Commentary & Analysis
FREE: HP Withdraws Support from Long-Time Indigo User Group
WhatTheyThink has learned that,
By Cary Sherburne
Published: July 6, 2005
WhatTheyThink has learned that, in a move that is sure to surprise many industry watchers, HP has withdrawn support from its long-time Indigo user group, the Indigo Customer Exchange (ICE). One of the oldest independent digital printing user groups in the industry, ICE was founded ten years ago and has over 260 member companies, which the group claims represents about one-third of HP Indigo’s installed base.
HP’s Vice President, U.S. Commercial Sales, Rich Raimondi, sent a letter to HP Indigo customers in late June 2005, asking customers to join an alternative group the company is calling “The HP Indigo Customer Forum.” While the structure of this new group is unclear, it appears to offer much of the same functionality that ICE has been providing for a decade.
|Text of HP’s Customer Letter
Dear <customer name>,
Please accept my sincere thanks for your continued trust in and support of HP. With your investment in our digital printing products and services, you've taken a significant step toward transforming your business. Selecting HP as your business partner puts you in a position not only to compete, but also to differentiate and lead. Staying in the lead is an ongoing process of education and innovation.
With that in mind, I'd like to tell you about an exciting new forum that is being designed to help you gain access to more information quicker and faster than ever before - the HP Indigo Customer Forum. This forum, designed for the HP Indigo user community, will supply you with a powerful venue to connect to HP and industry experts and actively communicate with and learn from your peers. Webinars and trainings will be available, with technical and business focused topics.
The HP Indigo Customer Forum, in addition to any other industry groups you may be involved in, can give you an extra edge, with authoritative, actionable advice on improving the productivity and profitability of your organization. We are very excited about this new forum and will share more details in September at Print '05.
Jack Glacken, President of Today's Graphics in Philadelphia, has been named President of the HP Indigo Customer Forum. Jack states, "The Printing Industry is really a tough business. But in unity there is strength. I honestly believe that if we can create a customer forum that works in partnership with each other, HP and their partners, and pool our collective expertise and experiences, we can all succeed. To take advantage, we need a unified force. We cannot do it alone." I encourage you to register today to become an active member of this valuable forum. Membership is complimentary. Look for more details about this forum at Print '05 and in your upcoming monthly HP Graphic Arts Customer eNewsletters.
Other HP support programs that you can leverage for your business success are outlined below:
HP Graphic Arts eNewsletter - If you haven't already, be sure to register to receive this monthly eNewsletter, designed specifically for HP digital press customers. The eNewsletter features informational articles designed to assist you in growing your business. It contains HP digital solution news, updates, events, success stories, business optimization tools, training, tips, technical information and more. Register by visiting www.hp.com/go/graphic-arts or email firstname.lastname@example.org.
HP Graphic Arts portal - A dedicated web-based resource with improved functionality and an expanded portfolio of HP solutions for graphic arts professionals. Visit this newly designed site today at www.hp.com/go/graphic-arts.
Print '05 & Converting '05 - As a sponsor of Print '05, one of the largest tradeshows in the industry for printers and converters, we are putting together a robust schedule of presentations and exhibits, including the HP Indigo Ribbon Awards, a new opportunity to showcase your work and recognize breakthrough projects. See what we have in store for you.
As Jack Glacken said above "we cannot do it alone"; Jack is right. It is thanks to customers like you that HP is the company we are today. I thank you for your business and confidence in HP, and I look forward to supporting your continued success with these programs. I hope you will look into the many benefits of these offerings, discuss this with your sales executive and meet with HP representatives at Print '05 to learn more. I look forward to seeing you there!
According to the letter, Jack Glacken, President of Today’s Graphics in Philadelphia, an early adopter of Indigo technology, will be president of the new organization. HP plans to release more details about the organization at the upcoming Print 05 trade show scheduled for September at McCormick Place in Chicago.
In researching this article, WhatTheyThink spoke with Glacken, and with Val DiGiacinto, the current president of ICE an d Vice President of The Ace Group, Inc. in New York City . Like Glacken, DiGiacinto was an early adopter of digital technology, starting out with an Agfa Chromapress and acquired two HP Indigo’s in 2001. We attempted to reach Raimondi, who did not return our calls, but we were able to gain HP’s perspective in a conversation with Francis McMahon, Director, Strategic Planning and Alliance Management. We also spoke with Tom Wetjen, vice president, worldwide graphic communications industry business, Xerox Production Systems Group, to get his perspective on this evolving situation.
When asked about HP’s long-term dedication to the HP Indigo product line, McMahon stated that in a recent analyst meeting held in Half Moon Bay, California, Vyomesh (VJ) Joshi,Executive Vice President, Imaging and Printing Group, talked about the company’s renewed dedication to its emerging businesses, which include the commercial print market space and the customers HP serves there.
In talking about ICE specifically, McMahon says that HP views the HP Indigo Customer Forum as “complementary to ICE and other industry associations.” He compared the coexistence of ICE and the HP Indigo Customer forum to the coexistence of the multiple groups in our industry such as PODi, GATF and others, many of whom share common goals, but each of which offers different value. He said, “We have spent a year collecting input and figuring out the best ways to update and educate our customers, doing the best possible job of meeting our total customer experience and satisfaction goals. One of the things that has come across loud and clear through ICE, our advisory councils and our customer engagements is that we need to do a better job of communicating clearly, accurately and in a timely fashion. I see this [the establishment of the HP Indigo Customer Forum] as one more avenue to do a good job for our customers.” When pressed for an example, McMahon cited the need for specific support based on the type of equipment a customer owns, as well as the need to reach the entire installed base as opposed to the subset represented by ICE.
When asked about financial support for ICE, McMahon said, “We believe ICE is in a good position to be able to support itself. We have supported the group financially in the past, and now we are going to invest our dollars differently. The way we continue to invest will help all of our customers, including ICE members.”
While HP is currently not charging for membership in this group, it was not clear whether that was a permanent condition or something that would be reassessed later on. McMahon indicates that on the first day the Forum was open for registration, approximately 200 members signed up. Regarding its organization, he says, “The way we have broken out the Forum is that we have a technical group and a business group, and we plan to cater to both needs. There needs to be a Business, Sales & Marketing component as well as an operator or prepress component.”
We also spoke to Jack Glacken who will be the President of the new Forum. Glacken was a Vice President serving on the ICE Board until resigning very recently, although he still maintains his membership in ICE.
Glacken agreed that communications among HP, ICE and the ICE membership have not been as effective or cordial as everyone would have liked. He views the new Forum as being in a position to improve that situation, even acting as a mediator between HP and ICE. He positioned ICE as more of a technical association than a business and marketing organization, and while he indicated that the Forum would also include technical support, he placed more emphasis on the marketing and business side and feels that will be the strength of the Forum. Glacken said, “One of my goals is to bring ICE back to the table, and I think I can do that.”
In addition, Glacken talked about his goals for the organization, saying, “The number one thing is to get back the communication with our manufacturer; number two is to reach and have participation from as much of the installed base as possible beyond the 20% to 30% represented by ICE. After that, we need to determine the best ways to help the entire installed base. Many of these guys have been struggling for years, and we need to help them with both business and technical issues.”
The Word from ICE
Finally, we spoke with Val DiGiacinto, President of ICE. He indicates that HP had considered pulling support for ICE shortly after Indigo was acquired, but that HP senior executive Bill McGlynn was able to alter that decision. However, DiGiacinto agrees with Glacken that the relationship between HP and ICE has not been effective of late. He says, “Since HP acquired Indigo, we have tried to figure out how we could make the relationship work, including a definition of our common goals and what we could offer each other. In January of 2004, w e met with Francis McMahon in New York City for 1.5 days and developed an excellent business plan. Our October 2004 annual meeting was generally agreed to be the best meeting we have ever had. We have continued to grow our membership, we grew the attendance at the annual meeting, and we had outstanding feedback from the meeting itself. But we were still having difficulty understanding how best to work with HP.”
DiGiacinto says that the ICE board had discussions with HP over a number of months, and in hindsight, he wishes the board had engaged the membership earlier in the process. “But we didn’t really have any decisions from HP, and we felt that those decisions would be forthcoming soon,” he says. “It seemed premature to engage the membership, and it was unfortunate that when we finally did, it was to let them know we no longer had funding from HP.”
According to DiGiacinto, the ICE membership represents about one-third of the Indigo installed base, and the group has a goal of increasing that number to 50%. He says, “Our assumption is that not everyone will join the user group, no matter how good the potential benefit is. But to reach that goal, we needed HP’s support, especially that of its sales force, and we just haven’t had that support.”
What’s next for ICE?
A key initiative for ICE has been to increase the amount of marketing support it provides its membership, in addition to the technical forum the group provides. To that end, ICE has begun working with other partners to deliver that added value, in view of the lack of support from HP. DiGiacinto reports that ICE is close to releasing a web-enabled marketing process that he considers an essential role for ICE in helping its members to be more successful. He says, “With this new web service, members will have access to postcards, brochures, case studies, PowerPoint presentations and other materials they can utilize in their marketing efforts. The service was developed in partnership with Printable and we will also soon have additional marketing resources utilizing XMPie technology. That offers a further benefit to our membership of exposing them to important enabling technologies. ICE has about 20 companies that are vendor sponsors, including those two, and most are very helpful, offering to assist in any way they can.”
Additionally, the ICE board has begun having discussions with both Kodak and Xerox to explore their willingness to support ICE in providing business and marketing tools and support to the group at its upcoming Annual Meeting this November in Las Vegas . The board is also considering a proposal to the ICE membership that will broaden the audience of potential members and change the name of the organization to DICE—Digital Imaging Customer Exchange. DiGiacinto indicates, though, that a technical support forum for Indigo users will continue to play a prominent role for the organization. “On the sales and marketing side,” he says, “we are all facing the same issues regardless of which brand of press we are operating.” The board has initiated discussions with its membership on all of these issues as it prepares for their annual meeting.
DiGiacinto believes part of the relationship issue with HP revolves around its culture of channel versus direct sales, and the company’s oftentimes limited direct engagement with the end customer in the lion’s share of its businesses. His message to HP? “We have people that have signed their lives away for your technology. Their homes are literally on the line. These customers want your attention; they want you to communicate with them. And ICE has been a well-established venue to make that happen for more than a decade.”
The Bottom Line
User groups can be both a benefit and a bane to manufacturers. Oftentimes, especially when they are first formed, and when the members are users of breakthrough technology such as that Indigo represented when it was first brought to market, there is a benefit in leveraging a group like ICE to synthesize the customer feedback and act as a sounding board relative to future product improvements and marketing strategies. But because of the breakthrough nature of the technology, the road is not always paved with happiness, and these groups can often become a hotbed of dissension and complaints. ICE certainly went through that phase, but as the technology continued to improve and as the pre-HP Indigo worked hard to meet the needs of its customer base, the organization began to gain in maturity and become more positive.
WhatTheyThink also spoke with Tom Wetjen, vice president, worldwide graphic communications industry business, Xerox Production Systems Group, who indicates he has seen this increased maturity across the board as the industry as a whole has matured. Wetjen says, “The audiences I am in front of these days, where discussions used to be centered on issues and problems, are demonstrating a much different business climate. We are more likely to have very good business discussions, whether the audience consists of users, non-users or both; we are not having the same discussions we used to have.”
Still, it is no surprise that a manufacturer would like to exercise more control over a user group such as ICE. But the reality is that an independent organization, particularly one that has been around for a decade and has already gone through the growing pains, can be much more effective than a corporate-controlled entity.
Frankly, as an outsider looking in, it is difficult to see much difference between the organizational aims of ICE and those of the new HP customer forum. They both claim they will support both technical and business/marketing issues. They both would like to have good communication with both HP and the Indigo user community. It would seem that HP would benefit more by working out its differences with ICE while at the same time using its internal resources to establish direct and product-specific communication with its customer base rather than launching an entirely new organization. It is highly unlikely that the new HP customer forum will garner 100% membership of the installed base, even if it continues to be free. The types of users who understand the value of these kinds of organizations and who are most likely to take the necessary steps to be successful—or to continue to be successful—are probably going to join both. And that paints a picture of an awful lot of redundancy.
It is surely unfortunate that HP and ICE have not been able to work through their differences. It remains to be seen whether the HP-sponsored alternative forum will be able to achieve its goals and what will ultimately transpire with ICE. And although HP has indicated its new Forum is complementary to ICE and that it still sees a role for both, it is interesting that HP’s commercial printing web site makes no reference at all to the ICE organization.
Meanwhile, one has to wonder what the ultimate impact will be on HP—if ICE becomes DICE and Kodak and Xerox begin to play a larger role with the organization, HP will have lost a valuable venue that was dedicated to supporting its digital presses and now is likely to begin to be influenced by its competitors. Xerox’ Wetjen commented, “If there is an independent organization being formed that wants to promote the digital printing business, such as it appears is happening with the Digital Imaging Customer Exchange, sure, Xerox would like to talk to them about participating. As with any organization we partner with, however, we will move slowly, and we certainly haven’t made any commitments at this point.”
What Do You Think?
WhatTheyThink will continue to follow this story as it unfolds, and encourages reader comment which we will be happy to post in our Dear Editor free content area at WhatTheyThink.com.