Commentary & Analysis
Some Fast Takes on the SDP/Kodak Deal
By Noel Ward,
By WhatTheyThink Staff
Published: November 30, 2003
By Noel Ward, Executive Editor December 1, 2003 -- Thanksgiving Week is a rough time to get comments out of people. Everyone who isn’t traveling is overwhelmed with work and news of big corporate acquisitions sometimes take a little while to digest. As I emailed and called around last week to get some comments on the SDP/Kodak deal, most people were on the road and unable to respond. Executives from other vendors are always circumspect in their responses, and some are no doubt wondering just what it means to the 2004 marketing plans they are finishing up. So anyway, here are a couple of comments and some of my own thoughts on the big news of Thanksgiving Week 2003. * Responding quickly and with his usual style was Steve Scholl, of Scholl Media Consulting. “It has gone from being a two filly race (meaning HP’s Carly Fiorina and Xerox’s Anne Mulcahy) to having a stallion (meaning Daniel Carp at Kodak) in there as well,” said Scholl. “Kodak fills the void and adds the clout that SDP needed. And it really furthers Kodak’s goal of becoming an all digital company.” Schnoll further speculated on what this new alliance might mean for Kodak’s deal with Heidelberg on the NexPress, something he’s hardly alone in wondering about. And he raised an interesting point: this merging of technologies may give IBM the “out” needed to make its long-rumored exit from the digital print business a reality. And that would be quite the story! * A highly placed vendor executive told me he wasn’t surprised by the announcement and said it represents a logical move for Kodak given their announcements of last few months. The company wants back into the putting-the-ink-and-toner-on-the-paper side of the printing business and this is a good opportunity and a good mix of technology. * A jet-legged David Davis of Interquest emailed back saying, “SDP could use some help with marketing, particularly in the U.S., and Kodak should provide that. Inkjet is definitely an up-and-coming digital printing technology but has not yet really tapped the production color market to any significant degree. A great many Scitex installations only involve [black-and-white or] spot color, at least in the U.S. Their concept of Business Color hasn't gone over very well yet, but I think a lot of end-users are intrigued by the speed and low costs and would jump at a higher level of quality. Kodak's expertise in color science should compliment the Scitex continuous ink jet technology. In the area of front-ends, Kodak proved itself well ahead of its time with the server technology it provided with the LionHeart system so it may tackle that area with a good deal of creativity. The speed at which the Scitex systems operate dictate some major development efforts if they are ever to move away from IJPDS which I've heard puts somewhat of a burden on end users in terms of setup.” My Take My own initial thoughts are that this is a good move for both companies. For SDP in particular, it provides 3-key advantages: a big brand name, color science and the resources to bring a solid workflow to market. * SDP has done quite well in developing its technology and setting itself up as a competitor to Xerox, IBM, and Océ. While it hasn’t had the traction it would like for color in the U.S., the company’s technology is being successfully adopted in Europe and Asia-Pacific. But in the U.S. SDP needs a partner with some strong brand-recognition to get traction in the market place and Kodak should be able to deliver on that front. * SDP also needs deeper color management expertise and they certainly get this with Kodak, along with the related ink and substrate technologies so critical for inkjet printing. This is expensive stuff to develop and Kodak’s knowledge-base in these areas is perhaps the most extensive on the planet. Being able to access this knowledge and apply it to their printing technology is perhaps the greatest advantage for SDP in the deal. * SDP also needs a clear workflow strategy to move ahead in a meaningful way, because a profitable digital print operation can live or die on its workflow. Xerox has FreeFlow, Océ has PRISMA and IBM has Infoprint Manager. To compete with these, a solid, comprehensive workflow architecture is essential, because not having one is a definite deal-breaker. I’m not sure how attuned Kodak is to the growing market focus on workflow, but they have the depth of pocket and development resources to create a very competitive, open workflow that would be a huge asset for SDP. * Finally, for Kodak, SDP provides a wholly owned re-entry vehicle to the printing side of commercial and transactional printing. Their NexPress deal is great, such as it is, but inkjet is a rapidly emerging technology that is poised to replace certain offset applications on the commercial print side of the market while making serious inroads on toner-based printing on the transactional side. Owning the leading inkjet technology in the market is not a bad place to be at this stage of the technology’s development. A big question is whether Kodak will be able to commit the needed resources to provide the necessary workflow platform and color management support while simultaneously adding its marketing strength to promoting SDP’s printing systems. The jury will be out on that for a while. There’s no doubt this deal is going to make for some interesting shifts in the market. They may not come immediately, but realize that high-speed continuous inkjet is nearly as disruptive a technology as toner-based electrophotographic printers were 20 years ago. With SDP and Kodak now joined at the hip, expect changes that will alter the way printing is done.