LAS VEGAS -- Hewlett-Packard Co.’s push to get its partners to embrace managed print services (MPS) is nothing...
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new, but the company’s new focus on mobility and cloud-based services may reinvigorate it.
A typical MPS provider consults with customers about their printing and copying needs, analyzes costs and proactively monitors and manages a company’s printing fleet with consolidated billing and account management at a monthly charge.
The CTO of one large HP partner based in the Washington D.C. area said his company is reaping big rewards from its two-year-old MPS practice.
“I [visited] a customer the other day and the CTO told me up front she needed to cut $6 million out of her budget and not to even bring up virtualization because they were already far down that path. And so I talked printing,” he said.
Because many companies now over-provision their printing fleet, an MPS can go in, spot that waste and set up a much more cost-efficient system, he said.
Many companies still have a printer on every desk, which is wasteful, many have too many high-end and color printers for their needs. An MSP can go in and do a reality check on what printing they actually need and in many cases can cut a double-digit percentage – some say 30% -- out of their printing budget, VARs said.
The Washington D.C. VAR got the deal, but he cautioned that setting up MPS practices is not cheap.
“First, it’s a long sales cycle; you can’t just walk into that sort of business. You have to make an investment and learn the workflows and cost analysis,” he said. And a traditional VAR that’s used to selling thousands of dollars worth of servers and storage, needs to revamp the back-end accounting and billing systems in order to deal with amounts in the “thousandths of a cent,” he said.
Leigh Carpenter, director of strategic services for Nth Generation Computing Inc., a San Diego-based HP VAR, said her company recently started an MPS practice and is quite happy with the result.
The bottom line, both she and other partners said, is that selling toner and paper is a profitable business. They can save customer’s money -- be the hero -- while also adding incremental revenue to their own bottom line.
MPS can be recurring revenue for VARs
Scott Dunsire, vice president of HP imaging and printing group (IPG) sales, said that many HP VARs that sell servers, storage and networking have not focused on the company’s strong printer lineup, but they can build their business by monitoring customer devices and gain recurring revenue with toner sales.
“They can start to recognize a new monthly revenue stream. If they sold them hardware in the past, they never sold them [printing] supplies,” Dunsire said.
VARs with MPS practices can also educate customers about why they might not really need a super-fast, high-capacity printer for most of their jobs. And they can talk to them about why a multi-function printer could save them from buying more hardware than they need.
Joe Barganier, MPS consultant for MT Business Technologies Inc., helped MT launch its MPS business in 2007. He says the company has enjoyed significant growth with its small and medium-sized business (SMB) customers.
“The SMB market has been a sweet spot for us because the majority of these customers aren’t focused on buying equipment, which we could provide anyway, and we have the ability to analyze their environment and improve it,” Barganier said.
He said there are three stages to MPS: Performing inventory for a customer who doesn’t know what they have, optimizing what they already have and, most important, improving workflow.
“When we improve [a company’s] document workflow, we help them better manage their output environment and get rid of the bottlenecks,” Barganier said.
Barganier said that while output is big, there aren’t a huge amount of successful MPS providers out there because many think printed service opportunities are antiquated. “What is comes down to is that MPS isn’t sexy,” he said. “People just aren’t putting the effort into it, but we’ve been pretty successful with it.”
Dunsire also said HP’s ePrint mobile printing service, which enables users to remotely print from most devices to any ePrint-enabled printer with an email address, should boost business further because more customers need to print from their smartphones and tablets. All HP printers over $99 are ePrint enabled, he said.
“EPrint is a $10 billion opportunity in the SMB market and VARs can use it for specific customer needs,” Dunsire said. “MPS is the fastest-growing part of the print business and partners who aren’t looking at it should be.”
He cited Gartner Inc. research that estimates 70% of companies with 250 seats or more will have a contractual relationship around printers by 2014.
HP and the printer players are contending with the office copier makers for this business. Dunsire said that someone’s going to do this work, maintain the equipment, monitor performance, sell toner and paper -- why not HP partners?
HP is the market leader in printers although it suffered some embarrassing inventory problems both in hardware and toner last year. For its most recent quarter, the company reported revenue of $6.63 billion for its IPG unit, up slightly from $6.2 billion in the year-ago quarter.