The question is why is HP buying Exstream since at this time HP does not really participate in the markets where Exstream operates. Exstream is a software supplier to the corporate data centers principally for transactional documents. HP is the leading supplier of solutions for office printing. If HP is prepared to spend what may be around $1 billion it shows a significant statement of intent to operate in the enterprise market of the corporate data center and also in the rapidly developing market of transpromo.
Perhaps the answer is HP will soon announce a new development in its printing strategy and have a suitable printer for the corporate data center and possibly for personalized direct mail. Now I know that HP Indigo has its HP Indigo 3250 press that prints around 140 color pages per minute and a number of these printers are used for transpromo work in Israel and other places, but this is not really a corporate data center printer.
Perhaps the answer lies in HP’s Edgeline thermal inkjet technology. HP has always indicated that this technology will be used for many applications. Today it is used just for HP’s entry into the office multi-function document market.
I have analyzed in depth all the HP white papers on Edgeline and from this have worked out that HP could easily make a 20 inch width color data center printer that could operate at a speed slightly in excess of 300 pages/min. I know this is not as fast as the new range of high-speed color printers from Agfa, IBM, Kodak, Océ, Screen and Xerox, but Edgeline technology would allow HP to sell this 300 plus page/minute printer at a fraction of the price all of these new printers are selling for. Not everyone in the corporate data center market wants to run 1,000 pages/minute, and many would want to have multiple slower printers rather that relying on one super-fast device.
Perhaps the announcement of the planned acquisition of Exstream is also a pre-announcement of the HP Color Data Center Printing System. It will be interesting to see how this news develops in the coming months.
For further analysis and commentary, review Gail Nickel-Kailing's commentary today on WhatTheyThink.com.
Discussion
By Noel on Jan 23, 2008
My sense is about the same as Andy's, in that HP has been wanting to play in the transactional space but has been having trouble getting the attention of service bureaus and of companies that produce transactional docs in-house. In aggregate, these firms produce a few billion bills and statements each month. So to any print engine vendor that's a big ka-ching! Exstream already has decent reach into those markets, which HP may be able to use as a wedge to further their strategy of using existing IT-based relationships to help drive sales of HP print engines. The engines currently in place from IBM (OK, Ricoh), Oce, and Xerox won't be easy to displace, but having HP enter this space will no doubt cause some revisions in strategy in Boulder, Rochester and Boca. If HP can deliver "fast enough" reasonable quality color, combined with the trans-promo capabilities of Exstream, and do it at attractive rates they could be a real contender in this space. This won't happen quickly, but it will certainly make for some interesting changes.
By Henk Gianotten on Jan 23, 2008
Don't forget that HP was not an important supporter of AFP Color. That's important for Transpromo stuff. Exstream was in the AFP Color consortium from the beginning.
By Michael Josefowicz on Jan 24, 2008
Thank you Andy for doing the analysis of what is possible for HP with ink jet. A "fraction of the price" caught my eye. Depending on what that fraction is, it might make sense for even a large data center to purchase three of that product. From the point of view of the data center, it might be very attractice to have the redundancy and flexibility implied by an output farm. It's sort of like the server farms built by Google. If the consumables of ink jet are cheaper and environmentally friendly, it might turn out to be a big deal.
Discussion
Join the discussion Sign In or Become a Member, doing so is simple and free