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Oct 1, 2008 12:00 AM
It was a conference that almost didn't take place, but this year's edition of EFI Connect beat the odds and paid off handsomely.
By drawing, despite soaring airfares, more than 500 attendees to the Wynn Las Vegas resort for a four-day (July 29-August 1) symposium on all things EFI, the annual event retained its distinction as the industry's largest user group meeting. It also furnished the setting for some of EFI's most significant product-related announcements in years, including one tied to a major acquisition on which the ink was barely dry the day the conference opened.
Convening the program, CEO Guy Gecht said EFI initially debated the wisdom of holding Connect in a drupa year, when travel and exhibit budgets typically are constrained by the high costs of taking part in the German show. But, facing what he described as “tremendous pressure” from customers who did not want to see the event cancelled, EFI reversed itself and presented Connect for the ninth year in a row.
Also showing their support were 16 technology partners and other participants in a tabletop mini-expo that ran for the duration of the conference. Gecht noted that this year's attendance, although well under half of last year's, met present expectations and set the stage for Connect's return to Las Vegas for its 10th anniversary edition in 2009.
Adding a bit of drama to the opening general session was the disclosure of the conference's most consequential piece of news — EFI's acquisition of Pace Systems Group, a deal that had been closed only hours before. “We rushed everyone to get it done this morning,” said Gecht.
Marc Olin, senior vice president and general manager of EFI's Advanced Professional Print Solutions (APPS) division, explained what the urgency was all about. He recalled that as far back as 2000, customers of printcafé — an aggregator of MIS systems that he led as CEO until EFI acquired it in 2003 — were asking, “When are you going to standardize on a single product?” At the time, printcafé offered a dauntingly broad assortment of solutions for MIS and production control.
Now, Olin explained, two of these products have entered an extended phase-out and replacement period that will last as long as their current users continue to rely on them. Others are to be combined into new product offerings, and one will continue serve its user base in its present form.
The sunset products are the print MIS solutions PSI and Logic. Two years ago, said Olin, EFI realized that the technical obsolescence of PSI, a FoxPro-based package for mid-sized printers, eventually would leave a void in its product offerings to that segment of the market.
EFI Pace will fill that gap — a new product combining EFI technology with ePace, an integrated suite of software modules from Pace Systems Group. EFI Pace will be offered as an upgrade path to users of PSI and EFI's Logic MIS product, each of which will transition to maintenance-only status after receiving one final new version by the end of the year.
Olin also announced that Hagen OA, EFI's print MIS for large printing businesses, will join EFI Prograph and other existing products in EFI Monarch, a new solution for large plants and multiplant operations. EFI Monarch will be an option for some PSI and Logic customers as well, he added. At the other end of the market spectrum, PrintSmith will continue to serve the needs of the quick-print shops and small commercial printers.
Olin said the new, segment-specific product configurations would help to untangle legacy arrangements dating back to the early days of print MIS in the 1990s, when competing solutions were sold to all takers without respect to business size or type. He emphasized repeatedly, however, that the changes would not oblige customers to give up existing solutions or switch to new platforms against their will.
Olin said this means EFI will remain committed to keeping PSI a stable platform “for many years to come” — a reassurance clearly aimed at the 900 current users of the product, a number of whom were present at Connect. These customers can either stay with what they have or look at EFI Pace or EFI Monarch as a potential replacement. Olin predicted that the initial migration would be modest, with 5-10 percent of PSI users opting for one of the new alternatives in the first year.
“We're not compelling anyone to move,” Olin declared. Although EFI will offer discounts to encourage migration from legacy products to the new solutions, he said, “There's no rush to switch off of your existing platform if you're happy with it.”
And while the new arrangements bring EFI closer to what users were asking for in 2000, Olin said, “There is no way to have everything on a single platform.” Because the EFI customer base is so diverse, there is, as far as MIS is concerned, no “commonality” between the needs of a corner copy shop and those of an RR Donnelley.
Olin acknowledged the effects of the changes will take time to make themselves felt. He added, “a dramatically simplified” product structure will emerge when the anticipated migrations to EFI Pace and EFI Monarch are complete.
Gecht joined Olin to offer additional insight into the product realignment. “No platforms stay forever,” he said, noting that Logic was more than 30 years old and that sooner or later, legacy systems have to give way to new ones. Gecht said that EFI, facing a decision about how best to serve the long-term needs of the mid-range market, found the answer in ePace, an established product with 1,500 successful installations.
Olin added that because middle-market printers are “huge” users of EFI's Fiery RIPs, it would have been unacceptable to tell these loyal customers that plans did not include the development of suitable MIS products for them. During a session with journalists later in the conference, he would note that by purchasing Pace Systems Group, EFI not only acquired a new MIS platform but co-opted a formidable competitor as well.
Pace, said Olin, grew by 50 percent between 2007 and 2008 mostly by taking market share away from other MIS developers, including EFI. Over the last 18 months, he added, the acquired company has sold four times the volume of new ePace systems as sales of PSI and Logic combined.
In his first public appearance as an EFI executive, Jay Farr, founder and CEO of Pace Systems Group, briefed the Connect conferees on the ePace platform and its entry, as EFI Pace, into the family circle of MIS solutions from EFI. He said that having access to EFI's “very robust and very deep talent pool” would be a powerful advantage for Pace Systems Group, an 80-employee organization that will continue to operate from its headquarters in Jacksonville, FL.
EFI Pace, said Farr, will be an integrated, cross-platform suite of highly customizable software modules that can be accessed from anywhere via standard Web browsers. The software runs on a Linux-based, SQL-compliant database server, a piece of hardware that can be installed at the user's site or maintained at another location.
Farr said that the ePace platform will undergo some modification in its rebranding as EFI Pace. EFI's Digital StoreFront will replace its original e-commerce module, and Farr said that other components could be swapped out for EFI equivalents if doing so would improve functionality for end users.
Because EFI Pace is browser-based, said Farr, built-in browser tools such as tabs and bookmarks can be used to create shortcuts and otherwise enhance ease of use. Users also can change the appearance of the interface with CSS (cascading style sheets); import and export databases in popular formats such as Excel spreadsheets; and generate custom reports.
Farr promised EFI Pace adopters “a frictionless, plug-and-play installation and a turnkey solution” backed by unconditional support: if something goes wrong, he said, “It's us.” He noted that site licensing also will include training in the form of admission to the “University of Pace,” an online, multimedia resource featuring lessons, testing, grading, and “report cards” for EFI Pace learners.
As part of the opening session, Olin gave a general overview of the Pace acquisition and other developments on the software side. Later, in a program for journalists and analysts running parallel to the customer seminars, representatives of EFI's principal business units offered detailed technology updates and application briefs.
Kathy Wilson, senior director of product marketing for the Fiery division, said “logical, easy-to-use workflows” were a key to productivity and that Fiery RIPs are built to turn every digital print engine into “the most effective competitive weapon it can be.” She presented the combination of a Fiery RIP and EFI's Mac-based Splash workflow as an ideal solution for end-to-end color optimization and production control.
The Fiery-Splash solution is so richly featured, said Wilson, “End users are not taking full advantage of the capabilities of the product.” To help these customers make the most of their investment, EFI has programmed additional help and instructional routines into the systems. It also offers a series of “ABCs” guides to proofing, print management, variable-data printing, and other subjects of practical interest to users of Fiery RIPs and their related workflows. (The guides can be downloaded at www.efi.com.)
Jon Minion, JDF product manager for APPS, discussed how the JDF connectivity of EFI products equips them for fully automated tasks such as “lights-out prepress.” He noted that the Hagen 10.2 and Prograph 7 workflows have earned JDF certification from the CIP4 organization, explaining that this ensures their interoperability with similarly certified products. The EFI solutions are two of only three MIS products that have earned JDF certification, Minion added.
According to Minion, one of the keys to achieving lights-out prepress is just-in-time plating — burning plates only when the press is ready to receive them, a practice that makes it easier to accommodate last-minute content changes and other unforeseen developments that disrupt conventional routines. He said that EFI Prepress Integration Suite, an implementation of Prograph for Kodak's Prinergy workflow, automates imposition within Prinergy as a first step toward the kind of integration that just-in-time plating requires.
Ken VanHorn, product marketing manager for the VUTEk division, spoke about the extent to which digital inkjet output has displaced analog screen printing to become the method of choice for POP, billboards, fleet graphics, and display materials for events and exhibits. He said that digital inkjet in all size categories — narrow (24-inch), wide (60-inch), and grand or superwide (192-inch) — was enjoying an overall CAGR of 12 percent as screen printers and other producers increasingly bring it into their operations.
Earlier, Gecht had noted that superwide inkjet is the fastest-growing segment of EFI's business. He said that until the U.S. economy slowed down this year, VUTEk had been experiencing year-over-year growth of 25 percent.
Systems running solvent-based inks continue to be popular, VanHorn said, because of their economy and the wide range of substrates that they can handle. However, systems featuring UV curing are coming into their own and have reached what he called “the end of the early-adopter stage.” In fact, he said, VUTEk reached a crossover point of its own this year when it began shipping more UV inkjet systems than solvent-based ones.
A notable advantage of UV inkjet is the fact that once the VOC-free ink is cured to hardness on the substrate, the job needs no lamination or any other protective treatment. VanHorn said that in solvent-based production, up to 60 percent of the output may have to be discarded because of problems occurring in laminating and finishing.
Thanks to its many efficiencies, said VanHorn, UV inkjet yields a higher gross margin than solvent or aqueous systems and can cover its operating costs in about one hour of output per day. EFI foresees a 49 percent CAGR for wide-format UV inkjet jet through 2010, strongly outpacing the growth of solvent-based systems and eclipsing aqueous inkjet, which is expected to decline.
VUTEk exclusively serves the superwide segment of the inkjet market with roll-to-roll solvent, roll-to-roll UV, and flatbed UV systems. They are used, VanHorn said, by commercial and billboard printers, commercial photo labs, screen printers, sign shops, digital service bureaus, and other customers in more than 100 countries.
Dan Crnarich, director of product marketing for APPS, gave an MIS update that added detail to the general announcements about changes in these product lines. The principal developments include:
The integration of the Digital StoreFront online job manager with PrintSmith 8.1, creating what Crnarich called a “lite” W2P (web to print) solution for small shops.
In the Q4 2008, the “last functional release” of PSI, v12.2, after which the product will enter maintenance-only status for customers who go on using it.
v24 and, when coding is complete, v25 of Logic, final updates incorporating many customer-requested improvements.
EFI Monarch, melding what Crnarich termed “the best” of the Hagen OA print MIS, the Prograph advanced planning workflow, the PrintFlow dynamic scheduler, and the Auto-Count direct machine interface for production data collection. The combination will be available for sale next year, he said.
Crnarich emphasized that EFI Monarch does not merely stitch these applications together. Instead, it integrates them to maximize their efficiency and automates their production sequences by eliminating redundant “touch points.”
In the opening session, Olin stated that another design objective for EFI Monarch was to give “a common look and feel” to the interfaces of its various components. “We need to make them look more like one seamless tool,” he said, adding that the components can still be purchased and used independently of EFI Monarch if customers want to acquire them that way.
Bill Bieger, director of sales for graphic arts solutions in North America, summarized EFI product offerings for controlling “the color supply chain”: the network of digital proofing and output devices throughout which color consistency must be maintained in jobs for advertising agencies and other high-end customers.
Products include Colorproof eXpress, a low-cost, “proofing-to-go” solution for small shops; Colorproof XF, a software RIP for high-end proofing; Colorproof XF Satellite, a remote-proofing package; Fiery XF, a production RIP for inkjet printing; and XFlow, a PDF workflow for wide-format output.
Patrick Henry is the director of Liberty or Death Communications. Contact him via www.libordeath.com.
Guy Gecht, CEO of EFI, opened EFI Connect on July 29 with a keynote presentation in the form of a one-on-one interview with Jacques Mallette, CEO of Quebecor World, the world's second-largest commercial printing company. Mallette, who has been with Quebecor for five years and was its CFO until his appointment to the top spot last December, discussed the company's continuing efforts to emerge from bankruptcy with the help of a well-funded strategic reorganization plan.
Quebecor filed for protection from its creditors on January 25, 2008. This was done, said Mallette, to “calm down” employees and other stakeholders so the reorganization could proceed. As part of the filing, Quebecor obtained commitments for $1 billion in new financing that would enable it to meet wages and other operating expenses. With the help of that capital, said Mallette, “The target is to have and exit plan approved in court by the end of the year.” Then, the intention will be to exit protection “very quickly, and with a very strong balance sheet.”
As for the events that led to the bankruptcy filing, Mallette said that those issues “have been mostly related to Europe” and operations there that the company has since exited. The strategic focus now is on North America where, according to Mallette, Quebecor remains strong.
He admitted that business conditions over the last six months have created a “very tense” situation for Quebecor, given the weakened state of financial markets in general. Nevertheless, said Mallette, “After we filed, life was a little bit easier than before we filed.”
Describing the reorganization, Mallette noted that the company now consists of 10 divisions including three in the United States, which once had been served by six. The consolidated U.S. divisions are marketing solutions, including retail inserts, catalogs, Sunday magazines and direct mail; publishing, now comprising magazines as well as Quebecor's extensive operations in books and directories; and a unit for premedia and logistics.
According to Mallette, Quebecor and the industry as a whole face “very challenging times” as the costs of paper, ink and manufacturing processes continue to rise. It is “not a secret,” he said, that the industry is shrinking or that more consolidation lies ahead.
But, he added, because print still represents 50 percent of the total advertising spend, “It's not insignificant — it's huge.” He predicted that relatively little of that volume will migrate to digital output, noting that 98 percent of the accounts renewed by Quebecor this year will be served primarily with offset lithography. Quebecor has invested in digital equipment, he said, but for only for “specialized applications.”
In “Making the Best MIS Choice,” (Februrary 2003), consultant Don Goldman details 22 attributes to consider when shopping for a new system. See http://americanprinter.com/management/business/printing_making_best_mis