This Month's Spectrum Summary:

(The following is an excerpt from the November 2004 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2004)

Good Numbers are Priceless, But They Are Only a Beginning

This month Patti Williams and Marco Boer meet with us to explore the numbers game a bit, acknowledge the pitfalls, and suggest the kinds of questions clients need to ask to get the best possible mileage from anyone's forecasts and other statistical data.

Over the past ten years industry statistical programs have become ever more complex due to the explosion of printer models and marketing channels. Sampling is more important than ever, but difficult due to distortions caused by getting "outlyers" in the sample. Determining optimal page volume for new products is difficult. Designing for high volume means high acquisition cost and narrowing the market. But as you narrow performance specs, you narrow the market.

Sampling can be biased by the method used. To get desktop color inkjet printer usage, researchers a few years ago offered a group of users free paper and cartridges. At the end of the test period they were asked how much of each was used. But with free supplies, people will probably print more than if they have to pay for them. Industry associations can be an important source of statistical data. But association data can also be biased depending on the membership and whether studies are commissioned by individual companies.

Usage data historically has been collected by EPROM chips embedded in printers, which could be accessed by service people. Today, at least with higher end machines, manufacturers can obtain usage data as a by-product of remote diagnostics.

OEMs are generally willing to share usage data with independent industry analysts, but again, this data is not the full picture because there are so many kinds of media being processed, applications and duty cycles. What looks like good research no doubt lies beneath HP's recent laser printer-based MFPs. One market addressed is the large pool of copier users who are paying for perhaps 80% of functionality that they typically don't use. Besides lowering costs for these users, HP will profit from user replaceable components, by-passing distributors who traditionally make most of their money from service.

Industry statistics, no matter how accurate, are just a beginning. There are important layers beneath any market forecast. But to include them would make any report too expensive. Additional custom research is essential and here is where experience and consistency are critical. So we are reminded that the core I.T. Strategies research team has been consistent for over ten years.

Looking at the big picture, the U.S. Census of Manufacturers is mentioned. This is a good source of market information. But industry classifications don't keep up with cutting edge trends. Also, it is only a piece of the worldwide picture. Finally, today there is the Internet with a flood of free data. Here care is needed to sort out what is useful. Free numbers are perhaps worth only what you pay for them.

We close with the reminder that market data, no matter how accurate, is only a beginning, a tool, just one ingredient that needs to be used with care in building a winning business plan.