by Jiquiang Rong
This article examines data from Lyra’s Office Print Monitor (OPM) service as it relates to the legal services, manufacturing, and educational services sectors—three very different vertical markets, each with different printing requirements. An understanding of the similarities and differences between various vertical markets can assist vendors in making appropriate recommendations for their clients through their managed print services programs.
Number of Devices Tracked and Installed by Vertical Market
Figure 1 indicates the number of devices that Lyra tracks in the legal services, manufacturing, and educational services vertical markets and also displays the percent of the total panel that each vertical market represents.Lyra tracks about 2,000 machines in the legal services vertical market, the fewest number of devices of the three verticals, compared to about 8,500 devices in manufacturing companies and about 11,500 devices in the educational services segment.
In terms of the number of devices installed per company in these vertical markets, legal services has an average of 14 devices per company, while manufacturing has about 29 devices per company and educational services has an average of 53 devices per company (see Figure 2). This data indicates that educational institutions—which include elementary and secondary schools; colleges, universities, and professional schools; libraries; and vocational schools—rely heavily on printing and distributing documents within their organizations.
According to the 2007 U.S. economic census, manufacturing companies have a much larger number of employees per establishment compared to legal services companies, which are included in the professional, scientific, and technical services category. This explains why there are more devices per establishment in the manufacturing industry compared to the legal services market.
Average Number of Employees per Vertical
The average number of employees and the number of employees sharing a printer varies among the three vertical markets. The legal services market contains the fewest employees per company in Lyra’s OPM panel, with an average of 17 per company (see Figure 3). The employees in legal services companies typically do not share their printers with a large group of people—an average of only 1.8 people share a single device in this vertical market. Given the confidentiality of legal documents, as well as the volume of documents that each person must print daily, it is logical that an attorney and a paralegal, or a partner and an administrative person, for example, may share a printer.
Types of Devices Installed
There are some significant differences in the types of devices installed in each of these three vertical markets. Almost 60 percent of the devices installed in legal services companies are monochrome laser printers. Another 25 percent are monochrome laser MFP devices. In total, about 85 percent of the devices in the legal services segment are monochrome laser devices. This is an indication of the high demand for text-based printing in this segment.
Color laser printers account for only about 6 percent of the devices in the legal services segment, and color laser MFPs account for about 7 percent of the total number of devices (see Figure 4). This shows that there is not much demand for color printing in the legal services market and that the vast majority of legal document output is monochrome. Inkjet printers account for about 2 percent of the hardware devices installed in the legal services segment.
In the manufacturing market, there is much greater demand for color printing than there is in the legal services market. About one-quarter of the devices in the manufacturing market are color laser printers or color laser MFPs. Monochrome laser printers account for 47 percent, while monochrome laser MFPs account for 22 percent of the devices.
There is not much demand for inkjet printing in the manufacturing segment—about 3 percent of the hardware installed in this segment is classified as inkjet or inkjet MFP. There also is a very little demand for wide-format printing in this segment—0.2 percent of the devices in the manufacturing companies are classified as wide-format.
Educational services also rely heavily on monchrome laser printing. Fifty-six percent of the devices installed in this segment are monochrome laser printers. Compared to the total panel of 121,122 devices, there are relatively few monochrome laser MFPs in the education services market. In the OPM panel, 22.5 percent of the devices are monochrome laser MFPs, while only 16 percent of the machines in the educational services segment are monochrome laser MFP devices. It is possible that companies in the educational services market require less of the copying, scanning, and faxing capabilities provided by multifunction printers.
Color laser printers are more prevalent in the educational services market than they are in the legal services or manufacturing markets. Color laser printers account for 19 precent of devices in the educational segment, 11 precent of devices in the manufacturing segment, and 6 percent of devices in the legal services segment. Color laser MFPs account for only 5 percent of devices in the educational segment, again showing that the educational services market demonstrates a weaker demand for the capabilities offered by MFPs.
Average Monthly Print Volume
The legal services market may be the smallest of the three vertical markets, but it produces more monthly output than the other two vertical markets combined on a per-device basis. Legal services companies produce 7,155 pages per month per device. This is a very large volume of output considering that only about two people share each device at these businesses. In contrast, the manufacturing segment produces 3,227 pages per device per month, and an average of 9.6 employees share a device at these companies. The educational services market produces about 2,600 pages per month per device, and about three people share each device at these institutions (see Figure 5).
Examining average monthly print volume per company by selected vertical markets shows that in Lyra’s panel, the legal services segment produces 102,188 pages per month, while the manufacturing segment produces 94,153 pages and the educational services segment produces 138,629 pages. With just over 2,000 devices in the panel—compared to 8,400 in manufacturing and 11,500 in educational services—the legal services segment is definitely the most print-intensive of the three vertical markets that we have compared (see Figure 6).
What This Means for Your MPS Program
From an MPS vendor standpoint, there are benefits to targeting legal services companies. These companies have the potential to be a lot more lucrative than businesses in other vertical markets simply because of the huge number of pages they print each month. Because these machines consume a high volume of toner, supplies revenue alone will be very high. Companies in the legal services vertical market also are typically smaller than manufacturing companies and educational institutions, and this means that people with the authority to sign an MPS contract may be easier to locate in a law firm compared to businesses in the other two verticals.
MPS vendors also may find opportunities to standardize hardware in the legal services market, limiting the machines installed in each company to one or two monochrome laser devices, depending on what type of machines are already installed and the age of the existing fleet. This would make it easier to service hardware and deliver supplies. Also, because many companies in the legal services market already track their printing in order to charge printing expenses to specific clients or cases, some companies may already be using tracking systems, which may make them more receptive to managed print services programs in general.
The educational services vertical market also relies heavily on printed output and produces a high volume of pages each month. Printer hardware is widely dispersed in these institutions, with only about three people sharing each device. In this market segment, MPS vendors should likely encourage device consolidation where possible. By removing some personal devices and deploying fewer, higher-end networked devices, significant savings could be realized. The prevalence of educational services companies in Lyra’s OPM panel indicates that many of these organizations are already using managed print services, which means it is likely that many more would be receptive to adopting an MPS program.
The educational services vertical market also presents some challenges for MPS vendors. For example, institutions with large organizational structures may be more difficult for MPS vendors to penetrate. If devices are widespread throughout a large organization, it could be difficult to locate decision makers and convince them of the value proposition of an MPS program. Some educational institutions may have preapproved lists of vendors from which they are authorized to purchase devices, and this could make it difficult for a new vendor to enter the market.
Like the educational and legal services vertical markets, manufacturing also has substantial printing requirements. Companies in this sector have a wide variety of printer hardware installed, including color laser MFPs and color laser printers. The companies that Lyra tracks in the manufacturing vertical market have an average of 154 employees per company. These are large companies in which an average of almost 10 employees already share one output device, although not all employees necessarily require the ability to print. In this segment, MPS vendors must aim simple, straightforward messages directly at IT departments that are struggling to manage the technology infrastructure for a large number of users.
For large companies in which imaging devices are widely dispersed, simply identifying all the hardware currently installed and then tracking output and usage can help MPS vendors identify areas in which manufacturing companies can save money. This may appear to be a very simple message, but when large volumes of output are involved, changing some workgroup sharing patterns and possibly replacing some older machines can potentially result in significant savings. Overworked IT departments usually do not have time to monitor output and workgroup patterns in order to determine the best way for groups to share devices. Managed print services providers can do this for large companies without having to burden their internal IT department.
Vendors also must emphasize to IT departments that MPS programs include features that allow their printing devices to be repaired faster when they break down. Machines managed with remote monitoring technology can send error codes directly to the MPS provider, immediately alerting them about a problem. This method of error reporting is much faster than relying on users to call their IT department to report a malfunctioning printer. This feature is a key benefit for companies that have a large fleet of machines to manage.
Understanding the typical structure of printing environments in specific vertical markets allows MPS providers to develop vertical-specific offerings. In combination with understanding the needs of a specific client, this gives vendors the opportunity to provide each of their customers with an MPS program tailored for their business.