Printing: Buy One, Get All

Convergence, from being just a buzzword a few years ago, has now
become a reality and this is visible across product/technology domains. In the
IT field computing products and devices such as WiFi-enabled notebook PCs,
mobile phones, PDAs etc strongly endorse this trend.

Printers too are riding the convergence wave with the offerings
of Multi Functional Devices (MFDs), popularly known as 'All-in-Ones' or AIOs.
These MFDs are ushering in an era of new print quality while at the same time
creating new challenges for better management of printing volumes and costs
across Indian enterprises. In fact, across the world, after an age of relatively
low attention to printing, enterprises are now taking a closer look at
controlling increasing print costs and are grappling with various ways to
contain them. So, the stature of Print Management has been growing starting
around 1H 2005 in the minds of enterprise CIOs and the principle of "RoI on
Print" has also gained increased attention and importance.

Across the Market

MFD product offerings from vendors have matured over the last two years and have
grown significantly in the enterprise segment. An MFD's rich features such as
scanning, copying and faxing help it to stand apart from standalone 'single-function'
devices. A closer look at the market reveals that laser MFDs may be split into
different categories by output range (in ppm). These categories are 1-20 ppm,
21-30 ppm, 31-44 ppm, 45-60 ppm and so on. Today, a typical entry-level laser
MFD in the Indian market starts at Rs 12,000 per unit and high-end models can go
up to as much as Rs 350,000 per unit.

Some key value propositions play an important role in making
adoption of MFDs successful in the Indian market. For laser based multi-function
devices, these feature-benefits/value propositions include-saving of time and
space, user friendliness in operation, network connectivity, document store and
fax and many others. As a result, many enterprise customers have experienced
increased productivity levels. The MFD market is more polarized towards
products/models with A4 paper size capacity, as against the A3 paper size
capacity, which is being promoted more by the traditional copier-based vendors
to niche market segments such as advertising agencies, design studios etc.

Shifting to MFDs

On the technology side, vendors offer two kinds of products-printer-based
MFDs and copier-based MFDs (also known as digital copiers).

Currently, there is a sizeable gap between the shipments of
standalone laser printers versus shipments of laser MFDs. According to IDC's
India Quarterly Printer Market Tracker-2006, 3Q 2006 a total of 141,342 laser
printers were shipped in the JAS quarter of 2006. This is against the
approximately 37,000 laser MFDs shipped during the same period, as per IDC's
India Quarterly Multi-Function Device Market Tracker: Laser-2006, 3Q 2006.

While cannibalization will take its own time to have an impact
on changing the mix of shipments to the enterprise segment, MFDs are the choice
of the future, being clear winners in terms of TCO (Total Cost of Ownership). As
this understanding gains ground, the shipment volumes to the enterprise space
are expected to grow further.

MFDs are also seen as a complementary print technology rather
then a competition to standalone print devices. The multiple functionalities and
price points of MFD product offerings are in fact an acknowledgement of their
high acceptability. The fast clip of evolution in MFD product features in fact
point to the fact that a multi-function printing device not only performs the
simple operation of printing but, can influence overall business effectiveness
by helping improve office productivity and document flow, reduce cost and speed
up processes.

Historically, copier-based MFDs held a bigger chunk of the
market and the low-end (entry level) printer based MFDs were in a minority.
However, with technology advances and market maturity the landscape has changed
a lot. Printer-based MFDs now account for a share of almost 66% of the average
total shipments according to IDC India estimates for the period January to
September 2006. Both printer- and copier-based MFD vendors compete for the same
printing opportunities. However, currently, both printer-based and copier-based
vendors are concentrating on the low end (mono, 1-20 ppm segment) of the market,
offering boxed solutions, ease of installation and value for money packages.

The multiple functionalities and price points of MFD/AIO product offerings are an acknowledgement of their high acceptability

Changes Ahead

According to industry estimates, over the last 1-2 years the global
e-documents market has been growing at 65-70% annually as against paper
documents, which are growing at 15-20%. Dramatic changes in the business
landscape will require the Document Managed Services market to constantly
innovate in terms of new technology and offerings to customers, and that's how
vendors will be able to differentiate their offerings from others. The current
usage is typically for customer record management in telecom, centralization of
paper-intensive processes for banks and insurance companies, file tracking
initiatives for e-governance projects, and image-enabling of some solution
packages in ERP. There are other happenings, which would change the entire
landscape of the MFD business. Businesses are evaluating the option of
streamlining and outsourcing their document-intensive processes. The application
areas under consideration include imaging, archival and client account lifecycle
management. Such production services improve the effectiveness of customer
documents in production areas such as customer data centres, central
reprographics and printing departments.

In brief, the Indian Laser MFD market is an amazing combination
of technological innovation coupled with product innovation and a huge untapped
market potential. This market can be tapped by a marketer with superior
technology and strong distribution muscle. The key factors for growth and deeper
market penetration include a wide product range with the latest technological
innovations to address a variety of consumer needs through a single converged
device. Reliable and comprehensive after sales support would ensure a winning
strategy.

Shiladitya Sarkar

maildqindia@cybermedia.co.in

The author is Asst Manager, Peripherals Research, IDC India