It's just about 9:30PM, I arrived home from the Epson Road Show (special shout out to Impression Solutions Inc., and Joe Buck for the invite) in Philly about four hours ago. My plans were to skip writing tonight and watch the Mets game, well that plan failed since the Mets are in a rain delay.
As I listened to Bob Palmer (Research Director with IDC's Imaging) during the opening session for the Epson Road Show today, I found my-self in agreement that disruption for the copier industry will not come from the likes of HP, Ricoh, Canon, Xerox, nor KonicaMinolta. But, rather from a player that is on the outside looking in. Bob put it something like this, "why would they want to disrupt the business model that has made them so successful?'
For those of you that may not be familiar with the Epson WorkForce C-20590, is an A3 high speed inkjet line (scans & prints 11x17 for print, scan, copy) color MFP that will print at speeds of up to one hundred color pages a minute with the Epson inkjet PrecisionCore line head.
Today, I was able to see the device up close and also take a good look at the print quality. Well, the print quality was actually very good, and while HP touts "affordable" color with their new A3 PageWide MFPs, I'm thinking the quality of prints I saw today was better than what I saw from the HP PageWide device while at ITEX a few weeks ago.
If you're not afraid of this device, then I need to tell you that you should be.
Right now it's only one device, but more will be coming. The Epson WorkForce will ship with a enough black ink for 100,000 pages along with 50,000 pages of color (I'm thinking I'm spot on with that). If that doesn't open a few eyes, then you might be shaking in your boots when you hear that the warranty on the print head is 3 years (rumor it may be longer). Yikes, no drums!
Are you scared yet?
Besides the ink and print heads there are no additional consumables!
Death of the Cost Per Page
A few weeks ago, I wrote the blog "The Death of the Cost per Page", that blog centered around the "what if" scenario of device billing. Device billing would be where the dealer charges a monthly service fee for the WorkForce. That fee could be $200 or maybe $300 per month, the client would pay for supplies (ink) and the client would be entitled to unlimited clicks. Do the math, at $200 per month the device would develop and annual revenue of $2,400, at $300 per month the annual revenue is $3,600. How could you not get your price of $300 per month with a color 100ppm device? The dealer would not have to supply any consumables with the contract, plus they would also garner the profits from the ink. I'm just guessing here, but with no consumables and no heat process, how many on-site service calls could there be in a year? Two, three, maybe four at max. That's a pretty tidy profit stream.
End Users Don't Want Overage Charges
I'm still in that day to day business of selling copiers. Every month, I have at least four to five clients that I conduct account reviews with. More than half of those clients have quarterly overage charges. Many ask, "why do I have to pay for overages when I already pay a base charge?", and then we have to lead them back to how our industry billing model works. If you go over on clicks, you pay, if you go under, we win, you lose and you don't get those clicks back. This type of business model puts a strain on the client vendor relationship. Why can't we give the clients a flat rate and unlimited pages? We know why, it's because the toner based devices require more service.
Where Does the WorkForce C20590 Fit?
If you're a Major Account rep, you need to start shaking now! The Epson WorkForce device will kick your ass on price, speed, cost per page and or device billing. I see the 100ppm WorkForce device excellent for Colleges, K12, Universities, Hospitals, and many other Enterprise accounts. As far as solutions, the WF-C20590 features Epson Open Platform for seamless integration with web-based enterprise applications such as PaperCut MF and other workflows, and is fully MPS compliant. I'm just glad that I'm not selling in that major account space.
Is Time is On Your Side?
Geesh, I'm not so sure. The WorkForce C20590 (Epson can we give this device a name instead of the 5 digits, the device is worthy of one) is due to be launched this summer. Pricing should be ready for dealers in thirty days or so. If I had to guess about dealer pricing, I would guess somewhere in the higher four figures area (again that's just a guess). All you need is a few savvy dealers that will run the numbers, and then develop the cost per page plan or the device billing plan. Anyway you slice it, that Epson Dealer will win business and still make a tidy profit on the service and supplies.
What Would I Do?
Eddy Jones and I spoke about this. I told Eddy, if I can't beat em, then I need to join em.
Ink is here to stay. Epson is here to stay and we need to figure it out.