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

By Steven Swift

Part 1part 2part 3.

For those in the printing and imaging channel who don’t change, the future could indeed be bleak. Not only will they see their core market decline by upwards of 30%, but as it does so, and increasingly commoditises, their margins will come under pressure too. Indeed, we already see plenty of evidence of this happening, in some countries, especially in the UK. If resellers do not adopt a service based business model, they will not be able to capture the new higher value service revenues, and they will be left to fight for a shrinking pool of hardware and supplies sales.

On the other hand, we have already seen that those resellers who can adapt successfully to a service-based business model can see big gains in both revenue and margin. They create stronger, deeper relationships with their customers, capture more of the value chain, and open the way to a broader range of business opportunities. This is the guiding principle for members of IMPSGA.


The balance of power between manufacturers and the channel.

The interesting question which this raises is, how will the printing and imaging channel develop over the next few years. As value shifts from hardware and supplies to software and services, we might expect the position of independent channel partners to strengthen vis-à-vis the device manufacturers. Today the channel comprises mainly medium and small companies, operating at country level, or regional level within a country. Will the change in business model lead to the emergence of independent super service providers, perhaps on an international scale? Will the balance of power between manufacturers and the channel shift?

Manufacturers are clearly thinking about this, which is why many of them talk more and more about the importance of services within their business.
However, often this refers mainly to their direct business, which serves large corporate clients. So far only some more enlightened manufacturers have seriously addressed the challenge of how to help their channel partners adapt, and work with them to ensure that, as manufacturers, they retain their share of revenue and margin within their indirect business.
Just as the shift towards a service-based model poses a threat to resellers who do not change, so manufacturers who do not do enough to help their channel partners face losing their indirect business – as their dealers either go out of business, shift allegiance to other manufacturers who will support them, or if they have the scale and capability, develop their own independent service-based business.

IDeAs has worked with a number of manufacturers and channel partners, helping them to shift to a service-based business, and has a great deal of experience in this area. We confidently predict the emergence of more highly capable service-oriented providers in the printing and imaging channel, which potentially will lead to further consolidation in the reseller community.

Will you be one of the new breed of winners?

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This article was written on 07 Nov 2013, and is filled under Business Forecast, Managed Print Systems.


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