In the world of managed print services (MPS), Europe represents an interesting set of contradictions. Some of the first major enterprise MPS engagements took place in Europe. Lexmark’s win of UBS, Ricoh’s win of Unilever and a number of other large multi-country engagements in the late 1990s and early 2000s were constructed in Europe and mark the beginning of MPS engagements.
While many of those contracts were closer to a “pay-for-print contract” than we would consider true outsourcing today, these engagements represented the beginning of an industry and a new business model for a traditional, transaction-centric industry. They also provided an incredibly rich learning ground for early pioneers to begin developing infrastructure for today’s global MPS engagements.
Given this early lead, the European market should be the ‘centre’ of MPS globally and to be leading the market. In some ways this is fulfilled, there is an incredibly rich experience base, and some of the leading firms in the MPS assessment market are based in Europe.
At the same time, the very nature of the European market has presented challenges that have delayed progress relative to North America. Europe is not one homogenous market; it is a collection of many different markets, each with different languages, economic structures and distribution channels. A recent study has shown that the decision makers, decision-making dynamics and underlying market structures are very different in countries such as the United Kingdom, Germany and France.
Unlike North America, where numerous pan-American distribution organisations with MPS capabilities exist (such as the IKON group acquired by Ricoh or the Global Imaging Solutions group acquired by Xerox), there is no pan-European distribution channel for MPS. Perhaps more importantly, there is a very limited set of pan-European ‘infrastructure’ providers (financing, software, parts, service and supplies companies) to enable the MPS capabilities of resellers.
So, while the European market has some of the most experienced personnel (particularly among the hardware manufacturers who have been providing MPS directly to the customer), the channel opportunity for MPS is just beginning to emerge.
A recent conference in Barcelona provided a clear glimpse into the uniqueness of the European market. Over 160 attendees from hardware manufacturers, corporate decision makers, resellers, software providers and support firms attended the three-day event focusing on the emerging MPS market. This unique event provided a ‘watering hole’ atmosphere where competitors, their customers and channel partners all network, share insights and discuss best practices in a ‘neutral’ ground environment.
Conference sponsors provided a glimpse into the unique diversity of the market. Platinum Sponsors including Hewlett Packard, Ricoh and DocuAudit / FMAudit were accompanied by a number of Silver and Gold Sponsors including MWAintel, PrintAudit, PrintFleet and Xerox. There were over 30 educational tracks addressing topics ranging from how to implement an MPS program in a large corporation to the MPS financial models for resellers.
The event provided insights into the market forecast, which shows this $28B global market growing to almost $70B by 2014. Europe is actually predicted to be the largest MPS market by 2014, fueled by the growth of MPS in the channel and small and medium business adoption of MPS. Signs of gaining momentum are evident throughout Europe, this being driven by the leading OEMs, Xerox and HP, investing and developing their programs further, at the top end with more advanced Stage 3 offerings for enterprise-level clients, but also lower down with channel programs for the mid-size and SMB sectors.
Ricoh is emerging as a strong challenger to enter the top tier of MPS providers, with a strong emphasis on enterprise-level clients and business process outsourcing. Canon is also rapidly building its MPS program, and recently announced a joint venture with Accenture, to drive more advanced workflow solutions, and will work increasingly closely with Océ, which already has its own well-developed MPS offering, with particular strengths in high-volume environments.
Lexmark continues to be a significant contender, with particular strengths in some vertical segments of the market. Just behind this top tier, other vendors such Sharp, Konica Minolta, Kyocera Mita, Toshiba and Brother are also entering the MPS market and rolling out programs across Europe.
Channel providers are now starting to make an impact with both OEM-led and independent MPS offerings. For the time being these are mostly on an individual country level, with firms such as M2 Digital and Danwood in the UK, and OP&CS in France. In addition to the traditional hardware resellers, other channel players are also starting to engage with MPS, including large organisations in the IT distributor and office products sectors, which will have the potential to provide an independent MPS offering on a pan-European basis.
Looking at the individual countries within Europe, the UK and Netherlands are the most advanced and fastest growing MPS markets, followed by the Nordics, Germany and France. The development of MPS has been held back by a cultural resistance to outsourcing in some countries, especially in southern Europe, including France and Germany to some extent. However, this resistance is being weakened by the imperative to reduce costs driven by the economic crisis. MPS is also now starting to take off rapidly in the emerging markets of Russia and Eastern Europe, albeit from a small base.
Reduced environmental impact is a dimension of MPS resonating particularly strongly in Europe. The environmental benefits are used by some organisations to help to convince their employees to embrace MPS. Governments are also getting involved, and there have been some recent examples of directives for public sector organisations to move towards MPS, for environmental as well as cost reasons.
The excitement associated with the MPS market is clearly building momentum in Europe, and the focus on offering MPS through the channel will clearly be a growth driver. The key question is, when will the financing, supplies and parts firms be able to offer the diverse set of offerings and country-level support required to enable the channel across Europe to successfully engage in MPS in a major way?