WEB 2.0, the catchall phrase for user-generated websites such as Flickr and MySpace, isn’t just making venture capitalists and search engines rich. Web 2.0 is also boosting, of all things, the printer market.
So says Michael Hoffmann, chief of HP’s Europe, Middle East and Africa imaging and printing group (IPG). "There’s an explosion in digital content worldwide and Web 2.0 is the major driver. More and more content is being created by non-professionals and at least some of it’s then printed."
For example, the content produced by non-professionals includes the users of Web 2.0 sites that print their digital camera photos and small companies that, with cheap software and cheap hardware, can now produce full-colour marketing material such as brochures themselves. "Marketing collateral is a major growth area – all small businesses want to look like big businesses," says Hoffmann.
HP, the world’s largest printer manufacturer, estimates that in 2005 some 46 trillion (that’s 46 000bn) pages were printed worldwide. That figure includes everything from industrial printing to an office A4 copy. HP says by 2010 another six trillion pages/year will be added. "We all know the paperless office turned out to be a myth. Paper processes still dominate within companies and for many workflows have become unmanageable," says Hoffmann.
HP’s IPG division turned over US$27bn (R190bn) last year, representing growth of 7%. It’s the biggest contributor to HP’s profits and the company managed that growth despite a declining worldwide printer market, according to research firm IDC. That sounds contradictory to the expected increase in pages printed, but 3,7% fewer printers will be sold through to 2010 only because so-called MFPs – or multifunction peripherals, that function as scanners, faxes, copiers and printers and are network-connected – are cannibalising sales of the single-function printer.
"Copier" companies such as Konica Minolta, Xerox and Ricoh have long dominated office printing. However, Hoffmann says like with other IT hardware, such as storage or servers, companies are looking to consolidate their printing infrastructure to save costs. Here HP’s computing and networking expertise stands it in good stead. HP also offers software to manage printer fleets.
HP is best known for desktop inkjets and lasers that cost around R1 000 but is now moving aggressively into office printers for what it calls the enterprise market (companies that have more than 1 000 employees). These high-speed, high-volume machines can sell for around R100 000. That’s if you could buy them.
HP’s latest top-of-the-range entry into the enterprise market is called Edgeline. HP is offering Edgeline printers only on a contract and pay-per-page basis with no outright sales. In SA, resellers Motion and Tarsus have been accredited to offer managed print services on the Edgeline MFPs. HP also offers full outsourcing of printing functions and the likes of Vodafone and Bayer now make use of such services on a global scale.
Edgeline is a product of the company’s $1,4bn spent on research and development of scalable printing technology. Edgeline ink technology was introduced last year as photo-printing kiosks in retail outlets. Edgeline doesn’t rely on inkjet (not fast enough) or laser (resolution not good enough) technology but uses pigment-based dyes with a bonding agent. Those machines are for company departments that print between 20 000 and 50 000 pages/month and can print 50 colour and 60 monochrome pages/minute.
HP says the new technology used in Edgeline enables it to provide better margins to resellers and expects the new machines to prove as disruptive to the market as its smaller scale MFPs proved to be. In just three years HP went from accounting for 1% of sales in that segment of the office MFP market to 18%.