As 2019 draws to a close, PrintIT Reseller invited some of the industry’s bestknown vendors to share their thoughts on what 2020 holds for the print and IT sectors
Mike Barron, Managing Director,
It’s a really interesting time in print as well as the wider IT channel. Resellers, distributors and vendors are all having to re-evaluate their roles, the value they deliver and the nature of their channel partnerships. We’ll see this continue and gather pace in 2020.
The idea that HP floated recently, at the Canalys Channels Forum, whereby it would adjust the sale price of its print devices depending on whether or not they were capable of running with only genuine HP, or with third-party ink or toner cartridges, was one illustration of how things are changing.
For a long time, it’s been known and accepted that print vendors make more off the sale of consumables than they do from selling the print and MFP devices themselves. But the after-market has since become saturated with alternative replacement cartridges. It seems HP has decided that it’s not going to win this battle by fighting the imitators through its legal and marketing departments. Instead, it’s going to make customers pay more if they buy a device that can take someone else’s consumables.
How’s that going to change things for the channel? It’s always good to be able to offer customers a choice of course, but what you offer may now depend more on the kind of reputation and relationships you want to build with customers and with suppliers.
Another rising trend for 2020 will be sustainability. There is a lot of talk about this now. End-user customers want to know about the carbon footprint and environmental impact of print and IT solutions. Everyone wants to move towards circular economies, so as well as a products’ green credentials, tradeins and recycling will become more important.
We expect managed services to continue growing in 2020, not only with print but also in areas like back-up, security, networking and infrastructure. This is very closely tied into the steady migration we are seeing to cloud services and to subscription business models for IT. This is not confined to software anymore – there are many more device-as-a-service and hardware-as-a-service offerings out there now.
In terms of vendor trends, it’s interesting to see that – as far as our business is concerned at least – that HP has consistently been our number-one print vendor, but their market share has decreased by 14.3%, mainly due to a fall in supplies sales. Canon has seen the biggest growth in the past year, increasing market share by 4.4% to 14%. In 2020, everyone in the channel will need to think about how the changes in the way technology is being used and consumed will impact the value they deliver, and the way they do business and interact with customers. The whole channel is undergoing a transformation and that will bring many challenges, but also many opportunities. It will be important to recognise and adapt to the former and seize the latter.
Martin Randall, Sales and Marketing Director,
2020 will see more uptake in a lot of the already prevalent market trends. Whilst cloud-based technology is now widely accepted, we have yet to see fully established SaaS-based print management platforms.
Relatively new vendors like OneQ and EveryonePrint are continuing to cause disruption with their respective cloud and hybrid hosting models for output management which is putting pressure on the more established players to develop and differentiate their offerings. With the momentum this has gathered, 2020 certainly looks like the year that the shift to cloud in this space, and in turn subscription-based licensing will become established.
As the ‘as a service’ model continues to gather pace in general, print hardware vendors will continue to innovate and find ways to benefit from the subscription wars by launching more of their own proprietary app-based system connectors and integrations. And, as the mind-set of buyers continues to shift from traditional contractual options, more fluid agreements in all aspects of print and document solutions will also take shape.
Aside from this, we’re also still seeing an exponential increase in client engagement around digital transformation using content services platforms which looks set to continue to increase as a business priority in 2020.
Undoubtedly also we will see more consolidation within the market place and shouldn’t be surprised by more collaboration between IT and print partners.
Mark Bailey, Managing Director,
EBM Managed Services
*Brexit uncertainty: I’m sure this one’s at the top of everyone’s list. As things stand, we don’t know for certain the timeline or the manner in which the UK will leave the EU – and how this may affect SMEs. Planning for the unpredictable is a real challenge, but prioritising customer care will be key.
*Importance of genuine relationships: Making sure that you provide a quality service and communicate well with your clients is key. When faced with an unpredictable political climate and potentially challenging business circumstances as a result, the key to retaining clients will not be an unsustainable race to the bottom: it will be establishing trusted, genuine relationships and weathering the storm together.
*Market consolidation: The current trend for market consolidation is likely to continue, with private equity houses getting more involved in the industry. This will drive up the acquisition price of businesses, not necessarily reflecting the genuine value of the company and creating a potential ‘bubble’ of overinflated business values.
*Customer consolidation for simplicity and savings: Prioritising quality relationships over a race to the bottom doesn’t mean that price isn’t a factor in business. We’re seeing clients and prospects looking to consolidate suppliers and streamline their business processes and costs. This is simply common sense and is a trend we expect to continue into 2020 and beyond.
*Focus on wellbeing and the rise of flexible working: Both within EBM and with our clients, we’re seeing a new focus on supporting staff as individuals and recognising the importance of a genuine work/life balance. Supporting flexible and home working comes hand-in-hand with this, so we’re also seeing a rise in requests for software and services that support the effective implementation of flexible working. We expect to see this demand growing throughout 2020.
Gary Day, Group Sales Director,
The technology channel is going through an exciting phase of its transformation, where opportunities for suppliers are multiplying. In 2020, we will see them developing broader propositions and offering a wider range of services, with flexible ‘consumption-based’ services and contracts.
Channel partners who are able to provide value-added services will see strong margins when they focus on delivering business solutions and projects that require planning, implementation, integration, security, and compliance. Vendors will have to invest considerably in their programmes to prepare their partners for new opportunities and focus on any additional enablement resources, including tools and attractive offerings to help them differentiate themselves from the competition.
Additionally, we may also see an increasing number of mergers and acquisitions as separate organisations join forces to improve and streamline their product and services.
Alastair Adams, Director,
As Atle Skjekkeland, President of the Digital Value Institute said recently: “EVERY organisation, EVERY executive, EVERY individual and EVERY object are now on a digital journey. Organisations need to decide whether they will be disrupted, manage the disruption, or want to lead the disruption.”
We see this essential theme impacting all the markets we work in, and our response to it is the single most important factor in determining whether our businesses will continue to grow and prosper.
From an information technology perspective, clients will increasingly want to adopt infrastructure as a service and software as a service, and therefore the focus will move away from the individual hardware and software components and be much more about the service or the experience. One of the benefits of this is that the ‘I’ of IT will become more important: information and data and how we use them effectively is key to improving productivity and enhancing the client’s experience.
This theme is clearly impacting on print, because the way clients want to consume information directly affects the method and media we use to deliver it. Understanding why, and how, our clients want to print should be our focus, because the process which delivers printed output is where the true cost lies: we must focus attention on this business issue to create a value proposition to help our clients work in smarter ways, rather than just watch as page costs continue to reduce inexorably.
We must therefore broaden our skills and capabilities to include as a minimum an understanding of process automation in order to remain relevant. We need to identify which of our colleagues want to learn the skills necessary to meet this challenge, consider new hires and also build relationships with trusted partners. This is one way to win new business and offset declining profitability in core services. It’s a fantastic and exciting opportunity!
Nigel Allen, Marketing Director,
As we approach 2020, there is a lot of uncertainty from a political point of view with Brexit still not resolved. This naturally leads to unrest in business and planning as well as making it even more difficult to predict what might happen next year!
I believe that the demand for products to be sold as a service will continue and develop even further. There is still a huge opportunity for print resellers such as ASL to take advantage of this trend, as we have been service-led for many years. The trick is the ability to offer other products and services within the mix. The market definitely exists, and I expect more unified comms and IT services to be included as part of an overall package throughout the year. Although it has been well publicised, the fact that 2020 will see BT stop any further ISDN being supplied will drive further demand for cloud hosted telephony, an area that many print resellers are benefiting from through great incremental growth.
Additionally, 2020 will continue to see digitisation of the production print market. This trend will gain further traction with increased activity from manufacturers and larger dealers investing in this area to capitalise on the growth.
In summary, the print reseller market is still attractive and continues to reinvent itself. This is proven from the increased interest from traditionally IT-focussed resellers looking to move into the MPS space.
Phil Madders, Managing Director,
*AI: The amount of information that we must contend with in today’s office is growing exponentially. It is attached to emails, – buried in spreadsheets, encompassed in the plethora of applications we use to run our businesses. In theory this boom in data should help us to make better, faster and smarter decisions. Only problem is that there is so much to consider it is difficult to process it and see the issues that matter. It can be overwhelming. To address this, analytics, dashboarding and BI will continue to grow, but it will be linked to practical implementations of artificial intelligence.
AI is becoming more mainstream. Microsoft has been advertising its AI project involving thousands of motion cameras deployed in the Himalayas to track Snow Leopards. Firstly it had to teach the program to recognise a snow leopard, then put the processing power in place to crunch the thousands of images received to identify which image was a snow leopard, and then report on this to the scientists to turn the data into meaningful analysis. Brilliant, in its simplicity, it shows what AI is about. At PAE we are using the work we have done on predictive modelling for usage volumes into an AI application to see if we can predict accurately requirements on toners, spares, engineer resource and supplies. We see this as a practical application of the experience we have built in analytics and the experience we have working with our partners.
*GDPR: is moving from a concept to an everyday business practice and is having an impact upon day to day business activities. It has had some strange side-affects. I have been engaged in discussing the tracking of fax traffic. Now if these predictions had been related to 1983, I would have been prepared for that – but 2020! However, the facts are self-evident – 50 billion pages worldwide sent last year – a forecast of 11 per cent growth and 1.6 billion of those pages in the UK. The reason being that fax is now recognised as one of the most secure formats for protecting data and providing audit trails. Very difficult to hack and manipulate – its popularity is set to grow, but in the electronic format rather than a piece of hardware. If in any doubt just watch this space.
*Data sovereignty: the restriction of data leaving a certain geographical location – be it the EU or in a recent request we had, the data had to stay in one country. Will it have an impact on SMEs in the UK? The most likely source of enquiry will relate to the provisioning of cloud services and where the data resides. I expect this will be a question that is asked increasingly during 2020, especially if Brexit happens.
*Millennial and Generation Z factor: will grow in terms of influence within the workplace. The phrase ‘screenagers’ is very suitable for the first generation that has been brought up with information on tap, fed via a free app or the internet. They expect information in the workplace to be as readily available, services to be provided on a SaaS model and to be constantly updated. This is a massive challenge to the more traditional workplace and the practices that have evolved. Add to this that the competition that companies face in recruiting and retaining this sector of the workforce it is easy to see their influence growing and accelerating the change in the workplace
*Consolidation will continue: Venture capital companies seem to have become more prevalent in the acquisition process. Their route to success is a tried and tested one – growth through acquisition – achieve a critical mass, sell to another larger VC, or as in the case of Apogee, to an OEM. Which leads me to another prediction that OEMs in the print hardware sector will continue to acquire large dealers to control and shape the market in their own image, and each other as the market, or related value added organisations such as IT services organisations. I expect at least one major player to be acquired by another in 2020.
Rod Tonna-Barthet, CEO,
Kyocera Document Solutions
Technology and innovation are reshaping almost every sector and it has created a significant shift in our industry. As many organisations have already migrated to the cloud, 2020 will be a good time for them to explore the opportunities it can create. In particular, this will be crucial to those who are moving towards more flexible ways of working and need to have the right tools, such as cloud print in place to ensure that their staff can perform their work securely and effectively.
Equally impactful on the way we work is automation. While it has traditionally been used in industrial manufacturing processes, it can now be applied on time-consuming and routine tasks, which can free staff to focus on value-add tasks. The time saved through automation can also be used to upskill, for personal development, or to focus on more complex or customer-centric work. Aside from the huge efficiency gains for the organisation, customers often want to self-serve wherever possible, so customer satisfaction is increased. I really hope to see more organisations taking advantage of this technology in 2020!
Jason Cort, Director of Product Planning and Marketing,
*Cybersecurity for SMBs: Understanding of cybersecurity is on the rise, although there are still a significant number of small to medium sized businesses that need to take up the mantle. Too many think “it won’t happen to me, I’m too small”, which is dangerous and naïve. Cybercrime must be taken seriously at every level and even more so in the SMB community, where business owners should be doing everything in their power to ensure customer data and digital assets are safe.
As awareness of cybersecurity grows, we expect to see SMBs continue opting for fewer suppliers – not more – and the onus will be on current suppliers to provide a guarantee of security on top of their service. For example, businesses are increasingly looking to source connected MFPs from their IT suppliers and gain a more unified approach to infrastructure security. This is simpler and business leaders feel safer in the knowledge that suppliers already have the expertise and technology to protect them.
*Serverless printing: We predict the adoption of serverless printing will increase due to rising demands in cloudbased infrastructure, as opposed to onpremise. However, network bandwidth is not unlimited, and printing via the cloud has the potential to drain this resource quickly.
That said, the trend to remove onpremise infrastructure makes serverless printing an attractive alternative, retaining secure printing capabilities without the need for servers or cloud. Adoption of cloud usage will continue to rise, with more businesses of all sizes making the move to secure cloud environments such as AWS and Microsoft Azure. Moving to the cloud is also allowing businesses to utilise big data analytics and AI services, giving them greater business insights and helping them make better decisions.
*The environment: As environmental issues become even more prominent, every industry’s environmental policies will be subject to change. 2019 has been a big year for environmental awareness and accountability and it is clear that this movement will only gain momentum in 2020. Organisational and cultural change takes time in the corporate world, though as suppliers we must think one step ahead about what our clients will require from us.
The print industry must consider the EU’s legislative approach and how we can contribute to an organisation’s environmental objectives. In particular following a Circular Economy approach to product design – such as the use of recycled materials for manufacturing – and the reuse and collection of consumables. However, this kind of change needs to be made at the beginning of a product’s life-cycle, not as an afterthought. Furthermore, as the proportion of Millennials and Gen Z represent an ever increasing proportion of the work force, purchasing from environmentally and socially responsible businesses carries greater weight. This requires both operational and cultural change for supplies which takes time to become truly embedded.
*Inkjet printing: Whilst we are seeing more confidence in business inkjet by the likes of companies such as HP, who predict considerable adoption in the short-term, there are challenges to widespread adoption in business. The consumer experience of inkjet is often fraught and this perception, along with the reality that at a business level the variability equation of speed vs quality vs ink coverage can be the deciding factor for DMs. However, business inkjet is strong enough to attract new adopters but there’s a long way to go before we see widespread acceptance across the industry.
*5G: 5G is a big buzzword at the moment in every sector. Whilst businesses and the public speculate on the future applications for 5G, the real conversation for printing has not yet started. Although 5G connectivity will be available as a consumer standard by 2020, it is a complicated and long road before we see adoption of any significance in print. 5G could eventually replace fixed line broadband, guaranteeing offices to have access to faster and more secure connections – but any impact on print will not be felt for a few years yet.
Dave Weston, Head of Channel Sales,
I predict challenging times ahead for print, margins are eroding, competition is fierce and economic uncertainty continues. However, OKI remains focused on finding those opportunities where we add value for our customers. This high profit method will take our resellers on a deep dive into the green ocean where it is less about price and more about the solutions being provided, in turn adding meaningful value for our end customers.
Jeremy Spencer, Director of Marketing,
In 2020, we expect to see accelerated adoption of process optimisation, with users capitalising on the major efficiency savings that can be delivered through intelligent document management and the digitisation of workflows. These efficiencies are ever more important given the fragility of the current business climate, with businesses looking at flexible finance models and subscription services over traditional capital expenditure which enables them to realise greater value within their organisations.
Clearly this builds on the ongoing merging of the traditional print world and IT services, something that we at Toshiba have been investing in with a number of key appointments and investments in the product and solutions portfolio.
Finally, in this competitive market in which we operate, 2020 will continue to require the channel to demonstrate how it addresses the challenges that end-users face, providing solutions that clearly meet their needs. Importantly, these needs increasingly include ‘softer’ elements such as working with a partner that has strong ethical standards and CSR or environmental credentials.
James Pittick, Director of B2B Indirect Sales,
*Automating paper-based workflows will become a higher business priority: Over the course of 2020, the industry will see a more prevalent shift to the digitisation of workflows, as these technologies and processes become more mainstream. Businesses will continue to look for experts who can consult on the available solutions and how they can help them deliver more efficiencies in their business by take their paper-based processes and automating or digitising them. Along with this, the blending of print and digital processes will further enhance the services that partners can offer to customers.
*Print will become more relevant in a broader IT services proposition: Customer expectation will drive a need for partners to diversify their offering. Increasingly, customers are looking for partners who can advise them on a wide range of IT services and digital transformation more broadly. Print will be one element to a range of broader requirements, for example, printers integrating with collaboration tools and file sharing services. Partners who wish to grow in the year ahead, will need to become generalists across a range of technologies, rather than specialists.
*Personalised print will become more prevalent: Higher quality, point of sale material will become more personalised in the mainstream print arena. We can see this happening already in the rise of personalised print services such as bespoke wallpaper and personalised wrapping paper on the high street. Personalisation is being driven by customer demand, but also innovation in the market where digitisation is complementing and advancing traditional print services.
*New revenue opportunities will be created between high-end office and low-end print: The ‘overlap zone’ between high-end office print and lowend light production in professional print will create more opportunities for the channel. New printers on the market, such as Canon’s imagePRESS C165, will boost in-house print. Creative businesses and marketers will not necessarily require managed or outsourced print rooms to create high quality, bespoke creative outputs. This development in the print market will open up new revenue streams for partners, allowing them to offer a broader range of capabilities for creative industries.
*Partners will need to build out their ecosystem and form alliances in 2020: The market is evolving at a rapid pace in terms of acquisitive activity, consolidation and customer choice. The partners who are slow to adapt, will run the risk of being left behind. For many partners, expanding or acquiring businesses might not be an option in this economic climate. To diversify, the channel will look to build out its ecosystem, with partners forming closer alliances with each other. For example, print specialists will look to partner with other businesses who are more experienced in IT services.