Business opportunities and competitive challenges continue to grow for managed print services.

As managed print services continue to go main stream, growing sales opportunities mean more and more solution providers will be competing for business in this area. For example, one recent study by the Institute for Partner Education and Development found that 67 percent of solution providers are currently selling managed services while another 16 percent plan to add the offering in the next year. "That means you and your peers are getting heavily involved in managed services," says Edward F. Moltzen, senior editor for CMP Channel.

Moltzen was part of a November panel presented by CMP Channel that provided an overview of the managed print services market (see a replay).

Fortunately, solution providers also are seeing a growing number of new tools to help their managed print services programs. For example, remote monitoring technology makes printer fleet and inventory management less time consuming and therefore more profitable for solution providers. Better and more economical color printing technology has also made color services offerings more attractive for both customers and solution providers, Moltzen says.

These maturing technologies are setting the stage for expanded consulting services at both the pre- and post-sale stages to help customers better control costs. "Consulting is a key ingredient when delivering managed print services," he adds. "You and the customer develop a game plan for making costs more predictable."

How to succeed
But given the increased competition, how can solution providers carve out a successful market niche? One answer is to target specific vertical markets and hone in on the unique needs of that area. Becoming expert in one industry segment also makes it possible to sell to other organizations in that arena without a lot of additional upfront research.

Solution providers searching for verticals to target should consider state and local government customers, which offer attractive opportunities for growing a revenues and profits. According to Moltzen, solution provider sales strategies for the public sector should focus on that area's document retention requirements. "The story is more complicated than vertical markets like retail, manufacturing, SMBs," he says. "There are a number of statutory and historical reasons why information has to be retained, archived, and management properly."

Industry research shows that 80 percent of today's organizations don't actively manage their printer fleet, "So the opportunity is enormous," says Jack Byrne, Oki Data Americas printing solutions manager for managed services program development. He advises solution providers to sell the economic benefits of the service, noting that active printer fleet management can reduce overall printing costs by 10 to 30 percent. "It's an on ramp and a new revenue opportunity," Byrne says.

Education is key
However, solution providers shouldn't let the promise of new profits blind them to one ongoing challenge associated with managed print services—end-user education. "Most customers in the public sector probably don't know what managed services are when it comes to printing," says Jim Ingalzo, deputy chief information officer for the Pennsylvania Office of Attorney General.

The right managed services contract delivered dual benefits for Ingalzo's office. It acquired color printing capabilities only after it "figured out how to deploy and manage it" within a managed services contract, he says. "If you manage [print services] correctly you get a great deal of savings and enhance your services."