Software Development Programs and Software Development Kits: The Cornerstone to Innovation in Document Solutions
Introduction
The office equipment market has undergone a major technology transition in a short period of time, as traditional standalone single-function output devices like printers and copiers have evolved into networked multifunction input/output devices. For a few years, vendors were able to differentiate within specific segments of the copier market as each vendor transitioned its entire product line from analog to digital technology.
Now that the market has completed this transition, the first phase of digital innovation is coming to a close and the next phase is beginning. This next phase focuses on vendors’ abilities to develop and deploy solutions that enhance the processes involved with document-based communication. These efforts include the creation of tightly integrated software applications that increase the value of office equipment as access points and appliances within the communication framework of computer networks.
To unlock the potential in the document solutions market, MFP platform manufacturers and developers need to consider strategies for attracting and building a community of creative software developers who can maximize the new generation of digital MFPs. A software development program that features robust, open software development kits (SDKs) will be a cornerstone to enabling and capturing this potential market.
The Defining Value of SDKs and Independent Software Developers
Third-party developers bring experience and a fresh perspective to the challenges and inefficiencies embedded within the office document lifecycle. They can objectively evaluate MFP functionality and design creative tools for solving well-identified customer needs as well as those that have yet to be articulated.
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Benefits of Independent Software Development
There are many compelling reasons for vendors to transition their businesses toward selling and delivering document solutions. The initial, short-term benefits are that solutions sales will enhance hardware sales efforts and help compensate for eroding hardware margins through:
Differentiation: A focus on customer needs and processes can be the competitive edge that wins the sale.
Broader, higher margin opportunities within accounts: As hardware margins decline, complete solutions including software and services will bring higher revenues and margins.
Customer loyalty: Focusing on customer processes and business challenges enables vendors to build “partnerships” that bring repeat business and valuable referrals.
Ability to attract new customers: A solutions focus, especially one supported by a demonstrable record of success, will appeal to many customers that had not considered office equipment vendors for their printing and document workflow needs in the past.
Incremental revenue growth from within an existing customer base: A deeper analysis of customer processes and workflow can lead to additional software, services, and hardware sales, as well as stronger relationships for future business. Once implemented, solutions are often scalable. A vendor can start a sale in one department and then spread the solution across the organization with lower cost of sales for each incremental deployment.
Increased volumes: Hardware that is optimized with software in environments managed for maximum resource utilization will potentially produce more aftermarket revenue in terms of supplies consumption and service revenue.
Ability of copier vendors to compete more effectively with printer vendors, and vice versa: Market lines are blurring; printer manufacturers are now targeting MFP and traditional copier customers for growth, while office equipment vendors have begun to target printer placements. A solutions approach will enable properly structured sales organizations to compete effectively in either scenario.
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If innovation is not aggressively promoted, MFPs may never fulfill their potential as integrated network appliances and the office equipment industry may find itself dis-intermediated from the broader market for office document solutions. Without innovation, MFPs of the future will look very similar to MFPs of the present. Vendors will remain locked in a continuous battle of commodity pricing between unspecialized devices whose primary value is served at the end of the office document lifecycle. In such a commodity market, consolidation will drive the industry and only the largest vendors, whose sheer size will provide the advantage of economic scale, will survive. Smaller unspecialized players, on the other hand, will be lost in an increasingly cutthroat game of price-per-page.
The small, intuitive, and nimble things that independent software developers do in terms of software integration and innovation could have a dramatic impact if applied appropriately to the office equipment market and if embraced by the appropriate distribution channels. Tapping that potential requires a solid strategy for independent software development and a robust SDK program.
The door to the document solutions opportunity is open, but few companies have stepped up to take a lead in this market. Innovation will be required to tip this opportunity from a series of niche applications into a mass market. Those vendors who consider the need for scalable, customizable, and flexible products when designing their platforms, and who understand the potential for integrated software solutions, will gain significant competitive advantages through the use of SDKs and independent software development initiatives.
This document has been abstracted from the CAP Ventures white paper entitled “Software Development Programs & SDKs: The Cornerstone to Innovation in Document Solutions.” The report examines the next phase of digital innovation in the office equipment marketspace: Software development programs that feature robust, open software development kits (SDKs). For more information about this and other CAP Ventures white papers, contact Stewart MacDonald at (781)-871-9000 or stewart_macdonald@capv.com.
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