Radical printer's road to market is a marathon, not a sprint

Every so often a firm changes its industry's rules. Are printers about to be revolutionised, asks ADAM MAGUIRE

WHILE THE humble printer may not have the immediate appeal of cutting-edge mobile communications, telecoms veteran Len Lauer says moving to head up a printer company was an easy decision to make.

There was a $250 billion annual market value. A disruptive technology in a space that has not seen much innovation for 20 years. And the backing of billionaire George Kaiser through his Argonaut private equity firm.

Lauer, perhaps unsurprisingly, describes this situation as a “businessman’s dream”. It also happened to be the one he faced early last year when the opportunity arose for him to leave mobile chip-maker Qualcomm to become Memjet’s president and chief executive.

“To have a capability to bring something very disruptive to a large global market with steady financing coming in, I saw it as really leveraging my capabilities in terms of my global operational background,” he says.

Before Memjet, Lauer had 14 years’ experience in telecoms in the US, including time as president and chief operating officer in Sprint and time in Verizon-precursor Bell Telecom. Before that he worked for IBM for 13 years but says Memjet was different as it was “an unusual opportunity”.

In fact, there is very little that could be called “usual” about Memjet. The company has been in existence since 2002, although the research behind it is many years older than that. It has varying degrees of a presence in two American states as well as Australia, Dubai, Taiwan, Singapore and Ireland. It is responsible for over 700 jobs, some directly and some through its research partner Silverbrook Research in Sydney.

Despite this, it has only started selling its product this year, which will see its new type of printhead become available in business, industrial, label and retail photo printing devices. Outside the printing and high-tech world, its brand is almost unheard of, not that this will be of too much concern to the company.

“Our core competency is in designing the Memjet technology that has the capability to be very fast and inexpensive,” says Lauer. “We’ll be steering clear of having our own brand of printer out there and focusing on getting manufacturers to use our technology to get the most out of their printers.”

According to Lauer, the aim is to be what Intel is to the PC, with branding on the device telling customers it is powered by Memjet but made by someone else. Such an approach is not new in the technology world – in fact it is similar to the business model of Lauer’s previous employer, Qualcomm. However, so far the notable companies Memjet have signed up, like Medion and Lenovo, don’t already have a presence in the market.

“When you come into an industry like this that has a lot of established players, many times they have a significant challenge in adopting new technology,” he says. “One reason for that is with new technology there can be a fear of cannibalisation of old technology.”

However, Lauer is confident that the Tier 1 players will see the opportunities of Memjet in the not-too-distant future. He also hopes the company can move back somewhat from the manufacturing it is currently having to do to make its technology a commercial reality.

The previous aim of Memjet was to just produce the ink and inkheads, giving the other tasks to the manufacturer making the printer itself. It was ready to commercialise in this way in 2008 but no one was willing to buy in, wanting Memjet to produce the print engine itself before they would get on board.

As a result they were forced to go back to the drawing board and the revised results are coming to market now. This echoes what happened to Memjet in its infancy, when it was intended to be an IP-only company but was pushed into manufacturing to provide a proof of concept for ideas.

If Lauer has his way, the ink-and-inkhead-only business model will eventually be followed, even if it takes a few years to go back there. He also hopes to be able to create a return for shareholders in the next few years with a stock floatation also a possibility in the next half-decade.

Whatever its future, Memjet’s expansion plans at least show that Ireland is a part of its model.

“We were attracted then and we’re attracted now in terms of the skill base of employees,” says Lauer, who adds that the company has tended to seek out experienced people as opposed to graduates. “It also gives us a good beach front for Europe and it does have tax advantages too.

“We feel very good from what we’ve been told by the likes of the IDA that the tax rate is going to stay in place; it would be really hard for Ireland to step away from that even if some European countries want them to.”