Color Printing Turf Wars

Competition among the major digital color printing vendors is tougher than ever. In-plants, as luck would have it, are caught in the crossfire.

by Mike Llewellyn

FOR ANY large organization, if they're saying 'I need this job now,' they're going to want to send it to an in-plant," declares Abby Abhyankar, vice president for integrated marketing at Xerox. "In-plants represent short runs with fast response times and no compromises on quality."

That's not news to in-plant managers, whose job it is to make sure their shops offer the highest speed at the lowest price. But it is making headlines at companies like Xerox and NexPress Solutions, which are discovering that in-plants are the ideal market space to grow their digital color printing business.

"We consider in-plants to be a vital market segment," says Vahaaj Khan, director of product management for digital printing at Heidelberg USA. Khan contends in-plants already running a sheetfed offset operation are an ideal site for a NexPress 2100.

Why all the fuss over this "in-plant market space?" Well, for the past five years the industry has been fighting a major battle for the lion's share of the digital color printing market. Several companies, like Heidelberg and Kodak, have partnered up; others dropped out of sight entirely. Some, like IBM, chose to mark a specialized territory—forms and data center printing, in IBM's case—and have dug in to protect it for the long haul. And still other companies, like Canon and Xerox, are duking it out in the open for mainstream color business.

But regardless of the niche these companies select, says Abhyankar, in-plants are now perceived as ripe, uncharted territory.

And vendors are trying to get in while the getting's good.

Because digital color printing has become so refined over the past few years, it's tough for companies to make drastic improvements to the products they already have. But to snatch the attention of in-plant managers, there are several key areas where even small advances will help manufacturers score valuable points.

The Battle Lines

"The number one goal is to lower the cost of printing," says Roger Wingerberg, marketing manager for enterprise color products at IBM Printing Systems. That makes sense for the company, says Wingerberg, because IBM is trying to stay focused on what it has done best for a very long time—data center printing, which requires very long runs.

Xerox's Abhyankar shares this goal for his own reasons—his buyers are more likely to charge per page.

"At a macro level, [in-plant managers] would say to us that they're looking to decrease the cost per page. In order to be successful, new technology must deliver price points at less than 10 cents a page," he says.

Consequently, vendors must strike a balance between the cost of new technology and the ultimate purchase price.

But price can only get an in-plant to open its door. To get inside the shop, vendors must consider other important areas.

Heidelberg's Khan explains that bringing digital color printing into an offset shop is required as the needs of print customers change.

"In-plant managers are seeing run lengths significantly coming down. Plus, they have to keep the least amount of inventory possible," he says. He recommends that instead of producing waste on an offset press, or compromising confidentiality by sending work outside, companies want their in-plants to offer high-speed, full-color, short-run printing. In other words, says Khan, companies want their in-plants to go digital. NexPress is doing its best to be there when managers make that move.

Still, many in-plant managers remain skeptical after digital printing's shaky start. In addition to price points and careful positioning, they want to see features worth their time.

So to give sales an extra jump, vendors are offering extras to boost the attractiveness of their product lines.

"Price was the biggest feature on the CLC 3900 and 5000," says Mark Suzuki, director and assistant general manager of Canon's color systems division. But he adds that since the two machines have been upgraded to "plus" models, finishing options are proving to be the most attractive selling points.

Suzuki believes most companies are also focusing on improving the range of substrates their color printing devices can handle.

"The ability to run multiple substrates is very important," agrees Rick Mangold, HP Indigo general manager, but he contends that's only part of a larger effort. Mangold argues print customers are looking for a finished product solution. So in addition to printing on every type of paper, in-plants should also be able to collate those jobs on the same machine.

Niche Markets

For some companies, it's not enough to improve on price and features. Survival means a strategy that focuses on one area of expertise and excels. IBM has chosen data center printing.

"Our legacy started in the data center. Right now, we're still running on our 'legacy' type of gear—the InfoPrint 130s," says IBM's Wingerberg. He explains that the ongoing merging of in-plants with data centers has made in-plants particularly attractive to the company. A merge not only means more business for the in-plants that pursue one, but Wingerberg says it increases the opportunity for IBM to sell an in-plant on the benefits of color.

"Color is important in a data center in-plant because it allows you to add pictures of products or other information to a bill," he says, referring to advertising material included in a bill mailing. "From a behavioral standpoint, color is used very successfully in this area."

'Offset Is Still Strong'

All the attention given to digital color may leave some managers wondering just how long their offset shops will be relevant. But even the most outspoken proponents of digital color technology admit there will be room for offset presses for a very long time. Digital output, they say, still can't match the quality of a good offset job.

"Offset is still strong," says Steve Burger, national marketing manager for Ricoh's work group systems division. "Just on a quantity basis, and for its consistency of output." He says his company is focused on variable data, but when it comes to high speed and long runs, digital is a long way from competing with an offset press.

Canon's Suzuki says it's best to look at the relationship between offset and digital in this light: "You bring digital in as a complement. It's a great addition, and you're going to see some shifting [from offset to digital], but for the longer runs you're always going to need offset."

Is The Revolution Over?

Five years ago, digital printing— color or otherwise—was often referred to as a "revolution." In 2001, more than 80 percent of in-plants already had digital printing capabilities, up from 62 percent two years before. With numbers like that, it's quite possible the time has come to call the revolution a thing of the past.

"I personally believe we've crossed the chasm," says Indigo's Mangold. "When you look at the people who bought this stuff three years ago, those were the folks who were really into technology—everyone else was on the sidelines. We're not mainstream yet, but we're certainly not in the adopter stage."

Heidelberg's Khan sums it up this way: "This technology is here to stay."