Posted on Thu, Jan 07, 2010
I didn't hear many people shedding tears as they said Good Riddance to 2009 last week. However, when you look back at the past ten years, should we also be happy to say goodbye to the decade?
From a stock market perspective, the 2000's will go down as the worst decade on record in terms of investor returns. Seeing the demise of Nortel, Worldcom, Enron, and the meltdown in the financial markets, I guess it's not that surprising.
In the print world, we've also seen a significant shift in the ‘players'. At the turn of the century, Xerox and Kodak employed almost 40,000 employees in Rochester. Today, that number is just over 15,000. Both of their challenges have been well documented with Kodak selling its copier business (to Danka, subsequently sold to Konica Minolta) and losing much of its dominance in the photographic market. Xerox also given up its Catbird seat to HP, Canon, and Ricoh. In addition, Xerox was forced to restructure and has since outsourced most of its copier & print technologies to partners including Okidata, Samsung, and Fuji.
We have seen HP follow the path of IBM. Both are huge ($100B+) and have become increasing aware of the need to become more service focused. Of the major OEM companies, HP appears to have the lead in migrating to this service model.
So, the decade ahead...what's next for print? Well, Managed Print Services (MPS) has become the new trendy term, with many technology companies painting themselves as service organizations. My belief is we'll see this term last the decade...and may even have it defined before 2020! We'll see continued consolidation in the market, in terms of both acquisitions and hardware partnerships (Xerox-Samsung, HP-Canon, Lexmark-Oki, etc). From a customer perspective, maximizing the efficiency and productivity of their staff will be paramount in the coming ‘jobless recovery'. Therefore, customers will demand a complete managed print program, including software, hardware, realtime asset information, and a solution that maximizes uptime while minimizing capital expenditures.
And, finally - we'll see those Consulting companies (Gartner, Photizo, Lyra) shift their business models to recognize the best print/copy service-based companies...including LaserNetworks. It's the right thing to do for both customers and the industry. Without it, are we destined to repeat our mistakes of the 00's? As of Oct. 18 2001, all 15 analysts tracked by Thomson Financial/First Call rated Enron a "buy"--12 of the 15 called it a "strong buy." Even as late as Nov. 8, the date of Enron's disclosure that nearly five years of earnings would have to be recalculated, 11 of the 15 recommended buying the stock. There were three "holds" and one "strong sell." Enron declared bankruptcy Dec 2, 2001.
Happy New Year!
Brian
Posted on Mon, Nov 16, 2009
As we have seen lately, there is a fair amount of consolidation in the copier & printer marketplace. We have seen Ricoh acquire Ikon in an effort to ‘push' more Ricoh equipment. We have seen HP and Canon team-up in the belief that partnering will result in the sale of more equipment. This week, we saw Canon in the news with its acquisition of Oce. Again, the acquisition appears to have been made in an effort to sell more hardware...this time in the production printing space.
Here's the link... http://news.yahoo.com/s/nm/20091116/bs_nm/us_oce
It appears many of the copier-based companies have come to the realization that there is far too much capacity in the market. At a conference last week, a Xerox VP noted customers have far too much copy/print capacity and the market for 60+ page/minute devices "were sinking like a stone while the workgroup MFPs (20-50 page/minute devices) were continuing to increase in popularity." We have seen this product shift with our customers for the past several years. In addition, we're seeing the life expectancy (reliability) of workgroup devices extend well beyond the traditional 3-5 year useful life of those higher speed copier devices.
With the recent poor financial performance from Xerox, Canon, and Ricoh, it appears the copier industry is set for more consolidation and partner agreements. Across the industry, beyond the negative trends at Xerox, Canon, and Ricoh, copier companies are cutting back on their sales, marketing, service, and R&D capabilities. As an example, Xerox builds very little product today...most of the lower speed MFPs are manufactured by Samsung; the higher-end devices made in conjunction with Fuji or other manufacturers.
From our perspective, the impact of the above consolidation will not be dramatic to our customers or our company. It should also be noted that LaserNetworks has completed two acquisitions over the past 24 months. These were service-focused and geographic acquisitions, made to create more capability and value for us customers across North America.
Regarding the copier acquisitions, my belief is that until the copier companies create a business model that first addresses the customer, instead of a model focused on selling more hardware, we'll see continued profit erosion from these companies, and therefore continued consolidation in the copier industry.