GETTING IN ON MPS

The jury is out here. Demand for managed print services is increasing. “Enterprises have been using MPS to identify waste and reduce costs in the print environment for decades, and the expertise is now available to businesses of all sizes,” says Mark Pettit, Executive Director, Xerox GDO, India.

SMBs spend about 3% of their revenues on running printers, copiers, scanners and fax machines & devices which are often energy inefficient. A document process optimization strategy can reduce this expenditure by as much as 30% while at the same time decrease energy consumed and waste generated.

As the technology is redefining the way the businesses are being transacted, the solutions software services are becoming increasingly a lot more critical to the success of businesses. That realization is occurring more and more as India is getting more globalized. Competition across the world and therefore the best practices in the organizations need to be in line and at par with the best in the world. More so in the large corporates because the whole competitiveness is the more sustainable edge for any country and for that matter any country would stick to pursue.  

“There is an exponential rise in demand for the managed document services. The slowdown in 2009 had forced the CIOs and CTOs to start focussing on the IT infrastructure costs,” says Bhaskar Joshi, Marketing Manager, Multifunctional Devices, Canon India.  Also, as companies are shifting their business procurement models from Capex to Opex, managed services see a dramatic rise in need. The trend seems to continue and a recent study suggests that the total addressable MPS opportunity in India will grow at a CAGR of around 20 per cent. 

The most significant trend for MPS in India is the emergence of global markets where MPS is emerging to reveal a new end-to-end managed services business model in Asia-Pacific. This is the result of an increasing awareness by CIOs about the advantages of utilizing an MPS contract to reduce cost, improve the IT department's productivity, and to significantly reduce the carbon footprint of the imaging fleet.  

“MPS in India will continue to remain as a topic of interest from both client and vendor perspective. For the last two-three years, there has been an emerging trend in this space. But in reality the business volumes generated from MPS are not very substantial. So, MPS in India is still expected to grow to be a profitable business,” says Ram Prasad, Deputy General Manager - Consumer Products, Epson India.  

As per estimates by research agencies, the market size of Managed Print Services in India is about US$ 237m and is growing at CAGR of 50%. In the past one year, it's in the private corporate segment where the demand increased significantly.

“The adoption of MPS primarily started in 2008-09 as a measure to cut costs. Today, with the emerging ecosystem and growing awareness, customers are looking for a complete value proposition instead of just outsourcing,' says D.Mohanty, Vice President (Operations), HCL Infinet Ltd.   

Channel partners; Opportunities Galore 

The potential of managed print services has many channel partners eager to get on board. As the organizations matured, they have long ceased to look at printing as a discretionary expense and pays in the long run like any other IT asset. Therefore, Managed Print Services is and will continue to gain more visibility among organizations. This offers a huge market opportunity for resellers who are looking to expand into the printing enterprise market.    

“There is an increasing interest by resellers, and particularly IT integrators that MPS is a significant business opportunity for them. Until recently, this was an area that was not a focus of the reseller community. This will have an ultimate impact of increasing the availability of MPS for SMBs,” says Bhaskar Joshi.  

Today, time is ripe for channel partners who are willing to become managed services providers. In the past, they had to make significant investments in software, hardware, training and personnel to become MSPs. However, with the emergence of third-party vendors who are responsible for the delivery of helpdesk and management/monitoring services, it has become somewhat easy for the channel partners to scale up their businesses without increasing their investment.  

“The market for document managed print services has gathered momentum over the past four to five years. It is emerging as a huge opportunity for vendors/channel partners as large businesses continue to consume more printed output,” says Mark Pettit. 

D. Mohanty of HCL says, “Currently the adoption is more among large enterprises, but the trend would definitely cascade to SME segments in future. Channel would play a large role in fulfilling the demand in the SME segment. This would provide an opportunity for dealers to move up the value chain in their sales and enter long term contracts with assured revenue over longer periods.”

According to Ram Prasad of Epson, “With a very thin operational margin, the current conventional MPS doesn't offer much role for corporate resellers. The success of the model will depend on the quality of the resellers. MPS requires technical expertise to manage the operations. Unless there is a substantial customer base, it will become extremely unviable for a successful business proposition. At Epson, we offer solutions to our partners that would address the bottom of pyramid in the corporate printing space.”  

In managed printing services business, the largest player in India is a homegrown Indian company which is largely owned by the employees of the company. The company inn discussion is WeP Peripherals Ltd. “We started this business as a part of WeP Peripherals Ltd way back in 2002 even before the research agencies started tracking MPS market. We intuitively felt as a part of our interaction with customers that there will be a good demand for this kind of printing services, hence MPS was launched in July 2002", says Sanjeev Arora, General Manager - MPS, Datanet Systems Ltd. Managed Printing Business of WeP Peripherals has been acquired by Datanet Systems Ltd and today is being operated as the MPS business of Datanet Systems Ltd.

Managed Print Services for SMEs 

Going by the recent trends, it seems that managed print services are no longer the preserve of large organizations as SMEs are looking to this model to lower co sts. 

As a matter of fact, those who don't have the manpower, equipment or experience to build out their IT offerings are prime customers for the services of an MSP. 

An increasing number of small- to medium-sized enterprises (SMEs) in India are coming to grips with the managed print services model, thanks to its ability to cut costs and reduce the need for capital equipment, both hardware and software. The reason for growing adoption among the SMEs is not far to seek. The managed print services model with its contract-guaranteed levels of performance has the potential of offering a much more permanent solution to the cost-sensitive SME market. 

In the recent times, a greater adoption of managed services within the SMB segment in India is being witnessed. To maximize opportunities for themselves as well as to address unique needs of different SMBs cost-effectively, service providers are offering managed print services.   

Finally...

The MPS market has evolved over the years, and today it has become a core business process in every enterprise. Enterprises, which have not yet leveraged MPS, are looking at it as a potential business enabler. There are several factors that have led to the growth and the need for document management. One of the prominent factors being observed in the document management space is that most of the medium and large organizations are consistently on the lookout for ways to cut costs and increase profits. However, very few of these enterprises access and manage documents (the lifeblood of business processes and a key source of costs).

For more contact: Deepak Singh
edit@varindia.com