Sunday, August 1, 2010

Managed Print Services: EatersOfTheDead

August, 2010 -

I recently attended a webinar hosted by the MPSA. The subject matter included a quick synopsis of the MPS industry by InfoTrends and future view of the MPSA and how our members can contribute to the growth of the Association.

Jim Fitzpatrick, MPSA President presented very well.

The "state of the industry" provided by InfoTrends was great, relevant - unfortunately for me, nothing new.

A re-occurring theme was exposed - the cannibalization of our industry.

Randy, from InfoTrends, observed the "eroding of the supplies market..." and that there is no "real expansion in the market..."

More poignantly, we are "cannibalizing the market".

Randy and others are half right.

Back in June, Tom Callinan presented an opinion piece, "MPS: The 30% Catastrophe vs. The Reality".

The first two paragraphs:

"...Many commentators in the MPS space like to talk about the 30% savings companies receive through an MPS agreement. I guess it helps them sell research, advance the theory of displacing printers with departmental MFDs, or helps the weak sales person generate some commission and retain his (her) job for a period..."

Ok, that whole bit after "I guess..." is a bit transparent. Obviously a slam against those of us who think we can actually displace MFD's, we who generate commisions or peeps who sell research...like IDC.

Anyway - Paragaph 2:

"But I have to ask a simple question, what is the rational to deliberately taking 30% of the revenue out of our industry? Overcapacity and technological improvements are already creating year on year decreases in hardware and aftermarket pricing and A4 is replacing A3 at a lower unit selling price. Those environmental changes should easily drive 10% of revenue per year out of our industry. Over the last two years units sales have decrease by more than 30%; they are gone and probably will never come back. Now we are all going to join in a concerted effort to drive an additional 30% of revenue out of the imaging space? Let’s all go to the jungle and drink some Jim Jones juice!.."

I love the "drink the cool aid" reference - how appropriate.

Throw in this, from Luke Carpenter, CEO, Expert Laser Services, Adventures in Office Imaging:

"...it rips me to see our industry -- an industry which has had to fight long and hard to gain respectability and secure our seat at the table -- dragged back down into the muck by a bunch of greedy, know-nothing talking heads. The drill-and-fill and void-my-warranty fears of the remanufacturing industry's past will be replaced by a managed print services label of incompetence, short-ships and product failures..."

These guys are no slouches - they've both been around the copier, FM and toner re-man world since the beginning.

And they see the truth.

The story goes like this; there are a finite number of prints, a pie, available to a reasonably stable number of folks in the industry. With only 10% of all "cartridge based" output devices under an MPS engagement, the pickings look good, that pie is big.

The contention is that we are all simply trading our clients' spend, and not creating any new revenue - as one of the best Sales Managers I ever worked with once said, "we're just moving the jello around." The players are sitting at the round table, grabbing as much as they can.

Tom goes even further, asking, how can we continue to exist, if we as an industry consciously take another 30% out of the market, by reducing our clients' costs by 30%?

Good Question - for all you old skoolers in the industry that is.

But what about the new breeds? The Hybrids coming from OUTSIDE the industry?

If my client is spending $100.00 with Xerox or IKON, and I can reduce their cost to $70.00 and pick up that $70.00 of new MPS revenue, who is that a bad thing for?

I'll tell you who, all you folks who dropped big coin and willingly filled ex-copier guys "strategy sessions" simply to be told what you want to hear:

MPS is just like color
You don't need to change your business model to implement successful MPS
You need 2,000 hours of "mentoring"
You can use your existing sales team to evangelize MPS opportunities
You can run MPS under your existing service model
On and on...

While all you guys are trying to figure out which consultant has the best talk track, and while you are listening to the old skool dogma spewed by simple "enablers", just know that there are companies and players out there that have no MIF. For them, every client can save 30%-50% and every click they take for you, is NEW REVENUE for them.

These firms have thousands of IT contacts and hundreds of IT projects under their belt.

And while you're worrying about your slice of the pie being withered away, watch as your peers begin to die.

Witness the Outsiders, the EatersOfTheDead, consume the MIF of the fallen before casting a narrow glance in your direction.


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So, how does EatersOfTheDead figure in with MPS?

As you know, The 13th Warrior is a film adaptation of the book by Michael Crichton, Eaters Of The Dead.

Crichton's work is based on the poem Beowulf - Beowulf is the oldest surviving epic poem in the English language and the earliest piece of vernacular European literature.

The poem's exact creation date and author is still a mystery and is considered one of the earliest, written, works.

Key word, written - like on paper n stuff...



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