Many in the printing industry, and dare I say it – the printing industry as a whole – missed the boat when the Internet started having an impact on business communications, and we see where that has led today. From what seemed like, to many, a fad, has had a dramatic effect on how content is communicated and consumed.
That wave will seem as nothing compared to the tsunami Scott Stawski predicts in his new book, Inflection Point: How the convergence of cloud, mobility, apps and data will shape the future of business. But thanks to thought leaders like Scott, we have an opportunity to get ahead of that wave. At first glance the book seems to be targeted at large companies, and it is, in a sense. But the concepts and suggested actions that Scott presents apply to all businesses, large and small, albeit in potentially different ways.
I had the opportunity to speak with Scott recently to talk about how the concepts, cautions and advice contained in the book apply to printing businesses and the customers they serve. I highly recommend that you preorder the book, which is expected to be available September 29th. I know it will become a part of my permanent library! You’ll be pulled right into the book with a harrowing story of survival at sea and it only gets better from there.
WTT: Scott, thanks for taking the time to speak with us. Can you distill down for us what the convergence you speak of in Inflection Point means for small businesses, especially those in the printing industry? And then we will get into more detail on several of the elements you discuss in the book.
SS: The new model I see emerging, especially for smaller companies and start-ups, with the convergence of cloud, mobility, data and apps, is what people refer to as business in a box. That means that you can start a business—or refresh an existing business—in a turnkey fashion, with all IT provided to you quickly and seamlessly, with no capital expense.
WTT: That’s a pretty bold statement. Maybe you could explain a little more.
SS: I remember the days when you opened a business and you had to do everything—buy the capital applications; find people to handle accounting, recruitment and any of the operational systems you needed. This includes computer systems, CRM to keep track of customers and to market to them; campaign management to find new customers. All of that was very time and capital intensive. What I believe the convergence of technology has allowed is more people to either open a business or a small business to lower operating expenses leveraging a pure consumption model. Examples would be Salesforce for a database to track and market to customers. If you are a small to mid-sized business, you don’t need a computer room or servers in a closet. You sign up for cloud services and store information there. You can use a cloud-based marketing automation solution that eliminates the need to go out separately and buy lists and then figure out how to do direct mail or telemarketing. There are a myriad of services available that can filter lists to meet your needs and deploy your campaigns. And you can do this without buying a single computer.
WTT: That’s another provocative statement you made in the book—that businesses should never have to buy another computer, tablet or smartphone. How does that work?
SS: While this model is still not highly publicized, computer companies like Dell and HP are already offering programs where you get units for a fixed fee per person per month, and every 24 months you trade them in on newer models. That takes care of the obsolescence issues, and it also comes with support in case you ever have a virus or other operational problems. This places those acquisitions squarely in the operating expense box, not capital expense.
WTT: This approach certainly makes sense for new businesses. But what about existing businesses?
SS: While it can seem frustrating, and even overwhelming, to get rid of existing systems and go to a pure consumption basis, you will be amazed at how much time and capital will be freed up. The question you should ask yourself is: If you were starting your business today, would you do it the same way? How much of your bandwidth is being spent on your core competencies versus operational tasks?
WTT: The printing industry has its own set of challenges, with continued price pressure and consolidation. Do you see this model benefiting printing businesses?
SS: I see it benefiting all businesses. The printing industry has been under pressure for a long time with various waves, but with their customers focusing more on digital media as opposed to print, that is causing another round of consolidation that people are already experiencing. But there is opportunity inside of that. I predict that in the next one to two years, or five years at the outside, most trade media companies—magazines and newspapers—will have outsourced their printing. That transition is already underway. I think you will also see—and already are seeing—a shift from the small, local print service provider to a model comprised of larger providers with smaller satellite offices or plants. A good part of this is driven by a move from the capital expense model of buying large presses to an operating expense model similar to the one I described with computers. This will allow what was formerly a fixed capital expense to become a variable expense based on print volumes, print revenues or some other performance-based metric with a refresh cycle built in.
WTT: You also spend time in the book talking about 3D printing. Do you see that as something 2D prints should be focused on?
SS: I believe, as many of us do, including the Gartners and Forresters and McKinseys of the world, that we are on the brink of a much greater business disruption that will make the Internet pale in comparison, and that is 3D printing, so yes, they should be paying attention. The technology that is under development and in preproduction as well as technology that is already there, and what will be populating the market over the next decade, is absolutely phenomenal. It completely disrupts the value chain. Take, for example, a pair of nail clippers. The value chain starts with the raw materials, is manufactured, assembled and goes through a multi-level distributing process that ultimately ends up with the consumer. There are many companies that make a profit off of that value chain. What we are looking at here is massive disintermediation, the elimination of rungs of the value chain much as the Internet has done with travel, music, books and the like. The new value chain could have powder arriving at the wholesaler who prints the nail clippers on demand, with no inventory. Or in a few years, you might simply go online and purchase the ability to print them on your own 3D printer at home. Or say you need a new cabinet knob in the kitchen. Instead of going out to Home Depot to buy it, you simply print one at home and install it. This is a massive next round of disintermediation that is coming our way. There will be 3D printers in homes, but there will also be 3D printing service centers—which are already starting to pop up, by the way—that will enable you to go there and print things yourself or have them print them for you.
WTT: I can certainly see that for a cabinet knob, but what about more complex products?
SS: Technology is already in preproduction to be able to print basic electronic switches from powder. We are projecting that we are five—at the most 10—years out from doing more complex electronic circuitry, even to the extent of printing a new phone. That’s what we are on the verge of. The technology is within our grasp and many companies will go out of business if they don’t see this coming and react to it. The ones that are proactive have a huge opportunity ahead of them.