Abbott and Costello. Captain Kirk and Mr. Spock. Lennon and McCartney. Heck, you can even add Cagney & Lacey to the list of dynamic duos that are inseparable in our minds and certainly realize their greatest potential when working in tandem.
It’s only fitting that we add A4 and managed print services to that list. With that in mind, we usher in this month’s State of the Industry look at A4 devices with some thoughts from our dealer panel regarding the symbiotic relationship between the two and their role in delivering a true MPS value proposition to end-users.
Sean Sullins, vice president of sales for Cincinnati-based Prosource, points out that A4 has had an “enormous impact,” particularly in regards to bringing hardware into the dealer’s overall MPS strategy. Prosource seeks to understand the client’s environment and applications as opposed to focusing only on service for large footprint accounts laden with equipment. A savvy assessment enables the dealer to incorporate A4 in a way that makes sense to the client’s overall technology environment.
“Since A4 devices have gotten bigger, better, faster and more reliable, that enables us to make better recommendations that have a positive impact on our customers as well,” Sullins said. “For the customer, getting the right product means they may have lower costs overall. They can reduce their footprint and save on space and electricity. And today’s faster, more reliable A4 devices often mean that customers can consolidate equipment because the machines can handle more volume and are more reliable.”
Trying to establish a true definition of MPS can be a chore, however, and not all dealers will agree on its main ingredients (call it the coleslaw of business technology solutions). Josh Salkin, a partner with Atlanta-based EDGE Business Systems, notes that a survey of 10 dealers might yield 10 different responses. For EDGE, MPS is all about a contract that includes a device, toner and service.
“Technically, an A3 device with a corresponding service contract is MPS, but it’s typically defined for the A4/desktop model,” he said.
EDGE has experienced mixed results with some of its vendor partners; some have struggled with inventory during the pandemic, others were nixed due to their insistence on the dealer providing end-user data. “Canon has a complete A4 product line and inventory has been the most favorable, so we’ve really benefitted from that partnership,” Salkin added.
Sean Bell, president of Solutions YES in Portland, Oregon, points out the A4/MPS combination has been a core part of the company’s approach throughout its 10-plus years in business. One of the most significant developments within the offering occurred in the second quarter of 2020 when the dealer saw an 80/20 balance of lease to cash pacts tip almost exclusively to leasing.
“We saw cash customers dry up in 2020, and a majority of those were still on the fence in 2021,” Bell pointed out. “We have to grow through net-new customers that lease, and as we get into 2022 and 2023, we’ll see demand for cash customers to upgrade.”
The inclusion of A4 in an MPS platform creates a better value proposition, notes Gregg Petrie, president of Copiers Northwest in Seattle. A3 devices held the advantage of operational costs, which offset the hardware cost. Now that A4 devices can offer similar speeds at a more economical price, Petrie believes it is the winner going forward in light of declining volumes.
Petrie also notes the impact of the new Financial Accounting Standards Board (FASB) rules—resulting from questions regarding accounting standards following the Enron collapse—requiring lessees to record assets and liabilities for operating leases. “Our new MPS program is truly a monthly expense with customers paying for images, not renting or leasing devices,” he said. “Instead, Copiers Northwest-owned assets are installed, and our customers and paying for a true managed print services agreement monthly based on images produced.”
