A video interview with the head of the printing company’s Canadian division on the present and future of printing
The promise of the paperless office has never seemed so far away.
Every day office printers spew out thousands of pages despite the pleas of management. To the jaded observer, it appears that managed print services, the hoped-for whip, is facing an uphill battle.
In an interview, Todd Hamblin, president of Lexmark Canada, admits there will be slow migration away from paper so the largely digital office won’t be mainstream for at least another five years.
Craig Le Clair, a principal analyst at Forrester Research who covers the managed printing services industry agrees: The paperless office, he says “is a long way off.”
He has seen big drops in so-called production printing such as marketing material and production reports. But office workers still feel the need for something in their hands for certain tasks (including, Le Clair admits, himself).
Lexmark, which overhauled its lineup last October by announcing 18 new laser smart multifunction printers, many of which integrate with office productivity applications like Microsoft Office and SharePoint, isn’t trying to push either way.
“Ultimately we feel its finding the right balance for paper,” Hamblin said, “because we feel it still has a place in the office. But how you manage and control digital is still forming, and that is where we want to have a major voice in helping our customers understand what they should keep only in digital form, versus what should be in paper form.”
So, like its major competitors Xerox Inc., Hewlett-Packard Co., Ricoh, Toshiba and Canon, Lexmark has been expanding into content management software to meet customer demands for digital solutions.
In fact, you might say it’s been on a buying spree:
In March it completed the acquisition of Twistage, a cloud software platform for managing video, audio and image content; and AccessVia, which makes software that allows organizations to create signs for digital displays or color or monochrome printers. The two deals totaled US$31.5 million.
In January it bought Acuo Technologies, which makes a platform for consolidating medical images, for $45 million. Acuo has become part of Lexmark’s Perceptive Software division, which Lexmark bought in 2010. Also part of Perceptive is Belgium’s BDGB Enterprise, which Lexmark picked up last year for $148 million. It makes a product called Brainware Distiller for pulling data from paper and electronic documents that can be funneled into customer relationship management (CRM) and enterprise resource management (ERP) suites.
Hamblin said Lexmark has bought eight companies in the last three years as it moves from a hardware-centered company to one that focuses more on software and services.The effect can be seen in Lexmark’s latest quarterly financial results, issued this week. The Perceptive Software division revenue was up 54 per cent to $44 million compared to the same period a year ago. Sales of software outside Perceptive, as well as other revenue, was $94 million, up 34 per cent. Hardware revenue during the three months was $181 million (down 9 per cent from the year ago period) and sales of printing supplies were $609 million (down 16 per cent).
Like other printing companies, it is also heavily into offering managed print services through its partners. “It allows us to bring a broader offering as a supplier and help our customers get a handle on their printing and imaging,” he said. Lexmark estimates savings to organizations typically range between 20 and 40 per cent.
It’s a big enough business that in 2012 Xerox bought Laser Networks, one of Canada’s largest managed print providers. Hamblin suggested Lexmark [NYSE: LXK
] won’t go that way.“We go to market in MPS with the partner model,” he said, noting the biggest are Pitney Bowes and Unisys. “I won’t rule out that we won’t be looking to enhance our capabilities, but we feel (now) they are second to none. We’re happy with our partner network and we’re investing heavily in our own capabilities through new software tools.”