Lexmark International has remained a top employer in Lexington since it was founded in 1991 as a spin-off of IBM to manufacture dot matrix printers. And, as with any longstanding technology company, Lexmark has adjusted its business model and services several times over the years to grow and remain competitive.
The company expanded into inkjet printing in the early 1990s, and by the 2010s exited the inkjet business to focus on software. In 2016, Lexmark was acquired by a consortium of three Chinese companies — Apex Technology Co., Legend Capital and PAG Asia Capital — and the company went private. Lexmark then shifted its focus again, to manufacturing laser printers for businesses.
While home printer use has trailed off dramatically in recent years, there are business environments where high-volume printing remains a necessity — places like hospitals, pharmacies, medium to large-sized offices, universities and other applications around the globe. In addition to selling and distributing its printers, Lexmark can also help maintain, diagnose and optimize these connected devices through its managed services division.
Collectively, such connected devices and appliances are known as the Internet of Things, or IoT. To support the more the 1 million devices that Lexmark currently manages on behalf of its customers, the company developed a proprietary software platform to track and make sense of the endless streams of data it collects, even using machine learning to predict when a device is likely to fail and implement a proactive fix.
Allen Waugerman
“We’ve been a leader in imaging, especially the managed print services business, now for 20 years. And, over those 20 years, we had to build this IoT system to manage these 1.2 million devices that we have all over the planet right now in 200,000 locations,” said Lexmark president and CEO Allen Waugerman.
Lexmark announced in late September that it would o er its proprietary cloud-based technology platform — called the Lexmark Optra IoT Platform — as a solution for any manufacturer or company with large volumes of collected data to better manage, understand and utilize that information.
“This isn’t a transformation, it’s an expansion,” Waugerman said of Lexmark’s latest offering. “We’re taking core technology and expanding it into these adjacencies.”
The platform is a first step, Waugerman said. Within the next six months, Lexmark will introduce related hardware to help manufacturers outside of the imaging business better utilize the platform. It will also continue to offer managed services, consultation and support services for its devices and for companies using the platform.
“When you look at what we’re bringing as part of this portfolio, it’s a whole set of skills — analytics, machine learning — that’s part of this package that we’ve built,” Waugerman said. “We know what works for IoT devices like imaging, but the outcomes are the same whether you’re trying to reduce help desk calls, reduce development time, accomplish a remote fix or proactively service.”
While Lexmark has been working on building out its cloud infrastructure over the past five years, Waugerman said the company doubled down on its efforts during the pandemic.
“Pre-pandemic we said, ‘how can we leverage this?’, and then during the pandemic we accelerated that as we started to think differently. Plus, imaging was impacted significantly early on in the pandemic,” he said. “We’re bringing all of that knowledge that we have in IoT from managing printers and taking it to a whole other set of industries.”
While the business imaging market is slowly contracting, it’s still a $60 billion industry globally, Waugerman said. Lexmark’s research indicates that its Optra IoT Platform and related services will help the company access what’s estimated to be a $50 billion industry related to IoT.
“I don’t want anyone to think that we’re exiting the imaging business, which is core to our DNA,” he said. “Our focus is continuing to grow share. We have a strategy around doubling our managed services business over the next few years, as well as winning more [original equipment manufacturer] customers. Lexmark also sells our engine technology to other printing providers across the world.
“And then with this IoT play, we believe the addressable market is … about $50 billion. We would love to take a modest share — a couple points — which is still a big number, and we’re just getting started.”