*NEWS*N.WORK PRINTERS GAIN POPULARITY

[Anonymous]

Network color printers gain in popularity,
especially among SMBs
The network color-printer market is a healthy one for solution providers, as
a growing number of small and midsize businesses (SMBs) move out of the world of
black-and-white and companies of all sizes invest in multifunction devices that
include color printers.

It makes good economic sense for many businesses and departments within
organizations to share color printers, so devices that can be networked are in
demand.

“The trend has been to connect more and more; the people who manage big
fleets of printers want to have them network-connected” as opposed to directly
linked to individual desktop devices, says Michael Zeis, president of Blackstone
Research Associates, an Uxbridge, Mass.-based technology research and consulting
firm.

Part of the trend toward network printers comes from companies’ desire to
better control their inventory of IT assets and eliminate duplicate equipment,
Zeis says.

“There’s a big fear on the part of the end-user community that legions of
direct-attached inkjets are bleeding the company,” he says.

Also driving demand for network color printers–including higher-end laser
printers–are declining prices. Recently, the price of some laser printers has
dropped below the $500 point, and that has made them attractive to many
businesses.

“There’s a tremendous amount of price competition in both color printers and
copiers,” Zeis says.

Part of the pricing decrease comes from competition from connected copiers.
These products provide some of the same functionality as network printers, in
some cases handle wider sets of paper stock and are more suitable for
high-production jobs, Zeis says. Connected copiers have also decreased in price,
making them feasible purchases for a wider range of customers.

“If [connected copiers] become more popular in the office, they will
gradually take away print volume from color printers,” Zeis says.

Decreasing manufacturing costs for network color printers are also
contributing to the lower prices, Zeis says. And with prices falling to more
affordable levels, many companies are more apt to trade in older black-and-white
printers for devices that provide both color and monochrome printing.

“Customers in the general office are requesting color printing and imaging
more than ever before,” says Tom LaRocca, vice president of partner development
and programs at Hewlett-Packard’s HP Americas Solution Partners Organization,
Palo Alto, Calif. “It’s not just a specialty market, tailored to graphics or
creative professionals, as was the case years ago. Color printing and imaging
for the general office is faster, easier and more affordable for everyday
business documents and communications.”

Solution providers who carry printers also report increased sales of color
products that are networked.

“We are seeing companies utilize network color printers for several reasons.
Primarily, it is more cost-effective to remove individual color inkjet printers
and reroute that print traffic to a network device,” says Ty Johnson, document
management specialist at HP partner One Source Document Management, Yaphank,
N.Y.

Johnson expects to see further price erosion for the products. “The overall
cost per page for color units will decrease significantly over the next 18
months,” he predicts.

SMB Opportunities

Printer manufacturers say the SMB market is especially ripe for network color
printers, and that presents a significant opportunity for VARs.

“Right now, everyone is vying to reach [that] market,” says Gary Gillam, vice
president of channel operations, North American Resellers, at Xerox, Rochester,
N.Y. “Because the reseller channel is highly targeted toward the SMB segment,
Xerox understands that our reseller partners are instrumental in reaching this
important customer segment.”

CompuDirect, a Myrtle Beach, S.C.-based company that sells printers from Oki
Data and other manufacturers, has seen a rising demand for higher-margin color
laser printers among its customers, primarily SMBs. Its sales of Oki Data
products rose about 30 percent in 2004, and more than 60 percent of that
increase came from network color printer sales.

“As prices come down to more of a commodity level, people are starting to
look at the color laser products,” says Bobby Gallaher, executive vice president
of CompuDirect. “People who in the past bought inkjet printers are looking for
speed and capabilities they need for their business. It’s a growing market.”

Gallaher says companies in a variety of industries–including real estate,
legal, recreation and hospitality–are buying network color laser printers for
their day-to-day and special project printing needs. The move to these products
will likely continue, he says, as businesses opt to do their own printing of
brochures, business cards and other documents rather than having these produced
by an offset printing vendor.

In addition, many customers are looking at the overall value network color
printers can bring to their businesses, rather than just price, says Candice
Dobra, director of printer marketing at Oki Data Americas, Mount Laurel,
N.J.

“With black-and-white, more pages per minute is as exciting as it gets,”
Dobra says. “But when you look at color, you have to consider how the product is
being used and the tools that can enhance the business.”

Oki Data has seen a huge increase in sales of network color printers,
particularly in markets such as retail. In January, the vendor unveiled color
printers that include a new signage feature that enables companies to print
signs, banners and labels that can be used in stores. While it’s ideal for
retailers that want to produce in-store signs, the product is aimed at other
types of businesses as well, Dobra says.

The Buzz Around MFPs

Printer manufacturers and solution providers also report an increase in
demand for multifunction printers (MFPs), which combine color printers, scanners
and fax machines.

“Those products come with a wide array of bundled software and utilities, and
after-market software,” Zeis says. “I see that as an opportunity for the VAR
community. The software and hardware combinations can be very complicated, and
there’s a role for third parties to help companies get up and running, for help
with integration.”

Pro-Copy Technologies, based in Cincinnati, sells color MFPs from Konica
Minolta Printing Solutions U.S.A. Many of Pro-Copy’s customers that have
black-and-white or color printers and fax machines are opting to consolidate
those functions into one multifunction device, says Scott Runge, color
specialist at Pro-Copy.

“It’s a rapidly growing market, our biggest growth opportunity not only for
hardware, but for our long-term service [offering],” Runge says.

Gillam says sales of Xerox desktop MFPs through the VAR channel increased by
43 percent in 2004.

“We continue to expand the scope of this [MFP reseller] program with new
products because customers want to consolidate their office products into one
device,” he says.

In March, Xerox introduced its latest color MFP, the Xerox WorkCentre C2424,
which uses the company’s solid ink technology and is aimed at SMB
workgroups.

Other Enhancements

In terms of functionality and performance, network color-printer
manufacturers are continuing to make improvements in their products. That
includes enhanced print quality; more features, such as built-in digital photo
printing capabilities, stapling and hole punching; and, in particular, faster
print speeds.

“Color products are faster than ever,” LaRocca says. “They’ve hit the speeds
of black-and-white products and will continue to increase.”

In addition to faster speeds, he says HP’s new product development efforts
are focused on making network color printers easier to use and manage.

Higher-quality printing is also a priority for manufacturers.

“It’s not acceptable these days to offer ‘business’ quality in a color
laser,” says Melvin Evans, director of channel marketing at Konica Minolta in
Mobile, Ala. “New product introductions are featuring professional and
photo-quality color to suit both general business and design applications.”

Evans says the trend in network color printers is toward movable, shareable,
desktop-size devices. Other future developments, he says, will include wireless
operation, driverless printing from PDAs and cellphones, 64-bit Windows
compatibility and support for gigabyte transfer speeds.

Incentives To Do Business

Network color printer manufacturers are providing an array of incentives to
resellers to help move their products. Among the offerings:

Oki Data in January introduced a program called OKIPartners Plus, which
offers incentives such as an automatic 5 percent purchase discount and an
additional 5 percent back-end rebate on sales of color printer products.
Participating solution providers can earn monthly rebates for achieving
pre-established color sales goals, based on the volume of sales. The OKIPartners
Plus program also includes cooperative marketing efforts funded by Oki Data,
sales promotions and access to customized products.

Xerox’s PEAK Reseller Program offers incentives, such as increased margin
opportunities of up to about 10 percent for its partners based on their
commitment to Xerox through training and product volume. In 2004, the PEAK
program was revamped to provide a new set of rebates that has a simplified
rebate structure, expanded training offerings and increased marketing
development funds.

Konica Minolta Printing Solutions Partner Program provides up-front margins,
spiff rewards and back-end incentives of up to 8 percent. Partners have access
to dedicated account reps in the field and on the phone, continuous online
technical support, free sales literature and marketing collateral, and an
extensive library of product information and competitive research.

Hewlett-Packard’s HP PartnerOne program offers a variety of incentives on
color printing and imaging products, as well as technical support, grants and
access to direct mail and e-mail marketing programs.

VARs say they’re pleased with the programs vendors are delivering. “We have
had excellent support from HP to help us market their products and our
services,” says Ty Johnson, document management specialist at One Source
Document Management in Yaphank, N.Y. “They contribute monetarily to help us
reach our prospects both through mailings and telemarketing efforts. They also
provide several avenues for development, including product knowledge Webinars
and the ‘Rolling Thunder’ consultative selling skills program.“

[Author]

April 20, 2005 at 11:41 AM