Printing in the Blue Ocean

The idea of “Blue Ocean” and the strategy behind it is incredibly appropriate for the printing industry. Most printers live in the “Red Ocean” today, and are greatly suffering (and many continue to disappear) because of their inability to get out of it.

Blue Ocean is a term coined by the prolific authors, professors and business theorists W. Chan Kim and Renee Mauborgne in their book "Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant" (2005).

If you are in the printing industry, and are not familiar with Blue Ocean, I would highly recommended putting in some late summer reading— it’s a quick read, unlike many business books. A lot of people throw the term around loosely, but if you study it closely, it really is among the best of many popular business ideas that have emerged in the last 20 years or so.

The theory goes that in an established industry, companies compete with each other for every piece of available market share. The competition is so great that some firms cannot sustain themselves and stop operating. This is the state of companies living in the Red Ocean (as in blood red.)  At the risk of sounding obvious, firms in the printing industry are in this Red Ocean. There are many thousands of companies that are almost indistinguishable from one another.

The book contains several fantastic case studies of firms who clearly differentiate in core ways. These are firms who, by innovating and creating great differentiation, find their way into the Blue Ocean, where no firms operate, allowing the company to expand without competition. Examples in the book include Cirque du Soleil and Southwest Airlines. In the case of Southwest, at this point they’ve been copied by dozens of other companies… but they took many years to emerge, during which the company profited immensely.  In the case of Cirque, they arguably have remained alone in their unique market.

From the Cirque du Soleil film, World's Away, photo credit: Mark Fellman, Paramount Pictures

Some might think it is a stretch to compare printing to a circus, but there actually are parallels. The circus business, pre-Cirque, was in long-term decline. Alternative forms of entertainment—sporting events, TV, and video games—were casting a growing shadow. This is similar to what is happening to print in the face of digital media. Children preferred video games to circus acts. Marketers prefer digital media now, due to faster cycle times, lower costs and measurability.

An industry beset by decreasing audiences and increasing costs. In printing’s case, even without increasing costs, we are faced with price competition from weak and desperate direct competitors as well as from the easier and less costly digital media alternatives.

Interestingly, a new entrant to the printing industry would have a tough time in face of the existing competition, just like Cirque faced a challenge competing against the incumbent Ringling Brothers, who for most of the last century had set the industry standard. Cirque created uncontested market space that made the competition irrelevant. It pulled in a whole new group of customers who were traditionally non-customers of the industry—adults and corporate clients who had turned to theater, opera, or ballet and were, therefore, prepared to pay several times more than the price of a conventional circus ticket for an unprecedented entertainment experience.  

Southwest Airlines strategy, as articulated in the book, was not to compete head on for traffic from existing airline customers, but to go after people who normally could not afford to fly—to compete for business normally owned by bus and car travel instead. 

Both companies created new demand for their products. I can think of only a handful of companies in the printing industry who have taken this kind of approach.  There are a couple of ubiquitous examples who are "online printing companies”, or companies who solely do business on the internet, but whose products are tangible, print or print-related. There are also “brick and mortar” printing industry companies who have made the swim into the beautiful Blue Ocean of profits and growth.  

Can you name any of them?

HP Graphic Arts Users Group, Dscoop

I just returned from Dscoop7 in Washington, DC. This was the 7th annual face-to-face meeting of the Digital Solutions Cooperative, founded in 2005. Dscoop is the independent global community of graphic arts business owners and technical professionals who use HP Indigo and Scitex equipment and related solutions. Dscoop7 had over 2,000 attendees and more than 150 sessions. More than 90 vendors showcased their solutions in addition to HP, and we also had a pre-conference program for graphic designers this year called DSee, which was wildly successful.

I'm proud to say that the Operations Committee (of which I am the incoming chairman) was responsible for a track of 10 sessions over 2 days, all of which were delivered to full house crowds! Kudos to Mike Blanco (with GPA), our outgoing chairman who led our group into the conference and Amy Biedenharn at Dscoop HQ, who facilities our every move.

I put together two sessions for this year's event. My first session was a "201-level" panel discussion called Fine Tuning Web-To-Print: Implementation and Operation. We realized going into the conference that a lot of technical and operations folks already know the basics of W2P, because these things are becoming part of how we all do business. A lot of companies now run more than one system or are in their second or third implementation.

So we put together a panel of experts to discuss the challenges and opportunities and talk about the nuts and bolts of such topics as storefronts, cross-media capabilities, e-commerce, workflow and business system integration, variable data printing and customization online, hosting decisions and more.

I wanted to have representatives of all the great Web-To-Print solutions present at the event. Logistically-speaking, it's awfully hard these days to get technical people from printing companies to commit to speaking at events. Thanks to Leslie Wengenroth at PageFlex, the well known VDP and storefront vendor, we got Paul O'Brien, CTO of Acculink, a leading-edge printer in Greenville, NC to join us. I managed to round up a nice cadre of technical people from most of the solutions present at Dscoop7: Alex Boissezon from Pixfizz; Chris Young from XMPie, a Xerox company; Greg Salzman- CEO of Aleyant Systems; Steven Enstad- one of the founders of PageDNA; and Becky Schick from HiFlex, now an HP company as a result of their recent acquisition.

There was a time in the not too distant past when a panel like this would have seen the vendors bickering over small points and vying for the microphone to get the last word in. This panel was nothing like that, in fact there was much agreement on many points, little contention. These companies all have powerful solutions: Paul and I as the users on the panel could easily see the value in each of their products and technologies. In the recent past, software vendors had more of the approach that the marketplace was a zero sum game, and to win you had to squash the competition. This isn't the case any longer. Today, you must pick and choose among solutions that fit your target customer and market, and they must work together. That was the overriding message of the session. I had 3 pages of "seed" questions I put together in advance with the help of the panel. I only made it through a handful. We had fantastic audience interaction, many great topics arose. The session could have continued for the entire afternoon if the time had been available!

The second session I presented was called Printing is Easy, Everything Else is Hard (Workflow Automation), and was somewhere in between introductory and 201 level. I partnered with Bill Weiners from Digital Lizard, who is a kindred spirit and well known in the group. Digital Lizard is owned by venerable Las Vegas offset printer Creel, and while smaller than Mimeo, Digital Lizard is very advanced from a technology standpoint-- and they own almost as many Indigo presses as we do! Like Mimeo, they produce both documents on demand as well as photo products.

The premise behind the session was that when you have powerful equipment on your floor, printing is the easy part. The hard part is getting the work from the customer onto the press, tracking it throughout the steps in your operation, getting it finished and out the door, finally delivered and billed. The solution for many of these challenges lies with advanced workflow automation.

Bill and I presented case studies of the way we do things at our respective companies. We talked about key building blocks for implementing solutions to help our attendees streamline their operation, while improving efficiency, quality and profitability. This session was in the last time slot of the event on a Saturday afternoon, and I am happy to report that the room was completely full. Bill and I can't take full credit for the topic or the speakers being such an exciting draw-- it's just as much a product of the fact that the Dscoop audience is definitely the best and brightest, and most dedicated, group of printers in the industry!

There were many, many other highlights at the the event. Notable among these, the introduction of new HP Indigo Presses, the Indigo 10000, Indigo 20000 and Indigo 30000 the "biggest" among them, in more ways than one-- these new machines can print in the popular 29" or B2 sizes, and applications include commercial printing, labeling and packaging. There were many other announcements, including software upgrades and new workflow solutions. HiFlex was highlighted in a couple of sessions, and in the solutions showcase. I will talk more about the software aspects in an upcoming post.

Keynote marketer Sally Hogshead provided an exciting and fun kickstart to the event. It's the first time I've seen a Keynote presenter at an industry conference do a shot on stage! HP Indigo GM Alon Bar-Shany, presented a fantastic "state of the industry" report, with terrific insight. Bar-Shany paints a very good picture for adopters of the technology, and HP Indigo as an organization is well positioned to help printers capitalize on the opportunities ahead. Along with all the data, Alon pointed out that Dscoop7 began on March 22nd, which was the 10th anniversary of HP's acquisition of Indigo. Resting on the laurels of the past 10 years is not in the cards, though, as the company charges forward!

Even though Dscoop7 has just ended, I'm already looking forward to Dscoop8 next February in Dallas, Texas!

(photo credit Bryan Yeager, Associate Director, Infotrends, from pre-Drupa festivities at HP in Israel the week prior to Dscoop7.)

Cloud Printing Service Provider. Is it a term we should embrace?

I think the Cloud is here to stay, and I think Cloud is a term that has been embraced far and wide, but it must be used correctly.

The test I would put forth for whether your service or platform is truly "Cloud" is if I can contract for the services you offer without speaking to a human being, and activate/deactivate them when I want to stand them up or tear them down.

There is no "overhead" or startup costs for me to become engaged with you-- I literally can take advantage of the services when I need them, and only pay for them as I am using them.

That's what differentiates Cloud from "ASP" or "SaaS" or just the "plain old Internet". This is a nuance that I think a lot of non-technical people miss and it's driven by a combination of technology and business model.

Companies that use the term Cloud without fulfilling this promise could easily be seen as jumping on the hype bandwagon, and further confuse the market. Mimeo has been called a Cloud Printing Service Provider by Gartner, and we do fit the definition I've provided here. However, we are still very careful to only use this term with audiences we are sure will "get it."