3/A4 population mix look like in 2010? How will hardware shipment shifts affect print and copy volumes and utilization factors in key product segments? What products, technologies, channels, and vendors will win, and why? What strategies do vendors need to employ to deal with this major industry shift? Research Objectives This study is designed to promote a better understanding of the shifting demand curves for hard copy devices. It should prove particularly beneficial to the following management teams with equipment vendors of office copiers and printers: Product development/roadmap and planning managers Marketing, pricing, distribution, and sales channel support personnel Sales, marketing, and channel managers and executives The results of this study will provide necessary information to help these vendors: Assess the impact on the U.S. copier industry from the market penetration of low-cost A4-based monochrome and color printer-based MFPs between 2006 and 2010 Assess and measure end-user awareness; plans or receptivity towards changing or migrating copier and printer deployments; and the related product, support, and channel factors that will trigger those decisions: o By company size segmentations o By major industry segmentations o By major document applications Understand the key influencing factors affecting these changing purchase decisions and identify vendors strategies to successfully address: o What is sold o How it is sold o Who sells it o Why it is bought Obtain profiles of key vendor strategies and their marketing messages Receive individually-tailored recommendations based on in-depth research results, analysis, and market position

6 Market Size and Forecast by Product Segment (Profiles) InfoTrends will provide market size analysis and forecasts for office color workgroup devices (copier, printer, MFP) by key product segment and geographic region. These markets account for the majority of equipment placements and pages produced. The profiles will help marketers understand and refine the product requirements and target their key selling messages. InfoTrends will focus this study on the Workgroup office environment for equipment producing between 20 and 70 ppm. The office color Market Size and Forecast document (2006 through 2010) will include: Shipments Installed base Page volumes Hardware revenues Supplies revenues The forecast will be broken out by key market parameters: By product category: o Printers/printer MFPs o Copiers/copier MFPs o A3/A4 Sheet Size Usage o Monochrome/color Major product segments o Printers/printer MFPs o Copier Segments 3-5 Indicators of the replacement or displacement of copier-printer machine installs by key decision factors By company size o Small (20 to 99 employees) o Mid-sized (100 to 999 employees) o Enterprise (1,000+ employees) Environments o Small workgroup (4 to 24 workers) o Large workgroup (25+ workers) Profile elements: Copier- and printer-based MFP A3/A4 metrics

7 Market Research Project Components The comprehensive research plan will include: An extensive review of existing research data and forecast segments Desk research on key vendors products, marketing, and positioning In-depth field interviews with major channel partners (10) In-depth field interviews with major printer and copier vendors/oems (10) Structured field survey with business/institutional office decision-makers by size of company (over 1,000 respondents) o Small (20 to 99 employees) o Mid-sized (100 to 999 employees) o Enterprise (1,000+ employees) Study analysis and resulting forecast and implications Strategy recommendations for client subscribers Personal Interviews with Office Equipment Dealers (10) InfoTrends will conduct a series of at least 10 in-depth personal interviews with office equipment dealers and major printer resellers in key segments (corporate resellers, national and regional resellers, and direct vendors) and with differing equipment/vendor profiles. The interviews will be with dealers or sales organizations offering a mix of copier and printer hardware and solutions to the marketplace, and probe their experiences, their view of the critical A3/A4 factors and recent experiences, best practices, and strategies for future growth. Personal Interviews with Principal Office Equipment Vendors (10) InfoTrends will conduct a series of at least ten in-depth personal interviews with several of the principal printer and office equipment/copier vendors. The interviews will be with vendor organizations offering copier and printer hardware, as well as solutions and services. They will probe respondents market views, go-to-market plans, view of evolving the A3/A4 factors, and strategies for competing in different channels and with various competitors. Structured Survey with Office Equipment Users and Decision-Makers (1,000) Following the in-depth interviews, InfoTrends will conduct a broad-based, structured survey with approximately 1,000 office equipment users, decision-makers, and influencers across the United States. The end-user research will be essential in uncovering current measurement or management practices, hard copy product strategies and fleet purchasing plans, purchasing preferences and key metrics, important applications, the monochrome/color mix, channel attitudes, and other factors influencing the workgroup pages. InfoTrends distribution of surveys will include: Small companies (20 to 99 employees) 400 completed surveys Mid-sized companies (100 to 999 employees) 400 completed surveys Enterprises (1,000+ employees) 200 completed surveys Ultimately, this research will identify and quantify the shift in market segments and pages, critical vendor success factors, customer behaviors, attitudes and purchasing preferences, and underlying market drivers that will influence vendor product development, and their service offerings, channels, target marketing, and sales strategies.

8 Secondary Research InfoTrends has conducted extensive relevant research over the past several years. Research studies that will serve as foundation data to be leveraged in support of this study include: Universal Copier Printer Study* The Workgroup Color Study* Digital Peripherals Market Forecasts, *200+ page research reports based on at least 200 structured interviews. We will also thoroughly examine available market information on key applications, market segments, competitive trends, and product categories. InfoTrends anticipates utilizing a variety of sources that include: Industry trade associations Published industry reports Periodicals and trade articles User groups Web sites Department of Commerce Bureau of Labor Statistics Industry databases Vendor white papers Research reports Analysis and Project Deliverables InfoTrends will conduct extensive analysis of previous desk research, vendor and channel telephone interviews, and the business end-user general population survey to develop a comprehensive understanding of the shifts and major factors facing copier, printer, and MFP makers and their channels. Clients will receive a combination of reports, presentation materials, and research data for use by senior management, product managers and planners, and sales and marketing executives. The materials will include: An Executive Summary (approximately 30 pages) that addresses key study issues, findings, analysis, and individually-tailored overall recommendations A detailed PowerPoint report and analysis (at least 100 slides) with text, charts, and graphs reporting on the objectives and outcomes of the study, ready for internal use by clients in meetings, briefings, and internal reports. A data book of the 1,200-respondent survey tabulations for additional in-house analysis of key questions and market segments A 2-hour teleconference presentation of the general findings and recommendations

9 Project Schedule InfoTrends intends to start this project in November Based on the following schedule, the project will be completed with materials distributed by the first quarter of Throughout the project, InfoTrends will issue regular updates on the project status. Milestone Completion Desk research November December 2006 Personal interviews with channels November December 2006 Personal interviews with vendors November December 2006 Survey - 1,000 completed with end-users December 2006 Results analysis and report development February 2007 Report delivery March 2007 Project Fees For Charter Subscribers that sign up before December 22nd, the participation fee is $12,995 USD. Clients that sign up early can also participate in the questionnaire design and review the interview guides. After December 22nd, the price of the study will be $14,995. An on-site presentation is available for an additional $2,000 plus travel expenses. Clients may also receive bespoke deliverables such as a customer sales presentation for an additional fee. This study is sold on a company-wide license basis the participation fee is a single price for use of the study throughout the entire company. Clients may have other major geographic-based business units co-fund and participate in the study, review the questionnaires, and receive a copy of the report.