managed print services dynamics - konica minolta europe · customer trends in the digital imaging...

© 2008 InfoTrends, Inc. www.infotrends.com

Managed Print Services DynamicsMoving from a MIF focus to a page capture focus

Zac ButcherDirector

Friday May 15th, 2009

2© 2008 InfoTrends, Inc. www.infotrends.com

Boston

UK

TokyoBeijing

InfoTrends

Industry analysts and consultants focused on consumer imaging, office document technology, production printing and publishing industries.

Focused Credible Responsive Visionary


Office Document Technology

Printers, MFPsScannersWorkgroup softwareSuppliesProfessional-Managed Services (MPS)Enterprise software

InfoTrends Practice Areas

Consumer Imaging

Production Printing & Publishing

Digital camerasPhoto printingCreativity toolsManagement & sharing

Printing systemsWide format printingWorkflow softwareOutsourcingPaper & consumablesSpecialty/industrial

Serving technology vendors, service providers, large corporate users, and investment firms


Agenda

• Market Trends

• What is MPS?

Definition

MPS Methodology

• MPS for the SME/SMB customer

• MPS Competitive Overview

• Summary and Closing Thoughts


MARKET TRENDS


The World Changed in 2008 ………… 2009-2010 Trends

More challenging to generate revenue, customer expenditure constrained

Investments must demonstrate tangible short-term savings and/or impact business growth

Increased awareness and willingness of business to embrace ‘Green’ and the CSR agenda

Projects needing to demonstrate positive ‘Green’ impact without incremental cost

New opportunities emerging but so too are new competitors from related fields

Customer desire to improve productivity and reduce complexity/admin mirrors other IT sectors

World unlikely to go back to 2007


Key Trends In Office Imaging Device Market

• Vendor focus shifting from “hardware placed” to “pages captured”

• Increased penetration of A4-size MFPs

• Business looking for tighter control of document output

Effective device utilisation, reduced costs, single-source supplier, minimisation of environmental impact

• Fewer ways to differentiate hardware; the real differentiator will be services

• Document solutions will be the key drivers in capturing pages and pulling device placements

• Economic environment resulting in longer device life

• Capital expenditure under scrutiny across the board


Customer Trends in the Digital Imaging Industry

• “Circa 70% of European organisations surveyed lack an accurate understanding for the total cost of document communication starting with the output produced in the office” (InfoTrends , cross-services assessment)

• A company spends on average 6% of its total annual revenues in document management – including hardware & supplies” (InfoTrends, Assessing and Benchmarking Document Costs)

• For every dollar spent on assets, InfoTrends estimates that $9.40 is spent on soft costs, such as IT support, administration and document management” (InfoTrends, Moving Toward More Effective Print Management)

• The associated costs of paper have been estimated to be as much as 31 times the purchasing cost” (Solid Waste Management Coordinating Board)

• Economic conditions resulting in spend being deployed on efficiency improvement and cost cutting measures

• Environment ally positive initiatives, with zero financial cost impact, resonating with businesses looking to reduce carbon footprints as part of CSR initiatives


CAGR 6.08%

CAGR 1.50%

CAGR -8.76%

CAGR 4.73%

Western Europe Laser Device Forecast 2008-2012(as at Q3 2008)


Western European Office Laser Images (Billions)

This is a massive number of images and pages (even in duplex)


MPS: MARKETING BUZZ OR SOMETHING MORE SIGNIFICANT?


Fleet Optimisation

MPS – Why is it Different?

DISTRIBUTORDISTRIBUTOR

DIR

EC

T S

ALE

SD

IRE

CT

SA

LES

RESELLERRESELLERBUSINESS BUSINESS PARTNERPARTNER

SYSTEMSYSTEMINTEGRATORINTEGRATORRETAILRETAIL

Home/SoHo SoHo / SMB SMB SMB / ENTERPRISE

MANUFACTURER / VENDORMANUFACTURER / VENDORAnalogue B/W Enabler Bus.

Digital Colour Solutions Led

Connectivity Convenience Colour

Managed Print Services


MPS – Becoming the Only Fish in the Customer Pond

• The only fish in a large pond • The only fish in a small pond

Enterprise

SME/SMB


So What is MPS?

• A managed print service engagement is likely to embrace hardware, software, supplies, consultancy and on-going services across the entire print environment of the client organisation.

• Assessment services, strategic planning, fleet management, technical support, hardware placement, workflow design and strategic management services provide revenue opportunities for the provide

A Managed Print Service is a professional service offering that utilises the specialist skills and knowledge of the provider to design, implement and then manage a customised document strategy and print environment for the client.


Percentage of Revenue spent by industry

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

Telecommunications 6.28%

Petroleum refining 1.25%

Transportation 2.36%

Healthcare & Pharmaceuticals 8.56%

Computer/data services 10.24%

Diversified Financials 6.84%

Govt. Operating Budgets 15 - 25%

Advertising & Marketing 14.79%

Average 6.1%

Industry Sector Print Costs(Commercial, Office, & Production combined)

• Documentmanagement

• IT supportand infrastructure

• Administrationand procurement

90%

10%Actual print cost

Costs ofmanagingdocument

lifecycle

For every dollar spent on assets, InfoTrends estimates that $9.40 is spent on soft costs, such as IT support, administration and document management

Moving Toward More Effective Print Management, June 2007

Source: Examples taken from ALL

Associates Group.EDAM 2005 industry

sector research

MPS – Addressing the True Cost of Printing


What Does MPS Cover?

Managed Print Services

Break-fixService

JustCopiers

JustPrinters

MFP’s Production &Print Room

Maintenance WorkflowSupplies

Replenishment

DocumentAssessments

FacilitiesManagement

Optimisation

FlexibleBilling

Help DeskSupport

RemoteDiagnostics

ChangeManagement

A3 / A4

Multi Vendor Support

Training

Monitoring

DocumentManagement

Customisation driven by customer’s unique processes, infrastructure, requirements and elements selected from the vendor MPS toolbox


Typical MPS Phases


Managed Print Services Tools

One-time usage Continuous usage

Assessment AuthenticationCost Recovery

Data Consolidation and Optimisation Reporting

Monitoring Service Automation & Back Office

Accounting


InfoTrends Document Solutions Categories

• Remote diagnostics

• Device relationship management

• Service Automation

• Print tracking

• Document security

• Print Authentication

• Scan hardware & software

• Document conversion

• Workflow solutions

• Document repositories

• Project management tools

• Retrieval & Collaboration tools


MPS:TARGETING THE SME/SMB SPACE


Customer Segmentation and Opportunity

• Enterprise customers have been serviced well by larger Global Services organisations

Xerox Global Services

HP Global Services (EDS)

Williams Lea

• InfoTrends believes the mid-market shows a significant opportunity as they face similar challenges to Enterprise customers

• Vendors are now focusing on addressing the mid market


SME/SMB Customer Engagement Scenarios

• Customers wanting entire fleet replaced, both copiers and printers – extremely rare

• Customers wanting to keep copiers but want to replace entire printer fleet – very rare

• Customers that don’t want or need any products replaced. They want to keep existing copiers and printers but want greater costsavings – becoming more common but still relatively rare

• Customers that want to replace copier fleet but want to keep existing printers – most common but usually only happens towards the end of lease cycle

• Customers that don’t know they need help and do not have a need to replace anything at this time – most common scenario


A Key Strategic Decision in the SMB Space …………….

Transformation (MIF)• Sell more of our hardware

• Lock in our genuine supplies

• Lock in our break-fix and preventative maintenance services

Transition (Pages)• Assist the client in designing,

implementing and then managing a digital document output environment

• Become a services provider delivering that which is in the best interest of the customer

MIF FOCUS:Chance of supplies business and

service revenue/profit

PAGE CAPTURE FOCUS:Control of supplies, service and

influence on future HW


A Fundamental Shift in Thinking …………….

• Switch fleet to our devices and then optimise

• Manage our new fleet

• Deliver our break-fix and preventative maintenance services

• We capture all pages within customer environment

• Locks out our competitors

• Customer benefits from cost saving, process improvement, etc.

• Take over management of client’s existing fleet

• Less intrusive for the client

• Less costly for the client – genuine customersavings from first day

• Customer gains value from existing assets and investments (ROI)

• Opportunity to switch to our hardware comes at end of normal product life

• Deliver our break-fix and preventative maintenance services

• We capture all pages within customer environment

• Locks out our competitors

1. Replace end of lease copiers, keep existing printers2. Don’t know they need help, do NOT need to replace anything

Transformation model Transition model


3.3

3.5

3.5

3.5

3.6

3.6

3.7

1 2 3 4 5

Internal staff was not capable of performing theseservices

An internal staff would be too expensive tooperate

Wanted to have my technical networking, driverinstallation and device management software

managed by an outside company

Wanted a vendor that could provide meenvironmental offerings and processes

Wanted to have more flexible billing options fromONE vendor

Wanted to better understand my Print/Copyinfrastructure

Wanted to have our supplies managed by ONEvendor

Importance of Criteria for Engaging in Managed Print Services (2)Rate the importance to each of the following criteria to why you chose to engage in Managed Print Services?

N = 343

Very ImportantNot Important

Source: Professional & Managed Print Services Multi Client Study


47.7%

47.7%

50.3%

55.5%

57.4%

57.4%

69.0%

75.5%

80.0%

0% 20% 40% 60% 80%

Purchasing of Printers/Copiers

Installation and support of device managementsoftware

Networking of printers/copiers

Administration, management of Printers/Copiers

Printer/Copier help desk support

Toner or ink replenishment of printers/copiers

Installation of Printer/Copiers

Printer/copier maintenance

Printer/Copier repair

Percentage of Respondents

Services Included in Managed Print Services Contract (1)What services are included in your Managed Print Services contract? (Check all that apply)

N = 155 Respondents involved or familiar with Managed Print Services who are currently using Managed Print Services for their company

Multiple Responses Permitted

Source: Professional & Managed Print Services Multi Client Study


MPS:COMPETITIVE ACTIVITIES


• Xerox turns on enterprise-class managed print services for small and medium-sized enterprises

• New Xerox Print Services enable resellers and their customers to reduce and control printing costs, regardless of device type and brand

• Uxbridge, UK April 22, 2009 – Xerox today announced Xerox Print Services, a new version of its enterprise-level managed print services tailored for small and medium-sized enterprises (SMEs). Xerox Print Services is a set of services and tools that will be delivered through its worldwide network of channel partners to help SMEs assess their current printing environment, fine-tune their printing networks for optimum performance, and then manage their printinginfrastructure – regardless of the manufacturer or device type. For end customers this results in lower print and copy costs, reduced IT support and increased office productivity across multiple print platforms. The offer is available immediately in Western Europe, with launches in North America and other countries to follow.

XPS – Power of Global Services for the SMB


• Xerox Print Services is an all inclusive approach. Customers only pay for the software and services that they use

• Xerox hosts the technology tools whilst the accredited partner delivers and executes the service

• Pricing is dependent on partner and customer assessment of existing versus desired future state of the print infrastructure

• Service available through accredited XPS resellers

• Low cost, low risk way for channel to move into MPS – a zero risk approach

XPS – Power of Global Services for the SMB


Canon’s Approach to MPS

http://www.canon.co.uk/MPS/index.asp


Ricoh Global Services

• Ricoh Global Services helps organisations gain control of processes and costs for document output

• Ricoh's Managed Print Services are available across Europe or from Ricoh Global Services globally from April 2009

• A Ricoh direct offering


Ricoh’s Channel MPS Offering (UK)

• Helen George, UK services marketing manager at Ricoh, says the impetus for print management is reflected in the fact 31 dealers have signed up for its @remote product in the past two months.

“It’s been taken up very well by the channel,” she claims. Some dealers have signed up because their customers have demanded it and they were keen not to find themselves locked out of their customer base. Others have been quick to understand the benefits in cost savings and revenue generation offered by managed print services. www.microscope.co.uk

http://asp.april-six.com/ricoh/076286/Flash_presentation.html


HP Smart Print Services (formerly PrintAdvantage)

• Targeting SMB Market through IT Resellers

• Reclaim lost revenue from third party supplies (remanufactured supplies) predictable supplies revenue and take over entire fleet of a customers print environment

• Customer Value Proposition is to save time and money by controlling printing costs, and improve productivity and increased customer satisfaction

• HP is aiming for 60% growth across EMEA for Smart Printing Services which, Hatfield admits, will be challenging, adding the UK will be pleased with 30%.

In a bid to boost its competitiveness against other vendors, especially the copier channel, on a cost per page basis, HP is heavily discounting its supplies business through the contractual channel.

“Customers can get particularly aggressive HP supplies pricing with managed print services through the channel,” Hatfield says. www.microscope.co.uk


Lexmark – Global and SMB/Channel Propositions


Additional Printer Vendor Offerings

• Has the vision and can (and will) move very quickly to develop a full MPS offering

• Currently provides a range of tools to support the channel in moving into MPS

Assessment Consulting Tool

Cost Simulation Tool

SyncThru™ Admin (device management for IT managers)

CounThru™ 2 Pro (remote management for channel partner)

• Some sound local initiatives

KYOPrint Pack (UK)

KYOclick (DE)

• Appears to favour locally developed in country offerings


Vendor Provided Channel ‘MPS’ Overview

• HP’s ‘Smart Printing Services’

• Xerox’s ‘Xerox Printing Services’ and ‘Page Pack’

• Ricoh’s ‘@Remote’ programme and new ‘Click’offering

• Lexmark’s ‘Value Print’

• Samsung making progress

• Kyocera’s ‘KYOprint pack’ (UK)


MPS: CLOSING THOUGHTS


Summary

• W. Europe hardware market down in 2008/2009

• Page growth set to decline (paper even more so)

• Copier vendors and channel have been providing managed copier services for many years

• Print vendors and resellers do not have copier legacy infrastructure so many programmes have been developed to enable click-charge, pay-per-page, pay-per-usage, with back-end vendor support and a revenue/profit share model

• Many things currently labelled as ‘Managed Print Services’

Characteristics/messages tend to be cost reduction, increased efficiency, automated supplies, inclusive service and reduced printing/minimised environmental impact


Closing Thoughts

• Managed Print Services is likely to mean different things to different clients

• Having a range of tools, techniques and processes available to support direct and channel engagements across the customer pyramid seems to be the direction most vendors are taking

• Much of what already exists in the vendor/partner portfolio can be leveraged - MPS is arguably a natural evolution of Solutions business

• The key strategic decision for vendors surrounding MPS appears to be whether to provide a full service offering (including consumables) for competitive devices

• Given the current economic outlook and where the World is likely to be at the end of this economic cycle, it appears that MPS is here to stay


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managed print services dynamics - konica minolta europe · customer trends in the digital imaging...

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