Year in Review
Revealing Snapshots from the Industry
We’re coming to the close of a very interesting year. Trends, such as TransPromo, made it into the limelight, while others established permanence in the industry. It is common to come across a print service provider well-versed in the lingo of a marketing professional—a telltale sign that we are embarking on a rapid evolution of print.
This article’s year-end recap looks at the market from the perspective of the manufacturers making it all happen. We asked various industry professionals to share their thoughts on the state of the digital print industry, and the vertical markets that affect it.
Their knowledge and forecasts provide a deeper understanding of the market changes, and where their company positions itself. It is safe to say that things these individuals find important today will most likely be dominant in the next-generation of technology.
Bitstream, Inc.
Anna Chagnon, president and CEO
2007 marked a year in which printers, marketing service providers, and corporations sought out technology as a way to grow their business and gain efficiencies. Three big areas of growth for our customers and for us were in Web-to-print, marketing automation and tracking, and workflow automation.
In 2007, we saw an explosion in the demand for Web-to-print solutions with a focus on increasing the simplicity involved in getting a Web site up and running. We also saw an increase in printers expanding their storefronts into the business-to-consumer market. To support that shift, we released a new version of Pageflex Storefront that addressed the functional and graphical requirements of a storefront that sells print to consumers. For 2008, we anticipate that this business-to-consumer expansion will continue to grow.
We continued to observe how marketing has become a two-way conversation between companies and their audiences. Enabling this type of conversation are multi-touch cross-media campaigns that bring together email, print, and personalized URLs. Consequently, we saw a dramatic increase in demand for our cross-media technology that enables this type of dialog with customers.
These types of customer conversations yield important data, and capturing and reporting that data is essential.
Customers are also looking for ways to be more efficient. We saw an increased demand for lights out production workflows. Pageflex supported this demand by developing software integration with a number of production workflow systems. We expect to see a wider adoption rate for these integrated workflows in 2008.
Böwe Bell + Howell
Marv Isles, CEO
The Postal Accountability and Enhance-ment Act (PAEA) and IMB have created opportunities—mailers can leverage technology to improve operations and generate savings, as well as create new value-added services.
The United States Postal Service (USPS) is reshaping the mail flow through incentives and penalties. Shape-based pricing, for example, charges more for flats than folded letters. Mailers can reduce postage by up to 39 cents per piece by folding the contents of a first-class large envelope and mailing it in a letter-sized envelope. But the documents must be reformatted—a challenge for mailers who bill from complex legacy applications. Print stream manipulation software such as BÖWE One ReCompose modifies the appearance of print-ready output without needing to touch legacy databases.
With more emphasis on correct mailpiece assembly and processing, an audit trail is invaluable for documents requiring high integrity. Mailers can rely on robust item management software to assure compliance. Emerging technologies such as Document Fingerprinting can also help ease the burden of tracking documents, while creating additional opportunities for mailers to drive value from the existing mailstream.
Due to more stringent requirements and more frequent audits, improving data quality is an imperative. CASS-related discounts are only available when the first line of an address can be confirmed via the USPS' Delivery Point Validation (DPV) process. An estimated two percent of the addresses from a mailing list could lose their automation discount, greatly increasing the cost to mailers. USPS' Merlin has been updated to incorporate DPV. As the developer of Merlin, all of Böwe Bell + Howell’s preprint and sorter offerings are Merlin compliant.
Everyone in the mailing industry needs a healthy USPS. While we can expect ongoing uncertainty, the overall direction is clear. The mail stream is becoming more connected and the quality requirements are increasing. Those in the industry who can take advantage of these trends will benefit.
Canon U.S.A. Inc.
Janet Cain, director and assistant GM, Production Systems
Printers are looking for ways to redefine themselves and expand into new services to help maintain a healthy offering of print solutions and value-added services to their customers. The health of the digital printer market is growing nicely, and we feel that we have entered the market with our imagePRESS C7000VP digital press and our workflow solution offerings at a really exciting time. The digital print market is still in its adolescent stages, still growing, and far from maturation.
Digital is not looking to replace offset, the two are a good complement to one another; they're a great team, each bringing unique efficiencies to the production table.
Canon sees digital variable data printing and personalization as opportunities for designers and printers to get more creative with output and incorporate more image variations, while delivering full campaigns with measurable return on investment (ROI). Instead of printing one standard brochure with a lot of information, where only 30 percent may be relevant to the reader, catalogs and printed pieces can be customized to the end recipient and based on buying preferences, category interest, or need. As companies are able to seamlessly collect more information, such as buying history, and set it up in a manageable format, it will drive more personalized printed pieces like catalogs or special coupon offers.
What will really drive growth is not just the productivity and efficiencies within the digital device, but also the efficiencies within the entire print system, from the Web submission to the finished product. All stages of the workflow are critical—creative and submission, business management, prepress, production, finishing and fulfillment—and market share will be driven not so much by pages per minute, but the integration of the steps in the printing process. The printer that offers that total solution will also see the greatest growth.
EFI, Inc.
Frank Mallozzi, senior VP, marketing and sales
We predict that the print industry will accelerate its analog to digital transition. The contributing factors are relentless—shorter runs and turnaround times, and increased demand for high-quality color pages and variable content. EFI is leading the digital revolution, providing customers with the imperative digital infrastructure. We're passionate about our customers' success and offer everything they need to drive growth and profitability: headlined by our Fiery, VDP, workflow, and color management, as well as inkjet printing, Web-to-print, JDF integration, business management, and proofing solutions.
Digital inkjet printing will continue its stronghold, and our VUTEk and Jetrion industrial printing solutions are well-positioned to maintain EFI's leadership position. Out-of-home advertising and display graphics will continue to take off, and VUTEk systems print high-definition quality color on the widest variety of flexible and rigid media substrates beyond paper, delivering applications ranging from banners, signs, and billboards to building wraps and high-end display systems, floor, window, and fleet vehicle graphics. Work-flow adoption in this segment is in early stages; we have designed our software products to create a 2008 uptick.
New software versions addressing customers' needs for labels, direct mail, and direct-to-substrate packaging. Our Jetrion systems deliver high-quality, high-speed personalization, bar-coding and other VDP, using fast-cure UV inks.
2008 will be big for production print as our partners ship high-end engines in volume.
Exstream Software, LLC
Richard Troksa, CEO and president
The evolution from monolithic to service oriented architecture (SOA) is forcing companies to look at new ways to use technology. Businesses typically have hundreds of applications that involve documents. We are seeing that companies are now evaluating the entire business process, not just the document, in an effort to make processes as efficient as possible and create documents that truly drive the business. To optimize cost and document effectiveness, companies want solutions that allow for the consolidation of data sources to make it possible for one application to drive multiple types of customer communications.
In early 2007, we saw enterprises deploy document infrastructures that met the needs of IT departments. What we are seeing today is that lines of business are beginning to influence that infrastructure in an effort to obtain a competitive advantage.
New application demands, such as on demand or interactive documents, are picking up momentum, causing enterprises to recognize that it is the application that will drive the business process in 2008—and subsequently the infrastructure to support it.
Exstream Software was founded in 1998 with the vision that a document evolution would take place over the next decade. Our Dialogue enterprise document automation software was developed to answer the traditional technical need for a single platform infrastructure. However, it was built from the ground up to be ready when the time came to answer the need to support all types of emerging applications, whether they are high-volume, on demand, or interactive. Dialogue readily offers the scalability necessary to grow with your business and, provides enterprises with the adaptability necessary to respond to the changes we have experienced to date, and are sure to see in the future.
Hewlett-Packard
Rich Raimondi, VP and GM, U.S. Graphic Arts Organization
One of the major trends over the past few years has been an increasing level of competitiveness that is leading print service providers (PSPs), and by extension their vendors, to focus on quality and features that create a distinct advantage. Printers are expanding their service offerings, becoming marketing providers in addition to producing print. 2007 saw some trends take shape in specific markets, like TransPromo and digital photography. This year also brought attention to specific technological developmental needs, such as sustainable technology.
There’s no denying the importance of greener technologies and green thinking—it is much more than a trend and will be a factor in everyone’s future business decisions. HP has been committed to developing and promoting greener solutions for many years, and is consistently working to design for the environment with its solutions. This year, HP made two major steps in providing the option for UV-curable large-format among those who need it to address regulatory concerns or other factors: the HP Scitex XL200 printer, the first product using HP’s next-generation X2 UV printheads, and the announced acquisition of MacDermid ColorSpan, the market leader in UV flatbed printers. In our digital press business, we’ve reached the point where a wide range of recycled-content, SFI-certified and FSC-certified papers can be used on HP Indigo equipment.
InfoPrint Solutions Company
Chris Reid, global solutions manager
There are two key trends we have seen this past year. First is the ongoing uptake of color amongst customers, in particular innovation in variable data production printing.
Secondly there is a great buzz in the industry surrounding TransPromo, particularly when dealing with external factors such as new postal rates, environmental concerns, and opt-out mailing lists. Transpromo is not only a great way to conserve the amount of paper inserted into each envelope, it is a more relevant and personalized way to reach audiences. The use of color means the statement becomes a revenue center rather than a cost center as it draws the attention of end-users with highly targeted marketing and special offers.
We expect to see TransPromo grow significantly in the next 12 months. The notion of TransPromo is not itself new, but many enablers are appearing that can make TransPromo a reality for our customers. Variable data management software, for example, that combines data with color for targeted messaging, or "onserts" as they have become known, will drive uptake. And once some of the big players openly support the use of TransPromo, we will really see a spike in uptake.
InfoPrint Solutions Company continues our aggressive worldwide expansion, with new hires and new innovation bolstering our efforts. With further investment from our parent company Ricoh, we will continue to strive to lead the market with a slew of new solutions. Working with our customers to help them be both environmentally aware and profitable is also a key focus, as is working with all of our customers, both old and new to help them enable the best output solutions for their business.
Since the company launched in June 2007, we have seen two consecutive quarters of growth and expansion to mean that we operate in 36 countries worldwide. What makes the company really stand out is the combination of industry experience, from our heritage with IBM, combined with industry-leading innovation from the Ricoh family.
InfoTrends, Inc.
Barbara Pellow, group leader
At the risk of being repetitive, Info-Trends still believes that color is the most important trend for the coming year. Our surveys confirm that digital color, and the value-added applications that drive it, will be a source of growth for system vendors and print service providers. Driven by applications such as direct mail, TransPromo documents, photo-rich/on demand books and facilitated by Web-to-print tools, the digital color market will be the revenue driver for print service providers. With cost reductions, productivity enhancements, and improved workflows, we anticipate significant volume increases in color printing over time.
InfoTrends expects the U.S. Print On Demand market to experience an 11 percent CAGR between 2006 and 2011. This will bring the market to a total of $79 billion in terms of retail value of print by 2011. Nearly $70 billion of this total will be attributable to pages printed on color devices. Color is expected to rise at a 14 percent CAGR, while B&W will decline by negative two percent.
Companies like HP Indigo, Kodak, Xeikon, and Xerox have led the charge in bringing high-end process color digital products into production graphic arts environments. This competition is heating up as traditional copier vendors such as Canon, Konica Minolta, and Ricoh begin to play a larger role.
There is currently a large gap between the color product offerings from RISO and Kodak Versamark, and early indications suggest it will be filled by products from vendors such as HP and Screen, including new technologies from Kodak’s laboratories. Inkjet technologies pose a long-term threat to toner technologies. Although this will take time, inkjet technologies will begin to impact toner’s long dominance in the print-on-demand market.
Service providers who purchase digital printing equipment without a business plan in place are typically setting themselves up for failure. Many users have learned this the hard way, and numerous vendors have seen that without advanced preparation, their new customers do not produce the level of print volumes that drive strong aftermarket revenues. Xerox has led the field in this area with its Profit Accelerator program, HP is working to support customers with its Capture Program, and Canon has stepped up to the plate with its Essential Business Builder tools. There is clearly an emphasis on vendor support to build business.
System vendors, software providers, and print service providers are adjusting to a changing environment that values turnaround time, targeted messages, and reader impact over historic attitudes toward craft and quality.
Kodak GCG
Kevin Joyce, managing director, U.S. and Canada region
The overarching trends for digital printing in 2007—variable data, shorter runs, versioning, and increased color—will gain strength in the year ahead. Print providers will continue to place an emphasis on offering new capabilities and value-added services that take advantage of digital print technologies. As they expand and enhance their offerings, printers will focus on evolving their business from one that primarily produces print output to a company that delivers integrated communications services.
To gain greater shares of their customers' spending on marketing and communications, more printers will implement Web-to-print solutions in 2008. A robust electronic storefront provides an efficient, effective way for customers to order and purchase print. When integrated with an electrophotographic digital press, creative professionals and print buyers can easily create applications using customizable templates, variable data printing, and other digital-enabled techniques via Web-to-print. Photo services, such as calendars, cards, and books, will also gain greater momentum.
On the inkjet side of the digital print market, TransPromo communications continue as a major opportunity for providers of bills and other transactional documents. We also expect to see greater use of inkjet/offset hybrid printing solutions as printers seek cost effective methods for adding personalization and other capabilities to their services. Significant advancements in inkjet technology will be introduced in 2008.
Kodak is the only graphic communications provider with both conventional and digital solutions within the unified workflow system. That helps our customers create new revenue, increase profit, and grow their businesses.
Konica Minolta Business Solutions U.S.A., Inc.
Kevin Kern, VP product planning and marketing
The market is going through a dramatic transition at the moment driven by factors ranging from the growth in the adoption of color in the office to the rapidly increasing price performance of digital production class products. These changes will create risks for those who are not quick to adapt to change and opportunities for those who can take advantage of change.
At Konica Minolta Business Solutions U.S.A., our fundamental business strategy is based on three core elements: leading the color transition in office MFPs and printers, expansion of our production print business through breakthrough capabilities and value, and growing our software and services business.
In the general office market, see strong growth in the use of color. Early adopters have tended to be small- to medium-sized businesses, but we also see how larger companies are beginning to transition. Customers are also looking at their overall fleet of output devices, and attempting to rationalize their print strategies. As a result, we see an uptick in our assessment and implementation planning services.
Finally, you will see emerging standards that will influence the market. As an example, the federal government is mandating the use of IPv6 in their organizations, which will cause faster adoption rates in the private sector over the next several years. Windows Vista offers new print and scan technology with XPS. Users are requiring workflow integration for MFPs, which is driving more partners to work with the API's that come within the product.
With production print, we see continued progress of digital technology into commercial print. With our bizhub PRO C6500 product line, we see more short color work that used to be produced by offset machines. This drives the demand to integrate traditional production workflow, which Konica Minolta is doing with our controller partners—as well as through our Printgroove modular production workflow product line which utilizes JDF as the underpinning for interoperability. Printgroove can also integrate color and monochrome digital workflow, and supports expansion areas of commercial print like short run bookmaking. There will be a trend to expand in line finishing capabilities, particularly in areas like perfect binding as—while they will never replace offline finishing—they offer a complementary short turnaround service that is less labor intense.
2007 has been a banner year for Konica Minolta Business Solutions U.S.A. We look forward to another year of growth as we continue to strengthen our commitments to innovation, reliability, and customer service in 2008.
Megaspirea
Scott Gerschwer, VP, global marketing
2007 may be remembered as the year that Dynamic Envelope Creation was born. And 2008 will be the year that Dynamic Envelope Creation revolutionized the print/mail world.
It's been said that there is a mail moment, which can be described as the anticipation or hope one gets while at the mailbox, that they will find something useful or interesting in the daily mail. The mail moment has been cited as the reason that 67 percent of people surveyed prefer to get offers in hard copy mail.
We dare not emphasize the mail over the moment. The first three seconds that a person looks at and feels a mail piece is the key to success—how it looks, feels, and reads. There's been a kind of semiotics to mail, we know what to expect from the various types of envelopes we receive. You know from experience whether the piece is transactional, advertising, government ... but all that is changing now. Direct mailers use official looking envelopes or a transactional look and feel as a ploy to increase the open rate. Transactional mailers seeking to leverage a TransPromo approach would like to get away from plastic windows and use closed face envelopes with a measure of marketing messages on the front and back.
The technology is here now. At Graph Expo 2007, Megaspirea introduced Dynamic Envelope Creation as a way to create finished mail pieces—envelope and contents—from a single pre-printed roll of paper. The benefits of cutting, folding, and gluing a real envelope in a single workflow are overwhelming the industry, with implications for marketing, warehousing, business process improvement, and presorting.
2008 may be the year of digital color, but the envelope may be the key to successfully using color and variable data as a driver for more revenue. As someone recently remarked, "What's the use of printing all that color if you're going to hide it in a plain white envelope."
Presstek
Todd Chambers, senior VP and CMO
It's an exciting time to be in printing. The industry is evolving and printers are seeking innovative solutions to differentiate their businesses.
In speaking with our customers throughout the year, we have found that their goals center on the following:
According to Dr. Joe Webb, 80 percent of today's four-color print jobs are now 5,000 impressions or less. As a result, printers are seeking solutions to meet mainstream demand for short-run, high-quality color printing with fast turnaround capabilities.
Today's printers are looking to attract and retain customers via differentiated solutions that offer competitive advantages. As a result, we are seeing a growing implementation of Web-to-print storefronts. In addition, printers and their customers are seeking environmentally friendly solutions, which reduce paper waste, eliminate VOCs, facilitate regulation compliance, and improve the bottom line.
Printers today are looking for cost-effective, high-quality, and easy-to-use solutions to increase profitability. Since the cost of paper can account for 22 percent of a printer's sales revenue, a good way to start is with solutions that reduce makeready waste.
As 2007 closes, Presstek looks back on our customers who have achieved these goals. DI customers have cited up to a 90 percent decrease in makeready paper waste. In addition, both our Presstek DI and CTP users report that chemistry-free CTP streamlines their workflow, eliminates chemistry costs and chemical plate processing, and boosts profitability.
Ricoh Americas Corporation
Carl Joachim, VP of marketing, Production Printing Business Group
Since October 2006, Ricoh Americas Corporation has been preparing to enter the production printing industry by leveraging the strength of its MFP platforms, the acquisition of Hitachi Printing Solutions in 2004, and its various relationships with third parties to build an infrastructure that could support an applications-based approach to the business.
This September at Graph Expo 2007, Ricoh Americas Corporation officially launched the Production Printing Business Group (PPBG). A unique blend of sales, marketing, and production engineering expertise. The intent is for PPBG to build on Ricoh's leadership in the light production space while leveraging the design and manufacturing prowess of Ricoh's international R&D facilities.
During the past year, Ricoh has focused on broadening its product and solution offerings to effectively address the requirements of its production printing customers. At the same time, PPBG's marketing team has focused on products and solutions, alliance partnerships, demand generation, and sales support to target the areas of the market where Ricoh will see most success. All of these efforts will ensure Ricoh’s product roadmap to meet the demands of production customers.
On September 8, 2007, Ricoh announced a new relationship with Kodak's Graphic Communications Group. Under the terms of this agreement, Ricoh's PPBG we resell Kodak's NexPress full color digital presses. The relationship will augment Ricoh's strengths in the in-plant and data center spaces.
Due in part to changes in the overall pace of the transfer to digital, production printing environments are clearly being driven by color. Ricoh's R&D resources are devoted to evolving Ricoh's position in the production color space by developing solutions to improve output performance, media handling, serviceability, image quality, and security. Ricoh's color strategy will cover a broad range of the market from light to high production.
Ricoh expects the production printing channel to continue to grow in 2008 and the demand for production products to increase within the data center, in-plant, and graphic arts environments.
Screen USA
Robert Prah, VP of sales
Screen has continued to grow due to the production quality and excellent reputation for reliability of the technology we provide. The replacement market has been successful for Screen, and we continually look for new ways for our customers to become more efficient and profitable. The trend in the printing industry is for shorter runs, which requires more plates. As need for plates increases, so will the need for Screen’s CTP technology. I feel that customers will continue to look to replace their old, manual CTP systems with faster, more automated models, but at all times keep an eye on costs.
At the same time, this year has been challenging for CTP manufacturers. The demand for CTP technology is leveling off, and new customer adoption is decreasing. Print service providers are much more knowledgeable about CTP devices than in the past, with many of them having implemented their second or third systems. Customers are not willing to invest in equipment that will not provide the return on investment they need in this tight market. That gets back to trend toward higher speed devices with more automation. As manufacturers of CTP, we need to continually improve on the technology and services we offer.
Standard Finishing Systems
David Reny, managing director
Among Standard Horizon and Standard Hunkeler customers we see feeding and finishing automation as the number one trend. Printers want to reduce makeready time on their folders, binders, and saddlestitchers to drive as much labor cost from the finished product as possible. This is even more critical with POD applications, when set-up time is spread across low unit volumes. Ease-of-use is also important because some shops want their printer operator to run a finisher too. This is made easier with the intelligent touchscreen control available on today's state-of-the-art post-press equipment.
We also see growing importance in being able to process both offset and digital output with the same finisher. When an offset shop adds digital, any new floor-model folders they buy should finish ink-on-paper and toner-on-paper with equally professional results. For example, the new Standard Horizon AFC-566FKT folder has built-in features that let it straddle the offset and digital worlds quite effectively. And our StitchLiner saddlestitcher performs high-speed sheet feeding for digitally pre-collated output, and vacuum collating for conventionally-printed sheets.
As digital printers get faster, pre/post suppliers have been tasked to handle web speeds up to 600 feet per minute and beyond. Hunkeler is well positioned with a new generation of high speed unwinders, rewinders, cutter/stackers and fan folders that can today with room to grow for tomorrow. We also expect new ink jet and LED color to play a larger role, as TransPromo applications become more popular and cost-effective. That leads to high-speed double-cut requirements, to remove a perforated or for cross-web bleed trimming. And lightweight paper applications are rising for books and prospectus work. Hunkeler's next-generation product line has been tailored to meet these challenges.
Digital print providers today need reliable, flexible, and affordable solutions that add real value. Standard strives to provide cost-effective feeding and finishing that meets the application needs of our customers and helps them deliver quality-finished products fast and efficiently. When we do that, we meet our goal of customer success.
Xerox
Tom Wetjen, VP, worldwide graphic communications
According to the PIA/GATF 2006 Print Atlas, only about 23 percent of the 23,500 commercial printers in the U.S. offer digital printing. However, that number continues to grow and many in the industry expect it will rise dramatically in the next two to three years.
Print providers who haven’t yet addressed the digital opportunity are likely seeing their operations become less relevant to some of their customers and prospects. Digital offerings can be a true business differentiator that translate into growth and the ability to produce revenue-generating jobs.
Looking to 2008, there will continue to be demand for high-value monochrome jobs while the growth in color will keep accelerating. Specific print applications that will continue to drive page volume and profit will be digital books and manuals including full-color photo specialty books, TransPromo documents, marketing collateral on demand, and personalized direct mail.
Improvements in workflow have also eased the transition to digital and increased the profitability of hot applications—a trend that will continue in 2008. For example, the production of these applications can be driven by a Web-to-print system, where clients can log on to submit orders over the internet and print providers can move jobs into production quicker and streamline the fulfillment process.
Xerox differentiates itself with end-to-end turnkey solutions spanning the entire process. In this competitive market, it is important for print vendors to differentiate themselves from their competitors. Xerox focuses on helping print providers implement the right business model, the right workflow, and the right technology to drive success. Success doesn’t hinge on any one of these individually; you need all three, and Xerox prides itself on having the broadest portfolio of digital printing products, workflow software, and business development tools.
Dec2007, Digital Publishing Solutions
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