Wednesday, February 25, 2009

The Xerox advantage - MPS. Use the force, Luke.

"Use the force, Luke." - Star Wars, 1977
The Force = network relationships + referral comp.
If you want to follow the MPS space, the best place I've found is Jim Lyons Observations. This morning I found his latest which is called Xerox (NYSE XRX) Tries to Go Beyond Copiers -- Today's Wall Street Journal.

The blog post was so interesting that I actually paid WSJ $109 for a year subscription so I could read the whole thing at WSJ. I thought it would probably be worth it over the long term anyway.

Here are selected sentences from the 800 word article.
Xerox, Hewlett-Packard Co. and others say they are seeing strong demand for consulting services that show companies how to eliminate desktop printers and force workers to share multifunction devices that copy, print and fax. The vendors say such moves can reduce printing costs up to 30%.
My bet it is not "show companies" but organize the printing fleet. Nobody has time to be "shown." This is not, in my opinion, a consulting gig, as much as an execution gig.
In some cases, clients let a single supplier manage the whole system for a monthly fee.
"Manage" is not "show." People don't easily pay for "show." Everybody will pay for "manage."
. . . Ed Crowley, president of Photizo Group in Lexington, Ky., which tracks the print-consulting market. He estimates revenue from managed-print services will jump 36% this year to $15.7 billion. . . . Last year, services, including maintenance as well as managed print, contributed $3.5 billion of Xerox's $17.6 billion in revenue.
Does that go into the "after sales bucket" or does it have it's own bucket or does $3.5 billion include toner and paper sales? Is it me or is it an over complicated, opaque statement of revenue?
. . . Last month, Procter & Gamble Co. agreed to turn over to Xerox its vast fleet of printers and copiers in a multi-year contract valued at more than $100 million. . . . You can read the whole 800 word article behind the pay wall, or in this mornings Print edition.
What I think I see
The sooner our team gets eraseable paper to market, the sooner we make a huge leap in the MPS market. Imagine HP or Ricoh or ?? competing with an epaper offering in MPS. What exactly is the hold up?

Until then, Xerox has the lead in formal organization MPS. I think I read somewhere we have over 50% of the market. Although $3.5b is not 50% of $15.7b. But anyway, it's a nice place to start. As this part of the network continues to get organized, one trick is to create value that nourishes the other parts of the Print Output networks that are also self organizing.

This could play out a couple of ways.
Comp MFP dealers through some kind of "affiliate" model if one of their leads is ready for MPS. If the MFP dealer is ready to execute, he does. If not, bring in the MPS team from corporate. Or do it together with appropriate split comp. How about Global Services + XGS?

The MFP cavalry finds the opportunities, decides how to monetize. Working together with an XGS team will be the best form of "education." Earn, while you learn. But don't learn on the customer's dollar.

Comp MPS players using the same affiliate model for recommending members of the commercial network. The pitch is "If you need a larger job, here's a list of 3 Printers who you should consider." And of course, visa versa.

For the commercial Printer, "If you need someone to organize your fleet, you can save more money than you print in a year. Here are the names of three outfits who have done it for organizations just like yours."

Meanwhile, everybody can keep selling Google Apps.


  1. Dr Droock, what team are you part of? IN this post you mention. "The sooner our team gets eraseable paper to market, the sooner we make a huge leap in the MPS market"

  2. My IRA started at Xerox. Most of my very good and supportive friends over the years were and are at Xerox. My passion is fixing High School ed, not the Printing Businesss.From where I sit, Xerox, right now has the best legacy and the best possiblity of fixing High School Ed, the fastest.

    Besides, I fell in Xerox when they released the Docutech. i have always love the folks at Parc.

    So, like the Chicago Cubs, Xerox is my team. Once I really started looking at the space, on around February 17, I diversified my IRA as it says on the top of the blog.

  3. The objective certainly was not to be "over complicated, opaque statement of revenue?" The original statement was that this revenue represented hardware, supplies, management software, and service. As anyone who has been quoted in the press often knows, it's not uncommon for the original quote to come out slightly different (although this particular Wall Street reporter does an excellent job).

    The key is that MPS brings real, tangible benefits to customers who adopt this outsourcing model. I think this is the important point.

    To learn more about this or other factiods for the MPS market - visit our web site at

  4. Dear Photizo,
    Let me try to clarify. I agree that MPS is going mainstream, sooner rather than later. In fact I linked to Jim Lyons blog as a great way to stay on top of the industry.

    I noted with interest that you are hosting the 2009 Managed Print Services Conference
    April 26-28, 2009
    San Antonio, TX

    "This is the first conference dedicated to Managed Print Services (MPS). The objective for this conference is to provide MPS decision makers, dealers, and vendors the opportunity to share experience, insights, and war stories regarding the in's and out's of MPS engagements. The conference features case studies, panels, and interactive sessions which will highlight experiences and learnings from actual MPS engagements."

    The sentence you reacted to re opaque etc etc, was to our dear friends at Xerox, not you or the reporter at the WSJ.