1. WHITE PAPER
Konica Minolta Broadens Its Market Reach as a
Transformed Document Solutions and Services
Technology Provider
Sponsored by: Konica Minolta
Keith Kmetz
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA
P.508.872.8200
F.508.935.4015
www.idc.com
October 2013
IDC OPINION
While the traditional print market matures, customers' need to manage the massive
amount of paper and digital business information is becoming increasingly critical. We
anticipate that the future market success of print providers will stem from the ability to
provide a more comprehensive set of solutions and services that cater to a range of
requirements in the document life cycle. Konica Minolta is an example of a vendor
that has been undergoing a series of transformative changes to best serve these
evolving market needs. Over the past three years, we have observed a number of
substantial moves that signal a new Konica Minolta, including:
 Creating a vertically integrated solutions and services organization.
Konica Minolta's EnvisionIT brand puts together specifically targeted document
software and solutions for key vertical markets. Today, this includes initiatives for
the legal, healthcare, and education markets, and more is expected soon. The
company is strategically planning for key growth areas that align with its
EnvisionIT value proposition. It will continue to provide unique document and
information solutions that focus on addressable workflow opportunities in these
markets and tailor a distinctive set of solutions for each one.
 Offering a software portfolio that targets key document management
requirements for a transforming market. Many document challenges — such
as security, document/enterprise content management, job tracking, and general
workflow — are horizontal in nature. Konica Minolta is focusing on these key
areas that apply across industries and providing unique solutions within many of
them as part of the EnvisionIT industry initiative.
 Providing managed services. The creation of Optimized Print Services (OPS)
Enterprise Edition and the All Covered acquisition offer clear signs that Konica
Minolta is moving quickly into managed services opportunities. This effort not
only includes traditional print opportunities but also extends this capability into a
broader managed IT services program. Additionally, Konica Minolta has built
this infrastructure so that it can extend such offerings into both office and
commercial environments.

2.  Finding success in both traditional and new markets. Konica Minolta not only
has managed to grow its embryonic software and services business at an
exponential rate over the past three years but also has increased its share of the
U.S. copier MFP business from 12.6% to 15.1% during the same period. This
means that Konica Minolta is effectively managing the traditional and new
business opportunities by growing its presence in both markets simultaneously.
IN THIS WHITE PAPER
IDC analyzes how Konica Minolta is transforming itself from a provider of print and
copy solutions to a provider of new document solutions and services technology to
address its customers' business information needs.
SITUATION OVERVIEW
Companies such as Konica Minolta have historically thrived by addressing the basic
copy/print needs of their business customers. With a focus on satisfying customers'
requirements for printed output, these companies have realized revenues and profits
primarily from a business model based on equipment sales, print supplies, and break/fix
service contracts.
However, these print industry revenue and profit pools are changing at an accelerated
rate. In recent years, we have witnessed the transformation of many customers'
business information needs, particularly in an IT market that is increasingly offering
solutions that shift users further away from a reliance on paper-based output.
In fact, IDC has determined that this market is in the midst of a seismic "once every
20–25 years" shift to a new technology platform based on mobility, cloud, big data,
and social technologies. This means that suppliers and customers will need to
exploit this "3rd platform" to drive future growth and innovation. In fact, we anticipate
that the "3rd platform" will drive the bulk of IT industry growth over the next dozen or
so years. Millions of new apps and services will be built on this emerging platform and
spread to a broader range of users inside and outside organizations (see Figure 1).
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3. FIGURE 1
The 3rd Platform
Trillions of Things
Billions
of Users
Millions
of …
Intelligent Industry Solutions
CIOs
Apps
LOBs
Enterprises
SMBs
SPs
Consumers
Emerging
Markets
Hundreds
of Millions
of Users
3rd Platform
Mobile Broadband
Big Data/Analytics
Social Business
Cloud Services
Mobile Devices and Apps
Services
Information
Content
Experiences
2nd Platform
LAN/Internet
Tens of
Thousands
of Apps
Client/Server
PC
Millions
of Users
1st
Platform
Thousands
of Apps
Mainframe Terminal
Source: IDC, 2013
While this significant market transformation does not eliminate customers' need for
print anytime soon, it does change how businesses use and manage data,
documents, and other types of business information. Although print will continue to
play a critical role in future business operations, it is expected to mature and decline
slightly over the next several years. Even though IDC's latest U.S. page volume
forecast projects a -1.5% CAGR through 2016, it is anticipated that a robust 1.1 trillion
pages will be produced at that time. It is clear that paper-based document
technologies will still be significant years from now, even as obvious market maturity
sets into this segment.
On the other hand, digitally based content is exploding. According to IDC's top 10 IT
predictions for this year (see IDC Predictions 2013: Competing on the 3rd Platform,
#238044, November 2012), the "digital universe" (a measure of all digital data created,
replicated, and consumed in a single year) is expected to expand by almost 50%,
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4. reaching 4 zettabytes (or 4 trillion gigabytes). This is nearly a quadrupling of the 2010
volumes. Given the rapid emergence of new data capture and generation technologies
and solutions, it's almost certain that we're underestimating the volume and growth.
Obviously, these figures represent massive changes in how businesses will adequately
create, manage, and distribute the increasing amount of content (i.e., data, documents,
business information) in both paper and digital forms. Additionally, this transformational
effort needs to be conducted in a fashion that drives cost savings and improved worker
productivity benefits that ultimately create a positive bottom-line impact.
How Konica Minolta Is Changing to Better
Meet Customers' Business Information Needs
Technology suppliers must cater to this transformational customer demand in order to
remain successful and viable in the future marketplace. We expect that rather than
being print or device focused, the current printing and imaging market, as defined today,
will be reinvented into more of a solutions and services market opportunity. The truly
savvy print technology providers are already in the midst of this metamorphosis, while
others may be just embarking on this journey.
Konica Minolta is an example of an organization that correctly assessed the market's
pending changes and initiated its own transformational process a few years ago. Its
Enterprise Services Strategy starts with a "four pillar" infrastructure as the building
blocks to this initiative (see Figure 2).
FIGURE 2
Konica Minolta's Enterprise Services Strategy
Source: Konica Minolta, 2013
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5. As a result, this document analyzes a transformed Konica Minolta offering a new set of
value propositions in categories such as software integration and professional services,
document management and enterprise content management, vertical market software
deployment and integration, and managed IT services. Certainly, this is an impressive
array of new capabilities that extend beyond the printing and copying that the company
has long been known for. The following sections take a closer look at each of the four
pillars Konica Minolta is building in response to the market's transformation.
Services & Solutions
In early 2011, Konica Minolta launched a new branding position to signal its solutions
and services initiatives for select vertical markets. EnvisionIT was created to provide
these industries with the ability to work smarter and more efficiently with integrated
workflow solutions from Konica Minolta. The initial offering was aimed at providing
managed print services, managed IT services, integrated software (Konica Minolta
and/or third party developed), professional services, and hardware under the EnvisionIT
brand umbrella and tailored for each industry. The current EnvisionIT roster includes:
 EnvisionIT Legal
 EnvisionIT Healthcare
 EnvisionIT Education
 EnvisionIT Print Production
In the near future, Konica Minolta is expected to expand this roster to include
EnvisionIT Government, EnvisionIT Financial, and EnvisionIT Manufacturing.
The company's bizhub MFPs and software solutions are core to this strategy. Konica
Minolta's bizhub Extended Solution Technology (bEST) MFP platform is the
architecture on which software solutions can be integrated into the company's family
of bizhub MFPs. The software portfolio focuses on six key opportunities:
 Security and compliance
 Cost accounting
 Document management
 Enterprise content management
 Variable data
 Workflow for office and production environments
Depending on the opportunity, Konica Minolta will work with third-party providers and
partners for these solutions (e.g., NSi's AutoStore for Healthcare for scanning
applications; Prism Software's document management suites for the education,
healthcare, and legal markets; Hyland Software for enterprise content management)
or will integrate its own solutions (e.g., Dispatcher Pro for the legal market, bizhub
Secure for security and compliance needs across industries).
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6. The true value of this initiative to bring software and solutions to key target markets is
in the integration of the technology with Konica Minolta's bEST-supported MFPs.
Through integrated connectors at the device level, Konica Minolta users can access
any of these solutions directly from the MFP control panel. This full integration brings
simplicity to the process and is seamless to the user. The customer benefits from
both the cost efficiencies and the productivity gains resulting from replacing paperintensive workflows with digitally based workflows.
Managed Print Services
Integration is also an important step in the next phase of the Konica Minolta
transformation strategy — managed print services (MPS). According to IDC's most
recent forecast, the U.S. managed print services market is expected to reach $17.29
billion by 2017, representing an 8% CAGR from 2012 to 2017. In preparation for this
market growth, Konica Minolta's OPS offering is positioned to target the MPS
requirements in the SMB and enterprise markets with four important components:
 Fleet management. Rightsizing the fleet to ensure an optimized printing
environment with sensitivity to cost of ownership and environmental concerns
 Worker efficiency. Maximizing business process efficiency on all business
workflows
 Financing. Offering a range of financing options under one financial plan
 Security. Ensuring security of all information-related solutions
Of course, this all sounds typical of most MPS programs that focus on cost-saving
opportunities for customers that implement such a program. The true success of any
MPS initiative is to ensure that the MPS provider and customer dialog makes certain
that customer cost and productivity gains are ongoing.
The Konica Minolta OPS offering continues to evolve. The latest development is the
creation of the OPS Enterprise Edition, designed to begin the customer's migration
toward a "less print" environment. It has all the usual elements of an MPS program for
large companies (e.g., meter reads/alerts, usage data, print behavior, floor mapping),
but the key piece of this program is establishing a system in which customer usage
data is integrated with Konica Minolta's SAP system. This means that usage data is
collected directly from customers' print servers into a Konica Minolta repository to
effectively monitor machine activity. Konica Minolta's OPS Enterprise Edition, which
launched on October 1, enables the essential ongoing management of the customer's
print environment with an established system of using this data to proactively manage
these customer accounts.
For example, as part of OPS Enterprise Edition, customers' print usage data is
integrated with Konica Minolta's call centers. Based on this data, Konica Minolta
service providers can predict when supplies will run out or when parts will wear out
and need replacing. Rather than losing productivity due to the conventional initiation
of a service call by a customer and waiting for the tech's arrival, Konica Minolta
service providers can use data analytics to proactively respond to a pending customer
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7. need prior to the customer even noticing it. Downtime is virtually eliminated because
the process to initiate machine service occurs before any breakdown.
This predictive maintenance aspect of OPS Enterprise Edition potentially sets a new
standard in how managed services accounts will operate under a usage data set
made available to the provider. The Konica Minolta software platform is the toolset
that will enable the vendor to deliver the necessary data and reporting to clearly
identify the opportunities for cost consolidation. Perhaps more importantly, this
software database platform of actual customer usage data will help Konica Minolta
sales teams and channel partners rapidly assess and more efficiently identify ongoing
cost and productivity efficiencies for end-user customers.
OPS Enterprise Edition is not for all Konica Minolta customers. The company admits
that the account should have a significant number of devices (75 machines and up) to
make it a worthwhile venture for the customer. While the offering is targeted at large
enterprises, we believe it could extend into the upper end of the SMB market where
some smaller companies may have a large number of devices to adequately address
their high level of document traffic.
In subsequent phases of OPS Enterprise Edition, Konica Minolta will address MPS for
the production/CRD and external print management environment. The intent is to
develop a platform that links all print elements for Konica Minolta customers to assist
with decisions related to the transformation of their print infrastructure.
Managed IT Services
As an extension to managed print services, managed IT services is a key component
of the Konica Minolta transformational strategy. In early 2011, Konica Minolta
acquired All Covered to be the delivery vehicle to tie managed IT services (e.g., data
backup, security, cloud, call centers, training, vertical expertise) with Konica Minolta's
MFP and print hardware. As the market moves toward more cloud-based services,
we believe that IT services will play an increasingly important role in customer
support, so this acquisition was and continues to be a good move by Konica Minolta
to establish itself in this category.
While the traditional All Covered target market has been SMB, Konica Minolta
expects to take the All Covered managed IT services model to the enterprise market
and utilize it under OPS Enterprise Edition engagements. The expectation is that the
company will leverage All Covered's SMB successes to continue growth in this
segment while significantly expanding its presence in Fortune accounts with a select
set of All Covered services for that market segment.
In preparation to create a more national IT services organization, Konica Minolta
has been diligently augmenting this organization with several acquisitions under the
All Covered division (see Table 1).
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8. TABLE 1
All Covered Acquisitions Made Since the Konica Minolta Purchase
Who
When
Where
Vertical Specialties
United Computer
April 2013
New Jersey
Financial, government
InterTech
December 2012
Phoenix
WaveTwo
August 2012
Dallas
Compuquip
August 2012
Miami
Thinsolutions
April 2012
Cleveland
PC Solutions
April 2012
Minneapolis
Covisia Solutions
March 2012
Boston
Service Assurance
February 2012
Memphis
ColdCypress
October 2011
Pittsburgh
Vertical IT Solutions
September 2011
Tampa
Financial, real estate, staffing,
construction, nonprofits
PMV Technologies
September 2011
Detroit
Education, financial, healthcare,
legal
LAN Associates
September 2011
New York
Legal
Techcare
May 2011
Chicago
Education
Healthcare
Financial, manufacturing, legal
Note: Konica Minolta acquired All Covered in January 2011.
Source: IDC and Konica Minolta, 2013
Konica Minolta is expected to broaden and expand upon this initial All Covered
foundation for its managed IT services play in a number of ways:
 Geographic expansion is anticipated until the company feels it is adequately
covered on a national basis. As shown in Table 1, Konica Minolta has acquired 13
companies under the All Covered family since it made the purchase over two and a
half years ago. Konica Minolta has given every indication that it is not finished with
such moves.
 Product portfolio expansion will also come in the form of new skills and new
services built upon the already established All Covered organization.
 Konica Minolta's EnvisionIT offering will evolve to include managed IT services
as a core component. It is anticipated that during this time, cloud services,
security and compliance, and document management will be the solution areas
of concentration and will be tailored for each EnvisionIT vertical offering. Services
will be provided in conjunction with this solutions development.
 The predictive element of customer service for OPS Enterprise Edition extends
nicely into the broader IT market opportunity. As Konica Minolta launches this latest
MPS offering in the market, we expect these data analytics to be offered in any
Konica Minolta customer service engagement, whether for print or general IT.
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9. Commercial Print Management
Konica Minolta is also transforming its approach to the production print market
opportunity. At the end of 2012, Konica Minolta acquired Charterhouse PM Limited, a
European marketing services production company. The acquisition gave Konica
Minolta entry into the commercial print management market in Europe, but these
skills and capabilities (e.g., digital services, data management, studio services,
promotional merchandise, point of sale, and print management services) are
expected to expand to other geographies. The value proposition is that Konica
Minolta now provides a comprehensive suite of services, solutions, consulting,
support, and hardware under a single management platform. The company is in the
process of evaluating this growth opportunity in the United States to support the
expansion into commercial print management.
Challenges
While Konica Minolta has made significant progress over the past three years, all
other traditional print/MFP competitors are moving in this direction as well, and some
have been at it longer than three years. Konica Minolta will need to position itself as
having learned from early-adopter mistakes and plan accordingly versus competitors
with more direct experience over a longer period of time.
The general market consensus is that printing and imaging is moving quickly to a
solutions and services platform. We expect the future market will be crowded as all
market participants build and refine their services offerings. Konica Minolta will need
to continue to demonstrate that it can execute at a level that is above the industry
norm and expectations. At this point, the results show that the company is effectively
doing so, but momentum needs to continue.
Konica Minolta needs to continue gaining legitimacy in new evolving adjacent
markets. Obviously, the company is well established in the print/copy arena, but the
market's perspective that Konica Minolta also has legitimacy in the management of
both paper and electronic business content domains may not always be readily
apparent to the buying audience. In fact, some customers may believe that these new
core competencies that Konica Minolta is building come from suppliers outside the
traditional print/copy and document technology sector. The challenge in this
reinvention is to convince customers that Konica Minolta not only has print/copy and
paper document expertise but also can bring this same credibility to the digital
information arena with unique value-added services.
Lastly, slow-to-move channel partners and end-user customers will need to be
convinced that this technology path is the right one to take and that Konica Minolta is
the best technology supplier to provide for this transformation.
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10. FUTURE OUTLOOK
Ultimately, no one vendor can alter the changes taking place in the printing and
imaging market — the market will do what the market will do. What that means is that
the transformative wave hitting the traditional print market will not be stopped and that
change is inevitable. In response, vendors will need to make significant changes to
keep up with the market's new direction.
One thing is clear: Customers will continue to expect more from their technology
providers, including vendors and their channel partners. In part, customers expect
providers to help them manage the transformative factors that are changing the
shape of their businesses. This means having a substantive knowledge of the
customer's business (or vertical industry) and offering a range of products (hardware,
software, and services) that help customers better compete. The good news is that
such offerings are rooted not in low pricing but in the perceived value provided and
lead to potentially higher-margined sales.
As a result, this transformation is creating new opportunities for vendors and channel
partners to assist end-user customers with tailored document solutions and services
essential for their business. This includes:
 Vertical markets (e.g., customized solutions will differ considerably among
industries such as healthcare, legal, education, financial, government, and
manufacturing)
 Software (e.g., document management that requires cloud, mobile, security
support)
 Managed services that include print as well as the IT environment overall
The successful print providers of today and tomorrow cannot rely primarily on the old
sources of revenue (e.g., hardware, supplies, break/fix) to drive the business forward.
While hardware continues to lead most current customer engagements, we believe
that software and services will figure more prominently in an increasing number of
future sales opportunities. Nevertheless, hardware will still be important for the
foreseeable future, and vendors should continue to invest in both established
(hardware) and emerging (software and services) markets to drive future success.
With all these changes taking place, Konica Minolta has artfully managed the tricky
navigation of a gradual transition from hardware to services. The company has not
abandoned its printing and imaging roots. The proof lies in Konica Minolta's continuous
demonstration of year-over-year hardware unit shipment growth and market share
increases. IDC research shows that Konica Minolta's market share of the U.S. copierbased MFP market grew from 12.6% in 2010 to more than 15% through 2012. In
software and services, the company's revenues have grown exponentially since the
beginning of this initiative three years ago. While some of the industry is struggling with
making the transition, Konica Minolta's positive accomplishments in both established
and new business opportunities are rare and notable.
So what does this mean for the broader market as well as all participants in the
Konica Minolta ecosystem (e.g., company, channel partners, and customers)?
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11. Konica Minolta has made several acquisitions to make itself relevant in the printing
industry's transformation. In the process, it is hiring expertise in vertical markets,
services, and software. Hardware is not being abandoned, but it is not the only offering
for Konica Minolta's customers. The company is taking the appropriate steps to reinvent
itself in order to carve its piece of the market and to grow its future business.
For Konica Minolta channel partners, there are more profit pools available by
representing a vendor offering a greater array of technologies and services, particularly
where there are growth opportunities.
Most importantly, end-user customers get more than just a printer or MFP hardware
solution. Instead, their vendor or channel provider can offer a comprehensive set of
technology and capabilities that appropriately address workflows and processes that
are key and essential to that specific business. It is not a general "one size fits all"
approach with a generic hardware device but a "business hub" that enables efficient
business information processing.
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