Commentary & Analysis
Variable Data Printing: The Great Maturity Debate
by Heidi Tolliver-
By WhatTheyThink Staff
Published: June 2, 2005
by Heidi Tolliver-Nigro VDP is picking up speed but is in more of a growth phase, and is nowhere near maturity. June 2, 2005 -- A couple of months back, I made the statement that variable data printing is mature, in the sense that applications are developed, customers are achieving long-term success and profitability, and the technology has reached a level at which it is no longer placing restrictions (in terms of production speed and quality) on the development of this market. This statement brought disagreement from a reader of this column, and we got into a friendly email debate over the topic. This dialog brought up a lot of important issues, so with his permission, I'm replaying that debate here in a conversational format. I would love to hear from other readers on this subject, as well, so please weigh in with your comments. If I receive enough feedback, I'll make it the subject of a future column. In fairness, my dialog partner told me later that some of the things he said were just to "yank my chain" to see what I would say. However, whether or not he personally holds all of the viewpoints expressed here, I have heard these views expressed by others. So I will simply call him "Reader" and allow him to represent an amalgam of viewpoints. Reader: I'm reading through your article, and you state "the VDP market is mature." I'm wondering how you can make this claim. It seems to me --and to most of those at the VDP conference I attended last fall-- that it is picking up speed and has lots of room to grow. That would not make it mature by any stretch of the imagination. It is in more of a growth phase, and is nowhere near maturity. Can you clarify? Heidi: I can see your point. You are right -- I didn't mean "mature" in the sense that we often use it to refer to markets [meaning that, when we say that a market is "mature," we mean that it has reached saturation]. Perhaps I should have said, "and while VDP technology and applications have matured…" Maybe there are questions about creating demand and how to market and sell these services. VDP no longer has these problems. Reader: But they haven't matured. It is still not easy to do, and in a VDP job, there are too many places for things to go south in a big way. The companies that can do it successfully are doing well, but the ones entering the market still face substantial challenges. I think a more accurate statement would be, "although the VDP market is still developing…" Heidi: I don't feel this way. For the companies that do VDP day in and day out, creating variable data jobs has become routine. This doesn't mean that these jobs are not fraught with challenges, but these challenges are not due to lack of maturity in the technology or the applications. They are inherent in the process. These companies know how to handle these challenges and they don't impact the viability of the market. When people say a technology or application is not "mature," I think of fundamental improvements in technology that need to be addressed or questions that still need to be answered before the market is viable. For example, there is something that needs to be improved in the technology before it is at a professional, production level (like the quality of digital press output, the production speeds of these machines, and the quirkiness of the software in the early days). Or there are questions about the best applications or how to produce them profitably? Maybe there are questions about creating demand and how to market and sell these services. That's a developing market. But VDP no longer has these problems. It did, but not anymore. Nothing needs to be improved in the technology to make these applications work at a professional level and at production speeds. There are no questions about applications -- these companies know what works and what doesn't. They have a sales history. They have repeat customers. They have case studies. They have ROI studies. They have the history of long-term, profitable programs to back them up. And they know who to market to and how to market to them -- and they do so successfully. The questions about VDP workflows, applications, customer bases, and sales approaches have been answered. Now it's just a question of whether or not new players have the commitment, capital, and expertise to catch up. In fact, those who do are ramping up on the learning curve very quickly. If they have the right workflows, the right skill sets, and the right marketing strategy, they can jump in and, within a reasonable period of time (a year or two), be marketing and selling VDP at a professional level. The industry's commitment to education has really paid off. Just because a technology works doesn't make it mature. When I recently asked several VDP market leaders for a list of other market leaders, I ended up with a combined list that was more than twice as long as I'd expected. The number of companies that have jumped into this market, and that are now producing higher end VDP jobs successfully, was surprising. New players are coming in under the radar and are getting up to speed more quickly than many people realize. This would not be happening if the VDP technology and applications were still "developing." On the contrary, these are signs that the VDP technology, applications, and sales approaches have matured. Just because the rest of the marketplace hasn't caught up doesn't mean that they are not mature. It just means that these folks are behind in the learning curve -- for now. Reader: While you are looking at the companies that are successful, you miss the ones who are asking, as you put it in one of your columns, "Is there room for me?" These comprise far more print providers than the ones who have some level of VDP offerings/products in place. The vast majority of potential users are blissfully unaware that VDP even exists Besides, just because a technology works doesn't make it mature. Consider the following technologies that work: GPS systems in cars, electronic bill presentment and/or payment, high-speed color inkjet printers. None are mature, but all work, with lots of examples. Any of these -- and VDP -- would be mature if and when they are commonly accepted and widely used, and VDP doesn't qualify. While there are lot of proven examples of VDP applications out there, there are far more yet to be developed; and the vast majority of potential users are blissfully unaware that VDP even exists and that it can solve problems and provide real benefits. The only place where VDP is mature (and has been for years) is in transactional printing, but that is not what your article is about. This is somewhat an issue of semantics and phraseology, but to say the "technology and applications have matured" is an overstatement. These applications have come a long way, and are now at the point where wider adoption can take place, but that's not maturity. Heidi: It's true that I have focused my attention on companies that have been successful with variable data, and that there are many more who are at very early stages, or who are saying, "Is there room for me?" But just because it's not easy to catch up, does this mean that the technology and applications themselves aren't mature? There is a difference between technology and applications and the marketplace itself. Do you see the distinction I'm making? It's true that just because a technology works doesn't make it mature. Your examples are good parallels to VDP. These technologies work, people understand them, and some people need them and are willing to pay for them, and yet they aren't deeply penetrated. But why does this stop them from being mature? These are niche technologies. In order for something to be "mature," does this mean that it cannot be a niche? Are niche markets and market maturity mutually exclusive? When you say that applications are only mature when they are commonly accepted and widely used process, I think you are making the terms "VDP market" and "VDP technology and applications" synonymous, and in my opinion, they should not be. Just because it's not easy to catch up, does this mean that the technology and applications themselves aren't mature? Of course, this leaves us with the question: What is maturity? It seems that you are defining maturity as "widely adopted and deeply penetrated." If this is your definition, then yes, you are correct. I'm defining maturity differently -- the technology is stable, reliable, and functional for volume production; applications are seasoned and have long, reliable track records; and variable data print vendors understand how and to whom to market -- and they have long, reliable track records of doing so. To me, that's maturity. We're not waiting on anything. It's ready. And has been for awhile. Reader: The problem is that neither the technology nor the applications are mature. If they were, they would be more widely adopted and the applications would be pervasive, which is not happening. Desktop publishing, as it used to be called, is mature as a technology, both for many applications and as a market. It still gets tweaked, and certain areas still need a lot of improvement (like color management), but it is essentially mature. VDP (except for transactional print) is not mature under any definition. In fact, the points we both have raised indicate that it is not. And if it were, you'd have to find something else to write about! Heidi: I think this goes back to my point about VDP being a niche technology. By definition, niche technologies and applications are not going to obtain broad market penetration. By your definition, no niche technology would ever achieve market maturity because it will never penetrate deeply into the marketplace. In order for VDP to be broadly adopted by the marketing community, for example, all (or most) marketers would have to have good databases, high-value products for which higher-cost-per-piece marketing is appropriate, and so on. We all know that isn't realistic. VDP will never be appropriate for every company, or for every application, so its penetration will, by necessity, never reach that of desktop publishing. Does this mean it cannot reach maturity? I agree, however, that many customers who could use variable data printing are not yet taking advantage of it. There is lots of market education left to do, and that there are still plenty of untapped VDP opportunities is clearly indicated by the fact that there is still room for new players in this marketplace. But I think that it is because VDP, as an application, has reached maturity that these newcomers are being successful. If the technology weren't ready, and the applications didn't work, and if there were still confusion about what makes this market tick, it would still be in the hands of the few market leaders that jump-started this market in the first place. Rather, newcomers can confidently enter this market, knowing that the road has been paved, that they have long-term, successful program applications to point to in their sales pitches (even if they didn't produce those applications themselves), and they can sell VDP, knowing that their digital press vendors will stand alongside them and help them make their first VDP job a success, even if they have never produced a VDP job before, without the customer being any the wiser. To me, this is an indication that this marketplace has arrived, and in fact, did some time ago. Okay, I actually did not email this last response to Reader, but this is my column, so I have to get the last word in if I want to. But if you would like the last word, send your opinions to me via email and we'll continue this debate.