Exclusive Interview: Jeff Paterra, Vice President of Development and Professional Services, IBM Print Systems Company By Noel Ward, Executive Editor - OnDemandJournal.com and Cary Sherburne, Senior Editor - WhatTheyThink.com January 30, 2007 -- The announcement last week of the joint venture between IBM Printing Systems division and Ricoh to form the InfoPrint Solutions Company quickly spawned a host of discussions, articles and interviews, with more to follow in the coming weeks as the deal actually closes and the new company comes to life. On Friday Noel Ward and Cary Sherburne talked with Jeff Paterra, VP of Development and Professional Services, IBM Print Systems Company to get some answers to some of the questions that are on a lot of people's minds as this shift in the industry takes shape. WhatTheyThink also checked in with research firm InfoTrends to gain a snapshot of the market in which this new company will play. Interestingly, according to the summary the firm provided, growth in the overall market for production copying and digital printing is slowing down. The firm projects placement growth rates in the period of 2005 to 2010 of 2%, with a 2% growth rate in annual impressions as well. Inside of that, data processing, which has historically been the key focus of IBM Printing Systems, is projected to have negative growth; black & white, another strong area for IBM, is projected to decline in placements and deliver flat numbers in annual impressions. The area of biggest growth is digital color, which should not surprise our readers. In this segment, InfoTrends projects a 5% growth in placements and a 31% growth in annual impressions. IBM has lacked a clear color strategy, while Ricoh has been busy introducing more color devices to the market. It will be interesting to see whether the new joint venture will be able to maintain its position in black & white while capitalizing on potential double digit growth in color in a crowded marketplace. WTT: Ricoh has been working with IBM for some time, even before the Hitachi acquisition. Why do this deal now? JP: IBM Printing Systems has had 20 year relationship and a great partnership with Ricoh. That tells us the match is right, and this is a natural evolution of that relationship. It's also a matter of focus--of all parties involved. Ricoh's focus is on becoming a worldwide leader in output solutions. And given the familiarity we have established with them and where they are moving, the timing is just right to extend that a big step further. WTT: The new company will be called the InfoPrint Solutions Company, which is obviously leveraging the InfoPrint brand. How important is the InfoPrint brand in this arrangement? JP: I think it's very important. The brand has been around for over a decade and it has strength and recognition in the marketplace. Leveraging that provides continuity of what has already been built. It is also a common theme that is important to customers and ties together our history and the future. WTT: Why a three-year transition for the new company to become a wholly owned Ricoh subsidiary? JP: It really comes down to is the desire for the smoothest transition possible. From customer support to internal operations, we're very focused on making sure there are no hiccups along the way. As you can imagine, there's a lot to transition and it was a very pragmatic decision to make sure we have enough runway to ensure that everything seamlessly transitions from IBM Printing Systems to InfoPrint Solutions. WTT: You already have some cut-sheet machines from Ricoh that you sell under the IBM brand, but you also have machines from other vendors. What about the cut-sheet machines IBM sells that come from Lexmark? Do you expect those to continue? JP: Yes, we expect the relationships with all our existing partners and suppliers to continue. WTT: What should customers expect when they call for sales, service and support once this arrangement is consummated? JP: This goes back to the question about the three-year transition. We're looking for the smoothest transition possible. Customers should see no change. That is our goal. They'll get the same level of sales and service support they're accustomed to, and that is such a key element of our belief that we're going to do everything we can to ensure that is the experience they receive moving forward. WTT: One of the issues IBM has had is lack of a clear color strategy. Ricoh, on the other hand, already has substantial knowledge and expertise with color. What are your plans in this regard? JP: As you know we've been doing technology demonstrations around color. Ricoh does have great knowledge and expertise in color, and as we move forward we clearly intend to have a great deal of collaboration with Ricoh. It's a matter of bringing the two teams together and we plan to expand and grow the offerings in the color space. WTT: You mention the technology demos and I'm sure you're referring to the inkjet printer from Screen you showed at GraphExpo. Do you expect the relationship with Screen to continue? JP: Absolutely. The technology and the capabilities are unique and have great potential for this market and as with our other partners, nothing will change in that area either. I believe that inkjet and electrophotography are complementary technologies and they will continue to develop and co-exist in the market for the foreseeable future. WTT: IBM has actively been working to move its proprietary AFP language to an industry standard. Who will continue to lead that charge and what is the current status of that initiative? And how about the AFP Color Consortium? JP: Let me start at this one from the back end. The AFP Color Consortium has really migrated to wrap around the whole architecture. We have made announcements that we are looking to open the entire architecture up to the Color Consortium. That work has already started, so now the work that started a couple of years ago has evolved to encompass the entire AFP architecture. The membership has almost doubled in that period, and more companies are asking to join the Consortium. Relative to the leadership, ownership of the Consortium moves to InfoPrint Solutions Company and we will continue to lead that effort. Combined with the growth in interest, it says a lot about where AFP is headed. WTT: Finally, there's the whole question of Intellectual Property. There is a significant amount of IP, including patents, associated with the IBM Printing Systems, on both the hardware and software fronts. Is that all targeted to transfer to Ricoh over the next three years, or will IBM retain an interest in the IP going forward? JP: The actual IP will become part of the InfoPrint Solutions Company. There are some licensing agreements between IBM and Ricoh and InfoPrint Solutions Company, but in terms of the Printing Systems-specific IP, that is included in the new venture WTT: Is there anything else you'd like to add? JP: All I'd like to add is what an exciting opportunity this is for the marketplace. As we talk about bringing this together, we believe this will provide an opportunity for growth and the customer benefit will be an increased number of very compelling solutions and offerings in the marketplace. I think the customers will get more and better choices as they try to meet their output needs and there is a very exciting element to this that will really benefit the customers. Thanks again, Jeff, for taking the time to speak with us today. And we're looking forward to seeing the evolution of InfoPrint Solutions Company. Please offer your feedback to Noel. He can be reached at [email protected] Cary can be reached via email at [email protected], online at www.sherburneassociates.com and by telephone at 603-430-5463. See More Exclusive Articles