In most cases, the devices themselves tend to be owned by the customer organization. But, the managed services component is typically based on any number of models, whether that is based on the number of cartridges, the cost per page or some similar means of measurement.
"Don't just go in and take over the fleet," said Lexmark's Johnson. "Do the assessment and build a cost-benefit analysis. That's when you can make money."
Technology Integration Group (TIG), a San Diego-based integrator, counts itself among the early adopters of managed print services after having entered the space several years ago. The company takes a very systematic approach to understanding the print environment of a company, and in so doing, claims it can typically save its customers money.
"It helps people develop a budget," said Becky Connolly, the company's director of managed print services. "By establishing it as a service, there are no highs or lows. If the printer goes down, if the rollers are done, it doesn't matter. Everything is included at that price. You can also enhance security and be able to cost-out the printing to specific departments. It's a simplified way of managing an area that has been an uncontrolled cost forever."
TIG works, in part, with Hewlett-Packard, which has assembled an entire platform and strategy around managed print services over the course of the last year. HP has built a large-scale infrastructure that provides partners with capabilities around remote management, billing, administration, monitoring and service deployment. "All of those are multimillion dollar investments," said Mike Weir, vice president and general manager of managed services at HP. "The partners can choose to use us on an agency basis, or as a subcontractor for their own contracts. By utilizing the HP infrastructure, these IT VARs can use their working capital to build incremental solutions on top of the platform we provide."
Partners working with the agent model bring customers to HP, and then they get a percentage of toner revenues, software provisioning revenues, break/fix, and also a finder's fee, Weir said. In addition, the partner typically gets discounts for the corresponding sale of hardware.
"The IT VAR already has a stronghold with their customer, but they don't necessarily have access to the printing aspect of this," Weir said. "So we are offering them the ability to get a printing footprint with these customers to broaden their capabilities and their profitability. In many cases, the partners can even develop homegrown applications using the OXP open extensibility platform and run those on top of the HP platform."
The concept also resonates with Jeremy Morgan, MPS sales manager at Valcom, a Salt Lake City-based HP partner.
"Managed print services enable us to capture consistent reoccurring revenue because of the value that is added to hardware and supplies," he said. "We have been able to wrap service into a more complete solution. And in that way, it makes us more competitive because it's more of a solution sale that includes recommendations around potential cost savings, based on quarterly business reviews that examine how they use printing in their organizations."
PUBLISHED MARCH 5, 2013