Commentary & Analysis
SDP & Kodak Poised to Change the Market: An ODJ interview with Homi Shamir
By Noel Ward,
By WhatTheyThink Staff
Published: November 30, 2003
By Noel Ward, Executive Editor December 1, 2003 -- Last week Scitex Digital Printing (SDP) and Eastman Kodak announced Kodak’s acquisition of Scitex Digital Printing. This ODJ-exclusive interview with SDP’s Homi Shamir takes a look at some of the key points surrounding the acquisition. Even before we got to the questions, Homi began by noting how excited SDP employees are about the deal and remarked the Kodak people he has met so far--and not just at the executive level--share in that excitement. “When you go to Kodak and go through the labs and see how much they spend on technology you realize the company really believes digital printing is the future and they share that vision with us at SDP,” said Shamir. Indeed, such shared vision is a key part of bringing two companies together, and can create a synergy that makes the relationship all the more valuable. Scitex Digital Printing has done well in developing its technology and carving out space in the market against its competitors. But taking the game to the next level is a big challenge--one that should be much easier to meet with the brand name and many resources Kodak brings to the party. So what is most appealing about the SDP/Kodak deal? Where does it make sense? What potential does it hold for the future? Let’s see what Homi thinks. ODJ: Homi, you have plenty of ink jet technology at SDP and Kodak has it too. Where do you expect to see the first sharing of your respective technologies to begin? Is there a particular area that might take precedence? Shamir: Where the alliance is particularly helpful is with Kodak’s expertise in inks and dyes and coatings on substrates. I think Kodak is number one in the world in paper coatings and inks [for digital printing], and who is most associated with color than Kodak? I can see the fastest benefits coming from color science and paper. ODJ: Kodak is certainly an established brand, but in some ways has been less visible in the digital printing market recently. In fact, it is often overshadowed by Heidelberg in the NexPress and Heidelberg Digital alliance. Do you think that Kodak being an American brand will help SDP gain further credibility in the U.S? That is, do you think having the Kodak name behind you may make selling SDP technology easier? Shamir: Absolutely. This is one of the reasons I tried to find a big parent for Scitex Digital Printing. Although we have very good technology, we are still a relatively small company, and one of the things that has held us back in the printing market is that we didn’t have a big name behind us, like Xerox or IBM. This was becoming a huge barrier for us to penetrate. When a print provider has an important customer with mission critical applications, they want to know it is a Fortune 100 company that is selling and supporting their printing equipment. Noel, that is really one of the major decisions I made as the CEO. Now if a smaller company came to us and even offering the same amount money, we’d really have to think twice before doing the deal because it wouldn’t provide the weight of a big company. We need to be able to leverage the brand that is Kodak, which is one of the best brand names in the world. In fact, just before I called you I was talking to one of our service bureau customers who told me there are a lot of service bureaus who remember the Kodak microfiches they once used and he said he was very excited about the deal and what it meant for SDP and for Kodak. The Kodak name provides a lot of confidence. ODJ: In the analyst call yesterday, it was noted that a go-to-market strategy for SDP would be forthcoming over the next six months or so. What changes from the present SDP marketing strategies do you anticipate? Shamir: I don’t know that we will have a lot of changes right away. For the moment will continue under the SDP name but we will be wholly owned. Also, we will be choosing a new name and with the Kodak brand behind us will be moving into the commercial digital print environment. ODJ: Color management is critical as SDP moves forward with its Business Color strategy. What new expertise and support do you anticipate from Kodak in this area? Where do you think this will be brought to bear first? Shamir: I don’t know yet, but Kodak is the best color company in the world with a tremendous depth of expertise in color management. They have a great many tools and years of knowledge that will be made available to us and we will now be able to tap into that expertise. I do know their years of knowledge will elevate us to a completely different level of color management. ODJ: Workflow is becoming ultra-critical. Xerox has FreeFlow, Océ has PRISMA, IBM has Infoprint Manager, Heidelberg has Prinect. How might Kodak--and possibly EFI as a RIP partner, work to develop a SDP/Kodak workflow that will compete with these more established systems? (Kazem Samandari, SDP’s Vice President for Global Marketing was sitting in on the interview and Homi passed this one over to him.) Samandari: Noel, you have pointed out an area we have to reinforce and make progress in. So it’s important for us to understand what kind of knowledge and know-how is available at Kodak. We will make progress in this area, and it is one of the conditions for going into the transactional printing market. We have already developed an IPDS controller and the controller we are developing with EFI will be absolutely compatible with AFP datastreams. And as we need other controllers and print managers they will be part of our future development. Shamir: We will be playing a very important role in this arena. But you know, it is like SDP and Kodak have just gotten married, so we haven’t had a chance to talk about any children yet! Finally, let me emphasize that SDP will be a subsidiary of Eastman Kodak. We will operate independently and there is no intention to integrate into Kodak. The intention now is to test the results and the synergy. I’m currently president and CEO of both Scitex Corporation and Scitex Digital Printing. Once the deal is formerly closed, I will leave the Scitex Corporation and will be a corporate vice president at Eastman Kodak. ODJ: Thanks for your time today, Homi and Kazem. I’m looking forward to seeing how SDP and Kodak can change the future of the printing industry.