As market continues to grow for MPS, future sales face competition, hurdles.

The market for managed print services (MPS) continues to grow at an impressive pace in North America and Western Europe and may combine to reach $26.7 billion over the next four years, or more than triple the size of 2007's $8.5 billion total, according to the new "2008 MPS Market Size, Share, and Forecast Analysis" from the Photizo Group, a consulting and research firm that specializes in the imaging market.

In addition, North America and Western Europe, which may grow to represent 35 percent of total imaging sales by 2012, are now experiencing 20 percent compounded annual growth in MPS contracts, says Edward Crowley, CEO and managing partner at Photizo (www.managed-print-services.com).

Although MPS revenues are growing, the numbers don't tell the whole story. Solution providers that include MPS as part of their long-term expansion strategies will need to navigate a range of competitive threats that can make new MPS sales more difficult. For example, Photizo identified what it describes as three ongoing "myths" in the MPS segment.

First, just because a customer allows a solution provider to assess the printing and imaging infrastructure for possible MPS opportunities, there's no guarantee that the solution provider will eventually receive the MPS contract. In fact, nearly half of the MPS decision makers who participated in Photizo's survey signed on with a different company, which puts the odds at about even that an assessment win will translate into revenues, Photizo says.

Second, leasing arrangements aren't as integral to MPS contracts as many companies believe. For example, Photizo found that in about 52 percent of MPS engagements, the client purchases the hardware.

Third, MPS contracts don't have to be implemented on a global scale. While about half of the MPS agreements it studied spanned multiple domestic sites, fewer than 15 percent were global engagements.

Sales Strategies

Nevertheless, solution providers can put themselves in a strong position to tap MPS growth while also contending with its mercurial nature. Solution provider sales strategies can be bolstered by market trends that point to continued MPS penetration in the business world based on the services' ability to bridge the gap between formerly separate copier and printer technologies, Photizo says.

In addition, key MPS components, such as multifunction products, will continue to act as "on and off ramps" that enable new deployments of workflow applications, which, in turn, can lead to business-process optimization efforts, the researcher says.

Finally, Crowley says that when IT and copier dealers drive down hardware margins as they compete for the same customers, MPS contracts offer a way out of outmoded transactional sales strategies by providing the potential for improved profits and larger market share.

But there's not likely to be any letup in the competition for MPS revenues anytime soon. Customers now have a wide variety of options for implementing MPS programs, including local or national dealers, or using a hardcopy vendor's direct MPS program, he adds.