The following appears on LouellaFernandes.com by Louella Fernandes

Hardware commoditisation and shrinking margins means that many printer manufacturers are turning to software and services to capture longer-term revenue opportunities. While managed print services (MPS) has boosted service revenue for most manufacturers, the future may lie in a shift to higher-margin software business models that can create greater value and relevance for their hardware business.

Can printer manufacturers follow the path of IBM, a great example of a hardware-centric vendor that has successfully built out a very strong portfolio of software services to enhance its overall business?

The multifunction peripheral (MFP) lies at the heart of this opportunity. MFPs have evolved to become sophisticated, intelligent, smart devices that print, copy, scan and fax. Networked connectivity and a growing ecosystem of embedded apps for mobile printing, security and document workflow is making them an ever more critical part of the IT infrastructure.

MFPs are becoming more deeply embedded in business processes, becoming a key enabler for integrating paper and digital workflows. Advancements in technology means that next-generation smart MFPs have an extensive software ecosystem. Most MFPs now support an embedded software platform where customised workflow applications can be designed. Documents can be captured and routed directly to enterprise content management (ECM), customer relationship management or enterprise resource planning (ERP) systems.

Examples of this include Canon’s MEAP platform for its imageWARE MFPs, Xerox’s ConnectKey MFPs, Lexmark’s MFPs which are integrated with Perceptive ECM software, and HP’s Flow MFPs that leverage the Autonomy platform. More vendors are extending their MPS offerings beyond the device toward helping organisations drive business process efficiencies around paper-intensive processes.

With software becoming a key point of differentiation in an increasingly competitive market could vendors be doing more to monetise their software?

The growing focus on expanding the application ecosystem for their MFP devices means that printer manufacturers are now becoming software publishers. Yet they have limited experience of monetising and licensing software across a vast array of devices enabled with different software.

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