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Managed Print Services Channel Optimistic Despite Impact of COVID-19

66% predict a revenue bounce back in 2021 as MPS maturity offers opportunities to diversify into adjacent services

UK, 27 October 2020: The Managed Print Services (MPS) channel is optimistic that 2021 will see revenues rebound and growth in opportunities to offer cloud services, contactless printing and support for home printing as customers adapt to the demands of remote and hybrid working.

Quocirca’s 2020 State of the Channel survey investigated attitudes among 205 channel organisations selling managed print services (MPS) in the UK, France, Germany and the US. Although 50% of respondents reported that revenue has declined in 2020, the majority display optimism for the next year, with 66% predicting that revenue will rise in 2021.

COVID-19 causes print volumes to plummet

COVID-19 had a severe impact on the sector, with 45% of respondents saying customer print volumes have fallen. This rose to 62% among UK respondents and 64% in the USA, while only 24% of French organisations said print volumes had dropped. Overall, 53% said the pandemic had a negative impact on their business, although for 25% the effect was positive.

Quocirca Director Louella Fernandes comments: “The pandemic has accelerated changes that were already under way in the print market. The channel is optimistic but must adapt fast to capitalise on new opportunities and secure its place as a trusted partner for organisations that are pivoting to hybrid and remote-working.”

Key findings from the study at a glance:

  • 53% of respondents say COVID-19 has had a negative impact on their business. 25% indicated a positive impact.
  • 45% say customer print volumes have dropped due to the pandemic
  • 34% say selling MPS has opened new opportunities to provide value-added services; 32% say it has helped build longer term customer relationships
  • 37% say broader market disruption is the top channel concern for the coming year. Other key concerns were adapting to a managed services model (23%) and digital disruption (22%)
  • Cloud is viewed as the leading growth area between now and 2022, followed by home printing services and contactless print provision.
  • Channel companies report satisfaction gaps with key elements of vendor programmes including market development funds (MDF), training and support for app development, and financial support.

Mature MPS programmes are delivering broader opportunities

MPS programmes are mature and they are delivering additional benefits. 34% of respondents said they had accessed new opportunities to sell value-added services such as information management and collaboration tools; 32% said they have built longer term relationships with customers; 29% said there were more opportunities to sell non-print related services such as IT services.

Diversification is under way, with 32% saying they now offer managed IT services alongside MPS. There are significant regional variations, however. Half of UK respondents offer managed IT services alongside MPS, compared to just 16% of German respondents. Overall, 29% offer print security services and 28% offer cloud print services.

Looking ahead, cloud print services are viewed as the most important growth area in the next two years, followed by the provision of home printing services and contactless printing. While cloud migration has been a driver for some time, the other areas are directly associated with pandemic factors. This is reflected in the top challenge facing channel businesses in the coming year, with 37% citing broader market disruption as a key area of concern.

Commenting on the research findings, Quocirca Director Louella Fernandes said: “MPS is undoubtedly providing opportunities for the channel to diversify into adjacent areas. It can be a platform for future growth if companies can successfully build partnerships with complementary service providers and invest in the sales, technical and marketing skills needed to deliver a broader range of services.” 

Vendor support must be better aligned to channel priorities

The study identified a disconnection between elements of a vendor’s channel programme seen as important by channel companies and their satisfaction with those elements. Respondents rated training and support for app development, access to market development funds (MDF) and lead generation as the three most important criteria in a vendor’s channel programme. However, they were least satisfied with MDF and financial support, and the biggest gap between importance and satisfaction rates occurred in training and support for app development.

Analysing the effect of satisfaction gaps, Louella Fernandes commented: “The channel needs to be clear with vendors about the support it needs to adapt to the changing environment, and vendors must respond. The channel recognises opportunities around integrated document workflow apps and solutions, especially for hybrid and remote-working environments, but doesn’t feel equipped to capitalise on these.”

Quocirca’s State of the Channel 2020 contains in-depth analysis of vendor programmes and recommendations for channel partners so they can successfully navigate the challenges ahead. Download a complimentary executive summary and infographic:

About Quocirca:

Quocirca is a global market insight and research firm providing strategic market analysis and intelligence to print industry business and technology leaders. Quocirca specialises in analysing the convergence of print and digital technologies in the future workplace.

Since 2006, Quocirca has played an influential role in advising clients on major shifts in the market. Our consulting and research is at the forefront of the rapidly evolving print services and solutions market, trusted by clients who are seeking new strategies to address disruptive technologies.

Trusted by global industry organisations, Quocirca offers a wealth of specialist knowledge across the connected print ecosystem. Our extensive research activities are backed up with rigorous analysis and a robust primary research programme.

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