According to a September IDC report, Worldwide and U.S. Managed Print Services and Basic Print Services 2013-2017 Forecast Update, the U.S. market for "basic" and "managed" print services combined was worth $11 billion in 2012, and is forecast to grow to $16.7 billion by 2017. Managed print services (MPS) alone will grow to $7.3 billion by 2017 while basic print services will reach $9.4 billion in that same timeframe. Among U.S. companies with 100 to 499 employees, the compound annual growth rate (CAGR) for MPS is forecast at 16 percent up to 2017.
"Basic" print services are more commonly provided by the copier dealer channel relative to their numbers, according to Holly Muscolino, IDC's research vice president, document solutions. These entail discounted supplies, remote monitoring, and break-fix contracts, and are usually based on fixed costs per page. "Managed" print services achieve cost reduction through right-sizing hardware, permission- and rules-based printing, and ongoing optimization. That calls for on-site assessment and end-user interviews as well as device metering and invoice reviews to get a baseline of current print costs.
At its most advanced, MPS takes on integration with line-of-business workflows. "As we print less, printer devices become workflow hubs," says Muscolino. And since intelligent print tools like OCR, forms automation, and fax servers are commodities by now, resellers are currently looking to supply vertical apps and workflow to differentiate. Accounts payable documents, for example, route themselves through approval chains, gathering e-signatures.
"The major printing vendors-HP, Lexmark, Ricoh, Canon, Xerox, and Konica Minolta-are all developing and heavily investing in structured channel programs to drive services down into the SMB market," says Muscolino. These include new iPad field applications that help resellers during on-site walk-throughs, as well as Konica Minolta's EnvisionIT portfolio of workflow solutions for all the usual verticals. "Some printer companies, like [HP and] Konica Minolta Business [Solutions], are now offering IT services to their channel as well," she adds.
Developing a Portfolio
Joe Reeves, CEO of Sacramento, Calif.-based Smile Business Products Inc., is a print equipment dealer who immersed himself in IT to arrive at a broad portfolio of network, PC, server and mobile device management, VoIP, and managed print services. He started offering MPS to his existing copier customers, just as IT VARs are best advised to sell MPS as an add-on to their current IT base.
Reeves' pitch can be straightforward dollars and cents: "We can supply toner and service for much less. We can query a company's print volume, see average toner density per page, and offer 1.5 cents per page, including service, where the customer might have been paying 2 cents." (Or, he adds, 50 cents or more if they've been printing whole PowerPoint presentations with colored backgrounds. Part of MPS is discouraging or even disabling such wasteful practices.) His firm also performs 30-day assessments and workflow programming.
While price can clinch the deal, both Reeves and Muscolino note other selling points: serving multiple locations remotely with one point of contact; implementing a pay-per-use model, and requiring no minimum volume. Preexisting successful relationships are also a strong factor. The deeper the reseller can go into high-value services like workflow line-of-business integration, the stickier the relationship.