Commentary & Analysis
FREE: The Economy and the Expo: Workflow Vendors Comment
by Gail Nickel Kailing September 23,
By WhatTheyThink Staff
Published: September 23, 2003
by Gail Nickel Kailing September 23, 2003 -- For some time, in my own part of the world – on the “Left Coast” in the “Last Corner of the US” – the economy has been dismal at best. The monthly economy watch published this past weekend in the Seattle Times stated: “Key indicators show faint sign of economic growth.” Faint signs! Sounds good to us; we'll take it! Dr. Joe Webb's “Q4 and 2004 Outlook” Webinar on Wednesday, September 17, also delivered “pretty good” news. He pointed out that business capital spending is improving and consumer spending is still strong. Housing is strong and unemployment levels are “not bad.” Productivity is good and corporate profits are starting to increase. Could recovery be on the way? While economic recovery may be just around the corner (or the corner after that), there are some positives as we go into Graph Expo next week.According to Dr. Joe, printers still need the right equipment and workflow still needs upgrading and streamlining. Even though pricing will continue to be difficult, demand is still declining, and it is a print buyer's market, there has never been a better time to buy technology. The Macro-Level - The Market Speaks So what are the vendors – these are the folks with their fingers on the pulse of the market – saying about economic prospects? It's their salespeople who are talking directly to print service providers and winning (or losing) deals. Who better to tell us what is happening on the street? And what are the messages they are hearing? The “sound bites:” * “There is a real up tick in interest.” * “People are ready to start spending money on things that will make them money and things that will save them money.” * “Signs are good – we think it's real – though the improvement isn't all over the country, but just in pockets.” * “Things are not getting worse, and might be getting better. There is some customer nervousness – is this [improvement] just a blip or is it long term?” * “We're starting to see the purse strings loosen up a bit.” * “I don't think it will be a quick turnaround, but we're seeing good growth in a lot of markets.” * “The good news – people are re-evaluating their operations and looking at ways to be more efficient.” * “We just stay positive.” * “Are we just tired of this whole thing and everyone has just said the hell with it, it's time to move ahead?” What Does This Mean? Print buyers are looking for better ways to manage the total cost of print. They're not looking at just the cost of the printed page, but the inventory cost, the fulfillment costs, and waste and obsolescence. Electronic communication has eliminated some types of print, and other areas – “strategic print” – are growing. As a result, printers need to change the type of print they product. They aren't walking away from print as a core business, but picking up services to add value to their customer relationships. Fulfillment, for example, can have a huge impact on revenue at a relatively low cost, and can contribute very healthy margins. However, to offer these value-added services, printers need to make sure they have the type of equipment and workflow in place to manage them. While the mix of products has changed, that doesn't mean that revenue is going up. If the economy isn't going to let the top line grow, how do you grow your profit? To continue to be successful, printers need to cut costs and be more efficient to protect and grow the bottom line and their margins. Printers have had to be more introspective from a business standpoint. It's a healthy thought process, and one that will benefit the vendors and the printers in the long run, as they become more manufacturing oriented. The Micro-Level - Graph Expo Expectations Are we kidding ourselves, happily floating on the river of denial? What do we really expect out of Graph Expo this year? Our vendor sample was more than cautiously optimistic; in fact, some were positively enthusiastic about this year's potential. * “Many print software companies have been around a long time. We're clearly the new kid on the block. We have confidence in our products - the customers love them - but we just need to get in front of them. Graph Expo offers us that opportunity!” * “We're anticipating the floor traffic will be better than last year.” * “It's going to be a great show. We always like going to Chicago. We see a lot of interest from our customers who want to look at their businesses, make them more efficient, and become more profitable.” * “We have a lot of interest from customers who are coming to see what we can do to help them improve their businesses. We think it will be a very good show.” * “We view Graph Expo as our public coming out party. We're hoping to gain credibility as the new kid on the block.” * “We'll probably will never see the huge shows of the past again, the last couple of shows were significantly smaller. I expect we'll see about the same level of activity, number of people at the show. But frankly, I expect to be able to make a decent number of sales, given our pipeline. It should be a more effective show for the exhibitors.” Sounds like this year will be a great year at Graph Expo. Looking forward to a terrific show and to seeing you all there! Thanks to the folks representing the following companies for providing input for this piece: Creo, DiMS! Organizing Print, EFI, Printable Technologies, Printcafe Software, Prism-USA, Radius Solutions, SAP America, and syskoplan.