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The problem with the Xerox ColorCube pricing model

November 13, 2009

Xerox has been touting its new color cube pricing model.

On paper it sounds great! It sounds like you could print some color documents for little more than the price of a black & white page. The Xerox sales force has been showing off three sample pages and giving the following costs per page

.0089 -(under a penny) for a B&W page with just a small color logo
.029  -for a page with a little more color
.059 -their highest rate for a color page. (BTW, both Canon & Konica Minolta have a lower per page color price)

The .0089 seems unbelievable to the Customer, they can now do color for the price of black & white (so says Xerox). In fact, at this cost why would anyone even care if their end users print everything in color? And THAT IS WHAT XEROX IS HOPING FOR!

Because if Xerox can get the customer (and especially the CFO) to not care if their end users print color then they WILL print color, and the cost will rise, and Xerox will make more money, because their customers will spend more money.

How you ask? Let’s look at how we set up most of our customers now. When one of our customers buys a Color MFD we default BOTH the Copier and all the Print Drivers to B&W. We set it up in such a way that when an End User copies or prints without thinking it comes out in B&W. If they want color they must choose color. They must actually make an effort to switch from the B&W default to Color when they copy or when they print. And guess what? That keeps the price EVEN LOWER than the lowest color price of the Xerox Color Cube.

And if that is not enough we will lock down the color capabilities so that only certain end users can do color at all. If certain end user’s jobs don’t require them to print or copy in the color then they don’t get the ability to do so. While other end user’s jobs do need this ability. So we give them the codes to do so. This strategy works to keep the cost of color printing truly low for our customers.

Xerox is trying to remove these safe guards, but I believe that Customers who do allow their End Users to print everything in color will find that these amazing savings that Xerox is promising will be as illusive as “free health care”.

That’s My $0.02
Vince McHugh
vince.mchugh@yahoo.com

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8 comments

  1. Hi Vince,

    What is the Canon street price for a colour click in the US through a dealer? You mention 5.9c in the post above, is this a toner inclusive agreement? Im interested to line up with what our end users are paying in Australia.


  2. Victor –

    Help me understand how a “pay for how much color is on the page” is a bad idea? Businesses are printing emails with one line of color and being charged at best by Canon and Ricoh, 5.5 cents; but the ColorQube will charge less than a penny. BTW, can Canon do less than a penny for color prints?


    • “Brent”,

      Because once you convince a customer that “they can print color as cheap as b&w” they (the End Users) will begin to print everything in color indiscriminately. Once this “Open Bar” mentality happens Xerox promised cost savings will be as illusive as free health care.


  3. I think the point has been missed with your article.
    Is this just anti Xerox or too much suspicion of the product?
    Of course it will save you money, the support aspect is fantastic as no drums/ toners/ fusers etc.. just blocks of wax and a maintenence kit once in a blue moon.
    I have worked with Canon/ Ricoh/ Konica & Xerox machines and believe me tiered pricing is as real as it gets and cheap. Plus to support the product is a dream for IT guys and if you go for the green environmental bit it ticks all of the boxes.


    • Phil,

      I am just not buying the Xerox hype! I have had an opportunity to monitor a ColorCube (using PrintFleet) in a typical office environment and the Xerox ColorCube reported that it’s average color coverage was just over 20% (industry standard is 21%). That pretty much negates the promise of great savings on color. And like I said once the End Users think its OK to print anything they want in color, the flood gates will open and costs will soar! I think that the average company will find Xerox’s promise of huge savings on their color cost elusive at best.


      • Hi Vince,

        That’s a fair comment to make and as you say it is all ‘hype’ and stats from Xerox to market and sell a product that is new to market. I’ve looked at other forums and the viewpoints published come from across the board. Most do either tend to be from either Xerox resellers or people in competition so any middle ground is always welcome to ensure no bias. I too work for a Xerox reseller that also sells HP/ Epsom/ Brother etc… we are mainly an IT company that also provides the full spectrum of IT services and products. My background is from office equipment spanning 25 years working for Canon and IKON (before Ricoh bought them) and a few others besides. Having worked for large coorperates/ manufacturers in the past I have learnt to not believe internal marketing to the letter, with the usual ‘ our product does xyz and is better that abc because…’ I also have always been amazed at how many employees do buy into this but it is usually down to a lack of experience in the industry and only ever being exposed to one manufacturers equipment. Let’s be fair a copier is a copier (sorry MFD)no matter who makes it and there is always going to be a percentage of buyers that buy purely on price. In this case you won’t buy a Xerox ColorQube. However I have been working on Tektronix/ wax printers for over 10 years and seeing the evolution and work put into this product is impressive. A massive amount of R&D has been put into it before finally launching and due to it’s high price Sales are not as prolific as anticipated plus the Credit Crunch has had an impact.
        What I do know for sure in these early days is that everyone we have sold, the client has been extremely impressed with their investment and like their little brother printers – users actually want to put wax in – not email their support guys with the usual ‘ copier needs toner – not my job – urgent’ requests. As I said before another big plus is no drums/ toners/ fusers, end users love that as well.

        The main fear and concern by everyone is the stated cost savings and I agree you can make figures paint any picture you like. I’m not keen on believing industry standard figures just like believing what normal or average are – they just don’t exist in the real world. However I do know that we only market the ColorQube to new clients by choice as if we were to upgrade an existing customers fleet of laser MFD’s we would lose revenue. We still configure them like any other MFD by defaulting to mono output and if required configure Active Directory Groups for permissions to access colour. The savings for a client who is in the market for one is firstly to analyse their current network useage by the many apps available – XPEA/ Xopa/ any print audit tool or as you say PrintFleet. The point is to still control useage but for clients who have a set business pattern such as insurance companies and the like who print standard forms with some colour or the usual emails with just the signature in colour to name a few the savings are real over pay as you go printing (buy consumables) or MFD’s doing the same job. It’s like everything else the tiered pricing may not suit everyones business model but the recycling side for used toners etc… is an argument in itself. We have to send every used Drum/ Toner /Fuser and engineering spares back to Xerox every week and for a small Island the pallets and pallets of this stuff is frightening.
        It may be good practice by Xerox to recycle everything for free but as many comments I have seen state – the carbon footprint of all this is huge – no reclycling required justifies itself.

        I am also informed that future versions will be smaller ( it is a monster ) and the potential for the machine to re use waste wax is also being investigated ( not sure how that can work? )

        Either way it is early doors for this beast and my experience so far is that extensive development and testing before launch has been done.

        But don’t believe me – i’ve obviously got too much time on my hands writing this and must be mad.


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