Exploiting the “Printernet” of Things

May 26, 2016
Article, Artificial Intelligence, Channel, Digital Transformation, Trends

Internet of Things: Opportunities for printer manufacturers

Within the next five years, the Internet of Things (IoT) market landscape is set for exponential growth. Today’s era of connected devices is the driving momentum behind the IoT. This represents a significant opportunity for printer manufacturers in product innovation, personalised offerings and optimised service delivery. Yet they have still to tap into the potential of IoT which could serve as an important new source of revenue and also enhance customer relationships.

Hardware commoditisation and margin pressure means that printer manufacturers are already transitioning to a solutions and services model to increase long-term revenues. Smart, connected printers and intelligent multifunctional printers (MFPs) allow products manufacturers can expand core value propositions. With print volumes declining, there are opportunities to be gained from the capabilities that MFPs offer around digitisation and paper-to-digital document workflow integration.

Multifunction printers (MFPs) are IoT enablers.

The concept of IoT has been around for decades, having evolved from machine-to-machine (M2M) technology. The IoT connects machines, devices and appliances wirelessly to deliver services with limited direct human intervention. Depending on the machine’s function it can capture relevant data on its usage, performance and status. This information can be used for remote monitoring and control, predictive maintenance and to generate other actions to improve device performance.

This approach is nothing new in the printer industry. Today’s advanced networked printers/copiers and multifunctional printers (MFPs) generate a wealth of data which is used for remote monitoring, predictive service and maintenance and just-in-time delivery of consumables such as ink and toner. Through managed print services offerings (MPS) printer manufacturers and their partners already leverage device analytics to enhance asset management, proactive maintenance and analytics and reporting.

In addition, MFPs operate embedded software platforms for app development – be it mobile printing, document capture and management or business process integration. Such apps enable users to invoke applications directly from the MFP panel and connect directly to enterprise applications. MFPs therefore operate as sophisticated document processing hubs which are integral to the IT network.

Capitalising on the opportunity

Printer manufacturers must play to their strengths and better leverage device intelligence to increase revenues and build longer term customer relationships. Areas of opportunity include:

• Service model transformation. Service models are already moving away from selling equipment to selling outcomes or performance. These offer a recurring revenue stream and, more importantly, create a relationship with the customer long after they have purchased a product.Service bundling to generate recurring revenues is not new, with simple “pay-per-use” MPS pricing models that integrate service, and consumables replenishment to lock out third-party suppliers. Yet there is the potential for innovation. Service-based pricing could be based on the time a device is up and running or an outcomes based model could be based on the results from the service offering. So for instance, paying based on how much is saved each month (for instance in energy, paper and consumable usage and so on). Such service models could attract customers that are not convinced on the value of a contractual offering – which is often the case in the price sensitive SMB market.
• Predictive service and maintenance. The impact of device downtime is leading to higher demands for service quality and device reliability. By examining real-time machine data being generated by devices, manufacturers and service providers can use predictive maintenance techniques to determine the condition of a machine and when maintenance should be performed. This approach not only reduces downtime for the end user but offers cost savings for the manufacturer over routine or time-based preventive maintenance, because tasks are performed only when needed.
• Automatic consumables replenishment. Devices can self-report on their consumables levels enabling automatic replenishment of ink and toner before depletion. This is an opportunity for manufacturers and their partners to control the supply of original consumables and through just-in-time delivery enhance existing customer relationships. On the consumer side, one example is Amazon’s Dash service which, through a button on the device, allows consumers to instantly order replenishment supplies for several brands of printers. This could create further opportunities for channel partners to offer similar services – and profit both from the direct sale and from a relationship with the hardware supplier.
• Product design improvement. Printer manufacturers face immense pressure in launching new products in short time scales, in order to stay ahead of the competition. They need to innovate continuously just to remain relevant and maintain revenues. Collecting machine operating history across machines can help determine priorities for future designs Manufacturers can extract information such as the most/ least used features, the features/ components resulting in most cases of malfunction and usage patterns for different users, devices and consumables. So for instance, if a device is using up a particular consumable at a higher than expected rate, leading to more service interventions for replenishment, consumable capacity may be increased in the next design iteration.
• Expanding the developer and partner ecosystem. The IoT thrives in a connected and diverse ecosystem – the bigger the ecosystem, the greater is the value generated for all partners. The fragmented and proprietary nature of the print industry means a diverse range of products, software and embedded platforms. The transition to an open platform would bring multiple benefits to participants. For instance, with the APIs provided by the vendor for its MFP platform, independent companies that have IoT products/services can develop custom applications. The need for a unified connected MFP device ecosystem may still be some time in the making, but those manufacturers that leverage an open platform with broad connectivity to mobile platforms will be best positioned to succeed.

• Software monetisation. MFPs devices have become intelligent solutions and capable of generating completely new types of revenue streams. With the integration of embedded software and app-driven hardware into printers and MFPs, the ability, through software licensing, to monetise those device functions and features becomes a new opportunity for printer manufacturers. They will need to start thinking more like software companies, potentially leveraging the software applications they build into their products to increase product innovation and differentiation.

While the benefits of IoT technologies continue to evolve, a fragmented market, lack of standards, outdated support services, legacy devices and security concerns may impede progress for printer manufacturers. They must prepare now and devise a strategy to address these challenges. This includes partnering and developing open platforms to unify a fragmented market, updating legacy technology and developing a range of service models.

Quocirca believes that the industry needs to wake up to the IoT opportunity. So far the only vendor to be articulating an IoT strategy around its print and mobile platform is Samsung. As a vendor, Samsung is well positioned to leverage its strengths in the mobile, print and consumer technology in the IoT landscape. It recently announced Artik Cloud, a service specifically for connecting IoT devices and recently announced its plan to launch a wireless IoT network in South Korea. Whether other vendors have the technology, strategy and partnerships to pursue an IoT strategy remains to be seen.

For now, printer manufacturers should capitalise on their capabilities. Printers and MFPs already have the embedded smart technology to drive new revenues for manufacturers in a market. While print volumes are declining, the opportunities for MFPs to play a role in digitisation transformation remain. Building intelligent control into a commoditised product can expand the market, lead to higher margins and generate greater business value. A long term strategy must be in place now in order to seize future opportunities as the market develops.