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MPSPs believe the managed print services market holds promise

A CompTIA study shows managed print services providers see opportunity in the managed print services market, even as the number of printer shipments declines worldwide.

Despite the shrinking number of printer shipments worldwide, a CompTIA study published in July shows that almost everyone still needs to print.

CompTIA found that 98% of U.S. workers printed at least once during the previous quarter. According to the study's data of self-reported print volumes, the bulk of companies are printing at fairly strong rates: While 38% of respondents reported moderately high printing volumes, 33% said they printed mid-level printing volumes.

CompTIA collected the data for the study from online surveys that were completed in March 2014 by end users -- 400 IT and business professionals across the U.S., responsible for technical or strategic decisions affecting print or document management at their company -- and by 350 U.S. managed print services providers and channel firms with some level of involvement in managed print. Additionally, 200 Canadian end users were surveyed in April.

"Generally, we are seeing a decline, but the research, I think, confirms that there's still a significant amount of printing taking place, so maybe [the decline is] not happening as fast or it's not as prevalent as what conventional wisdom may hold," said Tim Herbert, vice president of research and market intelligence at CompTIA and the writer of the report. 

If printing continues to play a role in customer business operations, then the vast installed base of printing devices will be in need of ongoing service and supplies, according to CompTIA. Many companies, particularly print-intensive ones, have found value in outsourcing their print functions. Of the companies that print in large volumes, 56% of those firms reported themselves as managed print services (MPS) adopters. Other companies, however, may have yet to see a reason to outsource for a variety of reasons. CompTIA measured the overall MPS penetration rate at about 36%.

"In some cases, print is simply not a top-of-mind issue in the C-suite," Herbert said. "Certainly, cost savings, staff productivity [and] in some cases, being able to have a more digital approach to workflow and processes -- those are very top-of-mind issues. But at times, they're not really connecting it to the print function."

Company size is also a factor in whether MPS is seen as a worthwhile expense. The CompTIA report states large firms with 500-plus employees adopted  MPS at more than double the rate of small firms, with 1 to 99 employees.

"Very small businesses … print needs may be so basic that managed print would be overkill for their needs. A firm that has five employees and one printer is not going to need [managed print services]," he said.

One of the things that stand out about the CompTIA study is the optimism among MPS providers. Many of the MPSPs surveyed said they foresee their print practices expanding imminently: One in three said they expected growth of 10% or more in the next 12 months.

Herbert gave several reasons why these companies are so positive about the managed print services market, including a perception that customer awareness of MPS has increased. But that optimism may be misplaced. While in this year's survey, about half of end user respondents said they were "very familiar" or "mostly familiar" with MPS, Herbert said that percentage wasn't "an enormous jump in familiarity among end users" compared with prior research. "But I think, generally, though, there's just a general growing awareness of the concept of managed services and outsourcing the IT, whether it's IT networks or print or whatnot," he said. "So the MPS providers … are hopeful that, that will lead to improved business."

Metro Atlanta-based Flex Imaging currently derives 10% to 15% of its annual revenue from MPS, but Matthew Iles, the company's president, anticipates deriving more from MPS in the next year -- an additional 5 to 20 percentage points.

Now that the mainstream manufacturers are really pushing managed print, I think people [are becoming] more comfortable with it.
Matthews Ilespresident of Flex Imaging

"Basically … we're getting more conversations [with potential customers], people are talking about [managed print], and with that, it should have positive results. As long as we're having conversations and people are willing to talk about it, [then] that should give us more opportunities to grow that portion of our business," Iles said.

Headquartered in Kennesaw, Ga., Flex Imaging has 25 employees, including dedicated MPS sales specialists, and serves businesses that usually range from 50 to 500 employees in size. The company's MPS program is all-inclusive and charges customers on a month-to-month basis, per page and without a contract.

Iles attributed the growth of customer awareness for MPS in part to the promotion of managed print by major manufacturers such as HP. "Now that the mainstream manufacturers are really pushing managed print, I think people [are becoming] more comfortable with it," he said.

Hoboken, N.J.-based eMazzanti Technologies is another company that expects an increase in its managed print services business. eMazzanti has offered managed print services for more than five years and is a Xerox Managed Print Services Partner, said Carl Mazzanti, founder and CEO of the company, in an email.

"We expect our MPS practice to grow significantly in the next couple of years," Mazzanti said. Although it is against eMazzanti's company policies to disclose any of its business percentages or revenue numbers, Mazzanti said he expects the company's MPS practice to grow by 20 percentage points in the coming year.

"Controlling print costs is high on the financial decision maker's list, and that's part of our business strategy. We show organizations … how to optimize their IT department to reduce costs and increase efficiency," he said.

He said the company's ideal client size is between 50 and 500 employees. While eMazzanti delivers managed print services to companies in any industry, it focuses primarily on retail, professional services and manufacturing. The company bills its MPS customers monthly, and either by pages used or on an average monthly print volume basis depending on the customer's preferences.

According to Mazzanti, customer awareness of MPS is higher now compared to five years ago, but it hasn't grown compared with last year. He cited company size as a factor behind customer awareness. "The larger the customer, the more familiar they are with what MPS is," he said.

Other factors MPSPs cited for expected growth were improvements MPSPs made to their internal operations and sales and marketing resources, as well as the targeting of paper-intense verticals such as healthcare and legal, Herbert said.

The CompTIA report suggests that many companies that are aware of MPS have yet to see the value in managed print services. Thirty-six percent of non-MPS adopters said they may or may not adopt MPS and 33% said they probably will not. Only 6% said they definitely will not adopt and 7% said they definitely will consider it.

With the introduction of technologies like feature-rich, multi-functional devices and app-based wireless printing, and with developments in managed print and workflow products, CompTIA asserts the managed print services market is dynamic, but whether more businesses will see the value in outsourcing print remains to be seen.

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Which vertical presents the most opportunities in the managed print services market?