By Kim Crowley
Panelists include: Todd Deluca VP of marketing for RISO ; Emerson U. Fullwood president, Xerox Channels Group; George Grafanakis, senior manager Product Planning and Marketing, Sharp Electronics Corp.; Rich Howarth director of strategy, IBM Printing Systems; Kevin P. Kern VP, product planning and development, Konica Minolta Business Solutions U.S.A., Inc.; Ann Moser VP, Printing Solutions Division, Ricoh Corporation; Tim Peters VP and GM, Dell Imaging and Printing; Robert W. Raus, Jr. director Océ Digital Document Systems; Roberto Torok VP and GM for small and medium business, Lexmark Consumer Printer Division; and Greg Wallace VP worldwide business marketing, Imaging and Printing Group, Hewlett-Packard.
We are in the thick of National Small Business Month, May 2004, as we sit with some of the top equipment providers for the small to medium-sized business (SMB) market. Nationwide, organizations and communities are offering lectures, discussion groups, conventions, and other forums geared toward the establishment, betterment, and celebration of U.S. small businesses. Gathered with some of the leading manufacturers in the printing industry, we queried their thoughts on the SMB market and how they too are on course to help SMBs succeed. In our next issue, look for predictions for future SMB printing needs and technology.
BTE: What sales channels does your company use to reach out to SMBs?
Deluca: RISO has worldwide sales of approximately $800 million. While RISO does not report company sales figures by region or market, SMBs represent a sizable portion of RISO’s extensive installed base. RISO sells its products through a combination of direct sales and dealer locations in the Americas . . .RISO made it a top priority to insure that all users have easy access to sales and service.
Grafanakis: Sharp document solution products are sold through an extensive nationwide network of authorized dealerships. Our dealers are among the best in the industry, offering customers the products, solutions, and support needed for success in today's fast paced business environments. SMBs can purchase Sharp products through local Sharp dealers in their community.
Kern: Konica Minolta has an extensive network of direct sales offices, authorized dealers, resellers, and distribution partners, SMBs are serviced both through direct sales and authorized dealers. In addition, select printers are available via the Web and through authorized retail locations.
Torok: A key initiative for 2004 is a focus on the SMB customers and their needs. Lexmark employs all of the traditional channels, including major distributors, solution providers and systems integrators, industry VARs, catalogers, contract stationers, and, of course, retail. Our full range of offerings are also available online.
Wallace: In September 2003, HP announced a company-wide strategy for SMBs with its HP Smart Office initiative and a $750 million investment in R&D, marketing, sales programs, and services SHP’s investment has generated many products and programs, including investments in new channel programs and benefits, end-user Web resources and tools, development of integrated solutions, go-to-market systems, and building a completely new SMB organization. According to IDC, Hewlett- Packard (HP) is the number one SMB technology vendor and global market share leader with $21 billion in sales. HP continues to manage a combination of direct and channel partner sales that give the company maximum reach. These sales models co-exist in response to diverse marketplace requirements. For small businesses, in particular, HP relies on partners to provide technical expertise and the local service and support they require.
Moser: Ricoh Corporation is well positioned to achieve significant growth in the small and midsize businesses for its printer and MFP product portfolio. Ricoh Corporation utilizes several channels to penetrate the SMB market. For Ricoh brand, there is an indirect channel, a direct channel and then an IKON channel. For the Savin and Gestetner brands, there is an indirect channel. For Lanier brand, there is both a direct and indirect channel. We feel that having focused channels, both direct and indirect, we can effectively implement Ricoh Corporation’s products and services and achieve growth and capture total document volume in the SMB Market. Howarth: IBM does not disclose sales figures, but needless to say, SMB is a large and very important market for IBM. From an overall IBM perspective, our primary route to market in SMB is business partners. IBM relies upon our business partners’ regional presence and customer relationships to extend our reach into the SMB market and provide the personal touch valued by SMBs. IBM Printing Systems sells its extensive range offerings through a blend of distribution channels. For our high-end production offerings, our highly skilled brand specialists, complemented by a select group of business partners, provide the expertise required by SMB customers when purchasing these types of solutions. Overall,we offer SMB customers the freedom to choose their preferred channel and method of purchase depending on the level of support and other solution elements required.
Peters: Dell is a direct company, so we do not use any channels; we sell directly to our customers.
Raus: Océ Digital Document Systems uses a direct sales force, as well as channels for the midrange products to reach all its markets. Our ‘One Océ’ approach lets Océ operating companies jointly present comprehensive document strategies that help companies achieve greater productivity and profitability. Organizations large and small benefit from the ease of acquiring and implementing the industry-focused solutions they need to stay competitive.
Making a Purchase
BTE: What differentiating factors should SMBs consider when evaluating their next printer purchase?
Peters: SMBs should consider how to best consolidate their printer, copier, fax machine, and scanner devices. SMB customers are increasingly evaluating printer purchases based on total cost of printing. Dell recommends they evaluate hardware purchase price, toner cost per page, and service cost. Cost per page is a better metric for comparing toner pricing than cost per cartridge because it adjusts for different cartridge yields. Select high-yield cartridges for the lowest cost per page. For service cost, compare both the base cost and the cost of the preferred service extensions.
Raus: SMBs must look at their printer purchases as long-term investments in their company’s business strategy. Océ supports this approach by designing systems with the versatility and flexibility to let customers accomplish much more with just one system. Total cost of ownership is another factor to consider when making a major printer purchase. The sales price is only a piece of that. Other factors to consider include consumables and maintenance. Océ printers continually receive strong ratings for low overall total cost of ownership, as we strive to bring the market affordable, effective solutions.
Grafanakis: Businesses should consider a single device that meets their document imaging requirements for printing, copying, scanning, faxing, as well as document management. Today's MFP devices offer powerful multi-tasking capabilities in a compact design and allow businesses maximize their efficiency as well as lower their total cost of ownership. In the past, having separate devices for copying, faxing, printing, etc, meant having to manage leases, servicing, and supply usage for several devices. This costs much more than managing as single MFP device that can do it all. All of Sharp's MFP devices utilize an advanced modular design, so businesses can easily add the features they need at the time of purchase or add them in the future as their needs change.
Kern: The key thing and perhaps most difficult thing to determine is ‘what do I really need for my business?’ It is easy to fall into the trap of being seduced by features that you will never use and actually can make the product more complex than necessary. The primary thing is to identify current and future print volume requirements, color requirements, and whether a multifunctional copy/fax/ print/ scan (MFP) device makes sense. The type of work being run is also an important consideration you need ledger capability or only legal and letter. You should also know who is the target audience for the output. Is it only for internal reporting or does it go to customers? Finally, the purchase of a printer or MFP is a long-term commitment that means you should make sure you have a sense of the service capabilities of your provider as well as their financial stability.
Howarth: [Key factors include] Total Cost of Printing of the printer will comprise a small portion of the total cost over five years. Many companies find inexpensive inkjet printers attractive at first and then become very concerned over their running costs. A typical inkjet printer can cost more than five times as much to operate as a laser printer. . . printing a 10-page document on a personal inkjet printer may cost two dollars . . . the same document printed on a laser printer may cost 20-30 cents. Growing like a field of weeds, ink jet printers are inexpensive enough for employees to purchase on their own, but represent an expense exposure for the company when acquired through an unorganized and unmanaged procurement process. Convergence of Hardcopy and Digital think about what they print and whether it really needs to be printed at all. If the document originates as hardcopy (e.g. a contract from a supplier), MFPs allow you to scan it, store it, and route it electronically to each recipient. Once paper information is converted into a digital format, not only are printing supply dollars saved, but also unnecessary shipping and courier costs can be eliminated.
Additionally, altering hard copy documents into electronic versions ensures that documents are processed faster, allowing an organization to invoice and collect payments from customers faster and more efficiently. Maintaining paper information in a digital format reduces costs while providing critical disaster recovery capabilities. Device Consolidation into one multifunction device makes sense for many companies, in terms of improving productivity and reducing the total cost of printing. Installing MFPs into an office environment helps reduce capital expenditures, saves valuable office space, makes managing consumables uncomplicated, and allows hard copy documents to remain electronic until needed. Duplex and Multi-Up Printing reduces paper costs by half. Further savings are realized by printing multiup (multiple logical pages per physical sheet of paper), where a certain number of document pages fit on one physical sheet, thus enhancing print performance and saving money on supplies. Not all printers offer duplex and multi-up printing, but for those that do, the feature is often overlooked by the majority of users.
Two Machines in One--many organizations are still using separate machines for color and B&W printing. With today’s latest print technology, this is an unnecessary expenditure. Printing in B&W on a color printer now costs the same as printing to a dedicated monochrome printer. Having two separate units is false economy. Torok: Small and medium businesses focus on maximizing their productivity and producing a return on every investment. [Some factors that he notes for printer purchases include size, network capability, flexibility, and warranty.] Look for a unit that is stacked vertically rather than horizontally to optimize desk space. If your office PCs are connected to a network, it’s important to purchase a MFP that can be networked via Ethernet. Because you have increasing and changing printing needs, you need your laser printers to have expandable options to help you adapt to those needs. Because you do not have time to lose, you need the manufacturer to stand behind its products and respond quickly to any problem you may face.
How Printers Stack Up
BTE: What are your core products offered to SMBs for printing, and what makes them unique?
Peters: Dell printers range from inkjet all-in-ones to personal lasers to large workgroup lasers. The diversity of SMB customers creates demand for the full product line. Dell A920, A940, and A960 all-in-one color inkjets are popular choices for small offices, remote sales forces, stores, and other SMB locations requiring print, scan, copy, and fax functionality. SMBs can also purchase a range of laser printers to meet their varied needs, from the Dell Personal Laser Printer P1500 at 19-ppm (pages per minute) to the Dell Workgroup Laser Printer W5300n at 45- ppm. Dell’s products are unique primarily because of the customer experience they provide. Dell performs extensive usability testing to maximize our customers’ experience such as the functionality and installation of printer drivers. We are the only printer provider with the Dell Ink and Dell Toner Management Systems, which constantly monitor levels of ink/toner, proactively notify users when cartridges are low, and link to the correct printer on the Dell Web site to identify the appropriate replacement cartridges, which are ordered from that site. Service is a key differentiator for Dell. All of our service options are next-business day inkjets and non-networked lasers include advanced exchange, while networked workgroup printers offer onsite service standard; the M5200n and W5300n workgroup laser printers include fuser replacement as part of the warranty.
Wallace: In March of this year, HP announced its full Smart Office of print products. The HP Officejet 9100 series all-in-ones are their first series of ink-based, five-function units that include digital sending capabilities with the full lineup of print/fax/scan/copy. The devices include the HP Embedded Web Server for device management across a complete infrastructure of printing and imaging equipment, and have print speeds up to 25-ppm for black and 22-ppm for color. The HP LaserJet 3000 series all-in-ones add to HP’s existing line up of laser-based monochrome all-in-ones which conserve limited office space with a small footprint and fit comfortably within smaller budgets. HP also carries the Fax 1240 fax, phone, convenience copier which has copy speeds up to 17-ppm for black and 12-ppm for color, a 200-page incoming fax memory, and a 20-page automatic document feeder for unattended faxing.
Howarth: Within the IBM Infoprint 1000 family, SMBs are offered print speeds of up to 20 through 45-ppm along with many other features and paper-handling options. IBM also offers MFP solutions and a range of connectivity options, including wireless for network printing and mobile communication. IBM also offers cutsheet production printers, ranging in speed from up to 60 to 110 impressions per minute for fast, flexible, digital document creation, storage, and delivery. Over the last several years, IBM has noticed that customers are less concerned about the features of the box about ensuring it can be easily integrated into their environment and keeping running costs to a minimum. IBM keeps the bigger picture in mind, because that’s what customers depend on IBM for, total value.
Kern: Konica Minolta offers a wide range of printers for B&W and color printing, and for satisfaction of copying and scanning needs. For B&W prints, copies, and scans, the units in their Di family and the 7145 range from 20-ppm to 45-ppm. For color and B&W, offerings include the Konica Minolta 8020 for 20-ppm printing, copying, and scanning; the Konica Minolta CF3102 for 31-ppm color and B&W printing, copying, and scanning; and the Konica Minolta Magicolor 3300 26-ppm color and B&W laser printer. Our products offer the highest value to companies in terms of both capabilities and an attractive total cost of ownership. We also have product leadership in the area of affordable color printers and multifunctional products. Perhaps most important is our extensive support network of dealerships and branch offices around the country.
Torok: Lexmark offers a full range of laser and inkjet-based printing solutions and services with various features and price points. Our customers like the fact that with Lexmark they can get many of the same capabilities of enterprise level customers at prices that are attractive to smaller organizations. Many of our higher-end laser printers, for example, are available in base models that are appropriate for desktop use. We also offer more feature-rich versions of our products that can be deployed on the network. Lexmark is also relatively unique in the industry in that many of our laser products are scalable. You can purchase the base printer and then add multifunction devices at a later time.You don’t have to do it all at once. Dedicated laser-based multifunction products that are popular with SMB customers include the Lexmark X215, X422, and X630. They are widely employed by many SMB professionals due to their low acquisition costs, ease of use and ability to provide color output. On the color side, the Lexmark C510, introduced this Spring, has been in great demand and is a great way for small and medium-sized organizations to acquire high-speed color capability at an extremely attractive price point.
Raus: Océ Digital Document Systems offers a range of solutions geared to the needs of SMBs. [Besides their industry leading color devices, Océ has a number of multifunctional solutions.] The new Océ VarioPrint 2045 46-ppm; 2055, 52- ppm; and 2065, 62-ppm multifunctional systems provide printing, copying and scan-to-file capabilities in one robust resource. Customers gain a more cost-effective way to integrate digital document workflow into their networks for better control, time- and cost-savings, and quality. The Océ VarioPrint 3090 digital printing system is the newest member of the Océ VarioPrint family of production class digital cut-sheet systems. The 85-ppm system delivers the speed and quality to handle the convergence of data and graphics needed by corporate and commercial customers alike for medium-volume transaction applications.
Moser: Ricoh offers a product portfolio that includes a full line of B&W and color printers, as well as MFP products. Ricoh’s uniqueness in the SMB market is from a variety of standpoints. First, we have a high caliber of field and staff personnel that have extensive sales coverage to support our SMB customers. Second, we have a nationwide service organization for our printer products to support those SMB customers in remote locations where they may require local support. Our national service network extends its reach and its ability to respond to those remote locations. From a product standpoint, we have a Networking strategy where we have utilities including Ricoh’s SmartNet Monitor and Ricoh is HP Web Jetadmin certified so we can manage devices on the network. We also have the ability through our customization program to handle our customer’s requirements that are not standard with the product offering.
Grafanakis: Over the past several years, Sharp has become the industry leader when it comes to document security and device security on the network. Sharp has pioneered many advances in this area such as secure data erase. Sharp's Digital Imagers were the first products in the industry to offer Common Criteria validation from the federal government, which qualifies these products to be used in sensitive areas such as the Pentagon, Department of Defense, and the National Security Agency . Scan2 Technology is another feature that makes Sharp's products unique in the industry. Scan2 Technology scans both sides of a two-sided document in a single pass, which dramatically improves productivity and saves time for office workers. This feature also reduces wear and tear on the equipment and helps maintain the integrity of the original documents. Scan2 Technology is offered on our AR-M350, AR-M450, AR-M550, AR-M620 and AR-M700 Imager models.. Sharp also offers businesses a unique customer care web site called My Sharp. My Sharp makes learning all of the features of their Sharp MFP simple ad easy. With this dedicated Web site, customers can access operational information, step-by-step instructions, and resources specific to their Sharp MFP.
Deluca: RISO offers a variety of high-speed, economical Printer-Duplicators that print at up to 130-ppm, in spot colors, on a wide variety of paper stocks and sizes, for a fraction of a cent per print. They enable SMBs to print jobs in-house that they would otherwise have to send outS(which) greatly reduces the cost and turnaround time associated with outside printing services. RISO MFPs complement the Printer-Duplicators by providing cost-effective low-volume printing and copying, plus full color capabilities. They also fill the faxing and scanning needs of an SMB, reducing the number of different machines needed in an office, thereby saving space and maintenance costs. RISO is the only company to offer the ability to link Printer- Duplicators with MFPs to seamlessly meet an organization’s printing, copying, faxing and scanning needs. Software can be programmed to automatically route each print job to the most appropriate device based upon job parameters and cost considerations. SMBs interested in minimizing printing and copying costs while improving staff productivity will appreciate the multi-technology approach to information management and output.
Fullwood: [With its WorkCentre M20 and M20I, digital copier/printer/color/scanners] Xerox is helping customers solve business challenges with a feature-packed desktop multifunction device that has the muscle to stand up to their everyday office needs. This product will help customers in a variety of industries save time and money by using features that deliver exceptional performance. Printer manufacturers realize the strength in sales from the enormous U.S. SMB market. This is reflected in increased options, features, and services, as well as competitive pricing for smaller budgets.
In our next issue, look for responses from these leaders on the future of the SMB printing market and SMB needs.
Summer2004, Business TechEdge