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Falling costs, lengthening upgrade cycles, and rise in paperless workflow may all be contributing to an ongoing decline in enterprise spending on printers, supplies, and related services. While causes are open to debate, the trend is not.
As shown in Figure 1 from our study, IT Printer/Printing Expense Benchmarks, the percentage of total IT spending that goes to these expenses has reached it lowest point in at least five years. IT print/printer expenses dropped to 1.1% of the total IT spending in 2015, which is decidedly below the 1.5% in 2011. A downward trend is evident over the period, although the ratio fluctuates. This is likely due to rising IT budgets as well as changing print costs.
Our spending category for this line item includes more than the cost of printers. We also include acquisition and leasing costs for copiers, scanners, plotters, and multifunction devices and, as the name implies, the printer/printing category includes the cost of maintenance, consumables, and managed print services. Likewise, our printer device count includes copiers, scanners, plotters, and multifunction devices. Managing printing costs effectively requires taking the total cost of IT print services into consideration.
Our findings show that IT organizations overall have been quite successful in reducing their printing costs. Our research also shows that spending can vary greatly by sector, and the outcome for the composite sample cannot be used as a benchmark. The downward trend, however, is likely impacting all sectors to some degree or another.
The financial gain for the enterprise has come at the expense of manufacturers, some of which are engaging in significant consolidation amid a general sales drop. Hewlett-Packard recently split into two companies and Xerox announced plans in January to do the same, both having the printer operations separated from more strategic businesses. Lexmark hired Goldman Sachs to explore strategic alternatives for its printer business. Other manufacturers such as Epson, Canon, Ricoh, Brother, Oki Data, Samsung, and Kyocera also face a challenging sales environment.
To remain relevant, many of these challenged vendors have dropped prices and focused attention on new products that allow for increased efficiency and flexibility. HP, for example, touts a new printer with “universal apps” that allows enterprise users to print seamlessly from phones, mobile devices, and PCs. Industry executives estimate there are as many as 600 million printer devices worldwide that are at least five years old and in need of an upgrade. They hope that focusing on improving customer workflow will hold the key to unlocking that potential future market.
For the moment, though, enterprises are dong a fine job of getting more out of what they have. The use of multifunction printers has led to an increase in productivity and a resultant impact on the number of users per printer. The rise of cloud-based printing solutions also is positively impacting printer and printing expenditures and cost per user. So, too, are government mandates in some vertical markets. In the healthcare field, for example, providers are being pushed to safeguard patient information by moving away from paper and toward electronic record keeping. Not coincidentally, our study shows that printing cost as a percentage of the IT budget is the lowest within the healthcare market.
Due to the ongoing changes in printer technology, print management, and the ways in which employees use printers, IT managers need to assess whether their organizations are managing printing resources in the most efficient manner possible. The full study establishes three benchmarks that enable organizations to assess their print strategies. The benchmarks include printers per user, printer/printing expenses as a percentage of total IT spending, and printer/printing expenses per user. We examine the five-year trend in these benchmarks as well as variances by organization size and sector. We conclude with recommendations for optimizing printer and printing costs.