EFI had a significant presence at drupa and saw a lot of traffic throughout the duration of the show. EFI could also be found in numerous other stands throughout the 17 drupa halls, including the JDF Parc, Apple, KPG, Ricoh, Xerox, Screen, Kodak and Komori, to name a few. For a drupa first-timer, it was an impressive presence. WhatTheyThink was able to catch a few minutes with CEO Guy Gecht at the EFI stand; Gecht shared his thoughts about drupa and the industry as a whole.
WTT: As the first week of drupa comes to a close, were there any surprises here for you?
GG: From an announcement perspective, there were no big surprises. Everything was pretty much as expecteda lot of emphasis on workflow and JDF. If I look back to drupa 2000where we had a meeting room but no standthis drupa has a lot less emphasis on big presses and finishing equipment. The attention really has shifted to workflow. The biggest surprise for me is around the interest level of customers. It is a lot better than I thought it would be. Traffic is much better and there is a lot of in interest in our products. I see people staying in the booth for two hours, looking for software they can buy to make their company stronger, more efficient. We are collecting a lot more leads than we ever expected.
WTT: So it seems to you that people are in a buying mood at this drupa?
GG: Yes, and that was a really good surprise. People are serious in a much better way than I was expecting, I see more in-depth interest in product functionality. The international mix is different, too. There seems to be more international balance than before. There are more visitors from the U.S., Asia, Australiaa lot of people from all over the world made the trip. That's a good surprise for a company like us that is international. For example, since we closed the Printcafe acquisition late last year, we are experiencing solid demand for our Print MIS products in the US but what was very encouraging in the show so far was the strong international interest in the portfolio of our MIS products. I thought we would have to do a lot of market education in the European market but it certainly seems like a lot of people already had heard about the Printcafe MIS products.
WTT: What do you think about the show as a whole?
GG: What struck me is that the number of technology vendors that are here is unbelievably large for this industry. It is unsustainable. I think you will see a lot of ongoing consolidation among the industry's technology vendors. It will be more difficult to be a small, standalone company. Customers will be saying, If this is a small company, I am not going to buy and risk being stuck with the product if the company disappears or get bought by someone who will not continue to improve the product. This phenomenon has already happened in other industries, but not yet in printing. I am already seeing people coming to us after looking at similar offerings from smaller companies, because of our size and range of offerings.
WTT: Do you think we are heading for more of a sole-source environment?
GG: I don't think it will get to single source. People don't like to be locked in to a single vendor, even if the vendor is large. Recently, I talked to a customer that bought software from a large company who stopped developing the product, so he is now stuck. But I do think you will see people dealing with fewer vendors. Increasingly, part of the buying criteria is the vendor's commitment and long-term viability, and size certainly plays a role in that but is not the only consideration. Four years ago, that was not even a question people asked.
WTT: So do you see this as a bad thing for the industry?
GG: Not at all. Through this process, the industry will become healthier, with fewer companies spending more R&D dollars. Customers are more demanding and more knowledgeable. And they don't want to deal with technology, per se. They want to focus on producing printing. I think this next phase of consolidation among technology providers will see the strong companies getting stronger and weak companies getting weaker.
WTT: What about JDF? This has been called the JDF drupa. What are your thoughts there?
GG: We are trying to avoid the hype. We talk about JDF only as an excellent standard interface not as a magic formula that fixes all the issues in the industry. The good news is that beyond the JDF buzz, CIP4 is gaining ground, for the first time after many similar failed attempts, and this is something that seems to have grabbed the attention and commitment of the industry technology vendors. We had easier lives as technology vendors in the 90s. Now it is time for us to prove that we can make the industry more efficient and one of the main ways of doing so is by implementing technology standards across the industry.
WTT: I notice that, unlike many of the other exhibitors here at drupa, you don't have a presentation theater. Why is that?
GG: I know this is somewhat unconventional in tradeshows, but we wanted people to spend time with us and go station by station instead of listening to a 10 minute theater presentation. We decided not to have a theater so we can get into more depth with our visitors. And it is working it is hard to imagine visitors spending two hours or more at a single exhibit in this massive show, but it is happening!
WTT: Since much of your business is through indirect channels, this must be a good opportunity for you to get direct customer feedback.
GG: Even though we do most of our revenue via partners, I believe that very few companies spend as much time with end users as we do. Eighty percent of our business is indirect. But here we are, and Fred [Rosenzweig] and I are on the road all the time, talking to end users. Everyone at EFI is very in tune with what the market is looking for. As an example, even though we come out of the digital world, OneFlow was developed for the offset world first. Who would have thought EFI would have done that? Now the offset world has digital workflow, too.
WTT: What other changes do you see this new emphasis on workflow bringing to bear?
GG: The whole industry is moving toward delivering solutions instead of products. These days, you can be a relatively small printer doing a lot more and moving much faster than the larger ones. The technology and the solutions that are coming to market are acting as an equalizer. In the past, technology development in our industry was most often internally funded by the big players and only the large printers could afford this type of investment. Companies like EFI are changing the dynamics. When you buy a $30,000 workflow solution, you are buying $30 million worth of R&D.
WTT: So do you see your business mix moving more to direct sales?
GG: With products that involve a great deal of customization or configuration, like our Print MIS products that we acquired with Printcafe, we will continue to sell directly to our customers. For products that are much more plug and play like the Fiery, OneFlow, DigitalStoreFront and our proofing solutions, we will continue working with very competent partners like Xerox, Canon, Kodak, Konica, Enovation and others. KPG is a good examplethey are showing great vision and have come to drupa with a great strategy, saying, We are going to offer best of breed and our value add is KPG. And EFI is part of their strategy with offerings which include customized versions of OneFlow, BEST proofing technology and Fiery.
The new Fiery server for Kodak's Versamark has been specially optimized for ultra high speed inkjet. NexPress is building a branded workflow that includes a number of EFI components, including OneFlow and Exchange, taking a best-of-breed approach under the Kodak umbrella. Xerox also has been very successful selling Fiery driving devices from their digital color 3535 to all the way up to their iGen3.
WTT: One final question. Will you be making more acquisitions?
GG: With 17 halls of exhibitors here at drupa, there are a lot of targets. We are looking carefully at what is available. I still think we should acquire companies in the future, but we will do so very selectively.
WTT: Thanks for taking time out to talk with us during a very busy show. Any final comments you would like to add?
GG: I am excited because you come here and you immediately remember why you love the industry. We have very smart, creative customers, and there is a lot of innovation going on. Yet if you are passionate about the industry, as we are at EFI, there is still so much that can be done to make it healthier. We are now in the center of the opportunity with the focus moving to workflow and improving productivity. We believe we can adapt in the next few years to wherever the customer takes us. We don't know exactly where it is going to go long term, but we do know we can adapt to it.
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