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HP LaserJet Printers and Cost of Ownership - The HP LaserJet blog by Vince Ferraro

You may have noticed various printing device manufacturers making claims around their operating costs. This usually takes the form of a device being launched during the Fall or Spring of the year, claiming low (or, in some cases, the lowest) Cost Per Page (CPP), Total Cost Per Page (TCPP) or Total Cost of Ownership (TCO). It reminds me of the skirmishes around other specifications, such as printing speed (PPM) or resolution (DPI). Taking it to another industry, like automobiles and you get mileage claims that are seldom, if ever, reproducible by the average user. As we’ve learned from all of these industry dialectics there is always more to the story than the simple specification.


Nowadays, low operating cost claims are most often made by copier manufacturers, which makes sense if you consider their business model. I will let you in on a little secret about the industry (I can do this as HP doesn't sell copiers). They have traditionally tried to hide the cost of their copier hardware in a complicated and cryptic arrangement and sign companies to long-term service contracts. These contracts usually included over-featured hardware and minimum page requirements, so they made a slug of cash over the life of the contract and locked companies into a situation where they would get paid to tell you what additional service your copier needed. This reminds me of trying to get a “deal” from a car dealership. You got one of those? Almost everyone did at the time!


As laser printers have taken substantial market share from copiers, copier manufacturers have moved toward more of a "simplified" leasing model. In this model, they encourage you to simply look at the Cost Per Page to make a leasing decision. As you might have guessed, the CPP goes down if they quote it using an exceedingly high number of pages. This is like saying, “we’ll save you money if you start printing more.”




This has also led many people to lock into a contract that is oversized for their needs, while still having to pay for the high number of pages (it is a contract used to get the low CPP)--whether the pages are actually printed or not! Like a car lease, they are looking to have you take the gas-guzzler off their lot by quoting a longer lease than you need (to lower the monthly lease payment) and you still have to pay the high price at the pump. Or, better yet, compare to the fuel option waiver you see in rental cars (pay for a full tank of gas up front, in order to "save time and money" later--even if you only use a fraction of the full tank).


Looking at printer-based multifunction products (MFPs) tells a different story. While we previously discussed the more technical differences between printer- and copier-based MFPs, it is important to note the tangible differences. One is that, when you buy an HP LaserJet MFP, you actually get to keep the hardware—you don’t have to pay for the device by printing a lot (with the copier cost being hidden in the CPP, because they are substantially less expensive than copiers). And you don't get to the end of a lease, finding that you've paid alot of money without anything to show for it.

You also don’t have to pay for a service contract (and wait for a service tech to show up) in order to replace the toner cartridges and keep the device working. It is important to note that some customers do want the option to purchase extended break-fix types of service contracts and HP does offer a full range of these services that scale up to a fully outsourced Managed Print Services model. However, this is not usually an option in the copier-vendor model.


We use MFPs in this discussion as most organizations want the efficiency of having all document processing functions as close to their work teams as possible, rather than asking them to hike to a centralized copier center to print, scan, and digitally send documents. When evaluating the acquisition cost for such multifunction hardware, consider that it is a lot less expensive to purchase a printer-based MFP than it is to gain the same functionality from a copier-based device. For instance, you could buy four HP LaserJet M 4345 MFPs that deliver network printing, scanning, digital sending (faxing), PostScript and hard-disk overwrite--for the same functionality in a Ricoh Aficio 3045 SP (from www.buyerslab.com on 12/7/06, actual prices may vary).


A more comprehensive way of looking at costs is through Total Cost Per Page (TCPP). This captures the total amount that you would pay for owning and operating a multi-function device, including: hardware acquisition cost, installation, break/fix service and toner. At an output of 6,000 pages/month, HP’s TCPP is 5.04 cents, while the competitive average is 5.66 cents. At 12,000 pages per month HP’s TCPP is 3.08 cents with the competitive average of 3.31 cents. As 80% of workgroup and departmental MFPs print less than twenty thousand pages per month, chances are your business would save by going with a printer-based MFP. (Competitive averages and usage rates based on substantially similar products from 3 primary MFP manufacturers as of 1/03/07).


Just like when buying a car, you should focus on the overall acquisition cost rather than the “low monthly payment.” If you do, you’ll likely find that you can get at least 3 printer-based MFPs for the price of one derived from a copier. And, as you may remember, HP printer-based MFPs enable balanced deployment and centralized management with HP Web Jetadmin. Some companies do sell printer-based MFPs based on a CPP model, if that is how your organization want to make purchasing decisions. Its interesting to note that many of these companies that lease printer-based devices evolved from the copier business. They are clearly attempting to duplicate their previous business practices with the new breed of printer-based devices--while old habits (or in this case, business practices) die hard, the customer is getting wiser as to meeting their needs without hidden costs.



Editor's Note: I’m going to be changing a number of previous blog titles so that they are more descriptive and it’s easier to find what you’re looking for. Thanks for your patience.