1. Gartner @ Xplor Effective Management of Office Document Output Systems Andrew Johnson Managing Vice President

2. The Opportunity and Dilemma Document output and management spending worldwide is $180 billion Represents 1 percent to 3 percent of most businesses’ revenue Savings of 10 percent to 30 percent are common when businesses actively manage products and processes Quest for savings is opportunity for businesses and threat to some vendors

3. Worldwide Spending on Devices is Slowly Declining

4. Best CaseMost LikelyWorst Case Economy and Politics Political settlement in Iraq or the war ends quickly without global consequences. Economic recovery follows soon after. Iraq War concludes in the second quarter of 2003 without global consequences. Economic recovery will follow in the second half of 2003. Iraq War is prolonged and has many negative global consequences (high oil prices). Economic recovery is delayed into 2004 or later. Normal Replacement Cycle Resumes First half of 2003Second half of 2003First half of 2004 Product Mix Color and MFPs Rapid adoption of office color printer, copier/printer. “Universal” printers become popular as color becomes a familiar part of many internal office documents. MFPs boost ASPs and create incremental spending on services and software Modest adoption of office color products in external-facing documents only. Colorusage in internal documents is still a novelty. MFP replacement strategy keeps fleets of copier, printer and fax stable — boosts ASPs. Restricted budgets prevent color output in all but the most important documents. Inkjet printers are removed from offices. MFP prompt reduction in fleet sizes suppresses demand for Single-function products. Pricing Vendors increaseASPs in face of stronger demand by selling richer configurations. ASP declines continue with some positive impact on demand. Products are seen as “commodity” — sparks price war among vendors and channel. Regional Market Issues U.S., Western Europe and Japan meet expectations. Latin America, China and Eastern Europe demand exceeds Expectations. Two out of three developed markets meet expectations. Mixed success in developing markets Only one of the developed markets meet expectations. Developing markets struggle. Worldwide Copier, Printer and Fax Market Forecast Scenarios by Major Issue

5. Shift in Client Issues Pre-2002 — Most clients searching for product advice –Speeds, feeds and bid review –Separate from content management initiatives Spring 2002 — Most clients searching for different advice –Cost savings –Asset consolidation and optimization –Vendor selection –Solutions linked with services and software

6. By 2005, the number of copiers, printers, MFPs and fax machines installed in businesses in developed markets will be 10 percent lower than in 2002 (0.8 probability). Strategic Planning Assumption

7. Time and Effort Technical Solution Business Solution Product Optimization Process Optimization S a v i n g s O p p o r t u n i t y Consolidation and Standardization Alignment of IT and Business Solution Management Optimization Automation, Centralization Document Cost-Saving Model

8. Time and Effort Technical Solution Business Solution Product Optimization Solution Management Optimization Process Optimization Procurement, FM IT Management CIO, LOB C-Level or LOB Board Level Consolidation and Standardization Automation, Centralization Alignment of IT and Business S a v i n g s O p p o r t u n i t y Document Cost-Saving Model

9. Time and Effort Technical Solution Business Solution Product Optimization Process Optimization S a v i n g s O p p o r t u n i t y Tools Management Services Assessments, MFPs Content Management Solution Management Optimization Document Cost-Saving Model

10. Time and Effort Technical Solution Business Solution Product Optimization Process Optimization Software Vendors Hardware Vendors Services Tools Management Services Assessments, MFPs Content Management P a r t n e r s h i p s S a v i n g s O p p o r t u n i t y Solution Management Optimization Who Can Help Deliver the Savings?

11. What is the size of the market? What is the competitive structure of the market? Which technologies will play a prominent or disruptive role? How do we cost-effectively plan our document output devices around current and future road maps? What product type and configuration should I choose for each user type? What are the key criteria to determine if a vendor meets our organization's requirements? Which contract, relationship and vendor management practices lower the total cost of ownership? What are the trends of the color segment of the market? What are the promises and pitfalls of outsourcing? Gartner Research Agenda

12. Agenda Ken Weilerstein, Gartner Research Director –Best Practices for Copier, MFP, Printer Fleet Management Malcolm Hancock, Gartner Principal Analyst –How to Put Color in Your Office Documents — Effective management strategies that deliver the value of color documents, without all the cost Peter Grant, Gartner Principal Analyst –Output Outsourcing: Promises and Pitfalls of Turning Over Document Output

13. Agenda Vendor Executive Panel –Get your questions ready for IBM, HP, Xerox and IKON User Panel –A reminder of the real world Ralph Witcher, Gartner Director, Software Specialist –Vendor Selection Software Tool