VARs Cashing in on Managed Print Services

By Alison Diana  |  Print this article Print

Managed print services keep margins strong and customers front-and-center for VARs, and Xerox and HP have recently both announced new investments in their MPS organizations.

From high-ticket, high-output networked printers to low-cost personal multi-function devices tucked in private offices, organizations spend a small fortune each year managing, maintaining, and operating their armies of printers and copiers—and savvy solution providers are helping clients take control of the associated costs, management issues, and upkeep through margin-rich, customer-centric managed print services offerings.

Indeed, managed print services—or MPS—revenue is growing at more than 20 percent per year, industry experts agree. Last year, managed print services were valued at $25 billion, Ed Crowley, CEO of Photizo Group, told Channel Insider. By 2014, MPS could be worth almost $70 billion, he said.

"We don’t see anything that we believe is going to make it slow down. There’s a huge amount of momentum behind it," said Crowley, in an interview. "This market has incredible jet fuel."

Cost-savings are primarily fueling customer interest: After all, MPS can drive down print costs by almost one third, according to IDC. Many offices use printers and copiers inefficiently, and the economic downturn forced them to scrutinize their output costs, said Joe Barganier, MPS consultant at MT Business Technologies and president of the Managed Print Service Association, in an interview.

"You have a garbage can next to the printer, right? People don’t read the instructions. Paper gets lost in all these output bins. It’s inefficient," he said. "When money dries up, people start looking at things they could have looked at 20 years ago."

Service providers are helping organizations cut through the paper overload, and also providing break-fix, maintenance, and toner replacement services. While many VARs often have shunned ink and toner sales, the traditional IT reseller channel should proactively pursue this opportunity to not only win revenue but also another chance to interact with customers, vendor executives told Channel Insider.

"In general, partners are doing better with managed print offerings because they’re able to capture 100 percent of the revenue after selling a device," said Tom Gall, value channel marketing manager for Xerox, in an interview. "A lot of resellers think that the toner business or the printer business is kind of a painful business. They don’t think they can make money at it. They can’t make money on the hardware, and they don’t think they can make money on the supplies. That’s why the tools we’re bringing to them make so much sense to them. We’ve made it easy for them to get into that business by leveraging the tools we have."