by Heidi Tolliver-Nigro The biggest long-term opportunities are not going to be in creating more of the same, but in fundamentally new business models targeting well-defined customer bases. November 15, 2004 -- In the last few weeks, I've gotten a number of emails from printers looking to get into the variable data printing market, asking for advice. They want to know if there is room for more players, and if so, the best way to break into the market. One printer put it succinctly: "Am I too late?" The answer is, "Absolutely not." In general, the issue with coming into VDP late is ramping up on the learning curve. Anybody can buy a digital press and VDP software, and from a technical perspective, VDP isn't that difficult to do. It's developing the applications, marketing, and track record that is the real challenge and that has become the real differentiator in this marketplace. But for companies that already have experience in digital printing and in handling databases, and that have good, strong marketing teams who understand and are committed to VDP, just being a new player in itself isn't a disadvantage. For these companies, the learning curve is generally short. The VDP market is mature. Its penetration rate is still low and there is still plenty of room for new players, especially those with innovative business models. Non-Concentric Circles I recently found evidence for this when I asked several market-leading companies for lists of other companies they thought were movers and shakers in the VDP market. None of their lists was the same. In fact, only one or two companies were on more than one list. In other words, each "mover and shaker" isn't bumping into the same competitors all the time, which suggests that the market is wide open. To a large extent, the existing players are operating in non-concentric circles. So, for new players, where do the biggest opportunities lie? While there is undoubtedly still room in the market for selling traditional VDP applications, this is still a specialty niche. For this reason, I believe that the biggest long-term opportunities are not going to be in creating more of the same, but rather in taking what the industry has learned and using it to spin off fundamentally new business models that target very specific, well-defined customer bases. Two interesting examples are companies I profiled last month, and Example One is an online storefront selling postcards, business cards, and flyers that is one of the very few companies in this industry utilizing a true CIM model. It starts with flexible design templates and allows each customer to use them to build a catalog of products from which they can choose. These jobs can then be run through production with (in most cases) no human intervention.'s sales team selects and markets traditional VDP to specific customers and plans to broaden access to these applications by releasing a version of its "FlexTemplates" to allow online preparation and automation of VDP, as well. Unlike traditional online storefronts using templates, has some unusual aspects of its business model that make it stand out. These include: A tightly defined customer base. A business model built on providing a solution to a well-defined customer problem. The sophistication and "intelligence" of its templates (rather than traditional static) templates. True CIM production model that allows the company to charge prices and turn around jobs at speeds most competitors can't -- at a profit. An active sales force that truly understands and is focused on its target market and helps to develop applications, including VDP, for this customer base. (For details on and that led to these conclusions, see last month's column, "Variable Data Printing Among Y'All," October, 2004.) At Expresscopy, VDP isn't just something thrown into the mix. It's part of a highly tailored set of services focused on the unique needs of its customer base. So what's important to notice is that this isn't your usual storefront trying to sell everything to everybody. has a tightly focused business model that, while being built on a traditional storefront, has evolved into something truly unique. VDP isn't just something thrown into the mix. It's part of a highly tailored set of services focused on the unique needs of this company's customer base. Example Two is likewise unique. It helps its customers create email marketing and VDP marketing campaigns with online back-end monitoring and tracking capabilities, but like, it has some unusual features that make it unique. These include: A tightly defined customer base. A business model built on providing a solution to a well-defined customer problem. Back-end monitoring and tracking tied into an easy-to-user customer interface that allows easy access and use of this information. Cross-media focus on measurement and monitoring of VDP print, as well as email. While many companies offer email marketing and back-end tracking, offering these services for print applications is very unusual. And it's even more unusual when these print applications are marketed as part of a CRM program. This unique blend of services and marketing focus puts LeadGenesys in a unique position to serve its target audience. The Internet Connection For companies with the expertise, the sales team, and commitment to the VDP market -- especially those that have unique business models -- VDP remains a wide open market. I particularly like models that utilize online storefronts, back-end monitoring, and templates to downscale these applications, make them more accessible, and give them the flexibility to be tailored to innovative new business models. Speaking of the Internet, I also think there is a lot of room to play in the Web-to-print space (something I've also called "decentralized customization"). Not just because the market itself is still relatively open, but because I don't see these as specialty applications, like VDP. Rather, I see them as having broad-based application to a wide range of customers, of all sizes, in most (if not all) vertical markets. It used to be that Web-to-print applications -- which allow third parties to access and customize online templates approved by a parent organization, then download them to their local printer, to PDF, or sometimes to email -- had to be developed from scratch. But today, companies like Saepio and Printable are creating "boxed" solutions that are cost-effective even for small and mid-sized printers. Within the next five years, I expect Web-to-print to be commonplace in this industry. Summing Up So to sum up, I still see lots of opportunity in the VDP market for new players. I see opportunities: In the traditional VDP market, which is far from saturated, for companies with the skills, experience, and sales expertise to sell these applications. For companies developing fundamentally new business models, particularly those around templates and the Internet, in which VDP plays a key role. Web-to-print applications, which have broad-based market applicability. This doesn't mean that printers should enter the VDP market cavalierly. I'm not saying that. But for printers who have the skill sets, the resources, and the business models, there is still room in this market to play.