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Graph Expo 2000--Vendor Coalitions Offer Real Promise

October 2000

Introduced just recently by Ariba, Commerce One, Microsoft and IBM, along with others, UDDI will develop a standard intended to create a platform-independent, open framework for integrating business services using the Internet.

According to printCafe's co-CEO Mark Olin, the Rochester Institute of Technology (RIT) has been chosen by printCafe to be the independent certification agent for printCafe PCX transactions. In other words, RIT will be mediating software disputes between print buyers and printCafe customers on ineffective or inefficient interoperability concerns. Fees will be set by RIT and its Center for Integrated Manufacturing Studies, where the service will be staffed.

The printing industry as a whole has been hesitant to buy into the e-commerce models. printCafe, as one example, has responded by offering its printing clients a more flexible pricing approach. Its Internet software services are available at either of two levels of subscription: $25,000 introductory or a ramp-up version for unlimited e-commerce.

The new e-commerce startup Digeno, funded by R.R. Donnelley & Sons (RRD), has a series of different business assumptions from its competition. Among its nearly 20 employees, there are no programmers. All programming is done by third-party contractors.

Secondly, Kevin Hess, Digeno's CTO, feels that the firm has leap-frogged its older e-commerce competitors by incorporating software by BroadVision, Adexa, Click2Learn and Exodus—many of which are used by firms like Yahoo. Also, RRD, being a totally web printer, thinks its pricing model will be attractive to non-competing sheetfed printers in the $3 million to $30 million annual sales range. The buyer pays $9.95 per RFQ; the printer pays $19.95 per sold job up to $10,000 in value and $15/month per password.

The $30 million that RRD invested in Noosh less than a year ago is now a passive investment with RRD having pulled its representative off Noosh's board of directors. Likewise, Terry Tevis, the RRD executive charged with creating Digeno, departed the firm just before Graph Expo.

At the Executive Outlook Conference held the day before Graph Expo opened, supply chain vendors spoke of their clients' e-commerce experiences during this past year. Jim Milici, of the Pitman Co., said that the capability to order supplies from his company's Website has been fully operational for more than five months. While a very low percent of sales has been generated this way for Pitman, select clients have been very active.

Noosh shared its transaction experience year-to-date and noted that two-thirds of the jobs awarded by its print buyer clients had no other competing bids, i.e., single sourced. This suggests that these buyers were using the Noosh system as an administrative tool and for management efficiency, while continuing to rely upon proven printer relationships.

CreoScitex demonstrated its SP technology announced conceptually at DRUPA. This direct-imaging application of spraying a laser imageable polymer onto a plate sleeve was demonstrated on a single color form on a 10-year-old Shinohara press. The laser imaging of plates directly on the printing press will be a magnificent complement to the proven computer-to-plate technology.

However, an even more exciting possibility was unintentionally demonstrated. These spray-on units could be mechanically adapted to virtually any used press. Similarly, the plate sleeves might be like a mountable plate, though reused several dozen times without dismounting. These older presses are currently becoming less competitive, not because of slower speed or sacrificed print quality, but because of slow makereadies. Reducing the makeready to a few seconds makes "old faithful" very viable.

Likewise, should ink-water balance be a concern in a multicolor application, Flint Ink's Single Fluid Ink might solve that issue. The combination of these digital workflows with proven older presses could create exciting opportunities for printers.

Xerox also received major attention at the show—not only for its greatly expanded space, but because of the broadest array of products the firm has ever offered. A major flaw in its Premier Partners program, originally announced at DRUPA, was corrected. And that was its announcement to no longer compete with quick and commercial printers for print production work through Xerox-owned print shops known as Document Technology Centers (DTCs). Only 28 to 30 DTCs are expected to continue after the current contracts expire, according to Douglas Lord, Xerox senior vice president.

Print-for-pay firms will pay about $1,000 to join Premier Partners and will agree to a range of prices for comparable services. Xerox will receive an additional 3 percent of billings for managing the Internet infrastructure and invoicing global clients. These global clients would be expected to negotiate their typical 20 to 40 percent volume discounts off list prices. Hence, printers could realize lower margins being associated with this network.

However, so long as these global clients are new to the printer, the work would be considered "found," as is currently the case with GPO or public sector, low-bid jobs won. Since many of the Premier Partners serving the same regional market will have comparable capabilities, it will also be interesting to see how Xerox places the work since price has already been predetermined.

With the international extravaganza of DRUPA a scant four months prior, Graph Expo 2000 might well have been anticipated to be a rehash to veteran show-goers. Nothing could be further from the truth, as leading vendors reacted quickly to concerns expressed by the market and threats perceived by competitors.

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