For many solution providers, the old transactional revenue model of simply selling a printer and repairing it when necessary has been eclipsed by managed print services. The recurring revenue model that MPS generates is leading the way in the market.
But which segment of the market? Over the past few years, revenue from managing print operations in the U.S. enterprise space has been falling, industry sources tell CRN, leading printer vendors to roll out new MPS-focused programs and new technologies with an eye toward the small- and midsize-business market.
"The enterprise space is pressured, especially where revenue is concerned," said Ken Stewart, an analyst for Photizo Group, based in Midway, Ky., but the SMB space continues "to provide strong opportunities” for printer vendors.
"Page volumes are generally under pressure and print manufacturers continue to look for [new] opportunities, and so they are now looking to grow their footprint in the SMB space," Stewart said.
As vendors look to the SMB space, they have realized that the best way to break into new opportunities is through partners, according to solution providers and analysts.
"A lot of opportunities have opened up," said Guy Baroan, owner of Baroan Technologies, an IT consultancy and Xerox partner based in Elmwood Park, N.J.
"The recurring revenue stream [around printers] was historically one of the areas that we didn’t touch," he said, adding that margins on them after they were shipped were too tight. But Xerox’s managed print services program has led to a 5 percent increase in business, Baroan said.
On toner, customers have saved, by Baroan’s estimates, 10 percent to 15 percent annually over the alternative: purchasing it from elsewhere. And, they get service from Baroan too.
"It costs less for toner; they don’t have to keep anyone staffed to look at [toner levels] because the software [inside the printer] does that, and there is a service included with their printers," which Baroan is managing, he said.
The global print market, according to Bob Palmer, an analyst for research firm IDC, is growing in specific geographies. But overall, he said, specifically in developed countries, "the enterprise [market] has peaked and is either flat or in decline -- certainly, there has been an ongoing transition" to lower printing costs in the enterprise.
Over the past 10 years, Palmer explained, printer manufacturers have been steering most of their enterprise-market sales toward MPS to more effectively manage those environments and gain revenue by charging per page for all printers.
Initially, he said, vendors used MPS as a strategy to take over a client's entire print network, including competitors' printers within those networks.
However, Palmer added, MPS promotes print reduction through device consolidation, rules-based printing and stricter printing controls, and that reduction, combined with new paperless document technology and green campaigns, has led enterprise clients to print less, shrinking the market and making it harder to find growth.