Copyright Quocirca © 2014

Managed Print Services Landscape, 2014

A vendor analysis of the global enterprise MPS market
June 2014



Thi s report examines the competiti ve landscape for MPS and di scusses the key market
drivers and trends that wi l l shape future generation MPS engagements .


REPORT NOTE:
This report has been written independently by Quocirca Ltd. During the preparation of this report, Quocirca has spoken to a number of
suppliers involved in the areas covered. We are grateful for their time and insights.

Quocirca has obtained information from multiple sources in putting together this analysis. These sources include, but are not limited to, the
vendors themselves. Although Quocirca has attempted wherever possible to validate the information received from each vendor, Quocirca
cannot be held responsible for any errors in any information supplied.

Although Quocirca has taken what steps it can to ensure that the information provided in this report is true and reflects real market conditions,
Quocirca cannot take any responsibility for the ultimate reliability of the details presented. Therefore, Quocirca expressly disclaims all
warranties and claims as to the validity of the data presented here, including any and all consequential losses incurred by any organisation or
individual taking any action based on such data.

All brand and product names are trademarks or service marks of their respective holders.
Louella Fernandes
Quocirca Ltd
Tel +44 1753 754838
louella.fernandes@quocirca.com

Clive Longbottom
Quocirca Ltd
Tel +44 1189 483360
clive.longbottom@quocirca.com

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Managed Print Services Landscape, 2014
EXECUTIVE SUMMARY
The managed print services (MPS) market continues to evolve beyond the core services of device consolidation
towards driving improved business efficiency around paper-dependent processes. While many organisations are still
at the early stages of their MPS journey, Quocirca estimates that around 20% have moved to next generation
contracts that incorporate document workflow and additional services such as business process services (BPS) and IT
services (ITS). Industry expertise remains a key differentiator as providers expand their business process automation
capabilities.

Leaders possess a strong
balance of capability,
strategy and market
presence

Xerox heads a closely packed group of leaders. In addition to Xerox, market leaders also include
HP, Ricoh, Lexmark and Canon. Xerox currently offers the broadest service portfolio across office,
mobile, production and off-site commercial environments. HP’s MPS offerings are differentiated
by an extensive solutions portfolio with a mature vision for the cloud, mobility and security.
Lexmark continues to expand its ECM credentials through acquisition and its workflow
automation capabilities are also bolstered by mature industry expertise. Ricoh continues to
expand its MPS footprint with enhanced ITS and BPS capabilities while Canon is working to
strengthen its BPO capabilities.
Strong performers provide
complementary strengths
Konica Minolta and Kyocera lead the strong performers’ category. While possessing significant
strengths, these suppliers may lack the global reach or market presence of more established MPS
competitors. Konica Minolta’s sweet spot is mid-size organisations, which has helped contribute
to significant growth in 2013. It is particularly focusing on growth through IT services, where it is
working to unify acquired service providers. Kyocera is emerging as a credible player in the
market with its MDS proposition, which is primarily delivered through its dealer network.
Predictable costs is the top
driver for MPS
Notably, gaining predictable costs was the top reason for moving to a managed print service
(average score of 4.3 out of 5), above improved service quality (3.9) and reducing consumables
costs (3.8). The cloud is certainly helping to drive interest in managed services, offering similar
benefits of predictable expenses and services that can be scaled up or down as business needs
change. Predictable and transparent pricing is a key tenet of an MPS model and can help
businesses reduce costs and gain the financial flexibility to structure OPEX and CAPEX, and
potentially fund transformation programmes.
MPS is a platform for
increased business efficiency
The most effective MPS engagements have moved beyond a hardware-centric model for device
consolidation and optimisation to a business process-centric approach. With the majority of
enterprises looking to increase their digitisation efforts, MPS is proving an effective approach to
the integration of a digital workflow. Over half of MPS users are confident that they are
effectively integrating paper-based information with digital workflows, compared to less than
10% of non-MPS users. Better integration with broader ECM platforms will be a key differentiator
for MPS providers over the coming year.
Supporting enterprise
mobility and security is a key
need
Document security is cited as the top print management challenge amongst enterprises,
particularly as more move to a shared MFP environment where devices, and therefore
uncollected output, can be exposed to many users. Yet many are still failing to protect their print
infrastructure, with almost 90% of enterprises indicating that they have suffered at least one
data loss through unsecured printing. With the financial and legal ramifications of a data breach,
not to mention the brand damage, the print security gap must be closed. More MPS providers
are offering comprehensive security assessments that recommend the implementation of an
integrated ‘pull-printing’ platform.
Key success criteria for MPS
providers
Businesses looking to start or extend their MPS journey should look for an MPS provider that can
have a truly transformative business impact. Employees are demanding access to the latest
technologies that enable them to work flexibly and productively. Meanwhile, customer
expectations are changing, meaning organisations must interact in more dynamic, agile ways to
maintain competitive advantage. This demands a new kind of MPS provider that can tame the
complexity of the print infrastructure, removing the IT burden, whilst helping them focus on
innovation and employee and customer satisfaction.


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Table of Contents
METHODOLOGY ......................................................................................................................................................................... 4
END-USER ANALYSIS ............................................................................................................................................................................... 4
VENDOR ANALYSIS ................................................................................................................................................................................. 4
DEFINITIONS .............................................................................................................................................................................. 4
THE MPS ECOSYSTEM ................................................................................................................................................................ 5
MARKET OVERVIEW .................................................................................................................................................................. 5
EXTENDED SERVICES .................................................................................................................................................................. 8
VENDOR ASSESSMENT .............................................................................................................................................................. 10
VENDOR HIGHLIGHTS ............................................................................................................................................................... 11
MARKET LEADERS: XEROX, HP, RICOH, LEXMARK, AND CANON ..................................................................................................................... 11
STRONG PERFORMERS: KONICA MINOLTA, KYOCERA DOCUMENT SOLUTIONS AND TOSHIBA ................................................................................ 13
RECOMMENDATIONS ............................................................................................................................................................... 14



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Methodology
End-user analysis
Quocirca conducted an end-user survey among senior IT managers with responsibility for decisions relating to a managed print
service. Research was conducted in the UK, France, Germany, and the US, at 210 enterprise companies with 1,000 or more
employees. Overall, 100 respondents were using MPS, 46 were planning to and 64 were not using or planning MPS. This survey
was conducted by telephone and fielded during April 2014.

Vendor analysis
Quocirca has included the following MPS providers in this study: Canon, HP, Konica Minolta, Kyocera, Lexmark, Ricoh and Xerox.
Vendor selection was according to:

 Experience and skills in providing MPS services: all providers had to demonstrate a strong record of delivering MPS.
 Geographical delivery capability: each provider was required to have the capability to deliver global services.

Each MPS vendor was requested to complete a written submission detailing its strategy, capabilities, and customer references to
ensure key facts and figures were captured. These submissions were followed up with vendor interviews. The quantitative and
qualitative inputs from the vendor research were analysed by Quocirca in order to determine each vendor’s score against a list of
criteria for market presence and completeness of offering. Each score is on a scale of 1 to 5, where 1 is weak and 5 is very strong.
This evaluation of the MPS market is intended as a starting point only. Please note that Quocirca's scoring is based on an un-
weighted model although prospective buyers may wish to weight the scores to meet their own specific needs.

The full market report, with detailed vendor rankings, can be purchased directly from Quocirca. Please contact
Louella.Fernandes@quocirca.com for more details.

Definitions
Quocirca defines a “managed print service” as the use of an external provider to assess, optimise and continuously manage an
organisation’s document output environment in order to lower costs and improve productivity and efficiency while reducing risk.
MPS allows organisations to reduce costs and improve efficiency by rationalising the print environment. It also leverages existing
investments in multi-function peripherals (MFPs), while continually monitoring usage, so that the optimised infrastructure
continues to meet business needs.
MPS covers a number of service areas across three broad categories:
 Assessment – a review of the current print environment to provide recommendations for a rationalised print
environment and provide an estimate of potential future savings. Assessments range from basic online assessments to
full workflow assessments. Environmental impact analysis and document security assessments may also be included.
 Optimisation – device rationalisation and consolidation to improve user-to-device ratios and development of print
policies to develop a governance framework for a full enterprise MPS, including change management, deployment, and
transition.
 Management – continuous process improvement, business reviews, SLA monitoring, remote management, and
workflow improvement.
These services fall under Quocirca’s definition of MPS when the vendor takes over responsibility for delivery under a contract of
three years or more in length. Such activities may also involve the transfer of people or assets to the vendor or provider.




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The MPS ecosystem
The MPS landscape includes printer/copier manufacturers, systems integrators and software infrastructure vendors.

 Printer/copier manufacturers: these vendors’ programmes are generally tied to their product offerings, although multi-
vendor support is often offered. Service offerings include assessment, design, implementation, and support services.
They may also offer MPS programmes to their reseller partners. Vendors in this category include Canon, HP, Kyocera,
Konica Minolta, Lexmark, Ricoh, Toshiba, and Xerox.
 Systems integrators/resellers: these are a channel to market for some printer and copier vendors, and may offer MPS
as part of a wider managed IT services offering.
 Independent Software Vendors (ISVs): these provide software tools for use in the print environment. Examples include
print management products such as Nuance Equitrac, Print Audit, FM Audit, and PrintFleet and secure printing products
from Nuance, SafeCom, and Ringdale. MPS providers often use such third party products to add value to a particular
element of their MPS portfolio.

Market overview
The managed print services market continues to gain momentum as enterprises seek to tackle escalating print costs and drive
greater business efficiency. Quocirca estimates that almost 50% of large enterprises (over 1,000 employees) are now using some
form of MPS, with stronger prevalence in very large enterprises. Overall, a further 20% are planning to use MPS within the next
year, reflecting the growing maturity of the market. As more businesses enter the second and third phases of their MPS
engagements, expanded services and solutions that support broader process automation initiatives are proving to be a key
differentiator amongst the leading MPS providers.

Indeed, many enterprises are well along their MPS journey – 76% of respondents in Quocirca’s survey have been using MPS for
between one and four years with 15% having used MPS for five or more years. The most mature regions for MPS are UK, Germany,
and the USA, with the financial services and business and professional services sector showing the highest propensity for current
and planned MPS usage.


Figure 1. By Country - What is your current or planned adoption of MPS?

32%
47%
56%
56%
21%
23%
15%
30%
47%
30%
30%
14%
0% 20% 40% 60% 80% 100%
France
Germany
UK
USA
We currently use a
managed print service
We do not currently use a
managed print service but
are planning to in the next
12 months
We do not use a managed
print service and have no
plans to do so.

MPS Market Landscape, 2014 June 2014





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Figure 2. By Vertical - What is your current or planned adoption of MPS?

Quocirca’s survey reveals that the top driver for moving to MPS is to gain predictable costs, followed by improved service reliability,
and reduced consumables costs (Figure 3). However, there are wide regional variations in terms of the most important factor.
Financial service organisations place a higher emphasis on improved document workflow (4.4), predictable costs (4.3) and
enhanced security (4.1). Meanwhile, reducing paper usage (4.0) was the second top driver for public sector respondents after
predictable costs (Figure 3).



Figure 3: How important are the following drivers in motivating a move to a managed print service?
(Where 1 = unimportant to 5 = very important) MPS users and those planning to use MPS

The MPS model adopted varies. Overall 41% indicate they are taking a fully outsourced approach, with the remainder taking a
hybrid or out-tasked approach where an organisation may choose a selection of out-tasked services and/or retain some print
3.0
3.5
3.6
3.6
3.7
3.8
3.8
3.9
4.3
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Reduce costs (hardware)
Reduce environmental impact
Enhance document security
Reduce paper usage
Improve document workflow
Reduce burden on IT staff
Reduce costs consumables
Improve service quality/reliability
More predictable costs
Average Score
33%
37%
50%
49%
71%
16%
22%
18%
38%
17%
51%
41%
32%
13%
12%
0% 20% 40% 60% 80% 100%
Retail, distribution & travel
Public sector
Manufacturing
Business and professional services
Financial Services
We currently use a managed print service
We do not currently use a managed print service but are planning to in the
next 12 months
We do not use a managed print service and have no plans to do so.

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management tasks in-house. A hybrid approach is most prevalent in France while a higher proportion (almost 60%) of US
organisations take a fully outsourced approach. Notably, those using a fully outsourced approach display the highest levels of
satisfaction with their print infrastructure (Figure 4).



Figure 4. How satisfied are you with the performance, control and management of the print infrastructure?
(Where 1= not satisfied to 5 = very satisfied)

Equally, those enterprises that are using a fully outsourced model are most likely to be further along their MPS journey. Over 70%
of those fully outsourcing have been using MPS for over three years compared to 54% of those using a hybrid approach, and 17%
using an out-tasked approach. Those organisations that have most experience of MPS are also more likely to be deploying
document workflow automation to drive greater business efficiency and therefore will be reaping greater rewards than those at
the initial stages of their MPS journey. It is US organisations that are most likely to have moved beyond MPS to broader BPS and
ITS initiatives (Figure 5).




Figure 5. At which stage is your business in terms of its managed print services engagement?
3.54
3.69
3.95
3.30 3.40 3.50 3.60 3.70 3.80 3.90 4.00
Out-tasked (selected services only)
Hybrid (some outsourced, some inhouse)
Fully outsourced
Average Score
31%
18%
27%
36%
53%
41%
32%
50%
40%
41%
28%
50%
23%
24%
6%
0% 20% 40% 60% 80% 100%
Total
USA
UK
Germany
France
Phase 1. We are currently optimising our office printer fleet, through device
consolidation
Phase 2. We have optimised our fleet and are now implementing document
workflow tools to improve business processes
Phase 3. We have moved beyond MPS to incorporate non-document related
services such as IT services

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Extended services
As the MPS market gains maturity, organisations moving beyond first generation engagements have often reached the end of their
cost-cutting phase and are now looking for innovation to drive more business value. MPS providers are extending their services
beyond office printing to encompass the print room, business processes and the IT infrastructure.

The print room
For organisations managing a print room in-house or using a separate outsourced provider, there are significant benefits to be
gained by using a single MPS provider for both the office and the print room. Quocirca’s research reveals that 23% of organisations
use a single MPS provider for both environments, with an additional 45% indicating that they would be very interested (Figure 6).




Figure 6. What is your level of interest for using a single provider for the print room/CRD and office printing? (n=100
organisations using MPS)

This presents an opportunity for MPS providers with an established presence in both office and production printing to promote
the benefits of an integrated MPS to existing customers. Indeed there are a number of benefits from this approach. Production
print devices are often poorly utilised in the print room, and integrated production workflow tools can enable complex print jobs
to be re-routed from office printers to the print room, ensuring better overall optimised use of devices. Certainly, for large
organisations with high volume production printing needs, Quocirca recommends considering a single provider to drive better
utilisation of production devices and take advantage of cloud-enabled production print services as appropriate.

Business process services (BPS)
Leading MPS providers are more commonly offering BPS as part of wider MPS engagements, helping enterprises automate paper-
dependent processes such as payroll, claims, mortgage processing and accounts payable, which are full of time-consuming,
transaction-based tasks that can stifle productivity.

Quocirca’s research shows modest interest in using a single provider for MPS and BPS. Currently 13% indicated they already use a
single provider, with 20% very interested. Interestingly, this has not changed since last year, suggesting a potential lack of
awareness or understanding on the synergies between MPS and BPS. US enterprises are the most receptive to using a single
provider with 28% expressing an interest compared to just 16% in the UK and Germany.

23%
45%
21%
11%
Already use a single provider
We would be very interested in using a single provider
We would be slightly interested in using a single provider
We would not be interested in using a single provider

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Figure 7. What is your level of interest for using a single provider for MPS and Business Process Services (BPS)? (n=100
organisations using MPS)

IT Services (ITS)
Several MPS providers are promoting their IT services (ITS) capabilities as an extension to their MPS offerings. Often, this relates
to print server management and help desk integration. Overall, 20% currently use a single provider use a single provider for MPS
and ITS and an encouraging 31% indicated strong interest (Figure 8). Again, the US is most receptive to this approach, with over a
quarter of respondents indicating they already use a single provider to manage the print and IT infrastructure.


Figure 8. What is your level of interest for using a single provider for MPS and IT services (ITS)? (n=100 organisations using MPS)


13%
20%
33%
34%
Already use a single provider
We would be very interested in using a single provider
We would be slightly interested in using a single provider
We would not be interested in using a single provider
20%
31%
23%
26%
Already use a single provider
We would be very interested in using a single provider
We would be slightly interested in using a single provider
We would not be interested in using a single provider

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Vendor assessment
Quocirca has created a vendor scorecard for each MPS provider, based on a range of criteria that determines an overall score for
market presence and completeness of offering. Each score is on a scale of 1 to 5, where 1 is weak and 5 is very strong. This
evaluation of the MPS market is intended as a starting point only. Please note that Quocirca's scoring is based on an un-weighted
model although prospective buyers may wish to weight the scores to meet their own specific needs.

Market presence criteria
 Enterprise customers: the strength of the vendor’s European enterprise customer base.
 Strategy: how comprehensive is the vendor’s MPS strategy, the quality of its overall value proposition and its
evolutionary vision for MPS?
 Maturity of offerings: how long has the vendor been active in the market; how developed are its offerings?
 Geographic reach: a vendor’s geographic reach, either directly or through partners or channels.
 Overall financial strength: a vendor’s overall financial position and assessment of the scope for future investment in its
MPS offering.
 MPS revenue and growth: European MPS revenue and growth over the past year.
 Market credibility: the effectiveness of vendor initiatives to promote its brand, increase awareness of its service offering
and influence market development. Also includes the clarity, differentiation and internal/external consistency of the
vendor’s market messages.
 Alliances and partnerships: The strength of the vendor’s partner and alliance network.
 Investment and dedicated resources: The vendor’s investment in its MPS portfolio, resources, and its innovation that
will add improvements in approach, process, or service offering.

Completeness of offering
 Modularity of services: the flexibility and scalability of the service portfolio to provide a customised offering.
 Breadth and depth of service offering: the range of services available, including complementary ones such as business
process outsourcing (BPO), IT outsourcing (ITO) and document process outsourcing (DPO).
 Help desk capabilities: centralised help desk capabilities and integration, remote diagnostics and support.
 CRD/production printing: print room/production printing services to support high volume printing requirements.
 Multi-vendor support and maintenance: the vendor’s ability to service and support third party products.
 Mobile printing support: capabilities to support mobile workers, either through mobile device printing or pull
printing/authenticated secure printing.
 Document workflow integration: integration with third party products and services.

Figure 9 represents Quocirca’s view of the competitive landscape for printer and copier vendors that deliver enterprise MPS. A
vendor’s market position is indicated by the size of the bubble, based on estimates of customer base. An indication of the growth
in each vendor’s position is shown by a (+), (-) or (=). The following categories are used to reflect a vendor’s position:

 Market leaders: vendors that lead the market in both strategic vision and depth of service offering. Leaders have made
significant investments in their service portfolio and infrastructure and are supported by strong delivery capabilities.
 Strong performers: vendors that have established and proven offerings supported by demonstrable customer success.
 Contenders: vendors that have service offerings that are currently being aligned on a global or European basis.
Contenders are typically investing in resources, infrastructure and partnerships to expand market coverage.

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Figure 9: Quocirca MPS vendor positioning
* Customer base: Please note that enterprise customer figures and estimated devices under management have been considered when
determining customer base bubble size.

Vendor highlights
As can be seen in Figure 9, every vendor has been given a ‘+’ rating, denoting an improvement for each vendor in their MPS offering.
Quocirca has seen the MPS market gaining maturity and emerging from first and second generation offerings, leading to
improvements in all vendors’ offerings as new functions and capabilities have been added to the core offering, as well as through
BPO and ITS services. Many of the vendors are also investing heavily through acquisitions and adapting their portfolio to changes
in the overall IT market, such as BYOD and mobility.

Market leaders: Xerox, HP, Ricoh, Lexmark, and Canon
Market leaders possess diverse strengths with a wide global presence and have prioritised their efforts and investments to win in
this highly competitive marketplace. Prospective buyers will find these providers differ in their individual strengths by industry,
geography and service line but all articulate a strong MPS proposition for enterprise customers.

 Xerox: Xerox has retained its leading position in Quocirca’s evaluation of the MPS market, buoyed by continued
investment in its mature MPS portfolio. An early leader in the market, its key strength is the depth and scale of its service
offering, which encompasses office printing, production printing, as well as IT services (ITS) and business process services
(BPS). Xerox has deepened its broad range of assessments services, leveraging its 2011 acquisition of NewField IT
technology. This forms the backbone of its comprehensive assessment offerings, which include CompleteView Pro, a
visual dashboard for the entire print environment, and its latest workflow assessment and document analytics services.

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The latter service, in particular, is unique to Xerox in providing an in-depth analysis of how, why and where paper
documents are used and shared within an enterprise. Xerox is also actively expanding its solutions portfolio. It now offers
a comprehensive suite of security offerings to help enterprises control and protect document security. Building from its
existing partnerships with McAfee and Cisco, Xerox now offers a Print Security Audit Service and a Secure Print Manager
Suite. Xerox is looking to uncover further opportunities for business process optimisation, which will also enable it to
leverage its BPO expertise to drive additional productivity improvements for its customers. Xerox Content Management
Services leverages its DocuShare platform, which, although a mature offering, has so far not been fully exploited as part
of MPS engagements. With close integration with Xerox’s hardware portfolio, including its ConnectKey MFP products, its
new Workflow Automation Suite will enable Xerox to drive further productivity and efficiency gains for its customers.

 HP: HP has retained a leading position in the MPS market due to its broad service offering and extensive solutions
portfolio. HP has the breadth and scale to operate in all areas of the imaging and printing industry, covering consumer,
SMB, enterprise and commercial print. It offers a scalable MPS offering, supported by a comprehensive hardware range,
from office to light production printers, along with a growing software portfolio. In December 2013, HP announced an
OEM deal with Sharp for its new S900 Series of light production MFPs, expanding its product line for enterprises with
higher print volume/finishing option needs. HP’s MPS strategy aligns with HP’s “New Style of IT” company strategy, which
is based on four technology enablers – cloud, security, big data/digitisation, and mobility. HP continues to strengthen its
solutions to support the convergence of these trends. This includes new cloud-enabled capabilities, enterprise mobile
print capabilities, expanded security products and services, and enhanced digital workflow through its Flow MFP range
of hardware and software. Overall, HP has built a strong MPS proposition. Its dominance in the printer market and strong
network and infrastructure management credentials has enabled HP to build a strong market presence in both the
enterprise and SMB space. While it continues to accelerate its partner-led MPS initiatives, at the enterprise level HP is
able to leverage the BPO and ITO capabilities of its Enterprise Service organisation. With broader IT expertise, in areas
such as the cloud, big data, and mobility, than some of its traditional print competitors, HP has the credentials to be a
valuable strategic partner for enterprises looking to deepen their MPS engagements.

 Ricoh: Ricoh retains a leadership position in the MPS market, boosted by a 14% growth in its global MPS business in FY
13. It continues its transformation to a services-led organisation, with expanded investment in IT services and BPO
capabilities. Ricoh states that it has over 4,000 MPS engagements worldwide with in excess of 1 million devices under
active management. Its mature and broad MPS portfolio is centred on the transformation of business processes. To
support this approach, Ricoh is actively enhancing its IT services, as well as its ECM and BPO capabilities. Ricoh has made
strategic investments related to services in the last twelve months including the acquisitions of mindSHIFT Technologies
Inc., a leading managed print service provider, Aventia and inspireIT, as well as a strategic investment in Avanti Computer
Systems Limited, a leading provider of print management information systems, among other global acquisitions. Ricoh’s
strong heritage in the production print market has enabled it to effectively manage both the office and production print
environments for its customers and Ricoh estimates that it is managing both environments for 40–60% of its MDS
customers. Ricoh’s range of production print services includes variable data print for customised communications, a
digital mailroom to automate classification and distribution of mail, and electronic invoicing. Ricoh continues to extend
its MPS engagements to help its customers streamline business-critical processes. Its MDS Process Analysis evaluates
single or multiple business processes to recommend improvements such as elimination of bottlenecks and better
integration with customer line of business (LOB) and/or enterprise content management (ECM) systems. Ricoh has
applied its business process expertise in sectors such as the financial services and healthcare, implementing digital
workflows and improving operational efficiency.
 Lexmark: Lexmark continues to strengthen its position as a leader in Quocirca’s evaluation of the MPS market. Since its
$280 million acquisition of Perceptive Software in 2010, it has transformed its overall business, deepening its business
process expertise. Its strong position in the market is boosted by a mature service portfolio and its industry-leading
business process expertise, which is becoming a key differentiator in the market. It continues to see strong growth in its
MPS business, which increased by 16% globally in 2013. A major focus of Lexmark’s MPS offerings has been on adding
value to a customer’s business processes. The $54m acquisition of PACSGEAR, a healthcare ECM (enterprise content
management) provider, in October 2013, is the latest in a string of ECM, business process, search and industry-specific
acquisitions that have broadened Lexmark’s reach and bolstered its Managed Print Services (MPS) market leadership
position. Most recently, Lexmark made a tender offer for ReadSoft in May 2014, a global provider of software solutions
that automate business processes both on premise and in the cloud, to further expand and enhance its business process
and industry domain expertise and document processing capabilities, particularly in Europe. Industry expertise is a key
strength for Lexmark. Its industry teams are organised across eight specific industry groups – banking, insurance, services,
retail, manufacturing, health care, education, and the public sector. A competitive advantage for Lexmark is its
customisation capabilities. By owning its own services, solutions, software, firmware, and product technology, rather
than partnering, it has the ability to quickly respond to customisation requirements.

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 Canon: Canon continues to strengthen its presence in the MPS market, particularly in the US and European regions.
Global MPS revenue grew by 12% in 2013, with European MPS revenue increasing by 30%. Its Managed Document
Services (MDS) approach is most advanced in Europe, which accounts for almost 35% of its global MPS revenue. MDS is
backed by a comprehensive range of hardware, software and an established global service delivery network. Canon’s
Global Services group plays a key role in expanding Canon’s global MPS engagements. Canon offers a globally consistent
MPS methodology based on industry standard IT infrastructure library (ITIL) methodology. Its five-phase approach
provides a single source of accountability at each stage of the MPS engagement, namely Discover; Design; Implement
and Transition; Support and Manage; and Review. Canon has a strong product portfolio across office and production
devices. Its latest imageWARE ADVANCE range is designed to have extensive workflow capabilities, including new
middleware technology that integrates with enterprise applications (such as ERP, CRM or ECM), cloud-based services and
mobile devices. Canon has developed a broad software ecosystem around its imageWARE ADVANCE range including its
Therefore document management solution, I.R.I.S. document recognition and its long-established uniFLOW print
management tool. Canon has an established global BPO service, inherited through the acquisition of Océ. Services include
accounts payable, eDiscovery, Records and Imaging Services, Mail and Print services, and Information Management. In
Europe, Canon is working to articulate a BPO strategy and link this to its broader MPS offerings.
Strong performers: Konica Minolta, Kyocera Document Solutions and Toshiba
 Konica Minolta: Konica Minolta has accelerated momentum in the MPS market. It continues to see impressive global
MPS revenue growth of over 50% with its Optimized Print Services (OPS) program, which is now a central part of its value
proposition. Today it has more than 6,400 OPS customers globally, 61% of which are based in Europe, with approximately
200,000 devices under active management. In 2013, Konica Minolta achieved a number of global MPS wins as it works
to boost its global presence. Konica Minolta has had most success within the manufacturing and logistics sectors – and
this remains a significant sector for Konica Minolta in terms of MPS demand. Konica Minolta’s sweet spot is mid-size
organisations – up to 1,000 users – which accounts for around 60% of its customer base. In Europe, 30% of its revenue is
generated through indirect sales. Konica Minolta continues to invest heavily in supporting its channel to shift to a
solutions and services model, both in the US and across Europe. Konica Minolta’s strong heritage in the colour production
print market is a key differentiator, across Europe in particular – office-based MPS is being extended to include
consultancy for centralised reprographics, print room, and commercial print environments. Konica Minolta is looking to
leverage its service delivery reputation in this market to drive the provision of fully managed services across both office
and production print. Quocirca believes that Konica Minolta’s M&A strategy will continue to extend its MPS proposition
to a wider customer base.
 Kyocera Document Solutions: Kyocera continues to expand its MPS penetration, particularly in the European mid-size
business space. Kyocera Document Solutions has spent the past two years evolving its growing MPS offering, known as
Kyocera Managed Document Services (MDS). It still has some progress to make in accelerating its services and software
strategy, which, to date, has seen most success in Europe. European MPS revenue grew by 32% in 2013, and now accounts
for over 40% of its global MPS revenue. Kyocera now manages almost 180,000 devices in Europe, more than doubling its
devices under management from 2012. Kyocera Document Solutions adopts a five-phased MDS approach, which includes
Assessment, Design, Implement, Manage, and Optimisation. It offers a range of standardised services encompassing fleet
audit, proactive support and consumables replenishment, change management, reporting and review, and de-
commissioning and disposal of a retired fleet. A key differentiator for Kyocera is sustainability, through its long-life
ECOSYS technology, which is known for high reliability, low total cost of ownership (TCO) and reduced environmental
impact. Kyocera’s focus on smaller companies means its MDS offering is tailored to deliver the core MPS services rather
than the broader business process services that some of the leading players in the market are offering. Quocirca expects
Kyocera to build out its business process automation capabilities, leveraging its HyPAS integrated platform. The nature
of Kyocera’s channel focus also means it should consider partnering with the broader IT service channel to integrate its
MDS offerings and reach a wider market.
 Toshiba: Toshiba has an established MDS offering in the US and Europe although its strategic approach differs by region.
Overall, its European MPS business grew by 25% to reach 66 million Euros revenue in 2013. Today, Toshiba’s MPS
business is strongest in the US where it has built the Encompass brand over the past decade. In Europe, its MDS business
is growing rapidly and it is developing a sustainability strategy around its MDS offering. This is based on its e-STUDIO306LP
MFP paper reusing system which prints documents in erasable toner and erases documents for reuse – making more
effective use of paper. This is alongside its Energy Manager software which allows IT administrators to easily implement
policies for energy usage profiles on PCs and Toshiba MFPs. Based on a long established Carbon Zero CO2 offsetting
initiative and optimised Eco-settings for regular MFP products, Toshiba has bought these elements together to form its
ECO-MDS offering. Quocirca expects Toshiba to expand its MPS offering in Europe over the coming year as its builds out
its strategy and expands its channel partnerships.

MPS Market Landscape, 2014 June 2014





© Quocirca 2014 - 14 -


Recommendations
Organisations today need to look for a managed print service provider that will not simply ‘keep the lights on’ but have a
transformative impact on the business.
Whilst some enterprises may be at the early stages of their MPS journey, many are now entering their second or third generation
MPS contracts. Although cost control remains a top priority, enterprises are also looking to drive wider productivity and business
process improvements. Consequently enterprises are looking for next generation MPS providers to become true innovation
partners with industry-specific business insight and services that will deliver new cost savings.
Quocirca recommends taking the following action to maximise the benefit from MPS, and ensure it can drive greater business value
and sustained long term performance.
 Think big, start small. MPS engagements vary widely in scope depending on business needs. New opportunities exist to
not only extend the scope of MPS engagements to encompass all aspects of enterprise printing (office, mobile,
production and commercial), but also improve performance by outsourcing higher-value services such as IT operations
and business processes. Consider how well the scope of services matches your business needs. Is it possible to start with
a limited engagement and add services as business requirements evolve and/or your relationship with your MPS provider
beds in?
 Conduct a full evaluation of the print infrastructure. A detailed assessment is the foundation of an effective MPS
engagement and should take a holistic view of all print-related processes. Things to check include: is an established
methodology used? What scalability is offered in terms of depth and cost of assessments? At the minimum, this should
include a full document analysis that analyses print usage across the enterprise. Additional assessment services to
consider include environmental impact and document security. Some vendors also offer document workflow assessment
services, which identify potential for business process improvements. A comprehensive assessment will ensure the
greatest opportunities for cost savings and productivity improvements over the term of a contract.
 Evaluate the flexibility to add new services. As a business continually adapts to the marketplace, MPS agreements should
be adaptable as well – in terms of the commercial offering, contract arrangements, staffing, and delivery location etc.
When agreeing on the service offering, negotiate for the flexibility to incorporate new capabilities. For example, next
generation MPS may look to take advantage of evolving technologies such as cloud, mobility, business intelligence, and
ITIL-based process methodologies to ensure that business objectives continue to be met throughout the duration of the
contract.
 Leverage MFP sophistication. Multi-function peripherals (MFPs) are often underutilised in the office environment, yet
have powerful document workflow capabilities that can be integrated with key business processes such as HR, legal, and
finance and accounting. Look for seamless integration of MFPs, either via the cloud or on-premise, with enterprise
content management (ECM) systems that can optimise paper-to-digital workflows and improve productivity.
 Ensure mature service level quality. SLAs are critical to the success of any MPS engagement. SLAs have to be flexible,
and the MPS provider must use analytics to be able to advise on past performance and future requirements. Are service
levels matched to your business needs (hours of services, problem resolution times, end-user productivity)? How does
the provider handle service events in a multi-vendor environment? Is a pre-emptive service and automated supplies
management used to reduce response times and solve device problems? Is on-site or off-site support available?
 Continuous improvement. Monitoring and ongoing management is critical to ensure that the MPS adapts to changing
business needs. This requires governance throughout the contract, which should place a high emphasis on service
analytics, reporting, and communication. A governance programme allows the parties to evaluate address and resolve
service issues as and when they arise.



MPS Market Landscape, 2014 June 2014





© Quocirca 2014 - 15 -


About Quocirca
Quocirca is a primary research and analysis company specialising in the business impact of information technology and
communications (ITC). With worldwide, native language reach, Quocirca provides in-depth insights into the views of buyers and
influencers in large, mid-sized and small organisations. Its analyst team is made up of real-world practitioners with first-hand
experience of ITC delivery who continuously research and track the industry and its real usage in the markets.

Quocirca works with global and local providers of ITC products and services to help them deliver on the promise that ITC holds for
business. Quocirca’s clients include Oracle, Microsoft, IBM, O2, T-Mobile, HP, Xerox, EMC, Symantec and Cisco, along with other
large and medium-sized vendors, service providers and more specialist firms.

For more information, visit www.quocirca.com.




Disclaimer:
This report has been written independently by Quocirca Ltd. During the preparation of this report, Quocirca may have used a
number of sources for the information and views provided. Although Quocirca has attempted wherever possible to validate the
information received from each vendor, Quocirca cannot be held responsible for any errors in information received in this manner.

Although Quocirca has taken what steps it can to ensure that the information provided in this report is true and reflects real market
conditions, Quocirca cannot take any responsibility for the ultimate reliability of the details presented. Therefore, Quocirca
expressly disclaims all warranties and claims as to the validity of the data presented here, including any and all consequential losses
incurred by any organisation or individual taking any action based on such data and advice.

All brand and product names are recognised and acknowledged as trademarks or service marks of their respective holders.

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