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By Lou Slawetsky, CEO, Industry Analysts, Inc.
What happened? Managed print (or, MPS, or MDS, or OPS, or etc.) was to have been the strategy off the millennium. A market with a triple digit growth rate. The ability to lock in your account for three to five years. Gross margins of more than 50%. A natural conduit for the placement of MFPs supplied by your primary vendor. A continuous revenue stream. A stepping stone leading from managed print (or managed printers) to managed IT services. Easy sales, huge upside. Sales reps love the comp plan. MPS is a great plan that benefits both the dealer and the imaging system vendor.
Surprise!! The promises never materialized. We're in the process of finishing the research phase of our annual Imaging Systems Dealer Strategies Report - a state of the industry snapshot. While not finished, we're already seeing many dealers being stabbed by thorns in the rose garden.
Some dealers have dropped out of the market after only a few years, citing poor margins and higher than expected costs. One in particular reported negative margins. Ironically, he will be sticking with it, at least for now. He shared the fact that he saw his MPS efforts as a startup and expected margins to turn positive as he achieves critical mass.
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