MPS: The time is now

ARN Magazine - August 2010

  MPS: The time is now (PDF) 

Just about everyone talks it up, but is managed print services really all that? Matthew Sainsbury reports.

If cloud is the overall buzz word for 2010 in the IT industry, then managed print services has been a printing industry-specific buzz word for the last two years that has held a similar impact within its niche.

Vendors, resellers and customers have jumped onto it like some kind of Holy Grail, and it’s difficult to find a case of a printer vendor, distributor or reseller that is not trying to find some way to latch on to it and make some business through it.

But is it really all that? And, for that matter, what is the value proposition?

IS IT ALL ROSEY?

One vendor that has been less than pleased with the resller uptake of managed print solutions is Kyocera Mita.

“Everyone talks abut managed print services, and everyone’s says they want managed print services, but when you offer the channel true managed print services the take up is very small – it’s a bit of a paradox,” Kyocera Mita managing director, David Finn, said.

The vendor began offering a comprehensive managed print solution, in which the reseller can leverage off Kyocera’s field tech service force. It costs a nominal fee, but once a partner has registered a product acquired through distribution, it can offer that printer to the end user with full assurance that Kyocera’s tech service force will look after it.

It’s only around $90,”Finn said. “Most resellers can’t afford to have dedicated service tech people to fix printers and copiers, so we said to them ‘you can go forward, sell your managed print service with everything else, and we as a vendor will use our own tech force to take care of it from a service point of view – everything except toner’.”

The vendor also offers typical Web-based calculators so the reseller can work out how much to charge per click to maintain adequate profit margins.

However, the program has had very limited success since its launch in March. Just 15 resellers, according to Finn.

“It’s like the buzz word,” he said. “Everyone talks about managed print services, and there’s a couple of big players that do it. Some of our competitors at vendor level offer managed print, but the resellers, they want it, but they don’t know what to do with it.”

Despite this, Finn expects the managed print business to pick up over time, and the vendor has released a new series of printers that are friendly towards managed print applications.

“If the resellers don’t start getting itno this now, then they’ll never get into it,” he said.

Other organisations – both channel and vendor – are more optimistic about the uptake on managed print.

For instance, late in July, Fuji Xerox announced that it would acquire managed print services specialists, Upstream Print Solutions, for an undisclosed sum.

As a business unit of Fuji Xerox, Upstream would act independently in the market, and report to Japan, but with existing partnerships with both Lexmark and HP the service provider is at the forefront of the managed print industry, with customers including Ansell, Sony, Raine & Horne and Repco.

Upstream executive general manager of marketing, Peter Burr, said there had been strong traction in verticals including manufacturing, transport and logistics, warehouse and wholesale distribution, but admitted there was plenty of room to grow further.

“There are plenty of businesses that haven’t currently employed managed print services and would benefit from it,” Burr said.

Upstream recently brought its UTrack application to market – a software solution that delivers benefits around cost recovery and being able to provide detailed analysis on who within an organisation is printing what. Burr claims as part of an overall managed print solution, UTrack is capable of reducing a fifth of a businesses’ printing costs, but despite some success in the market, there were lingering adoption challeneges.

“Part of the battle is to get people to understand exactly how much they are spending on printing,” He said. “A lot of people don’t have it on their radar, but they should because there’s plenty of studies that indicate print can account for three per cent of business revenue.”

If the key is getting customers to relasie the benefits of managed print solutions is in data tools, then, Upstream is on the ball in looking to additional vaule-adds to offer customers, providing greater data density.

“We’re launching a new device called the Upstream Calculator which will broaden people’s visibility, not only across the cost savings, but around reduction to C02, paper and power, because power prices are on the increase,” Burr said.

CLEARING THE FOG

Visibility is a key component for a vendor’s managed print offerings, too. It’s the key part of Lexmark’s managed printed value propositions to its customers, and the main driver behind the strong growth that channel and SMB manager, Stephen Bell, claims the vendor has been enjoying.
“From the channel and SMB space through to our enterprise and government business, managed print services is by far the fastest growing part of our business.” Bell said.

“For the customer the environment might be completely unmanaged, so our ability to work with dealers to give them visibility to what’s going on in their business, and to implement something that makes more sense. This is in terms of numbers of devices, device types and simplified processes around ordering and installing toner, improving service levels, and then giving them ongoing visibility so there’s continuous optimisation.”

Lexmark takes a two-pronged approach to the market. While clearing the fog amongst customers and improving the print environment visibility is one thing, a vendor also needed to do more than just offer managed print solutions to channel partners, Bell claimed. Educating that side of the supply chain is just as important.

HP is also invested in building a greater level of understanding in the managed print business space. I t has set up a business unit dedicated to managed print, and is finding a great deal of interest coming from partners looking for additional revenue streams. At the same time partners are offered a solution that allows them to scale their managed print activities as they become more accomplished.

“There are partners that have historical sold into the copier market, and those partners already understand how to sell a product in a contractual-type engagement.” HP contractual print services business manager, Paul Vella, said.

“Those partners are very keen on looking at what we’re offering for managed print services, to open up new revenue streams and allow tem to sell HP products contractually.

“Looking at historical supplies partners, we have grams, such as QuickPage, which allows partners to progress up the scale of complexity and sell HP print products in a contractual or cost per page-type engagement.”

THE FUTURE OF MANAGED PRINT

The good news for the industry is that the opportunities is driving managed print are only going to get better into the future.

With the cost of the printing devices going down, end-users are looking at building ore distributed printing environments, which is a ripe opportunity for management tools, Fuji Xerox sales operational manager, Anthony Toope, said.

For example, a mid-size networked laser printer, costs about $1,000. Five years ago, it would have been between $5,000 and 10,000, according to Toope.

“With colour, five years ago, you were talking between $10,000-$20,000 for a printer.,” he said. “Now you’re talking under $2,000 for a colour MFP.

“So products are becoming more affordable. What we say to the reseller channel is that it is very much about distributed printing – businesses want to make it easier or more convenient for their staff.”

The actual services that managed print providers will be able to offer will also increase into the future.

Canon, meanwhile, in attempting to differentiate itself in the name of its managed print services offering as well as its application, unveiled its managed document services initiative last year in Tokyo.

Through the initiative, Canon will leverage its existing managed print services, while simultaneously unifying and standardising the company’s menu of services, providing optimised services for customers in each region.

The initiative was launched in Australia on April 19.

“The system is global and runs through a secure network. Within 10 minutes of an error code being received we can have a technician in Sydney troubleshooting it before the customer is even aware that there may or may not be a problem.” Canon assistant general manager of business products, Jeremy Plint, said.

“I think you’ll see where we’re trying to go is looking a little more holistically and looking at what the customer is doing with documents,” he said.

So indeed, it looks like managed print is here to stay.

COMPETITIVE LANDSCAPE

According to Gartner, managed print services guarantee a revenue stream from the suppliers, which is critical for organisations playing the print space, who have need to change their core business models as equipment sales drop.

It also presents the opportunity to engage customers in additional activities around document management and workflow improvement. Managed print services contributes to improving customer satisfaction retention as providers build a relations through a three-to-five year contract.

At this stage, managed print services is a strong corporate play, with services sold by providers through their direct sales forces, account management teams and key channel partners. However, many providers are now tailoring or expanding their service offerings and are targeting the midsize business market.

Key Findings

• Technology providers and resellers that don’t develop MPS risk losing business to competitiors that do as more and more organisations are buying devices and associated supplies as part of an MPS contract.
• MPS is changing the way organisations purchase and manage their printers, multifunction products (MFPs), copiers and fax machines. It can become a strong value proposition for technology providers that seek to help their customers manage their document output to certain objectives, such as driving down costs or improving efficiency and productivity.
• Cost reduction remains the most improant evaluation crierion for organsations deciding to opt for mPS. However, once the deal has entered into the delivery phas, the focus will move to the provider’s ability in offering experienced and reliable project management skills.
• The MPS market is dominated by offerings from printer/copier manufacturers, and few IT outsourcing service providers are starting to include MPS as part of their desktop management services.

For this space, Gartner recommends:

• Develop global capabilities. Organisations with a regional or global presence might deploy MPS nationally to start with, but in time they often aim at expanding the relationship to the rest of their subsidiaries. With this end goal in mind, they will often look for an MPS provider with a consistent program worldwide.
• Tie print management and reporting tools to IT management tools as printing assets are becoming part of companies’ overall IT strategy. This will allow printing assets to be viewed and controlled as part of more-holistic IT management.
• Position their document capture and secure printing solutions as part of the MPS engagement, to enable both paper and electronic documents to be tightly integrated into business processes.
• Invest in vertical expertise to address customers’ needs. This is key to successfully taking MPS to the next level – from managing the office print infrastructure to enabling real business value through managing the complete document life cycle.

(Taken from Competitive Landscape, Managed Print Services, Worldwide, Cecile Drew, December 16, 2009)