Following up on my December article on the Top 10 Stories of 2013, there’s nothing like starting the New Year off right with a discussion on the Top 10 Trends of 2014. You may notice that some of these trends mirror some of the Top 10 stories of the previous year; however, a trend can be ongoing and there’s a couple that will no doubt continue to impact the office technology and imaging industry in the coming year. Let’s take a look.
- The Industry Further Embraces the Mobile World
This is a place that everybody in the industry from the hardware manufacturers to services and solutions providers is focusing on. Mobile apps are proliferating to meet the end user’s needs for anywhere, anytime access and that’s good news in general, although there are some challenges surrounding mobile apps. “It’s going to get more confusing before it gets better,” predicts Brian Bissett, editor of The MFP Report. “That’s not necessarily a bad thing; the range of options and approaches are proliferating which makes for confusion. On the flip side it requires that vendors get back to marketing so that if you’ve got three different [mobile applications/solutions], the user understands when to use one and not the other.”
- The Emergence of Apps
This next trend is tied closely to mobility, but not exclusively. When discussing apps, Bissett emphasizes that this is more than just terminology, particularly when it comes to new capabilities running inside or on an MFP. To date, Kyocera and Konica Minolta seem to be the most prolific in the applications arena among the OEMs. Bissett is less enamored with some of Konica Minolta’s applications because he views those as more of “Gee whiz, look what we can do” as opposed to apps that people are actually asking for. An example of one of those is an app that displays weather report information at the MFP.
“Konica Minolta seems to come up with things and see if they stick while Kyocera’s at least have some business practicality,” opines Bissett. “This also shifts the role back to apps as things that the vendors want to develop rather than being developed by third parties.” As a result he wouldn’t be surprised to see some of the OEMs shift the focus away from software partnering and take more of a do-it yourself approach when it comes to app development.
- Page Volume Continues to Decline
Wherever one turns in the office technology segment, everyone seems to be on board with this trend. No wonder vendors and dealers are spreading their wings and looking for other opportunities. Bob Sostilio, president of Sostilio & Associates, points out that papermakers have been reporting a decline in the sale of office papers in the U.S. since 1999. “International Paper alone reduced its North American capacity by 150 billion sheets of 8.5 × 11-inch uncoated cut-sheet paper from late 2008 through early 2010 and in September 2013 announced closure of another plant that will remove 82 billion pages (950,000 tons) of uncoated free-sheet paper from the market in 2014,” he says.
While printed output within the corporate environment is on the decline, Sostilio sees revenue growth coming from high-speed digital printing and color because of the growing number of pages printed with some color.
Color is an area where vendors like Toshiba continue to see strong growth with color system sales up 14 percent year over year from 2012. “Color now represents 42 percent of our unit shipments, which are up 37 percent from the same time last year,” noted new Toshiba America Business Solutions President Scott Maccabe at the company’s recent dealer meeting.
Expect those percentages to grow across the industry. Bill Melo, TABS’ vice president of marketing, services & solutions, is adamant that dealers have to push color over monochrome devices. “We ship 40 percent of our products in color; it has to get over 50 percent. If the number of pages are going down the value of the page has to go up.”
- 3D Printers are Ready for Prime Dealer Channel Time
You can probably count the number of BTA type dealers who are selling 3D printers on one maybe two hands, but with Konica Minolta’s recent announcement that it is planning to partner with 3D printer manufacturer 3D Systems, expect to see more activity in the channel for this product segment. Add to that HP’s announcement that they are also entering the 3D space, albeit focused largely at the lower end of the market with more consumer level products. The dealers who are currently offering these products to prospects and customers are the first on their block with this technology, which gives them a modest advantage. That advantage won’t last for long as other dealers across the country are getting primed to pick up on this uncharted product territory.
“In 2014 3D is going to get real hot,” predicts Keith Kmetz, an analyst with IDC who says he’s been fielding a lot of questions from dealers of late about how they can go after this market opportunity. Validating Kmetz’s prediction was a well-attended session on 3D printers at Konica Minolta’s November dealer meeting.
“The dealer channel is very thirsty about better understanding this market, how they can make money, and so forth,” opines Kmetz. “It introduces a whole new realm of printing that is not of the conventional nature and not subject to the maturity we see in the traditional print marketplace. Our numbers showing exponential growth market of 3D printing has a lot of folks excited about the opportunity.”
- The Rapidly Emerging Role of the Cloud and Cloud-Based Repositories
Whether you’re talking Dropbox, Googledocs, Evernote or some other cloud service, these are new destinations for storing documents rather than the traditional ECM document management repositories. Expect to see the cloud become an even bigger presence within the channel, or at least, a key component of new products, solutions, and services introductions in the coming year. At Sharp’s recent dealer meeting they introduced Cloud Portal Office, a software solution that allows mobile workers to share information and the organization to maintain control and security over the documents being shared.
The challenge of cloud-based repositories, according to Bissett, is figuring out how to scan the information and store it in these repositories as well as how to access that information from the device, how to print directly from those, and how to tighten the nexus between mobile device and cloud repository and scanning and output device. “This is the new solutions focus to be addressed,” states Bissett. He feels that Ricoh has done a little more than most other vendors here, but it’s not as if they’re leaving the competition in the dust. “It’s sort of virgin territory and there isn’t an established leader,” adds Bissett.
- A Focus on Workflow & Services
IDC’s Kmetz identifies business process workflows, which is tied into the cloud and mobility and anytime, anywhere access, as a services trend that will continue to pick up steam in 2014. “It’s driving efficiency,” he says. “It started with managed print, but that’s evolving, and part of this is transitioning paper-based workflows into more efficient digital workflows. A dealer needs to recognize that traditionally they’ve enjoyed many years of machines, supplies, break-fix maintenance of documents that spit out of printers and MFPs, and they’ll continue to enjoy that, but the machines are going down in unit shipments and there’s a decline in page volumes, which means if unit shipments are declining the installed base is right behind it.”
As a result he says dealers need to target more growth opportunities and help customers to be more cost efficient as well as drive productivity. “Provide managed services—managed print, managed IT, managed documents—it’s all part of the evolution taking place, leading to the consideration of how I’m going to bring software solutions and services that cater to information requirements of businesses,” adds Kmetz. “Everybody is talking about services led, that’s going to port down to the dealer community as well because of the manufacturers like Ricoh, Konica Minolta, HP, and Xerox talking about being services led.”
He contends that the truly savvy dealers with a long-term view of their business are looking at ways to transform their dealerships into a services led business that ties into business information along with the product offerings that cater to that.
- Big Dealers Continue to Get Bigger
Tom Callinan of Strategy Development identified this as a trend for last year and he’s sticking by that opinion again this year. “The strong dealers get stronger and the weak get weaker,” he says. “Large dealers are growing organic revenues at low double digits while smaller dealers and direct operations are shrinking. An illustration of the latter is Ricoh direct effectively getting out of the small account business and turning those accounts over to its dealer base.”
- The Accelerating Synergy in the Solutions Space Between Scan and Print
Scan and print go together like, well, milk and cookies, hot dogs and mustard, Bogart and Bacall, you get the picture. “You have both Nuance and NSi now saying both are equally important and related to the other,” says Bissett. “And you have people like Canon and Ricoh with their own software where they’re tying together different pieces, so the idea of going one place for your scan solution and one for your print is going away.” That’s an interesting trend and as it continues to develop, it’s likely that more OEMs will follow Canon and Ricoh’s leads by combining the two.
- The Office Technology Business Becomes More Appealing for Younger Workers
This may be wishful thinking in an industry where young folks aren’t exactly chomping at the bit to sell copiers, or those who start on this career path end up figuring out fast that this isn’t for them. With the emergence of managed services, IT services, managed print, along with mobility and the cloud, this industry may no longer be the domain of old dinosaurs anymore. I’m going out on a limb and predicting that the industry will see an influx of young talent, particularly in dealerships where management has come to the realization that they’ve got to do something to make the industry more appealing to younger people as a way to secure their business’s future.
- Healthcare Represents a Healthy Business Opportunity
Vertical market opportunities have always been the norm in the office technology business, but it seems that more dealers such as Centric Business Systems in Owing Mills, MD, Marco in St. Cloud, MN, and Meritich in Cleveland, OH to name just a select few, are finding big–and I do mean big–opportunities with healthcare clients. With an aging population it’s only natural that healthcare organizations will be bolstering their infrastructures, and that means more opportunities for selling an array of hardware, solutions, and services for the dealer channel.
