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Lexmark's loss is a major win for Ricoh
February 10, 2011

Analysis by: Edward Crowley

Summary
Lexmark loss of the University of Kentucky managed print services contract is a significant blow in terms of loosing a highly visible account in Lexmark's home city. This contract, valued in excess of $4M annually was a marque account for Lexmark.

Analysis
Ricoh, through it's IKON subsidiary, has won a marquee account away from Lexmark. This is a significant account in terms of revenue (see details below), but it may actually be as important due to the value of winning bragging rights for a key account in Lexmark's back yard (Lexington Kentucky).

A few final pieces of information from this MPS proposal - UK owns over 400 copiers and rents over 400; additionally, it owns over 1,500 printers. The University creates approximately 130,000,000 impressions annually, of which an average of 90.5 percent black & white and 9.5 percent are color. UK spends over $4 million annually on copiers, printers and toner supplies. Originally, the contract was going to be awarded on August 2, 2010, but the actual award date was in February 2011, six months later.
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I don't find this story surprising at all. Lexmark is a printer company that lacks a complete competitive product line. Ricoh has a complete product line to fit a major university from production machines down to desktop printers. You can bet this was a very profitable deal for Ricoh. I don't even think low bidder would be an issue regarding Lexmark given how weak they are on any product beyond a desktop printer. Loyalty would be the only thing Lexmark would have going for it in this situation cause they sure don't have the product. More than likely Lexmark wasn't even a player in the final decision.....I bet it came down to Ricoh, Canon or Xerox in the end.

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