This Month's Spectrum Summary:

(The following is an excerpt from the December 2003 issue of Spectrum. Spectrum is a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2003)

HIGH VOLUME EP AND INKJET
Technology: Enough Already?
Time to Redefine Where We're Going With It

This month we look at barriers facing the continued development of high volume EP and Inkjet. Looking first at inkjet, we agree technology is not a limitation. Speed is, but here chemistry is the main barrier. Technology format is another question, whether the building block should be the print head, the head array, or the complete engine. Integrating basic components to address specific applications is ever more difficult, in part due to the patent "minefield." Finally, there is the question of the business model. Looking at this question last is too late.

Color EP is growing well, but mostly at the desktop level. No one has really defined where the high end market needs to go. The old "print-on-demand" concept is seen as obsolete in that it has tended to be based on short runs, high volume, variable data, and replacement of offset. The success of color EP has more often been and will continue to be due to other less discussed factors:

1. Quick turnaround has been something offset cannot offer, and has helped drive color EP.

2. New market creation, appealing most strongly to people with new applications. This is a key value proposition, with the precaution that it is bound to be slow.

3. Channel diversity: new markets often require developing new channels, which can also be a slow process.

4. Scale: faster printers don't mean larger markets. The major market is relatively cost insensitive and in the middle scale.

5. Brand loyalty remains strong, as some newcomers have discovered, favoring established vendors such as Canon and Xerox.

6. IT Infrastructure: Variable data has been touted as a major high-end EP application, but to date has not lived up to expectations because it requires a specialized data infrastructure that is not yet in place for most potential users.

7. Application fit can be a barrier as well, since introducing a new system is not likely to fit into how the user has been doing things.

Strategy for inkjet differs from EP. It takes years to recover the cost of developing an EP platform. The greater complexity is why there are many IJ integrators, but no EP integrators. It's easier to target specific markets with inkjet. EP strategy is more difficult, with the Xerox iGen3 the prime example. Opinions differ as to whether aiming first at the high end was the right idea.

A problem on the inkjet side is that strategy is reactive rather than proactive. There is a tendency to focus on technology because it is tangible. People need to look beyond technology to really understand a given application target and its pain points. This is the place formulating a product needs to begin. We have the technology, we have the tools. Now comes the harder work: transforming tools to more real world solutions.