Can a Lexmark Internet of Things expansion win in a $50 billion market?
When was the last time you printed a document? Maybe before the pandemic. You may not even have noticed that you haven’t printed anything. But Lexmark, which manages more than 1.2 million printers for businesses around the world, did.
Years ago the Lexington-based company shifted from just making and selling printers to managing them for offices that didn’t want the hassle. Along the way, Lexmark developed software to manage all those devices, collect and analyze vital data and figure out ways to save customers money.
The company, privately owned by Chinese investors since 2016, on Wednesday announced that it will begin selling their Internet of Things software so customers can better manage their own Internet-connected equipment without reinventing the wheel.
The expansion will target a potential $50 billion market, the company said, and Lexmark hopes to eventually capture 1-2 percent of that.
The cloud-based technology, called the Lexmark Optra IoT Platform, is designed to let companies do more with the data they are already collecting but rarely putting to good use.
“Lexmark has been historically really strong in our managed print services business here in Lexington, which basically means we operate the print infrastructure for many of the largest companies around the world,” said Allen Waugerman, president and CEO of Lexmark since May 2019, in an interview. “We take care of the service, the usage supplies, and we do it in a very predictive, proactive fashion.”
COVID speeds up Lexmark plans
Before the coronavirus pandemic, Lexmark began looking how to capitalize on its IoT expertise and planning an expansion. COVID accelerated that.
“The printing industry was one of those industries impacted pretty significantly during the pandemic last year,” he said. “Today is the culmination of that. Now this platform can be used for other devices people manufacture.”
He said they are working with a dental devices manufacturer already. Normally, when a piece of equipment breaks down, the dentist calls and asks for service. But with the Optra platform, the manufacturer could see potential problems and fix them before that happens, saving the dental customer frustration and lost revenue.
What Internet of Things means for Lexmark
“We continue to outperform the imaging industry in our historic core business of laser printing, so from that point of view Lexmark is going well, although we were impacted by the pandemic last year,” Waugerman said. “I feel good about the health of Lexmark’s imaging business, but it is a declining market so we need to continue to expand our offerings.”
Waugerman said that they think this could be a $50 billion market.
“We think we’re well positioned to take share in that right away,” he said.
“In the next five years, we could see $100 million-plus business, which is significant,” Waugerman said in the interview.
He said the company plans to use its existing sales team as well as slowly adding resources to target mid-tier companies that could be doing more with what they already have.
The company remains one of Lexington’s largest employers with 1,240 employees. Globally, Lexmark employs 7,750. In fact, Lexmark is hiring now, Waugerman said, with 45 job openings in Lexington.
“The types of challenges that we faced with our products and our services aren’t limited to our business or our industry,” Waugerman said. “All kinds of companies from manufacturing to health care to retail are grappling with their own digital transformations and how to manage that huge influx of data that IoT and cloud are creating.”
Vishal Gupta, senior vice president, chief innovation and technology officer, said that they are launching the platform as a product now because the other technologies needed to make it work are available now.
“Today, organizations around the world struggle to uncover actionable insights from the vast amounts of data within their organizations,” Gupta said. To help the manufacturers harmonize and harness that data “they need an architecture that’s scale-able and proven to support the collection and quick analysis of vast amounts of information.”
Waugerman said the platform will be available immediately and there are more products to come in the next six months.
But Lexmark will continue to offer the managed print services that have become a core part of its business since they were introduced in 1999.
“It’s true that everyone is printing less, thanks to digital innovations. But here’s the fact of the matter: The printing that remains is mission-critical. It’s essential to how you do business and communicate with your customers and partners. Today printing and imaging remains a $60 billion market. That’s not small. Leading and innovating in that still large market is Lexmark’s core business,” Waugerman. “As we expand, Lexmark is well-positioned for growth, thanks to our 30-year history as an innovator, our own internal transformation, our longtime technology focused approach and much more.”
