by Charles Brewer, Actionable Intelligence
Over the past few months, I’ve blogged regularly at The Imaging Channel website about the various MPS market forecasts that currently exist within our industry. As you probably know, there’s a wide range of estimates out there as to how big the market is and how fast it’s growing. The large delta between the high and low estimates is unsettling because it underscores that the MPS market remains obscure and ill-defined.
Depending on whom you believe, this year the worldwide MPS market may be worth around $8 billion, which is at the low end of the estimates, or in excess of $25 billion on the high end. Looking forward, forecasts and growth rates range just as widely. Some predict that the market is growing at a compound annual rate of between 8 and 9 percent, while others insist annual growth is well above 20 percent. Various pundits predict the market will be worth over $60 billion in just three short years. Others maintain it won’t be nearly that big.
As I’ve blogged about the competing estimates, visitors to our website have been more than willing to leave comments. Some have even taken the opportunity to contact me directly. Regarding the actual size of the managed print services market, I can say from firsthand experience that people have plenty to say. In general, the comments I received were insightful—and sometimes quite passionate. Despite differences in how individuals lined up with the competing estimates, there was one area of commonality: even at this late date, the industry has yet to reach consensus as to what MPS is—and what it isn’t.
We recently polled visitors to The Imaging Channel website about their views on the size of the MPS market. While our results were far from scientific, they were not surprising. The majority of visitors who took our poll indicated that the market lacks meaningful benchmarks that would allow it to be accurately sized. In fact, a third of responders felt the market is too diffuse to be measured at all. If our poll is even vaguely indicative of the industry as a whole, it’s obvious that most are bewildered about the size of the market, which means they are unclear of the size of the opportunity it represents.
The ambiguity that continues to cloud the MPS market does more than just lead to questionable sizing forecasts. Far more serious is that the lack of clarity leads to confusion in the marketplace. Even today, sales teams are often challenged as they attempt to differentiate between what’s new and innovative from what’s just more of the same old thing. Vendors have added to the confusion by repositioning older offerings as “new” MPS products, without actually adding any substantive enhancements. As a result, customers often fail to totally grasp the full value proposition of bona fide MPS solutions. Confused and unable to recognize the total worth of groundbreaking MPS products, consumer interest is stymied, if not lost altogether.
Unicycles to the USS Enterprise
One of the industry’s trade organizations, the Managed Print Services Association, has been wrestling for a while with the question, what is MPS? Formed last year during the Photizo Group’s 2009 MPS Conference in San Antonio, TX, the MPSA seeks to establish standards for the industry and promote communication. It undertook the unenviable task of drafting a formal definition for MPS. On July 8, the MPSA issued its definition, which the association claimed would help set expectations for both end-users and providers, and also help establish standardized services. The MPSA defined MPS as “the active management and optimization of document output devices and related business processes.”
The MPSA did a nice job defining at a high level what managed print services do, but left it up to the industry to designate what these services are and how they operate. In this regard, the definition fell short of its claim of standardizing services. The definition offers no insight at all into which services actually provide the active management and optimization of document output devices and related business processes. Unfortunately, the definition is just too brief to be of much value.
Defining any market isn’t easy. Even in the most familiar and traditional markets—and the MPS market is neither—there’s ample room for confusion. Consider the transportation industry. Let’s define the market as products and related services that move people or freight from point A to point B. That’s a reasonable definition, but it’s just too broad to be helpful. You could legitimately include a disparate mix of products ranging from unicycles to aircraft carriers, or roller skates to spaceships, as part of the industry. Now, let’s look at transportation services. Okay, let’s not—but you get the picture.
My contrived example illustrates some of the problems with the MPSA’s definition. Like the association’s definition of MPS, my definition of the transportation industry does nothing to narrow the market into useful categories that can be mined for meaningful data. With such diffuse definitions, how can analysts accurately gauge how fast either market is growing? What are the key trends shaping these industries? What are the end-users’ demands? How are hardware vendors addressing those demands? What new services are available in either industry? And so on.
A Modest Proposal
What we really need is a more comprehensive definition as to what managed print services are. Currently, competing analysts cram a lot more than just services into the MPS “bucket” before sizing the market. I visited the websites of the leading market research firms that are sizing the market, including IDC, InfoTrends, and the Photizo Group, to see what goes into their MPS estimates. Unfortunately, none of the competing firms were very specific as to their methodologies or exactly what they include in their forecasts. The descriptions of their competing services, however, suggest that hardware, consumables and software, as well as services, are all part of the various MPS forecasts. I think this is akin to my transportation market.
To add clarity, I suggest the MPS industry take a page from another high-tech service that emerged a couple of decades ago: enterprise resource planning. I know a little about ERP because in a prior life I managed several newsletters for SAP professionals. At the time, SAP was the German software developer that dominated the ERP industry. Like the MPS market, the ERP market is made up of various disparate components, including hardware, software and services. In general, however, the ERP world is split into two parts—software and hardware—and the services components that support each of the two are included with their respective category.
What I propose is that we think of the MPS industry in two segments—hardware and software. The “hardware” segment would include machines and software such as drivers that come standard with the device. Because consumables are such an intricate part of any MPS package, they should be included with hardware. The “software” segment would include software that specifically supports MPS and any IT infrastructure needed exclusively to support the software. The various services that support MPS should be assigned to either hardware or software. Once these divisions have been made, subcategories could be established, for example, “office” and “production” for hardware, and “work flow” and “print monitoring” for software.
There is no time like the present for market researchers and the industry as a whole to come together in the interest of seeking clarity. The MPS market is maturing and should be recognized for what it is and isn’t. All of the players in the industry need accurate data to understand who’s winning and who’s losing, and individual firms need to know what their position is on that continuum. The data needs to be accurate and clear so people can understand how the various components are performing and why. More importantly, having some commonality in services will make things much more understandable to end-users. And that would be in everyone’s best interest.