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Xerox MPS ambitions increase the focus on channel partners
Xerox continues to invest in its channel strategy, which includes a focus on helping partners win more sophisticated Xerox MPS deals.
Xerox is pushing its partners in the SMB space to adopt a more mature model of managed print services.
The small and medium-sized business (SMB) market has become a major focus for Xerox in recent years, leading the vendor to up its commitment to its channel partners, which generally work in this customer segment. Xerox believes managed print services (MPS), in particular, are underpenetrated by partners in the SMB market. To help enable channel firms to capture the MPS opportunity, Xerox this year introduced several enablement initiatives, among them the Xerox MPS Accreditation Program, launched in July, which offers training, sales and assessment tools, and marketing support.
According to Jim Joyce, vice president of managed print services for Xerox's U.S. channels unit, the SMB space is "a huge market opportunity" for MPS companies. Citing previous research, he said 54% of the U.S. working population is in the SMB space, with only about 20% of the market penetrated by "true" MPS.
"We have driven more than $30 billion in MPS revenue in our company over the last 10 years in [the large business] space. So ... [looking] at the market in SMB, it is twice the size and [lightly] penetrated," Joyce said.
Xerox MPS: Maturation required
Jim Joycevice president of managed print services for Xerox's U.S. channels unit
Many partners, however, have yet to embrace a mature Xerox MPS business model, Joyce said, which involves layering additional services and applications, such as security and analytics, on top of a foundational MPS offering. Partners must also take more of a consultative approach, rather than transactional, toward customers. A true MPS offering should allow a channel firm to "more deeply embed themselves" in their customers' businesses, he said.
Additionally, the majority of Xerox partners today think of MPS in terms of a "cost-per-click" model, which "really misses the mark," he said. Joyce said some partners are now shifting to more progressive models, such as "cost per user" or "cost per seat," per month, where customers are given a flat rate for everything they print. He said the SMB space welcomes this kind of predictable model, because it allows them to better control and manage costs.
Benchmark Business Solutions, a Xerox partner headquartered in Lubbock, Texas, was one of the first companies to receive Xerox's Master Elite MPS status through the accreditation program launched this year.
"We are really proud of our staff for going through the curriculum required and qualifications needed to reach that status within Xerox," said Jeff Horn, CEO and president of Benchmark.
Benchmark serves the SMB space in western Texas and eastern New Mexico, "targeting mom-and-pop businesses all the way up to medium-sized businesses," and it focuses on vertical markets, such as K-12 and universities, banking, legal services and government, Horn said. He noted the company's PrintSmart MPS practice developed over the last five to seven years and is growing at about 15% year over year. It was a shift from its previous focus on selling and servicing equipment.
"We have tried several different iterations of managed print over the years," he said. He cited retraining sales staff as one of the most challenging elements of making the transition.
In October, Benchmark acquired TonerTiger, an MPS and IT solutions provider based in Abilene, Texas, which is poised to boost the MPS business further.
Horn said customers that Benchmark engages are frequently concerned about security. Security is "one of the main driving factors in almost every sale that we come across," he said, adding that he is happy with the security features that Xerox has built into their products. "The embedded security that they have within their devices today protects our clients [and] it protects us in being able to provide the best customer service out there."
MPS meets NASCAR
TUI Total Solutions, an MPS provider based in New Smyrna Beach, Fla., is also satisfied with the security features of Xerox's products. TUI, which has partnered with Xerox for about four years, recently won equipment and services deals with the International Speedway Corp. and NASCAR. The deal includes an MPS contract at ISC's Daytona International Speedway facility.
Zack McDonald, CEO of TUI, noted that Xerox products offer many layers to security. "To be able to offer that in with your solutions ... is a big deal," he said.
In addition to initiatives like the Xerox MPS Accreditation Program, Joyce said Xerox is moving many of its direct customers to partners. Xerox is the midst of "transferring tens of thousands of active customers to our partners," he said. He expects this process will continue over the next 12 to 18 months.