PRINTING AND IMAGING: Make Color Your Business

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DQC Bureau
New Update

The time for black-white printing is out. Color is the in thing, and
enterprises are expected to adopt it at a fast pace. Market research company,
Gartner, forecasts that US will witness a CAGR growth of 18.93% between
2003-2008, for color printer sales. Gartner also predicts that units sales in
India will rise from 12,70,378 in 2003 to 15,33,092 in 2008.

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Photo printers will grow by 50.57% worldwide, while MFP color copiers will
move up by 20.97%. However, inkjet color printers are likely to experience a
decline of 11.53% for the same time frame. Robust color printer growth is also
predicted for APac between 2003-2008.

WHY THE SHIFT

There are several factors for the rising sales of color machines. The 'color-capable'
market will accelerate the conversion of mono to color. These means that more
business needs will now rely on color for correct deliverance, like project
reports, sales charts, marketing collateral, etc. With customers identifying
brands with their color marketing collateral, companies now see the value of
color in getting a competitive edge.

"Black and white is not true communication, as the object interpretation
is not realistic," says Don Dixon, Financial Analyst, Digital Documents and
Imaging, Gartner. He adds that color also improves the information retention in
hard copy. Also, the average sales price and running costs of color machines are
declining. While the acquisition costs will continue to decline, it will now be
at a gradual pace.

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"Color will become as normal in business environments, as it is in a
normal environment," says Michael Hoffman, Sr VP, Imaging and Printing
Group, Apac/Japan, HP.

Adds PG Kamath, GM, Lexmark International India, "We understand our
customers' needs and provide high-value solutions that go beyond enabling
business users to take care of their diverse printing needs. Our color printers
helps organizations reduce costs and manage their bottom line."

Preparing for this shift, Canon India has launched a digital imaging
solutions lab for the enterprise segment. The lab is designed for customers and
partners to test and customize solutions. The lab will simulate real business
environments and allow enterprises to see how proposed color solutions can
perform with minimal investment using the latest Canon technology.

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According to Alok Bharadwaj, Director and GM, Conusmer Imaging and
Information Division of Canon India, the enterprise segment is an early adopter
of new technologies and trends. "Color in office is the latest trend that
is catching up around the world. After all, it lends to more effective
communication and the enterprise segment looks at ways to be more effective in
highly competitive market lace," he says.

Enterprises are taking color printers, especially laser MFDs as they are
getting increasingly cheaper. There is also a growing realization that
communication presentation is as important as the communication for its
effective delivery.

In many developed countries, one third of printing has moved to color
already. In India, the trend has just started and with all the vendors focusing
and driving this trend, Alok predicts that it won't be long before the country
starts seeing major contribution coming from color printing.

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CHALLENGES FACING ENTERPRISES

Most enterprises today have to deal with a lot of competition and have to
use every trick in the trade to remain ahead of the pack. Their printing
requirements have to adhere to strict budget restrictions and they want to
maximize returns on their IT investments.

At the same time, they need to create a seamless IT infrastructure for
maximum manageability while communicating more efficiently and effectively with
customers. The CIO has to reduce outsourcing printing cost and enable the
company's sales force to be more effective.

In such a perspective, if color is added to their printing environment, they
can accrue better RoI, in terms of mindshare and revenues. "This is because
content and processes in businesses will be transformed from physical to static
to digital, to mobile to virtual over time," says Michael. "Networking
has enabled all imaging and printing activity-from traditional office printing
and copying inside a company to offset printing outside-to be connected and
interdependent."

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At the same time, there has been a dramatic decline in acquisition price and
TCO of color printers, with a converse increase in speed and performance.

DISPELLING MYTHS

There are several myths surrounding color printing, which is why enterprises
shy away from adopting this technology. As a solution provider, it is your job
to educate your customers about the right color printer, which will fit their
budget and their needs.

The foremost belief among buyers is that color printers are is costlier to a
monochrome. While the acquisition costs might be higher than purchase of
monochrome machines, if the cost is spread over a period of time, then color is
much lower, comparatively.

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Try this test. Find out the amount of color printing your customer outsources
and cost incurred, for a period of three years. Then, work out how much the
buyer would if color printing is done in-house and spread the cost across three
years. And then your buyer will probably find that it is cheaper to print
in-house.

Also, you can get enterprise customers to realize that they need not rely on
offset outsourcing for their printing needs. Also, offset machines can only
accept bulk-printing demands to offer economies of scale. If a customer wants to
print 10 personalized color brochures, then outsourcing it to a offset jobber
works out to be much more expensive.

"An average SMB purchases 382 billion four-page pages every year from
professional print shops," says Tan Lee Chew, VP, Business and Enterprise,
HP Imaging and Printing Group, Asia Pacific & Japan, HP. According to Trend
Watch Spring '03, an average SMB spends $17,000 annually to outsource
marketing collaterals. The potential savings, if color printing is brought
in-house, can go up to 50%."

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Another reason why enterprises avoid color-printing machines is because they
think these would mean deployment of bulky devices. But most of the latest color
printers occupy lesser footprint. Also, they come with single- or four-pass
technology, with various form factors. It can also be backward integrated easily
with the company's existing network.

FORECASTING TRENDS

Gartner predicts that color-enabled applications will act as an accelerator for
sale of color machines. Graphics organization sales will either be flat or
decline, as more companies reply on in-house outputting, especially for
on-demand printing needs. Production in color will grow in double-digit figures.

Market margins will decline as sales increase, but volumes will compensate
for it. Front-end margins will fall, but vendors will devise their own margin
plans for rewarding their partners. Scanning will become more of a requirement
for workflow and imaging, "Something that is nice to have, rather than need
to have," says Don.

VINITA BHATIA

CONVINCING ENTERPRISE BUYERS FOR COLOR

l Point out that acquisition and
operational costs of color products rapidly coming down

l Printing speed increasing along
with the duty cycles, thereby reducing cost per page

l More creative applications are
being developed for color output

l Lesser service interventions as
only individual faulty components are replaced, rather than the whole machine