MFDs to the fore

Adoption of MFDs and LCD monitors is picking up, says Atanu Kumar Das

Unlike small businesses that are quite content with standalone printers, mid-sized companies have a substantial installed base of network printers. 69 percent of survey respondents have invested in this product category. This segment has also deployed MFDs.

Most mid-sized businesses have a robust LAN and a relatively large number of PCs. An average mid-sized organisation, as per the survey, has 148 PCs. Buying network printers makes sense in such an environment. Network printers also provide lower TCO than standalone ones.

Says P G Kamath, General Manager, Lexmark India, “Mid-sized companies are realising that network printers provide a lower cost of ownership than standalones. For example, for a standalone printer, the acquisition cost is only 5 percent while maintenance is 95 percent. For a network printer, maintenance cost is almost nil.”

For mid-sized businesses with considerable printing requirements, network printers are quite cost-effective. Says A Rajan, Research Officer, Tea Board of India, “We have been using HP network printers as we believe that these provide a lower cost of ownership than standalone devices.” Penetration is greater than 80 percent for network printers in the services and IT sector. Some companies also prefer network printers as they feel that they can control the cost of printing by using this technology.

Says Sudhir Chaturvedi, IT Manager at Eli Lilly India, a pharma major, “Investing in network printers lets us monitor and control the cost of printing.” The organisation has invested in 40 HP network printers.

Mid-sized companies are realising that network printers provide a lower total cost of ownership than standalone ones P G Kamath General Manager Lexmark India

Mid-sized organisations with over 500 employees are realising that printing costs can be substantial if they aren’t controlled. Costs can escalate when organisations expand. Kamath says that most organisations do not realise that they inadvertently spend close to 3 percent of their revenues on printing.

Says he, “CIOs today are looking for printing solutions that can be customised and controlled.” Most respondents agree that the management of printing activities can save a lot of time and cost. As network printers provide these features, they are being accepted by medium enterprises.

Always on with UPS

These businesses are investing heavily in UPS systems; 67 percent of respondents have done so. Traditionally, the biggest market for UPS systems has been Mumbai, New Delhi, Chennai, Kolkata and Bangalore. Of late, there has been a shift towards B&C-class cities. Most vendors believe that this is due to the poor quality of power and the upward spiral of PC penetration in these locations.

SMBs are among the fastest-growing segments and the penetration of low-end and mid-range products is high Sandeep Nair Managing Director Emerson Network Power India

According to Sandeep Nair, Managing Director, Emerson Network Power India, “SMBs are undoubtedly one of the fastest-growing segments today. There is high penetration of low-end and mid-range products in this segment.” Nair says that within the segment, awareness of business continuity solutions is growing at a fast pace.

Agrees Deepak Sharma, Managing Director, Eaton Power Quality, “Medium-sized enterprises are driving the adoption of high-end and online UPS.” He says that the SMB segment contributes one-third of his company’s revenues. According to estimates by Eaton, an organisation with 100 employees typically spends Rs 5 lakh to Rs 6 lakh on UPS.

According to MAIT, the UPS market touched Rs 1,400 crore in fiscal 2003-2004. Of this, the sub-5 KVA segment of home users, SOHO and SMB users accounted for Rs 745 crore. The enterprise segment accounts for the remainder. MAIT’s findings are validated by the IMRB survey which shows a high penetration of UPS systems among medium enterprises.

Says Pankaj Kumar, IT Manager, Delhi State Co-operative Bank, “UPS systems are absolutely critical for our industry as we cannot afford any downtime during working hours.” The bank has been using 5 KVA UPS across its 40 branches in the country. The brands vary—there’s APC, Microtek and Eaton Powerware.

The Tea Board of India has 18 branches across the country, and it uses online UPS for continuity. The company is upgrading its UPS infrastructure. “We were earlier using 5 KVA UPS but we recently upgraded this to 2 online units of 20 KVA,” says A Rajan, Research Officer at the tea board.

Choosing a brand

While the UPS industry is fragmented with a variety of local options, most mid-sized businesses feel that buying a branded product is a better option. They approach consultants and system integrators to find out which brand they should purchase. “We make sure that we use a reliable brand because we want to ensure that we are supported by the vendor. In a product like a UPS, one should not compromise because it would be a deterrent to productivity,” explains Rajan.

As in the PC space, branded players are being preferred in this segment too. “Most medium-sized businesses are buying UPS systems from branded players as they have realised the importance of support and service,” says Sharma of Eaton Power.

MBs say yes to entry-level MFDs

In the drive to lower cost of ownership, mid-sized organisations are buying entry-level MFDs. Says Kamath of Lexmark, “Medium enterprises are investing in entry-level laser MFDs which start from Rs 20,000.” He says organisations have realised that by using these peripherals, they can cut overall printing costs. He expects the MFD market to grow by 25 percent. While sales of MFDs are growing, vendors do not expect this trend to influence sales of standalone printers. Among mid-sized businesses, the scan to e-mail function is popular. Many organisations with a multi-locational presence are using this feature to send documents, a change from the earlier method where these organisations used to courier documents to branch offices.

Says Som Gangopadhyay, Senior Marketing Manager, Office Systems and Solutions, Volume, Canon India, “Medium-sized enterprises have understood the benefits of MFDs. We have seen greater adoption of entry-level MFDs as these are competitive in pricing as well as in efficiency.”

Similarly, Xerox Modicorp is bullish about entry-level MFDs. The company’s sales in this category grew 48 percent in Q105 vis-à-vis Q104. Says Natesh Mani, Executive Director, New Office Group, Xerox India, “We are seeing a trend of Laser MFDs eating into the market share of standalones.” Mani says that the falling prices of MFDs have influenced this trend.

Eli Lilly is using three high-end MFDs and a couple of entry-level MFDs. Similarly, The Tea Board has four mid-range HP MFDs. Says Rajan of the Tea Board, “MFDs are much better than standalone printers simply because they offer superior functionality for a lower price tag.”

However, not all organisations believe that MFDs should be looked at as replacements for standalone printers. Chaturvedi opines that mid-sized organisations should look at MFDs only if they require features that are not available in normal printers. For example, if an organisation already has a fax and a printer in place, it does not make sense for it to acquire an MFD. That said, vendors are driving down costs of MFDs to encourage adoption. Some vendors have also been holding seminars and road shows across the country to promote the low-cost-of-ownership angle.

Says Nalini Jolly, National Operations Manager, Toshiba India, “Medium enterprises have actively purchased entry-level MFDs. Investments in entry-level MFDs give them a lower cost of ownership as these products cost less to maintain than standalone devices.” Looking at the positive reaction, Jolly believes that the stage has come for vendors to market high-end MFDs to medium-sized businesses.

High-end MFDs pick up

Medium-sized businesses are buying from branded players as they have realised the importance of service and support Deepak Sharma Managing Director Eaton Power Quality	We have developed an ROI calendar that helps a company understand how it can reduce costs by using high-end MFDs Lakshmi Narayan Rao Assistant Director, Marketing Canon India

The adoption of high-end MFDs by mid-sized businesses has been encouraging. Typically, a high-end MFD is defined by a production rate of over 20 pages per minute. These machines are typically equipped with features such as e-mail alerts for low ink, distant document sending, and password protection. Medium-sized enterprises with multiple printers, scanners and copiers are strong buyers of these devices as they seek to consolidate their print, scan and copy needs onto a single MFD. For instance, Eli Lilly has purchased three high-end MFDs from HP.

While MFDs look attractive from the TCO standpoint or for consolidation, vendors are cautious while positioning their products as most also play in the standalone segment. Some printer manufacturers advise companies to adopt a mix of MFD models and standalone printers.

Says M Lakshmi Narayan Rao, Assistant Director, Marketing, OSS Value, Canon India, “We have developed a ROI calendar which helps companies understand how they can reduce costs by using high-end MFDs. We also have our own solutions laboratory, where we simulate an environment similar to that of our clients, so they can visualise the profits they can derive in the long run by using our high-end devices.”

LCD monitors are hot

With the cost of LCD monitors dropping below Rs 10,000, mid-sized businesses are purchasing them. Says R Manikandan, General Manager, Sales and Marketing, IT Products, LG Electronics India, “Price cuts have seen LCD monitors being accepted by medium enterprises.”

Organisations such as the Tea Board and Eli Lilly have begun using LCD monitors at their head offices. “We are using four LCD monitors. These help us project a better image,” says Chaturvedi of Eli Lilly.

The consensus is that companies have to look at cost-effective printing solutions that lower the total cost of ownership. Adoption of network printers and MFDs by medium businesses is a step in this direction.

atanu@expresscomputeronline.com