EFI and VUTEk: 10 Years Already!
Published on June 4, 2015
EFI made its acquisition of VUTEk 10 years ago this week. The deal moved EFI from focusing only on digital production and print MIS workflows into the center of the inkjet graphics space. Senior Editor Cary Sherburne reviews how this acquisition positioned EFI and interviews EFI CEO Guy Gecht.
EFI issued a press release about its 10th anniversary of the acquisition of VUTEk. Where does the time go? The deal was completed on June 3, 2005, moved EFI from focusing only on digital production and print MIS workflows into the center of the inkjet graphics space. At the time, many pundits questioned how successful EFI would be in this venture since it embodied a number of significant changes in the business:
- From channel sales to direct sales
- From software and workstations to print engines
- From offset and digital print into signs and display graphics
None of these are trivial changes. But EFI, who CEO Guy Gecht would tell you underwent a “near death experience” a few years ago, has been up to those challenges.
Today, inkjet revenues account for nearly half of EFI revenues. Wow. And that is due largely to the VUTEk acquisition, although the Jetrion, Raster Graphics and Cretaprint acquisitions also added to this success.
We had an opportunity to speak with Gecht to hear what he had to say about the impact inkjet, and more specifically, wide format, has had on EFI’s business. (For the full conversation, see the video).
“Ten years ago when we did this,” Gecht said, “I think a lot of people thought we were crazy. This was something we really didn’t have a lot of experience with. And I think the answer is, we were crazy. But we saw an opportunity with this wonderful technology that lets you print on almost any material, and at speeds and quality that are only going to get better over the years. It’s allowing us as an industry to expand the definition of printing.”
Gecht often talks about the “Imaging of Things,” explaining that the first applications were signage and display graphics, which is still a growing market, and there is a lot going on there with things like LED curing that allow printing on a wider range of materials with lower energy consumption. “With the Imaging of Things,” he adds, “our customers around the world are printing on many different materials and developing new applications every day.”
Gecht admits that it was a risk to change the business model in the way that was required with the VUTEk acquisition, including more direct sales and selling equipment as well as software and workstations. He says, “It was a dramatic change for the company. The good news is that we acquired a lot of smart people with the VUTEk acquisition, and that helped us address those challenges. And we also had people in our organization, like Frank Mallozzi, that came from the world of direct sales. So we had a lot of the talent we needed to make that transition. Customers also reacted very well to this company that many of them had not heard of before that has software for workflow, web to print and MIS, on the one hand, and on the other hand, bringing a piece of equipment and providing an ecosystem where the workflow and equipment work together. Customers liked that. It was just necessary for us to adjust to being this very new type of company.”
Gecht has also stated many times that EFI is always looking at new opportunities. With its strength and cash position today, these types of ventures are likely to be less risky. While he wouldn’t comment on specific opportunities, we did discuss the fact that EFI has shown an interest in 3D printing. Could that be the next big thing for them? Gecht says, “We are continuing to look at new opportunities, and we are not going to bet the company again because we don’t need to. Ten years ago we had to. The business situation was such that we had to do a big move and that’s what we did by entering into inkjet. EFI is in very good shape today, there is a lot more to do, and customers want us to do more. We want to expand into other areas and we have the cash to do that. We will use that to acquire technology that will make the company offering to the end user even better.”
Gecht also points out that a core competency of EFI from the early days has been to do deep strategic alliances with a variety of companies – the Fiery business, after all, was based on these types of alliances with companies bringing new digital printing technologies to market. Could a future step be a Fiery server for 3D printers? He doesn’t rule it out, saying, “We don’t need to develop everything ourselves and we can’t really buy more than we can buy. Part of the value we create for customers is in those alliances.”
As far as EFI’s very public goal to reach $1 billion in revenues in 2016, Gecht says the company is on track and serious about it, adding, “I think it’s going to be an incredible decade ahead with all of the technology and our enthusiasm for what we are going to bring to the market in the next decade.”
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