Lexmark CEO: Printers Moving Toward Convergence, Color

Q&A: CEO and chairman Paul Curlander discusses where Lexmark is focusing its energies, and how partnerships and rivalries are evolving as the printing business heats up.

Printers typically dont stir up the same excitement among IT enthusiasts as other areas of technology do, but, lately, the $106-billion-a-year market has attracted more attention as Dell Inc. continues to ramp up its rebranded printer push in an effort to steal sales from rival Hewlett-Packard Co.

In the middle of the turf battle is Lexmark International Inc., of Lexington, Ky., which supplies Dell with many of its printers but also competes with Dell and HP. In a recent interview with eWEEK staff writer Shelley Solheim, Lexmark CEO and chairman Paul Curlander discussed Lexmarks relationship with Dell and HP, how Lexmark plans to position itself for advantage as the battle heats up, and why he thinks the printing business is about much more than just hardware.

Where is Lexmark focusing its energies right now, regarding both products and customer segments—enterprise and consumer?

Were kind of half-focused in the enterprise space and half in the consumer space. In the enterprise space, were very focused on solutions and services. Weve more recently started an initiative into small and medium business, and were trying to reach those customers through our channel partners.

Has your OEM agreement with Dell affected your relationship with other channel partners?

I would say no. Certainly there were great initiatives by our competitors to try and stir that up as an issue, but its not an issue. What we find with our channel partners is that, in general, all of them are dealing with Dell in one way or another.

/zimages/3/28571.gifLexmark officials say theyre staying cautious even as the companys earnings grow. Click here to read more.

As the printer market becomes more crowded, what will set Lexmark apart?

We spend a lot of time talking to our customers, and I think whats unique about us is that were exclusively focused on [printing]. We internally develop all three of the core print technologies in the industry: color ink jet, mono laser and color laser.

Were organized by industry with large account teams, and I dont see anyone in the industry doing that. Primarily, what we see when we go in and study customers print/copy/fax environments is an excessive amount of equipment ... with anywhere from, say, 30 to 50 percent of the equipment significantly underutilized.

But we also see that the average print job 85 percent of the time is one to three pages, and 65 percent of the time its one page. So productivity is really important, as well, because that shows that people are printing really short jobs, and theyre printing really often. So people may not want to walk 50 to 100 feet to get to a device to get their output.

[Among] the key trends [is] convergence; we see the color, we see all these investments in e-business infrastructure, and ... what we tend to find is that there are hundreds, if not thousands, of paper-intensive processes where they havent had the resources or ability to utilize the infrastructure theyve already invested in.

/zimages/3/28571.gifClick here to read about a Lexmark printer line targeting small and midsized businesses.

Regarding trends in converged devices, do you see a movement from standalone printers to multifunction printers and, if so, are you focusing on this?

Historically, the role of the printer company has been to help people take information from the digital world to the paper world, which was really through print. Going the other direction, from paper to digital ... is more difficult. What were seeing is a kind of convergence in technology between these devices—printers, copiers, fax machines and scanners—into multifunction devices.

So, technically, thats being accomplished, but the reality is that that makes those devices even more complex than the individual pieces. We think the real issue is how people can utilize technology to really accomplish the core business processes they have and to make that easy. And its not clear how thats evolving.

Do you think that Lexmark, not having the reach of bigger companies like IBM or HP, can really get into [larger] businesses?

We always limit the scope of things we do to make sure we have the bandwidth to do what we undertake. We limit ourselves to a select number of industries, limit ourselves to a specific number of accounts that we call on, and were focused on how we can do these types of jobs in those accounts in those industries.

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