MPS: The future of the print market?

As businesses try to embrace a more ‘paperless’ way of working, and home users continue favouring mobile devices and cloud storage over the traditional desktop and printer setup, is it really all doom and gloom in the print sector?

All major Western European (WE) countries registered negative unit sales performance across distribution in Q1 2016, except for Italy, according to the latest research from CONTEXT.

“Sales of business-targeted inkjet printers continue to increase by three per cent year-on-year in WE distribution, while the revenue was flat in Q1 2016,” CONTEXT’s Imaging Market analyst, Zivile Brazdziunaite, tells PCR.

“This is mainly due to a strong performance of Epson, while sales of HP business- targeted inkjets declined for the quarter.

“In contrast, the performance of consumer- targeted inkjet printers continue to decline across WE distribution, due to continuous weakening of the demand and increased usage of mobile devices.”

As it seems printer hardware is getting harder to shift, IDC’s research and consulting manager of European Managed Print Services & Document Solutions, Jacqueline Hendriks, points out that although businesses and individual users may not be physically printing as much, they’re still creating, saving and storing documents. This paves the way for printer and document-related services.

“We talk continually about the eventual paperless office and although IDC’s 2016 Western European SMB end- user survey results indicate the gradual move towards digital content this has two effects – on the one hand, it is a key factor for a decrease in print volumes. On the other hand, as more information is received in digital format or scanned, it also drives an increase in some companies – the amount of digital information received is growing exponentially and, although they are printing a significantly smaller percentage of what they receive, in some companies this still constitutes an overall print volume increase,” says Hendriks.

“The Western European print services market continues to grow in Europe, fuelled by the business need to reduce overall operational costs as well as increase productivity and efficiency, through the implementation of better print and document management solutions.”
And this is where MPS comes in.

WHAT EXACTLY IS MPS?

Managed print services (MPS) include services aimed at optimising or managing a company’s document output. According to Gartner’s IT glossary, the main components provided are needs assessment, selective or general replacement of hardware, and the services, parts and supplies needed to operate the new and/or existing hardware. MPS providers can also offer services to track how printer, fax, copier and multi-function printer (MFP) fleet is being used, the problems that can occur, and the user’s satisfaction.

While these services have been introduced by printer vendors and other providers for a while now, what opportunities are there for other firms looking to get in on the action?

“There is still plenty of MPS opportunity out there, particularly in the SMB space. At the high-end enterprise level, customers are well served and mostly already under contract so the battleground remains in the SMB sector,” Brother UK MD Phil Jones tells PCR.

“There is still plenty of MPS opportunity out there, particularly in the SMB space.”

Phil Jones, Brother UK

Midwich’s divisional director Stuart Mizon believes MPS hasn’t reached its peak yet: “While larger end users may already be using MPS in some way, shape or form, there is a huge number of SMEs who have little or no idea of their print costs within their businesses.

“Print services can be offered in many different shapes and sizes and a tailored approach can be taken to ensure it meets the needs of all users.”

Network Group’s MPS programme manager David Tulip adds: “For some it may have reached a peak but for others we see a beautiful view ahead that is positive for resellers looking to grow their business.”

To give you a better idea of the kinds of MPS offerings you could potentially offer, here’s what’s already working for some vendors and retailers.

“In terms of managed print services on the consumer side of things, we do have Instant Ink. It is a very important part of the business and we are seeing sales increase month on month,” John Lewis’ assistant buyer Louise Witchell tells PCR.

Dealer-only network UTAX provides a full turnkey package to its partners, many of whom have followed a traditional route to market and are now looking to diversify their print portfolio and broaden their offers.

“The wide portfolio of hardware and customisable software solutions available from UTAX means that the managed print solutions we offer are fully dependent on the needs of end-users – and as complex or straightforward as their needs demand,” says Shaun Wilkinson, UK managing director of UTAX.

Midwich offers a full managed print service in partnership with vendors such as Kyocera and Oki. The firm also offers PDI and installation on a ‘menu of services’ basis to help partners with elements they may need, or want, to outsource.

Brother UK’s Phil Jones tells PCR: “We offer a cloud-based Basic Print Service, as well as more sophisticated managed print service option including pre-print audit, device optimisation/design, deployment and management/optimisation.”

SOUND ADVICE

While these firms are well underway with their offerings, what advice do they have for retailers and resellers looking to get into the MPS game?

UTAX’s Wilkinson advises resellers to make sure they deliver a solution that provides answers to the problems end users have. “This means knowing what you can offer – or at least tapping into the expertise of a partner vendor,” says Wilkinson. “Clients will be prepared to pay more where they can see the wider benefits to their business and the discussion becomes more about the overall business case rather than the straight cost of investment.

“The last thing resellers need to get themselves involved in is the race to rock bottom prices.”

Brother UK’s Phil Jones adds: “MPS can be high touch in the preliminary stages, however when the contract is fully deployed and working well, it is an excellent tool to give cost transparency, genuine consultancy and financial management to customers.

“It’s the main reason why so many customers renew their contracts with the same supplier at contract end, so the upside is in customer retention and projectable recurring revenues over many years.”

“It’s no longer about shifting boxes. The concept of a standalone print vendor will become outdated in the future.”

Shaun Wilkinson, UTAX

Aside from those planning to get into the world of MPS, Network Group’s David Tulip outlines the best way for resellers already providing MPS to make more money.

“Review vendor relationships and service tools, technical review and competence of engineers. Reviewing each account, and the service delivery and customer satisfaction, is crucial. For me the best tip I can give for resellers to make money is to look after your customers and keep them happy so they stay and refer others.”

THE FUTURE OF PRINT

It is clear the nature of the print market is changing, but, MPS aside, what does the future for the print industry – and the vendors in the space – look like?

“There will be fewer players for sure,” says Brother UK’s Jones. “With a number of vendors up for sale or recently sold, consolidation remains a key theme. The race to get pages under contract will hot up too so it’s vital the channel builds capability with managed services at all levels.”

Midwich’s Stuart Mizon tells PCR: “In terms of solutions, we are well placed to help with our Papercut offering and the support we can offer on this. With regards to connectivity, especially in the form of mobile and tablet, there is more demanded to be at the forefront of people’s minds when selecting devices.”

UTAX’s Shaun Wilkinson believes it will be more difficult to categorise an IT company in the future.

“Print vendors won’t exist as print vendors – print will be part of the larger solutions that companies are selling and customers are looking for,” he says.

“It’s no longer about shifting boxes – the concept of a standalone print vendor will become outdated. The IT resellers that survive will be those that offer a holistic approach and greater integration between office systems such as the cloud and BYOD, and manage the issues that follow, such as security and digital workflows.”

Network Group’s David Tulip adds: “The future of the market in my opinion lies around software to help with policies, rules and routing, and software that can help manage the flow of both paper and electronic documents.”

Louise Witchell from John Lewis concludes: “The printer market growth will continue to slow and the levels of growth will diminish. At key times of the year like ‘back to school’ and ‘off to university’ there will still be a demand for printers and for families, but I think other customer groups will decline.

“The market in the future will see printers becoming a potential feature within the connected home story. They will become smaller and more compact with improved functionality.

“As people print less, the convenience and ease of use will play a factor in whether a customer decides to purchase a printer.”