by Robert Palmer
If you spend much time following the imaging business these days, there is one question that is often repeated: How long can printing remain relevant? It is an interesting question to ponder. On the one hand, the printing business is under attack from numerous disruptive forces, all of which have been discussed and debated by pundits the world over — including within the pages of this publication. Yet the “paperless office” that was predicted more than 20 years ago has been very slow to materialize. Printing, while certainly threatened and on the decline, remains an important part of our everyday lives.
There are segments of the printing business that show greater signs of fatigue than others. The home printing market, for example, continues to shrink for a number of reasons. To begin with, home photo printing, which not long ago was the boon of the consumer printing segment, began to plummet with the massive adoption of online and retail digital photo printing services. Once consumers found a less costly and more efficient method for producing photo prints captured by digital cameras, the writing was on the wall for the home photo printing market.
Meanwhile, consumer adoption of online services combined with the penetration of mobile devices (smartphones and tablets) has significantly altered the landscape for printing at home. The impact has been felt in a variety of areas, from general home printing to student papers, correspondence, bills, archival, entertainment — you name it. Consider then, the factors that have fueled the decline in the home printing space: the rapid transition to digital display technologies, continued adoption of online and cloud-based services, and alternative methods for outsourced prints. Sound familiar?
Commoditization of MPS
There are lessons to be learned from events in the consumer printing market. First and foremost, the office imaging industry needs to continue to work hard to keep printing relevant in the eyes of the business user. The shift to MPS has helped sustain the office printing business by focusing on issues such as reduced fleet costs, device consolidation, elimination of redundancies and improved service and uptime. For the same reasons, however, MPS has in many ways minimized the value of printing. This has occurred not only in the form of reduced hardware and page volumes, but even in a much narrower view of printing as a valuable business function.
Once positioned as a differentiator, managed print services is now viewed as necessary for any vendor or provider participating in the office imaging market. Indeed, MPS is one of the few growth areas remaining in the office space. Success for many providers is measured by machines in the field or pages under contract. In order to drive profits through MPS and push CPP rates lower than those of their competitors, providers consistently look for ways to take cost out of the system. In many ways, MPS has therefore become a business driven on price — a commodity.
We are already feeling the effects of commoditization at the very low end of the MPS space, where customer engagements typically involve only basic fleet-management services. Within this ultra-competitive environment, there are numerous providers competing on the same premise: optimize the print environment to reduce customers’ overall printing costs. The result is a challenging market wherein competitors use similar tools for assessment and auditing while positioning reduced cost as the primary value of MPS.
Changing the conversation
The longevity of any market depends highly upon the value associated with the products or services offered. Therefore, it is imperative for vendors and channel players alike to shift the MPS conversation from fleet costs to service value. Much of the conversation on this topic today revolves around the need to move beyond print and focus on areas such as managed IT, workflow and other document-based services. These are certainly important, but it also seems that our industry could benefit from a renewed focus on the value of printing itself.
One area where MPS has actually stunted market growth is in the transition to office color. In many MPS engagements today, color is viewed as an opportunity for cost savings — achieved either by reducing color pages or restricting and/or eliminating access to color devices. Of course, color is expensive, and there remains a strong concern over the abuse or misuse of color in office environments, but we need to be careful that opportunities for color are not lost in the desire to drive costs lower.
The value of color printing becomes even more demonstrable when you consider the recent advancements in display technologies. Color is exploding all over the corporate environment today through mobile devices, HD screens, laptops and digital signage. As an industry, we should be striving hard to make sure business users can produce affordable color prints that match the color quality of their digital displays. In short, color needs to be much more affordable and accessible, even within the confines of an MPS engagement.
Advancements in technology are helping to drive down the costs for color printing. Indeed, new pagewide, ink-based technologies on the horizon could significantly change the cost structure for color in the office. It is important that the industry does not devalue color to the point where improvements in price and performance no longer matter.
Selling value instead of cost
Given the threats that face our industry, it is wise to question the long-term relevancy of print. The transition to mobile devices is certainly impacting how business is conducted, and there is no question that there are fewer reasons to print today than there were just a couple short years ago.
Historically, printing has been viewed as a necessary but unmeasured business expense. Printing has always been a critical business function — but not necessarily an integral business process. The shift to MPS has helped change those perceptions by raising awareness about the costs associated with printing. Yet providers need to take that a step further by ensuring that customers understand the value of print as a service and the importance that print plays in the overall business.
Selling on price has always been a challenge. With little market differentiation, the playing field is leveled, and everyone is susceptible to competitors that can undercut one’s position. To foster a sustainable business model that generates repeat business, it is best to establish value. Offering extended services is one way for MPS providers to establish that value, but as a supplier of printing services, the value of printing itself should not be understated.