Thanks to stiff competition and near saturation in the Indian large enterprise segment, Canon is aiming to tap the mid-market and government sectors with its office imaging solutions. By Mehak Chawla
Over the course of the past five years or so, office imaging has evolved into something that’s about more than a few printers and stacks of paper. Vendors are not only bringing newer products to the table but they are also orchestrating their services to penetrate the market further.
Office imaging is broadly targeted at three segments namely SMBs, government and large corporates and that’s true across vendors. However, with definitions changing, office imaging is taking on a new avatar. It now encompasses Document Management Services (DMS) as well as an organization’s digitization drive.
K Bhaskar, Sr. Director, OIS, Canon India, said, “An office imaging solution is something that takes care of an organization’s entire paper and printing needs. From printers to software to security features and some MIS functionality, all this is encompassed in an office imaging solution. It also includes things like workflow solutions along with after sales services.”
Given the fact that most large corporates are fairly advanced, both in terms of digitization, as well as DMS, the next wave of office imaging is expected to sprout from the mid market and the government sector and that’s just where Canon happens to be investing its energies. At the end of Q1 2012, the vendor had a market share of 12.7% in the Indian printer, copier and MFP market. Its market share in A3 multifunctional devices stands at around 25.5%.
Tapping the Government
According to Bhaskar, DMS has two aspects. The first is that of pure printing, which includes MIS and other printing infrastructure. The second, and bigger aspect of DMS in an organization, is with regard to reducing the overall quantum of printing and moving to a digitized environment. Bhaskar believed that, while corporate India was gradually getting sensitized with regard to the second aspect, the government was still largely focused on the first.
However, with increased emphasis on e-governance at both the center and the state level, the government, in some instances, is also showing an inclination towards digitization. The effort is mostly scattered at the state level and that is where Canon is looking to tap the market. Bhaskar said, “Karnataka is in the process of digitizing land records up to the tehsil level. Right now, almost all governments are digitizing records and putting some sort of DMS in place.”
Citing that there was a high probability of the government becoming highly digitized within the next four to five years, Bhaskar outlined Canon’s strategy for this sector. “We deal with the government through a specialized team that takes care of pre-sales and gives demos. Secondly, we try to get in touch with consultants, who are often hired by governments for their opinion, in order to generate more interest around our product offerings.”
Bhaskar admitted that the longer purchase cycles in the government sector posed a challenge to vendors. “In the government sector, the process is longer for software as compared to hardware. In some cases, it can go up to one year as compared to a three or four month cycle in the SMB sector.”
A slice of SMB
Since most large companies have already streamlined their print operations, thanks to efficiency and green concerns, it is in the mid-market where printing vendors are seeing an opportunity. “The large enterprise space is already quite cluttered in terms of printing solutions. On the other hand, the SMB sector is relatively untapped,” remarked Bhaskar.
As far as DMS goes, larger organizations would definitely need a customized system and they are more likely to go with a TCS or an Oracle. “For us, the scope lies in selling over the counter products to organizations where the process restrictions are not quite so strong,” said Bhaskar.
SMBs are showing interest in consolidated printing offerings rather than isolated and scattered hardware-oriented printing infrastructure. That gives a vendor like Canon the opportunity to market its MFPs to this segment.
In order to make deeper inroads into the SMB segment, Canon is redefining its partner reach and focus. “The catch with this sector is that we can’t sell directly. A strong partner network is the only way out. We have 546 service locations in India and building a strong partner ecosystem for SMBs is a key focus area for us in the coming year,” he added.
SMBs are expected to move from owning ten small printers to one large printer in the short term. “SMBs from tier 2 cities like Thiruvananthapuram, Kochi etc are showing considerable interest in printing solutions. We want to increase our partner network by 30% by 2013. We are supporting partners to offer more focused after sales services,” commented Bhaskar.
Services differentiators
Products come with more or less same functionality and, apart from cost, there is little to set one apart from another. That’s why, most printing vendors are emphasizing services. “Services or solutions can distinguish a vendor in terms of TCO, reduction of print volumes, software efficiency, security, freeing of IT staff etc,” said Bhaskar.
Thanks to this angle, software has become an integral part of print solutions. That is why, most print biggies like HP and Xerox are revamping their print lines in the hope that it would give them the services edge. Canon too is trying to build its service and software differentiators. Elaborated Bhaskar, “SMBs are soon going to understand that a consolidated setup works much better. Software is going to be a key point of differentiation for printing vendors in the future.”
In order to target the mid-market, Canon intends to expand its partner ecosystem and go online for orders, after-sales services, consultation etc. “Our strategy in the SMB space is that we want to pull rather than push customers,” he concluded.
