Commentary & Analysis
FREE: Xerox and Kodak Hold Pre-Graph Expo Consultant Briefings
By Cary Sherburne,
By WhatTheyThink Staff
Published: October 7, 2004
By Cary Sherburne, Senior Editor October 5, 2004 -- During the month of September in the Graph Expo run-up, both Xerox and Kodak held consultant briefings, both to communicate corporate strategies and directions as well as to talk about their Graph Expo plans. I found it interesting that both companies chose to take a more esoteric and futuristic view than these sessions normally have. Both put significant focus on their research & development capabilities and less focus on product “speeds and feeds.” I found this interesting since, presumably, they arrived at their session strategies independent of each other. The Xerox briefing was held in New York City at the Marriott Brooklyn Bridge, September 13-14. The session was attended by 110 consultants from 9 countries, representing 54 different firms. Kodak hosted its event at its Rochester NY headquarters on September 20 and 21, and arranged a number of visits to labs and manufacturing operations around the Rochester area for attendees. It was a smaller group, attended by 18 consultants from 4 countries, representing 15 different firms. Xerox: Smarter Document Management SM The Xerox session was kicked off by Hervé Gallaire, Xerox’ Chief Technology Officer, as a clear signal that this was a different type of event. Outside the ballroom were ten tabletop displays and demos staffed by Xerox researchers (see diagram below). This Innovation Showcase touted a number of “smart document services” Xerox was working on in its labs that were either already being rolled out in product form or were likely to make it into products over the relatively near term. The session structure allowed plenty of opportunity for the consultants to interact with the researchers over the course of the day and a half. While Xerox has backed away from its “The Document Company” tagline, the company continues to maintain its position as a leading source of knowledge and expertise relative to better management of documents throughout their entire life cycle. Xerox also used this opportunity to unveil a new iteration of its logo and tagline to better frame, as Chairman and CEO Anne Mulcahy put it, “what we do.” While print engines and their service and supplies are clearly still the bread-and-butter revenue stream for Xerox, this accelerated positioning of Xerox as a services company, which just happens to manufacture world-class print engines, was a natural evolutionary stage of the company’s migration toward being a total solutions provider in the document technologies space. What does Xerox expect to deliver to customers with Smarter Document Management? To paraphrase Gallaire, and almost every other speaker on the agenda: Provide innovative value added services that will reduce costs, improve productivity and transform the way people work. Xerox veteran Dr. Bob Bauer, Chief Technology Officer for Xerox Global Services, framed the discussion in terms of the “Big I, little t” Information Technology positioning that Mulcahy has been talking about for some time now—declaring that the emphasis in IT is shifting from technology to information—when he articulated Xerox positioning in terms of the information work infrastructure layers that must be examined when companies reengineer their business processes. This includes the technology layer—the hardware and software underpinnings; the information layer—the various paper and electronic containers used to present information to humans; and the business process layer—how workers actually interact with the information and the technology to get work done. It wasn’t until the last half of Day Two that conversation turned to the usual topics for these briefings: Key Business Drivers, presented by Ursula Burns, President, Business Group Operations Line-of-Business Break-Out Sessions Office Channels Group Production Systems Group Global Services Burns framed her comments around Xerox’ continued role in providing technology-based industry leadership; improving workflow across the enterprise; and bringing more color to digital printing from the office to the print shop; with the goal of delivering to customers better ways to work through innovative services, software and supplies. Throughout the briefing, Xerox very effectively demonstrated how these strategies were being deployed in the field through both video and live customer testimonials that talked about their business process reengineering efforts and the measurable results they had achieved through their work with Xerox. As many of my readers know, I spent ten years with Xerox, beginning in the mid-1980s, and was fortunate during that time to have had significant interaction with the very smart people at the Xerox Palo Alto Research Center (PARC), including Dr. Bauer and may others too numerous to name. Many of the technologies and processes that form the basis for this new Xerox market positioning were beginning to see the light of day in the Xerox labs back then. For me, personally, it was gratifying to see this innovative thinking beginning to make its way into Xerox products and services at a time when businesses are under more pressure than ever before to contain costs and improve productivity, and as information workers struggle to get their jobs done in the face of an unprecedented deluge of information that is increasingly difficult to effectively navigate. Xerox has taken a lot of heat over the years for its inability to effectively market the breakthrough technologies developed in its labs, and for allowing many of those technologies to “escape,” becoming the basis for the founding and growth of companies like Microsoft, Documentum and Apple, to name a few. I left this session with a belief that that tide may finally be turning. It will be interesting to watch how the company executes on this grand vision over the next few years. If you are attending Graph Expo, visit Xerox in Booth 1431 to see this strategy in action. While there certainly will be no lack of hardware in the booth, the overarching message you will hear from Xerox at Graph Expo is how it is working with customers to help them leverage existing IT investments through the application of innovative processes and technologies to enhance the way people work. Kodak: No Limits Kodak used the consultant briefing platform to address a slightly different challenge. For many of those present, the first peek into the strategies and objectives of Kodak’s newly-formed Graphic Communications Group came at drupa in May of this year. At the time, the group consisted of Encad, which had been a Kodak company for some time; Versamark, acquired from Scitex earlier in the year; and the NexPress color and black & white businesses, transferred to Kodak as a result of an agreement with Heidelberg, Kodak’s former partner in those ventures. Since that time, the Kodak management team has been busy building and articulating its go-to-market strategy and marketing messages, and in aligning its resources to be able to effectively deliver on that strategy. Industry veteran Barbara Pellow, Chief Marketing Officer for the Graphic Communications Group, kicked off the session by introducing the Group’s vision: Kodak will be recognized as the leader in the digital transformation of the graphic communications industry. An aggressive vision, to be sure. Though Kodak has a long heritage in various aspects of the graphic arts industry, the Graphic Communications Group in its current form is a newcomer to the market. The challenge for Kodak is to demonstrate that it is in the market to stay, that it has the breakthrough technologies in its portfolio that will enable it to be come a leader, and that it is making the appropriate investments. The challenge Kodak set out to meet with this briefing was to get these messages across to industry influencers, and at the same time, to get their feedback on the path Kodak was taking as it reenters the graphic arts market. In her presentation, Pellow laid out key elements of Kodak’s marketing strategy: Technology leadership in Wide format Digital color and black & white Continuous inkjet Workflow/color management Consumables and media Integrated products and professional services targeted at in-plant, commercial and digital printers; corporate data centers; and service bureaus A breadth of solutions for the production environment Key to this strategy are Kodak core competencies in image capture, nanotechnology, continuous inkjet, scanning, media and archiving. Kodak also liberally dispersed customer testimonials (video) throughout the program to demonstrate customers to whom Kodak is delivering these types of solutions today. Kodak also used this venue to tout its new advertising campaign: No Limits. The campaign is comprised of extreme sports images and uses such taglines as: Your Digital Future More Opportunities. No Limits The campaign features versioned ads targeted at specific Kodak product lines. Group President Jim Langley discussed the state of the business, indicating that integration of the acquired businesses was proceeding well. He laid out Kodak’s near-term, medium-term and long-term objectives as show in the figure below, with medium-term extending out two to three years. Langley also positioned Kodak’s core competencies, including those brought to the mix by Kodak Polychrome Graphics (KPG), Kodak’s joint venture with Sun Chemical and spoke about Kodak’s efforts in building a structure that delivers an integrated face to the customer. Kodak then shifted gears to its manufacturing and R&D operations to provide attendees with an inside look at Kodak capabilities that support these claims and the abilities of the Graphic communications Group to achieve its vision. Dr. James Stoffel, Chief Technology Officer and Senior Vice President, Eastman Kodak, spoke about technology trends which he categorized as Infoimaging, and Kodak’s heritage of pioneering innovations, going back a hundred years to the invention of x-ray film. He outlined the importance of the company’s core competencies in material science, image science and thin film coating to Kodak’s ability to continue to deliver innovation to the marketplace. As the group toured a representative group of the company’s research labs and manufacturing operations, attendees were exposed to both the science and the art behind these innovations, and it was extremely impressive. To see the process of manufacturing color toner and different types of films, starting with the base resins, polymers and chemical components; and to begin to understand the level of investments Kodak has made—and is making—in its R&D and manufacturing operations and the scope of those operations, was quite overwhelming. At each stop, not only were we exposed to what is happening today, but we were also enlightened as to where these efforts might lead in the future. We even had to suit up a couple of times to enter clean-room environments, reminiscent of the “bunny suit” pictures of John Kerry we saw earlier in the Presidential campaign. It was also interesting to observe the manufacturing operation for the NexPress and Digimaster print engines, where Kodak has implemented its version of Lean Manufacturing which the company calls the Kodak Operating System (KOS) to streamline the manufacture of these devices, gear up to deliver more volume and rigorously ensure a quality product. Like the Xerox agenda, it was only at the end of the session that attendees were provided with specific product updates from Encad, NexPress and Versamark. We also heard from Dolores Traxler, GM and VP, Commercial Services and Document Products, whose business unit, including high-speed scanning and microfilm products and worldwide service and support, was folded into the Graphic Communications Group on September 20th. The overall session was very much future-focused and served to reinforce the power of Kodak’s core competencies in driving change into the market; demonstrated the fact that the company is making significant and focused investments in maintaining its leadership position in materials science, image science and thin film coating; and educated attendees on how these technologies might be used in the future. Throughout, the dedication, expertise and enthusiasm at all levels of the Kodak team shone through. They were proud of the work they were doing, and they were proud of their contribution to Kodak and to the market as a whole. At Graph Expo, you can visit Kodak at Booths 1697 (Graphic Communications Group), 2089 (Kodak Versamark) and 4031 (KPG) to see the latest from the Graphic Communications Group and to speak with Kodak executives about where the company is going in the future. To Contrast and Compare It looks as though these two long-time Rochester neighbors and sometime competitors are clearly geared up to face off in the production digital printing arena. Both have exceptional manufacturing expertise in their respective areas, both have the ability to continue to make significant and innovative contributions to the graphic arts space. My personal take-away from these sessions was that these two corporate giants both have a strong story to tell, and while Xerox has a stronger presence in the digital production printing space today by virtue of its longevity and expansive product portfolio, Kodak will be nipping at its heels as it continues to define and deploy its go-to-market strategy and refine its product portfolio. Xerox has chosen to frame its message around changing the way people work; Kodak emphasizes its heritage of scientific innovation in materials and imaging science. Both are players to be reckoned with and it will be fascinating to watch them evolve, both where overlap exists and where their strategies and capabilities are differentiated.