A Look into Print Audit’s Take on the Industry’s Changing Landscape
It’s no secret that the days of cost-per-page (CPP) billing for managed print contracts are numbered. In April, we covered a Print Audit blog entry predicting the established pricing model’s extinction. In that post, West McDonald, Print Audit’s vice president of Business Development, cited declining print volumes and declining profit margins as a sign of a changing industry.
Luckily for MPS providers, all is not lost. In July, Print Audit released its e-guide entitled “Diversifying Beyond Managed Print,” which offers a host of ways in which resellers can come out ahead in a climate where CPP billing no longer guarantees success. The experts at Print Audit assembled five potential offerings—as well as their drawbacks—on what they call “the path of business diversification.”
-Workflow/BPO (Business Process Optimization): There is no shortage of products on the market that help customers optimize their business processes. These solutions can serve many functions, from scan capture and routing to full-fledged document management/ECM platforms. Print Audit recommends keeping up to date with industry publications to read the latest on Workflow/BPO software. Incorporating these solutions into a service contract can pay off very well for dealers. Additionally, the amount of providers selling these products is still small relative to the number of MPS dealers, leaving the market wide open for the progressively minded. Dealers can monetize these solutions in many ways, but Print Audit recommends a contracted term subscription for recurring revenue. Not all is sunny and bright in BPO, however. Print Audit cautions that enterprise-level solutions in this sector are often handled by OEMs, making that market quite saturated. Providers should look for smaller clients to begin breaking into this space.
Print Audit’s guide has made clear that the changing landscape is as much of an opportunity for growth as it is a challenge to established practices.
-Managed Service Provider/Managed IT Services: These services allow for the outsourcing of IT-related functions. How companies use these services can differ: some will outsource certain functions (the guide uses the example of desktop computer support specifically being handled by a third party) and others will have their entire infrastructure managed from the outside. Managed services are often priced on “value-based billing” models and clients are charged per seat or user per month. Often, companies have to invest in tools, training, staff and more in order to succeed in managed services. With that in mind, many companies have tried to offer managed IT (MIT) and have failed due to the lack of necessary resources and knowledge. Additionally, many MIT customers tend to be small, so providers need to assess the market and see if offering such services is worth their time and resources.
-Cloud Services/SAAS
The guide describes cloud services and SaaS (software as a service) as one of the most disruptive models of the past decade. In recent years, Google, Microsoft, Salesforce and other companies have been the leading providers of cloud-based email, document storage, and applications. These services often run on a “freemium” model, giving users certain privileges and amounts of storage for free but requiring payment—usually in the form of a monthly subscription—for full functionality and storage space. Offering these services can be useful as an additional revenue stream, but resellers should be cautioned that most cloud options bypass the managed print channel altogether and those relationships happen directly between companies like Google and the end user customer.
-IP Telephony/VOIP
“Internet Protocol Telephony” or “Voice over Internet Protocol” is defined by Print Audit as “communication technologies that encompass using packet-switched connections to enable people to talk to each other.” Replacing the POTS (plain old telephone service) can be an incredibly beneficial way to add to one’s business services portfolio. These technologies are also commonly charged on a “freemium” model; one of the most popular services of all, Skype, only charges for calls to landline phones. Subscription models, usually priced per user per month, are also popular. Benefits include the ability to engage in video conference calls as well as the huge savings to the customer in switching over from more expensive POTS services. IP telephony/VoIP also allows users to route calls to any number of devices in multiple locations. With that said, providers should also be aware that services like Skype and Google Hangouts are mostly free to use (with the aforementioned exception of calling landlines) and employ a direct-to-consumer model that bypasses the reseller altogether. Call quality is another concern for those looking to adopt this functionality, as quality depends on connection strength.
-IOT (Internet of Things)
The Internet of Things describes the progression of the internet to the point where everyday objects have web connectivity. This can be anything from Google’s NEST thermostat, which allows for remote management of heating and cooling systems, to more outlandish products like trash cans that will notify municipal employees when they are full. Print Audit notes that this market is “poised to be a $19 trillion dollar opportunity,” which is too promising to ignore. The e-guide continues: “Given the rate of change a dealer would be well advised to at least keep abreast of the IOT as it grows and evolves.” There’s no concrete data on how a provider would monetize IOT management, but subscription pricing seems like it would be the best way to approach diversifying. The main concerns about IOT at present are standardization and interconnectivity—and, making early choices on brands and products that could be dominated in a short period of time is risky.
Print Audit’s guide has made clear that the changing landscape is as much of an opportunity for growth as it is a challenge to established practices. Diversification stands to be the best way for office equipment dealers to stay ahead of the competition and grow in this changing business. For more info, check out the full Print Audit guide today.
