Thursday, December 28, 2006
Thursday, December 21, 2006
Thursday, December 14, 2006
by Jim Lyons
The Hard Copy Observer, December 2006
One of the printing and imaging industry’s most important trends of 2006, well documented elsewhere in this year-end edition of the Observer, was the plummeting prices of high-quality personal color laser printers. A midrange or low-end color laser printer now costs the customer less than an equivalent monochrome laser printer did just a few years ago. But does the downward pricing trend change the customer’s buying behavior? Is this a case of throwing cheap hardware to the masses and watching them beat a path to the vendors’ and resellers’ doors?
My answer to both questions is no. Similar to the situation two decades ago when desktop publishing (DTP) solutions propelled monochrome laser printers into a multibillion-dollar industry (to say nothing of the boost DTP gave to a nascent operating environment called Windows), the success and growth of the low-end color laser printer market depends on developing a story around what to do with color laser printers and how to do it.
A basic marketing principal is that selling a product involves more than just offering a low price. Identifying customer needs and satisfying those needs better than anyone else is the key to marketing nirvana. This strategy is not always the easiest concept to internalize in an industry that revels in hardware price/performance trends and supplies usage factors. But there is a customer behind all that data, and a really nice color laser printer—no matter how inexpensive—may prove to be a boat anchor without a real application for it. Healthy supplies usage also requires real-world printing applications to drive the use of toner, ink, and paper.
Enough about marketing theory. What is the key to pulling low-cost color laser printers (and high-quality business ink jet printers) through the channel? Many believe that at least one of the drivers is a small business’s need for high-quality marketing materials that can be printed in house, rather than being outsourced to a local commercial printer. One of the original goals of DTP was to bring high-end publishing capabilities to the masses, and that idea has now expanded to include printing originals directly on the in-house printer, albeit in smaller quantities than before but with higher frequency.
PC Magazine’s November 21, 2006, edition features an article titled “A Dozen Ways To Boost Your Business.” Many of the tools listed are high-tech and relatively futuristic and include Voice over IP (VOIP), business blogs, wikis, and Web-based applications for customer relationship management (CRM), payroll, and recruiting. But, amazingly enough, right in the middle of the list is the “in-house copy shop.” PC Magazine suggests that businesses use desktop printers for “marketing materials, glossy flyers, [and] pamphlets,” and the article even mentions in-house production of posters and banners using low-end large-format machines, all “without going to a professional print shop.”
Small business is the target of the in-house marketing push. The ability to crank out small quantities of originals meets a small business’s obvious need for personalized short runs. And small businesses represent a massive opportunity for printing and imaging vendors. The Small Business Administration reports that 99.9 percent of the United States’ 25.8 million businesses have fewer than 500 employees, and expanding the definition of small business to include nonprofits and other similarly structured organizations makes this market segment that much more attractive.
Vendors have been promoting do-it-yourself marketing for years. Ink jet technology provided the first wave of printers for do-it-yourself marketing applications, but now color laser printers are coming to the forefront due to their image permanence and ability to produce crisp and professional-looking output. Vince Ferraro, vice president of HP’s LaserJet Business, waxes enthusiastic about what the firm now calls in-house marketing. He asserts that while HP offers a broad and growing portfolio of high-quality business ink jet and color laser printers, buyers often decide to go with a color laser product because these devices offer a broad range of finishing options and can use a wide variety of media. For example, Ferraro points out that creators of marketing collateral want to be able to approach the “look and feel” of the output from commercial printers.
In terms of putting together a total in-house marketing solution, I refer back to my DTP example from the late 1980s. Aldus, HP, and Microsoft worked together to match Apple’s all-inclusive DTP offering. Similarly, Ferraro speaks about “building an ecosystem” around the in-house marketing solution. HP’s current Web page, http://www.hp.com/sbso/productivity/office/index.html, is a gateway to solutions using common applications such as Microsoft Word, Publisher, and PowerPoint; Corel Draw; and Quark XPress. The company’s Web site also offers links to HP partner services such as template designs (StockLayouts), logo creation (LogoWorks), and stock photos (iStockphoto). In case you are wondering if HP is done with this effort, the answer is “not by a long shot,” according to Ferraro, who says that HP is working on other related services, including copy creation.
So is this just one more area where centralized printing is relinquishing its leadership role to desktop and workgroup printers? Not necessarily. Home inkjet photo printing took off a few years ago, but centralized photo printing is fighting back, as exemplified by HP’s 2005 acquisition of Snapfish and Shutterfly’s recent IPO. And what about color laser printers hitting closer to home and infringing on the photo-specialty ink jet printing turf? Ferraro insists that HP’s color laser printers are not positioned to compete in the consumer photo market, despite their inclusion of features such as memory-card support. Rather, HP’s color laser printers are optimized for printing photos as a part of business documents, and effective in-house marketing collateral certainly needs to include high-quality photographs, especially in early-adopting industries such as real estate.
So, in short, my take on the color laser printer market is “Build it, and they will come.” But the “it” that vendors need to build is a complete package including hardware, software, and solutions, not just cheaper and faster laser printers.
Tuesday, December 12, 2006
See blog updates on the entire meeting at ZDNet.
Monday, December 11, 2006
A couple of interesting references to marking technologies of the past caught my attention over the weekend. The first title, "Retro Printers, Grounding the LaserJet", sounds directly relevant to this blog's mission of reporting on the past and future of the printing industry, is from the weekend NY Times Art and Design Section. It describes a growing trend in interest in printing using OLD presses. The LaserJet reference in the headline turns out to be only a play on its name and the term "grounded". Still, nice to read about an interest in an old and disappearing craft.
The other parallel (?) piece in the news has to do with the Scottish elementary school emphasizing instruction in using fountain pens! Techdirt, as usual, covers this trend (?) "well" (poor pun intended).
Friday, December 08, 2006
No, not the cheers kind of toast. We're talking imaging on bread. We started the week with print-on-demand books, and now we're closing with something a little more "off the wall". Gearlog reports on the Zuse -- a wall-mounted toaster that "burns" a 12 dpi image on your breakfast toast.
Monday, December 04, 2006
In another deal announced right before Thanksgiving, photo printer Shutterfly (NASDAQ SFLY) will use Xerox (NYSE XRX) iGen3 presses for at least some of their printing needs.
Wednesday, November 29, 2006
Monday, November 27, 2006
Tuesday, November 21, 2006
Thursday, November 16, 2006
It's starting to seem like a long time ago when Dell's PC business seemed invincible, and the company boldly ventured into the printing arena. Their stated intent was to disrupt HP in those markets, and hurt that company's ability to fund a losing computer business with their large printer and supplies profits.
Things do change!
Wednesday, November 15, 2006
One comment in his most recent entry regarding third-party supplies caught my attention:
Very often those “recycling” bins you see for remanufactured cartridges are actually just giving cartridges to companies so they can sell them back to you, at a greatly decreased level of quality.
While I grant the free market and "caveat emptor" allow for offering consumers a choice for their printing supplies, eliciting used cartridge donations under a "green" banner takes a certain amount, if not a lot, of nerve. When I see these bins in schools, churches, and even our local organic food store, I am disgusted, knowing what I know about the business.
And on the subject of printer blogs? I was at a seminar the other day featuring a blogger from one of our local printer and copier resellers. They're an innovative company, and the gentleman in question is doing some great things with technology. But when referred to as doing a blog about printers and copiers, he quickly corrected the panel's moderator, noting that would be "far too boring" so he blogs about larger IT and business concerns.
So looks like it's just Vince and me for now!
PS -- Kudos to my buddies at Istockphoto.com and their amazing collection of, yes, stock photos. When searching for a graphic to liven up this entry, I was given a choice of 124 different images tagged with "blog". Wow!
I like the quote from Paul Thurrott of Supersite for Windows:
...the one area where I can unequivocally say that Microsoft has finally gotten it completely and utterly right. Nice job.
Tuesday, November 07, 2006
by Jim Lyons
The Hard Copy Observer, November 2006
I am dedicating this column to those of you thinking ahead past the looming holidays and the closing of the books on 2006 to that all-important winter vacation somewhere sunny. While the Lyra Imaging Symposium held in late January in Rancho Mirage, CA, might be enough for some, others are thinking about something more substantial such as a tropical cruise. So for you soon-to-be-cruisers, I am offering some advice based on recent personal experience about how to stay in touch while you are at sea—with the added bonus that my advice relates directly to the printing industry!
I just returned from a long cruise across the
For a little background, let’s go back to the beginnings of the Internet revolution, when some of the more imaginative leaders in the printing and imaging business began to see that the industry was facing a classic threat/opportunity paradigm, maybe the biggest the industry would ever face. News and information that flowed physically to people, from centrally printed newspapers and magazines, would eventually be replaced by electronically distributed material that readers would print at the point of consumption. Industry pundits referred to this paradigm shift as moving from a “print-and-distribute” model to a “distribute-and-print” model. Not only was the new model much more efficient in terms of both cost and time, it was also a potential boon for manufacturers of desktop and workgroup printers, as these devices would take much of the workload (and revenue) from centralized printing plants.
In the mid-1990s, some industry leaders sought to validate this trend and learn how to facilitate the new model’s adoption by searching for some corner cases where special circumstances had caused the shift to already occur. One such early example was TimesFax, which was a version of the New York Times edited down to a concise eight-page summary (including the crossword). The TimesFax was faxed to far-flung locations around the globe, such as out-of-the-way hotels,
In 1999, NewspaperDirect was formed. The firm’s value proposition was similar to that of TimesFax, but NewspaperDirect served more in the capacity of a distributor. The firm reached agreements with multiple media companies to provide electronic versions of complete newspapers and offered hotel chains the ability to sell their guests daily printed copies of their local paper, which were printed on demand on-site at participating hotels in the wee hours of the morning. The HP LaserJet 8100 was the printer of choice for local printing.
HP and NewspaperDirect formed a partnership during my time at HP. At the time, I had doubts that the business model could produce enough volume to justify the hardware overhead and supplies hassles. The print volume for such a service was dependent on increasing demand for hard copy newspapers among the growing segment of laptop-carrying, Internet-addicted road warriors. Along with accessing e-mail and other company information, this group was getting more and more of its news via the Web, spurred on by better news sites and the increased availability of broadband connections at hotels.
This takes us to the present—NewspaperDirect’s product (or is it really a service?) was available on my cruise in late 2006. The company had made it after all, and I decided to learn more about the firm’s story.
An interview with James Woloszyn, NewspaperDirect’s director of operations, and Gayle Moss, the firm’s director of marketing, answered some of the questions I had about the company’s path from its humble beginnings to the present. Woloszyn and Moss freely admit that the firm had to shift from its initial business model of 1999. One important change involved the transition from in-hotel printing to a “semi-distribute-and-print” model in which printing occurs at a local distributor’s off-site location. Physical distribution then replaces electronic distribution over the proverbial last mile—rather from every individual hotel’s printer to each guest room. In addition, the print distributors refocused their customer list beyond road warriors and business hotels to include luxury hotels, cruise ships, and yachts.
Variety is a key part of NewspaperDirect’s value proposition, so the company has continued to expand its offerings. In the beginning, the firm had agreements with 30 newspapers. Today, NewspaperDirect has arrangements with more than 600 newspapers. For example, on my cruise, I was offered the choice of 370 newspapers from 66 countries in 38 languages. (Call me boring or pedestrian but I picked USA Today.) Perhaps most importantly, in addressing the large and growing customer segment that prefers on-screen viewing of the news, NewspaperDirect has leveraged the print-on-demand newspaper offering with a feature-rich newspaper-viewing alternative called PressDisplay.com, recognizing there are two segments of information consumers: those who prefer hard copy and those who prefer electronic display.
While I am more display-oriented, the ship’s satellite-based Internet service was costly and slow. News sites took quite a long time to download when they did display at all. So my chaise-lounge-friendly alternative was a hard copy ledger-sized USA Today—duplexed, stapled, and printed in monochrome. (The irony of getting USA Today, which pioneered the broader use of color in newspapers, in black-and-white was not lost on me.) At $3.95 a day, the hard copy was not cheap, but the additional cost was in line with the premiums one typically pays on a cruise, and the newspaper was a welcome lifeline to civilization.
So how does the cruise line provide on-demand printing? While still tied up to the dock at our embarkation point, I realized that the daily printing demands of a cruise ship are massive even on an average-sized-ship—let alone the mega-cruisers being commissioned these days. Typical printed documents include daily menus, newsletters, and advertising flyers for several thousand passengers. Adding in a few dozen newspapers does not add much to the ship’s overall printing workload, and the newspapers produce profits and satisfy guests’ needs to keep in touch with the world back home. I did not see the ship’s behind-the-scenes production facilities where NewspaperDirect papers are converted from ether to hard copy. It seems that cruise staff are well trained to keep passengers away from the ship’s “backstage.” And, after all, I did not try too hard—I was on vacation!
Jim welcomes comments, questions, and suggestions for future columns at email@example.com. Past columns, links, and other musings may be found at jimlyonsobservations.blogspot.com.
Tuesday, October 31, 2006
Much of technology innovation comes feature by feature, and it always has. The very first DEMO conference nearly 17 years ago, included a little “feature company” that made envelope printing a breeze. Until then, trying to get four address lines properly placed on a standard envelope was a nightmare of waste and frustration. This feature spurred Microsoft to make it a cornerstone of the next release of Word.
Friday, October 27, 2006
Here it is, straight from my local Dollar Tree. Not that I was shopping for one but my HP PSC 1210 has been given me warnings about an empty cartridge so I decided why not give it a try! More in a few days (or weeks, or months?), when the cartridge really runs out.
Tuesday, October 24, 2006
Now how the functions interact, with their seemingly overlapping print enhancements, is still an open question -- worth looking into?
Thursday, October 19, 2006
As a pretty much full-time Firefox devotee, I don't use IE very often, but I have been using the Beta of Version 7, intermittently anyway. And the printing is much better. And as a matter of fact, Microsoft's spokesperson says, "the most popular feature among beta testers has been improved printing of Web pages". Hey hey -- how about that!
Interesting that enhanced or improved printing really just means that pages come out of your printer they way you'd expect them to!
Thursday, October 12, 2006
by Jim Lyons
The Hard Copy Observer, October 2006
A 10-year-old “archeological deposit” of past issues of The Hard Copy Observer inspired my “hard copy time capsule” article that kicked off this column almost a year ago (Observer, 12/05). Since then, I have enjoyed combining a historical perspective with a look to the future. But this month, I’m “going retro” once again to look back at a few of the companies, products, and technologies that make up our industry and to examine how, in most cases, the notable figures of yesteryear are prospering today. (In addition to firsthand knowledge of the companies, products, technologies, and people mentioned here, I also benefited from The Hard Copy Observer Archives and interested readers who contributed to this trip down memory lane.)
One of the inspirations for this month’s column was the recent news that Monotype acquired Linotype (Observer, 9/06). Both of these companies are legendary names from the printer industry’s early days, when fonts were a really big deal and the desktop publishing (DTP) movement was white hot, forcing the printing industry to learn far more about typography than TmsRmn and Helv (the font names of the LaserJet’s first proportional typefaces). At the time, the ability of PostScript-based DTP programs to send output directly to “Lino” typesetters seemed magical—although how many users actually did so is another question.
Bob Givens, president and CEO of Monotype Imaging, served as company spokesperson in last month’s Observer story on the acquisition. Givens first appeared in the pages of The Hard Copy Observer in October 1994, commenting on Agfa’s Universal Font Scaling Technology (UFST), which was a progeny of Intellifont, a technology that Givens helped develop in the years preceding The Hard Copy Observer’s inaugural issue. At the time, Givens was vice president of Agfa’s Typographic Systems, which had morphed through ownership and name changes from Compugraphic, and UFST was discussed at that summer’s San Francisco Seybold Conference. The Observer’s article on Seybold San Francisco 1994 discussed Infinifont technology. Although that font technology appeared to be gaining momentum and was embraced by HP and other vendors, today Infinifont is obsolete and has been replaced by UFST from Monotype Imaging, née Agfa Monotype, née Agfa Compugraphic. (Thanks to a fellow industry veteran for clarifying this history.) Remarkably, Bob Givens still captains the ship.
My initial column on Microsoft’s XML Paper Specification (XPS) was also rather nostalgic (Observer, 4/06), delving back to the 1980s, and the column generated an interesting response from a colleague at QualityLogic, one of the small but important firms making up the XPS ecosystem supporting Microsoft’s moves in this area. Dave Jollata, QualityLogic’s chief operating officer, noted, “When Microsoft acquired TrueImage from Bauer, they [Microsoft] approached us to take over Bauer’s application test files (which we did). That spawned an entire product line for us that is still alive and well today … [QualityLogic] also just added a former Bauer guy to our board—Steve Butterfield. [It’s a] small world.” As a refresher, Bauer and TrueImage were in the middle of the Microsoft, Apple, and Adobe printer language battles of the late 1980s.
Moving more into the hardware realm, a contingent of longtime HP executives now lead a number of other printing and imaging firms. For example, Kodak employs several former HP alumni, including Antonio Perez, CEO of Kodak, and Jim Langley, president of Kodak’s Graphic Communications Group (GCG). Other examples of former HP executives who now work for other printer OEMs include Steve Fletcher, president and COO of Konica Minolta Printing Solutions, which incorporates the QMS legacy and Minolta’s subsequent acquisition, and Bill Rumold, CEO of TallyGenicom, a company whose name is a combination of venerable printer industry names. Former HP employees also continue to influence the imaging and printing industry in other ways. One notable exception is Wall Street analyst Cindy Shaw, who has HP and Dell work experience on her resume. Shaw is a regular (and favorite) on the Wall Street panel at the annual Lyra Imaging Symposium and is often quoted in the Wall Street Journal and seen on CNBC. This partial listing may be the result of HP bias on my part, but it is not surprising that the longtime industry leader would develop so much technical and management talent and then see that talent disperse throughout the industry.
But how about people joining HP? CEO Mark Hurd has been praised for hiring top external talent, but that trend has mostly been on the PC side of the business. However, earlier this year, Bruce Dahlgren, senior vice president of worldwide enterprise sales for HP’s Imaging and Printing Group (IPG), was hired away from Lexmark, but that defection was not without controversy. Lexmark challenged HP’s hiring of Dahlgren in the
As the final part of my “Where are they now?” column, let’s briefly look at the flip side: who has not moved on? I mentioned Bob Givens’s staying power earlier, but a couple of well-known HP names also come to mind. As I have noted in this column previously, Vyomesh “VJ” Joshi, currently leader of HP’s IPG, has served HP in a variety of positions and has been quoted in the pages of The Hard Copy Observer since nearly its beginning. Cathy Lyons (a longtime HP colleague but no relation) first appeared in the second issue of The Hard Copy Observer, touting HP’s new LaserJet IIP Plus (Observer, 11/91). After achieving great success in a variety of roles,
With enterprise customers as the focus of the launch, the headliner is the new inkjet technology HP has branded "Edgeline". Read HP's materials and catch all the analysis in next month's Hard Copy Observer.
Wednesday, October 11, 2006
Google's (NASDAQ: GOOG) $1.65 Billion acquisition of YouTube certainly doesn't rate as a small announcement, but the evolution and merging of Writely and Google Spreadsheets into Google Docs and Spreadsheets does qualify. (See left hand screen shot above, and click on the image for higher resolution viewing.)
As a beta tester of both of the separate products (or are they services?), I noticed the change last night, but today, Oct 11th, is the official launch, timed with the Office 2.0 conference in San Francisco.
Neither product matches the scope of Microsoft's Word and Excel, but that's kind of the point. I found that for simple documents and spreadsheets they're pretty nice, and of course having your files stored remotely means they're accessible from whatever computer you find yourself using. The collaborative features mean work teams can have access to and modify files, and the link to Gmail (my email client of choice) is just one more little nicety -- though notice on the right-hand screen shot they still have the label "spreadsheets" that links to the combined site.
One loss in all this? Looks like the Writely name is gone -- which I liked.
Monday, October 09, 2006
With lots of breaking news going on while cruising the last few weeks (an Atlantic crossing no less), I was able to get a USAToday printed on board thanks to this company's offering. A little pricey ($3.95 a day) but what do you expect on a cruise?
Tuesday, September 19, 2006
Tuesday, September 12, 2006
And as a printer guy, always nice to see a little pub for our product category!
Monday, September 11, 2006
The Hard Copy Observer, September 2006
Who among us has not been lured by a rebate—that age-old offer to save money either instantly or after mailing in a few “simple” forms? This type of promotion has been a mainstay in many consumer markets, including the printing and imaging industry. This month, Jim Lyons, a 20-year veteran of the printing and imaging industry, leads us through the rebate maze and shows us what may be at the other end.
Reading the business press lately, or even skimming the Sunday newspaper, one could easily conclude that the demise of the mail-in rebate is at hand. Computer and printer supplier Dell and big-box retailer OfficeMax have been vocal about joining the rebate-ending bandwagon in recent months, following in the footsteps of rebate reformers Staples and Best Buy.
Most of these companies are not immediately terminating the use of rebates (OfficeMax being the exception) but are simplifying or phasing them out over time. But are these computer and printer sellers just delaying the inevitable? The time that these retailers must spend to root rebates out of their systems demonstrates how ingrained rebates have become as a merchandising tool for selling their wares. Some observers have described this movement as consumer power at its best, with consumers expunging from the market one of their biggest complaints about buying at retail. But is this assessment accurate?
Mail-in rebates (MIRs) have long been an important part of the printing and imaging business, enabling vendors to break through long-standing price barriers to offer products such as the “first sub-$100 monochrome laser printer” and the “first sub-$500 color laser printer.” Buy.com recently offered a $50 MIR on the Samsung ML-2010 to break the $40 price barrier. While this price barrier was not one that industry participants had long been striving to best, offering a monochrome laser for less than $40 is still a jaw-dropping feat. (As I write this column, Staples is again offering the Samsung CLP-510 color laser at a rebate-fueled $199.99.) Beyond their value in helping vendors to break through symbolic price barriers, rebates have also helped vendors to prosper by enabling them to move older inventory to make way for new product lines and by increasing the installed base of devices that use imaging supplies.
When did rebates begin in our business? Their presence was noted in the very first edition of The Hard Copy Observer from October 1991, which contains several references to rebate promotions on products such as Apple LaserWriter printers, GCC BLP and PLP printers, and the NEC SilentWriter printer. A simple text search of the Hard Copy Observer Archives shows that, by 1993, every issue contained multiple references to rebates. The chart above is a quantitative study of references to the terms rebate and rebates in the Observer, and rarely does a study yield such a definitively shaped curve. The number of instances of these terms in the Observer peaked at an even
One explanation for the downward trend is an underlying change in how The Hard Copy Observer reports on the industry, and in fact, a major editorial section that closely followed retail pricing and accounted for many of the references to rebates began in 1995 and was discontinued in 2003. I’m not advancing causal relationships here—after all, this is not Freakonomics. Nevertheless, the data shown in the chart speaks for itself and certainly surprised me!
While nothing is set in stone, it does indeed seem that rebates will continue to diminish in importance in the printing and imaging industry. I plan to revisit this topic in a future column to review the accuracy of this prediction.
How about rebates in general? With “rebate abatement” in the news, are rebates really on their way out? What I consider the definitive article on rebates, entitled “The Great Rebate Runaround, ”appeared in the December 5, 2005, issue of Business Week. In the article, lead writer Brian Grow details widespread customer frustration and the inner workings of the rebate game, including the profit-building “breakage” and “slippage” factors. These innocent-sounding terms refer to the percentage of buyers who never complete their MIR applications and the percentage of buyers who do fill in the applications but fail to cash their rebate checks. In an e-mailed response to questions for this article, Grow acknowledged that while the rebate process is changing, it will never go away altogether.
Friday, September 01, 2006
Thursday, August 31, 2006
Wednesday, August 23, 2006
Tuesday, August 15, 2006
The Hard Copy Observer, August 2006
In the United States, the hot months of July and August bring the annual tradition of taking some time off from the daily grind—kicking back and reading a few trashy novels while relaxing at the beach, in the mountains, or around the pool. This summer, I have been doing my best to conform to that tradition, but rather than reading pulp fiction, I have found similar enjoyment in reflecting back on the thrilling “file-format wars” of the past few years that lead right up to the present and that promise to spice up the future of our industry.
In my April 2006 column titled “Microsoft’s XPS—After All These Years, More Mumbo Jumbo?” I looked into the current industry dust storm surrounding Microsoft’s XPS document-format standard—promised as part of its new Vista Windows operating system and Office 2007 productivity suite—and its potential threat to topple the present incumbent standard, Adobe’s PDF. The title of the column referred to my recollections of some of the messy battles between Microsoft and Adobe during the late 1980s and these battles’ parallels to those of today.
The early fights between Adobe and Microsoft (and its seemingly unlikely coconspirator Apple Computer) centered on font formats (Adobe versus TrueType) and page-description languages (PDLs) (PostScript versus TrueImage). The latest battle centers on whether Microsoft has its sights set on PDF and Adobe Acrobat (née Carousel—there’s one for you fellow old-timers), which actually evolved slightly after the peak of the PDL wars. A year ago, when XPS was named Metro, The Hard Copy Observer published an excellent two-part article on the emerging new standard, directly addressing the PDF-killer aspect (Observer, 7/05 and 8/05). The threat has been discussed ever since, with most experts coming down in the middle. One the one hand, XPS will be an important step forward for Microsoft’s Windows operating system and Office software suite, as it addresses important customer needs. At the same time, PDF is entrenched and also, to its credit, does a pretty good job of addressing a wide range of customer needs itself. So in other words, everyone wins, right? (Conspiracy theorists, of course, will say that Microsoft always soft-sells its real interests in a similar way, with world domination, or in this case, dominating the world’s document formatting, being its ultimate goal.)
Little did I know back in April that the 2006 battles had only just begun! In early June, the Wall Street Journal and other news organizations reported that Adobe had filed suit against Microsoft in
Well, all that was early June, and since then I’ve been carefully watching the news wires. While there have been minor Vista and Office announcements, speculation about further relatively small schedule slippages, and European Union actions against Microsoft for other, older infractions, nothing more has come out about the PDF-related legal actions. So maybe the Adobe/Microsoft secret negotiations have reconvened? Or maybe, just maybe, the respective Adobe and Microsoft executives are taking the summer off reading trashy books at the beach?
Clarification on PDF Pervasiveness
One other detail in my April column has stirred some reader interest. In making the case for the ongoing solid position of PDF, I quoted some numbers that I had been provided to show the size of the massive PDF beachhead. Or at least what I thought was massive! It turns out that when I referred to “20 million individual PDF documents” available on the Internet, that figure was a four-year-old, government-documents-only number. The more current correct number for all PDF documents is 613 million! And this number includes only PDF documents on the public Internet, not those behind corporate firewalls, or what we used to call the “intranet.”
One of the primary wisdoms of my business career is the importance of learning magnitudes—that is, the general, if not exact, sizes of things such as markets. What is a large installed base? When is a market’s annual unit shipments sufficient to make a company take notice?
Friday, August 04, 2006
Brendan O'Connor, the "finder" of the problem (there might be a better descriptor of the type of people that "find" these problems), has some very interesting things to say about printers, MFPs, and copiers on our corporate LANs -- a familiar-sounding good news/bad news assessment that we in the industry have heard before.
"Think of all the sensitive data that's going through these," he said. "Everybody prints, and there's an inherent trust in these types of devices."
O'Connor said he was not trying to "pick on Xerox," but rather using his hack as a case study to draw attention to the security threat posed by increasingly powerful embedded devices.
"I don't think they're getting the level of scrutiny that they require," said O'Connor, who identified himself only as a security engineer who works at a U.S. financial services company.
"This is a Linux server wrapped in a copier box. These things are all over the enterprise," he said
Thursday, August 03, 2006
On the other hand, Adobe Systems (NASDAQ ADBE) led the entire tech sector to gains in Wednesday's markets, as they affirmed guidance for a strong third quarter. The company crowed about upcoming releases of Acrobat and Creative Suite -- interesting that one of the news items on their announcement referred to Adobe as being known for "the ubiquitous Acrobat program for sharing digital documents". We can see why there is some nervousness over the impending XPS functionality in Microsoft Windows and Office!
By the way, with EK below $20 a share, the company's market cap is between $5 and $6 Billion. And with ADBE back about $32 (a big improvement over the $26 of a couple of weeks ago but well below its range in the low $40's earlier this year), their market cap is just under $20 Billion.
Looks like...bet on digital!
Monday, July 31, 2006
First Xerox, quoting from the Rochester Democrat and Chronicle
Interesting ratio: 34 percent of revenue on 9 percent of the pages.
Xerox revenue from color products and services grew 14 percent in the quarter, and now represent 34 percent of the company's revenue. Installations of the company's high-end production color machines grew 96 percent, Xerox said.Color now represents 9 percent of pages printed on Xerox equipment, leaving plenty of room for additional growth, Mulcahy said.
Next Lexmark, quoting from a well-done CRN summary:
A key factor was Lexmark's decision to place less emphasis on low-end, single-function inkjet printers earmarked for consumers at retail, since that product line had a low and declining margin. Also fueling Lexmark's earnings in the quarter was continued growth in its laser printer and all-in-one device businesses.Interesting moves: shedding sales of low-end, single function printers (presumably intentionally) and OEM business (not quite as clear on intention).
Lexmark reported sluggish OEM sales of printers and multifunction devices to other vendors. Dell has been Lexmark's largest OEM customer and last week warned Wall Street that its earnings wouldn't meet earlier guidance.
So that's my management truism, or put another way -- "you know you're in management when you look forward more to your employees' vacations than your own!"
In this day and age, taking a week off from the blog is something too. Got to think about that!
Friday, July 21, 2006
Tuesday, July 18, 2006
Monday, July 17, 2006
Their advice? The first part is one I also subscribe to: "...your best bet is to be a sophisticate..." when it comes to understanding your total cost of ownership. The next part engenders a little less enthusiasm from me: "Print in draft mode, don't gratuitously print things that you don't need, and when in doubt, print at work. Those simple pieces of advice will save you about $500 a year." For one, printing at the workplace is a good idea, if it's for work! And $500 a year? Savings? That's a ton of ink!
will continue to benefit from rapid cost cutting combined with more benign pricing activity due to the strategic shift toward higher-priced, higher-usage devices and slower year-over-year sales of low-end inkjets.
Thursday, July 13, 2006
The Hard Copy Observer, July 2006
This month, Jim Lyons, a 20-year veteran of the printing and imaging industry, shares his thoughts on the razor-and-blades business model that has defined the printing and imaging industry for decades. Is this model still viable, and what are vendors doing to adapt for survival?
A May 2006 headline in a financial blog that I follow really struck a nerve. Entitled “Lexmark’s and HP’s Printer Business Model Is Increasingly Unsustainable (LXK, HPQ),” the blog, which was published on SeekingAlpha.com, noted that Staples is promoting the Samsung CLP-510 color laser printer for just $199 (after a $50 mail-in rebate, of course). In a well-thought-out but still somewhat pessimistic analysis, the blogger claimed that the laser printer market is following the same path as the ink jet printer market—the street price of a new laser printer (including its toner cartridges) is now low enough to disrupt consumers’ virtually automatic, steady, years-long purchase of supplies to replenish their printer “investment.” Instead, the blogger insisted, consumers will frequently start over and purchase new hardware rather than a set of new cartridges.
Let me try to add some historical perspective to this “the sky is falling” scenario. For many years now, printer makers have used a marketing practice known as the “razor-and-blades” approach to pricing products and attaining profitability. The idea is to “lock in” a customer with a relatively costly initial investment in a product (safety razor or printer) and then sell a stream of supplies (blades or printer cartridges) to that customer over time. Because the “lock in” is key to the follow-on annuity, the supplier is motivated to make the customer the proverbial offer one cannot refuse for the initial purchase, and then be less generous in pricing the supplies from which the vendor realizes an annuity stream. A unique technological “match” between the original product and the follow-on is obviously important, but there is also an important relationship between the pricing of the more costly hardware and the less costly, but more frequently purchased, supplies. With that price ratio rapidly diminishing over time, there is the potential that the razor-and-blades models will be disrupted and that a growing number of consumers will choose to purchase a new printer or MFP rather than purchase supplies for their old model.
For more background on the model itself, I suggest consulting a marketing textbook or Wikipedia.com, where I found some other interesting real-life examples other than razors and printers. (To name a few: cell phones and wireless communication services, video game consoles and game cartridges, and set-top boxes and cable/satellite TV services.)
Lyra’s John Mc Intyre, whom I consider to be the ultimate industry expert on this topic, points out that while the dramatic price declines (and concurrent volume explosion) in the low-end color laser printer market are raising this debate now, the ink jet printer market faced the same issue a few years ago with the first sub-$100 and then sub-$50 printers. One of the industry’s ongoing adaptations with ink jet printer pricing has been to resist the downward price pressure, partly by adding more value to their hardware, with the ink jet MFP and photo-specialty categories being obvious examples. Look no further than HP’s June product rollout (featured on page 1 of this issue). Although the rollout included a Deskjet printer for $39, the least-expensive product touted in the firm’s press release is a more feature-rich $129 Officejet MFP.
(Larry Jamieson, director of Lyra’s Hard Copy Industry Advisory Service, recently published a case study of the razor-and-blades business model called Consumer/SOHO/SMB Markets: Big Volumes, Low Profits. For more information on this $299 report, call 617-454-2612 or visit Lyra on the Web at www.lyra.com.)
There is, however, a market element that the “doom-and-gloom” set who point to the imminent demise of the printer industry’s business model of choice ignore: there are different types of printer buyers. Personally, I am the type of consumer that printer vendors are worried about—I thrive on technology; am well-informed about printers, supplies, and their costs; and tend to seek out the best deals. Thus, I am more likely to follow the “start over again” path and purchase a new printer rather than just the new supplies for my old printer. But, as John Mc Intyre points out, many (or even most) consumers may be sensitive to the intangible “switching costs” associated with purchasing a new printer, such a setting up a new device and getting it to work smoothly with your PC when your old printer is working just fine. These consumers might decide to “leave well enough alone.” Many end users may simply not mind paying $100 or less for a set of new cartridges every once in a while (these are most likely the same people who ignore their mail-in rebates).
And then there is the question of the razor-and-blades model’s applicability (and thus its risk of disruption) for business customers. I would maintain that the predominant business model in large enterprises looks quite different from the razor-and-blades model from a marketing standpoint but exactly the same from a cash flow/profitability perspective. In many cases, enterprises’ IT groups invest heavily in product evaluation and then establish a very select list of “approved” hardware, based on stringent criteria and review. IT groups then standardize and purchase only those selected models and continue buying supplies for that installed base as long as the machines are in service. (For a vendor such as HP, this phenomenon has a familiar cultural ring to it, as getting commercial customers to standardize on any IT solution, whether hardware or software, creates a huge barrier of entry for your competition for years to come.) I maintain that business customers, excluding very small businesses, don’t fall into a high-risk category of changing their purchasing behavior. (Of course, business customers buy more industrial-strength products for which the hardware/supplies price ratio may be less of a factor.)
In addressing this topic, I realize I’m opening a huge can of worms, and that’s without even tackling the huge complication of aftermarket supplies. Collectively, the OEMs, the channel, and third-party supplies vendors study and fret over the hardware/supplies pricing/profitability issue more than any other, as perusal of this or any other recent issue of The Hard Copy Observer or The Hard Copy Supplies Journal will show. And Wall Street and the rest of the financial community have been focused on the whole relationship between hardware and supplies since long before the consumables portion of a printer vendor’s income statement became the dominant line item. In fact, this whole discussion is so central to the entire printing and imaging industry, I risk not being able to reach any big conclusions in this small space, but I’ll leave you with a couple of small ones.
First, don’t assume that all your customers will behave the same way that a relatively few geeky, technology-obsessive customers will. I will jump at the chance to replace an older piece of technology such as a printer or MFP with a new one, especially if I can rationalize it as a cost-neutral decision. Mainstream end users and businesses are probably much safer bets in terms of continuing their steady buying patterns, and one might argue they know how to spend their time more productively as well.
Second, adapt! Nothing ever stays the same, and those that don’t realize this truth are doomed. Twenty years ago, when HP was getting ready to roll out a new product, I heard some internal moaning over the fact that we were endangering what had become a lucrative “blade” business. The new product was the LaserJet Plus, which featured “soft font” capability and offered customers an alternative to buying the “blades”—in this case, $300 font cartridges. Offering a choice and better bang-for-the-buck was the right thing to do for the customer, and the record shows that HP found ways to continue to grow a profitable business nonetheless.
Monday, July 10, 2006
Thursday, July 06, 2006
“This will not be the first time that Microsoft trails Apple into the market,” said Mr. Kay. “It took Microsoft a decade after the introduction of the Mac to market Windows, so following Apple into the MP3 market by five years is not that surprising.”
(Some might argue it was a decade before Windows was functionally close to Macintosh, but Microsoft certainly marketed it a lot fewer than ten years after 1984!)
Monday, July 03, 2006
Friday, June 30, 2006
Thursday, June 29, 2006
Dell (NASDAQ: DELL) seems to have once again taken the lead in good old price and ease-of-use over rivals HP (NYSE: HPQ) and Apple (NASDAQ: AAPL) with yesterday's announcement of their new global recycling program for PC's, printers, and other Dell-branded tech gear.
Good for them. Looks like they're putting that world class supply chain operation to work in a different direction.
And the office products superstores seem to be doing their part too -- have you noticed their "dedication" to "recycling" used toner and ink cartridges lately??? (Wink, wink...)
Monday, June 26, 2006
On this trip, I was relieved the laptop computer and all-in-one printer I'd ordered the week before had arrived and were accounted for (two boxes of gadgets is an average haul for a week at our house). And in this spirit, I direct you to Jason Fry's piece in today's online Wall Street Journal, on the "green" impacts of E-commerce, complete with a link to a fascinating 10-page PDF on the history of corrugated cardboard (no kidding!).
More on that new all-in-one later this week, and in the spirit of the reduce-reuse-recycle model, I am a dedicated cardboard recycler and occaisonal reuser. The reducing? Well, I'm working on it...
Tuesday, June 13, 2006
Here's a screen shot showing the Lexmark Web Toolbar in action, as covered in my June 2006 Hard Copy Observer Observations column. Please note the browser I'm using is the beta version of Microsoft's ( NASDAQ: MSFT) Internet Explorer 7, which includes print enhancements of its own, and also please note the Lexmark home page, which features and links to the free download.
by Jim Lyons
The Hard Copy Observer, June 2006
In last month’s “Observations” column, I wrote about the development of Internet-based printer management over the last 10 years. This month, spurred on by a small part of a major introduction by Lexmark International (NYSE: LXK), I’m taking a look at the past, present, and future of the other important aspect of printers and their coexistence with the World Wide Web—printing Web content.
The Present: Lexmark’s Web Toolbar
The new Lexmark product that inspired this article is the Lexmark Web Toolbar. I have downloaded it and given it a run for its money, and I am pretty impressed, even though monochrome and color HP (NYSE: HPQ) LaserJet printers are my primary output tools these days.
Lexmark’s Web Toolbar is a Microsoft Internet Explorer add-in and focuses on four (and only four) tasks: scaling Web pages to print without cutting off text or images; printing Web content in text-only format, thereby eliminating images (read “ads”); printing in monochrome only “using the black cartridge”; and enabling “easy Web photo printing using the included Lexmark Fast Pics software.”
For Web support, Lexmark offers one page of FAQs, a grand total of seven problems with recommended solutions. Given that the Web Toolbar is so clean and simple in its approach and appearance, it is probably appropriate for its single Web help page to be spare as well. One of the “big seven” questions, the last one in fact, is quite interesting, suggesting that problems with non-Lexmark printers can be expected, given that the product is designed with the company’s products in mind, and “results may vary” with other vendors’ printers.
My results have been fine using the Web Toolbar with HP LaserJet printers, but it does give one pause—why, after all these years, are we still hassling with chopped-off Web pages and that seemingly ever-present nearly blank last page that is printed? For me, anyway, those are my only real pain points with Web printing—I can deal with my text-only and photo-only needs in a variety of existing ways. For that matter, the pervasiveness of “print-friendly” versions of pages has been the biggest aid to printing everything from recipes to news items, although I find it ironic that often I use “print-friendly” pages to construct a nicely formatted e-mail that may never be printed!
For completeness’ sake, before leaving the “present” section, I should mention that Oki announced a similar solution earlier this year (Observer, 3/06), an Internet Explorer “plug-in,” using the old-school vernacular rather than a term such as Lexmark’s “toolbar.” Oki’s WebPrint tackles a few more Web printing problems and features, such as margins and frames, but I have not had a chance to try it.
The history of printing from the Web is an interesting one, with a well-documented lack of association between the Internet and printing in the early days (mid-1990s). Following these pioneer days, the industry realized that the Web was the eagerly anticipated manifestation of the “distribute and print” model and that, to avoid being stuck in the “print and distribute” past, printers and printer vendors had darned well better embrace the Web.
True sticklers will tell you Bookmaker’s Surf’n’Print was technically the first such Web-enabled product (Observer, 3/96). In my opinion, however, the first significant announcement along these lines was documented in a February 1997 article in The Hard Copy Observer called “Canon Computer Launches New ‘Photo-Ready’ Ink Jets.” Canon announced WebRecord as part of a larger ink jet printer announcement, and the Observer described it as “a utility that stores and formats Web pages for later viewing and printing.” The article concluded with the company’s rationale for the development and introduction of WebRecord: “Canon hopes that WebRecord will encourage people to print off the Web, something … that they don’t do much now.” In addition to bundling this utility with its printers, Canon even attempted to sell a retail version of the product for a time, for use with all printers, not just Canon models.
Later, HP leveraged assets acquired via an acquisition of (you guessed it) Bookmaker and introduced Web PrintSmart (Observer, 6/98). The Observer story on Web PrintSmart highlighted the strategic importance of this product as a tool “designed to suck pages away from competing print technologies onto HP office and home printers.” HP’s software package, which was available bundled with new printers and via free download, was designed to meet a perceived user need to print Web “selections and collections,” and it actually survived through a 2.0 version. As is the case with any HP bundled software, millions of customers ultimately acquired PrintSmart. User adoption was another matter, though.
In retrospect, these were important products from both Canon and HP, measured not by their longevity (relatively short) nor by their revenue or profit production (none) but as statements of strategic direction by these two industry leaders.
Where the products went off base, especially HP’s Web PrintSmart (and maybe even more so its later “Instant Delivery” software), was in their attempt to understand and to ultimately modify the behavior of Web information seekers. The idea of automatically scheduling “harvesting” of Web content, to be pushed to end users’ printers, could be positioned as a great convenience for busy knowledge workers, but in reality, many users saw the process as a complicated hassle resulting in stacks of unread printouts. Basic printing improvements were crushed under the weight of these behavior-modifying (and supplies-business-building) “features.”
This misunderstanding was not unique to printer vendors, however. As the Internet bubble swelled, the entire Internet industry was enamored with “push” technologies. Early push technologies such as PointCast and others met their demise when the Internet bubble burst. Of course, instances of the general idea of push technologies thrive today, including e-mail and spam, the latter of which has proven cockroach-like in its ability to thrive despite a variety of legal and technological countermeasures. More favorably viewed subscription concepts such as RSS and podcasting are also alive and well.
Even in some of the earliest coverage I could find about printing from the Web, Canon and HP acknowledged that getting the browsers to enable better and easier printing was key. Browser-based printing has continued to improve, and almost all browsers have long offered enhancements such as “print preview” and improved frame printing.
Much of the media coverage of Microsoft’s new Internet Explorer version 7, available as a beta 2 version this spring, has focused on Google’s problems with the software’s built-in preferences for embedded search engine MSN. Less widely detailed is Internet Explorer 7’s inclusion of print-friendly features such as “Shrink to Fit.” In fact, Microsoft’s own Web site lists “Advanced Printing” as one of the key feature areas of the new Internet Explorer. Its new browser automatically scales a printout of a Web page “so that it’s not wider than the paper it will be printed on.” Internet Explorer 7 also includes a multipage print preview with live margins, resizes text to avoid document clipping, and includes an option to print only selected text.