Office Document Solutions Important Factor in Maintaining Hardware Sales Revenue

InfoTrends:Office document solutions are becoming an increasingly important factor in driving increasing hardware sales revenues. Analysts warn that vendors who do not consider incorporating solutions into their sales model may be left behind.

The office document solutions market is a natural extension of the broader office equipment market, which includes the sale of copiers, printers, fax machines, scanners, and related multifunctional derivatives of the first three. Today, the office equipment market is mature, showing limited growth year-over-year and declining hardware margins. It is characterized by intense competition, pricing pressures, and consolidation. The office document solutions business, however, is characterized as innovative and is in the early adopter phase of market development. It represents tremendous new revenue potential.

The need to preserve market share and maintain sales levels has left key players in the office equipment market blind to new opportunities concerning document solutions. We believe if these players pause and take time to fully examine the benefits of marrying solutions with their hardware sales, they can deliver significant added value to customers and create new profits for their businesses.

In fact, research shows significant evidence that software-based solutions are becoming an increasingly critical factor in the sale of office equipment hardware in the United States.

Concentrating on networked printer and copier-based devices that are sold into workgroup office environments, InfoTrends compared the estimated hardware revenues for devices sold with and without software solutions. The results are dramatic. Looking at revenue alone, forecasts show that hardware sold with solutions is expected to increase at a compound annual growth rate (CAGR) of 29% from 2004 to 2009. Hardware in this same category that is sold independent of any solution, on the other hand, is projected to decline at a CAGR of -11%.

The message is clear,” continued Mazza. As solutions take a lead in defining the prerequisites for equipment sales, those vendors who pursue and promote combined hardware and solutions packages will continue to grow their revenue and potentially total margins. U.S. Office Document Solutions Forecast: 2004-2009 Publ 20060124