HP Looking To Managed Print Services To Reverse Supplies Dip

Managed print services typically encompass supplies, and HP CEO Dion Weisler says MPS could be key to solving the decline in supplies revenue.

HP Inc.'s strategic focus for overcoming its drop in printer supplies centers on expanding the company's contractual business, CEO Dion Weisler told Wall Street analysts Thursday.

Contractual managed print services typically encompass supplies, making that revenue less prone to the market forces that are impacting HP's supplies business. In HP's fiscal second quarter, ended April 30, HP reported that its print supplies revenue dropped 3 percent from the same period a year earlier.

[Related: 5 Biggest Drivers In The Managed Print Services Market]

That marked the second quarter in a row sequentially that HP saw a year-over-year decline of 3 percent in its supplies business.

HP executives have attributed the supplies drop to sales shifting online among commercial customers. Part of the issue is online competition from remanufactured cartridges and third-party alternatives, according to the company.

To combat the decline, HP is taking "very decisive actions," including a number of operational changes such as increased investments in search advertising and "upping our game in terms of brand protection," Weisler said during HP’s quarterly call with analysts.

Strategically, the Palo Alto, Calif.-based company is focused on boosting its efforts in contractual, he said.

"We're evolving in print to focus on driving growth in our contractual business," Weisler said. "Our customers are really interested in transacting with us through those contractual motions."

As HP and other print vendors have told CRN, many solution providers are missing out on major opportunities by focusing on product sales and ignoring the recurring revenue and margin that can come from selling MPS--which typically involves optimizing printer deployments to meet the current needs of the customer.

One solution provider that is capitalizing on contractual managed print services opportunities is Vancouver-based WBM Technologies.

WBM has seen 38 percent growth in MPS revenue over the past 12 months compared with a year earlier, said Brett Bailey, vice president and partner at the firm.

"Managed print is one of the great opportunities for us," Bailey said. "It can very quickly create business outcomes such as cost savings and end-user satisfaction. And once you start down that path, the amount of innovation available to us starts to broaden."

HP is clearly trying to "enable and empower" its channel community around increased managed print services, he added.

"There are lots of solutions that HP has allowed us to bring forward that are truly relevant," Bailey said, such as the HP Roam mobile printing solution for businesses. "Print can actually change and evolve with a modern workplace."