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Is the Channel in Europe Taking MPS Seriously Enough? 3/4

By Steven Swift

Part 1, part 2.

Despite all the factors mentioned above, which have been holding back MPS adoption, especially in southern Europe, I still maintain that resellers who think they do not need to change could be in for a nasty shock. Notwithstanding the barriers in some countries, the economic imperative driving MPS is so strong that it cannot be resisted. Concerns about outsourcing, data privacy etc. may mean that it will be adopted in slightly different ways in different countries – but organisations will not for long pass up the opportunity to reduce their document output costs by 30%+, as well as the other gains to be had in user and IT productivity.

Let us pause to consider the implications of this. If organisations generally are reducing their printing and imaging costs by around 30%, it doesn’t take a genius to work out that sooner or later the total market size will decline by 30%. Or will it? None of the major research firms is forecasting a market decline of this order, despite the fact that they are all confidently asserting that MPS will grow rapidly, at the expense of traditional transactional business.

How can we reconcile these apparently contradictory trends? The answer is that expenditure on hardware, supplies and maintenance, which have up to now accounted for the vast bulk of expenditure on print, will indeed decline significantly. However, at the same time, there will be a countervailing increase in revenue from software and other services. This starts with simple tools and services, such as assessments and device monitoring, needed to set up and run a basic MPS contract. It then rapidly extends into more advanced consultancy and document management services. Print is often a “window” into user behaviour and the underlying work processes, which creates opportunities for smart and imaginative providers to generate additional, higher value streams of revenue, helping organisations to improve workflows, and even taking over and managing functions on their behalf.

 

Red warning signal & big danger.

The growth of new revenue streams is also is the red warning signal for the printing and imaging channel. Firstly, do they have the skills and credibility to take on these new services – particularly taking into account that these may go well beyond the realm of printed documents, and the unspoken likelihood that print volumes will in any case start to decline at an increasing rate.

The other big danger is that this introduces new competitors onto the turf of the printing and imaging channel. IT Managed Service Providers (MSPs) have in the past shown little interest in print. It was seen as a low value function with a different business model. Furthermore the platforms used by MSPs to manage desktops, servers and networks did not have good functionality for managing printers. That is now changing, and MSPs are increasingly eying up document output and associated document management and workflow as potential new streams of revenue. Moving in the other direction, some of the more forward thinking providers in the printing and imaging channel are extending into broader IT services. IT Managers in user organisations see this happening, and they are starting to look for a “one-stop shop”, with document output management increasingly seen as part of the IT service spectrum.

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This article was written on 31 Oct 2013, and is filled under Business Forecast, Managed Print Systems.

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