There is no sign of a slowdown in the printer market: paper output is growing resolutely at 5% a year. But although the paperless office remains a pipe dream, there is a significant change afoot as the amount of paper being distributed both between and within enterprises falls.
This apparent contradiction is explained by the fact that the printing process is moving closer to the user. Although many documents end up being printed, they often exist in electronic form for longer, until they reach the point of delivery.
This process has been under way for at least 10 years, beginning with the first electronic data interchange implementations in the 1980s when business forms such as invoices were sent electronically rather than by conventional mail. This trend is now being accelerated with the growth of XML as a universal standard for such forms and indeed other documents. Furthermore, a variety of other documents that used to be sent in paper form are now being distributed electronically and only printed out when they reach the recipient. "The world is moving from print and distribute to distribute and then print locally," confirms Peter Urey, UK hard copy marketing manager at Hewlett-Packard.
There is also a trend toward using the Internet rather than private networks for distributing documents, and this has obvious implications for printer suppliers. Their products must be capable of being attached to the Internet and receiving documents for printing that way. In particular they must support the Internet Printing Protocol (IPP), which is being used increasingly for distributing work and controlling printers over the Internet.
This is all happening, with HP's mid-range 4550 laser series, since they have an embedded Web server and are IP-addressable so that documents can be routed to it for printing over the Internet. With this facility, it will soon be possible, according to Urey, for a user to access e-mail via a Wap phone and then route it for printing on a specified machine by keying in the relevant URL.
Once attached to the Internet or corporate intranet, a printer can also become a vehicle for inputting documents. A growing number of printers can digitise documents after they are scanned in, and then transmit them as e-mail attachments. To do this, the printer needs to have embedded PC functions as well as a browser, and some of the mid-range and high-end machines do. Printers with these capabilities can also order replacement cartridges and inks, with printers contacting an appropriate reseller. Such consumables can then be ordered "just in time", reducing the inventory that an enterprise needs to carry, and so saving money. Such automatic ordering is currently confined to slightly higher end laser machines, but will soon filter down to lower end inkjet models.
The laser and inkjet sectors will continue to constitute the two halves of the printer market. Roughly speaking, laser printers predominate for volume printing, while inkjet models will be preferred for personal printing, and where volumes are not so great, such as within local workgroups. Bearing in mind the trend towards distribution of documents before printing, many large enterprises will have inkjet printers close to end-users for dealing with more sporadic, ad hoc local output, while laser printers will be used for production work such as business forms.
In both sectors, the trend away from mono towards colour will be evident this year. This is being driven by the growth in printing of content accessed via the Internet. Estimates vary, but the consensus is that, while 25% of printers sold were colour at the end of 2000, this will have increased to 40% by the end of this year.
This could have a significant impact on enterprise printer budgets. Colour printers cost more, but with prices falling and coming closer to mono machines, the more significant factor could be the cost of consumables. These cost considerably more for colour, especially for inkjets. In some cases, particularly with low-cost inkjet machines, the lifetime cost of consumables such as cartridges or individual ink tanks can exceed the initial purchase price of the printer considerably.
For this reason, vendors have taken several steps to reduce the ongoing running costs. For example, Xerox, Canon and HP have just introduced cartridges for their inkjet printers that allow individual colour tanks to be replaced separately. Previously the cartridge had to be replaced as soon as any one of the three colours other than black had run out, even though invariably others had some left.
"We have done research showing that when one colour is empty, then on average the next emptiest tank has 20% of its ink left, and the other 40%," says Stephen Flint, marketing manager for inkjet printers at Xerox.
This means that on average 20% of the total ink is wasted. Furthermore, in replacing the whole cartridge, the cost of a new print head has to be incurred, even though there is usually nothing wrong with the existing one.
The other important consideration for colour inkjets is performance, which has been their Achilles' heel. Progress has been made by various strategies, such as having all the inkjet nozzles aligned so that they can print each line at a single pass but, as always, at a price. So while the top-end inkjets can now approach low-end laser performance at eight pages a minute, they often cost up to £1,500. However, it is quite likely that the cost of high-performance inkjet printers will come down and achieve a differential over lasers there too, just as happened at the low end a few years ago.
The next trend after colour could be printers capable of printing business forms formatted in XML directly, according to Keith Bloodworth, CEO of Formscape, which specialises in output management. "XML is rapidly becoming the standard for swapping documents between disparate hosts and applications," Bloodworth notes.
This, he argues, will fuel a growth in demand for printers that can print forms formatted in XML directly, without involving some host computer to decouple the content from the commands first. Then a printer could print out relevant XML documents such as orders or invoices as they arrive directly off the network, without the computers becoming bogged down with processing ERP transactions. This will continue the trend towards printers becoming independent network appliances comprising all the software and processing resources they need to perform their allotted tasks.
Another trend anticipated by Bloodworth will be IT managers exercising greater control over output management to reduce costs by cutting out unwanted printing and ensuring that hard copy documents are distributed to the correct people and places. "Currently very few IT managers - I would say 15% to 20% - have actually got a strategy for output," says Bloodworth.
Yet their efforts would be better spent on this than on agonising over the choice of PC or server hardware, or indeed over which printers to buy, Bloodworth argues.
A well-considered output management strategy has the potential not just to save money by cutting down on unnecessary printing but also to improve the distribution of information and knowledge.
This was first published in January 2001