The economic climate has led to surge in adoption rates by enterprises for business models like SaaS, cloud computing, IaaS and others, which are opex in nature. MPS is one of them. The slowdown has compelled enterprises to look at MPS (Managed Print Services) in a more serious way. As a result, many vendors are positioning their products/solutions tailored for this. Vendors like Canon, Lexmark, and HP are chalking out their MPS roadmap and empowering channel partners to ride this bandwagon. They are developing specific and detailed tools to show definite benefits of cost savings to convince enterprises for the opex model — MPS. 

Expected to be a huge market in the next few years, MPS is basically consulting and outsourced services offered to help enterprises reduce the number of printers in their fleet and cut printing costs. “India represents less than 1 percent of the worldwide MPS market. The MPS adoption in India is primarily driven by large businesses, with global contracts driven from headquarters in Western Europe or the United States,” says Vishal Tripathi, Principal Research Analyst, Gartner. By outsourcing the entire document production process including the hardcopy devices, document workflow strategy, and support services, the customers can achieve a significant reduction in cost while achieving significant environmental benefits. Some segments such as government and financial services will resist MPS for security reasons as well as ease of document management, he adds.

The Drivers
MPS is an evolving business and the real big opportunity is in the enterprise space. A service offered by printer manufacturers, it is designed to assist the end user to streamline management process and minimize costs associated with printing and imaging. MPS helps cut ownership costs, enhance productivity, and reduce energy consumption. MPS (also referred as ‘printing as a service’) can help businesses reduce costs associated with printing and copying through product consolidation or redeployment.

Cost reduction remains the most important evaluation criterion for the adoption of MPS. Puneet Datta, Senior Marketing Manager, Canon BIS Division, says, “Slowdown brought SaaS to life and now enterprises are understandably demanding opex-based models in the form of MPS for their printing infrastructure.” If there were no recession, MPS would hardly be in the news, he opines. The adoption of MPS among organizations is driven by their need to reduce costs by upgrading their print infrastructure, right-sizing, and optimizing, says Tripathi of Gartner.

Dixit Infotech has been reasonably successful with seven MPS contracts being managed by them for the past two years. “The concerns for us are what if clients cancel contracts or reduce printing and copying. There is a lot of opportunity here but partners must be judicious. Margins are over 50 percent for partners who are judicious on which toner they use and what volume of printing they are getting per printer/copier per client,” points out Shivram Iyer, CEO, Dixit Infotech.

MPS delivers greater effectiveness and cost savings as vendors claim that companies can save around 25 to 50 percent. The customer gets a predictable monthly bill. Though the printing still occurs on customer premises, the machines and consumables are managed by solution provider or the service provider. “Enterprises with higher volumes and more decentralized printing are more open to this idea of a provider managing their printer as it helps them cut down their expenses. It also becomes easy to track and control print and free the resources that can enhance the productivity, says Gartner’s Tripathi.

The Inhibitors
But, what is stopping the enterprises from opting for this cost-effective business model? In India, enterprises already have a more intensively consolidated starting state than would be typically seen in the West (20+ users per device instead of less than 5 users per device), says Tripathi. Thus, the opportunity might be less about how to have fewer printers and more about how to maximize worker productivity around printing.

“In India, MPS providers face resistance from businesses as most end users wish to keep their local printers on their desks and dislike the fact that their print utility will be tracked and controlled,” he points out.

Datta of Canon candidly admits, “Most printing vendors including ourselves have failed to a large extent to actually propagate the importance of MPS and its actual cost saving for customers.” Although few vendors are showing definite savings, the calculating tools need to be standardized across the industry. “This will ensure quicker decisions and faster sales cycles, thereby propelling the concept, said Datta.

Awareness among enterprises is also quite less. However, vendors and solution providers are actively engaged in developing attractive MPS models. “It is a big market in the offing,” he says.

Tripathi of Gartner points out, “The major challenge facing MPS providers is that some organizations still see savings associated with hard costs only but forget to look at softer costs, such as how much they spend on supplies, services, maintenance, and help desk.” In his view, MPS providers must better communicate the cost savings advantages and must highlight how managing the print fleet can enhance productivity as well.

The Vendor Roadmap
Vendors are aggressively pushing their suite of services and proclaim up to 30 percent cost savings for clients. Lexmark, a focused provider of printing solutions, is aggressively offering ‘printing solutions as a service’ for enterprises — an initiative started last year on a worldwide basis. “We map the entire floor plan for the enterprises, study their existing capex investments and monthly expenses on cartridges/paper/printing supplies before recommending a printing solution. Optimal use of office space and reduced carbon footprint is important in Asian countries like India,” points out KP Ranjan, Country Manager – India, Lexmark .The monthly calculated expense is a ‘desired business need’ for today’s enterprises, most of whom shy away from huge capex investments, he adds.

Canon is also engaged with quite a number of enterprise customers through its direct sales team for its MPS offerings. BFSI, telecom, and pharma are the favorite verticals for this business model. Datta reveals, “Canon will unleash a powerful and comprehensive strategy in Q3/2009 globally and also in India. The approach will be to study print usage and usage patterns at the customer end to provide them the benefits in black and white.” Not many vendors today deliver the exact savings for customers through MPS, which was projected before the deployment. It would be more like a consultancy in printing business, which is a huge business.”

He adds, “The number of print- outs, paper, manpower, and other costs in printing department are just one-third of the total printing budget. There are many hidden IT costs like networking issues, etc, which need to be taken in account before affixing  the x amount for MPS. This enables a document management vendor with a huge printing portfolio, widespread branch offices, and extensive channel base, leverage ‘printer as a service’ model, says an optimistic Datta.

Role of Solution Providers

Role of Solution Providers

According to Tripathi of Gartner, MPS providers need to keep their sales force and channel partners updated on the benefits of MPS and communicate how the two groups should deal with prospects and clients. There are ample opportunities, but what really counts is for MPS providers to deliver on the promise of MPS with the help that organizations truly and urgently need to manage office printing. “MPS providers need to enhance the scale of coverage, develop capabilities, and raise the level of services provided to remote sites, since many customers need wider geographical reach than in the past,” he says.

CMS India, Lexmark’s enterprise partner for the Indian market, is reaching across verticals like banking, insurance, etc. With nationwide branch offices equipped with technical staff and deep customer relationships, the solution provider is propelling Lexmark for over a year. According to Rajiv Mehta of Innovative Enterprises, “It is tough to quantify the market size for MPS in India, but it is in excess of Rs 1,000 crore and is growing rapidly.” All kinds of users — SMBs, large corporate firms, as well as the government bodies — are leading the way for increased adoption of the MPS model.”

The MPS business done by Dixit Infotech has two variants. “Clients who have printers but want supplies and support outsourced and the one in which clients want complete MPS including the printers or copiers,” says Iyer of Dixit Infotech. MPS has been very successful in the market for the copier vendors across enterprise customers who need a pan India solution, he feels.

Datta at Canon feels, “The channel partners need to gear up, keeping in mind a long-term strategy, as the MPS model will need alliance with service providers and third-party hardware partners to ensure cost savings for customers. It is an expertise domain in which solution providers need to go an extra mile. But the future is bright in this domain.”

The Future is Bright
In India, MPS is still at a nascent stage and adoption is quite still low. Right now, most of the solutions are designed for enterprises and depending on the offerings provided by MPS providers, we might see some MPS adoption in the SMBs, feels Tripathi of Gartner. MPS providers are primarily focusing on mid to large enterprise, as the volume is very integral to MPS. Adoption is still very slow in India and it will take considerable efforts from MPS providers to penetrate the market deeper, he says. In the SMB space, the value proposition is very strong for clients to look at this but most clients are conservative when agreeing to this, says Iyer.

Datta at Canon admits that MPS will be an essential part of document management strategy for enterprises. While India is still considered nascent for this service, vendors are confident that it will reach a critical mass soon. This translates into a huge playfield for solution providers and service providers to explore the next big thing in printing domain – the MPS.