MPS According to Distributors: What’s Changed and What’s Next
There was a time when venturing into MPS was like galloping into the Wild West. Analysts extolled MPS as the new frontier and innovating dealers looked to MPS to revitalize their businesses to varying degrees of success. There were no set rules to follow, and at times, you could get lost in the profit margins. But MPS programs have come a long way. With increased software monitoring capabilities, more reliable and efficient equipment, and well established support programs, it’s easier than ever to strike gold. This month at ENX, we spoke with the leading distributors in the dealer/reseller channel with a strong MPS program to share their experience and insight. We’d like to thank the following participants in this month’s roundtable discussion:
Eric Alksnis, MPS Product Champion, Carolina Wholesale
Eric J. Austin, VP of MPS, NER Data Corporation
Doug Johnson, SVP, Supplies Network
Tom Masterson, VP of Business Development, Printer Essentials
TJ Trojan, SVP, Product Management, Synnex Corporation
- What’s the impact of MPS to distributors?
Austin: Distributors and wholesalers often play dual roles when it comes to MPS. While providing a very important service as distributor, the mindset has historically been weighted to the transactional interaction. Until recently, this approach has hampered the adoption rate of MPS in their channels. Today, the continued downward consumables usage trend has pushed distributors to research and invest in programs that allow for growth through contractual, systematic business. Distributors are and will continue to be a strategic focus for many in the MPS industry.
Alksnis: MPS has forced all distributors to reevaluate the model in which they provide products and services to dealers and in turn their end-users. Whether improving our selection of OEM and compatible supplies selection or the actual process of managed print services, we as a distributor must be involved. As a result of our involvement, we have a better understanding of how our dealers are engaging consumers, the challenges they face, and resources they require to remain competitive.
Trojan: By collaborating with our resellers to help them offer turn-key MPS solutions that create sustainable recurring revenue streams, we build stronger, more loyal relationships. Furthermore, MPS provides abundant up-sell opportunities for our resellers with products and solutions that SYNNEX offers that might not be a part of their core offering. These range from technologies like networking to vertical practice offerings like Electronic Health Records solutions deployments. Therefore, it is a win-win for both resellers and distributors alike.
Masterson: It has provided an opportunity to provide expertise and support to our customers that will directly increase their revenue growth and their ability to increase customer retention. It has increased the partnership and loyalty of our valued resellers to Printer Essentials.
Johnson: MPS has had a couple of key impacts to the distribution point in the supply chain. First, MPS provides an opportunity to create a more valuable and sustainable relationship with resellers downstream and OEMs and other relevant vendors upstream. Those distributors without an MPS offering must rely on selling their hardware and supplies in a mature market with increasing pressure on already tight margins. We’ve certainly seen the benefits of having a comprehensive MPS offering, both in protection and growth of revenue and margins as well as in customer growth and retention.
Second, as more OEMs look to offer MPS programs directly to the channel, distributors have often been impacted in a negative way. The direct relationship of a typical OEM MPS program not only creates a direct relationship with the reseller, thereby disrupting or eliminating the relationship with the distributor, it can also shift the distribution of products and solutions to those resellers. The playing field for distributors in these MPS-related OEM offerings is no longer a level one.
- How has your MPS program evolved over the last few years?
Trojan: There have been several significant enhancements to our PRINTSolv program: 1. At the device level, we have MPS programs in place with most major print OEMs for hardware, supplies, and services. In addition, we have added copiers from Xerox and Okidata. We provide a number of specialty options around vertical market applications as well. Our unique combination of product and services enable us to be a singular MPS source which separates us from our competition. 2. At the user management level, we enhanced our MPS offering from printer management to true print management solution. Many MPS providers only provide device-level intelligence (e.g. toner level, page count, device status, etc.) but we took it a step further and now provide visibility to users’ behavior, rules-based printing, and quota management. These data points allow us to analyze print environments deeper to further lower overall total cost of ownership (TCO). While the technology of getting this level of intelligence is not new, it usually comes at an additional cost. We include it as part of our standard PRINTSolv offering at no additional cost. 3. At the solution level, we focus heavily on workflow solutions by working closely with major printing and scanning device manufacturers, as well as ISV’s. We provide training and support for resellers and offer turn-key solutions that are easy to implement and easy to sell.
Johnson: Our program has changed and grown significantly since our early offering in late 2006/early 2007. Initially, we offered a “bundled” cartridge that included software and delivery services. Over time, we recognized the opportunity to enable resellers to greatly improve the operational efficiency of their MPS program, improving profitability and mitigating most of the risk of an MPS offering. So in 2009, we introduced our Cost-Per-Image (CPI) program—an offering that included all of the software, services, supplies and delivery (with an option for break/fix service) in one simple six decimal cost per image. Essentially it is a “buy a page, sell a page” strategy for the reseller, virtually eliminating the profitability risk and smoothing out the cash flow for the reseller. Since then, that offering has been growing at triple digit rates every year.
In 2010, recognizing the need for resellers to be able to offer a consistent way for their end-users to interact with them on the care and feeding of the fleet under MPS management, we introduced myprintermanager.com. This end user-facing portal branded with the reseller’s information, is a one-stop portal for end-users to see the status of their next supplies deliveries and initiate and manage service tickets. We are very pleased with the rapid adoption of this solution across the thousands of end-user environments we now manage and support with our reseller partners.
Finally, our program over the last two years has expanded to include “backboning” the MPS programs of OEMs and other partners with their own reseller partners. This strategy has enabled us to expand our footprint in the market well beyond our existing reseller base. All of these additions have helped solidify our presence as a competitive, long-term player in the MPS space.
Austin: NER has made significant investments and enhancements to the Print4 MPS software suite since our first MPS contract nearly 10 years ago. Our platform, originally designed to provide resellers and their end-user customers the simple ability to monitor print devices, now offers a full complement of management tools to proactively report alerts, automate deliverables, optimize processing efficiencies and effectively manage client devices through a single cloud-based interface.
Our MPS program has also evolved to meet the needs of our changing customer base. Originally aimed at servicing the reseller channel, Print4 has since expanded to support MPS programs in the reseller, distributor, wholesale and OEM channel markets. Our platform, with over 20 different MPS service options, has become the platform of choice for three OEM Printer/MFP manufacturers, the largest imaging wholesale distributor in the US and one of the top office products retailers.
Our latest market break-through has come with the launch of our fully-integrated, fully-automated toner replenishment program. This new fulfillment program still utilizes Print4’s industry-leading algorithmic alert analysis but now integrates direct shipments from resellers/distributors using web services – making many of today’s manual order transactions a thing of the past. Enhancements to our invoicing modules allows resellers to invoice clients in a variety of methods including model-level, by cost center, location, consignee and more. NER has also collaborated with many leading document management solution providers to incorporate their technologies for workflow, mobile print, and policy administration into the Print4 tool set.
Alksnis: Carolina Wholesale spent many years discussing and researching multiple MPS solutions from various partners in the industry. We knew dealers required various degrees of sophistication in managing their fleets and in 2012 we found a partner and solution that meets a broad spectrum of needs. With our Ctrl-Prt solution, dealers will find everything from a ground-level monitoring of a printer network to more advanced fulfillment solutions.
Masterson: Partially due to market saturation and the changing needs of our customers, Printer Essentials has evolved in our support from a program that was based exclusively on “Platform Hosting”. We have expanded our relationship with all major MPS providers and offer a consultative, unbiased approach to client support. This allows the focus to be on the specific objectives of the client and not on a platform’s capabilities. It offers a solution that is the best possible fit for our customers.
- What are your challenges in providing a MPS program to resellers?
Johnson: Our biggest challenge continues to be finding more resellers willing to consistently engage and invest resources in building a successful MPS program. While our effort has evolved to virtually eliminate the need for operational expertise in the reseller’s organization, especially with our CPI offering, we can’t begin to manage an MPS engagement until it is successfully sold to the end user.
We’ve certainly seen that resellers who have invested and are offering a comprehensive MPS program with a solid customer assessment process are enjoying outstanding margins. However, it is often difficult for many resellers to “keep the lights on” in their current business and build an MPS sales process. As a distributor who had historically relied completely on a transactional business model, we can understand that challenge and are very willing to assist the reseller in their development of an MPS business model for their company.
Trojan: Our biggest challenge is educating our resellers on the right way to sell MPS. The focus and efforts put forth towards an MPS program will vary from reseller to reseller. We provide them with all of the data they need to make an informed decision and maintain competitiveness in the market place. It is critical that the resellers follow the basic MPS selling methodologies in order to be profitable in this field.
Alksnis: Our biggest challenge has been to find the traditional office equipment dealer that has the time and resources in place to invest in training and installation at end-user locations. The process of setting up printer fleets is fairly simple but requires action on the dealer’s part. Convincing the dealer that the benefits of MPS in their business will be worth the investment in resources has been a challenge. Once that dealer does make that investment they quickly understand the value Ctrl-Prt has to their business and their bottom line.
Austin: Luckily, NER works with a very knowledgeable reseller base so the challenges are minimal. Occasionally we will board a new reseller that understands the core concept of MPS but remain naïve to the internal resources needed to properly manage and run their MPS offering. As with any service program, there are baseline internal resources needed to implement and sustain the reseller to end-user MPS relationship. We address this issue through our mentorship program, and have found that resellers achieve a higher level of success when these resources are in put place.
Masterson: Based on the recent requests from our customers and the noted changes and adaptations, our support has reduced many of the challenges our customers have experienced in the past.
- What trends have been impacting your MPS offering?
Masterson: The increase of web-based services, the expansion of monitoring reports, the expansion of platforms to include local printer monitoring and MSP/MNS capabilities.
Austin: We have seen an increased acceptance of MPS at the end-user level, which has translated into significant growth for the Print4 MPS business. Some of this acceptance and the presence of OEMs in the MPS market may be a cause of the commoditization of MPS resulting in downward pricing trends. While pricing pressures are felt by everyone, we lessen the impact with our vendor independent MPS strategy.
Catch phrases abound in our industry; one such term being ‘business optimization’. Some claim to achieve this through use of their programs; however, few MPS packages actually accomplish it at the client level. The Print4 suite was developed from the ground up with the singular goal of optimizing business processes at all levels – NER, reseller, end-user – resulting in real return on investment for each party.
The other trend we are seeing gains in is mobile MPS and document workflow; the concept of which is not limited to the printed page but managing a broader definition of a “document”. NER has partnered with leading solutions providers to offer all levels of document management within the Print4 solution.
Johnson: As mentioned earlier, the changing nature of the OEM’s own MPS offerings has impacted our go-to-market strategy, although we’ve attempted to offset and participate in those changes with our backbone services offering. Also, as the overall market growth for printing and imaging has flattened and even declined for some participants, it has reduced the ability for some resellers to invest to move their business to an MPS model.
The largest trend affecting our MPS offering are the types of channels being successful with MPS compared to those who historically were our largest channels. Over the past seven years, we’ve seen a significant increase in the number of BTA/copier reseller partners buying hardware, services and supplies from us. Of course, each channel has unique needs and we’ve had to adapt to meet the needs of this channel in particular, including significant investments in connectivity to major ERP platforms supporting the BTA/copier channel.
Recently, we’ve seen the next “wave” of resellers coming into our MPS program that are classified as VARs and MSPs. They are drawn to our CPI offering in particular. Like the BTA/copier channel, we are adapting to the needs of this segment in order to facilitate growth.
Trojan: Several trends are impacting managed print: 1. Print volume is down overall, but color is up. 2. Cloud helps contribute to the decline of print volume because people can store their documents in the cloud and can access them wherever they have connectivity, meaning they don’t have to print documents like they used to. 3. Mobility has also contributed to the decline of print volume because people don’t need to print if they can download or search for their documents on their mobile device. 4. On the competitive landscape, there are more non-printing-related companies offering MPS in one form or another. 5. On a positive front, the addition of copiers to the PRINTSolv portfolio has helped because companies that purchase copiers usually have higher volume printing needs.
Alksnis: The most important thing as a distributor is to listen to what our dealers are telling us they require. We are fortunate to have an MPS development team that continues to enhance their MPS offering and continues to develop new innovations. New features are being developed currently that will be introduced to Ctrl-Prt users prior to the end of the year. These new innovations have been developed as a direct result of dealer and end-user feedback. Stay tuned.
- What’s the growth projection for your MPS program?
Trojan: PRINTSolv is one of SYNNEX’s most successful managed services programs which has been growing faster than the market over the past few years.
Johnson: We continue to be very bullish in the growth of our MPS program. We have had triple digit growth every year in our program to-date. Of course, as the business has grown, this rate of growth becomes more difficult. Yet, we expect to grow between 75% and 85% in 2013 and would forecast solid mid-double digit growth over the next three years.
Alksnis: As we are the new kid in town, with regards to MPS, we are beginning at the ground level and looking to triple our business within the next twelve months.
Masterson: We have seen an increase in 2013 and project this growth to continue into fiscal 2014. We have increased our resources, services and our offerings to support this growth within our core markets.
Austin: NER is on target to increase the actively managed fleet size by 75 to 100% by end of 2013. This growth comes from higher success rates within our current reseller base, addition of new resellers with a solid MPS background, and the new Print4 MPS programs launched earlier this year.
- What’s your MPS program’s most compelling value proposition to resellers?
Johnson: Without a doubt, our most compelling value proposition is bringing solutions to the market mitigating risk and greatly improving the operational efficiencies of our reseller partners’ MPS engagements. This has been our focus since the beginning. Our development efforts have yielded many patent filings, and our range of services that help resellers improve the bottom line have also expanded. Selling high margin MPS engagements makes the reseller happy, but retaining those margins to the bottom line keeps them in business, and that’s our forte.
Trojan: Our primary mission is to help our resellers win more deals. Our most compelling value proposition is our engagement model through our extensive field account executive team. Many competitors offer similar tool sets, but we are the only distributor that assists our resellers from beginning to end for each opportunity. This in turn helps them become self-sufficient and close deals more often. We help our resellers qualify opportunities, perform assessments, create and present proposals. The reseller always owns and maintains the relationship with the end-user, and if needed, we embed ourselves as a part of the reseller’s team.
Of course, our tremendous relationships with the majority of leading print devices manufacturers (HP, Xerox, Lexmark, OKI, Samsung, Brother, Konica-Minolta, etc.) allow our resellers to be more competitive.
Additionally, PRINTSolv is certified by the CompTIA Managed Print Trustmark, a vendor-neutral business credential designed to advance and differentiate organizations that offer on-premise print services via a managed services business model. It identifies provider businesses that have demonstrated a high level of competency and adhere to prescribed industry best practices, serving as a reference to the quality of the services these companies provide and the commitment they make to their clients.
Austin: We’ve found that many resellers excel at delivering different pieces of MPS, but fail when aggregating them into a profitable encompassing program. NER has the ability to assemble and align those pieces with our platform to formulate and provide an appropriately holistic MPS solution for each of their clients. Print4 offers a complete set of MPS components that integrate into any business environment. Resellers can match our “ala-carte” options to their business process resulting in a powerful MPS program that works for them – not the other way around.
Alksnis: It’s free! We are offering our Ctrl-Prt MPS solution to dealers at no charge with the understanding we fulfill the supply business on their behalf. Additionally, the NubePrint Predictability Outcome Technology™ allows users to have the most accurate alerts possible with the flexibility of a cloud-based MPS solution.
Masterson: Our management team has extensive experience developing successful and profitable MPS programs as company owners and executives in the reseller industry. PE offers an unbiased, consultative approach to MPS. Our approach is very unique within the industry. MPS is not a profit center to Printer Essentials and is therefore not married to a specific platform.
- What do you think your MPS program will look like in 3 to 5 years?
Alksnis: Our plan is to have our Ctrl-Prt MPS solution continue to grow with our business. As more Carolina Wholesale dealers join the Ctrl-Prt program, they continue to add more printers to their fleets and the supply fulfillment through MPS will grow. As our MPS development team continues to enhance the Ctrl-Prt software we believe more dealers will become more reliant on our offering.
Johnson: Based on the past five years, it will likely look a lot different, because this market is evolving and changing. As end customers continue to leverage mobile technology and BYOD (bring your own device), document workflow will change and impact the role print plays in the use of the document in the office. That means software and applications will become more important and will need to be part of our portfolio and operational ecosystem. Also, as the market moves from page-based pricing to seat-based pricing, our program will need to adapt to meet those market needs.
Trojan: SYNNEX constantly looks for ways to improve our technology solutions and will strive to offer additional solution-based software solutions that we can embed into our existing offering which will drive down document-related costs even further. We plan to broaden our reach by going beyond traditional output devices and focus on ways to improve document workflow. Additionally, we will continue to evaluate the financial structure of MPS to meet the needs of our resellers, their customers, and the overall business environment.
Masterson: As long as our customers continue to need support in launching and maintaining a viable and effective monitoring platform for their clients, Printer Essentials will continue to invest in support resources to meet and exceed their needs.
Austin: NER’s goals remain unchanged – we will continue to enhance our tool set with the goal of improving and simplifying the client experience. We will accomplish this via expansion of our mobile and document workflow offering, ongoing SaaS development and integration, and continued expansion of our national partner network.
- What ancillary benefits does your MPS program provide for your business?
Austin: With managed print having a foothold in the Managed Services space, we encounter resellers that can benefit from products and services offered through our Data Center Infrastructure Optimization division. Likewise, we have been able to expand our MPS reach through some of our traditional Data Center resellers. Overall it boosts business for both divisions. Also the growth of our US-based triage/help-desk needed to support our MPS offering enables us to expand into other areas of Managed Services.
Trojan: Customer loyalty and incremental revenue from adjacent technology solutions that SYNNEX offers that the reseller can roll into the solution they are selling to their customer.
Masterson: It keeps us closer to the growing and changing needs of our customers and our need to be on the leading edge of innovation and technology.
Johnson: MPS helped us see the value of adding services to our portfolio. In 2012, as we added a third party fulfillment as a separate business, we leveraged that learning to create a comprehensive, services-based offering for this completely new set of customers. The result to-date has been outstanding, and we are very excited about our evolution to become a value-added distributor.
Alksnis: Our program allows us to continue to learn more about our dealers’ businesses and the challenges they face in today’s print environment. Our MPS program help us engage these dealers, provide a solution, and further establish our relationship with each dealer. Obviously, as a distributor our core strength is providing product fulfillment and logistics support. Ctrl-Prt is a major vehicle we are providing our customers that further solidifies CW as their distributor of choice.
