MFDs: the fourth generation

Satisfied with your current crop of standalone laser printers? You might want to take a look at Canon’s latest MFDs that the company states will facilitate the integration of the hard copy and electronic document environments and thereby collaboration. By Prashant L. Rao

Alok Bharadwaj, Senior Vice President, Canon India is a man on a mission. His avowed goal is to get companies to measure, manage and ultimately reduce the amount of money that they spend on printing, scanning etc. In Bangalore, as part of the promotional activity around the company’s latest MFDs, he touched upon the state of the market and why these latest machines were different.

Business Imaging Systems (BIS) is the Canon division that focuses on the document management, printing, scanning and copying needs of large companies. This technology vertical took a hit last year.

In India there are about 2 lakh MFDs which are in use and close to about 20 lakh laser printers. 2 lakh MFDs on an average create close to 2 billion pages per month. The 20 lakh printers create about 6 billion pages per month. That's about 8 billion pages being printed or copied per month. There’s still a huge amount of reconditioned gray, refilling etc. which would account for about 50% of that number.

In 2009, the total industry was about 70,000 MFDs and 7,00,000 laser printers which was lower than it was in 2008. This year the expectation is that both these segments will grow by about 15%. Looking at Canon’s market share, it had about 23% in MFDs and it took leadership over HP in the laser printer area in one quarter. For the entire year, its share in the laser printer category was 33%. In Q1 2010, Canon’s share was about 40%. The total industry size of the copier and multi-function device business is close to about Rs 700 crores. The laser printer business should be about 8 lakh units this year. With the toners and everything put together this would be about Rs. 1,000 crores. In total we are talking about a market of 1,700 crores as per IDC. This will be back to 2008 levels. 2009 was close to Rs. 1,500 crores.

As we have seen, 2009 wasn’t a good year for the printing & imaging segment across the board. “That part of our business shrank. It was only because of services that we could maintain flat growth. We survived as a company with only some scratch marks. The turnaround began to happen late last year. I won't say that the turnaround is complete but the initial three months of this year have shown us an encouraging pattern. Last year our BIS business was flat. In Q1 this year, it has grown by 23%. Overall the company has grown 60% in Q1,” commented Bharadwaj.

Canon feels that things are starting to snowball with large companies having adopted the technologies that it is selling and that the interest in these solutions is percolating down the pyramid. Bharadwaj’s take is that during the last three-four years of growth that we had in the country, before things began to slow down in the second half of 2008, companies added a bit of flab and that is being trimmed. In their pursuit to improve efficiency, companies have started to realize that they need a different approach. This recognition is an admission that they were not doing the right thing and that there are better ways to do it.

Moreover, although scanning has been largely overlooked what with standalone printer sales dominating the numbers by 10:1, the scanner business in India is growing, or at least it is not declining. “There is a huge amount of archived data that needs to be digitized,” said Bharadwaj.

He cited the example of the check truncation market which is in the early stages of implementation. At this point only Delhi/NCR has been done. “Chennai is round the corner, it will happen by July-August and then it will be Mumbai’s turn. By the time the whole country has gone in for check truncation, it will be a big business. 3,000 check scanners get consumed in every city when they roll out the system,” stated Bharadwaj.

Coming back to the current crop of MFDs from Canon, Bharadwaj argued that we were entering into a fourth generation of these machines with the earlier three being standalone devices, networked devices and then MFDs that supported on board applications including archival, retrieval, transparency (access rights), security, cost and control. The fourth generation is where the MFD becomes part and parcel of a collaborative environment. To do this, these devices need to connect to external systems such as Microsoft SharePoint or Adobe's LiveCycle Rights Management ES system which is just what the latest MFDs from Canon do. In the past you would have needed middleware to accomplish this task.

One thing that is new in the latest crop of Canon MFDs is that they support the creation of PDF/A-1b documents that are guaranteed by Adobe to be compatible with its software for a hundred years. In a world of changing document formats where support for older formats is generally, but not always, retained, that is a plus for any company considering archiving its documents in this format.

Another change is that the machines now come with a hard disk built in and can be considered to be print & imaging servers after a fashion. At the rate at which the sophistication of these devices is rising, I wouldn’t be surprised to find that they eventually come under the ambit of directory services and management frameworks the way conventional servers handling tasks such as file & print and other duties are.

Another added convenience is that routine office documents will now be stored in the machine including the HR, conveyance, recruitment, joining and leave forms enabling the option of just walking up to a device, calling up the form that you want and printing it.

Canon machines have historically been blazing fast but festooned with buttons. This has been addressed with a customizable touchscreen UI that can be tailored to a user’s preferences or even to restrict or grant access to certain options for users on a department-by-department basis.

As of now, Canon’s launched the mid- and high-end devices targeted at large companies. “Soon we will be bringing it to the lower-end and next year the entry-level,” said Bharadwaj.

The increasing sophistication of MFDs should definitely help increase this product category’s share of the overall printing & imaging market. The only factor hampering the growing adoption of these devices will be, as it has always been, the fact that most companies need to print an order of magnitude or even two orders more than they need to scan. That being said, for companies in industries where scanning is a vital requirement such as insurance, these devices are going to prove useful indeed.

Managed Document Services (MDS) builds on the concept of Managed Printing Services and as the earlier concept has been quite successful with large enterprises, there’s no reason why the same shouldn’t be true of MDS as well. In fact, I fully expect to see MDS to start eating into the market of jury-rigged document management systems where scanners are cobbled with third-party software to enable the process. By offering a more structured solution to the problem of integrating the management of hard and soft copy documents, MDS has a lot going for it. It will not be every company’s cup of tea, and MPS will still have its adherents, but for any organization where the management of large volumes of hard copy documents is a fact of life, MDS will prove to be a compelling proposition.

prashant.rao@expressindia.com