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Consolidating Equipment Is Expected to Cut Costs Office Machine Companies Offer Combined Products

After years of using standard copiers, fax machines and printers in the workplace, many offices will soon combine all the functions into one machine, according to local office machine companies.

These companies are ranked by the number of local full-time employees in the San Diego Business Journal’s List of the Largest Office Machine Companies. Twenty-three of the top 25 office machine companies stated the number of employees either increased or stayed the same compared to the past year.

The contributing factor in many of the office machine companies’ growth is recent conversions to multi-functional products (MFPs), according to some local executives. MFPs are machines that can perform multiple functions, including copying, printing, faxing and scanning.

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Mark Johnson, president of Copycare Inc., No. 20 on The List, said the industry is quickly converting to making and purchasing MFPs. Copycare is an authorized dealer of Gestetner and Canon products.

– U.S. Market For

MFPs is Growing

He stated the United States market for MFPs grew 32 percent in placements from 1997 to 1998, and the overall 1998 equipment sales revenues reached $3.6 billion.

“Among the many advantages to using MFPs are cost and reliability,” Johnson said. “Rather than three or four pieces of equipment, MFPs combine two or more functions in a single unit.”

He also said the cost-per-print expenses are less than standard printers. Money is saved with one set of supplies and one maintenance contract versus dealing with multiple machines.

Michael Sherman, president of Digitec Business Systems, agreed the industry is heading to more digital and multifunctional machinery.

Digitec, No. 6 on The List, is an authorized dealer for Savin and Hewlett-Packard products. The company grew 20 percent, from 46 full-time employees to 55 full-time employees this year.

Sherman said there was once a clear distinction between a printer company such as Hewlett-Packard and a copy machine company like Xerox Corp.

– Hewlett-Packard

Reacts To Competition

“Hewlett-Packard owns approximately 85 percent of the printer market, but suddenly copier companies like Savin and Xerox are going after Hewlett-Packard’s printer market by merging the technologies together,” Sherman said.

“As a result, Hewlett-Packard responded to competition by introducing a copier product that is printer based called the ‘Mopier.'”

The Mopier stands for multiple output printer and is known as a high-end computer copier product, according to Sherman.

“The document can be in any type of word format like on the Internet, E-mailed, faxed, copied or printed,” Sherman said. “This technology allows people to capture it, print it and deliver it quickly and efficiently to the end user.

“The lines between the printers and the copiers are becoming blurry.”

Johnson predicted office machine manufacturers would eventually end the production of traditional analog copiers. He said the combination of a copier and laser printer brings out the best of both devices.

“Ultimately, end users won’t have a choice because eventually analog copiers will not be available as a choice,” Johnson said.

“MFPs are being pushed by the manufacturers and more people everyday are asking for these products.”

– Digitec Promotes

Digital Products

Sherman of Digitec did not predict an end to analog copiers, but said his company has been promoting digital products in the past three years.

“The marketplace has responded far faster than the manufacturers thought,” Sherman said. “There isn’t a company today that does not want to investigate into these products or already made a decision to purchase a digital machine.”

He said only 15 percent of the sales of Digitec are still in analog products and are considered “archaic” compared to the new technology available.

Sherman said his company has grown over 1,000 percent in the past six years and will have its 1999 revenues under $9 million.

His company plans to build a two-story, 15,000-square-foot facility in Kearny Mesa due to the rapid expansion. In addition, his company plans to open offices in Riverside, Ventura, Santa Barbara and San Bernardino.

Workplace Laws Go Into Effect

A new law that went into effect Jan. 1 requires employers to pay time-and-a-half to employees for work performed in excess of eight hours a day.

Assembly Bill 60, signed by Gov. Gray Davis in July, also requires overtime pay for time worked over 40 hours in one week, said Lois M. Kosch of the law firm Wilson, Petty, Kosmo & Turner LLP of San Diego.

One of the lesser-known features of the law is the change in exemption from overtime pay for administrative, executive and professional employees, she said.

Under the act, white-collar employees must now earn a monthly salary equivalent to no less than two times the minimum wage for full-time employment, she said.

Based on the current minimum wage rate of $5.75 per hour, the monthly salary requirement will be $1,993, or $23,920 annually. If employees who are being assessed as exempt are not making this minimum salary, they cannot now be classified as exempt from the overtime law, she added.

Another new law requires employers who offer sick leave to their workers to allow the sick leave time to be used in cases of an employee’s sick spouse or relative.

Amendments to the California Fair Employment and Housing Act now prevent discrimination based on sexual orientation. Genetic testing of employees is also banned.

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