Monday, November 11, 2013

Rule No.1 for Medium to Large business – Continue to build your MPS capability

Rule No.1 for Medium to Large business – Continue to build your MPS capability

MPS is growing both in size and scope, moving down market from traditional enterprise accounts where it began into large and midsize businesses. But with growth comes competition, and differentiating in a services business is always a difficult task. Meanwhile, the market has seen some commoditization of MPS – particularly in basic fleet-management services, where opportunities for differentiation are limited.

For the most part, MPS today is promoted as a means to reduce print costs, drive print reduction and, to some extent, improve overall sustainability. Most MPS providers take this narrow view on the MPS value proposition because it tugs at the heart of businesses focused on reducing costs. It is an effective message for capturing competitive devices, thereby increasing the number of pages under contract.

Most market research firms continue to position MPS as a growth opportunity, although the aggressive growth rates that were projected just a couple of years ago are no longer the norm. Of course, the future of MPS is tied directly to the future of office printing. If office printing is declining, what are the prospects for MPS?

There is no question that office print volumes are declining. The challenging economy has put pressure on businesses to reduce costs, and printing is one area that has seen a substantial impact. Hardware placements have declined steadily, and it is unlikely that we will see unit shipments reach prerecession levels ever again. Most market research firms are predicting slight declines in page volumes over the next few years, but market indicators suggest that we might see even more aggressive declines.

In short, today’s office printing market is saturated, with overcapacity and underutilization of current products to boot. This is one of the reasons why MPS resonates so well with customers looking to gain control of their printing fleet. Yet the overall market remains challenging for providers looking to grow their business. The installed base is declining slightly, with fewer pages printed per device. The result is a market with fewer pages, lower CPC rates and shrinking supplies profits.