There's Gold in Them Thar' Hills!

There's Gold in Them Thar' Hills!

The multi-function printing marketplace is one of the few areas of the IT industry where there is still gold left to be mined.

150 years ago this December the Eureka stockade at Ballarat was the site of Australia's largest land battle. One thing we've come to know about gold is that people will fight for it. The ICT industry has certainly seen this during its own gold rushes. These are times when certain technologies are pre-eminent and suppliers seek to make hay while the sun shines. Yet the ICT industry is so diverse that it's easy to be stove-piped in your own domain and fail to recognize when these gold rushes are under way.

This idea was brought home to me recently by a request to speak at a sales kick-off meeting for Fuji Xerox. They wanted me to talk about where multi-function printing (MFP) devices sat on the radar screen of CIO. As such, I needed to gather some background material from Loretta Pein, IDC Australia's senior analyst for peripherals. Even though we work for the same organization, up until then there had never been any reason for our paths to cross on work matters. And while I recognized Loretta as conscientious and capable, I was in for something of a surprise.

Loretta had an enthusiasm about what was happening in the local MFP market that would make an evangelical preacher envious. She gave me the distinct impression that she was relieved that, at long last, people like me were starting to recognize the significance of developments in this marketplace. She had a point. IDC monitors a myriad of technology sectors in Australia and New Zealand, but only two are growing at double-digit percentage levels. The MFP market is one of them.

Multi-Function Profits

IDC research shows that the Australian ICT market grew only 1.6 percent in the last twelve months. However, the MFP market increased almost 23 percent in the same time frame. Moreover, the colour MFP market experienced a 69 percent growth in the past year. The whole area of peripherals may not seem as sexy as other parts of ICT, yet the reality is that the MFP marketplace is one of the few sectors of the industry right now where there is some gold to be mined.

There are many reasons for this. Firstly, the technology represents a quantum performance improvement on its predecessors. MFP devices consolidate a number of peripherals for more cost-effective management. Integrating them into a computer network makes them accessible and enhances this consolidation. However, in so doing so, they become part of the domain of the CIO, since they usually have stewardship of what goes on the computer network.

IDC research also shows is that the future prospects for this market depend on organizations embracing colour printing. Users clearly recognize that colour enhances the quality of documents their business produces. Yet other research from IDC highlights that users also perceive colour as expensive to run, laborious to monitor and something of an administrative nightmare. In many ways there are parallels between the adoption of colour printing and colour television. Once you had to pay a premium for a colour TV. Then the price difference between colour and black and white diminished to such an extent that consumers could rationalize a move to colour because it was affordable. IDC's research indicates it's likely that colour printing will also soon be similarly recognized by CIOs.

As IDC's Forecast for Management research shows, reducing costs is the number one priority facing local CIOs. Given the increase in regulatory challenges ushered in by legislation such as Sarbanes-Oxley, effective document management is now also a growing issue for them. In many ways MFP technology fits the mood of these times. CIOs should expect to see a rush of suppliers keen to show them how they too can harness the capabilities of MFPs. Nevertheless, like all the previous ICT gold rushes I have witnessed, I expect their organizations will undoubtedly be enhanced by the application of this technology.

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