Analysis: MPS offers hope as printer sales falter

The latest figures from Gartner for EMEA printer, copier and multifunction product (MFPs) shipments are a wakeup call to those in the industry who have viewed the market as a reliable and untroubled source of revenue in the IT sector.

The latest figures from Gartner for EMEA printer, copier and multifunction product (MFPs) shipments are a wake up call to those in the industry who have viewed the market as a reliable and untroubled source of revenue in the IT sector.

According to Gartner, shipments were down 24.4% in the first half of 2009, and the trend is likely to continue through the second half of the year, perhaps declining by as much as 30%.

Gartner’s numbers were reinforced by HP’s recent third-quarter results, which showed a 23% fall in overall printer unit shipments, including a 42% decline in commercial printer unit shipments. But in grey clouds it is often possible to discern the merest glint of silver, and the printer market is no different.

Changing market
While Gartner is pessimistic about the potential for a sales recovery in the printer, copier and MFP market this year, it argues the time could be ripe for vendors and their channel partners to start promoting the managed print services (MPS) message.

In a statement accompanying the figures, Gartner senior analyst Todd Prabhakar said, “Vendors must sell services to businesses that will help them better control costs, save on running costs, reduce cost-per-page issues and consolidate devices.”

He specifically mentioned MPS, alongside document management software. This is not the first time that Prabhakar has urged vendors to consider MPS, he said pretty much the same thing when Gartner reported an 8% fall in shipments for 2008, so this will not come as news to many vendors in the copier, print and MFP space.

There can be no excuses for ignoring MPS, especially after market research company Photizo Group’s 2009 Managed Print Services Market Forecast claimed the market would increase from projected global revenues of $25.7bn to more than $50bn by 2013, with more than 50% of all devices coming under MPS contracts.

From a European perspective, it is even more worthwhile given that Photizo believes Europe will be the largest MPS market in the world by 2013.

Several vendors have been trying to focus the attentions of their customers and channel partners on MPS for some time. As far back as March this year, HP IPG channel development manager Alan Hatfield told Micro­Scope it was aiming for 60% growth across EMEA for MPS, and the UK would try to achieve 30%.

Speaking to MicroScope last week, he revealed the UK growth target for the six months from 1 May to 31 October 2009 is 100% and believes it should reach 90%. Hatfield also quotes statistics that 52% of SMEs in EMEA are evaluating some type of MPS. Hatfield estimates sales by value of MPS at HP are currently split 50:50 between direct and the channel.

“HP is very committed to having a good platform for our partners, because MPS is the future,” he says. “Most of the conversations I have with channel partners are around managed print services.”

Not that others are ignoring MPS. Lexmark UK channel sales director Marcus Harvey has described it as “a key area for us”. And Martin Tierney, UK services director at Kyocera Mita, agreed that MPS was “definitely the way to go”.

Significant growth
Circumstances have become even more propitious for the adoption of MPS since then. Paul Callow, Lexmark UK & Ireland marketing director, said there were “signs of recovery in Q2 versus Q1”, but added, “Traditional sales are not recovering as fast as managed print agreements, where we have seen significant growth year-on-year.”

He said Lexmark’s managed print offering for the channel – the Lexmark Value Print (LVP) programme – continues to be a focus for the vendor. “Especially with the channel versus copier resellers, with its per click charge model it has certainly been a success for us in 2009.”

Many vendors, including HP, Lexmark and Kyocera, have introduced simple pre-set packages that enable channel partners to sell a managed service even if they do not have the expertise to back it up themselves. Kyocera MPS project manager Ian Brich said MPS will be “pivotal” in an environment where companies are looking at cost saving measures and want to better understand the cost of their print environment.

“As a vendor that is committed to the channel, we offer solutions and services that enable the sale of managed print services to users,” he said.
The message is clear: MPS is here to stay and channel partners looking for an opportunity to offset falling margins and sales on printer, copier and MFP hardware should definitely get on board.

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