This Month's Spectrum Summary:

(The following is an excerpt from the July 2004 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2004)

Baby MAC Explosion Feeds Quiet
Industiral Ink Jet Revolution

This month we meet with Marco Boer and Mark Hanley to explore the nature and significance of today's explosion of OEMs developing industrial ink jet printing systems. Within the past year the population of these "Market Access Companies" (MACs) has almost tripled to more than 140 worldwide. The main gating trend has been moves by the head vendors to supply a widening range of components, engineering and sometimes marketing support, and in some cases to self-contained print engines.

As in any emerging field, terminology is seen as a problem, with various vendors using their own terms for components and products and how analysts refer to the players in the industry structure.

Despite the impulse to do it all, it generally is more practical for an OEM to turn to the expanding integration services of the head suppliers. But as the head suppliers move toward supplying more integrated systems, they have to be careful not to compete against their own customers. Currently there are two broad approaches among the head vendors for offering integration services: one is an in-house division or subsidiary; another is partnering with third party integrators. Of the three major head vendors, HP so far has taken the latter road. However such support is structured, it makes sense for the head vendors since, like the ink companies, they can be left behind unless they move up the value chain.

Although the MACs have proliferated, to date this has not translated into a flood of real products (with the exception of wide format). Many of the introductions have been prototypes. Most of the current in-line products to date have been monochrome, but interest in full-width arrays is growing. This is seen as the gateway to large volume systems, but systems that are restricted to narrow choices of inks and substrates. It is expected fielding significant numbers of fixed array systems will take time and that the key is to keep them relatively simple. Narrowing the choices can widen the market. Industrial ink jet cannot technologically match analog printing on its own cost and performance terms. Rather than going for volume markets, target specialized markets. The markets will not restructure their applications to fit our technology as it now stands.

Looking ahead to who will succeed, it is expected the proliferation of industrial ink jet OEMs will continue, but that the field will rapidly contract at some point as one or several leaders emerge. Those who succeed will probably be those addressing niche markets, but luckily the world is large so the niche markets can also be large. Vendors tend not to advertise their successes for competitive reasons, so it has been a quiet revolution, but a revolution worth watching or joining in any case.