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Analysis

The channel opportunity for MPS
Louella Fernandes By: Louella Fernandes, Principal Analyst, Quocirca
Published: 6th May 2009
Copyright Quocirca © 2009
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Today's difficult economic environment means that printer and copier resellers may struggle to sell hardware as businesses are under pressure to reduce capital expenditure. However there may be a ray of sunshine for resellers in the form of managed print services (MPS), which enables customers to shift from capital to operational expenditure, and benefit from fixed and predictable pricing on a monthly or quarterly basis.

The reality is that few organisations know how much they spend on printing, due to the lack of centralised print management. This can lead to under-utilised devices, device downtime, security risks and escalating costs in relation to consumables, resulting in low user satisfaction and poor control over service quality.

MPS can help alleviate these issues. Through a diligent assessment of the print environment, organisations can gain visibility into costs—what is being printed, by whom and on which device. Subsequent rationalisation can maximise the use of current assets such as high performance multifunction peripherals (MFPs), lower running costs, and increase user satisfaction through higher device uptime.

The MPS market is nebulous due to varying approaches from manufacturers which range from entry level services which wrap hardware sales with supplies and maintenance, typically based on a cost per page contract to fully outsourced contracts that manage all aspects of the print infrastructure.

In a flat hardware market characterised by falling prices and shrinking margins, printer manufacturers view MPS as key to growth. Achieving this for the SMB market is challenging due to the disparate nature of the printer and copier reseller channel. Whilst copier resellers have the experience of selling contracts based on pages or "clicks", many IT resellers are not used to selling these types of contracts but convergence has led to the emergence of hybrid resellers who offer such contracts backed by IT expertise.

Consequently, manufacturers are trying to simplify their channel propositions to make MPS more accessible for resellers so that they do not need to invest in a costly infrastructure. In effect, instead of building their own service infrastructure, they can resell an MPS as a "white-label" service provided by a manufacturer.

Examples include HP Smart Printing Services (SPS), Kyocera UK's KYOprint Pack, Lexmark Value Print and Ricoh's @Remote programme.

One MPS programme that particularly stands out in relation to its range of training and support for resellers to manage multivendor environments for SMBs is Xerox Printing Services (XPS). It has packaged its enterprise tools to provide partners with a portfolio of services to assess, design, implement and manage their customers' print environments. XPS is a hosted service enabling accredited resellers to deliver and execute their MPS based on their capabilities. At one level, resellers can use XPS for basic cost-per-page contracts across a mixed fleet or they can extend it to provide their own branded MPS based on the XPS technology platform.

Whilst services such as XPS are a good start in terms of making MPS more accessible to a wider number of resellers, the challenge remains to train resellers to make the transition from selling hardware to selling services. Resellers need to be able to educate customers on the benefits of transitioning to MPS and demonstrate return on investment.

With cost reduction high on the agenda for most businesses, MPS provides an opportunity for organisations of all sizes to gain the visibility they need into print costs and enables resellers to develop long term and profitable customer relationships. The vendor programmes outlined above mean that the barriers to entry for MPS such as cost and complexity, which may have discouraged resellers in the past, are no longer daunting - and there is no better time than now for resellers to add value to their services with MPS.

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