Canon Closes 2018 Strong and Opens 2019 to Possibilities

Ryan McAbee
Feb 15, 2019

Around thirty print industry analysts and press media flocked like snow birds to Boca Raton, Florida, this week for the Canon Media & Analyst Event 2019. The company shared positive financial results and customer successes from last year, in addition to sharing its future vision for leveraging technology and humanity to bring value to customers.

The day launched with a state of Canon address by the newly appointed, but not new to Canon, Sam Yoshida, Executive Vice President and General Manager of the Business Information and Communications Group (BICG) of Canon U.S.A. Yoshida noted the growth of Canon to $35.6 billion in net sales of which the BICG unit made a positive contribution through a 1% year-over-year revenue increase. More importantly, Canon continues to focus on research and development, spending $2.8B last year, to spur technological innovation. This led to the company ranking third globally in patent applications and second for the total market value of those patents.

(Sam Yoshida, Executive Vice President and General Manager of BICG)

Pete Kowalczuk, President of Canon Solutions America, furthered the discussion to focus on customers and technology innovation. Canon Solutions America is committed to clients and ensuring high satisfaction. This translates to key advantage for Canon namely, stability. Clients are looking for partners that focus on their success and will be there for the long run as technology shifts occur and industries are adopting new technologies.

Of the areas Canon Solutions America is focusing on data security and its implications to both large and small businesses. The average data breach in the U.S. costs business $7.91 million last year. The issue of security is not isolated to large enterprises as 58% of small and medium businesses (SMBs) were also targeted by malware. Canon Solutions America offers companies a five-pillar strategy around data security based on: device security, print security, document security, information security, and cybersecurity. One use case was the partner solution called Barracuda PhishLine which helps companies simulate security breaches, fire drill style, and identify poor data security practices and failure points within their organizations.

Push of Production

Francis McMahon and Rob Reddy provided updates to the production sides of the business, respectively production print solutions and large format solutions. They both echoed Canon’s mantra of becoming partners for their clients in implementing a range of solutions for document and sign & display graphics. As Francis noted about Chris Kropac, President PCI Group – “Canon Solutions America helps me sleep at night”.

On the business side, Canon print production devices printed 83 billion pages in 2018. Page volumes continue the upward trajectory due to placements of its cut-sheet inkjet-based Océ VarioPrint i300 and the few installs of the new Océ ProStream 1000 continuous inkjet press. Remarkably, the company saw growth across all print production areas including the mature and often declining area of black-and-white cut-sheet toner devices lead by the Océ VarioPrint 6000 TITAN. The production equipment is powered by the PRISMA suite of software solutions which also showed a double-digit growth last year, spurred by customers looking for ease-of-use while also enabling automation. On the second day of the event the production team introduced a new workflow solution targeted at the book printing and publishing industries. The Book Smart Suite is a collaboration between Canon Solutions America and their software and feeding/finishing partners to enable a fully enabled book factory that support book on demand manufacturing seamlessly. From backend integration to publishers’ SKUs, to full onboarding and production of finished books at any format. Combined with any print device in the Canon arsenal. The new integrated solutions will be demonstrated in a Book centric event during May 2019.

Not to be outdone, Reddy shared similar successes in the large format portfolio. Canon has over 7,000 wide format Arizona devices placed worldwide and over 800 of the newer Colorado 1640 devices based on UV Gel inkjet technology. The Canon wide format team touched on several new improvements and technology in their portfolio. In the water based imagePROGRAF TM series products they support pigment inks that provide vibrant colors alongside improved permanency, quite operation as well as 144 D sheets per our productivity in fast print mode on the imagePROGRAF TM 305. A new Océ Arizona 1300 fill in the entry level of the established portfolio with 4, 6, and 8 channels for CMYK, White and varnish, and a choice of 4×8” of double print bed. Additionally, this is the first Arizona product line using LED curing. On the Colorado 1640 the Canon team continued its investment in supporting customers by qualifying its media for TYPE II wallcovering certification for ink and media. This is critical for PSPs as without it they need to spend their own funds to certify output for residential and commercial use. The company has also launched the Océ Touchstone ability for the Arizona line to create dimensional prints for applications such as Braille and faux brush strokes on art reproductions. These technologies are used by customers to improve productivity, but also to extend creative solutions to their clients that have better profit potential.

Office Enterprise

When it came to the Enterprise or office related products, Sam Yoshida said that BICG grew 9% with A3 color devices growing at 14.7%. This was attributed by strong channel growth from both independent authorized dealers showing it 7th year of consecutive growth as well as Canon Solutions America demonstrating new revenue records. The top opportunities for growth in the office continue to be around security, as mentioned, which is a top priority of IT spending in SMB as well as digital transformation and workflow automation. Canon recently made an acquisition of a video surveillance company called BriefCam based out of Israel, that takes video surveillance content, combined with analytics, creates actionable intelligence that can derive insights on safety, security and operational decision making to critical situational changes. This acquisition complements Canon group’s previous acquisition of AXIS communications portfolio of video security camera technologies and solutions. Although these solutions may not directly be available to the typical office equipment dealer, these security solutions complement the security offerings and strategies as a strong player in the security market.

When it comes to MFP devices, Canon introduced its third edition of the imageRUNNER ADVANCE platform with security features and workflow efficiency. The new lineup features Security Information Event Management (SIEM) integration and other cybersecurity feature enhancements that allow for efficient activity monitoring and threat detection that, Canon claims, extend beyond traditional MFP security features designed to help prevent unauthorized access to organizational assets. The Security Information Event Management solution, which is an optional solution offered by Canon Solutions America, actively monitors security changes or policies on the network. With the imageRUNNER ADVANCE integration the SIEM monitoring solution can actively monitor these devices and detect changes made to them and alert IT or security officers about these changes or malicious activities.

 

The Customer Conviction

All the technology advancements mean nothing unless it provides benefits in the real world. Several customers candidly shared their experiences and benefits of using Canon technology and entrusting in them as a business partner.

(From left to right: John Reilly, Rob Reddy, Pete Kowalczu, Kris Tanner, Sam Yoshida, and Chuck Wingard)

  • Chuck Wingard, President of Tree Towns Imaging & Color Graphics located outside of Chicago, Illinois shared how the Colorado 1640 wide format printer has impacted the business. Most importantly the UV-gel ink technology has allowed Tree Town to pursue the wallcovering market, specifically targeted at interior commercial spaces like restaurants. Not only is the technology nearly four times faster than what it replaced, the print is more durable (ideal for installation by general contractors) and previous issues with material shrinkage have been eliminated (critical for seamless side-by-side installation). The speed a reliability allowed Tree Town to deliver next-day a reprint set of wallcoverings that had been damaged by a burst pipe at the installation site – an invaluable service to keep commercial projects on time.
  • Jennifer Gilliland, Director, Desktop Engineering of Phillips 66, a global fortune 67 company shared its Managed Print Services transformation experience with Canon Solutions America. Their organization had more than 1000 MFP’s with 13,000 employees (her customers) and decided to change providers in 2015 because of service issues with their incumbent. Canon developed a program specifically to resolve issues with a custom short-term lease program, and a right sizing of the environment with more advanced technologies that were easier to use. They also appreciated Canon’s vision of the future with a sustainable Managed Print Service program that uses analytics that provide feedback on what they can do more of to drive costs down and create value beyond the box, utilizing the devices to do workflow and automation. Phillips looks forward to discovering and re-architecting new workflow opportunities in the future.

Looking forward the company wants to transform existing boundaries of its current markets while also investing in future growth areas. To that extent, Yoshida mentioned macro opportunities such as contract manufacturing and healthcare optics and more direct opportunities for Canon Solutions America in textile printing and customer support as a service. A more recent opportunity for Canon’s customers comes from video technology acquired from Israeli-based BriefCam, which can find the proverbial needle in the video haystack by quickly reviewing, searching, and uncovering video for “actionable intelligence.” The technology is already in use to identify security threats at high profile venues like the Statue of Liberty.

From a print technology perspective, Canon has a thorough portfolio of products that enable opportunities for diverse applications across many print environments. Challenges certainly exist, particularly within the consumer division which is heavily dependent upon camera sales. However, with nearly 8% of R&D to revenue spent, the company is investing organically and through acquisitions to find the next growth opportunities.

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