In their relentless pursuit of the zillions of pages printed annually on electrophotographic devices in the office, Epson and Hewlett-Packard each made key announcements recently about their business inkjets. In early March, HP unveiled a bevy of new hardware including rebranded inkjet devices for small-office/home-office (SOHO) users, small to medium-sized business (SMBs), and even enterprises. Although Epson also introduced new office hardware, a couple of unique monochrome inkjet units, the company’s big announcement in March concerned a new distribution partner, which will provide Epson with access to more BTA dealers.
New Year, New Hardware
Using the theme “Printing Reinvented,” HP launched a broad assortment of new machines including some devices that may prove to be the most significant of the year in the inkjet hardware space. Leveraging the PageWide brand, which had previously been used for the high-speed inkjet technology found in certain Officejet Pro units, HP released its new PageWide Pro 300, 400, 500 product lines along with the PageWide Enterprise Color 500 family. The company also refreshed its OfficeJet Pro offerings with a new printer and six new all-in-ones and released a new OfficeJet-branded mobile printer and mobile all-in-one. And, for those office users who just can’t give up their toner-based machines, HP also introduced a couple new monochrome LaserJet printers and a new Color LaserJet Pro MFP.
Epson’s hardware news at the end of March was more modest than its rival’s and included just two new A4 business inkjet machines: the WorkForce Pro WF-M5194 printer and the WorkForce Pro WF-M5694 multifunction unit. However, the company made a major channel announcement in the United States earlier that month, which could be a game changer. On March 15, Epson America announced that it was working with a new distributor, Impression Solutions, Inc. (ISI), which caters to over 1,000 BTA dealers, to market machines featuring Epson’s Replacement Ink Pack System (RIPS).
Great Fit!
Tom Kettell
“The opportunities that Impression Solutions represents to us is their history and core competency in the BTA channel,” says Tom Kettell, Epson’s director of the commercial sales channel. “They have a proven track record of being able to identify, acquire, and support dealers in that BTA space, and that was something very important to us as we look to increase market share in these products,” he says. Kettell indicates that the RIPS line is unique and addresses specific color needs in today’s market. “It’s a niche-focused product and it requires somebody like Impression Solutions that has that expertise in the BTA market to help us.”
Based in Columbus, MS, ISI operates three distribution centers nationwide giving Epson extensive reach into the BTA channel across the U.S. According to Ray Looney, ISI vice president of sales, the firm started with the Kyocera line when it opened for business 17 years ago and currently Kyocera represents about $47 million of the firm’s $50 million total annual revenue. With their long-life consumables, Looney says Kyocera units provide great support for managed print services (MPS) contracts on the monochrome side of the equation but not so much for the color side. “Kyocera is the premier monochrome manufacturer, there’s no doubt in my mind. But they’re not there on color yet. So, we need something in the color space.” He told me ISI is excited by the way the RIPS models fit into its current portfolio.
Ray Looney
Describing it as a “perfect fit” in the ISI portfolio, Kettell echoes Looney’s sentiment and adds Epson allows ISI to expand its product offering. Released in the U.S. in January 2015, the RIPS line include the A3 WorkForce Pro WF-R8590 MFP and two A4 units, the WF-R5690 MFP and the WF-R5190 single-function printer. The machines employ large ink bags—or “packs”—capable of printing up to 75,000 pages, which allow RIPS devices to provide low operating costs as well as go for long periods without requiring consumables to be refreshed. The RIPS machines support dealers seeking to market MPS programs that offer customers low-cost color printing.
Epson and ISI are targeting the distributed print segment of the MPS market specifically with the RIPS units. Looney says that his customers have had a hard time offering low-cost color printing to companies with remote sites that don’t print much. He explains that a dealer may have the corporate headquarters nearby but there could be “20, 50, even 100 remote locations scattered around the country and it’s impossible for a dealer to turn a profit on those accounts because of the cost of delivering supplies and delivering service.” Looney explains that because the dealer rarely has to deliver consumables or service, the RIPS machines can be placed and maintained profitably. “In a [remote] environment where there are only 700-1200 prints, it’s almost impossible to [turn a profit] with a laser.”
Larry Trevarthen
In addition to servicing the distributed print needs of larger firms, Epson is looking to penetrate small to medium-sized businesses with RIPS devices. “And the resellers that Impression Solutions support, also support a real broad base of the SMB channel,” says Larry Trevarthen, director of business imaging at Epson America says his firm. “They touch both through their [ISI] reseller channels,” he says, “at the corporate level and the SMB level. So with ISI, we can expand our reach into distributed corporate and SMBs.”
Good (Early) Response, Big Plans
When I spoke with Looney, ISI had been selling the RIPS line for “exactly two weeks,” and he was enthusiastic about the market response. “We signed seven dealers in the first week, and I believe that was for 34 units,” he told me. While the new offering will amount to just a fraction of the 30,000 or so Kyocera units that Looney estimates ISI sold in 2015, he predicts 130 dealers will purchase some 2,000 RIPS machines this year. “Epson’s growing,” he opines, “and we expect it to grow real fast.”
As one would expect, Trevarthen shares Looney’s enthusiasm. “We’re continuing to see growing demand, growing interest, and growing understanding of the [RIPS] value proposition and business,” he says. According to Trevarthen, ISI is uniquely positioned to fuel that growth. “A real benefit to working with them is they understand that value proposition and they’ve got a really deep understanding of how to communicate with the reseller channel.” He is confident that ISI can explain the new business model associated with Epson’s RIPS units along with “new profit models to its channel, so they can explain our vendor proposition to a reseller sometimes better than the vendor can, since they know how to put the message within the language of the channel.”
Rather than being concerned by HP’s impressive hardware roll-out in March that I noted earlier, Looney seems to have welcomed it. “HP is who they are, and they’re spending a lot of money with these products,” he says. “They’re going to open this market and make consumers see ink as being more than just for the home office/small office environment.” While Looney predicts that as HP may successfully prove the concept that ink works for business users, he feels the company faces big challenges in the channel. “I’ve seen HP try this over and over again,” he observes. “They want the channel but they don’t want to change.” According to Looney, HP demands that dealers change their fundamental business practices when they agree to carry HP products. “And a BTA dealer is not going to change his business model significantly for HP.”
Although Trevarthen didn’t mention HP by name, he also indicated that Epson’s competitors appear to be following the company’s go-to-market strategy especially in the consumer inkjet market. Referring to the large capacity ink supplies that Epson has been deploying in various devices worldwide including the RIPS units, he says, “We’re seeing our competitors starting to mirror this strategy not only on the commercial side but on the consumer side as well.” Trevarthen told me that the RIPS roll out is meeting the firm’s expectations and Epson is happy “with where it’s going,” adding, “We’re even happier about where we think it’s going to go in the future.” Looney also thinks that ISI is poised for future success. “I think the earlier adopters—and we’re hoping to be one of those—is going to have a leg up [in the business ink market].”
Printing Reinvented
Looney’s comments regarding HP’s efforts to open the office market up for inkjet machines were reflected in the OEM’s most recent release of business-class inkjet devices. As I noted earlier, HP grabbed headlines in March when it rolled out a slew of new business inkjet machines as part of its Printing Reinvented launch. Some of the new units were really nothing more than SOHO devices gussied up for the office. But there was also some important new office hardware in the release that should further propel the adoption of business inkjet machines.
The most interesting new hardware of the bunch was the PageWide units. The PageWide 300 series features print speeds of 30 ppm in its Professional Printing mode (45 ppm in general-office mode) and is targeted at small workgroups of 3 to 10 users that print up to 3,500 pages a month. For the same sized workgroups printing 4,500 pages a month, HP has the PageWide Pro 400 line, which features print speeds of 40 ppm in the Professional Printing mode (55 ppm in general-office mode) and comes with more security features than the 300 model. Aimed at workgroups of 5 to 15 users printing 2,000 to 7,500 pages monthly, the PageWide Pro 500 series has advanced security features and prints at 50 ppm in Professional Printing mode (70 ppm in general-office mode). Finally, the new PageWide Enterprise Color 500 series is designed for the same sort of workgroups as the PageWide Pro 500 series and matches its Professional Printing mode print speed but offers 75 ppm in general-office mode.
Although the consumables found in the PageWide units have much lower page yields than the Epson products, the new HP 972 series tanks deployed in the line tend to be larger than traditional cartridges found in older inkjet units. They also feature a new ink formulation that supports faster speeds, higher page yields, and better image quality. Page yields range from 3,000 for the new CMY HP 972A tanks to 17,000 pages for the HP black HP 972Y tank. Use of certain SKUs is limited to certain models and depending on the installed tanks, the cost per page ranges from 2 cents for a black page printed with the PageWide Pro 330 and 400 using the HP 972A SKUs (or 10 cents for a color page with the same tank series), to 1.53 cents K and 7.04 cents color using the HP 972Y tanks. The new PageWide Enterprise Color 500 series takes the HP 981 family of tanks, a different cartridge family than used in the PageWide Pro models. All of the HP 981A yield 6,000 pages, while the highest yield K HP 981Y tank delivers 20,000 pages. Based on the cartridge pricing that HP provides, end users will get the best per-page cost by using the HP 981X black cartridge and the HP 981Y color cartridge, which together deliver output costs of 1 cent in black and 5.13 cents in color.
HP says the new OfficeJet Pro 8210 and OfficeJet Pro 8710, 8720, 8730, and 8740 are designed for micro and small businesses printing up to 2,000 pages per month. HP’s new OfficeJet Pro 8210 printer replaces the OfficeJet Pro 8100 released in 2011 as well as the OfficeJet Pro 251dw from 2013. The new OfficeJet Pro 8710, 8720, 8730, and 8740 replace the OfficeJet Pro 8610/8620/8630/8640/8650/8660 series. Instead of using the page-wide arrays found in the PageWide units, new OfficeJet Pro machines feature HP’s new Print Forward Design and a scanning thermal print head that shuttles across the page when printing. In addition to a higher carriage speed, the heads feature more nozzles (1,568 total versus 1,376) and a higher firing frequency of 30 kHz versus 24 kHz. As a result, the new units feature speed improvements over their predecessors for both simplex and duplex printing.
The new OfficeJet Pro machines employ new HP 952 series ink tanks, which contain a newly formulated four-color (CMYK) pigmented ink set. Compared to the inks used in older OfficeJet Pro units, the new formulation contains higher pigment loads and supports faster print speeds as well as higher page yields per container. In terms of yields and per-page costs, there is nothing remarkable about the HP 952 ink tanks. The standard-capacity HP 952 cartridges have yields of 1,000 pages for black and 700 pages apiece for cyan, magenta, and yellow. Yields were the same on the HP 950 black and HP 951 cyan, magenta, and yellow cartridges. Pricing on the new black cartridge is higher than the older K tank, while pricing on the color cartridges is unchanged. As a result, CPP has gone up when using the standard-yield cartridges from 2.7 cents in black and 11.7 cents in color on the previous OfficeJet Pro 8610, 8620, and 8630 to 3 cents in black and 11.99 cents in color on the OfficeJet Pro 8710, 8720, 8730, and 8740.
The new OfficeJet Pro 6960 and 6970 are typical SOHO A4 inkjet all-in-ones designed for micro and home business printing up to 800 pages per month. Together, they replace the OfficeJet Pro 6830 from 2014. The new units are not due out until June and details were scant. It appears, however, that HP is using a new four-color pigment ink formulation. A representative for the company told me that the new models use an ink set with higher pigment loads, which is similar to what HP is promoting with the new ink sets used in the new PageWide and OfficeJet Pro units. While hardware specs were not available for this series, supplies specs were. The new OfficeJet Pro 6960 and 6970 use new ink tanks: the HP 902/902XL/906XL cartridge family and with page yields ranging from 300 pages to 825 pages. The best cost-per-page for the new SOHO units is 3.2 cents printing a black page and 10.47 cents per page when printing a color job.
In addition to the range of office inkjet hardware above, HP refreshed its inkjet-based mobile line. The new OfficeJet 200 Mobile Printer and the OfficeJet 250 Mobile All-in-One replace the single-function OfficeJet 100 Mobile released in 2011 and the multifunction OfficeJet 150 Mobile from 2012, respectively. The OfficeJet 200 and 250 Mobile offer faster print speeds than their predecessors as well as device connectivity over Wi-Fi, an ultra-long battery life, and other enhancements. Featuring the HP 62/62 XL integrated cartridges released in 2014, the new units are based on a different imaging system than that used in the predecessor models, but not a new design. Regardless, the per-page costs of the new mobile devices are high—6 cents for black and white printing and 15.63 cents for color. Competitively, the high CPP is probably not an issue because operating costs tend to be high in mobile devices.
Marching Forward
HP’s Printing Reinvented launch once again demonstrates that the company is the technology leader in the office inkjet space. And, while HP is pushing hard to place inkjet technology into higher-volume office environments, it clearly is not yielding its position as the leader in the SOHO office inkjet market. Most of the new inkjet devices offer a compelling set of features compared with competitive devices, but it seems that HP wants to improve margins on ink, so it’s charging users a bit more if they choose to use certain combinations of its new cartridges. This could give competitors like Epson, which offer much lower operating costs on some machines, a sizable advantage. For those looking to lower the cost of printing, HP does offer some savings through its Instant Ink program for certain machines and it’s all but certain some end users will subscribe to the program.
Still, many of Epson’s latest office machines—SOHO, SMB, and commercial—have very low operating costs that Instant Ink can’t touch. Several units that Epson has released over the past year or so can print black and white and color pages at less than a penny, for example. But Epson’s success is far from certain. In terms of hardware, HP continues to hold the whip hand when it come to enhanced features especially in terms of print speeds. Two of the three RIPS units have a top-end speed of 20 ppm and the fastest model is a 24-ppm device. Customers may find such speeds downright poky when compared to the 50-ppm and 70-ppm speeds achieved by the PageWide machines.
This is probably a good place, however, to recall Looney’s comments regarding HP’s inability—or unwillingness—to woo effective channel partners. Lacking a channel partner that can attract office users with ink is a distinct weakness for HP. And this may be the competitive advantage that allows Epson to grow and go toe-to-toe with HP. Looney told me that Epson is “willing to adapt the product and do the things necessary for the channel to be successful.” Such a willingness to adapt may prove to be Epson’s strongest advantage.
