The Calm Before the Storm or The Perfect Storm?
The imaging industry was clearly a mixed bag in 2012, inducing almost a collective “holding of breath” within the industry, as signs of a major industrial shift were everywhere. Declining pages reduced unit shipments, and increased margin pressure continued to negatively impact industry financials. The vendor community appears to be taking three basic approaches to change: embrace change and shift to a MPS led model with a focus on advanced MPS (such as Xerox, Lexmark, and Ricoh) shift to a broacher managed services/technology services approach (Konica Minolta, Okidata and HP) or “more of the same” offering basic MPS and competing primarily on technology (the rest).
Really, the separation between vendors offering basic MPS vs. advanced MPS is so significant now, Photizo Group is breaking the MPS market size and forecast into two separate forecasts. The gulf between the “haves” and the “have-nots” is increasing steadily- but what does this mean for 2013?
In the product space, technology was thrust forward with Memject gaining significant traction as OEMs began adapting their technology and HP powering through with new page array technology announcements in the office. Lexmark’s software company acquisition spree slowed as they focused on integrating their 5 recent acquisitions into core business, with view of offering a unified sales approach. Software companies focused on developing mobile print platforms, while the “high-end” market continued to shift its focus into integrated workflow.
Geographically, political transitions in China and the global economic slow down are reducing the growth rate in China—a market many OEMs were looking to for growth. Brazil continued with strength, North America effectively stalled and Europe was heavily impacted by the economic climate for traditional sales. Europe is, however, poised for dramatic growth in the channel for MPS. Our European MPS conference was actually larger this year than our global conference in North America. This acceleration is also touching ground in South Africa, Brazil and India.
In fact, the channel scene was in many ways, most chaotic as it is rapidly moving from what kind of “provider are you” to “what can you provide?” It’s all about capabilities, and evolving your capabilities faster than your competitor.
I think 2013 is going to mark the next major churn in the imaging market—here are a few expectations:
- Offering MPS has ceased to be a differentiator. In 2013 the gulf will widen between vendors who offer basic MPS and those who offer advanced MPS. Customers are increasingly going to favor vendors who can truly deliver advanced MPS, consistently, on a global basis.
- The European channel will rapidly catch up to North America in terms of MPS adoption. The question is, who will be the preferred OEM partner?
- Page array inkjet from HP will finally drive ink jet velocity in business – maybe.
- Several competitors will be forced to consolidate as they face the reality of not having critical mass to compete, globally or even nationally.
- Page volumes and unit volumes will continue to decline. Customer’s focus will increasingly shift to how vendors can make more of their processes digital versus paper based.
So, 2013 becomes the year of the storm – maybe not the perfect storm, but certainly challenging waters. For those with a clear path for sailing through the storm, it could be a year of fast sailing and separating from the competition. For those who are following the same course, it will be a year of rough sailing.