Print13: Standard Register to acquire two HP Inkjet Web Presses

I had an action packed couple of days in Chicago at Print13 ealier this month.  Everywhere I went, I kept missing Joe Morgan, my uber boss and our fearless leader at Standard Register.  I was particularly unhappy that I missed him the HP booth, and then had prior commitments that made it impossible for me to attend the HP Press Conference featuring the announcement of our acquisition of two HP Color Inkjet Web Presses.

I've spent quite a few cycles in the last 3 years working on Inkjet-related business models and technology plans to support them, so I could not be more excited in general about this development. Fascinatingly, what we'll be using these machines for at Standard Register is sort of the polar opposite of what I'd been working on before.  I believe this speaks to the robustness of the technology, that there are a great many applications that can be run on these new machines. 

The T230 and a T400 Color Inkjet Web Presses will help us accelerate the transformation of the company and give us an outstanding platform for our increasing volume variable data printing applications.The presses offer outstandingly high-quality, four-color output, broad media compatibility, and lower overall costs. We all know the market is demanding ever faster turnaround times, color and personalization, and along with our unparalleled IT infrastructure, these presses deliver.

HP is a trusted vendor for us. Not only do we own HP Indigo digital presses, HP Scitex, HP Latex, and HP Designjet large-format printing solutions and HP Thermal Inkjet technology, we also make extensive use of HP computers and IT services across our footprint..

Some of my favorite people in the printing industry. From left to right, David Murphy, Marketing Director, Americas Graphics Solutions Business, HP; Aurelio Maruggi, Vice President and General Manager, HP Indigo; Joe Morgan, President and CEO, Standard Register; Yishai Amir, vice president and general manager, Americas Indigo and Inkjet Business, HP.

Lob is disrupting the Printing Industry- one Poster at a time!

In a world where even Print Service Providers sometimes question whether the printed piece has the compelling power it once did, a two month old Silicon Valley startup is achieving success by making (gasp!) paper-based, physical products-- albeit selling them via the most modern of programming techniques.

After graduating from the University of Michigan, and stints on Wall Street, and at Amazon Web Services and Microsoft, Leore Avidar and Harry Zhang founded their company Lob, and were accepted into the well-respected startup accelerator program at Y Combinator just a matter of weeks ago—and they are already generating revenue from their service at a fast pace of growth.

If you’ve read this blog before, you know that among my favorite topics are cloud printing, integration and automation, so as soon as I heard about Lob I needed to know more about the founders, their idea, and plans. Lob specifically refers to themselves as "Cloud Printing for Developers".  I love it. I sent Leore an email, and we spent a few minutes discussing the company and their approach. 

The concept and execution are both compelling. They created the service as a solution for software developers who want to include printing and distribution capabilities with their web/mobile applications. Without Lob, this is hard to do, and expensive.  With Lob, it’s easy and priced competitively.

In terms of startups who work with Y-Combinator, Lob is one of the youngest companies. Their idea was to expose printing to developers via an API (Application Programming Interface).  It took them a week to develop the initial alpha API, and then immediately got started working with customers.

The technical challenges were one thing, but getting familiar with printing industry jargon, paper and ink choices, etc. also presented challenges. Lob initially produced their products with their own desktop printers. Now, the company manufactures and distributes through a network of printing partners to whom they route the jobs.  Many of their print partners are good at printing and reliable delivering on time, but don’t understand how APIs work, and don’t have programmers.  For such partners, Lob translates the order instructions for the job and delivery into human readable form, or helps the printer develop the integration.

Their first printed product idea was transactional mail—financial statements, bills, etc.  Almost as soon as they engaged with customers, they started hearing new use cases. So they turned their attention to other printed items. Turns out, other products were more desirable. Because they are an agile Silicon Valley startup, and using their API, they can create new products of virtually any shape and size, from the ground up, quickly.

Brace yourself: according to Leore, physical mail is making a comeback: open rates are up.  Email open rates are down. His customers want to engage with users via physical mail… when they buy a product or reach a certain milestone. I almost fell off my chair—I thought to myself, “I know this… what’s wrong with all the naysayers in this industry?”

And as it turns out, there are a couple of things wrong with the printing process, from a customer standpoint, that Lob is addressing nicely.  Print automation and personalization are really hard for people outside this industry. When Harry worked at Microsoft, he had a project where he needed to send a large number of printed pieces, each personalized with information about products, and each to be delivered to a different address.  As many have found before him, when it came time to have them printed and mailed, there was no good way to do this… and service providers were expensive. Instead, Harry himself and colleagues spent untold hours printing, addressing, stuffing and mailing the envelopes. So the idea for Lob was born.

Other product ideas soon flowed. According to Leore, posters are “killing it.”  And this certainly shouldn’t be news to most Printers-- on demand posters, sold on a partner’s website, with no inventory required, shipped directly to the ordering customer… are a money maker.

As the startup culture requires, a prospective customers simply reads the documentation for the company’s REST API, at https://www.lob.com/docs, then signs up and orders an item sent to their self.  Almost immediately, most such customers start running batches of real work for their own customers. Not surprisingly at least for now, many of the company’s customers are other Silicon Valley startups—who begin with small quantities of print, then grow their business. LOB has grown with them. It’s a great market and Lob knows where startups hang out.

In their very short existence, Lob already has hundreds of customers and is generating revenue, the founders say.  With an innovative idea and a great technical approach, along with great energy and passion, it’s going to be very exciting to watch their evolution.  I can hardly wait to see what they are doing a few months from now—it’s bound to be a great story.

Workflow Renaissance

Workflow has been an important topic in the Graphic Communications business since there has been "technology" involved. The modern definition of workflow kicked into high gear as desktop publishing came into commercial use.  Then it really became essential when Print Service Providers (PSPs) adopted Computer to Plate (CTP) in the late 1990s. 

So it's kind of fascinating that today, there is a workflow renaissance going on.  It's really interesting because it's primarily driven by print service provider needs that focus on making vendor equipment more efficient.  These demands have always been present, but because they didn't gate the hardware sale for the press maker, nor did satisfying them differentiate a particular vendor company from its competition, they were not top of mind for anyone. 

That has changed, for a number of reasons.  

First, Web-To-Print is maturing, and many more PSPs need super efficient workflows to handle the high volume of extremely short run work. Second, presses are bigger and faster, as well as more expensive.  So PSPs ramp up sales efforts to increase equipment utilization, to pay the press bills.  To make money, labor expenses (and as a result, craft), must be kept at a minimum and workflow software is the only answer.

The demands from PSPs are frankly greater than what most vendors are delivering. With some great exceptions, many of the workflow solutions in the market today can be considered "legacy software".
Two of the brightest exceptions today are HP SmartStream Production Center, and Enfocus' Switch line of products, which we aren't going to go into in detail here, but may in a future post.

Instead, for the moment, let's think about some of the things vendors need to address to take workflow to the next level, and satisfy the emerging requirements of PSPs for the next few years. I'm probably going to write some discrete posts on some of these topics in the future, too.

- Sell software standalone vs. bundling with hardware. 

- Make workflow software work well with other people's equipment, including competitor equipment.

- Package and describe workflow software in bite size pieces that directly address the MOST IMPORTANT customer/users needs directly. 

- Make the existing software modern with user interface enhancements.  Software that runs on Windows will soon benefit from the "Metro" interface.  Some of the interfaces of industry software just look horrible, and users have become accustomed to new, beautiful web interfaces they use in their life outside of work.

- Make workflow a sexy part of the print production story, with giant screens, visualization and data elements, ala Landa and HP Production Center.  

- One of the coolest things about the Landa launch was the Tablet device from which the operator could control 3 presses

- Appropriate parts of Workflow software should run in browsers, and even smartphones. Handheld devices are incredibly valuable for managing a large and busy production floor.  They are good for a small and busy production floor, too.

- Touchscreens everywhere appropriate. Command line interfaces are still important for the tech nerds, though. 

- Rule based automation should be defined either graphically, or by writing code, depending on how complex the rules, and how sophisticated the user.

- Run the workflow software in the Cloud, delivering it as a set of services at tiered monthly subscription fees. If Adobe can do it with Creative Suite, it can be done with workflow software, too.

- Larger customers today are far less concerned about whether something runs on a particular piece of hardware.  Smaller customers would also likely gravitate toward the subscription model. 

- Create better and more integration with MIS and Web-To-Print systems.

- Create better ways for customers to solve each other's problems and let customers enhance the software, ala Enfocus Crossroads-World community website. 

- Add "cross-media" or marketing services stuff, where it directly benefits the PSP strategy to drive pages and profits.

- Help PSPs show how print complements email--  which for a younger audience with money to spend today is important (i.e., not how email or "cross media" complements print-- that's a message from yesterday.)

- Increasingly, the assets customers use to create printed materials are stored in the cloud.  Workflow systems need to be able to reach into those systems (via APIs), and consume the assets to make print jobs.

In summary, we're talking about a whole new generation of print production workflow.  It takes into account the new environment PSPs are operating in. It makes it so employees (especially those new to the industry) will want to become or stay involved in print production.  It makes the company profitable, efficient and competitive. It remains to be seen whether this will be delivered by the existing vendors, or by the new vendors... but one thing is certain, it will happen!

High Value Features: Increasing Importance

The clear trend in the industry for the last several years has been digital printing technologies overtaking traditional analog technologies.  And over the last few years, the sophistication of documents produced digitally has grown dramatically. You know, it wasn't that long ago that digital meant monochrome letter-sized printing!

Now we've reach a bit of a "tipping point", for lack of a better phrase, in terms of this sophistication. Everywhere you look now, you see digital products being produced with high value features. These features include, but are not limited to:

- Binding (Perfect, Case, Coils, etc.)
- Cutting (many different sizes)
- Folding (many different shapes)
- Coating (UV and others), Laminating
- Die Cutting (should probably be in quotes, because the lasers and other robotic devices are selling like hotcakes now)
- Inks: (additional imaging units have become common; Gold, Pearlescent, Neon Pink, White anyone)
- Dimensionality (i.e., Scodix, and native capabilities in HP Indigo and Nexpress)
- Papers (amazing, beautiful examples for all output technologies)
- Substrates (I spoke to someone who was printing on Hemp the other day, but plastic has become almost commonplace, and if you look at the GPA catalog, you will see a gigantic variety of versatile non-papers.)
- Foil (not done on the digital equipment, but applied to digital output)
- Special Effects (like Color Logic)

I've never seen so many example of amazing business cards since back in the early days of Printcafe... back in those days, a card that cost $3 was a demonstration of how well you could print, and all the things you could do.  PCAF had cards that were folded, scored, die cut, perforated, had at least 7 colors including a metallic and different coatings on both sides.  Those days are back, only it's digital not analog printing that is impressing.  Just take a look at Moo.com.  I bought some business cards from them, and they were insanely expensive-- so I expected the result would be for people to be impressed by them. I was not disappointed, everyone I gave them to (including many commercial printers) appreciated them.

Color Logic System Designer Swatch Book

It has been said for quite some time that anything that can go digital, will go digital.  In fact, I think Benny Landa himself has even said this. However, this is a double edged sword today.  Many things that were previously printed have gone digital in the form of not being printed at all-- rather delivered via the Internet. And many more will.  Some information simply makes more sense to be accessed via the web than via an relatively expensive piece of paper.

Other information, however, benefits greatly from the sophisticated treatments that can only be delivered by high-end commercial printing. When you understand that even the most basic printed piece is going to be more expensive to produce and deliver than something published on the web, you start to realize that the print service providers energy should be focused on producing printed materials for audiences who care about the quality of the piece. There are many examples of these categories of products and I may get into that in a future post.

Clearly, though the smartest operators in the industry have arrived at this conclusion, and are investing in capabilities that will allow them to offer all the advantages of digital printing coupled with beautiful, high-end features. They already have clients who see the value of this work, and they seek out more who fit the profile. This, to me, is the essence of the immediate future of the successful commercial printer.

EFI Connect 2013

I was very happy to get the opportunity to attend EFI Connect again this year.  I am pretty sure it was my 10th time around, out of 13 years, of this very special industry event that began life back in the Printcafe era. Wow, time flies.  The very substantial turnout of customers, partners and EFI employees continues to make it an impressive event. Only The HP Graphic Arts User Group meeting, Dscoop8 will have a larger customer turnout in the industry this year. 

January was unseasonably cold in Las Vegas, but inside the Wynn at Connect, it was hot! For me, as a former employee of EFI, it was like reunion.  I saw so many colleagues and friends, it was great to catch up and find out what's new with products I was involved with during my tenure, as well as learn about the systems and technologies my industry associates are using to run their businesses.  The striking thing this year-- it was almost "mind blowing"-- was see all the new EFI employees-- many of whom I know, but not from EFI-- like Mark McGowan, the CEO of Online Print Solutions (OPS), and Chris Woods, from Technique. Both very well respected technology companies were recently acquired by EFI, and were attending their first Connect event as part of the family.  EFI has been on a major global roll acquiring MIS vendors over the last year and a half-- including Metrics in South America and Alphagraph in Europe, not to mention venerable Prism, which was more or less a "tent stake" if not a tent pole for the new acquisitions and brought back Filip Buyse (prior to Prism, he was VP at Printcafe) as GM of the Web2Print products. At Connect this time around, Filip was so busy with customers, I only got to briefly say "hi" to him!

Guy Gecht is an amazing CEO, and he can also be quite amusing when he wants to be--  always a source of great knowledge and insight. His fireside chats with industry luminaries have become the stuff of legend at Connect.  I've been thrilled to hear them in the past, and this year's talk with Benny Landa was amazing. An industry legend and the founder of Indigo (acquired by HP a little over 10 years ago), and now CEO of several new ventures, including a new printing press and ink company, LandaCorp in Israel, Benny is like the Steve Jobs of the printing industry. He's been personally involved in over 1,000 patent applications in his career, and a large number were granted. He brings a beautiful vision and a contagious excitement to the printing industry like no other individual, or company for that matter... although EFI and HP are both close seconds in this area. I've seen Benny Landa speak 4 times starting with, and including at drupa last year. The coolest part is that I have learned something new about the man, and what he is doing, every single time.  That's pretty rare.

Benny spoke of his childhood, telling an amazing story about his father's tobacco store in which the man and his son, out of necessity to make a living for the family, built a passport photography machine. Among other unique features was that it made an image positive on glossy paper. He drew a direct line from this machine to Indigo, over the course of a few minutes of a spoken history that I'd never heard.  It was very moving.

One funny part of the Landa interview was when Guy asked Benny about the importance of workflow.  Guy was obviously fishing for an EFI endorsement, but Benny said flatly, "You're asking the wrong guy."  Guy pushed a little bit, and Benny retorted, "Why don't you ask Udi?"  At that point, much of the crowd erupted in laughter, because Udi Arielli is so well know, and another terrific feature of Connect was his Automated Workflow Experience (AWE), which is an animated, interactive, but live narrated movie that Udi's "british-academy award" winning daughter helped him produce, explaining the importance of CIM and automation, and how EFI's products enhance and streamline printing operations of any shape and size, from end-to-end. 

Benny Landa is also well known for never hiring people who have hobbies.  He wants people whose love is the work they are doing.  Clearly, he's found success hiring such people!  Guy grilled Benny on his hobbies... Music? No.  Books?  That's my wife's department.  Movies?  Benny says, "I saw a movie once in the seventies... it was called 'Debbie Does Dallas', I think."  This brought the extra-curricular activities line of questioning to a successful conclusion, and also brought the house down! Classic, outrageous, iconoclastic. Guy Gecht is as sharp as it gets, incredibly fast on his feet, and this proved that he and Benny are cut from the same cloth.

Of course, perhaps the biggest attraction of Connect is the training classes.  There were more than 150 classes at this year's event. At trade shows, there are a few interesting seminars delivered by consultants, unfortunately often leaving attendees with more questions than answers. At Connect, you can send your people to get deep-dive training, and actually save money versus having an EFI trainer come in-house. Plus, with features like the keynotes, other outside speakers, meals and receptions, not to mention unparalleled networking, it has all the good features of a trade show, too.  Many printing company owners find it to be an amazing value and use Connect as a perk for top-performing employees. There were even a number of third-party vendors in attendance, like Kodak, Xerox, MGI, Ricoh and Esko, just to name a few-- MGI even had a digital press on the floor of "The Lab", which is the central meeting space of the event. Along with the annual golf outing, and Andy Booth's newer tradition of a bike ride up Red Rock Canyon, people actually got to step outside the ritzy confines of the Wynn, too. 

If you are an EFI customer, and haven't made it to Connect, you owe it to yourself and the future of your company to attend next year.

Production Inkjet 2013 and Beyond

The inkjet market is evolving rapidly and moving into full-blown commercial applications. Paper dimensions, color quality, substrates, workflow and finishing are evolving rapidly.

Looking across all categories of print, and how people use it, the exciting thing now is that people can see this is the right technology for what the future of the industry looks like. Disruption of the traditional analog printing processes and business models as a result of high quality, shorter runs, personalization, and good economics is starting to present itself. Speed and cost are good enough to compete favorably against legacy technologies in many applications; then you layer on the value added capabilities and turn-around times, it's very striking.

Furthermore, Inkjet has the real possibility of disrupting today's existing high-quality digital production presses. For example, you could take the equivalent of an entire day of work on four of the highest productivity color digital presses, and move them onto an inkjet platform, and the result might be that the former entire day is reduced to only two hours. The opportunities are really in the improved efficiency, the cost impact, and the capability of adding new product features.

There is a lot of activity in hardware for "paper moving", in heads, and in ink itself. The software and computer side of things is ahead of the game at this point, which was a problem in the past. From my perspective, everyone but HP is in Version 1.0 of their production press technology. HP had quite an impressive showing at Drupa with their presses, notably showing the T-400 coupled with two different industry standard finishing lines.

A lot of the offset press manufacturers are "bolting on" inkjet technologies to existing platforms, a trend that I think has a short life expectancy-- primarily due to emerging technologies from companies like Landa Corporation. With their impressive show at Drupa, with such a great, comprehensive story and Benny Landa's proven track record, although they are at "version .9", it would be foolish to doubt that what they are doing will succeed. Landa will be an important company in the market. Another interesting showcase at Drupa, on the lower end of the spectrum was Delphax with their sheetfed Elan press, based on Memjet technology. A couple of years ago, it was commonly questioned whether Memjet technology was even real, whereas now it's seen altogether differently, and very real.

Inkjet is a big investment, but it's evolving so rapidly that an acquisition should probably be treated more like the purchase of computer systems, than a printing press has traditionally been financed. If you buy a machine today, the outside life expectancy is probably 5 years and at there will quickly be much better equipment available.

You also have to understand the workflow and finishing parts of the equation. Most printers innately understand the printing part, but it's getting the work onto the press and getting it finished and out the door that can make the difference between success and failure, and Inkjet presents new challenges in these areas.

Finally, the machines that create a competitive advantage today tend to be large and expensive. They have very high throughput. In order to achieve an ROI, a company must have the volume of work necessary to keep the press operating virtually around the clock. You may need two presses— because what do you do when you have 20 hours of capacity planned for a press that goes down?

A lot of people are saying, books and “transpromo” now, then marketing materials, newspapers, packaging, even photo books-- everything people use other printing technologies for, will be rolling out on Inkjet over the next 5-10 years significantly replacing offset technologies. I agree with this thought process.

Although there are many challenges, the opportunities clearly outweigh them. It’s a very exciting picture today, and I’m looking forward to rapid development over the next couple of years.

(this commentary originally appeared in Graphic Communications World "The Green Sheet", November 2012.)

Data: Is it the Printer's Nemesis?

I've long advocated that printing companies need to acquire IT capabilities to remain competitive. MIS systems, WebToPrint, and data handling skills have long been key to running a printing business.

All of a sudden, they are also an important part of a big segment of our product mix. Marketing materials targeted at specific consumers have been around for many years. VDP (Variable Data Printing) software coupled with digital printing took off way back in the early 2000s. Print personalization, which was once the wild frontier of technology for many printers, is now becoming obsolete. There are to big reasons for this: data and measurement.

Data
The biggest problem for print service providers is data. In a world where it's important to know "everything" about people, the only people who know that much are the search engines, and "big data" providers. Print is not part of their offering. Print might be considered competitive to their offerings but, because it doesn’t compete well, it isn’t perceived as a real threat. VDP stands for Variable DATA Printing… if you don’t have access to data, you can’t do it effectively.

It’s well understood how Google’s Adwords technology (just as one example) can deliver an audience to a marketer in an easy, cost effective way. Google approaches the marketing world in a way that is almost entirely different from a print marketer. It’s an algorithmic approach based on collecting and analyzing data. It starts with the data, not with creative. In fact, display advertising is a relatively recent addition to Internet advertising, which is somewhat incredible to imagine since the growth has been so meteoric. Such technologies are becoming ever more sophisticated.

Print media publishers can only offer marketers audiences based on their limited content. Golf clubs sell to people who read Golf magazines. With digital advertising, context matters less than tracking consumers wherever they go. That kind of tracking is the reason, for example, a shoe ad appears on Weather.com and also on a local blog.

Certainly many companies know a lot about the behavior of their customers, but many today are trying to create a strategy and framework to manage the data around it, primarily so they can participate in online marketing more effectively. Again, print isn't competitive in most cases. Print is being deployed via traditional methods, in what might be described as a “shotgun approach” versus the laser-guided smart bomb that is the Internet.

Furthermore, there is no real reason a marketer at any company, small or large, would trust the average Print Service Provider with access to their data. From security and privacy standpoints, “most” printers will not pass muster at corporate IT departments when they are audited. It’s also very often the case that the person the printer is calling on is not the person with access or control over the data, which results in barriers to selling VDP. Ironically, this has always been a barrier, and some have overcome it, but more have failed.

Measurement
With digital advertising, you now know what advertising and marketing initiatives you are running are working, and can change your campaign in real time to match customer behavior and results.

With print, you have to wait until the next “cycle”, whether it is the next issue of the magazine or the next mail drop. The only real way to determine the ROI of a print campaign is cumbersome testing that takes way too much time to implement and execute. The only real measurement of the effectiveness of a campaign is increased sales.

One impact the Internet has had on everyone is that we’re all incredibly impatient. We want information now, not a week or a month from now. When there are large amounts of money at stake, we get even more impatient—and advertising and marketing is the lifeblood of most companies.

Sounds really negative, doesn't it? Make no mistake: the days of "Dear Chuck" on a postcard are over. The good news is, there are still many applications where print personalization can play an important role. The adoption has been so limited, the sky is the limit for creative and technically savvy print service providers to succeed with these products.

But you've got to know how to use the data, and measure the results.