Managed Print Services
Managed print services (MPS) involve customers outsourcing their print requirements. The Indian market is estimated to be worth ` 500 crore in 2013. Key segments adopting MPS include BFSI, IT-ITeS, manufacturing and government.
HP India recently launched a partner-led MPS business initiative. Says Nitin Hiranandani, Director, Printing and Personal Systems (PPS) Group, HP India, “Partners can provide supplies, consumables and software-based services while the customer owns the hardware. Or partners can buy hardware through HP Financial Services and offer it to customers on base charges per month on hardware and click charges on actuals.”
Jayyesh Mehta, MD, Future Businesstech, Bengaluru, has 30 enterprise customers for its MPS. “We guarantee 30 percent savings on MPS as compared to traditional printing costs, and our customers have signed 3-5 year contracts with us. This has increased our recurring MPS revenue in FY2013-14 to ` 1.5 crore out of the ` 10 crore we clocked for our printing and imaging business.”
Rates per page for an MPS vendor depend on the printer, print volumes and print quality. “On an average, a black-and-white print costs from 42 paise to ` 1.10 plus the cost of paper. We charge a rental which is approximately the cost of the printer divided by 36 if the customer does not want to own the printer,” says Shivram Iyer, CEO, Dixit Infotech, Mumbai.
According to Mehta, partners can offer additional services such as reporting, security and forecasting print requirements.
Partners reveal that the vendor-driven MPS business offers margins of less than 15 percent. Additional costs include the cost of standby printers.
Some resellers say that while it’s riskier, investing in one’s own printers by buying second-hand or refurbished printers and re-manufactured cartridges makes more business sense. “While costing 30-40 percent less per print, re-manufactured cartridges provide similar yields. Besides, heavy duty printers which are refurbished are 10-20 percent cheaper than new printers, and give ROI on hardware investments in 4-6 months,” says Hari Nair, CEO, ER3 Solutions, Bengaluru.
He estimates that the ROI on running an MPS business on new printers is typically 18 months. However, if customers adhere to minimum print requirements the margins can be as high as 30 percent.
“We guarantee 30 percent savings on MPS, and have signed 3-5 year contracts with many of our large customers. MPS contributed R 1.5 crore to our topline in FY2013-14” JAYESSH MEHTA MD, Future Businesstech