Can Managed Print Save the Printer Industry ?

[Anonymous]

Can Managed Print Save the Printer Industry ?

Say what you will about struggling Lexmark, but it’s a smart company. It recognized more than six years ago that the future of enterprise printing is in managed print services (MPS), well ahead of many of its rivals. Unfortunately for Lexmark, recognition of a market opportunity and the opportunity actually coming to fruition often aren’t in synch.

Lexmark last week announced a massive restructuring that includes 1,700 layoffs and the shedding of its once market-leading inkjet printer products. The company plans to concentrate on its higher margin multifunction and laser printer products, as well as its managed print operations.

While Lexmark may have been among the first to recognize the potential of managed print, it’s certainly not alone among printer companies looking to ply the MPS opportunity. Nearly printer vendor has some form of MPS program, and many of them roll through the channel. The idea is nothing less than mashing up the classic managed services break/fix model with the ability to sell consumables such as paper and ink.

According to analyst firm IDC, MSP is already a $23.3 billion global marketplace as enterprises and small businesses alike look to curb their printing cost and even out printing expenses to a more predictable level. By 2015, IDC says, managed print will grow into a $40.5 billion market opportunity. Xerox is the clear MPS leader, with its enterprise, midmarket and channel programs, followed by Hewlett-Packard, Ricoh, Oki Data and Lexmark.

While Lexmark didn’t immediately ignite the MPS fire when it launched Fleet Manager MPS in 2006, it’s been steadily nibbling away at the market opportunity. In recently years, it’s seen more success with direct MPS sales than through the channel. Those direct sales could be the foundation in which it’s expecting future services growth to come.

Lexmark and other printer vendors aren’t alone in seeing the potential. Many remote monitoring and management tool vendors – Level Platforms, N-able, LabTech Software and Kaseya – are incorporating managed print or integrating with vendor MPS tools to bring the capability to their existing managed service provider networks.

The market opportunity is impressive, but it masks three fundamental problems. First, the channel has been slow to adopt and embrace MPS as a strategic revenue generator. Second, the market has been slow to accept MPS as a cost-saving, efficiency-driving platform. And third, people are generally printing less, thanks in large part to tablets and BYOD.

In theory, managed print sounds like a great business model. Through the performance monitoring of printer fleets, printer vendors and solution providers can anticipate problems, remotely reset devices and deliver just-in-time consumables inventory. Study after study shows the model saves businesses time and money.

The problem from the subscriber perspective is it exposes a cost that they previously ignored. Many businesses simply treat printers as a commodity utility in which they will order a stockpile of printer cartridges and paper. When those run low, they simply order more. When it’s on a schedule, they become quite cognizant of their printer cost, as well as see maintenance fees they typically didn’t pay before.

Solution providers haven’t quite figured out how to position MPS. While there are plenty of examples of solution providers and MSPs effectively exploiting the managed print opportunity, scores more are simply not adept at selling managed print. As a result, MPS becomes a revenue replacement scenario rather than an incremental, strategic growth engine.

And, of course, businesses are printing less with the advent of tablets (Apple iPad) and file sharing/synchronization services (Box, DropBox) and notetaking apps (Everdream). As digital documents become as portable and accessible as paper once was, people are avoiding the print button and that’s bad news for printer vendors and their partners. Look no further than HP for evidence, as its one-time cash cow printer division has all but dried up.

Managed print will continue to grow, but there’s a strong potential for the printing market to see its ceiling fall as more digital technologies disrupt and replace the printed page.

[Author]

September 4, 2012 at 7:33 AM