India is the fastest growing market for Managed Print Services (MPS) in the Asia Pacific Excluding Japan (APEJ) region and is expected to increase from $31 million (around Rs 160 crore) in 2007 to $70 million (around Rs 365 crore) by 2011, representing a Compound Annual Growth Rate of 22.6 per cent, according to a new report by Springboard Research.
MPS is a strategy designed to help manage the volume of documents flowing through the organisation and minimise the costs associated with printing, sharing and updating them. It would involve decreasing the number of output devices (one needs to look at the ratio of output devices to the employee population) and also addresses the issue of reducing paper consumption, decreasing power usage and eliminating several tonnes of landfill waste.
While India is definitely the fastest growing of all APEJ regions, it does not represent the largest MPS market opportunity and in terms of maturity, it is in the nascent stage of adoption. Though India will continue to lag behind relatively mature markets (Tier I markets for most vendors, with revenues more than $100 million or Rs 520 crore) like Australia and Korea, it will be significant when compared to other Asian countries below $100 million (Rs 520 crore) in market size. In fact, India’s market for MPS offerings is expected to be at least double that of countries such as New Zealand, Hong Kong and the Philippines.
The report also focuses on the recent trends in the MPS market in 2008 and shows that these offerings have yet to make a significant impact on the SMB (Small and Medium Business) vertical. Moreover, it notes that though the MPS sector is growing, it is yet to be classified as a mature segment and that most adopters are recent. In fact, the report estimates that nearly five per cent of the total APEJ printer market is managed using MPS and this is also a recent phenomenon.
The report also highlights uncertainty regarding the benefits of MPS engagements as one of the growth inhibitors to MPS in the region. Enterprises are also distracted by security concerns over document privacy. These issues, along with employee resistance to “losing their devices” has impeded enterprise MPS. Furthermore, most CIOs are also faced with a dilemma of working with a single vendor for their printing infrastructure needs and continue to be suspicious of the actual business benefits.
Finally, it has also suggested some success factors for the vendors who, it says, not only need to alter MPS perceptions but also needs to use innovative marketing to educate end users.