Commentary & Analysis
The Interview: Keenie McDonald, IBM Printing Systems Division
By Noel Ward,
By WhatTheyThink Staff
Published: March 8, 2004
By Noel Ward, Executive Editor March 8 , 2004 -- Joining competitors Hewlett-Packard and Xerox in having a woman at the helm, IBM Printing Systems division has appointed Kathleen "Keenie" MacDonald as general manager of its Printing Systems Division. McDonald replaces David Dobson, who has been named vice president on IBM's Strategy Team, a group that focuses on long-term strategic issues and opportunities for the company. A 25-year veteran of IBM, McDonald most recently served as a managing director in IBM's Sales and Distribution (S&D) division, where she held global responsibility for one of IBM's largest insurance industry customers. She also served as a vice president with IBM Global Services, where she led the global SMB market segmentation strategy, and has held numerous other senior executive posts in her tenure with the company. OnDemandJournal.com managed to get a few minutes with Keenie to get her first views on how IBM Printing Systems is addressing the changing marketplace for print. ODJ: What experiences can you point to that best prepare you to head up IBM Printing Systems? KM: My career at IBM spans 25 years, so I think my best preparation is the fact that I've had so many experiences with various divisions within IBM. My previous job as managing director in IBM's Sales and Distribution division afforded me extensive direct experience with customers, having had global responsibility for one of IBM's largest insurance industry customers. I was also a VP in IBM Global Services, which is of course one of the key mechanisms to deliver our customers the superior value that sets IBM apart from our competitors. Having held leadership positions in various groups across IBM, I hope to make sure that the printing division is in lock step with IBM's on demand vision, and that we're serving our customers in line with this vision. ODJ: What are some of the ways you feel IBM Printing Systems' performance can be improved? KM: The printing industry is in a major state of transition, caused by shifts in customer requirements combined with a dramatic slowdown in IT spending; therefore, there's increased competition. IBM PSD is creating new, attractive IBM on demand offerings that I think customers will see the value in. PSD is a business that consists of hardware, software, services, supplies and maintenance, all of which offer important opportunities. ODJ: What three factors do you think best distinguish IBM Printing Systems from its competitors? KM: With 45 years experience under our belt, and having launched the first laser printer in 1976, we are a leader in this space. We still take this role seriously. For example, IBM continues to lead the development and implementation of open standards in print, just as we led the development of AFP in the 80s, which has become the de facto production print standard. The three keys would be that 1) we are committed to helping our customers transform to an on demand business; 2) our solutions-based approach to printing is fundamentally different; and 3) we give our customers the right technologies that precisely address their business needs. ODJ: Your competition is going to be launching new products this year and introducing machines with some important technological advances. What are some of IBM Printing Systems' technology directions for 2004? How do these address specific markets of opportunity? KM: IBM will be launching new office and high-end printing products this year. In the front office, IBM will focus on MFP solutions for customers, as well as hardware, software and services offerings that help customers better manage their output. In production printing, IBM is working with customers behind the scenes on a color strategy that we believe will provide real value to end-users. IBM will help companies hone their direct marketing efforts in 2004. Initiatives like ‘Do Not Call' and ‘Can Spam' create a renewed focus on print marketing. Marshall Marketing and Communications found that of the almost 60 percent of people who prefer another marketing tactic to telemarketing, more than half said they would prefer to receive direct mail. In addition, many companies are interested in delivering bills and statements to consumers electronically, but consumer acceptance of this has been slow. Less than 10 percent of consumer bills are currently delivered and paid for electronically. Electronic bills and statements are forecast to grow about 5 percent per year and are expected to have a small impact on the production market over the next 2-3 years. IBM's current and future products are well positioned to offer capabilities in line with market demand. Another key focus for us in 2004 will be IBM's Workplace on Demand offering, the industry's first comprehensive solution to deliver and manage hardware for the front-end technology environment (including desktops, laptops, printers, MFPs, and mobile and output devices). This services offering from IBM Printing Systems, IBM Global Services, IBM Personal Computing and IBM Global Financing provides customers with a flexible, on demand computing solution that lowers the total cost of ownership and reduces the up-front investment they need to make. Taking costs out of the “desktop” environment is the next ripe opportunity for cost removal in the enterprise. ODJ: Related to that last question, how do you see IBM in the market for multi-function products, a point of clear growth in many enterprises? KM: IBM is going to focus on MFP solutions for customers in 2004. I can't get into specifics at this point, but IBM is expanding upon its current line of MFP offerings, in line with our customers' demands. The consolidation of desktop printers, copiers and fax machines will cause an expansion of network printers and MFPs in the marketplace. Companies will look to lower their print costs by reducing assets, standardizing on one supplier, outsourcing their office environment and integrating new MFPs into their document workflow. This leaves our customers to focus on their core competencies – not on managing multiple devices. ODJ: Your predecessor, David Dobson, said repeatedly that digital color printing is not ready for prime time. But clearly the market disagrees. Xerox and Scitex (now Kodak VersaMark) have clear successes with their color products, and demand for digital color printing is growing across multiple market segments. What is IBM doing to fill this obvious gap in its product offerings, and when can we expect to see IBM color products reach the market? KM: We already include color printers in our portfolio in order to be competitive in the front office environment, and we will continue to focus on this market in 2004. Furthermore, we do have the AFP color architecture in place and still have a production color offering on the market. In both the production and office environments technology needs to drive the cost of printing color pages lower and improve the quality of output. These improvements are slowly opening up new markets for color printing, and sales of color printers are expected to grow. Customers tell us they want superior products, lower total cost of ownership and the ability to service a variety of their needs with fewer products. Specifically as it relates to color, customers are telling us they will want a much higher speed than exists today, excellent quality and a price point that they can afford. In real terms, a price that is only slightly higher than black and white is key. That said, in the production segment, we are investing in future color solutions that will be attractive to our existing production customers as well as new customers (e.g. direct mailers). We know they will be attractive because we are engaged and involved with our current customers on this, and we're continuing to review the technologies we're investing in with customers to bring greater value to their efforts and meet their requirements. ODJ: Or perhaps IBM simply does not see the same potential for color printing as does its competitors. Can you comment on that? KM: We're going to provide the marketplace and our customers with the products and capabilities they tell us are important to them. We're engaged and involved with our customers on this, and they are definitely an integral part of our development process. ODJ: What are the key vertical markets where you see the greatest opportunities for increasing market share? KM: As you know, IBM is aligned around industries. This enables us to offer e-business on-demand solutions that can reach across the entire value chain of the largest enterprises, as well as small- to medium-sized businesses. IBM Printing Systems has targeted a number of sectors where our solutions best meet customer needs, including Communications, Distribution, Financial Services, Industrial, Public Sector and SMB. Our solutions focus at IBM Printing Systems is aligned with the broader focus of IBM and many of its partners who aim to deliver real value that helps our clients transform their business and make them more productive. ODJ: Both Océ and Xerox are putting a focus on workflow and striving to sell complete solutions for specific printing markets and applications. Both claim their solutions are relatively open, offer real flexibility, and work with emerging industry standards such as JDF. How does IBM plan to enhance the workflow associated with Infoprint Manager to make it more open and flexible? KM: Part of IBM's e-business on-demand push is offering the greatest flexibility, scalability, longevity and security of the solution purchased. A foundation of this is a solution built upon open, industry standards. In the printing industry, IBM has been a leader in developing and supporting standards for more than a decade. We spearheaded the ISO DPA 10175 standard for distributed print in the early 1990s and subsequently implemented it in Infoprint Manager. We participated in the development of the Internet Print Protocol as well as other SNMP management standards and implemented them in our workgroup printers. More recently, we are actively involved with CIP4 as a partner member driving the JDF standard, and we are adopting JDF in our print management software and printer controllers. Our recently introduced cutsheet printers support the JDF job ticket directly in the printer controller. To participate in the creation of an open standard for color variable data publishing, we are actively involved with PODi technical working groups and are represented on the PODi executive board. We believe the PPML standard will enable better interoperability between document composition systems and digital color printers from all vendors. IBM has taken a unique position with its workflow solution. Infoprint Workflow is only one piece of an entire process management system. IBM looks at business holistically and provides solutions businesses need to increase their business productivity. Through the many facets of IBM and acquisitions such as Pricewaterhouse-Coopers, IBM has the knowledge base and resources to offer this kind of end-to-end solution under one package. ODJ: Thanks for your time, Keenie. We're looking forward to seeing how IBM continues to address the challenges and opportunities in the on-demand market.