Lexmark Ceo: Paper is Not Going To Go Away Anytime Soon

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Lexmark Ceo: Paper is Not Going To Go Away Anytime Soon

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(The 53-year-old CEO of Lexmark,…)

With falling sales, and having to exit certain businesses, Paul Rooke, chief executive of $4 billion Lexmark should be an unhappy man.

The 53-year-old CEO of Lexmark, which makes printers and offers related services to corporations, exited inkjet printer business a few months ago as people are printing less and less every day. Lexmark , he said, will focus more on software services, an area that he is bolstering through targeted acquisitions.

Rooke, a former IBM hand and a veteran at Lexmark , became its CEO two years ago and since then has been seeking to steer the company back to better times. In an interview with ET, Lexmark CEO explains the strategy and the disruptions , which is making people print less.

Why did you pull out of the Inkjet printer business?

Fundamentally it’s a low usage market and we are seeing a declining trend. People are printing less photos. They are sending them up to the cloud. Content is also residing on smartphones and tablets. Low usage is impacting the supplies market.

Companies were losing money on printers to make money on the supplies (cartridges, maintenance). More like a razor and blades market. But, if you lose money on the hardware and on top of it if you don’t have much consumption (of cartridges ) then the business model fails.

So we decided to pull out. In the latest restructuring, 1,700 employees will be affected. About 1,100 of these jobs are in manufacturing facility in Philippines, which we’ll finally shut down by 2015. Lexmark will now focus solely on business and workgroup printing, managed print services and software solutions.

Lexmark has a fairly low share of the market in India, why is that?

Globally we are one of the leaders in printing business, but we’re not the leader. We’re under-represented in places like India or China, so there is lots of opportunity here for us, even in the printed market space if not digital (in these countries).

I would say it’s low because we are new in the Indian market, and our focus is just on the enterprise market. We have been in Calcutta for over 10 years but that’s our software development and R&D centre.

IBM talked about a paperless office thirty years ago. Do you really think an office without paper is possible?

The world has more paper now then we’ve ever had. There is a reason. The access to information is growing tremendously with access to smartphones and tablets. The per cent of it that’s actually printed perhaps is shrinking. But the two of those things together even though you may have a shrinking percentage of a rapidly growing pie is using up a lot of paper.

So, what I see is not that paper is going away tomorrow. In fact I see that the problem of managing between the paper and the digital world will emerge. Many of our customers still need lots of paper for interacting with their customers and suppliers, getting information on a form or signature. There should be seamless interaction between the paper and digital world. That’s where clients are struggling.

You were a part of IBM in 1990s when it predicted paperless office and sold off its printing business. Any new predictions?

 

So I’ve become smarter now. I know not to predict things that shouldn’t be predicted. But all I can do, as the head of this company, is be prepared for either way customers want to go.

There would be some customers who will be leaders in becoming paperless. There are those who want to remain in paper because they are interacting with customers who aren’t particularly hi-tech. We’ll be there for them as well.

I think we’re going to see customers in a mixed environment — a mix of paper and digital.

http://www.channelbiz.co.uk/2012/11/14/lexmark-targets-software-and-services-as-it-waves-goodbye-to-inkjet-business/
Lexmark targets software and services as it waves goodbye to inkjet business
Resellers to receive new training and incentives, UK channel boss says

Lexmark is looking to train up its channel partners to support its push into software and sales, following the announcement that it has ended its inkjet printer sales business.

In August Lexmark announced that it would no longer be continuing sales of its inkjet printers, in a major restructuring of its business which will see large numbers of staff lose their jobs in its global operations.   The decision followed a move last year for the American printer maker to stop selling through retail outlets such as Comet, Staples and others in the UK.

According to Lexmark’s UK&I sales director Martin Fairman, the decision to put an end to its inkjet business, which Lexmark is reportedly currently looking to sell on, is part of its efforts to move further into software and services sales, alongside greater emphasis on its laser multifunction printers for example.

Fairman told ChannelBiz UK that any disruption caused by the ending of its inkjet business is unlikely to have affected its UK channel partners.   He says that for channel partners, inkjet sales were generally only a fraction of their sales, with Lexmark’s retail partners tending to be the ones selling the inkjet products.

Fairman is adamant that those who did sell inkjet products as part of their portfolio were “not concerned” with the ending of Lexmark’s presence in the market.   He says that partners were often looking to move away from an area of the market that brought only small, and increasingly tightened, margins.

Partners are enjoying more profitability from the sales of MFPs, he said, while the opportunity to offer additional software and services is also a way to increase profits.

The “re-focusing” on software and services will involve delivering apps to customers, he said, and will mean increasing the level of service around enterprise content management (ECM).  This follows the acquisition of ECM software firm Perceptive Software by Lexmark earlier this year.

Fairman said that partners are increasingly required to provide services to their customers, an industry-wide trend, and the company is looking to facilitate the transition as easily as possible as it sheds its inkjet business.

This means that Lexmark has changed some of the sales staff that previously concentrated on inkjet sales, and will be retraining them to deal with the intricacies of a services led approach.

In terms of Lexmarks’ partners there will be a similar approach.  Fairman told us a that move towards services sales will be reflected in forthcoming changes to its partner programme, which will be announced fully in January.  Resellers will be offered new incentives, for example, as the company pushes for further growth.  Fairman said that the company would also continue to attract more partners to its growing reseller base.

In addition, Lexmark will be introducing a ‘university academy’, aimed at training up partners in its services sales

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November 15, 2012 at 9:21 AM