PRINT.IT
9
PrintIT:
How have the
European and UK managed
print services markets
changed since the last
Transform Europe conference
12 months ago?
Ken Stewart (KS):
Most
OEMs (original equipment
manufacturers) have cited
softness in their 2013 numbers
in the European market
especially. There is some
positive sign of growth, but it
is very focused on emerging
markets. In Western Europe
the focus seems to be more
on the channel and activating
that channel a little more
aggressively than in the past.
From all the signs we see,
the UK may be under stronger
pricing pressure than the US,
even though the US is technically
a more mature market. There
are also signs that channel
partners are struggling with
higher value offerings (e.g.
business process optimisation
- Ed). They want to offer higher
value stuff, but office equipment
dealers are finding it hard to do
and system integrators haven’t
fully decided whether they are
on board with MPS yet. There
are providers moving forward
at every stage of MPS, but it’s
a case of the strong getting
stronger – the weak don’t really
know where to go at this point.
PrintIT:
Why has demand
been soft in Europe?
KS:
There is still a level of
economic uncertainty, which
leads to indecision. Budget
decisions are being put off
MPS today
Ahead of the Transform Europe managed
print services (MPS) conference, taking
place in Prague on October 20-21,
PrintIT
talks to Ken Stewart, Practice
Director of Services at Photizo Group,
about developments in the UK MPS
market and how they are impacting end
users and resellers.
and customers aren’t investing
in infrastructure or people.
That said, they are looking to
outsource, so there is some
traction there, and people can’t
put off budget decisions for
ever, so we are seeing some
warming in the lower end of the
MPS market. Instead of going
full bore with a higher end
engagement, people are going
full bore with enhancements.
They are saying: ‘Lets centralise
purchasing as much as we can;
let’s reduce costs in the low-
hanging-fruit areas first’.
PrintIT:
Is there pricing
pressure because end users
aren’t so interested in high
value business process
transformation?
KS:
I am hearing different
tunes from different people,
which suggests to me that there
is a mixed marketplace along
the lines of the 80:20 rule.
We’ve done a lot of research
with our
Decision-Making
Tracker Study
, which we now
run across nine countries.
Regardless of which market we
look at, we see three buying
profiles: high-level strategy
customers; low-level price-
sensitive customers, who
spend three times less than
the strategy customers; and
middle-of-the-road, provincial-
type customers who are really
into MPS for device fleet
optimisation.
The smaller percentage of
channel partners that deal
with medium-sized and large
enterprises are having more
traction in the business process
space than those that focus on
companies of 10-49 or 50-250
employees.
PrintIT:
Do resellers prefer to
adopt OEM programmes than
develop their own, and are
they satisfied with what the
OEMs offer?
KS:
Overall, we find that
partners like to sign up to a
programme to see how vendors
run it. They then decide whether
to take elements from it or not.
In the UK, 40% have signed
up for OEM programmes; 20%
have their own programmes;
and 40% have both.
In the UK, the average
partner ranking for the
six OEMs we analysed are
all within about one point
of each other: Ricoh and
Konica Minolta got 7.5 and
7.4 respectively, with Canon
pulling up the rear with
about 6.4. There was a much
bigger spread in the German
and French markets, which
indicates that the UK is a fairly
developed market with a higher
level of competition.
PrintIT:
When do resellers
decide whether to use a
vendor programme or create
something themselves?
KS:
It’s all to do with
profitability. Whenever it is
more profitable for them to do
a programme with an OEM,
they will lean on that. But if
that decision leads to non-
profitability, they will quickly
switch to their own programme
or even defect to another
OEM’s programme.
PrintIT:
What are some of
the main obstacles stopping
partners from adopting MPS?
KS:
The major issues are
longer sales cycles and
competitor pricing concerns,
followed by capital investment
– the perception that it is too
expensive to invest in managed
print services infrastructure
– and staffing concerns, not
believing employees are really
going to adopt MPS. There is
also a concern that OEMs will
compete directly with them in
the same marketplaces.
PrintIT:
How can they
overcome these obstacles?
KS:
With longer sales cycles,
the one negative it is very
hard to get past is cash flow.
Getting into a perpetual
selling cycle is one of the key
challenges facing a services-
based business. Instead of
focusing on quick-hit lease
renewal and getting into what
we in the US call a dogpile,
competing against other
providers on price, service-
oriented resellers have to be
in the account on a monthly
or quarterly basis looking to
add value. This requires more
consultative selling skills. It
also requires them to have a
broader portfolio and to look for
opportunities to be customer-
led. This means understanding
their customers’ business,
not just understanding what
they have in the warehouse
to sell. One of the questions I
ask partners I consult with is:
‘When you think about your
top 10 or top 100 customers,
do you know if their revenue
went up or down last year? And
do you know why it went up
or down?’ Most folks have no
idea, and that has to change.
Interview
Continued...
