Thought Leadership

The Future of Imaging Part 5 - The Services and MPS Era

Virtulytix Thought Leadership Blog Series – Post 5

 From Typewriters to the Data Era. Service & Commoditization Era

 Ed Crowley, Virtulytix, Chief Thought Leader (CTO)

 In exploring the past – and future of the imaging industry, we have looked at the transition from scribes to mechanical devices (typewriters) to the impact era and most recently the ‘heyday' of the office imaging products, the page era. Through much of the industry's history, progress has been enabled through tangible products and by technology innovations in them to generate documents. It has been an amazing history of innovation with price performance levels increasing at fantastic rates, and features being incorporated at lower or no cost premiums (remember when duplex cost extra?). Of course, the evolution continues.

 At the same time, massive changes in the office environment have always been subject to influences from non-technology forces such as demographic shifts, adoption of new business models such as industrialized manufacturing, and general economic trends. During the most recent era of service and commoditization, changes in the industry were being heavily influenced by all of these factors.

The economic recession of 2008 had a massive impact on driving companies to focus on containing the cost of office equipment technology, accelerating the demand of Managed Print Services (MPS) and the appeal of its much-touted potential of saving up to 30% of a firms office printing and copying costs. The shift of the workforce from baby boomer to millennial dominance is changing the demand for print as the first generation to be raised on the internet, touch screens and mobile devices become the largest portion of the workforce. The millennial generation is the first generation to have the internet available from adolescence forward, in essence, to be ‘raised on the internet’.  Lastly, the shift from ‘transactional ownership’ to ‘pay for use’ is becoming a dominant business model trend.

All of these forces combined to drive two dominant themes during the last era – commoditization and servitization . Increasingly, customers perceive less differentiation between office imaging products as they increasingly offer a similar set of features and similar price performance points. In most cases, they have also far surpassed usage requirements. How often do you see a printer or MFD sitting in an office printing 2,000 or 3,000 pages a month when it is rated as a 50 ppm or greater device? Think about it.  As a 50-ppm device, the printer is capable of printing 480,000 pages a month if it was printing 8 hours a day, 5 days a week, for a full 4 weeks of the month. Data from our Page Volume Index (based on actual operating data for over 20,000 devices spread across a large number of end-customers) tells us that most are operating at below a 3,000 page a month average. That 3,000 pages per month only represent 1% of the capacity of a 50-ppm printer. You might say, that’s an unfair comparison – 50-ppm is not the typical office device. Okay – how about 20-ppm. That’s a pretty common performance point. And it equates to 192,000 pages per month at 100% capacity. Our 3,000 page per month usage only represents 2% of the capacity.

 The point is, most products offer far more performance and, in most cases, capabilities than any customer ever uses. Customers are beginning to realize this. As a result, the plethora of features thrown at the customers is met with a steady yawn. As someone who spent over 20 years of their life as an office products product manager at major manufacturers, this fact of life really hurts. But it is the reality with its reflection in the steady decline of hardware prices as vendors increasingly rely on price leadership to win customers. This is what drives commoditization and the reality is that relying on product feature differentiation commoditization not only is here to stay but will only get worse.

 At the same time, vendors are attempting to move to services to add value and drive revenue from usage versus using a transactional sale model. This has been achieved with varying degrees of success by different resellers and manufacturers. Lexmark attempted to shift to a services-led model with a high software-based value add component but was unable to successfully merge its software and hardware-driven business models. Xerox has led in services for years (one could argue they began with services when they introduced the cost per copy concept in the '60s) but has been struggling in more recent years to show results that can keep their investor base happy.  Some resellers such as M2 in Europe and EO Johnson in the USA have made impressive strides in offering services as a core business model for engaging customers. However, a large portion of the market still struggles to move beyond a cost-per-copy arrangement to offering true management of the customers fleet, a core basic concept of MPS.

 And this leads us to where the industry is evolving now – the data era.  This is where things really start to get interesting. In our upcoming webinar, I will be discussing what this next era looks like, how things are changing, and "what's next".  So, click here (LINK) to sign up for our webinar on Thursday, March 28 at 10:00 am EDT.

 I encourage you to share your thoughts and opinions on the industry’s journey through the Virtulytix website blog, the Virtulytix LinkedIn site or the LinkedIn discussion group at Imaging Industry Transformation.

ExpandedCustomerAdoptionModel (4 Stages).jpg

The Future of Imaging .... Part 3 .. The Impact Era

Ed Crowley, Virtulytix, Chief Thought Leader (CTO)

In the prior two blogs I sped through over 300 years of technology evolution from scribes and clerks through the typewriter era. While I remember (not too fondly) typing papers for College on my Brother typewriter, even by my graduation in 1984, with the advent of the IBM PC and word processing software, high speed 24-pin dot matrix printers were becoming standard office tools and displacing typewriters.  As early as the 1960’s, impact printers were pervasive in large computing centers. A number of technogies were available including line chain (IBM), drum (DataProducts), and line matrix (Printronix). These were the printers which used tractor fed ‘greenbar’ paper (if you know what that is, you are already dating yourself). Their little cousin, the desktop dot matrix printer didn’t really rise to prominence until the late 70’s and early 80’s.

Like the major office technology transitions before impact printers, the print technology was not necessarily the ‘driver’ of the transformation. Rather, demographic (led by a highly educated baby boomer work force), computing (the advent of real desktop PC’s such as the IBM PC and Apple), and software (for example WordPerfect – remember those fun <B> codes for formatting documents?) changes resulted in a need for low cost, digitally driven, desktop printing devices. Hence the rapid rise of the dot matrix printer.

However, compared to the scribe era and pre-electronic / typewriter era, the dot matrix era was actually rather short. The scribe era could arguably be defined as 300 years long. The Pre-electronic / typewriter era lasted 104 years. The dot matrix era lasted 25 years. The rate of change was clearly accelerating, and as we have seen, continues to accelerate today.

The change between eras became more dramatic and disruptive with each succeeding era. For example, the overlap between the Scribe and pre-electronic / typewriter era was lengthy and could be argued to have lasted at least 50 to 75 years. The overlap between when the impact era started and the pre-electronic – typewriter era ended was 35 years. However, the overlap between the end of the impact era (and by end I mean when they shifted from a leading technology to a rapidly declining technology) was only a few years. The first real desktop laser printer was the HP LaserJet, which was introduced in 1984. The same year that the leading printer product (in terms of unit volume) was the Toshiba P24 pin dot matrix printer. However, within two short years, dot matrix printer volumes were in a free-fall as laser technology become the standard.

Shortened ‘life cycle’ spans for technology eras, with less over-lap between the eras, and rapid demographics and complementary office technology changes has been the over-riding trend in the office as we journey from Scribes 300 years ago to the impact era 25 years ago.  And for the most part, with each transition between eras, the leaders in the office products space have changed. The dominant names in typewriters (IBM, Smith Corona) were not the leaders in the impact era. The leaders in the impact era (Toshiba, Centronics, and DataProducts) were not the leaders in the next era – the Page Era. The moral of the story is, when companies become more focused on protecting their existing technology / market leadership position than understanding the external market forces and dynamics shaping the office market – they are vulnerable to rapid and significant technological change.

So what is your company’s position? Are you protecting your existing ‘piece of the pie’? Or are you focused on what is happening externally to your firm and even to the industry? In the next blog I will discuss the Page Era, arguably the ‘golden age’ of the office imaging market when vendors were able to practically print money due to the rapid growth and high profitability of laser and inkjet printers.

 At the conclusion of this series of five blogs (each blog will cover a distinct era), I will be holding a complimentary webinar on how to thrive in the new Data Era, as well as provide access to a free white paper covering is critical topic. I encourage you to share your thoughts and opinions on the industry’s journey at on this blog, on the Virtulytix LinkedIn site or the LinkedIn discussion group at Imaging Industry Transformation.

The Future of Imaging.... Part 2

From Typewriters to the Data Era .. The Typewriter Era

Ed Crowley, Virtulytix, Chief Thought Leader (CTO) 

Have you ever really thought about how disruptive typewriters were. Can you imagine a time when clerks literarily hand wrote letters and kept handwritten entries in accounting journals? And this isn’t the dark ages we are talking about. Right up until the 1860’s, this was the norm.

The scribe era was dominated by a relatively small educated class that could read and write. Illiteracy rates were as high as 90% in the 1500’s falling to 60-70% in the early 1700’s. It wasn’t until the late 1700’s that literacy rates began increasingly significantly as education rates improved, and the industrial era began. During that time society began the first major shift away from a trades-based and agrarian society to the industrial society we know today. These socio-economic changes set the stage for the dramatic technology driven shift that we call the typewriter era.

Christopher Lathem Sholes introduced the first commercially successful typewriter in1867 Suddenly, the legibility of the letter wasn’t dependent upon penmanship. Every letter was consistent in terms of quality, despite the individual skill set of the operator. What a huge change.

At almost the same time, the peak of industrialization and the rise of education levels drove an increasing need for, and availability of, clerical workers along with standardized communication. The typewriter era brought a way for these clerical workers to create business correspondence in a standardized way faster and more accurately than ever before. The beginnings of the modern office were born.

Sholes Typewriter

Sholes Typewriter

In the early 1960’s IBM further revolutionized the office environment by introducing the electric typewriter which included such innovations as the qwerty style keyboard and proportional spacing.  By 1983, typewriters had enjoyed a long and successful run of over 120 years and IBM was the leader in the market with the number one market share position in the USA. Dataquest (a leading market forecast provider of the time) was predicting the typewriter market would more than double by 1987. This forecast was made despite the emerging PC market and the emergence of low-cost dot-matrix printers and ultimately was proven wrong. By 1987 the typewriter market was in a free-fall due to the increasing use of computer like Word Processors from companies like Wang and Lanier along with growing use of desktop personal computers (PCs) from IBM and Compaq. By 1991 IBM would divest itself of its typewriter division in a spin-off that would ultimately become Lexmark (which was acquired 26 years later by the Chinese firm, Apex/Ninestar).

The typewriter era had an incredible run. It created and then changed the modern office. However, it was ultimately displaced by new, emerging technologies. And no one saw it coming. This was the end of what we call the first modern office era - the Typewriter era. It lasted 124 years compared to over 300 years for the scribe era.

In this transition we see a foreshadowing of the increasing rate of change and disruption that will happen over the next thirty five years enabled by technology advances and changing socio economic trends. In the next blog I will walk us through the ‘Impact Era’ which overlapped with the typewriter era, but had a relatively short peak as the market rapidly shifted to page printers.

At the conclusion of this series of five blogs (each blog will cover a distinct era), I will be holding a complimentary webinar on how to thrive in the new Data Era, as well as provide access to a free white paper covering is critical topic. I encourage you to share your thoughts and opinions on the industry’s journey at on this blog, on the Virtulytix LinkedIn site or the LinkedIn discussion group at Imaging Industry Transformation.

The Future of Imaging... Part 1

From Typewriters to the Data Era .. The Beginning

 Ed Crowley, Virtulytix, Chief Thought Leader (CTO)

The world of imaging in the office is changing at an accelerating pace. In the five previous major eras of office imaging, we have seen each successive era become shorter in length, with increasing technology, economic, and social change. The pre-electronic era where typewriters ruled lasted 124 years. The last era, the services and commodity products era, lasted twelve. We propose that we are entering into the next era, the data era, where the focus shifts from technology, services, and products to using data to improve business processes, profits, and to ensure viability of the business. This new era has dramatic implications for who is at work, how they will work, and what their workplace is. Led by a new generation of workers, millennials, it will be fundamentally different than the eras which preceded it in almost every respect.

In this series of blogs, I will trace the history of office imaging and discuss the major technologies, user dynamics, and even economic drivers associated with each transition by breaking the industry’s evolution down into six distinct eras. This is not meant to be the definitive document about our industry, but rather a way to drive discussion and dialogue about where our industry is heading (and what it means for your business). As such, I encourage your comments, disagreement, acknowledgement, and/or debate – just be sure to engage.

At the conclusion of this series of five blogs (with 1 blog for each era), I will be holding a complimentary webinar on how to thrive in the new Data Era, as well as providing access to a free white paper covering is critical topic. So please join me on this journey and share your thoughts and opinions on our LinkedIn discussion group at Imaging Industry Transformation.

Office Imaging Infografic.png