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Issue of August 2004 

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Color printing set to go mainstream in enterprises

Michael Hoffmann, Senior Vice President, HP Imaging and Printing Group, Asia Pacific & Japan

Two years ago, owning a color laser printer was the privilege of a few enterprises, mainly from the publishing industry. A lot has changed since then and color has become more affordable. Starting prices for color laser printers have slid below the Rs 50 thousand mark and more options for color printing are now available. Seeing a huge opportunity in a steadily growing market, vendors like Hewlett Packard are aggressively moving color printing to the mainstream for business environments. Already a $7.1 billion market, HP estimates the office color printing market will grow annually by 20 percent to $10.2 billion by 2006 worldwide. HP's Imaging and Printing Group (IPG) has devised a strategy to increase marketshare.

Michael Hoffmann, Senior Vice President, HP Imaging and Printing Group, Asia Pacific & Japan, said three vectors have come together to drive the increased adoption of color printing in the enterprise. "Imaging and printing devices are more affordable, digital photography is widespread, and technology now can provide rich, powerful color at prices customers can afford. HP is harnessing these factors to make 2004 the year digital color goes mainstream."

Don Dixon, Principal Analyst, Gartner Research said the barriers to color are coming down, and more enterprises are adopting color for mainstream printing worldwide. "As ASP and running costs decline, color will become available to more businesses (especially from the SMB sector) in 2005 and beyond."

There are a couple of factors that are driving color printing mainstream for businesses. Firstly, acquisition prices are falling rapidly. For instance the HP Color LaserJet 2550 is available at a street price of Rs 35,000. According to HP, this makes volume color printing an attractive proposition even for small businesses.

Apart from that, print speeds are increasing and vendors are applying techniques like single-pass technology (all four colors are applied in a single pass instead of four passes), and dual-side printing.

Printer manufacturers like HP have also put in a lot of research to address CIO concerns about manageability and TCO.

Vibhor Bansal, Country Category Manager, Color Lasers & Business Inkjets, Hewlett-Packard India, informs that HP has looked into these concerns and responded by introducing certain features (in some models) that lower the TCO and improve productivity. For instance, there's a feature called Smart Printing Supplies wherein a manager can track the usage of toner through a Web interface. An MIS manager can see this and plan accordingly. This reduces the margin for printer downtime.

Running costs

A bigger concern with users is running costs—mainly the cost of consumables (cartridges). HP is aware that this could be a big issue with SMBs (a segment it is aggressively pursuing), and hence it has introduced the dual cartridge system in the Color LaserJet 2550 (which is positioned at SMBs).

Bansal informed that the LaserJet 2550 printer offers a choice of a low-yield, low-price cartridge system and a high yield, low cost per page (CPP) system. The standard cartridge set prints about 2,000 pages (per month), while the higher capacity system prints 4,000 pages.

HP's strategy

To increase its share in the enterprise color printer market, HP is primarily looking at migrating its existing base of customers to color or color/mono. It will also target fresh (large) accounts and pursue a new segment—SMBs. In the enterprise space, HP is targeting four segments: SMB, large enterprises, graphic artists and commercial printing.

To implement this strategy HP has already initiated marketing campaigns and programs for its existing customers and channel partners.

"We are telling our customers to go in for a balanced deployment. Have mono printers for high volume output and color printers for in-house printing. Have a mix of devices to get the best ROI on print infrastructure," said Bansal.

On the anvil are upgrade programs for its most valued customers (with a large installed base of HP printers). There will be a trade-in program for most valued customers.

— Brian Pereira

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