Rob Sethre
After running these short pieces on whether or not MPS has become a commodity in The Week in Imaging the past few weeks I received an e-mail from Rob Sethre, senior consultant for Photizo Group a little over a week ago. He had recently written a blog post on a similar topic and wanted to share some of his thoughts about the commoditization of MPS with me. Click here to read his blog.
Spoiler alert, Sethre does not believe that MPS is a commodity.
“It’s a total red herring,” he says. “It’s something that happens again and again.”
Sethre feels that much of the talk of the commoditization of MPS has to do with the cycle that every new technology goes through. “First there’s this quick acceleration of interest and activity, then this huge drop of disappointment because things aren’t going as well as they thought and then they basically curve up to reality,” says Sethre, acknowledging he’s referencing Gartner’s Hype Cycle. “I get the feeling that MPS is in this trough of despair. There’s a lot of enthusiasm initially…and then they realize it’s tough to do. They get disappointed and then fall into old habits—selling on price, selling the box, and forgetting the service.”
Sethre references dealers who purchased PrintFleet servers only to watch them end up entangled in cobwebs.
“These things cost $50,000, $60,000 and they weren’t using them,” says Sethre. “It’s not just because they didn’t have the resources. They had a valuable resource that first, wasn’t the do all and end all, and second, they had to integrate that into the billing system and the server system, and they had to make something happen with the data. And that data was useless to them because they weren’t executing on it. That all points to people either paying lip service or doing a little bit of investment and not the full integration. When that happens you end up with less than optimal results.”
Sethre emphasizes that this is more of a symptom than a cause.
“It’s a putdown for a lot of people to say ‘you’re not executing well.’ The fact is less than optimal implementation results in pricing pressure and commoditization because then the products are similar. In that sense then there is commoditization because people aren’t implementing and differentiating as much as they can. And then you’ve got products and statements that sound pretty similar. That’s the potential as opposed to reaching the stage where there’s nothing more to be pulled out of this business.”
Can resellers still differentiate themselves in the MPS arena?
“Absolutely,” contends Sethre. “We live in these worlds of stage one, two, three, four of MPS and yes stage one and stage two is more standardized than it was a couple of years ago. There’s standard tools, standard processes that aren’t always well implemented. That’s the area where it’s harder to differentiate. But when you go up market, if you will, you can find plenty of room to differentiate.”
Acquiring vertical knowledge yields another opportunity to overcome the risk of commoditization.
“You hear people talking about getting your vertical knowledge developed,” opines Sethre. “They’re all fantastic opportunities that lead the way to the future. There’s no way anybody can tell me that package of goods and services are commoditized. It’s almost by definition never can be because even if everything was standardized on management tools, everybody was pulling data, everybody was providing proactive service, everybody had a great contract form, everybody had third-party service and whatever you wanted to package in the bundle, there would still be the next stage which is everything else you haven’t touched yet.”
He feels that MPS by nature is self defining and that it can’t be commoditized.
“It sounds a little gruff, but the people claiming that either never got a grip on what it is or they’re using that phase as an excuse to explain their own lack of success,” states Sethre. “It sounds a little grumpy when I say it that way, but people who complain need a little bit of a kick in the pants. Those people need a nudge in the direction of where the opportunity is.”
In his opinion, the free market will be the ultimate decision maker as to where the MPS opportunities lie.
“If the market decides that more upscale [opportunities] are of interest or of value, you have to address that market. This has been going on for years in the industry. ‘If I finally get digital I can make money. If I get color, I can make money.’ As soon as you develop that skill set you have to be thinking about where to take your business next. There are probably a handful of people who say, ‘if I can finally get some MPS things in place I can make money.’ That’s denying the fact that success is going to come from very active and wakeful and continual activities. That’s where the business is going to continue for a long time.”
That’s not to discount the entry level segment of the MPS market.
“I have no misconception that [there’s an opportunity] for the Supplies Networks and others working in the direction of good automated systems for the type of customer and engagement they’re going after. But they can’t scale up that big and take that system up into a larger and more sophisticated engagement. You’re not going to have the right structures, processes, and skill sets. That split look at the market is important to know where the opportunities are and it’s up-market opportunities.”
Going back to commoditization Sethre is still hesitant to say entry level opportunities are commoditized.
“There’s still plenty of room to play in that sandbox for awhile.”
