Friday, December 26, 2008

Observations: 2008, The Year of Printing Dangerously

2008 -- The Year of Printing Dangerously

Somehow, going back over the year 2008 feels mentally harrowing. Although there are reasons to celebrate, the year was also characterized by nerve-wracking crises that we cannot say are fully past. It was a momentous and historic year for the world, to be sure, but in many ways it was a quieter and more down-to-business year for the printer industry. So in reflecting on a topic for my end-of-year column, no great industry event triggered my imagination. And in fact, the title of this column was the closest thing to a breakthrough I was able to produce for some time, until the rest of the pieces began falling together to support the thesis of the danger in printing in 2008. Why was printing more “dangerous”, at least in some small ways, in 2008? I think there are numerous reasons to be examined as early indicators at least of major changes in the printing and imaging business.

Printing’s association with troubled industries and the accompanying guilt by association is one reason. During this year’s Lyra Supplies Symposium in Las Vegas in August, the expert panel that concluded the event was asked to comment on the future growth, or lack thereof, that they anticipated in the printer supplies business.

While many panelists conceded that printing had recently declined in certain markets, there were counteracting forces leading to an overall GDP-level growth in printing over the forecast period of the next few years. What was the biggest recent source of decline in printing volumes? Banking and finance-related businesses, including real estate, which have traditionally been print-heavy industries. A lull in their business levels showed up in a correlation with pages printed—and this was in August! With the economic chaos since then, it is only natural to assume that when the dust settles, print demand generated from loans, credit applications, title work, real estate bids and assessments will have fallen drastically, because the number of deals is off sharply and so many pages are printed per deal.

The growing “green” consciousness around printing, especially as it ties to cost savings is another reason. The field of managed print services (MPS) has unquestionably been a bright spot for the industry this year. And its success, in finally seeming to take hold after years of discussion, has many pointing to the green trend among end-users (as well as organizations) as the potential reason for this tipping point.

A recent example, not appearing on the Web pages and success stories of corporate MPS providers like HP or Xerox but at the “TechSoup” Web site, is titled “Choosing Print Management Software.” TechSoup bills itself as the “The Technology Place for Nonprofits,” and while its interest in saving money for its readers is not surprising, the site seems to have focused on printing for both cost and environmental reasons. TechSoup ran a special series including features like “Choosing Print Management Software” and “Creating and Distributing Electronic Annual Reports and Marketing Materials” that was presented with a high level of professionalism, although the topics lead customers in the wrong direction for the printer industry.

One further example of how printing became dangerous, or at least on the outs, comes from a Wall Street Journal article from August 22, titled, “Tech Firms Pitch Tools For Sifting Legal Records: With E-Discovery, Lawyers Face Loss Of Client Fees.” The article reports that millions in legal fees are at stake, as hyper-efficient electronic searching supplants traditional manual searching of paper records, which is time-consuming but provides lots of billable hours. While in many cases (sorry for that one) the process involves merely scanning and indexing historic paper documents, there is also much to be gained from those documents never being in paper form to begin with, and then not, at least as a rule, being re-printed from their electronic repositories for legal purposes.

HP and Xerox are two of the “tech firms” mentioned in the article, and you need look no further than the pages of the May 2008 issue of this newsletter to find a story about HP’s acquisition of Tower Software, an Australian based e-discovery firm.

An alarming October 9 article in The Economist brought further squirming from those of us in the industry. Entitled “The Paperless Office, On its Way, at Last: No longer a joke, the ‘paperless’ office is getting closer,” the article contains a case study of a small Austin, Texas administrative business (Breedlove and Associates) and its efforts to go paperless. It includes chilling quotes.

“It is that everyone—clients and staff—is sick of paper. The clients tend to be young, middle-class families…they are good with technology and already pay bills online, use e-tickets on planes, e-file their tax returns, and Google recipes rather than using cookbooks. And Breedlove’s 16 employees are in their 20s, native to Facebook and instant-messaging, and baffled by the need for paper. Now everybody is happier. Next year the firm expects to be completely paperless.”

The article concludes (spoiler alert), however, with the familiar-to-some analogy of the arrival of the “horseless carriage” and the horse population, and the fact that today’s society is home to approximately the same number of horses as 100 years ago, but they are used in radically different ways. So one might argue that paper could be used in ways that we are only now discovering, while being replaced nearly altogether in other areas.

I take the liberty to examine the state of printing about once a year, and thanks to my readers for indulging me yet again. Indeed, to me anyway, printing, or at least relying on traditional printing, does seem dangerous at the end of 2008.

Nevertheless, while trade-offs will occur, vendors will continue to find growth areas where they can prosper.

1 comment:

Greg Walters said...

Jim,

Good year end summary - makes me wonder even more about a 2009 Summary