Review of 2013 | Part 1/2

By Steven Swift & Jean-Louis de La Salle

2013 was the year in which OEMs operating in EMEA and their channel partners started to take MPS for SMBs seriously.

Until 2012, with the exception of Xerox, with its XPPS programme, most OEMs saw MPS as a direct offering mainly for large enterprise clients and were struggling with the idea of transferring the concept to channel partners and much smaller accounts. HP might claim to be another exception, and certainly it has made several attempts at launching channel MPS offerings, but none of these has so far achieved enough traction to make MPS a mainstream part of HP’s printer channel business.

Change has been driven by increasing awareness of the benefits of MPS among SMBs, who want to realize the same cost savings and productivity gains as their larger counterparts have been enjoying for several years. This has been confirmed by research, for example Quocirca surveys showing increased salience for print-related issues among SMBs, and increasing levels of MPS adoption by SMBs in the main European markets.

At the same time, resellers have been experiencing increasing pressures on their transactional business, with many reporting declining revenues and squeezed margins, especially on hardware and colour clicks. It should not be a surprise to anyone that transactional revenues and margins are under pressure. We are all used to telling customers that they can expect to reduce their costs by around 30% if they move to MPS. If customers all take that advice and achieve 30% lower costs, the aggregate result has to be a corresponding dip in total market revenues and a massive crash in margins.

The saving grace for the industry is that in order to realise those savings, customers need additional software tools and services to manage their print output. The challenge for resellers is to adapt their business models and processes to ensure that they can build these services and then sell them at a worthwhile price to their clients. The uptake has to be great enough to recover sufficient revenue and margin, to offset the decline in sales of hardware and consumables. Some larger independents have been able to make this transition successfully, but many, especially medium-sized and smaller resellers, have found that they need help in creating the right strategy for themselves. It needs to include identifying and acquiring the right toolsets, enabling their staff and adapting their organizations to sell and implement these solutions.

OEMs have been hearing this message from their partners, and that is why they are responding with channel MPS programmes, which typically include integrated toolsets, training, pre-sales support, and access to special pricing. A good example is HP’s new SPS programme, leveraging the IP from the Printelligent acquisition, which has been piloted in Germany and the UK, and is expected to roll out across Europe in 2014. Konica Minolta has been supporting its channel partners in several countries with a version of its OPS programme, adapted for the channel, but retaining the core toolset based around PrintFleet and Perform IT’s Vendor suite. Kyocera is rolling out a concept that includes KyoFleet (a specially designed version of PrintFleet), together with access to Evatic, as a service management software, and a commercial strategy that actively supports the Channel. In the IT and Office Supplies channels, Brother has been actively promoting its MPS programme with increasing success. Expect to see more channel MPS activity in 2014 from among others, Ricoh, Canon and Oki … and maybe Samsung.