Some technologies sell in good times and bad. Everyone needs to protect their networks, but will run out of room to store data, so storage and security are evergreens.
Hardware, especially desktops and peripherals, are more susceptible to the change in financial seasons. Companies are delaying refreshes until conditions and IT budgets improve.
Printers fall into the peripheral category and so one would expect printer sales to be slowing. But printer vendors, as ever, are bullish and say they have seen no slowdown - yet.
One vendor argument is that printers are mechanical devices that suffer wear and tear, and at some point become more expensive to fix than to replace.
Another is that as far as hardware goes, printers themselves are not particularly expensive; even laser multifunction devices (MFDs) are becoming very affordable.
But both those arguments - cheaper to replace, low cost of hardware - apply equally to the desktop on the executive's desk. Resellers need more convincing ammunition to keep winning printer sales.
CRN asked several printer vendors the question at the front of printer resellers' minds: How does one survive in printing?
Cutting costs opens doors
The one line that should always work with existing customers is the promise to save them money.
"A lot of companies don't know the total cost of printing in their company," says Richard Bailey, vice president of HP's South Pacific imaging and printing group.
The numbers would probably surprise many businesses. Paper plus hardware and toner adds 1-3 percent of revenue, according to a December 2008 Gartner report.
IDC estimated in 2008 the average annual hardcopy spend is 5 percent of revenue.
Resellers need to convince customers to audit their printing network and learn how much they are spending. Once the numbers are on the table, resellers can play around with configurations, consolidate printer fleets and suggest improvements to workflow.
In the past this up-front consulting has generally been worth paying for. Now that resellers are the ones initiating discussions in the search for business, customers are more likely to expect it as a free service.
"Given the environment we are in I won't be surprised if that becomes more of a cost of doing business," says Kevin Goffinet, Lexmark International's vice-president and general manager of worldwide SMB and printing solutions.
Vendors say there are several ways to make the case to cut costs.
The most obvious is to upgrade outdated hardware. Cost per page falls with every new model, and even at the budget end latest mono lasers can squeeze out a B&W A4 for less than 4 cents.
Goffinet says an Australian reseller told him he was bullish in a recession as it gave him the opportunity to tell customers to save money through printer upgrades.
A customer with creaking old models still cranking out the invoices may be saving money on new hardware only to spend twice that on consumables and servicing.
Showing the IT manager how quickly he or she could recoup return on investment and continue saving can go a long way to making a sale, and the extra features of newer models can close it.
Entry-level printers for SMB and SOHO now carry paper-saving features previously reserved for more expensive products. Duplex printing is becoming a new standard, even for models with relatively small footprints.
"Pull printing" - where a user needs to enter a PIN on the printer to get documents printed - reduces the amount of wasted paper which ends up lying forgotten on the output tray.
HP says using duplex can reduce paper consumption by 30 percent and pull printing another 15-30 percent.
Keeping track of those costs should be easier with click charge auditing - a cost per page breakdown that the Federal Government has made mandatory on its tenders since the start of the year.
Clickcharge gives departments the ability to accurately audit their printing and its adoption by the industry at all levels will give businesses visibility over this area of their operations that has normally been slightly hazy.
Managing print
Auditing printer fleets and financial models like pay per click open up the possibility of converting a business selling printers into a managed print service.
MPS is a concept often talked about as a way to create recurring revenues, sticky customers and more profitable services. But now that fewer companies are spending, box-dropping resellers need MPS more than ever to distinguish themselves from the retail channel.
"This is going to force a trend that has been happening over the years - resellers who are just in the business to move the hardware are going to be under tighter and tighter restraints. It's going to force them to try to drive more managed services," says Goffinet.
MPS covers many profitable areas that take resellers beyond moving low-margin hardware. While one can question how printer sales will do in a recession, printing will always have one constant source of revenue: consumables. Toner and ink cartridges sell constantly through downturns because as long as people need to keep their businesses running, they will be printing.
"The hardware side can be impacted like any other IT hardware," admits Goffinet, but consumables have shown to be more or less constant. Consumables management can reduce inventories from stockpiles to a just-in-time model.
Companies can also save money simply by reducing the number of printer vendors and unique devices on the asset register. This normally means toner supplies can be reduced as a result, unlocking capital that otherwise sits in the storeroom.
Tying up consumables in a managed services contract protects this lucrative stream from intense competition. Catalogue companies that target receptionists with free holidays to Bali in return for signing over the account can introduce non-originally supplied toners and inks into the business.
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