PrintIT Reseller:
What proportion
of resellers offer managed print
services?
Louella Fernandes:
Overall, of the
addressable UK MPS channel, Quocirca
estimates that less than 20% have evolved
to a full MPS business. However, almost
40% recognise the need to shift to a
services-led model and have started on
their MPS journey.
The channel for MPS is extremely
diverse, ranging from copier/office
equipment dealers to IT resellers and IT
VARs. Typically, copier dealers are the
most mature when it comes to MPS, given
their experience of selling copier service
contracts, and they have the infrastructure
to manage cost per page contacts and
billing, maintenance and support. In this
channel, there are a significant number of
established and mature MPS resellers.
The IT channel has, in the main, yet to
make the leap to MPS and penetration is
far lower.
PITR:
To what extent is MPS a new
concept and to what extent is it
something that the channel has
always been doing?
LF:
MPS is not really a new concept for the
traditional copier channel, many of whom
have developed the expertise, resources
and infrastructure to offer cost-per-page
contracts that wrap hardware, service
and supplies. However, MPS has evolved
beyond these simple contracts to include
higher value services and solutions, such as
assessment, device consolidation and on-
going monitoring of the printer fleet.
There is a very clear continuum of
services that a reseller can offer based
on their capabilities and expertise, from
basic print services to broader services
that can also incorporate solutions such as
document workflow.
Making a success of MPS
We are
seeing the
growing
adoption of
the cloud
having a
positive
impact for
managed
services.
PITR:
Are those who don’t offer MPS
struggling, or have warnings about
the commoditisation of
office printing been overstated?
LF:
Quocirca’s recent study on the channel
and MPS revealed that those that have
made most progress with MPS are already
reaping the benefits. They rate their success
at creating new revenue streams, improved
profit margins and customer retention far
higher than those just starting their MPS
journey. Hardware commoditisation and
shrinking margins mean that resellers
must rethink their approach and embrace
a services-led model. Service delivery
quality is one of the top requirements
from businesses today, and resellers have
to counteract commoditisation in the
market through optimum service delivery.
This means moving from a reactive to a
proactive service model, which is the basis
for any effective MPS contract.
We are seeing the growing adoption
of the cloud having a positive impact for
managed services. Because the benefits are
similar – predictable expenses, the ability
to scale services as business needs change
– businesses are becoming more receptive
to a managed services approach for other
elements of their IT infrastructure.
PITR:
Has the threat of competition
from new entrants (e.g. IT
service providers and stationery
companies) also been overstated?
LF:
Managed IT services providers are
certainly an emerging competitor in the
MPS market. They already understand the
model and are looking to enhance their
services portfolio. However, managing print
is a very different beast to managing the
IT infrastructure, and in most cases they
will rely on a hardware vendor to provide
the delivery and billing infrastructure to be
able to offer MPS effectively. We expect
this to be a fast growing part of the MPS
channel over the coming years, as printer/
copier vendors refine their offerings for this
target market.
PrintIT Reseller
asks
Quocirca’s Louella Fernandes
what resellers must do to
make a success of managed
print services (MPS).
PITR:
Who needs more persuading
about the benefits of MPS, the
channel or end users?
LF:
A good question! For the SMB market
in particular, the channel is the key route
to market for the OEMs and so plays a vital
role in building awareness and educating
the market.
While the traditional copier or office
equipment dealer channel understands
the benefits of MPS – recurring revenue
opportunities and longer term ‘stickier’
customer relationships – the IT channel is
used to selling transactionally. Making the
shift from hardware to services/solutions
is more challenging, as it requires time
and investment in resources to develop
an MPS infrastructure. Consequently,
many vendors, such as Xerox and HP, are
developing cloud-based tools to minimise
the investment needed and provide a
packaged/simplified MPS offerings to their
channel.
However, there still needs to be a
sea change and ultimately resellers need
more training, financial support and
incentivisation to shift to MPS. Usually, the
most effective model is to move to a hybrid
approach for MPS, continuing transactional
hardware sales whilst starting to move to
MPS. This is because the economics of a
managed service model can put resellers
under pressure to keep cash flowing
while their business model changes: this
disruption to cash flow can be a major
hurdle to MPS adoption in the channel.
mps
01732 759725
Print.IT Reseller
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