IBM and Ricoh form new Printer company
A company formed from IBM’s printing division has begun operation as a separate entity.
InfoPrint Solutions was announced in January, when IBM revealed that it would partner with Ricoh to spin off its Printing Systems Division into a new company that would progressively be absorbed into Ricoh.
Big Blue will continue to offer InfoPrint Solutions products to its customers and will provide support for the new company, which will inherit a customer base that generated more that $1bn in revenue last year.
IBM also expects that as many as 1,000 of its employees may move to the new business.
“With this launch, we have created a billion-dollar enterprise with the backing of two undisputed industry leaders. Together, we will drive the next generation of innovation in output solutions,” said former IBM Printing Systems head Tony Romero, who will serve as chief executive of InfoPrint Solutions.
Ricoh has paid IBM $725m for a 51 per cent stake in the new entity, as well as prepayment for the remaining 49 per cent transferred over the next three years and “certain royalties and services” to be provided by IBM.
Ricoh hopes that the acquisition will allow it to tap into IBM’s status as an enterprise computing heavyweight and give the printing company access to Big Blue’s vast customer base.
“Today is an historic moment for IBM and Ricoh and more importantly, an industry first,” declared Norio Tanaka, corporate senior vice president of the Production Printing Business Group at Ricoh.
“The creation of Infoprint Solutions brings together the best of two industry leaders, and greatly enhances the Ricoh portfolio of offerings.”
“It all boils down to a question of funding,” said Bob Kilcullen, senior vice president and general manager, InfoPrint solutions management. With the wide range of technologies IBM has in servers, storage, software and services, the vendor’s printing business wasn’t front of the line when it came to receiving investment for research and development (R&D). “Now we drop right into Ricoh’s strategic direction,” he added. “We go from side stage to center stage.”
InfoPrint will look to increase R&D across the board, filling in any gaps in its printer line-up, and integrating Ricoh’s print engine technology into its range of printers. The hope is that InfoPrint with Ricoh’s backing will be better positioned to compete against high-end printer competitors like Oce Technologies, Xerox and Eastman Kodak as well as rivals in the general office printer space, notably Hewlett-Packard.
The only potential area of overlap between IBM’s and Ricoh’s printing operations is in the low-end InfoPrint Express machines, Kilcullen said. IBM sourced those printers from Lexmark and InfoPrint plans to continue and expand that relationship. At the same time, Ricoh is an OEM supplier to Lexmark of print engines. “We’d like to form a three-way relationship to extend the relationships we have with Lexmark and with Ricoh to a higher degree,” he added. Trying to establish such a relationship is a highly complex matter but Kilcullen said that discussions with Lexmark are ongoing.
InfoPrint currently employs around 1,200 staff worldwide. For the first year of its operations, the company will draw on IBM’s printer maintenance experts to continue to provide maintenance services to customers. By June of next year, InfoPrint would look to take on most of those 1,000 experts. In practice, an IBM printer customer should be unaware of any change in maintenance support, with the same person servicing their printers this year and next year.
InfoPrint held a large party on Friday afternoon for employees at its Boulder, Colorado, headquarters to celebrate Monday’s opening for business. Although being spun off from IBM was a traumatic move for some staff, everyone was congratulating each other on the formation of InfoPrint, according to Kilcullen. “I could feel energy in the air,” he said. “This move is so positive for our business and it has been very well received”
August 14th, 2007 at 2:27 am
I couldn’t understand some parts of this article IBM and Ricoh form new Printer company, but I guess I just need to check some more resources regarding this, because it sounds interesting.