How Disruptive Can Seat Based Pricing be to the A3/BTA channel?
The BTA channel and the printer manufacturers are very familiar with a “click” charge model or charging per print on office printers and MFPs. This model has existed for a long time so why change something where manufacturers and the channel both make money? How do end users really feel about this model? How many users really like to pay for overage charges? The answer is very few. From a budgeting standpoint, wouldn’t it be advantageous to know what your printing costs will be each month within an enterprise? With any kind of cost/print model, a user will not know with any accuracy what their printing costs will be.
Okay, what if you could have a standard cost per month, whether based on number seats etc. or not, wouldn’t this be better for end users? Sure, it would but these types of pricing models do present risk to printer manufacturers and to resellers if end users end up using much more ink or toner than what was assumed when establishing a fixed monthly charge model. Are there ways to mitigate this risk? Sure, there are, some of which are used today. You can segment users anticipated print volume and offer tiered monthly fixed pricing. This is not a new concept at all since HP’s Instant Ink program uses this tiered fixed pricing model. Predictive analytics such as models offered by Photizo, can play a big role in developing an accurate JIT toner/ink cartridge replacement model based on the fact that according to Photizo’s analysis, an average of 35% of residual toner or ink remains inside a cartridge when it is replaced. Using Predictive Analytics, Photizo believes that the residual material left in a cartridge can be reduced to 5%. This is huge! Predictive Analytics, based on considering history of print volumes and cartridge replacement by device within an enterprise, can accurately predict future print volumes which would reduce the risks normally associated with fixed monthly pricing.
Seat based pricing is a very disruptive model that will be going up against an incumbent pricing model that resellers are very used to (cost/page model), particularly the BTA channel. However, momentum is building for a seat based pricing alternative as offered by Print Audit and GreatAmerica.
Today, both HP and Epson are looking at penetrating the A3 printer market/channel with very disruptive hardware that offers huge price/performance advantages over traditional laser or LED products which are much more complex (higher maintenance costs) and much more expensive. HP has their thermal IJ based Pagewide technology and Epson has recently announced (March 20, 2017) their own line-head Piezo IJ technology as part of an announcement of a 100 ppm MFP which will be available in the summer of 2017. Both of these companies are counting on being very disruptive in the market and in the channel. It is the author’s view that both companies should continue their disruptive strategy by offering a print pricing model that is also disruptive based on fixed monthly pricing such as seat based pricing since, as mentioned earlier, many end users should welcome this model.