IT and Business Insights for SMB Solution Providers

Managed Print: Market Size, Solutions, and IT Pro Perspectives

Resellers who understand that printers and copiers can provide a regular revenue stream with high margins are in a position to help their customers and their own bottom lines. By James E. Gaskin

Managed print is the Flying Dutchman of the SMB channel: always on its way to the land of opportunity but never quite getting there. But since two-thirds to three-quarters of enterprise customers have contracted for at least some managed print support, the tipping point for small and midsize businesses appears close. Add in the increasing number of managed print providers and vendors, from both the IT and copier worlds, and that long-awaited Flying Dutchman may finally dock. IT resellers who believe there is no profit in printers may soon find that their customers, desperate to get a handle on printing costs, have set sail with another provider. Resellers who understand that printers and copiers can provide a regular revenue stream with high margins, albeit on fairly low transaction amounts, are in a position to help their customers and their own bottom lines. Definitions vary, but assume that a managed print solution covers three large categories: assessment of the existing print and document creation environment, including the tracking of printing costs across all budget areas; optimization of the number of printers per user and development of print policies; and continual management of printer workflow, including consumables and maintenance. Different providers may focus more in one or two areas yet are still considered managed print service (MPS) providers. MARKET AND COMPETITORS
How big is the MPS market? More than 20 million printers (just over half from HP) sell each year in the United States, down slightly from previous years. Copier sales are more than 2 million units per year, two-thirds of which are monochrome. The 2010 U.S. Census says companies with five to 500 employees have a total of roughly 49 million employees (assuming that micro businesses aren't likely to sign up for managed print services). Figuring a 10-to-1 employee-to-printer ratio, there are an estimated 5 million printers in the SMB market ready for management. Chris Iburg, director of managed print services at Xerox Corp., in Norwalk, Conn., quotes IDC numbers: “The worldwide SMB MPS market is currently about $13 billion and predicted to grow at around 16 percent CAGR through 2016.” In other words, managed printing may be one of the last multibillion-dollar markets desperately in need of more service companies. “Over the past two years, we've seen managed service providers emerge as the new channel for managed print.” But IT resellers and managed service providers often overlook, or look down on, this market. While they snub, some office products dealers are actively becoming full-line IT MSPs, with managed print a mainstay of their offerings. TALE OF THREE RESELLERS
One reseller who has decided managed print is not for him and his 20 employees is Benson Yeung, founder of Triware Networld Systems LLC in Santa Clara, Calif. Instead, Yeung helps his customers in Silicon Valley choose the right partner to manage their printing, although only about 5 percent have made this move. Most notable detail? The printer service firms he recommends are mainly copier companies expanding into printer management. Usherwood Office Technology, with seven offices in upstate New York, is one of the copier-centric companies now working to cover all the IT needs of its customers, including managed print. Chief Technology Officer and VP of Service Charlie Usherwood, who rejoined the family business after a long career in technology at EDS, says the company now has about 100 employees and $20 million in revenue. With seven years of managed print under its belt, Usherwood Office Technology has MPS clients of all sizes, the smallest of which has one device; the largest has 750. IT services is about 10 percent of Usherwood's business, and printers are about 5 to 7 percent. The rest is mostly copiers and huge production printers costing hundreds of thousands of dollars. “Copier groups are going after [the MPS] market hard core,” says Usherwood. “They're not fooling around. In their minds, it's their space, since IT folks get weird about copiers and printers.” He's actively looking for more managed print clients, using that service as a foot in the door for later IT and copier business. His managed services clients tend to be smaller, with two to four servers and three to five printers. Usherwood's managed print offering covers everything except paper. The company charges a monthly fee based on average monthly pages multiplied by the cost per page. If the average is 500 sheets and the client prints 600, Usherwood bills the overage at the regular page rate. When toner gets to a threshold based on print volume, new toner is shipped automatically. Printer problems usually trigger an alert, or the customer files a trouble ticket; Usherwood sends a tech within four hours to address the issue.

About the Author

James E. Gaskin's picture

JAMES E. GASKIN is a ChannelPro contributing editor and former reseller based in Dallas.

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