Last Friday's article by Frank Romano at WhatTheyThink discussed the impending release of an ISO standard for variable data exchange - PDF/VT. Frank sees this as a boon for variable data printing. He writes, "The use of variable data (or document) printing has been retarded over the last decade by short-sighted suppliers, specifications, and associations. Now perhaps we are on the cusp of opening VDP to all users, big and small."
The implementation of the PDF/VT standard may very well cause the market for variable data printing to expand by simplifying the workflows that VDP projects require. But this growth may come at a high price - lower profit margins for some digital printers that offer VDP production services.
I'm not suggesting that standards are all bad. In fact, standards are always intended to produce beneficial results, and most probably succeed, at least on some level.
But a standard can also be a modern-day version of a siren song - something that on the surface appears to be attractive and benign, but that often produces unforeseen negative consequences.
One problem with standards is that they can undermine competitive differentiation. As companies implement more and more standards and other "best practices," they begin to look more and more alike. And when customers have difficulty distinguishing between potential suppliers using other criteria, they turn to price. Therefore, the widespread use of standards can actually contribute to lower prices and profit margins in an industry by causing industry participants to compete primarily on price.
The PDF/VT standard may also make it easier to separate the development of a VDP project from the "output" of the project. Frank Romano alluded to this possibility when he wrote, "Since 1994, we have been able to take almost any designed job and save it as a PDF and give to almost any printer to be printed on almost any printer or press. But that has never been possible with VDP . . . There has never been an efficient method for saving a VDP job and sending it to any digital printer. Now there is."
My question is: Who will capture the lion's share of the profits produced by a VDP project? The company that helps the client decide who to target, what the marketing message should be and how it should be customized for each recipient, what the offer or call to action should be, and what the results mean? Or the company that receives a "standard" file and outputs the finished product?
My bet is on the company that uses creativity and innovative thinking to help clients achieve their marketing objectives. Of course, it doesn't have to be an either/or proposition.
Discussion
By Chuck on Apr 06, 2010
When innovative companies use open standards to create interoperable workflows, everyone wins. Not only does it not jeopardizes a company's competitive differentiation, but it almost surely makes it stronger.
Look no further than the open standards-based Internet upon which we are communicating here. Did Cisco Systems suffer because TCP/IP was a standard? No, they devoted their engineering talent to making it better and inventing a plethora of additional open standards that made the Internet better for everyone, but especially their customers. So did thousands of other large and small companies.
The real risk in this is lack of adoption by short sighted software developer vendors, and the ensuing lack of adoption by printers. That will surely doom VDP to continue to be a niche, rather than enable the broader adoption that the industry needs.
Frank has been beating this drum for a long, long time, albeit with another standard that was largely ignored by the vendors-- PPML/VDX, also a standard. Let's hope the same fate does not befall PDF/VT and the community wakes up to the benefits of being open.
By Clint Bolte on Apr 06, 2010
Standards have always been poo-pooed by the large vendors who feel that their proprietary solutions and marketing clout will snuff out the competition. This is never in the best interests of the industry - any industry!
The little guys, i.e., particularly printers, have always benefited from industry wide standards as the standards level the playing field. This allows smart printers to compete equally with printers that were much larger running (often) much more expensive equipment.
By Bryan Yeager on Apr 06, 2010
David, I think I understand the gist of the point you're trying to make that success of a VDP project is dependent on more than just a format (I assume you mean a multi-channel or direct mail VDP campaign, as all VDP is not created equal). Illustrating this point by referencing that standards somehow have "negative consequences" leaves a horribly bad taste in my mouth, however. I agree with what Chuck and Clint have said. I really think that our industry has started to go beyond largely proprietary technology in support of more open standards and interoperability. It's been a slow but steady process, and I think in the end, open standards will win.
Why? While it's true that some companies are comfortable putting all their eggs in one basket by using products and services of a single company and/or platform, there are many more that, either through apprehension, legally-bound risk mitigation, or the fact that one product might be better than another at something, want to use multiple vendors for multiple functions. Because of this situation, the requirement for integration and interoperability has become a top priority not only for printers, but for almost every industry and for companies of all sizes. By integrating multiple "best-of-class" solutions to create a unique product or service, for instance, you can obtain competitive differentiation while fully utilizing open standards.
It's not like there's some "secret sauce" to the actual VDP technology, at least not like there used to be. For a few hundred dollars, any printer can choose from multiple, very capable solutions that enable VDP, and in many cases can scale up as needed. Back to your final point, David: the "secret sauce" is in the execution. While PDF/VT may open up interoperability (which, in my view, is not a bad thing at all), campaign execution and even the combination with multiple channels will continue to be the key to success for printers pursuing this market.
By David Dodd on Apr 08, 2010
Chuck, Clint, and Bryan - Thanks for your comments.
Chuck - There's no doubt that Cisco Systems benefited greatly from the explosive growth of the Internet. And there's also no doubt that the TCP/IP standard enabled the growth of the Internet. I don't know how many open standards Cisco has developed or contributed to, but in December 2009, Cisco reported that it owned 7,000 patents worldwide and had 9,000 patent applications pending. Most of Cisco's profits are the direct result of the technological innovations the company has invented and protected.
Bryan - As I wrote in the post, I don't contend that standards are all bad. The primary function of standards is to reduce complexity and create common mechanisms for performing certain activities. By reducing complexity, standards can spur growth, which is why I think that Frank Romano is right when he says that the PDF/VT standard will cause the market for variable data printing to expand. But standards can also drive the commoditization of the activities or processes that become "standardized." That's what I was referring to when I used the term "negative consequences." A lot has been written about how the process of commoditization works. One of the best discussions can be found in "The Innovator's Solution" by Clayton Christensen and Michael Raynor.
By Chuck on Apr 09, 2010
David, standards make the world move forward faster. Without standards, the printing industry would be a very fragmented and difficult environment to work in-- ask Larry Warter or Dave McDowell, people who helped forge the standards we all depend on now. Instead of this "commoditization" you warn about, without standards we'd have only the largest and most sophisticated companies able to compete at all-- for example, only companies who could make their own film and plates and equipment, at the top of the food chain--we'd be living in an oligopoly most likel. Instead we have a relatively thriving marketplace with near perfect competition.
As for Cisco, in the IETF (Internet Engineering Task Force), people who work at Cisco have authored 855 RFCs out of about 6000 total. By comparison, employees of another leading vendor have issued only 58. Of course they have a ton of great proprietary technology-- that only reinforces my point. Their involvement in standards makes the market better, and their proprietary technology helps them compete in that market.
Standards leadership means taking on significant roles in standards organizations. This is unfortunately something that most printers don't do. In the IETF, Cisco employees outnumber the combined total of employees from the next two networking vendors. They are members of the Internet Engineering Steering Group in the IETF. They are on the Internet Society’s Board of Trustees.
Some of the key innovations that came from Cisco and are standards include some of the most fundamental technologies that power the Internet:
MPLS - Multiprotocol Label Switching
BGP - Border Gateway Protocol
SIP - Session Initiation Protocol
SNMP - Simple Network Management Protocol
Diameter
Multicast
DKIM - DomainKeys Identified Mail
IPFIX
Discussion
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