Aurelio Maruggi tells CRN plans to expand IT business and what the future of managed print looks like for Apogee
Apogee is now billing itself as a managed services provider as its CEO Aurelio Maruggi claims that the firm is rapidly expanding its managed IT service and outsourced document services business.
Demand for managed print services has fallen sharply during the Covid pandemic, with managed print resellers previously telling CRN that they expect to lose between 20 to 30 per cent of their print volumes from mid-sized and corporate customers post-Covid.
The estimations came after IDC predicted that four hundred billion fewer pages would be printed in 2020 than previous years - the equivalent of seven football fields-worth of paged every minute.
Maruggi told CRN that, while there's a lot of speculation about how badly the print sector will be hit in the aftermath of the pandemic, Apogee is working with the assumption that it will lose around 15 to 20 per cent of normal print levels post-Covid.
The Apogee CEO, who has been with the HP business for almost 20 years, said that the reduction comes as clients look to reduce their office footprints and move to a hybrid working model.
As a result, the deployment of printing devices, including multi-function devices, will also fall by around 15 to 20 per cent of normal levels.
While you'd expect these figures to be somewhat alarming for the UK's largest managed print provider, Maruggi appeared to be brimming with excitement in an interview with CRN about Apogee's future.
While the overall print market is expected to decline, Maruggi said that Apogee has a huge opportunity to grow its managed IT services and outsourced document services business.
This segment only represents less than 10 per cent of Apogee's revenues today, but is expected to be the main driver of organic growth in the business in the future.
"We have in excess of 11,000 clients where we have a tremendous opportunity in growing our share of wallet," he said.
"The majority of these clients are MPS clients, but we have an opportunity to grow with these clients - as we have already done in the past few months - with outsourced document services and managed IT services."
Maruggi said that a huge amount of investment has gone into Apogee to restructure the business and upskill its sales force to sell managed IT services to its clients.
"We are not managing the company by looking at what will happen in the next six to 12 months, we're looking at what will happen five years down the road, and we have done investments with that in mind," he said.
The plan is to grow Apogee's managed IT services business organically over the next 12 to 18 months by selling into its existing MPS customer base, but acquisitions could play a role further down the line, Maruggi said.
"I'm definitely not ruling out acquisitions for the IT side of the business, but they will be more down the road. I am a strong believer that the best way to do acquisition is from a position of knowledge and not from a position where you're starting up as a foundation," he said.
"We will definitely have to build a solid foundation of managed IT services, as we have already started to do in the past few months. And then from there, we will see if M&A can be an accelerator from that."
And what about the MPS side of Apogee's business? Maruggi said the reality is that, at best, organic revenues will stay flat or slightly decline based on expectations that its existing clients will begin to spend less on managed print services.
The CEO added that the future growth areas for Apogee's managed print business will be making acquisitions to expand its client base and expand its business into the public sector.
Other managed print resellers have also looked towards M&A to keep their businesses in growth mode. Corona Corporate Solutions (CCS) acquired Maintel's managed print services arm this month which added around 700 new customers to the CCS business.
Apogee has already started to grow its business through acquisitions. The firm made its first M&A move since it was acquired by HP around three years ago in the shape of Kent-based print provider Direct-Tec.
The business has around £10m revenues and focuses on the education, healthcare, legal, charity and commercial verticals.
"We did a thorough assessment of the client base Direct-Tec has and their engagement with clients and it is very much in line with the value of Apogee. And we found an employee base that is very valuable to us," he added.
Marrugi added that, as well as M&A, Apogee plans to expand more into the public sector space where it is currently underrepresented.
"We have made a lot of investment here - we have secured positions in some very important public frameworks in the UK that will open up opportunities for us to grow in the public sector," he said.