As traditional revenue streams in printer hardware dry up, the buzz is growing around managed print services (MPS) and other offerings promising an alternative source of income.
Lexmark last month became the latest in a growing line of vendors to speak out about the importance of pushing its channel partners towards MPS as its traditional print hardware market shrinks.
Printer sales continue to head south, with global shipments falling 2.5 per cent year on year to 25.8 million in Q1, according to IDC.
Meanwhile, figures from Quocirca suggesting 50 per cent of large firms have now invested in MPS in some form underline the scale of the opportunity now available to suppliers. Another 20 per cent will invest in the next 12 months, the analyst added.
In its simplest form, according to Gartner, MPS are services offered by an external provider to optimise or manage a company's document output. The term goes beyond simply replacing hardware, encompassing needs assessment and the service and supplies needed to operate the new and/or existing hardware, Gartner added.
Lexmark is among the print vendors keen to tap into MPS' rich potential, and has identified document management as the next area of growth in the sector as it strives to help partners stay afloat in a declining print market.
Martin Fairman, UK and Ireland channel and SMB sales director at Lexmark, told CRN he understands that the company needs to help resellers shift their approach to customers.
A managed document offering would see those resellers help customers store, manage and track all documents within their business, providing easier control and improved security of sensitive files and data, he explained.
"We recognise that our market is in decline, so we have to help our resellers evolve their business by putting the right devices into the client, and figuring out how we then talk to them about document management and streamlining their business processes," he said.
But while MPS is heading towards mainstream adoption, a "huge proportion" of resellers have yet to shift to a contractual MPS approach, according to Louella Fernandes, associate director of print services and solutions at Quocirca.
"While the enterprise area where the vendors offer it direct is quite mature, the channel and SMB market has definitely not reached maturity yet," she said.
"There are manufacturers that are still trying to convert their channel partners to MPS."
This view was echoed by Clive Hamilton, managing director of Xerox partner Pinnacle Office Equipment.
"A lot of the small resellers we come across talk MPS, some have some great collateral to get their foot in the door [with customers], but very few deliver a true MPS service," Hamilton said.
In addition, the market has yet to reach a consensus on what MPS actually is, said Moya Kelleher, UK channel sales manager at Kyocera.
"It's an all-encompassing phrase that means different things to many different people," she added.
"I guess that from an IT channel perspective it is essentially what we would call a basic print service, which is rolling your service and consumables into a single amount, where you can budget for your ongoing costs."
Dell's marketing director of imaging and print in EMEA, Dave McNally, said: "[MPS] simply means making print easier for your customers. Print is one of the highest strains on any customer's helpdesk, and they are looking to free up valuable resources and focus on other IT tasks. In a nutshell, it is really making it easier."
Explaining what a managed print service is and the benefits it brings to resellers is something Lexmark's Fairman admitted vendors have not handled well.
Resellers are cautious about pumping money into something when they are unclear about what it will give back to the business, he said.
"A lot of resellers are unsure about investing in the infrastructure needed, from data collection tools, to people going out and doing a site audit," he said. "There is a lot of education that we as manufacturers need to offer the market to really lock down what MPS is."
He continued: "There are great savings to be made from it in all areas. The benefit for resellers is that MPS locks them into their customers, which is what we are all trying to do."
Fernandez said there is also a danger that end users have set their expectations too high around MPS, especially when it comes to cost saving, meaning it is a harder sell than some resellers realise.
"There is a gap in satisfaction around cost savings," she said. "A lot of figures are bandied around about how much you can save with MPS, but it is difficult to actually provide a true estimation unless that channel partner really understands its print usage in the first place."
The road to MPS success may be fraught, but Paul Gaiser, director of MPS at Xerox, argued that investment will pay off for resellers that follow the right sequence of steps.
First a reseller must decide to run with an MPS-led sales culture - as opposed to a box-driven one - with a clear view of their target market, whether that be SMBs or mid-market, and the type of services they require, he said. The next step is figuring out if the customer is local or not and if they are solely focused on print or open to other opportunities, he added.
"That translates into what the reseller should be able to sell and deliver - and evolve into - either independently or with the help of an MPS provider," Gaiser said.
It is also a market that is bustling with new potential revenue streams, with Fairman echoing predictions from IDC that scanned images will be the next big growth area for MPS. But he said it will be a challenge going forward to start charging customers for this service, since it has been part of existing solutions to date.
"We need to educate our resellers on how to start charging for scanned images," he said. "We [Lexmark] have been giving away scanned images as part of managed print for too long now and this has real tangible value."
Mark Ash, Samsung's general manager of print, suggests on-screen or mobile device file management and cloud services as the next stepping stone in the evolution of MPS.
"While print remains the lifeblood of many businesses, documents are undergoing a digital transformation from traditional paper to files displayed on-screen, on mobile devices, and shared by cloud services," he said.
"This paradigm shift needs to be incorporated into the way in which we go to market."
Kelleher at Kyocera concluded that resellers who are able to look past the short-term pain of moving to a contractual model around print will end up reaping the dividends.
"A lot of IT resellers struggle with signing contracts because it isn't a simple transaction that you can do and then move on to the next one," she said.
"It is a different and longer sale cycle. But once you have that, you've got an ongoing revenue stream that guarantees you income over a period of time depending on the contract length. There has been a huge amount of evolution of MPS over the years - but there is always space for further evolution, as in any service - and I am sure that will continue."
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