Lexmark makes printers. Now it’s moving into IoT.
A smartphone in everyone’s pocket revolutionized the world we live in. Very soon, the Internet of Things (IoT) will bring about a similar wave of transformation, and its impact will have far-reaching effects on our everyday lives. Connecting machines (the “things”) to a blazing fast internet will bring forth new data that, when analyzed, will reshape work productivity, resource efficiency, asset optimization, business models and customer service.
IoT networks play a key role in bringing real-time insights together from devices that are connected to the internet and distributed in the field — such as an intravenous infusion pump in a hospital, a bulldozer on a construction site or a printer in a small closet of a research lab. Each piece of equipment is loaded with sensors that monitor and send back detailed data about device usage and performance.
Harnessing this data can unlock insights and ideas that take a business to new, unexpected places. Sixty percent of manufacturers say they have a connected product in production, according to research that Lexmark commissioned from technology analyst firm IDC. But there’s a hitch: Not all organizations using IoT platforms are fully capitalizing on the data that these connected products provide. Instead, many become overwhelmed by the data, or find they lack the in-house technology skills to maximize the return on an IoT investment.
Lexmark CEO Allen Waugerman
Lexmark, a leading provider of printers and imaging equipment — one of the first IoT devices — understands the potential as well as the challenges better than most. Calling it a “natural expansion” of its business, the company recently launched the Optra IoT Platform, a ready-made, cloud-based solution that allows manufacturers of connected devices to transform their businesses and actualize IoT insights into business outcomes. We sat down with Lexmark CEO Allen Waugerman to discuss this major development, which he calls one of the most significant milestones in the company’s 30-year history.
Lexmark is largely known for printers. Why are you moving into IoT?
We built the Optra IoT Platform as the core for our own managed print services business. Now, we’re applying those same concepts to help other manufacturers. Over the past 20-plus years, we have tested and perfected the platform, which now supports more than 1.2 million printers and multi-function devices at hundreds of thousands of locations around the globe. Analyzing the data, we now take a predictive posture in delivering service and are able to fix a device remotely 70% of the time. Additionally, we analyze device-use data and advise our customers on which ones to replace and which ones to keep in place in order to deliver a better ROI and sustainability benefits. Essentially, Optra is the culmination of what we’ve been doing ourselves for years.
Where is the business opportunity in the IoT market?
The trajectory for IoT market growth is exponential. For manufacturers, IoT will enable access to real-time data so they can immediately see what's happening across their fleet and act on those insights — in some cases, before customers even notice an issue. Yet all too often, companies buy the building blocks, but struggle with the construction. They don’t understand how to make the jump from implementation to the valuable insights about real-world product performance that inform how you design your products.
For many organizations, the real power of the device data isn’t being realized. I like to say it’s in the beginning phase, but it’s not even that. It’s in the chaos stage. Systems are overrun with data already, and by adding in even more data from IoT devices, they’re drinking from the firehose. Applying analytics within an IoT platform helps make sense of all that data, providing insights to shape business outcomes and drive critical business growth.
McKinsey estimates 84% of companies working on IoT remain stuck in pilot mode for over a year. Why is this happening?
From our own experience, we know that adopting IoT technologies is typically only the first step. The real challenge is finding true actionable insights from within the data “noise.” A manufacturer may have preconceived notions about their business, but the device data may tell a different story, if only they can access it. They need to analyze the data to find meaningful information and then operationalize it to deliver real business outcomes and new value to their customers.
Lexmark brings a proven IoT platform, expertise on how to connect these devices and the analytics that matter to obtain a better outcome from the start. For example, when we rolled out the ability to fix printer issues remotely, we knew it would have a big impact. We were impressed that it ultimately addressed more than two-thirds of the service requests. Adding this capability freed up our technicians and IT staff to focus on more important work.
What kind of customer can take advantage of the Optra IoT Platform?
Companies of all stripes can benefit from IoT. In particular, we’re targeting companies, particularly manufacturers of connected devices, with revenue between $1 billion and $5 billion. These companies generally don’t have the resources, expertise or the time to build an IoT solution. This market is where our IoT experience and message resonates, and we believe it will only grow as more companies embark on their digital transformation journeys.
As you move into this new space, what cultural issues did you address internally?
In the 20 years it has taken us to get to this spot, we have evolved our organizational structure to break down internal data silos and make data available across the organization, so it can be applied from product design through service delivery. Our proof is our 95% customer retention rate — customers stick with us because we deliver value such as visibility into connected devices, better device uptime and flexible business models including Product-as-a-Service engagements.
We understand the challenges in unlocking the value of IoT data because we had to overcome them. Our culture fostered our success and prepared Lexmark to help other connected device manufacturers jumpstart their business transformations. IoT is now and the future — we provide the tools to help unlock that potential faster.