HP Optimistic on Print Managed Services

By Lawrence Walsh  |  Print this article Print

The recession forced businesses to postpone upgrading their printer fleets. The huge, aging install base has Hewlett-Packard believing that solution providers can not only sell new printers, but convert their accounts to print managed services.

Sales of workstation and desktop printers took a beating during the recession as business made do with the legacy equipment. But what didn’t happen was a decrease in printed pages, and that’s making Hewlett-Packard bullish on its printer and print managed services business.

"There’s a large install base of products that could be refreshed because customers during the recession put off refreshing their printers," says Scott Dunsire, vice president of IPG sales and business management at HP. "I do not believe that print is dead; there are opportunities for partners in the form of things like managed print services."

The print managed services concept and business model first emerged around the middle of the decade, as printer vendors such as Lexmark, Xerox, Oki Data, Ricoh and Hewlett-Packard sought ways for replicating the service delivery model that photocopier vendors and resellers have enjoyed for many years. By converting end users to a per-page print pricing and service support model, print vendors sought to create a recurring revenue stream to augment or replace their existing fix-cost pricing model.

A long-proclaimed benefit of the print managed services model is the inclusion of consumables—cartridges, paper and ink. The automated monitoring in most PMS models not only alerts solution providers to mechanical problems and regularly scheduled services, but also when consumables are running low.

Traditionally, consumables have not been part of the solution provider service offering, so PMS created another sales opportunity. But print managed has been slow to take off, and many printer vendors have had false starts with their print managed services programs.

HP doesn’t believe it's changing the game with its print managed services offering, but rather it's creating new incentives for solution providers to adopt the practice.

HP has moved printer consumables under its Image and Printing Group (IPG) and is allowing partners to count consumable sales toward their PartnerOne channel program goals and credits. This means solution providers will earn higher status for the sale of paper and cartridges.

HP is working with distributors, including Synnex PrintSolv, to deliver and enable print managed services through resellers and managed service providers.

And HP is engaging in end-user marketing to promote managed services as a viable, cost-saving alternative to purchasing and maintaining a printer fleet.

"End-user customers are looking to save money, and the first conversation by the partner is that he can save the end user 30 percent of their print cost," Dunsire says.

HP is under no illusions that history has not been kind to the print managed services model. In fact, channel executives say part of the problem is that the end users weren’t used to buying print as a service and solution providers didn’t have the acumen to sell print services.

Both conditions are changing, says Herbert Koeck, HP’s vice president and general manager of Laser Jet and Enterprise Solutions in the Americas. Today, 50 percent of printing is originated in office applications such as Microsoft Word or PowerPoint. The balance is printing documents off Websites and other Internet resources. As more content shifts to the Web, Koeck says the volume of printing will steadily increase and businesses will demand cost containment options.

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.