Wednesday, May 16, 2012

Managed Print and Trickle-down Economics | Channelnomics

Managed Print and Trickle-down Economics

Hewlett-Packard is making a big deal out of recent customer wins in its managed print services (MPS) division, presumably because these new subscribers are very large organizations with diverse printing and document management needs.
HP’s new managed print customers are none other than Office Depot, Pace University and Global Experience Specialists. Office Depot is signing up to monitor and manage its distributed retail and commercial services. Pace University is looking to MPS to help curtail waste and cost among its 13,000 students. And Global Experience Specialists is seeking MPS to help optimize its workflow related to event and retail services.

These are big wins, indeed. And HP is not alone in the win column. Xerox recently announced aircraft manufacturing giant Boeing signed on for its Enterprise Print Services to consolidate and optimize the use of fax machines, printers and copiers in its fleet. Lexmark, too, had a big MPS win earlier this year when brewer Anheuser-Busch signed a deal to overhaul its printer fleet and get managed print support across the U.S. and Canada.

Vendors like talking about their big customer wins, especially when they have household name recognition. It exudes confidence to other would-be buyers and helps justify adoption. It’s a classic move right out of the pages of “Crossing the Chasm.”

Here’s the thing about managed print services: It’s still in the early-adopter phase of market acceptance, and it’s taking an excruciatingly slow time to mature. Printer vendors have been playing the role of Sisyphus in pushing managed print services to a reluctant and skeptical market. While vendors will point to substantial MPS gains and growth, these impressive numbers are often the result of the law of small numbers: It’s easy to show big gains when the base is so small.

No doubt these MPS wins by HP, Xerox, Lexmark, Ricoh and others are good for the cause, as they validate the model. But there’s something more to these announcement that should not be understated: a need to validate the managed print model.

Business customers remain skeptical because they see a recurring expense that actually reveals costs they never knew they had. Resellers and managed service providers have been cool to the model because it doesn’t necessarily fit into their current network and endpoint support. Worse, managed print requires MSPs to get into the consumables reseller business, something that’s a bit foreign to them.

Managed print, as a model and technology, is literally a license to print money. MSPs that have adopted it say it’s generating profits they could never get from printer sales alone. Customers who have managed print experience revel in its efficiency in performance and cost understanding.
Printer vendors should do a better job of promoting their reseller partners in these managed print announcements, as many of them omit that part of the sales equation. And, yes, some vendors are selling managed print direct; this is to seed the market and to recoup development expenses.
Promoting sales wins, especially among large business, will eventually validate the model and have a trickle-down effect to get small businesses to buy managed print rather than the conventional printer paradigm.