Discussion

By John Henry on Jul 30, 2008

My quick take. EFI is dumping ½ of the old PCAF they paid for. Once again they needed to go buy something for needs they were not able to fill in-house or compete in the market for of new sales.

Most times I would say this is good news for any firm, but EFI. With EFI it means its full attention is not on Printsmith or Hagen but on the new purchase. Next our fees will go up to pay for the new costs. The whole thing just spins round and round.

I watch many corporations and you can see patterns. Stock holders want rising stock prices or some big change. EFI plays the game, they buy others and that is the reason for lower profits, then they combine and refocus. This leads to the claim they will save in future, next they repeat the whole thing every 3 years. At some point they have to make money, funny part is with each new brainstorm the CEO, COO, CFO and top VPs get a big bonus for thinking this up. Then when the stock finally recovers they get more again, hell of a racket.

So EFI stock tanks stinks for years, they back dated bonus and got caught, so they go buying again and get another 18 months to cook up a new scheme?

EFI reported a loss, with revenue down in the 2nd Qtr to $144 mil. Compared to $162 mil. in last year's 2nd Qtr!

($8 million of that loss may be the fine they paid to keep their officers out of jail for stock option backdating.)

1) Olin et al. settle for a pittance, a $250 million securities fraud that should have sent people to jail. (It's still possible. The SEC+DOJ move like molasses and are still processing old cases.)

2) Guy Gecht dodges a bullet by paying an apx. $8 million fine, the same sort of stock-option backdating charges that sent others to jail.

So I need to ask this. The writing is on the wall. Under $1 million shops are fading away, Printsmith is targeted at the under $2 million market. Most Printers today have a MIS, so there are few new sales.

Where does EFI leave us?

Flagships of EFI are no longer being updated and just in maintenance mode, how long to PS is one of them?

If Pace is targeted at $2 million above, how crippled will Printsmith development be, so it does not impeach on that market?

Who pays for this, with few new sales will current users via higher maintenance fees?

I was just about to renew, buy 3 more seats and job scheduler for my merger. (Buying all Mac shop) I am putting that on hold and taking another look at switching to PrintersPlan. Frack they make it hard, to stomach being with them.

I bet the Pace users sure woke up in a bad mood. Seems like everything they went with Pace for is decimated. Small firm dedicated to one product, which was open and simple to work with.

Reading a book by Jim Collins on hot good-to-great companies come about. EFI mangement should read it. Pretty clear to see what they lack.

John M. Henry

By John Rawlins on Jul 30, 2008

We have been clients of Pace since 1983. Their legacy software, Pace 2020 was excellent in its own right, but with the release of ePace in 2000, they really set new ground rules for the entire MIS market. Running on a Linux platform, the product is virtually bullet proof. And it's made to serve the printers needs. Not made to someones concept of what they think the printer needs. They have been on top of the game, and I can certainly see why EFI had to at least take notice. In todays' world of acquisitions, I guess a buyout was the cheapest way out for EFI. And a smart move. They get the ePace technology, the clients, and create a de facto obsolescence of their current PSI and Hagen offerings.

From the ePace side, they get the funding to move deeper into new technology and product development for future offerings. Modern day MIS systems don't stand still for long. They are always upgrading and enhancing. ePace has some things now in planning and development that are really going make some people stop and look. Or in EFI's case, stop and buy.

As an ePace user, and to speak for some of my fellow users that I have spoken to, we look at it as a positive move. We had been starting to see a few small cracks in the level of support due to their rapid growth factor. I hope EFI has the where-with-ever to let the people at ePace continue to due their own thing.

By David Watson on Jul 31, 2008

I certainly hope that John Rawlins is correct in that it will be a positive move for ePace users. Initially, it felt like a kick in the gut to me.

After an intensive search, I chose ePace in 2005 because I could decide how I wanted the system to work, the pricing structure was attractive, it runs on a Debian Linux box, and it's accessible for use and administration via any standard web browser.

To me, it sounds like a good move for EFI and Pace. If the press releases are accurate, it will be beneficial to the ePace user base as well. Somehow though, I find it hard to believe we were much of a consideration. Hopefully I'm wrong.

By John Henry on Jul 31, 2008

David that was how I felt when PCAF, then EFI got PS. What happened was we got less innovations, higher service fees and poor support.

You researched and picked a great product with no limit to what pace could become. Now they are targeted at the middle of the line up. You will always be crippled as to not impact EFI Monarch sales and revenue.

Oh the PR was great; all the right things were said and promised. Ask the 900 PSI and 500 Logic users who are now need to pay to move to pace and lose a lot of what they invested in time and money. I bet they will be paying big to migrate. Not just a new service contract.

Printsmith users got hit very quickly with higher yearly fees, so expect that. Someone has to pay for all this. With few new sales it falls on current users for EFI to make a profit. So the 500 of pace and 1400 of the "end of life" EFI users will be hit hard. Innovations now take a back seat to profits and stockholders. Like me, you made the right choice when you bought, in your case I hope long term it works out.

By Clint Bolte on Aug 01, 2008

The strategic necessity of MIS to printers of all sizes is a given. Surveys have indicated for years that the MIS technology is one of the least capitalized on, least committed to by top management, and overwhelmingly implemented well below its potential through out the Printing Industry regardless of printer size.

As buyers are choosing fewer vendors to do business with printers are aggressively adding additional value added services to better position themselves competitively. This results in the printers buying more software islands of specialty applications. From the general commercial printers' perspective this means fulfillment, mailing, wide format printing, digital printing as well as full service lithography.

The need to integrate these various s/w islands so that common information can move between and among these apps is obvious.

Carey's article explaining the acquisition was most interesting. But this integration need does not seem to be addressed from either party's perspective. Perhaps white papers prepared for Graph Expo or future Connect gatherings might focus more effectively on this void.

By Hal Heindel on Aug 01, 2008

As the architect of Printfire Morning Flight, I feel it's improper for me to comment in a discussion involving competitors. But I do have a question: Is the active base for Printsmith really under 1,000 or is there a zero missing somewhere?

By John Rawlins on Aug 01, 2008

All ePace users were invited to attend a telephone "information and Q&A session" yesterday.

Many of the integration questions brought up by Clint Bolte in his earlier post were addressed by Jay Farr from Pace. From what we learned, it seems that a big effort, and a lot of dollars are going to be directed towards Digital and Wide Format integration, as well as Fulfillment, and Web to Print services. ePace never really had a decent storefront or on demand print solution, so they offered connectivity to Pageflex, XmPie, and Printable. We were all assured that these partnerships would remain in place for those of us who had invested in them, and that they would continue to offer support. But additionally, they plan on integrating the EFI Print-Centric E-Commerce Solution directly into ePace. On the output side, they also plan direct flow into EFI Fiery to a host of output devices.

So the "talk" seems to be a truly turn-key solution, with a lot of new things on the horizon. A "one stop" Web Storefront/ On Demand/ MIS/ Workflow/ Output and Distribution solution would be the Holy Grail of printing software. But it sure sounds like it cost a bunch as well. Let's have this conversation a year from now and I'll tell you how it's going.

By John Henry on Aug 03, 2008

I have not seen real numbers in years (pcaf legal docs had some) but I have heard numbers as high as 7000 printers had bought PrintSmith and a low of 2000 are currently on contract.

My best guess is around +/-3000 current users and that would make it the largest single user base in the USA.

I think no matter how you add it up (total users or total sales). EFI with all its MIS parts has the biggest user base in the print industry. Now add pace in and they are bigger.

The question becomes is bigger better or does it slow innovation? I have always said I love the program (PS) and what is has done for me...