Can every VAR be a managed print service provider? As it introduces a new program that lets channel partners resell its direct managed print services, HP thinks there’s an opportunity for more partners to add managed print to their mix.
An extension of an existing program that gave partners an annuity for referring and influencing sales of HP’s managed print services, the new resale program addresses the biggest challenge with that referral model, the fact that the vendor still owns the billing relationship. Under the new program, partners have the option of billing their customers, with the vendor then billing the partner for the services delivered. Partners use the company’s Express Decision Portal to quote, monitor, and set their markup on the HP-branded managed print services they’re offering customers.
A result of HP’s purchase of Printelligent two years ago, the program is available now in the U.S., and will be expanded to Canada and many other markets in early 2014.
Partners in the program sign up for HP’s Bundled Page rate, which sets the wholesale cost-per-page the partner pays HP for the services.
“We’re making our infrastructure, our tools, our scale available to IT VARs so they can resell managed print to their customers,” said Pradeep Jotwani, senior vice president of laser enterprise solutions in HP’s Printing and Personal Systems group.
The program sits alongside HP’s managed print partners who’ve developed their own systems and processes, and offers a first step into managed print, a market that’s at only about 25 percent penetration, and growing for HP at 18 percent year-over-year.
“There’s a crossover between traditional transactional and managed print towards the end of 2015. Managed print will be the dominant way that people buy their printing by 2016,” said Michael Weir, vice president and general manager of managed services at HP.
HP isn’t the first to offer this kind of program that makes the vendor’s extensive managed print infrastructure available to channel partners. Xerox offers a similar program. But Bill Avey, vice president of partner managed print services at HP, said HP’s is different because the infrastructure it has built out is a single instance of MPS that will work globally, giving partners a great deal more flexibility. “We’re the only ones who can do this,” he said.
For that reason, he predicted that while almost all of the partners currently in the agent model will likely add resale to the mix, they’re not likely to drop the agent model altogether. Instead, Avey believes most partners will use the resale model with customers they’re close to, and use the agent model for customers or customer locations further afield, where the partner isn’t likely to bring many other partner-fronted services to pair in addition to the HP managed print services.
Although many VARs and MSPs recognize managed print as a growing market opportunity, the space has largely remained the territory of relatively few solution providers – either pure-play MPS specialists, or MPS focused divisions inside of larger solution providers. Solution providers give three main reasons for not pursuing managed print further: the investment required to build out a managed print infrastructure, the risk inherent in doing so, and the lack of specific printing industry knowledge in their organizations.
HP has taken a good stab at reducing the first two concerns. The resale program means there’s very little investment involved for partners to jump into the game, and HP takes on the risk involved in providing consumables on a cost-per-page basis, something Avey says it can do because at its size and with its experience, HP knows what to expect from customers.
But the program itself doesn’t do much to address the third major challenge. Partners will likely still struggle with managed print as long as they don’t have sales resources that speak the language of printers and copiers. That’s why HP is setting relatively limited goals for the program – Weir estimates the company’s partner base in the U.S. for managed print resale will be “in the hundreds,” a far cry from many tens of thousands of IT VARs with which HP regularly does business in the country.
“We want to work with VARs that have a solutions orientation and have a key set of customers and give them a broader footprint in printing,” Weir said. “We want those who understand this trend.”
The company will also look to work with partners to create bundles that bring in other areas of HP’s printing business, most notably mobility and security, as add-on services that will be delivered by partners on top of the core managed print services that will be delivered by HP on behalf of partners.