Lock it in

Lock it in

The office environment has witnessed more revolutions relating to cost savings than the average IT manager can remember.

Thin client technology has long tried to show a simpler way to use the PC; the blade server has tried to replace traditional racks and maximise efficiencies; and virtualisation encourages businesses to get the most from existing physical storage.

While printing hasn't been immune to the cost-cutting push, it remains an area where genuine savings can be made, particularly through Managed Print Services (MPS). Gartner (UK) principle research analyst, Malcolm Hancock, said MPS started to come to the fore 12-18 months ago as a way of qualifying costs.

"MPS has become a big focus in the last year or so for the vast majority of vendors because the market has matured and they are looking for an alternate method of gaining revenue," he said. "Organisation are switching on to the cost benefits of consolidating services and running fleets more efficiently."

A typical MPS scenario, according to Hancock, involved a vendor or its partner auditing the printing environment of a business.

"An MPS audit will look holistically at an organisation, including the physical layout of its office; whether it has got multiple buildings; and how many people per office," he said. "It will also take into account the kind of work. Some might do more copying, some might need scanning facilities."

Following the audit, the MPS consultant will propose how to better use existing hardware, in addition to recommending new hardware from the vendor(s) they represent. Recommendations are normally financed via a 'click charge' covering the new hardware, paper and toner.

Dipping into the inkpot

Devices typically report print errors, toner levels and other information which can be used by resellers as the basis for remote management.

Handled correctly, MPS is a veritable goldmine because it provides a way for hardware, services and consumables to be 'locked-in' across a business, for a minimum three years. But not all printing vendors have yet given the channel the keys to take these lucrative revenue streams.

In recent years, HP has gone from offering MPS through the channel, to taking it back direct, to reinstating its resellers.. "Two years ago we put [MPS] out there for our partners and asked for dedication and investment but all we got back was a lot of, 'Yeah, yeah, we're going to it,' but not much more," HP vice-president of imaging and printing, South Pacific, Christoph Schell, said. "Only one company - Danke - really put its money where its mouth was."

Schell said HP took the concept back for two years, but had now warmed to offering it through partners again.

"We've been successful over the last two years, but I don't believe HP can grow it any more," he said. "In order for us to become a serious player, we will need a more balanced approach, so we decided to launch a new partner landscape four months ago."

Schell is looking to appoint 12 MPS resellers in the near future, selected from 16 applicants. The highest coverage will be in NSW and Victoria.

In practice

For many resellers, MPS is just an expansion of what many are already doing today, Gartner's Hancock said.

"At the end of the day, you can tie a business into a three-year contract supplying printers on an ad hoc basis, but to take 100 per cent of that print business - hardware, maintenance and consumables - can be very profitable," he said.

Channel-friendly vendors are also encouraging resellers to get on the bandwagon by pointing out the potential long-term revenue streams.

"MPS is not just selling a box, but 3-5 years of toner and service too," Schell said. "It's the perfect type of deal for a partner to lock an account in. Then they can go and sell other products and services."

Lexmark delivers MPS via a 100 per cent reseller model. Channel manager, Neil Campbell, said the channel's lower overheads gave it a potential advantage over direct selling vendors.

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