Riding the Convergence Wave

DQI Bureau
New Update

The Printer market is in the throes of change in more ways than

one. When Inkjet Printing technology started making its presence felt in

emerging markets like India, in the early 1990s, the print technology landscape

slowly changed. Then came Laser Printers and now MFDs. Over the years, printers,

from being just peripheral document output devices, became a key component of

the enterprise IT spend-driven by escalated print costs due to ever-growing

print and copy volumes.



from a buzzword, has now become a reality. It's happening across domains-through

devices like notebooks, mobile phones, et al. Printers too are riding the

convergence wave with the offering of Multi Functional Devices (MFDs). Popularly

called All-in-Ones (AIOs), the MFDs are ushering in a new print paradigm. This

is so because after ages of inattention enterprises across the world are taking

a closer look at increasing print costs, and are grappling with ways to contain

them. It is a wake up call for CIOs who were so embroiled in larger IT issues

that they failed to keep tab on print management. However, that's changing

now. And a look at the scheme of things over the last one year shows the growing

stature of print management, as a result of which 'RoI on Print' is gaining


Market Dynamics

MFDs have matured into a definite and hot segment in the peripherals space in
the last two years. When we look at the adoption of these converged output

devices by enterprises, it is Laser MFDs that rule the space. A closer look

reveals the market segmentation of Laser MFDs across four types of output

speeds, measured in 'pages per minute' (ppm): The entry-level Laser segment

is characterized by 1 to 20ppm; segment two starts with 21 to 30ppm speeds;

while the higher segments are MFDs that cater to 21 to 44 ppm and 44 to 60ppm. A

typical entry level Laser MFD starts from Rs 14k, and the high end models can go

up to Rs 2.5 lakh. On the technology side, vendors offer two kinds of products:

printer-based and copier-based (also called digital copiers). While

printer-based MFDs have regular cartridges, copier-based have drum and toner-wherein

the toner is re-filled once consumed. Lower end Laser MFDs work more on

printer-based technology, higher end printers use the copier technology.


, country general manager, Lexmark


the past, most companies didn't even know how many printers they

had or how many pages they printed"


The Indian printer market is unique in many ways. For one, the

technologies used are diverse and range from Impact to Thermal printers. Though

the impact printing market in the West has become smaller over the years-it is

on a growth path in India-thanks to players like TVSE, Epson and WeP.

Standalone Inkjets are a volumes segment, and during 2004-05 India consumed

around 689,391 Inkjets and 258,512 Lasers, against 226,508 Inkjet MFDs and

52,513 Laser MFDs. There is still a huge gap between standalone and MFD device

shipments. But MFD volumes are ramping up fast and in the days ahead will make a

dent into the standalone printer market. However, some in the industry say it is

too early to talk about this cannibalization effect. According to Samir Shah,

country category manager, shared printing and connectivity, HP India: "MFDs

will play a bigger role in the coming years and other technologies will also

co-exist. MFDs have given more freedom of choice in terms of technology and they

are clearly value enablers in an enterprise's output device management



country category manager, shared printing and

connectivity, HP India


will play a bigger role in the coming years, and other technologies

will also co-exist"

Kuldeep Malhotra, general manager, volume products, Xerox India,

has some predictions: "The A4 MFDs, which can be categorized as low end

MFDs, are growing at a fast rate and are expected to grow at more than

100%.  The mid range category is also growing at 30%-40%. The Inkjet market

should see negative growth in the future, and would evolve to standalone Laser

printers and A4 MFDs." One company that set the MFD ball rolling was

HP, dominating the Laser MFD segment with a market share of over 55%. HP, by

aggressively riding on its Balanced Deployment Strategy in the printer space,

was able to slice into the market with low to high end Laser MFDs.


The Enterprise Edge

The fact that MFDs are rapidly ramping up indicates a positively reacting

market. And much of this action is polarized on Laser MFDs, on the enterprise

side. Let's look at some key drivers hastening MFD adoption: New buying is

happening from mid and large enterprises, which already have a good number of

standalone print devices. These are going in for print consolidation by making

way for MFDs, overhauling outdated and aged print devices. With this they are

cutting costs by scaling down the number of printers, without cutting down on

productivity. Fewer printers also means less consumables and AMC costs.

Reflecting on that Vikram Negi, country product manager, Multi Function

Printers, Samsung India says, "MFD is a product whose time has come. Its

value proposition over single function laser printers is evident, and it is

quickly gaining acceptance. The convenience aspect, which also saves time, will

probably drive the next surge in MFD purchases in SMBs and large



head, office systems and solutions, Canon India


the one side costs related to document management are escalating,

and on the other, the CIO needs to manage fast obsolescence of

technology platforms."

Selection of the right print technology can be a daunting task

for the CIO. Given that today most vendors also play the role of a print

consultant, helping the CIO choose the right device, the CIO has to be careful

and not fall victim to vendor hype and marketing pitches. So, in order to select

the right print device, the CIO has to do an independent and thorough due

diligence of the existing enterprise print infrastructure and map the pain

areas. Experts believe that the starting premise of a 'print management

strategy' would be to study the print demand patterns, on any given day, for a

defined time-say a minimum of three months. After the end of three months, the

CIO would get the feel of the total number of print, copy, scan, and fax jobs

per day and the costs associated.


The second part is to take stock of the print devices used

across the enterprise. Some would be over used and some not so-and some never

at all. The third study's premise is in determining which print technology to

implement to contain costs. For instance, what is driving print volumes is the

implementation of enterprise applications like ERP, and this also calls for a

secured document management.

A study of all the parameters would help the CIO evolve a

comprehensive print management strategy. Says Som Gangopadhyay, head, office

systems and solutions, Canon India, "The biggest challenge the CIO faces

today is in establishing, maintaining and upgrading the IT infrastructure. At

one side costs related to document management are escalating and on the other,

one needs to manage the fast obsolescence of technology platforms. Also, growing

concern, of security during document transformation, and integrating different

platforms of workflow within the organization are other major concerns."

In the print paradigm, where do MFDs create the value

proposition for the CIO, and bring in cure to document management challenges? A

simple answer would be-wherever multitasking is required. A larger view would

be, by studying the acquisition cost of single-function devices. For instance,

an entry level Laser printer will cost around Rs 8k. Add to it an analog copier

at Rs 30k, an entry level basic scanner at Rs 4k. In all it adds up to Rs 48k.

This, when contrasted to an A4 Laser MFD, which costs around Rs 14k or less,

clearly makes the MFD the winner on the TCO front-and that would be the key in

driving more volumes in this space. Says PG Kamath, country general manager,

Lexmark, "MFDs are the right answers for enterprises where workflow demands

are big, and workspace is small. They consolidate print, copy, scan, and fax

functions into one simple space-saving device, and offer a wide range of

cost-saving features.


Agrees Xerox's Kuldeep Malhotra, "With growing acceptance

and user familiarization, MFDs have begun to emerge as the 'Communication Hub'

for networked offices. With the advent of Color MFDs, businesses in India will

be able to avail of next generation, affordable, color communications in India.

This is the stage where the Indian Laser MFD market will align with global


Moving Forward

At the enterprise level, the affordability factor will nudge CIOs to go in

for MFDs whenever there is a printer purchase requirement. Vendors also believe

that mid-size enterprises will drive much of the A4 MFDs. Large enterprise will

adopt higher speed MFDs-20ppm and higher. However, analysts point out that

despite the MFD value proposition, it does have its limitations. For instance,

if an enterprise has huge copy and image scanning demands, it should go in for

standalone devices like copier and high-end production scanners. Niche

requirements will keep the standalone device market going. As Samsung's Negi

points out, "Organizations' document production needs are varied. Some

organizations look at the centralized print room concept to consolidate costs

and bring down running costs. Other organizations look at giving users

convenience-right till the desktop. Still others believe in separating

document production under various sub-heads-printing, copying, faxing-hence,

differentiated procurement. MFDs definitely bring in consolidation of document

production; but, depending on the organization's need to distribute document

production the decision to buy networked or non networked, heavy duty or single

user machines will be made".


Value Proposition
  • Saves space and

    : MFDs deliver multiple functions-printing, faxing,

    scanning, and copying, providing the user with a complete office

    solution in one compact device

  • Increases

    : Can do all the documentation work from one


  • Is user

    : Simple functions make it a one touch operation

  • Provides

    network connectivity
    : Can be connected with the network and

    various workgroups can use it at the same time

  • Competitive

    : Much less than acquiring stand alone machines.

    Multi functionality helps enterprise, accommodate future needs


MFDs, hence, are seen as a complimentary print technology rather

than a competition to standalone devices. Most vendors agree that volumes for

copier-based MFDs will slowdown, as A3, as a segment, becomes niche-given that

the market is getting more polarized towards A4 printer-based MFDs. That's

more good news for the CIOs as the A4 MFD market will become extremely

competitive and vendors will resort to more price cuts to push more feature-rich

MFDs. Says Arun Gupta, CIO-Pfizer India, "MFDs offer value for money, while

saving the clutter in a compact size. As the price point keeps dropping, they

will end up cannibalizing low-end Laser printer markets. Pfizer, in India, has

deployed these devices for its regional offices, some home users, and remote,

clinical trail locations, which need more than just a printer."

At the end of the day, the evolution of MFDs as a key area in

printers can be correlated with enterprise applications-MRP blossomed into ERP,

which is a multifunctional solution; then ERP got supplemented with SCM and CRM.

In a similar fashion MFDs are ushering in more converged options for the

enterprise to consolidate and optimize on their document needs.

Shrikanth G

in Chennai