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MPS
In its 2011 MPS Market Size, Share and
Forecast Study, Photizo Group predicts
that by 2014 nearly half of all printing
revenue will be under MPS contract.
As vendors make a land grab in the
enterprise space, how can independent
resellers take advantage of this
opportunity? Are the OEM vendors
calling all the shots or can a reseller
compete for the best contracts?
In an inspiring, spiky and combative
presentation, Delivering Customer Value
Through MPS, John Taylor, chief executive
of independent MPS provider M2, urged
independents not to be cowed by the
big vendors or put off competing for the
best jobs.
“M2 deals with Xerox, HP, Ricoh and
Canon and every time we sit down with
them they say their direct operation is
going after the core enterprise market and
suggest our place is in the SME end where
they don’t want to put sales people because
even though there is a massive volume of
opportunity it’s hard to reach. But we want
to be in the mid to large corporate sector,”
he said.
Taylor questioned how much demand
there was in the SME sector and said
that independents had the qualities that
enterprise customers seek.
“Our experience is that small SMBs
still struggle to accept the real value of a
solutions sell. They are very price sensitive,
bound to product and suspicious of a
solutions sale.
“When we look at what corporate
customers want from an enterprise provider
we see fexibility; an ability to customise;
price competitiveness; and a willingness to
support third party installed devices. We see
an opportunity attuned to an independent
approach that’s more fexible and less rigid
than the vendor model. As an independent
we can deliver the key attributes a customer
is looking for better than an OEM,” he said.
Taylor said that the trump cards held
by M2 and other independents are the
fexibility and trust that come from having
a diverse, brand-agnostic toolset. He added
that these qualities are likely to become
more important as customers demand
bespoke solutions and were important
considerations in the tender process,
eventually won by M2, for an MPS for
4,000 print devices from 18 suppliers in
700 locations outputting 200 million pages
per annum.
“When we went from 15 suppliers
to a short-list of six, there were two
independents left. Then when we went to
the fnal offer stage only the independents
remained. Later, we asked why the OEMs
had fallen away and the customer said that
they felt the OEMs’ talk of a solution was
merely a veneer and all they wanted to do
was rip out the existing hardware and put
theirs in instead.
“Seven weeks later we had another
opportunity for more than 2,000 devices
and the organisation didn’t invite an OEM
into the tender process. That for us was
an interesting indicator that when you are
going down a managed solutions sale,
a trusted independent advisor has an
opportunity,” Taylor said.
M2 has proved up to the challenge, in
this particular case achieving cost savings
of 38% (equivalent to £2.6 million a year)
and a 34% reduction in print-related CO2
emissions for its client, an enterprise with
40 operating companies, an annual turnover
of £14 billion and profts of £1 billion.
“Some OEMs said you are not supposed
to win a customer like this. They want the
independent channel to be in an area that
suits them. I believe in some ways MPS
is coming downstream and there’s an
opportunity for independents to challenge
vendors upstream.”
Refecting the fears of many in the
industry, Taylor sees the biggest threat
to existing MPS players coming from IT
managed service providers and in an
ominous sign-off said: “I come from a
vehicle feet outsourcing background.
I remember when OEMs like Ford and
GM realised they were not good at being
a solutions provider and they exited the
managed services part of feet management
and went back to being good at building
products. Independents now own vehicle
feet management services and I wonder
if this is going to happen in this space.
I think OEMs are not ft for purpose in the
long run.”
Success with Xerox
Another reseller who has made a success of
MPS – and actually used it to turn around
his business – is Pete Bedford, erstwhile
MD of Document Express, sold to Danwood
Group in May 2011. In a counterpoint to
Taylor’s talk, he showed what could be
achieved by taking advantage of a major
vendor’s infrastructure to deliver MPS to
customers.
Bedford acquired the Xerox
concessionaire in 2002 and ran it on a
traditional, transactional basis, with Xerox
providing the servicing. This worked well
initially thanks to the introduction of colour
capable products that helped Document
Express increase its MIF to 1,900 in 2006,
by which time it was also starting to win
service contracts.
12
Independents’ day
Photizo Group’s European MPS Conference held in Berlin
on October 10-12 was an opportunity for resellers to fnd
out how MPS can help them increase revenue and engage
with customers.
...by 2014
nearly
half of all
printing
revenue
will be
under MPS
contract.
Photizo Group’s
European MPS
conferencing,
held in Berlin,
addressed the
challenges and
opportunities
facing MPS
resellers
continued...