Magic Quadrant for Managed Print Services, Worldwide

21 October 2013 ID:G00250995
Analyst(s): Ken Weilerstein, Sharon McNee, Elizabeth Kim

VIEW SUMMARY

Savings opportunities for customers are greater than ever as the focus of MPS shifts from optimizing printer fleets to optimizing business processes. Use this assessment to choose a provider that can offer consultation and not just equipment as the market transitions to managed content services.

Market Definition/Description

"Managed print services" (MPS) is a generic Gartner term for a service offered by an external service provider to optimize or manage a company's document output to meet certain objectives, such as driving down costs, improving efficiency and productivity, or reducing the IT support workload. Under MPS, a service provider takes primary responsibility for meeting the customer's office printing needs, including the printing equipment, the supplies, the service and the overall management of the printer fleet. The main components provided are needs assessment; selective or general replacement of hardware (optimization); and the service, parts and supplies needed to operate the new and/or existing hardware. The provider also tracks how the printer fleet is being used, the problems and the user satisfaction. The MPS provider analyzes the information gathered in the course of tracking printer usage and makes (or recommends to the customer) the adjustments needed not only to ensure fleet efficiency, but also to meet changing user needs.

Who Uses MPS?

MPS is mostly adopted by organizations with more than 500 users, across all industries and in all world regions. Although MPS can benefit all but the smallest organizations, it is midsize and large organizations that account for most engagements. Large organizations, in particular, tend to have the most complex and least efficient office printing practices to begin with, and thus they stand to benefit the most from optimizing MPS. These large organizations and many midsize ones, as well, typically have offices in multiple locations and world regions. Some seek MPS in all of their offices from Day 1, but most choose to start small and then add sites, divisions, countries and regions over time. For that reason, our Magic Quadrant is limited to providers that can serve as a single source for at least two world regions.

What Other Services Might Be Included in MPS?

MPS usually covers scanning and document capture and may also be expanded to include staffed services, such as copy centers, as well as telecommuters. It may also include enterprise content management services and workflow optimization components, such as developing custom applications for smart multifunction products (MFPs) that automate paper-intensive document workflows and route scanned pages to document management systems. It can also be extended to include the restructuring of document workflows. Some MPS engagements are also designed to improve document security or to reduce print volumes and power consumption for environmental reasons.

What Is the Difference Between MPS and Managed Content Services?

Gartner defines "managed content services" (MCS) as a comprehensive solution that rationalizes, streamlines and optimizes business communications by providing customers with consultative help, software and implementation. In the early stages of maturation, it is tightly coupled with MPS and focuses on communications inside the organization (for more information, see "Hype Cycle for Imaging and Print Services, 2013" and "Managed Content Services' Time Has Come").

As the successor to MPS, MCS subsumes the print-related functions of MPS and also helps customers manage the same content and documents in their digital form.

Note that the market for MCS is not yet mature enough to warrant its own Magic Quadrant.

How Did the Dawn of MCS Influence This Magic Quadrant?

This Magic Quadrant does take MCS into consideration, but it does not evaluate the MPS providers as though they were expected to deliver MCS today. It assumes that providers would use their current customer engagements to systematically learn everything they can about their customers' document-related needs in order to test and refine their own vision of how MPS can help customers beyond the printer fleet. This did not happen as widely or completely as we hoped, and our year-over-year changes in the Magic Quadrant reflect that. For example, needs assessments could have been used to research how customers are actually using printed documents and explore with them how that might change in coming years. Instead, they continued to focus on selling the current mix of products and services. Some MPS providers complain that customers deny them access to the appropriate contact points in the organization to discuss these questions, but then customers aren't really being given enough reason to open up. All this means that MPS providers need a more compelling vision. On the other hand, this Magic Quadrant reflects the fact that, as MPS practices mature, customers can generally expect improved execution, with, as in the past, differences among providers.

How Do Customers Pay for MPS?

MPS does involve a consolidation of spending, but the actual payment schemes vary. Generally, the external service provider either owns the hardware or (more typically) leases it from a financing company in its customer's name. The customer usually pays a per-page charge, which covers the cost of the equipment, any leasing costs, the supplies, the parts, the service and other MPS elements. Some contracts stipulate a minimum number of pages per device per month, with unused pages forfeited. Others involve some variation on the monthly minimum, such as a sliding cost per page that decreases as the number of pages increases. Services are usually folded into the click charge, although in some cases, they are billed on a flat monthly or quarterly basis. Contracts that impose no minimum number of pages appear risk-free but typically obtain some other financial commitment on the part of the customer, such as a flat fee, a per-device fee or a per-seat fee. Some MPS contracts include guarantees of a certain result, but this hinges on agreeing to do things the vendor's way. For example, a customer might have to agree to consolidate from an average of five users per device to 15 or 20 users per device, which implies a longer maximum walking distance for users, and the elimination of personal printers even for employees who must not leave their work location because they are interacting with their customers face to face or by phone. MPS may also be extended to include the outsourcing of desktops, servers and networks.

Magic Quadrant

Figure 1. Magic Quadrant for Managed Print Services, Worldwide
Figure 1.Magic Quadrant for Managed Print Services, Worldwide

Source: Gartner (October 2013)

Vendor Strengths and Cautions

ARC

ARC Document Solutions was the ninth-largest MPS provider worldwide in 2012, with $72 million in MPS revenue. It first qualified for inclusion in this Magic Quadrant in 2011. The company was formed over many years through the acquisition of local reprographic service providers that specialize in meeting the document-related needs of architecture, engineering and construction (AEC) firms. These include the need for skilled and usually on-site staffing, rapid turnarounds, excellent image quality, wide-format prints, and accommodating the cyclical nature of proposal- and project-driven niches, as well as managing and distributing digital documents. ARC is also one of the few large MPS providers that is neither an equipment manufacturer nor closely tied to a single manufacturer.

Strengths
  • ARC understands and caters to the needs of AEC customers in their permanent offices, as well as in their short-term project sites. ARC is also an independent integrator for many brands of regular and wide-format equipment, rather than a manufacturer with a stake in selling its own products.
  • ARC provides especially detailed cost tracking and clearly organized invoices that AEC customers need to manage and bill back their print-related costs across many customers and projects.
Cautions
  • ARC has very few customers outside the AEC industries. In principle, many other sectors might benefit from the flexibility that ARC offers its AEC customers in setting up and taking down temporary sites. But in practice, the economics of other sectors would make this difficult, and neither ARC nor its local subsidiaries have shown a strong interest in them.
  • Look closely at the resources and experience that ARC will apply to sites and projects outside North America and Europe. Although the company is active and opportunistically growing in other world regions, ARC's business volumes are still small and the track record is thin.

Canon

Canon was the fifth-largest provider of MPS worldwide in 2012, with $810 million in MPS revenue. Its MPS business is built on one of the largest sales and service organizations in the world for MFPs, and Canon's extensive A3-centric product line also underpins its MPS offering, which it calls Managed Document Services (MDS). Canon serves the gamut of industries, and most of its direct operations seek to help customers by optimizing and managing their printers and MFPs, rather than the vertical-specific approach that some competitors take. Canon first qualified for inclusion in this Magic Quadrant in 2008.

Strengths
  • Canon serves and actively pursues a wider range of company sizes, industries and office types than some competitors. Its MFP lineup helps it provide the right equipment for all kinds of customers.
  • As Canon makes organizational changes over time, it is aligning its organization around MDS, which should favor MPS customers. In the U.S., the new Canon Information and Imaging Solutions division and Canon Solutions America provide a convenient starting point for a thorough and methodical MPS start, including needs assessment and planning.
Cautions
  • Check that Canon will cover all your MPS goals in all your locations. Capabilities vary between and within countries, so check how it will, for example, provide high uptimes in small dispersed offices, or ensure consistent results across world regions or in developing countries, such as those in Latin America, where it has little MPS experience.
  • You might assume, because Canon controls the company that develops its uniFLOW software, that Canon would integrate uniFLOW under MPS in a complete and seamless way. If you are considering large-scale job accounting or pull printing, clarify with Canon who will support it.

HP

HP was the third-largest MPS provider worldwide in 2012, with $1.53 billion in MPS revenue. It has won and retained large numbers of MPS customers of all sizes in all sectors and in all world regions. HP has qualified for inclusion in this Magic Quadrant since 2008 and over that time has proved itself with more customers than almost any other MPS provider. HP's service consists of a single global package, with different service sets and options that vary with the needs of the customer and with the location. Although HP provides MPS to all sectors, it recognizes that helping its customers optimize their document workflows and business processes requires an industry-specific focus, and it is now taking that approach with the communications, media, entertainment, healthcare, utilities, financial services and insurance industries and the public sector. Since its own equipment is mostly of the A4 design, HP also collaborates with Canon and other manufacturers to provide and service A3-style MFPs. For many of HP's largest customers, MPS is an extension of a relationship that also involves IT infrastructure outsourcing services or computer systems, storage or networking. Many customers also started with HP laser printers. HP's MPS has continued to grow even through the changes of CEOs and the financial ups and downs of HP overall, and also as its parent division was merged with Personal Systems. Despite all this, MPS customers generally do not report disruptions.

Strengths
  • HP has all the extras that other MPS providers offer, and it consistently executes well on all the main aspects of MPS, even where its competitors sometimes falter. It delivers on needs assessment, scoping and planning the MPS engagement, rollout, monitoring and reporting, and user training. This continues throughout the engagement, with respect to routine maintenance, repair, supplies provisioning and billing. HP also communicates closely with customers over the whole course of the engagement.
  • HP is one of the only MPS providers able to support the MPS-specific approach to uptime that Gartner recommends, as well as the gamut of the SLAs that customers typically request (see "Seven SLAs for Success With Managed Print Services").
Cautions
  • Even some satisfied customers have noted a lag between HP's hardware and software developers that delays the alignment of drivers and HP's software, such as HP Web Jetadmin, with the latest HP printers and MFPs. Check with HP how this might influence when you roll out new devices.
  • HP tends to both propose upfront and then advise over time a more A4-centric mix than you may need. Make your wishes known since HP has added more A3 models.

Konica Minolta

Konica Minolta was the sixth-largest MPS provider in 2012, with $391 million in worldwide revenue. It has one of the highest growth rates of large MPS providers (48%), mostly in North American and Western Europe, where it has just gone through an intense effort to ramp up its MPS operations. Known as Optimized Print Services (OPS) worldwide, Konica Minolta's service offering has been especially successful in Europe and is an increasingly important way for it to distribute its mix of A3- and A4-style MFPs. Konica Minolta has qualified for this Magic Quadrant since 2010.

Strengths
  • Konica Minolta is an aggressive competitor when given the chance to bid, and prospective buyers who put it onto their shortlist usually find it provides a fair deal all around.
  • Konica Minolta has added workflow automation solutions, managed network services for IT infrastructure, and reprographic services that complement OPS, but its real competency is a pragmatic approach to MPS that scales nicely to its many midsize MPS customers.
Cautions
  • Konica Minolta has a thinner track record with large customers in Latin America than that of most market leaders with whom it competes for the many large banks and other enterprises in that region.
  • Consider what enhancements your MPS might require over time as it grows, and ask Konica Minolta about its plans. Following the launch of OPS in 2009 and a multiyear service expansion, Konica Minolta has reported fewer advances recently in the MPS-specific tools and infrastructure used in its direct MPS engagements. Such direct investment is what it takes to elbow aside larger competitors and gain the kind of market leadership Konica Minolta seeks.

Kyocera

Kyocera Document Solutions was the 10th-largest MPS provider in 2012. It scaled up its MPS program, known as Managed Document Services (MDS), later than most of its competitors and first qualified for inclusion in this Magic Quadrant in 2012. Kyocera is a major laser printer and MFP supplier and provider of other document solutions, and the company has long differentiated itself with its waste-reducing long-life imaging drums. Although North America is the largest market for MPS, Kyocera's MPS program is more firmly established in Western Europe than in North America. In both regions, it relies mostly on its established dealer network for service.

Strengths
  • Where most MPS programs were designed for large enterprises and then scaled down to midsize, Kyocera's mainstay is midsize customers. Such customers often need help with the initial needs assessment, so ask how Kyocera can use its software and process to help you scope out your printing environment.
  • Kyocera's printers and MFPs provide a good basis for the high levels of device utilization that should accompany a successful MPS. They have some of the low operating costs and paper handling and durability features normally associated with higher-volume equipment, as well as less materials waste.
Cautions
  • Kyocera will need to make sustained and continuing investments in software, solutions and methodologies to stay current, and that may be difficult for it to sustain at its current MPS revenue levels. So take stock of the emerging trends that might affect you, such as the shift to managed content services, and ask how it will keep MDS up to date over time.
  • Enterprises should check carefully how Kyocera will meet their MPS requirements. The number of Kyocera's large MPS customers is still modest, and some sales and operations teams may not have much experience incorporating into MPS such elements as change management or copy center staffing. Kyocera also relies partly on its dealers to fulfill large-scale MPS engagements, but their expertise is usually with small or midsize customers.

Lexmark

Lexmark was the fourth-largest MPS provider in 2012, with $958 million in MPS revenue. It specializes in industries that do a lot of process-driven printing, such as retail, banking and securities, manufacturing and natural resources, insurance, public sector, and healthcare. Lexmark has qualified for inclusion in this Magic Quadrant since 2008. Although there is a single Lexmark plan, it is adjusted and customized to the needs of the organization.

Although Lexmark's recent and well-publicized acquisitions were in enterprise content management (ECM) and other digital document areas, Lexmark has also made, and continues to make, substantial investments in MPS software, practices, staffing and training. Lexmark usually advocates an optimization strategy that centers on equipment of an A4 design.

Strengths
  • Lexmark has a complete and well-thought-out MPS methodology that has been proved in large and multinational enterprises, and the modular approach can be scaled to midsize ones, as well.
  • Lexmark's keen understanding of its key vertical markets has helped it shape its MPS practice to those industries' needs. It can augment the customer's business workflows in ways that a less specialized competitor would not think of. This is consistent with the market shift toward MCS. Lexmark's ECM software acquisitions position it to build on this in the future.
Cautions
  • Customers who compare MPS proposals on the assumption that the click charges for equipment and supplies represent the full cost should also check Lexmark's proposals for other fees and charges.
  • No MPS provider can specialize in all industries. If you are outside one of Lexmark's main verticals, ask for references in your own line of business who can speak to their experience as a customer. Try also to gauge Lexmark's level of interest in entering your industry.

Pitney Bowes

Pitney Bowes Management Services (PBMS) was the eighth-largest MPS provider worldwide in 2012, with $154 million MPS revenue by Gartner's estimate. Its MPS must be understood as part of a broader service line, since most of its MPS customers have also outsourced their copy center, mailroom or production printing center to PBMS, and their spending on those services may be much greater. The same personnel typically care for the office printers and MFPs, at least in the main sites. PBMS is now in the midst of a major transition. Its business was always heavily concentrated in North America and became even more so after it sold off its U.K. and Ireland operations to Swiss Post in 2013. That is one part of the transition; the other part is that, in October 2013, Pitney Bowes completed the sale of the entire PBMS division, including its MPS, to Apollo Global Management, a private equity company that specializes in acquiring and operating distressed securities. Under Apollo, PBMS will operate as a new stand-alone company named Novitex Enterprise Solutions. Since PBMS obtains its equipment from a wide variety of manufacturers, it can mix and match models across both A3 and A4 designs and place best-of-breed equipment. It's important to note that this reduces the disruptive potential of the sale, since Novitex is able to function independently of Pitney Bowes. PBMS first qualified for this Magic Quadrant in 2008.

Strengths
  • Some customers see the role of assessment provider and advisor as an implicit conflict of interest for equipment manufacturers, and they seek out PBMS as an independent that does not manufacture printers or MFPs but supports and distributes most brands.
  • Pitney Bowes has a wide range of services and long track record in adjacent areas to MPS, such as copy centers, production printing centers and mailrooms. In this way, customers can concentrate their spending with a single vendor and take better advantage of the on-site staff to maintain and manage the office printers as well.
Cautions
  • The effect of selling off the U.K. and Ireland operations is to narrow even further what was already a smaller global footprint than the leading MPS providers have. Customers who already have used or are considering using PBMS for MPS outside North America should ask PBMS to clarify its plans, and respond accordingly.
  • Part of the great promise of PBMS was that it would apply the Pitney Bowes parent company's cutting-edge analytics, currently used for targeted marketing, to a forward-looking, breakaway MCS offering, as reflected by its 2012 position as a Visionary. Under Apollo, that outcome is much less likely, since Apollo's expertise is in financial undertakings and not specific to this industry.

Ricoh

Ricoh was the second-largest MPS provider worldwide in 2012, with $2.09 billion in MPS revenue. It has very effectively mobilized its far-reaching worldwide sales and service organization both to shift existing customers to MPS, and to aggressively pursue new MPS accounts, some of which it has pulled away from competitors. Ricoh tends to draw on its own broad line of A3 MFPs in its MPS engagements. Ricoh formally announced its offering, known as Managed Document Services, in 2009, and it stands out for its heavy and well-publicized investments in MPS since 2011, as well as for its intense efforts to refine and promulgate its MPS program internally. Ricoh has a single service plan, with options and variations to suit the needs of different kinds of customers.

Strengths
  • Ricoh aggressively contends for customers' business on both price and value, and it does so across a wide range of customers, and not only the largest and most lucrative ones. It does this in different world regions and beyond where MPS is already most popular.
  • Ricoh has a complete and proven MPS methodology, as well as extensive experience with customers of all types and sizes. Customers benefit from this and from the continuing improvements it makes in MPS, such as its Global Clariti software, as well as in its extensive MFP line.
Cautions
  • There are few deals that Ricoh says "no" to, but review carefully with Ricoh how it will accomplish what it promises. Customers sometimes report follow-through glitches in such diverse areas as delivering global proposals and global contract language, as well as managing the software vendors that sometimes provide pull printing and other functions.
  • Ricoh tends to propose A3 equipment rather than A4 equipment in MPS deals. In some regions, customers find Ricoh reluctant to manage existing equipment from other manufacturers. Most prospective customers benefit from a mix of equipment types and should ask about Ricoh's A4 lineup.

Toshiba

Toshiba was the seventh-largest MPS provider worldwide in 2012, with $163 million in MPS revenue. It has qualified for inclusion in this Magic Quadrant since 2008. The Toshiba Encompass brand includes MPS and needs assessments. Toshiba is also a major supplier of A3-style MFPs, and it usually places them in its MPS engagements. The company can provide MPS directly, but most of Toshiba's business is done through its extensive dealer network. Since 2012, Toshiba has begun to seek synergies between its printing business and other business lines, such as digital signage and the Toshiba TEC point of sale (POS) division that acquired IBM's POS business in 2012.

Strengths
  • Toshiba's MPS customers generally report that it is responsive and attentive to their needs, and it's common for customers to remain loyal and stay with Toshiba over time. Many were originally customers for Toshiba's well-established line of MFPs.
  • Toshiba poses intriguing synergies for managing digital signage and POS as an extension of MPS, especially in sectors such as retail, hospitality and education. Like printers, digital signage is easy to purchase and deploy but harder for most organizations to use efficiently and effectively on their own.
Cautions
  • Toshiba's reliance on dealers for geographically dispersed accounts means that coverage can be patchy and less than uniform, even within a single region or country.
  • Toshiba's MPS business is heavily concentrated in the U.S. Its market presence and track record elsewhere are much narrower, even in Western Europe, which is the second-largest market for MPS in the world. Prospective buyers in these areas should look closely at the MPS-specific experience of the Toshiba organizations in those regions.

Xerox

Xerox was the largest MPS provider by a wide margin in 2012, with $2.75 billion in MPS revenue. Xerox's MPS practice dates to before 2000 and was the first large-scale program of its kind, upon which most of its competitors' MPS programs are to some degree modeled. It has qualified for this Magic Quadrant since 2008. Enterprise Print Services (EPS) is the most comprehensive plan, followed by partner-delivered Xerox Partner Print Services plans. Xerox works hand in hand with Fuji Xerox, which is the dominant MPS provider in the Asia/Pacific region and one of the largest worldwide, to provide customers a consistent set of services cross-regionally or globally.

Strengths
  • A very solidly established MPS program with consistent follow-through has earned Xerox the trust of a wide range of customers of different sizes and across different regions and industries. There are few customers that Xerox cannot accommodate.
  • Buyers must look ahead: The shift from MPS to MCS will require providers to invest heavily in R&D in coming years around digital document workflows and business process optimization solutions and practices for customers. Xerox's diverse business lines give it a running start on this effort, and its dominant share of the MPS market will help it justify making those investments more easily than competitors could.
Cautions
  • You might assume that Xerox's market leadership will ensure a successful engagement. But customers sometimes note lags — usually minor — on the basic MPS processes, with the variable often being how closely and consistently the customer itself is involved with planning the engagement and monitoring its execution. For example, complacent customers sometimes report shortcomings in areas such as needs assessment, rollout and training.
  • Although Xerox is well-suited to the breadth and geographical reach that large enterprises often require, those same customers also tend to have complex IT environments and sometimes unique requirements. Despite improvements in Xerox's organizational structure to improve account delivery, some customers still don't get the cooperative and timely responses that they need. Navigating the company to find help can be difficult for customers and even employees.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

No vendors have been added.

Dropped

No vendors have been dropped.

Inclusion and Exclusion Criteria

Inclusion Criteria

Only vendors that meet all the following criteria are included:

  • Provides the equipment (via lease or as a procurement service).
  • Provides the supplies.
  • Performs the repairs and preventive maintenance.
  • Provides the technical support.
  • Has at least 25 MPS customers in total, each with 500 or more users.
  • Provides MPS in two or more world regions to at least one customer. The customer must be verifiable and have at least 500 MPS users. The regions are North America, EMEA, Asia/Pacific (including Japan) and Latin America.
  • Provides the long-term tracking and management of the printer/MFP fleet.
  • Performs the initial assessment(s).
  • Buys back or disposes of existing equipment that is being replaced, if this is required.
  • Bills on a per-page or per-seat basis.

Exclusion Criteria

Print-related services that fall short of MPS are excluded. These include traditional, narrowly drawn copier contracts; certain retail printer service packages; and most infrastructure outsourcing contracts. Some genuine MPS providers also did not qualify because they did not meet one or more of our inclusion criteria. Many small MPS providers operate in only one country or location, and thus they do not meet the inclusion criteria for the Magic Quadrant, either. Depending on your requirements and needs, you may want to also consider these providers as well. Gartner recommends you contact our analysts to discuss your specific circumstances and needs, and to help you determine which of the MPS providers makes sense for your shortlist, whether or not they are in this Magic Quadrant.

Evaluation Criteria

Ability to Execute

The Ability to Execute axis position for each MPS provider is based on its success in delivering results today, as well as its preparation to deliver results in the future. On this axis, Gartner verifies an MPS provider's capability to deliver MPS based on direct feedback from extensive interviews with its clients and other provided customer references.

Gartner analysts evaluate MPS providers on the quality and efficacy of the processes, systems, methods or procedures that enable their performance to be competitive, efficient and effective, and to positively affect revenue, retention and reputation. Ultimately, MPS providers are judged on their capability and success in capitalizing on their vision.

Each criterion is weighted high, medium or low in importance and scored accordingly. Table 1 shows the criteria for evaluating providers' Ability to Execute.

Product or Service: This criterion addresses core goods and services offered by the MPS provider that competes in and serves the defined market. This includes current product and service capabilities, quality, feature sets and skills. We probed how well the provider ensures that the customer ends up with the right mix of equipment and help throughout the MPS engagement.

Overall Viability (Business Unit, Financial, Strategy and Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the business unit's likelihood of continuing to invest in the service solution. We drew on all available sources to gauge how solidly grounded the MPS providers are today and how safe a bet they are for the future.

Sales Execution/Pricing: This criterion examines each MPS provider's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. MPS agreements can lock in customers for years and can do more harm than good if the terms, conditions and pricing are drawn up wrong. We examine how well the vendor ensures that the customer gets a fair deal that is appropriate for the customer's needs.

Market Responsiveness/Record: This criterion looks at the MPS providers' ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the provider's history of responsiveness. Successful MPS engagements cater to the specific needs of the customer at hand. We looked closely at how far the vendor goes to ensure the success of the specific customer.

Marketing Execution: This criterion refers to the clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the MPS offering, and establish a positive identification with the service/brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotional activities, thought leadership, word of mouth and sales activities. Effective marketing is important, because customers struggle to understand exactly what each vendor will do for them and how this differs from one provider to another. We look from all angles at how well the vendor communicates this, and how easy it is for customers to obtain this information.

Customer Experience: This criterion evaluates the relationships, products and services/programs that enable clients to be successful with the MPS evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups and SLAs. Successful MPS depends on the provider's relationship with the customer in ways that SLAs and contract clauses can never entirely anticipate and enforce. We look from numerous angles at how well the provider ensures it maintains a good all-around relationship with the customer.

Operations: This criterion reviews the MPS provider's ability to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Office printing is one of those technologies that affect almost everyone, so even small disruptions matter. We look at how the vendor works hand in hand with the customer to minimize the disruption to the end users and key stakeholders in the customer organization.

Table 1. Ability to Execute Evaluation Criteria

Criteria

Weighting

Product or Service

High

Overall Viability

High

Sales Execution/Pricing

High

Market Responsiveness/Record

High

Marketing Execution

High

Customer Experience

High

Operations

High

Source: Gartner (October 2013)

Completeness of Vision

The Completeness of Vision axis reflects each MPS provider's prospects for success by analyzing its view of the market, service operating model, and strategic plans for growth and service improvements. Gartner verifies an MPS provider's vision based on presentations from the provider and direct feedback from extensive interviews with the MPS provider's clients, as well as insight gained while answering Gartner client inquiries on that topic.

Each criterion is weighted high, medium or low in importance and is scored accordingly. Table 2 shows the criteria for evaluating providers' Completeness of Vision.

Market Understanding: This criterion refers to the MPS provider's ability to understand buyers' needs and translate these needs into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and they can shape or enhance those wants with their added vision. We look at key areas in which the provider can prepare the customer for tomorrow's priorities as well as today's.

Marketing Strategy: This criterion evaluates the MPS provider's strategy and approach to marketing and promoting MPS. We looked for a clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, social media, advertising, customer programs and positioning statements.

Sales Strategy: This criterion reviews the provider's sales strategy and its capability to sell MPS. It includes the strategy for selling MPS that uses the appropriate network of direct and indirect sales, marketing, service and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: This criterion addresses the MPS provider's approach to MPS development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Across each of the main elements of MPS, we examined how the vendor maximizes the benefit of its MPS to customers.

Business Model: This criterion assesses the soundness and logic of an MPS provider's underlying business proposition. A sustainable MPS business model must not only deliver savings and other benefits to customers, but also minimize the risks. We looked at how the vendor protects its customers against the risks inherent in MPS.

Vertical/Industry Strategy: The experiences that MPS providers gain and investments that they make in vertical markets will help them build and retain their customer base in an increasingly competitive market. We assessed the MPS provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals.

Innovation: This criterion includes direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, or defensive or pre-emptive purposes. As MPS matures, customers should expect continued improvements both in what vendors do for them and in how they do it. This depends on judicious investments. We look at the quantity and quality of the providers' investments in MPS versus the value that they will likely provide to customers.

Geographic Strategy: This refers to the MPS provider's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market. Many of Gartner's clients have offices scattered across an entire country or region, several continents or the entire world. We evaluated the ability of the providers to accommodate the range of customers' geographies, from local through national, regional, multiregional and global.

Table 2. Completeness of Vision Evaluation Criteria

Criteria

Weighting

Market Understanding

High

Marketing Strategy

High

Sales Strategy

High

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

High

Innovation

High

Geographic Strategy

High

Source: Gartner (October 2013)

Quadrant Descriptions

Leaders

Leaders provide MPS to a wide range of customers, including the largest and most geographically dispersed, so they must demonstrate a truly global reach. They must demonstrate not only the skills to deliver today's MPS, but also the understanding, initiative and resources to prepare for tomorrow's MPS. Leaders characteristically augment the full scope of MPS with a wide range of added-value services. As a result, they are frequently shortlisted by large and midsize customers.

Challengers

Although Challengers have solidly demonstrated that they provide the core elements of MPS, they communicate a less complete view of the market direction than Leaders. The package of services they offer and the way it is marketed may also cater to a somewhat narrower range of company sizes and industries than that of Leaders. Even when the customers are the same as for Leaders, the scope of engagement may be narrower.

Visionaries

Visionaries thoroughly understand today's market and also know how to address customers' future needs and expectations. In the aggregate, they provide a wide range of MPS to a diverse range of customers. There are no Visionaries in the current Magic Quadrant for MPS.

Niche Players

Niche Players meet all our inclusion criteria but provide a more-narrow range of services to a more-narrow range of customers than the other vendors. They may be a cost-effective choice for customers whose requirements, scale and geographical scope happen to be a good match. They may also cater to specific industries. Some customers also report that the Niche Players pay them especially close attention and are generally more accommodating than large vendors.

Context

Gartner's MPS Magic Quadrant is a useful starting point for identifying and evaluating MPS providers. It is intended for Gartner's client base of mainly midsize and large organizations, many of which operate throughout two or more regions, and some of which are truly global. Although not all MPS projects are multiregional or global at the outset, customers often choose to scale up one region at a time. In this way, they can manage their office printing in a unified manner globally. The providers in this Magic Quadrant have the geographical scale to attend to your office printing needs across world regions in a coordinated way.

Numerous other MPS providers approach their MPS projects locally, country by country, or region by region and cater to like-minded customers, but they do not appear in this Magic Quadrant. Why not? As organizations progress from the prevailing loosely managed approach to an efficiently and closely managed one, it makes sense to manage the entire fleet in a unified way, rather than with today's characteristically fragmented approach. Naturally, some MPS customers are organized in a way that makes a unified fleet impossible or are confined to one country or region.

Your provider selection should be based on a detailed evaluation of your office printing needs and goals compared with a service provider's capacity to fulfill those requirements and expectations. Just because a service provider falls into the Leaders quadrant does not automatically make it the right choice for you. All selections are buyer-specific, so providers in the Challengers, Visionaries or Niche Players quadrants may sometimes be a better match for your requirements. For example, MPS providers in the Challengers quadrant are capable of delivering the services required by most enterprises and may have a long MPS track record. Customers whose needs are mostly at the local or national level, or whose interest in MPS is limited to reducing their printer and MFP fleet costs, may find Challengers more than adequate. For smaller organizations or large ones situated mostly in a single locale, providers in the Niche Players quadrant may be the most attentive and most-cost-effective match. Some Niche Players cater to specific industries. All the providers ranked in this Magic Quadrant are large, established companies, so buyers should not assume that the Niche Players are likely to drop out of the market in the near future.

Note that MPS is not right for everyone, and if you are unprepared to revisit what equipment and services you need to do the job, MPS will not produce results for you. Also, if you can trust an outside vendor to do no more than sell you equipment, repair it and provide the supplies, then you should seek a traditional purchase or lease arrangement. In this case, the savings opportunity will likely be smaller — 5%, rather than 10% to 30%. You will also need to take full responsibility for choosing the right mix of equipment and services, which would be the provider's responsibility under MPS. For more on how to choose the right printer and MFP fleet to meet your needs, see "Toolkit: Choosing the Right Classes of Printers and MFPs for Your Enterprise."

Market Overview

MPS is maturing and changing, and prospective buyers — even ones who have completed previous vendor selections or who are comfortable with their incumbent MPS provider — must understand where MPS is today, where it is headed, and what is holding it back.

Where MPS Is Today

MPS is a growing service market, with $8.9 billion in direct revenue from the top 10 vendors alone, and 10% growth worldwide (see "Competitive Landscape: Managed Print Services, Worldwide"). Once mainly limited to the most developed countries and the largest customers, MPS is now growing faster in developing regions, such as Asia/Pacific at 19%, and it is growing most rapidly among small or midsize companies. MPS providers are finally able to reliably deliver on their promises, thanks to more than 10 years of customer experience, as well as hundreds of millions of dollars spent on process refinement, training, software and staffing. Customers can expect solid MPS from providers in all four quadrants, and not only from the largest and most long-standing ones. As a result, large and midsize customers alike are able, to some degree, to take advantage of intense competition between vendors to ensure competitive prices and good treatment.

At the same time, what customers actually buy under MPS is gradually expanding from fleet optimization services, equipment and supplies, and printed pages to other, added-value, deliverables. For example, most MPS buyers we advise from Gartner's diverse base of roughly 10,000 client organizations are either using or considering pull-printing solutions to secure their printed documents and reduce their print volumes, and MPS providers must now step up to the challenges of fully supporting them, which is sometimes tricky. But the biggest risk that MPS buyers face is selling their own MPS engagement short by limiting their consideration of the cost-benefits and value to the infrastructure, and by leaving line-of-business departments out of the picture. Many customers we speak to give short shrift to user-side benefits that go beyond hard cost savings. Rather than treating MPS as a project and appointing experienced project managers, some customers pay so little time and attention to the process that they never completely optimize the printer fleet, which is one of the main reasons for choosing MPS to begin with. This approach undercuts the opportunity today and will undercut it even more sharply in the future.

Where MPS Is Headed and Why

Workplaces are changing under the combined trends toward mobility, data analytics, cloud computing and social media, and customers need to understand how the role of MPS is changing with it. Although MPS is growing, the shipments of office printing equipment are gradually decreasing, with an overall decrease of 7% between 2011 and 2016 (see "Forecast: Office Printed Page Volumes, Worldwide, 2011-2016"). This is just enough of a decrease to make it difficult for buyers to anticipate their future needs, but not so sharp a decrease that buyers can simply ignore the subject altogether. Buyers who don't do careful needs assessments may find themselves overspending on equipment and other resources. Naturally, with page volumes declining, such an assessment must look beyond historical and current printing needs to anticipate future demand, and that means looking at what is being printed and eliminating pages that are not really needed. Page volume levels are very uneven between different organizations in the same industry by a factor of two to three times, pointing out gaps in how effectively some organizations go about their business processes, handle information and documents, and communicate. The role of MPS, thus, will change gradually from simply helping customers optimize their printers and MFPs, to helping them handle documents more efficiently and eliminate printing where practical. The industry-specific needs assessments are a starting point, and one more step in the transition from MPS to the service we call "managed content services." MCS has modest beginnings with today's solutions for scanning and routing documents, replacing paper forms with digital ones, and helping users digitally search paper documents, but it will, over the next three to five years, help customers keep up with even steeper challenges that IT organizations and business departments will face. For more information, see "Hype Cycle for Imaging and Print Services, 2013" for more on MCS.

What Is Holding MCS Back?

In a basic sense, the shift to MCS is well underway, with many MPS engagements rolling in software that monitors how much users print or that holds print jobs on a server until users have authenticated themselves at the MFP (known as "pull printing"). Eager to shed their paper-centric image, MPS providers — all of which actually depend heavily on printing revenue — have taken to describing themselves in terms of content or documents. Some have actually diversified into document management services and solutions as well, but this is mostly a separate line of business, with little real synergy with their office printing and MPS. For printer manufacturers, then, MCS is a way to make that vision of reducing their dependence on printing into a reality.

The thing that is holding back MCS today is mainly trust and access to, and engagement with, the line-of-business leadership. Based on our continual reviews of MPS proposals and contracts, software and solutions today account for only 5% or less of MPS spending. The main barrier is that customers' purchasing and IT departments control MPS planning and vendor selection, and most are reluctant to complicate what they see as a simple infrastructure project with business-specific solutions and consultative help that happen to fall outside their own areas of responsibility. Accustomed to hardball copier negotiations, they tend to keep their MPS providers at arm's length, and deny them access to the line-of-business managers who stand to benefit from faster and more reliable business processes. Trust is a two-way street, though, and MPS providers must recognize that their customers are getting the wrong signal when, as many have told us, the MPS provider failed to comprehensively support the pull-printing and job accounting software they sold the customer, pushing the responsibility to the software developer and leaving the customer in the middle.

Implications for MPS Customers

Choose your MPS provider on its ability to help you optimize your printer fleet and keep it optimal. Beyond the obvious equipment, supplies and technical support, this includes the needs assessment, ongoing tracking and consultative help, as well as software-based components, such as pull printing and mobile printing services. Take into consideration any value-adds that make sense for you today, such as workflow packages for business process and forms or for scanning and searching paper documents. At today's level of maturity, all MPS providers should be able provide all these things, but how they go about it, at what cost and with what kind of foresight (around such risks as diminishing page volumes) will influence your selection. Don't stop there, though: Anticipate the help you'll need to streamline the business processes that generate much of your printing, and to help users reduce their dependence on paper for their ad hoc communications and carry them out more effectively. Choose an MPS provider that you believe will be able to help you meet these needs as they arise in coming years, even if they are not part of your current charter for MPS. In this way, you will end up with the best MPS provider for the entire length of the engagement and minimize the need to switch when the contract is up in three to five years.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.