Saturday, April 11, 2009
This week's IRA scoreboard: ( since Feb. 17, 2009)
EK + 6.8%
XRX - 9.90%
I started buying and keep holding XRX since 2005. So my overall XRX score is - 64.07%. That's why I sometimes say "Go Mets!" I still love 'em. But it has been tough.
I keep hoping that HP spins off print and Kodak spins off print and Infoprint goes it alone. That would make for a nice portfolio for me. As for XRX, I keep the faith. Sooner or later they will get it right. Go Mets!
Or maybe some of the hedge fund money that is prowling around for a new game will come in to reorganize and consolidate the whole sector. Separate out all the really boring print pieces from the "exciting" IT, organizing busyness and marketing pieces. It would be sort of a Mittal Steel for Print.
I'm seeing a radically slimmed down connection between OEM's and OPM/VARs. Cut out the middleman. Faster, better, cheaper. I figure that with all the amazing talent the globals can no longer afford, the pool of available talent for VAR's and OPM's has never been greater. If someone insures their health care, there will probably be a mass exodus from globals. Given the American culture of "who wants to work for boss?", it should be a no brainer.
Now that could get really interesting.
Friday, April 10, 2009
Good enough now, always beats perfect later.
How's that erasable paper and Kodak Screen coming along?
InfoPrint Solutions Launches Monochrome MFPs - Printing Industry News from WhatTheyThink:
"InfoPrint Solutions Launches Monochrome MFPs
Friday, April 10, 2009
Boulder, CO -- InfoPrint Solutions Company, a joint venture between IBM and Ricoh, today announced the launch of the InfoPrint 1930 MFP and InfoPrint 1940 MFP monochrome printers, an important expansion of its broad portfolio of multi-function (MFP) workgroup solutions."
Some retailers have learned the lesson. Walmart and Costco figured it out. Starbucks not so much. Starbucks was best of breed in pushing and executing a global brand. When the funny money disappeared, they have to readjust. Now they are scrambling to succeed in a world of prosumers who can choose McDonalds - now the largest coffee seller in the country - or Dunkin Donuts at number 2. Starbucks aggregated the market for coffee that they can no longer control.
Will this play out in Print with AlphaGraphics and Staples doing most of the printing for sMB?
As in coffee, so in newspapers, education and book publishing. Borders is searching for the next way. They're testing out selling computer stuff. If they have enough time, they'll get it right. Enough time usually does cure all ills. But, once you take on debt, time is measured in monthly debt payments. If Starbucks doesn't have alot of debt, they will probably figure it out, as long as the stores keep creating a revenue stream.
The financials and GM demonstrated with brutal clarity what happens when business-time and corporate-time turns into servicing-the-debt-time. They couldn't get it right enough, fast enough. Now that the federal government is involved, the feds created time for them to reorganize and get it right, sooner or later. But power moved from the Board of Directors to the largest debt holder. Just they way it has always been.
Independent Bookstores and Facilitated User Networks
According the Boston Globe, contrary to much of the blablabla of the last couple of years, independent bookstores holding up vs. big rivals
BROOKLINE - Signs on the doors of two Coolidge Corner bookstores told a tale challenging the conventional wisdom. The one at Barnes & Noble said "Closed." The one on the independent Brookline Booksmith welcomed the chain's customers and solicited their suggestions. Now, three months after Barnes & Noble departed, Booksmith savors modest growth in the midst of a recession that's battering most retailers.
It's not about smarter or better. It's about people becoming prosumers. Prosumers have the time and the technology to become their own VARs. They are value added resellers to themselves. There could be a better word, but I think VAR's is general enough to be able to discern the patterns of a google-mart user network economy.
The vanity press is built for people who have to solve their own problem of putting their words and experience in book form. Then print OPM's used web technology to talk directly to prosumer VAR's. The value of channels was destroyed for vanity press. Prosumer VARs are focused on solving their own problems.
The opportunity of the printernet
As the PDF standard is supplemented by pricing and process standardization, a distributed print production network, which I choose to call the printernet, will become more clear.
At the appropriate level of analysis there are only three moving parts; OEM - equipment manufacturers, OPM - print manufacturers, VAR's value added resellers. The emerging publishing company will earn their money by facilitating the user network that is created by everchanging relationships between OEM-OPM-VAR.
I know nothing about the process they use, but today I did a Google on
Greenleaf Book Group, one of the fastest-growing companies in America, is a New York Times bestselling publisher and distributor that specializes in the ...
When I clicked I found "A publisher and distributor for independent authors and small presses."
In my jargon, "independent authors" and "small presses" are OPMs. They manufacture a product of words and pictures that should live in a book. The VAR's are the independent bookstores. The value add is to connect OPMs with VARs, without the constraints of legacy channels. OEM's sell and help maintain equipment to both.
Given what they say about how they are growing, their experienced professsional staff, my take is that the Bookleaf Book Group are just in the right place to facilitate that particular user network of OEM+OPM+VARs. As the print ecology continues to evolve similar facilitators will emerge for printing. As the pieces fall into place, the printernet might be a useful word to capture a new reality.
The most sustainable kernel is an OPM that is also a VAR. They get new money from their local space. They produce product in the local space that they can monetize in their role as a VAR. For an independent bookstore this could mean be the entry point for the printernet for "independent authors and small presses" that sell the books in the independent bookstore.
Meanwhile, I guess I'll have to wait to see if Greenleaf decides to go public, so I can add them to my IRA.
Walmart Recognizes FUJIFILM for Sustainability - Printing Industry News from WhatTheyThink:
"Walmart Recognizes FUJIFILM for Sustainability
Friday, April 10, 2009
Valhalla, NY -- FUJIFILM U.S.A., Inc. today announced that it has been recognized by Walmart for its sustainable business practices. Walmart presented Fujifilm with the Sustainability Award among electronics suppliers at its annual Electronics Supplier’s Summit, held last month. The sustainability category was open to all of the approximately 500 Walmart electronics suppliers who attended the summit. At the same event, Fujifilm was also given Walmart’s Supplier of the Year award for the Photo Category."
The reason that most printers are not going to be VARs is that it is not in their DNA. And that's a good thing. Product manufacturers are a combination of engineers, inventors, and craftsman-mechanics. They usually are happiest when things are moving nicely along, product is walking out the back door, and they are making a sustainable profit. They live in production space-time.
VAR's are always searching for the new opportunities. They take the best, leave the rest and mash things up to satisfy a client and want to move on to the next problem to solve. They live in business space-time.
For an OPM the last thing they want is the Next Big Thing. Managing the thing they already have is quite hard enough, thank you. Truly lean manufacturing with the minimum of drama is what they want. VAR's, on the other hand, love drama. Drama means a problem to be solved. If they solve the problem and make the customer happy, they are happy. If they make some money at the same time that's even better.
OPMs hate to sell. That's why printers don't like marketing. They don't trust marketing. They trust making stuff and getting paid for stuff. The best salespeople are in conflict with "the plant." Sometimes the conflict breaks out into a war, with mistrust and lots of useless posturing on both sides.
Trade printers live their DNA. They are OPM only. OPMs are only interested in service that increases the efficiency of manufacturing. Taylor Industries have the DNA of single purpose OPMs. Motherall Printing has single focus DNA.
Single purpose OPMs do well by dealing with "professionals." The reality is that many of those "professionals" are not really pros. They are merely untrained independent VARs. Now that purchasing print is easier and easier, the new market of VARs - mSB, designers, civilians - are now their own VARs. Trade printers like Vista have aggregated alot of that market as of today. Maybe MarketSplash, tomorrow.
The OPM thinks VARs are just blablabla. The VARs think the OPMs are backward looking and boring. In the previous ecology, they were both right. But when the VAR is a BPO, you have teams of pros working with other teams of pros. Inefficiency is driven out of the system. As MPS morphs into BPO and as PSD morphs into Staples, more inefficiency will be eliminated from the network. The survivors will make money and save money at the same time.
VARs create new value. OEMs help OPMs to capture the value created
VARs select the best and make it easy for a customer to make a choice. That's why Staples, Costco, my corner bodega and retail in general are VARs. It doesn't matter if the VAR is web based like Vista or MarketSplash or space based like AlphaGraphics, or person based like Adobe VARs or Google Apps resellers. They are all still VARs.
Designers, for example, select the most appropriate from the history of design, the latest buzz, the emergent memes, and the world of words and pictures to mash together just the right visual/word combination in just the right form - print/web/video - to solve the signal v noise problem. Designers like to solve communication problems. That's why they are VARs. OPMs like to solve production problems. That's why they are manufacturers.
Can't change DNA, but it can be recombined with better connections
What is overlooked is that DNA determines what you see. What you see determines what you think. That's just the way it is. No amount of marketing budget is going to change it. The real opportunity is to create teams with complimentary DNAs. That's actually how it works in biology. People follow the rules of biology.
Often teams exist in the same "organization." Most often not.
"Organization" is in quotes because this is a word that describes a world that evolved with asymmetric information. As that world is now disappearing, "organization" has to be understood for what it really is. An organization is just a set of legal contracts. You work X, you get Y. Organization was mistaken for a "thing" when information was trapped within those legal contracts.
Now that information is becoming free it's easier to see that an organization is an ever changing set of relationships between OEMs, OPMs and VARs. The internal implied legal contracts are being replaced with explicit legal contracts between well defined entities. Commissions are sometimes replaced by affiliate fees.
It's why for many OPMs the smartest thing they could do is to free their salesforces from their payroll. Make sure they have healthcare and some way to secure their pensions, and they will be very happy to negotiate a new deal. Help them organize into semi or completely independent teams of VARs. Each team needs a CSR, a biz dev person and a hunter. Each team needs clear standard ways of communicating with the OPMs.
It's why independent MPS, PSDs, printing brokers and creatives are the catalyst for crystallizing a network of OPMs and other VARs. It is only VARs that bring new money into the system. Everything else is a cost center.
With great power, comes great responsibility
An "organization" is just a collection of teams. Each team is a group of people. Some of the teams work well. Many of the teams are limited by the cultures of power and hiding information. The inability of teams to communicate is the source of big organizations inability to respond quickly enough to stay viable. This is described as "silos." The relationships between teams is determined by power. The power in a Public Corporation is the Board of Directors representing the stockholders. In a private corporation, the power is the boss representing the investors.
AIG had a small team in the UK. They were doing great within the rules of their own team. Any well functioning team will usually do great following their own rules. They were doing their jobs. The Board of Directors job is to make sure the CEO is keeping all the teams communicating. For AIG, the Board of Directors did not do their job.
Same story with GM. Firing the Board of Directors to protect government loans is just the tip of the iceberg. Next will come the financials. Sooner or later the institutional stockholders will start doing their jobs to protect their investors money. When that happens Boards of Directors will probably start doing their jobs. The CEO will do their jobs. The ever flowing networks of connections of teams will play nicely together.
Or the public company will be purchased by someone else. They will find a Board of Directors that stays focused on their jobs. Or someone else will buy them. It will keep going until the right Board of Directors is in place.
Thursday, April 9, 2009
"At more than 24,000 words, Steve Fainaru’s Pulitzer-winning reports on American mercenaries in Iraq were nearly as long as Heart of Darkness and just as eerie. But spread over nine installments in nine months, the Washington Post series could hardly be read as literature.
Later this month, a coalition of news organizations — including the Post, New York Times, Wall Street Journal, Los Angeles Times and Associated Press — will try selling some of their multipart series as repackaged “digital newsbooks” for e-reader devices. Fainaru’s series, “The Private Armies of Iraq,” will be among those available for $4.95.
It’s a small but intriguing attempt to monetize the most costly and least profitable work in a newsroom: investigative journalism. The Reynolds Journalism Institute at the University of Missouri is producing the newsbooks and coordinating their sale through two retailers, eReader Outfitters and MBS Direct. The latter targets educators, who Reynolds is hoping might use newsbooks in their courses."
If newspapers are testing out multi-part investigative journalism as a e book for educators, see snippet below, it should be pretty easy for someone to get the rights to do it in paper.
It's cheaper and easier to buy a paperback, then to buy an ereader. Plus the ereader is not a mass market. Paperback books are the mass market information appliances.
They even have a great name. Newsbooks. So when your VAR makes the call, tell them you specialize in "printed newsbooks." If you already have a contract to sell into a school system, get the rights to sell it to high school teachers who do civics, or history or reading. You can call it supplementals, supplies or professional development.
Or if you are Staples, who already has all those contracts, you should call. Or if you have an MPS contract for a school, make the deal to print it at the district's CRD.
Free advice for global VARs
Follow the link to the story, get in touch with the people who are doing this. Offer to test it out as book. Print it black and white at Lulu.com or maybe PediaPress.
Free advice to independent regional/local VARs (MPS or Creative Studios)
Get in touch with anyone you know at a local newspaper. Tell them about what the big boys are doing. Ask them if they would like to try a proof of concept experiment with one of your really good customers in education or health.
Can you imagine doing this in a value chain economy? Can you imagine Lulu.com or Google in a value chain?
Consider publishing OPMs around the world, activated by VARs around the world, then output through printernet publishing OPMs around the world.
Chocolate Fuels Local Printing -
Printing Industry News from WhatTheyThink:
"According to Laucks, Madecasse (www.madecasse.com/index.html) goes beyond fair trade: “Rather than purchasing cacao beans cheaply from farmers and taking jobs offshore to developed countries, Madecasse made a conscious decision to improve the lives of the people on the island of Madagascar.” The company set up the whole production from bean to bar on the island off West Africa, generating four times the economic activity and transferring valuable skills. Malagasy Ambassador to the United Nations Zina Andrianarivelo stated, 'Mad�casse has taken a non-traditional route. It's not the easy route, but it’s the type of trade model and thinking that can help Madagascar in an important way.”
. . .
The new pouch-type wrapper printed in York brings additional hand-labor work—and income¬—to the indigenous Malagasy. The pouch construction is also necessary because Madécasse’s production partner in Madagascar does not have a machine that can automatically wrap the chocolate. At the same time, it’s more economical for the Brookyln-based chocolate company, making it a win–win for all parties. Always conscious of sustainability, Laucks made sure the wrappers are made from paper containing at least 30% PCW.
FYI, I'm thinking the same thing about GM.
Quebecor Reaches General Agreement With Creditors - Printing Industry News from WhatTheyThink
"MONTREAL, CANADA - Quebecor World Inc. announces it has reached agreement in principle on the key terms that will allow QWI to successfully emerge from creditor protection.
. . .
As the Company has consistently stated, in light of the CCAA and Chapter 11 Proceedings, it is highly unlikely that the Company's existing Multiple Voting Shares, Redeemable First Preferred Shares and Subordinate Voting Shares will have any value following the implementation of a plan of reorganization.
Kodak Customers Earn Top Honors at PODi Best Practices Awards - Printing Industry News from WhatTheyThink: "ROCHESTER, N.Y., -- Kodak customers captured top honors in the Digital Printing Initiative (PODi) 2009 Best Practices Awards. These customers used KODAK Solutions with Variable Data Printing (VDP) capabilities to enhance their digitally printed marketing materials."Nice, but...what I can't figure out is aside from some bragging rights how does this help Kodak? Given that the evangelist stage of digital is coming to an end, it is the VARs who produced the products that created the value. Recently there was a story about some outfit that replaced two igens with some Canon boxes. I wouldn't be surprised if they got some awards with the igens.
But, my bet is that any OPM or VAR will replace anything if the cost of change is less than the perfect fit to their specific market.
In the old days, when the job was to "educate" this made alot of sense. But the game has changed to block and tackle Any OPM that is going to get "educated" is already educated. The problem and the opportunity is the educated consumer. They will use their networks, both web and personal, to compare and contrast.
Everyone now knows the digital dog can dance. But can he do the cha-cha, samba or mambo? And exactly what kind of music is playing for addressable customers?
The story below is about how they are following their DNA into managing "critical business processes" that revolve around large scale high speed transactions. It's pretty similar to InfoPrint.
The headline about OutSourcing is a little misleading. As far as I can tell, the companies have actually insourced Oce's earned experience in organizing their tools to maximize efficiency. VAR's have earned experience that can be very valuable.
When a company follows their DNA and does not get distracted they make money. Once the silly money is driven out of the market, companies that make money will be rewarded by high stock prices. . . . As long as they keep making money and don't get distracted.
Nobody cares any more about the top line. Lehman Borthers and General Motors and AIG had amazing "brands" and huge "top lines."
One $100 million contract with P&G is very nice. Now if I could figure out how much of that filters down to the bottom and maybe even out to shareholders in the form of a regular dividend, that would be much nicer.
Oce Wins $70 Million Worth of Document Processing Outsourcing Deals - Printing Industry News from WhatTheyThink: "NEW YORK – Oce Business Services, a leader in document process management and electronic discovery, today announced that during the past 12 months it has won contracts totaling over $70 million to manage complex, high-volume document processing center operations. The multi-year agreements include managing document processing centers that support critical business processes for pre-eminent companies . . . . "
Newspapers win with new revenue streams at low cost.
Vendors win by selling the equipment/services so that newspapers and commercial print wins.
Commercial print sales win by unlocking true multi channel marketing for SMB. Barb Pellow has a neat piece about marketing for SMB over at WTT.
Triple wins usually pass the "why wouldn't I do that?" test.
A value chain economy obscures the fact that only the end user puts new money into the network. The vendor seems to make money by selling stuff into a channel. The channel seems to make money by selling to a retailer. The retailer brings the new money by selling to the end user.
As asymmetric information disappears the real state of affairs becomes much more clear. "vendor", "channel" and "retailer" are seen as what they really are, OEMs, VARs and OPMs -original product manufacturers. The very expensive and slow to respond value chain morphs into a much less expensive, fast to respond user network.
Most "vendors" are mostly VARs. Some have engineering DNA. A strong "Brand" in the States usually means VAR DNA. In other parts of the world it's different.
Vendors find, and sometimes invent, the best technology and incorporate it into a tool (technology) to make products. The tool has a service component and an equipment component. As the margins on the equipment component go down, services that make using the tool easier become both the differentiator and a recurring revenue stream.
The purpose of a tool is to make a product. Products bring the money into the network.
Printing brokers, PSD and MPS are VAR's. PSPs are sometimes VARs. They find the best technology and incorporate them into a specific service/equipment offering they can sell. If the tool does the job better than other accessible tools and there is a common agreement on what "better" means, the sell is pretty easy.
Design studios and advertising agencies are VAR's. They find the best ideas and incorporate it into specific tools that communicate a message.
The overwhelming majority of PSP's are OPMs - original product manufacturers. They will buy any tool that has a clear path to make a product they know will sell at a profit. The DNA of PSPs is OPM. Some PSP's are also VARs. But not very many. That's why "consultative sales" and "market solution providers" does not scale.
The complicated part is the VARs/OEMs/OPMs are fluid categories. Is Staples or Alphagraphics a VAR or an OPM? They produce print products (OPM). But they also gather other people's products in their stores -web+bricks and mortar - to create a "tool" for SMB and enterprise to easily get other people's products(VAR).
Is Amazon a VAR or an OPM or an OEM? They gather every product they can and create a "tool" for shopping. But they also have a book POD fucntionality. (OPM) . They also are selling computer time. (OEM)
Back to newspapers and HP, Oce and Kodak
So, the issue is to get a VAR on the radar of the OPM that is a newspaper. The VAR could be vendor, a PSP, an MPS, a PSD, or an Advertising Agency. Usually the easiest sell is to the advertising agency. That's where "mine" magazine for Lexus, Time Inc and Amex Publishing happened.
Outsourcing Ad Sales
From this week's column at PBS.mediashift.org.
MediaShift . MediaBids Could Help Solve Ad Sales Process for Hyper-Local Pubs.
In a recent post, I argued that the problem facing newspapers today has nothing to do with the notion that news-on-paper is not viable -- instead the problem is a broken advertising sales process. Since then I've discovered MediaBids, which seems to have a good idea for how to fix that problem.
"Me: I would like to test an idea that I've been floating to see if you think it might make sense. Get feet on the ground to sell local ads to local business by partnering with commercial print salespeople and retail stores. The idea is local businesses are not yet 'advertisers,' so the idea is to create a new group of buyers in the advertising/marketing market. Since 'copy shops,' Big Box stores like Staples, commercial print salespeople and local advertising creatives all need to help small business make the transition to effective marketing, it seems a natural step."
Lampron: We think that you're absolutely right on -- it would make complete sense to utilize commercial print salespeople to sell ads to local businesses. As a first point of interaction for many new businesses, they could certainly guide them in the right direction when it comes to their print advertising. We currently have an affiliate program in the works that is not live on the site yet, but will essentially compensate affiliates for advertiser/publication referrals or ad sales.
There is no doubt that the best way to sell local ads to local businesses is by putting people on the street to do the selling.
In a best case scenario, a salesperson is effective because he or she is able to understand the needs of the advertiser and tailor the advertising being offered to maximize effectiveness. In your question above you suggest that advertisers don't have the focus to be able to truly understand why the advertising being offered to them is so important. We agree with this premise, however, differ slightly in a arriving at a solution.Too often sales is not about offering advice or information, it is about building a relationship. And too often a relationship does not mean that an advertiser is getting good advice. Many local advertisers are turned off to print and other mediums because they have taken the advice offered to them by salespeople. So rather than buying into logical advertising concepts like testing and tracking, advertisers buy ads with unrealistic expectations of their success. This is a quick win for the salesperson but a long term loss for the advertiser and the industry.
Wednesday, April 8, 2009
Views: Print or Byte? - Inside Higher Ed:
"It's clear that the recession is accelerating the shift to digital publishing. “With the economy shaping up as it seems to be,” one astute observer of trends in the university press world told me last summer, “we’re going to see a 15 year leap in publishing in the next two years.” And that was well before trillions of dollars started vanishing into the ether."
. . . The bane of the entire publishing industry for centuries,” writes Thatcher, has “been the need -- rooted in the simple economic fact that unit costs decrease rapidly with the increase in the size of print runs when offset printing technology is used -- to make guesses up front about the lifetime sales potential of each book. And naturally, in their excitement about the new books they had acquired, editors were forever optimistic about their prospects in the marketplace and urged initial printings to be correspondingly generous.”
C'mon guys. Two Best of Show is terrific. Three Honorable Mentions is good. No need to spin. Although it is a bit of a drag that Canon beat us out on B/W.
the PR release: Xerox Wins "Best of Show" Awards at On Demand 2009: "PHILADELPHIA, April 01, 2009 -- Five digital printing products from Xerox Corporation (NYSE: XRX) and XMPie - a Xerox business unit - were recognized in the On Demand 2009 Best of Show Awards."
Best of Show (2)
Xerox FreeFlow Express to Print won Best of Show in the Workflow Solutions category.
PersonalEffect 4.6 was recognized with Best of Show honors in the 1:1 Communications category.
Honorable Mention (3)
Xerox's iGen4 press was distinguished with an honorable mention in the Innovative Use of Technology category.
Within the Monochrome Digital Printing Equipment category, Xerox's Nuvera 200 EA system earned an honorable mention.
An honorable mention in the Web-to-Print category went to uStore 3.5, which debuted at the show.
Abstract: Lenovo Returns to Its Roots - News:
"By Normandy Madden
Published: April 08, 2009
One of the first major Chinese companies to expand into western markets, Lenovo Group is going home. The company's recovery strategy focuses on emerging markets, including its home market, and new products designed for young consumers who crave portability and a low price more than fancy features. ..."
Free advice to Oce
If you can't do a deal with Kodak, do a deal with Heidelberg. Besides they are already in Europe and don't care about the digital piece yet. But as newspapers keep figuring it out, it could work out pretty well for both of you. Plus you probably share a similar DNA.
Meanwhile, the link is definitely worth the click:
Beyond-Print - all about future media - Heidelberg’s second-in-command discusses the company’s finances and strategy: "Advice to printers. Rautert believes that printers who want survive the current downturn will have to work very hard at streamlining their businesses. They must implement lean manufacturing – if they don’t, “it’s almost a guarantee of non-survival.” Workflow software is essential, just as an operating system is essential to running a PC. Payback on workflow software is usually under one year, sometimes just a few months. But it only pays off if you train and motivate people to use it.
Rautert looks at seven factors printers need to pay attention to: they must learn to run their shop by the numbers, provide training, provide top quality, ensure productivity, implement good marketing, minimize environmental impact, and add value. His specific advice would be different for every printer, depending on their situation and their customers. But there is one constant piece of advice: analyze your position carefully, then act swiftly."
Print4Pay Hotel's "MFP Solutions Blog": "- Canon won a “Best of Show” award in the b/w production print category during the OnDemand show last week in Philadelphia for its new imagePRESS 1110, 1125 and 1135 products."
"April 8 (Bloomberg) -- A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis."
from Seeking Alpha
Possible Lewis successors. Bank of America (BAC) CEO Ken Lewis has managed to hold on to his job thus far, but has signaled he could leave the bank as soon as the current crisis is over and at most within three years
Quotables. Calling for reforms to Wall Street pay and regulation, Goldman Sachs (GS) CEO Lloyd Blankfein said "we have to recognize a higher responsibility... to act like an owner responsible for the integrity of the system." Compensation practices "look self-serving and greedy in hindsight."
Google CEO Schmidt: Consumers Won't Pay for Most Online News - Advertising Age - MediaWorks:
"At NAA: Eric Schmidt Tells Publishers They'll Make Money From Ads, Micropayments, Regular Subscriptions
by Nat Ives
Published: April 07, 2009
SAN DIEGO (AdAge.com) -- The newspaper business and other publishers will end up using a combination of advertising, micropayments and regular subscriptions to support its content online, much the way cable TV already operates, Google CEO Eric Schmidt told newspaper executives today. 'I think you're going to end up with all three,' he said."
Pulte to Buy Centex for $1.3 Billion (Update1) - Bloomberg.com:OEMs + VARs + OPMs (Original Product Manufacturers)
"April 8 (Bloomberg) -- Pulte Homes Inc. agreed to buy Centex Corp. in a stock deal valued at $1.3 billion.
Under the terms of the agreement, Centex shareholders will receive 0.975 shares of Pulte common stock for each share of Centex they own, the company said. Based on the closing price of Pulte stock on April 7, 2009, the transaction has a value of $10.50 per Centex share, representing a premium of 32.6% to the 20-day volume weighted average trading price of Centex’s shares."
Consider that in a user network economy the cost of channels can be minimized and eventually eliminated. Once the internet allows compare and contrast in real time, channel partners can focus on their real value as VAR's. The defensible advantage on the ground is the customer list.
Globals are at a serious disadvantage in being VARs at the bottom of the pyramid.
So that leaves a much simpler commercial model. There are OEMs, VARs, and OPMs. A PSP is mostly an OPM and every once in a while a VAR.
VAR's sometimes morph into OPMs. Costco has a huge bakery in their stores. Staples has offsite print production and a "quick copy store" in every location. Even Walmart is doing food preparation in the models they are now testing. Sometimes OPM's morph into VAR's. The ACE Group and DME are good examples of OPM's that successfully made the transition into OPM-VARs.
By the way, the printernet is a network of PSP's that morph into OPM's with a little VAR on the side.
But what's an OEM to do?
The price of boxes has to get lower to be able to keep and gain market share. But the margins on boxes is already razor thin and will only get thinner. The only place I can see left to economize is by reinventing the "channels."
The good news is that we've already seen this transformation and can learn from it. First, as usual, is the financial world. Remember the days when your stock broker controlled the channel and was able to charge a price fixed fee for doing a trade? The internet disappeared that.
Then we watched it play out for travel agents, insurance agents, real estate brokers, and selling books. Now it's time for those same dynamics to move through the print industry.
Back in the day, the blablabla was about the end of bricks and mortar. Tell that to Walmart or Costco or Staples. The next generation is about web+bricks and mortar. It's about frictionless connections between OEMs, OPMs and VARs.
Here's how I see it
As far as I can figure out most of the wonderful products rolled out by Xerox in the last couple of years are produced by someone else. I think, but do not know, that Fuji Xerox is the OEM. Meanwhile, both companies spend gezillions managing channels. Xerox in US/Europe/ Russia/ Middle East/India. Fuji Xerox in Asia and Australia.
Xerox is a VAR for global 1000 organizations, in the private sector, government, education and health. The great performance of XGS in MPS is playing out the company's DNA. With the recent announcement of the P&G deal and announcements over the last year in the UK, that looks like sustainable organic growth. They are moving in the right direction with independent copier and MPS as evidenced by the recent announcement of PagePak.
But, since their DNA is as VAR, it makes sense that they have a pretty terrible record of "invented at Xerox and monetized by someone else": ethernet, postscript, the Apple GUI, electronic paper. I'm concerned that erasable paper is going to follow this well worn path.
Meanwhile, as far as I can tell Fuji Xerox has the DNA of an OEM. Their research lives in an environment that has an easy path to manufacture. It is important to note that John Seeley Brown moved from PARC to the Board of Directors of FXPAL.
So . . .what might happen if a deal could be struck
Xerox could focus on being a better and better VAR for European language markets. Fuji Xerox could focus on being the VAR for Asia and Australia. And Fuji Xerox could bring their OE to global markets at the lowest possible cost.
PARC could be integrated with FXPAL. Fuji could compete directly with Rico and Cannon on the ground. Plus a reorganized company could give HP a real run for their money.
And all the extra people could be given a clear transition path to become entreprenuers or VARs networked with PSP's or MPS. Everyone could make a nice living without having to worry about the latest bet on Wall Street.
Plus they could use the Fuji Xerox model and stay way from "Wall Street," so they could focus on making money instead of managing the blablabla.
According to Schwab, as of today, the Xerox Market Cap is $4.1 Billion, with 86% of the shares held by institutional investors. If, as expected, the United States Federal Government fixes the accessibility and cost of health care, the whole transition could be a win-win-win.
New Print Media Academy in Amsterdam - Printing Industry News from WhatTheyThink
"'The new Print Media Academy at Tetterode expands and professionalizes our training program in cooperation with Heidelberg, and allows us to benefit from the close cooperation within the PMA network,' explains Wouter van Dijk, CEO of Tetterode. 'This new development generates added value for our customers and for the entire print media industry in the Netherlands,' he continues. Print shops in the Netherlands are also feeling the effects of weak incoming orders as a result of the economic crisis. Particularly in difficult economic times like these, it is important for companies to invest in additional staff training in order to leverage their full potential."
The content cascade: How content will flow in digital news enterprises
@ Nieman Journalism Lab:
"Rather than trying to redefine “the basic unit of news” — it used to be the story; is it now the fact, or the topic, the issue, or what? — and what that implies for the work of journalists, going forward it will be most useful to think about content as a cascade, as in a stream running down a rocky glen, always moving, dividing, uniting, filling pools here and there, constantly finding new niches to fill."
Tuesday, April 7, 2009
It turns out that a "contract" with the NYC Dept of Ed is more like a hunting license. It's a lot like the way textbooks work. So a "contract" for $38 million can turn into a $68 million spend.
When central purchasing gives a vendor am exclusive hunting license, it's a bit like the King creating the Stationer's Guild. Like textbooks, it keeps the competition out. The danger for Xerox and the textbook companies is that this way of doing business might disappear as the world of asymmetric information disolves.
The difference between $38 million and $67 million is still real money for an education system that only graduates 50% of it's students. School systems can no longer afford the investment unless they have the metrics to prove it was worth it.
It never was about bad people. That's the story politicians like to use. It's about good, smart people playing by the rules, with unintended consequences that can be very, very expensive.
Here's what Joel Klein said,
In general, your analysis mischaracterizes the Department’s requirements contracting process. Requirements contracts are structured on a per unit price basis, meaning that schools and departments only pay for the units they purchase at the unit price fixed in the contract. In some of the examples your office listed, schools decided they wanted to purchase more services and goods than we originally estimated. These expenditures are not examples of cost overruns and do not add costs to taxpayers; they simply reflect increased demand, which the schools pay for out of their budgets.
The only bad thing is I can't figure out a way to add Fuji Xerox to my IRA. Adding FujiFilms is like adding HP. Too complicated. Plus it's not a pure play on Print.
You could read it in Print.
He says in the article that "he reckons the agency business model will change how the whole printing industry works in Australia." But why limit yourself to Australia?
Printer language is the same all over the globe. Same problems. Same solutions, just adapted to local circumstances. In the States this is for the PSDA network, independent MPS companies, printing brokers and of course the family owned printshop. Here's the money part,
Currently he has 16 agents operating in a number of different business segments, turning over anything from $1,250,000 to $3,000,000 per annum. Many are former printers who have sold off their equipment, retaining their invaluable business contacts and continuing to grow their business while outsourcing production to PMA. Some operate in partnerships, some are sole traders, while others have employed subagents to expand their business.And here's some snippets:
The article is called Be your own business: From Print 21online
"Okill makes the point that for many SME printers the true value of their business lies in their customer lists, their local contacts and their networking skills, not in their factory buildings and equipment. The days are gone when printers could look forward to retiring on the resale value of their Heidelberg press.
. . .
These are the people PMA Solutions is looking to recruit into its new agency sales channel. Building on the success of PMA’s own print management and out-sourcing enterprise model, Okill sees the expansion of the company’s reach as its next evolutionary step. More than that, he reckons the agency business model will change how the whole printing industry works in Australia.
. . .
To understand the dynamics you’ve got to get your head around the strengths of PMA Solutions. This is Okill’s $50 million per annum Sydney-based sourcing, fulfilment and logistics company. According to Phil Shanahan, national manager strategic sourcing, its strengths lie in a determination to source, store and deliver whatever it is the customer wants, be it print, promotional materials, branded apparel or safety gear. “It doesn’t matter what our customer asks us to source, we will get it for them,” he said.
. . .
What Okill is doing is opening up the system to a cadre of agents who can take advantage of the company’s back office and logistics network to run their own businesses under the PMA banner. It is similar to a franchise model but with one very important difference – there is no upfront investment. Agents have their own business, can grow it and sell it when they want to, while leaving the backroom administration, invoicing and sourcing to PMA. In fact, new agents are paid a three month retainer when they join so they can gain intensive training on the system.
It might first appear that this is a solution looking for a problem. But it's becoming clear that the problem of mainstream media is adjusting to a world where grown ups are in charge and the nature of journalism is moving away from "gotcha." It is inexorably moving towards finding the stories that inspire and what Malcolm Gladwell describes as solving mysteries instead of puzzles.
As the mainstream media adjusts, it opens space for a printernet to grow.
In Saturday's post, I quoted David Eaves, an expert in negotiation and public policy who works with two spin-offs of the Harvard Negotiation Project, Common Outlook and Vantage Partners and as a fellow at the Centre for the Study of Democracy at Queen's University.
He correctly noted that
a reshaping of credibility from objectivity to transparency, would have profound implications for every organization – corporate, non-profit and governmental – in our society.And then today there appeared an article at Miller McCune Magazine. It reports an experiment that finds citizens prefer political news un-mediated by journalists and vice versa.
Most political leaders would generally like to get out their messages without a media that often adds its own twist to the story. And more and more, they actually are trying to do so: Some are putting up their own videos on YouTube.com; others are now sending out their own Twitter feeds.Imagine if politicians had the ability to printernet publish. They could get a 4 page newsletter, versioned for every important niche audience in their constituency delivered in a day or so from the time they hit the print button.
That's just of the many problems, the printernet would solve.
Miller-McCune Online Magazine:
"According to a new study, one consequence might be that citizens would feel better about the political process. They'd be less cynical; they'd think politics was more representative. At least, that's what Brian J. Fogarty, a professor of political science at the University of Missouri, St. Louis, and Jennifer Wolak, a professor of political science at the University of Colorado, Boulder found. Their study is published in the January issue of American Politics Research."
To assess how people might respond to political information when they read it as news as opposed to when they get it directly from politicians, they had one group read a news article and one group read dueling editorials from prominent political leaders on one of three issues — affirmative action, drilling in the Arctic National Wildlife Refuge (ANWR), and stem cell research. In each test, the article and the editorials contained the same information and perspectives.
The two groups were then asked to respond. "Do you feel that the views presented in the article reflect the opinion of ordinary Americans?" Of those who got the news directly from politicians, roughly 45 percent said yes, the views were representative of ordinary Americans. Of those who read the news articles, meanwhile, only 16 percent found the views representative. (The results were generally consistent across the three issues). That adds up to a pretty sizeable difference, given that both groups were presented with the same information.
Monday, April 6, 2009
NYC Rubber Room Reporter:
"The figure you give for the contract’s original amount, $1 million, is incorrect. The Xerox contract was actually registered for $31 million. We originally registered the contract for $20 million in 2002, and later extended it twice, once by $10 million and a second time by $1 million. It appears that you cite the amount of this last extension as if it were the entire registration amount. The accurate estimate is still less than the amount actually expended, but as we explain below this fact in itself is neither problematic nor atypical in a requirements contract.
For the record, a review of the original Xerox contract documents shows that the original estimate was reached through a standard process. Procurement for the Xerox and T&G Industries contracts began before the start of mayoral control (the contracts went into effect on August 1, 2002). The Board of Education provided vendors bidding on this RFP (including T&G Industries) with a comprehensive inventory of the Department’s copy machines; the number and types of machines guided the unit pricing proposed by the vendors, ultimately resulting in a contract estimate."
It's hard to accept, but there it is. Anyone interested in going bottom of the pyramid in education? Re invent textbooks from the bottom up instead of wasting a lot of time with conversations at the top, that become useless anyway as soon as somebody gets fired.
PrintShop Mail named EDP variable data software of 09 - Printing Industry News from WhatTheyThink: "ontreal, Quebec -- Objectif Lune, a leader in the development and commercialization of variable data documents production software solutions, announced that its PrintShop Mail software has won the European Digital Press Association (EDP) award for Best Variable Data Software of 2009. EDP is a European association for the digital print industry established in 2006 by seven of Europe's leading digital print magazines. The EDP awards program recognizes outstanding developments in the digital print industry.
PrintShop Mail is part of the Objectif Lune portfolio that includes PrintShop Mail for promotional printing; PlanetPress Suite for transactional printing and workflow automation; and PrintShop Web, a web-to-print solution for print shops and marketing departments. Flexible, easy-to-use PrintShop Mail software personalizes promotional communications with variable text, graphics, barcodes or even entire layouts based on database information."
Everyone knows what VAR means. Everyone knows what a PSP is. Then you can have MPS VARs or Independent VAR's or Design Studio VARs or PSD VARs or retail and Big Box VAR's or web only based VAR's.
Plus then it's much easier to think about affiliate compensation. That's network thinking instead of value chain thinking.
Three-Part Webinar Series for Marketing Services Providers - Printing Industry News from WhatTheyThink:
"Chicago — Dscoop will host a three-part Webinar series focused on achieving digital sales success for marketing services providers, featuring Peter Winters of Winters Group & Associates, LLC. Dscoop Webinars are free for all Dscoop members and $50 for non-members. To register for any of these Webinars, visit www.dscoop.org."
If I were on a Board of Directors, I would cancel the next couple of conference calls and pay very close attention to protecting the investor's money.
I'm just a blogger, but you have fiduciary responsibility for my retirement account, so I figure I have standing.
Geithner May Oust Executives at Banks Needing ‘Exceptional’ Aid - Bloomberg.com: "April 6 (Bloomberg) -- Treasury Secretary Timothy Geithner said he’s prepared to oust executives and directors at banks that require “exceptional” assistance from the U.S. government.Here's the interesting part, from Seeking Alpha,
“If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes,” while ensuring taxpayers are protected, Geithner said yesterday in an interview on the CBS “Face the Nation” program. “Where that requires a change in management and the board, then we will do that.”"
Geithner's comments could be more than just talk, as chief TARP watchdog Elizabeth Warren will issue a report this week calling for the removal of top execs at Citigroup (C), AIG and other institutions, and saying shareholders should be 'wiped out.'
Really New Think for Old Publishers | William F. Aicher: "The ultimate “New Think” for the publishing industry that I’ve been pushing both in book publishing, as well as in the music publishing industry is to change the mindset that publishers are in charge and the customers should trust them. Instead, publishers need to stop trying to be tastemakers and instead realize that they are ultimately administrators of extraordinarily valuable copyright-protected content that they can build a brand around. Find content or creators that already have a following (and sometimes take risks on ones that have a potential to be big), cultivate those creators and their content with your professional editing staff and then get the content out to people.
But in no instance, think it is your job to decide what is and is not worthy of publication. Yes, you should decide what is worthy of having your logo slapped on it, as you are building a brand - but the concept that it is your job to be the ultiate curator and gatekeeper, as well as to create one single item that people should buy is not going to work anymore."
From now on, I'm going to take the lead from Death of Copiers.
Go Big X!
If they keep the deals reasonable and pay attention to growth of independent MPS, this might be just right! I wonder what happens when there is a "conflict" between XGS and independents. My vote is to go with the independents. Keep XGS focused on the Global 500. The market for everyone else is much too big to be leveraged with "channels."
You know that HP and Ricoh are going to do the same thing sooner or later. My guess is sooner.
In a user network commercial model, "channels" melt away. It is a little disappointing if you paid a gezillion dollars to buy an Ikon or a ComDocs. But, if you take the lead in turning a "channel" into an open network, there is still a chance to make it a good investment, instead of a waste of money.
from Death of The Copier:
"The Big X has it sights on the MPS market(duh), and not just through the Xerox lens.
Toner Pack, an extension of PagePack, is a program allowing dealers to supply their customers with Xerox branded, HP compatible toner.
But the primary thrust of the program is making MPS much easier on a select number of Xerox MFPs.
With Page Pack, meter reads, Service Requests/Maint. Kits and Toner orders go directly to Xerox. Xerox fulfills toner orders, submits Service Requests over to the correct Xerox Partner and invoices the partner monthly - partner bills the customer directly.
The Xerox partner's client never speak directly to Xerox.
I am not as much an HP advocate as a I am proponent for what works for clients and what works VARs. If I see something I like and think will fit into business, I will mention it."
HCL signs 6-yr deal with Xerox:
"HCL Technologies Limited (HCL), a leading global IT services provider, has entered into a six-year, multi-regional data center services and transformation engagement with Xerox Corporation.
The contract will span mid-range services, business continuity and disaster recovery for Xerox’s information management operations. HCL will manage data center hosting and migration, virtualization, consolidation and storage architecture services across North America and Europe. In addition, HCL will provide architecture and consulting services for new technology and system design, adoption and lifecycle improvement."
Digital only newspapers can't make enough money to survive. That means versioned, hyperlocal news-on-paper. The window is open now because when everything else fails, it's time to do something new. Within a year, newspapers will figure out that the way to make money is to sell print/web ads to local business. Once they do, the window will close. Then it will be business as usual.
Anyone who helps the newspapers sell local advertising, at a very low cost of sales, is the real solutions provider. The cost of the boxes are just the add ons, when the window is open. The cost of the boxes will be the primary issue when the window closes.
In the lead is HP. They have a machine in place on the West Coast. If they start selling newspaper ads through Staples they may turn out to have a first mover advantage that is going to be unbeatable. Given the functionality of mediabids it's a pretty easy add on.
Kodak has Screen to come. But Screen inkjet heads on web offset now. Oce has DNN now. Kodak has the newspaper workflow, the contacts and MicroZoning. Oce has a 30" full color web that produces newspaper product. More interesting is the black only boxes and the excess capacity on the installed base of black and white equipment all over the place.
Newspapers will come out of this tunnel producing many versions of their product and sell ads to local business to keep it afloat. MediaBids.com is the technology to sell those ads. Commercial print sales people could sell newspaper ads as mediabids.com affiliates. Or as likely, Staples will offer newspaper print/web advertising at retail. HP can incorporate it as part of MarketSplash.
Local business learns how to do multichannel marketing. Regional and local economies start to regenerate.
Ten Major Newspapers That Will Fold Or Go Digital, An Update - 24/7 Wall StreetFree advice for Oce and Kodak
Over the last few weeks, the newspaper industry has entered a new period of decline. The parent of the papers in Philadelphia declared bankruptcy as did the Journal Register chain. The Rocky Mountain News closed and the Seattle Post Intelligencer, owned by Hearst, now publishes only online. Hearst has held off closing The San Francisco Chronicle after making massive cuts at the paper. The property still may not be profitable. Advance . . .
Do the deal. I have a feeling that HP is going to try to go it alone. This is going to move too fast in the States for either of you to benefit from the disruption occurring. And both of you should call Quincy at Vertis. Do a deal that leverages their print infrastructure to do interest group, instead of geographical, versioning. it's about news stories in FSI's.
Oce, call the local papers in Florida around your innovation center. Do a proof of concept as soon as you can. It's a joint experiment, so keep the cost as low as you possibly can. Find a paper that is already gets it with a hyperlocal web site. Get the person who is managing the hyperlocal site to select the most interesting content to create 2 or 3 pages that have excerpts of that content in the versioned edition.
Call your local PSP's. Talk to the sales managers. Then call mediabids and get the paper set up on their website. Get the PSP sales force to prospect in small business. They make the contact by walking into the store. Their first exchange will be to sell them a brochure or more likely a newspaper ad. The sales person can place the ad through mediabids so it will only take a couple of minutes.
Kodak, call the Chicago Tribune and then call the PSP's who are in the micro versioned regions. Then do the same thing as Oce. Get in touch with your PSP's in those micro versioned areas.
Sunday, April 5, 2009
Once asymmetric information disappears, the idea of controlling the conversation or the offering disappears.
Consider this (thanks to RZ for the point)
I was scanning the Kodak Conference call and came upon something that caught my interest. The Q4 Conference call transcript is at Seeking Alpha
As far as the document imaging businesses, earlier this month we are now in the acquisition of Bowe Bell + Howell Scanner Division. This acquisition is complementary to our product line in a business that we know well because we are the current field service provider for these products. Once the acquisition is complete, we will be able to provide a broader set of products and services to our channel partners and any use customers worldwide as well as create revenue and cost energies through leveraging our distribution channels and driving back office consolidation.That might have made sense in a value chain commercial model. The Brand has the "total solution." They can supply the production equipment, the copiers, the workgroup printers and the scanners.
But the rules of a facilitated user network are that consumers - both end users and commercial printers - have the power to choose the right tool for the right job at the right time at the right price, with little regard for the "brand." If you make the best tool, you win. If you don't, channels are not going to protect you.
To invest time and money in "filling out the portfolio" is not time well spent. The days of buying a "portfolio" of products are quickly coming to an end. The new reality is about gathering the best solutions for the customer.
Consider that when Xerox did a big MPS contract in the UK it was box agnostic. Consider that independent MPS is growing in the "channels". They craft the best solution for them and their customers from a range of boxes and offerings.
The way to win is to be the very best at something. Then to keep improving it to keep competitors from eating your lunch. The competition is not the other brands. The competition is emerging combinations on the ground. The recent experience with e-paper for Xerox and Screen technology for Kodak is not impressive.
The competitive advantage is a constantly improving offering, the speed of implementation and easy integration with the in place production ecology. For example, it seems a no brainer that Kodak and Oce should work together with a combined set of offerings for newspapers. Xerox should work together with any box manufacturers to solve the K-12 education problem.
And everyone should work together with Google and other strong players - IBM? HP? - in the Cloud to implement Ground > Cloud >Print and printernet publishing.