now that was a printing show. the industrial inkjet …...tough for companies like xaar. they would...

INDUSTRIAL INKJET HEADS—The Seeds are Sown;Gateway To a New Industry?

“What business are we in?” This rhetorical question is often tossed outby inspirational speakers at business seminars. Today, as we explore thepotential for inkjet heads with Marco Boer and Mark Hanley, the questionactually seems relevant.

A number of companies around the world currently produce inkjetheads to market to printer companies or use in their own systems. For most,it continues to be a good business. But going forward, within the confines ofcurrent markets, growth is limited. The long term future looks bright,however, if industrial print heads are seen as key to new applications thathave the potential to spawn a whole new industry.

Key to a whole new industry? How did we get there!? Read on.First, the present.Marco notes things right now are not bad for the head vendors. “Unlike

the consumer side where companies like HP produce heads for their owninkjet printers, on the industrial side, printer companies generally rely onheads from outside vendors such as Xaar, Spectra, Ricoh, and Konica.These companies make heads and sell them as components to otherproducts. That’s worked pretty well, but compared with the industry as awhole, it’s never become a really big business. Because it’s just compo-

July 2005Volume 10, Number 7

In This IssueIndustrial Inkjet Heads.................................pg. 1

NPES, GASC and PRINT ‘05.....................pg. 7

The Big Picturea monthly feature based on interviews with I.T. Strategies Consultants

Quotes of Note

Now THAT was a printing show. Thesmell of money was in the air.

—From a recent “Blog On Demand”reflecting on past Gutenberg Festivals andreporting with nostalgia that the magic ofmoney was gone at the recent GutenbergFestival, that the premier West Coast event forthe printing industry was only a shell of thefestivals in years past.

Patent policy is too important to be left topatent lawyers.

—Josh Lerner and Adam Jaffe in theirrecent book, Innovation and Its Discontents:How Our Broken Patent System Is Endanger-ing Innovation and Progress and What to Doabout It. The book describes patent andlitigation frenzy and patent overload, withannual U.S. Patent Office applicationsexploding from around 100,000 in the 1960s toover 350,000 in recent years. One of theirexamples of spurious patents is Smucker’s1999 patent for a sealed, crustless peanutbutter-and-jelly sandwich.

[It’s a] Jack Welch kind of thing. If youcan’t be number 1 or 2, why do it?

—An anonymous HP print divisionmanager quoted in Business Week (May 9,2005) on why HP is “pruning the printers,”reportedly cutting back the division’s headcount by 10% or more.

This will be the year that the couchpotatoes beat the geeks, as the control centersof our home networks move to the comfortableconfines of our home entertainment centers—which quite likely will be made in China.

—From a release by marketing and webdesign consultancy E-agency of Oakland, CAon its predictions for 2005, including amongother things that this is the year that world-wide Internet users will top one billion, withmore users in China than any other country.

U.S. - Boston - Phone: +1 781 826 0200 Fax: +1 781 826 0151Japan - Tokyo - Phone: +81 3 3433 0691 Fax: +81 3 3437 5503

www.it-strategies.com

Spectrum is a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2005Reproduction within client organizations is encouraged; other reproduction prohibited. Editor and Lead Writer: Edward Webster.

Source: Dimatix, Inc.

Displays

Electronics

Life Science Optical

3D Mechanical

Chemical• Flat Panel Displays• PLED• LCD• Color Filters• Display Backplanes• Flexible Displays

• Material Development• Substrate Development• Coatings

• Flex Circuits• RFID• PCB Photomasks• Wearable Electronics• Solar• Fuel Cells• Batteries

• DNA• Proteomics• Antibodies• Food Science• Pathogen Detection• Medical Devices

• 3D Assembly Systems• Sensing

• Optical Lenses• Light Pipes

2005 Dimatix, Inc .

2005 Dimatix, Inc .

2005 Dimatix, Inc . 2005 Dimatix, Inc .

2005 Dimatix, Inc .

2005 Dimatix, Inc .

Figure 1: Materials Deposition Markets, an industrial inkjet application

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SPECTRUMJuly 2005

nents. At maybe around $200M worldwide, it’s not large, butextraordinarily important because it has gated much largerbusinesses, such as the whole wide format market.”

But now the problem we are facing is that what you cancharge for the heads is basically tied to what can be chargedfor the printer. Typically the heads account for about tenpercent of the retail price of the product, Marco says. As theprice of wide format printers comes down, this has createddownward price pressure on the heads, even as they need tobe continually upgraded in terms of speed, quality of outputon a broader range of substrates and other performanceattributes.

So far, the demand for heads has grown so fast thatvolume compensates for head price declines. Head prices godown, but volume grows. So everybody is in good shape. Thispast year, 2004, has been a good year for most of the headcompanies. Unfortunately—or fortunately, depending on yourperspective—it’s attracting new vendors who want to get intoit.

Some see it as a component business. The motivation ofothers is strategic. They feel it’s important, so they invest indeveloping their own heads. A company like Samsung, forexample, one of the world’s largest corporations, is likely tofeel that it is too big not to dabble in this. Samsung’s strategicgoals may remain unclear, but it feels that it has to be there,has to get into inkjet. And Samsung is big enough to make theinvestment without the promise of quick returns.

We look around and see there are not a lot of largeaccounts left, only hundreds of little ones. There’s no low

hanging fruit.

Now there is perhaps too much competition and currentmarkets are limited. “We look around and see there are not a lotof large accounts left, only hundreds of little ones.” Marcosays. “There’s no low hanging fruit. Only a few accounts onthe order of Scitex Vision are good for ten thousand heads orso. And there are not many new markets left for today’sapplications. The China market, mostly for wide format, isstrong, but now it’s already established. Elsewhere in theworld, perhaps? Maybe India?

On the fringes, yes, there are a lot of potential smallaccounts, and they are not necessarily small companies. Itcould be a company like Nestlé or Proctor and Gamble thatmight be looking at inkjet for in-house packaging systems.There may be a lot of these kids of prospects, but they needhelp. To capture them, the technology has to be easier tointegrate, which is the argument for developing inkjet modules,a product that can be used out of the box.

In short, looking ahead, say for the next five years, the

consultants see a slowing down of the market as it is currentlystructured.

There may be some wild cards out there, perhaps textiles,perhaps new geographic markets such as India. But in order toaccess them, too many pieces are needed in the infrastructurechain, and this is not expected to happen by natural evolution.

Three Paths to GrowthIn response to these realities—more competition and

downward price pressures—what are the options for the headcompanies? We see three general directions.

One is to move up the value chain. One way, as Marcomentioned, is to integrate heads into more self-containedmodules so they are easier to integrate, a way to expandexisting markets. This would open up lots of potentialcustomers. Some might be big companies, but even a bigcompany can have only so many packaging lines. To get intobig numbers, head vendors need a lot of these kinds ofcustomers, and in time they could add up to worthwhilevolume. “If you can get, say, fifty Proctor and Gambles, then itbecomes interesting,” Marco posits. “But you have to offerusable out-of-the-box technology in order to allow users toget into those accounts.”

Offering head integration consulting could help as well,but the talent pool in our industry is small and could limit theability to scale up. Most of the industrial inkjet engineerexpertise is in Japan and there would geographic hurdles inthe way of consulting and servicing customers scatteredaround the globe.

Path Number Two is to engineer complete systems andfigure out how to brand and market them. This path would betough for companies like Xaar. They would be competing withtheir current customers, and would have to develop channelsand a new level of customer support from scratch. That’s whycompanies like Spectra, Xaar and Ricoh are moving towardmodules instead.

Third, and the most interesting Mark and Marco believe,is to develop new applications, applications that are notprinting related. Rather than printing, we find ourselves talkingabout various micro-pump applications. More on this later.

Betting GameMoving ahead with one or more of these three growth

strategies becomes something of a betting game, Marcobelieves. “A lot of the head vendors are getting intomodules…Spectra was probably among the first …Xaar isgetting into it with Omnidot. Everybody is looking at ways tosupply more than just the head, but also the fluids, theelectronics, the mounting brackets so it becomes moreturnkey, so it becomes easier and these little users who didn’thave the resources to do this can now do it.”

Some of the larger companies in Japan have gone quite a



SPECTRUMJuly 2005

way on this integration path. A number have shown concepts.Ricoh recently showed its module concept. Konica hasdropped hints at conferences about a module concept. Othersinclude Olympus with TTEC and Canon’s subsidiary FineTech.One or more Chinese vendors may give it a try at some point.

Path Number Two looks best for the large printing systemvendors based in Japan that also have developed heads. Theymay have developed the heads for internal purposes, and alsohave the resources to develop branded products. A hugeconglomerate such as Samsung or Panasonic might best makethe branded product bet, in addition to using its heads forinternal purposes. Panasonic may have originally developedits heads to print DVDs. Epson has been working on ways tojet polymers and conductive fluids to make flat screen displaysand printed circuit boards.

Companies like Canon and Ricoh have taken physicalintegration of inkjet heads way down the road. A lot of

people don’t appreciate the significance of this.

“We don’t know how well developed their product anddistribution programs are at this point,” Mark cautions, “butit’s important to know that companies like Canon and Ricohhave taken physical integration of inkjet heads way down theroad, and that part they must know how to do. A lot of peopledon’t appreciate the significance of this. This path for thesecompanies is realistic because they are so large they caninvest lots in head development without having to commercial-ize them.

Some inkjet technology vendors are already looking aheadto Path Number Three, new applications, among them Impika,Cabot, and Xennia (see box page 4). Manufacturers in Japanand Korea have a lot of sunk costs invested in inkjet heads.They are fortunate in that the firms are large enough to makethe investment without the promise of short term payback.They stand ready to work this new market as it develops withminimal additional R&D investment.

“Time and money solves everything,” Marco muses.“And these companies have both. It’s just a continuum onwhere you bet, which button you choose to hit. ”

What about ink as a path to growth? Ink plays a criticalrole in the business model of the printer vendors. And inkformulations are closely tied to head design. Most of the headvendors’ business models include a plan to profit with inksales, but according to Marco, this has never happened. Markpoints out that the ink business tends toward cartridges and asystem of selling rather than the ink itself. The trigger for inkvolume is fixed arrays, and that’s only just beginning.

MicrodepositionNow, Path Three: find incremental markets rather than—or

in addition to—working existing markets. That’s where

microdeposition comes in. We see it just beginning to emerge.Jetting edible decoration onto food products has been aroundfor a long time and might be seen as a primitive precursor ofmaterials jetting.

Now we see Spectra, for example, launching a new“Materials Deposition Division.” Mark explains. “A way tospeak of it, or better understand it, is to envision fluid manu-facturing or what we’ve begun to term ‘liquid engineering.’This means making things, making functional componentsusing fluids as the raw material and inkjet as a means ofdepositing the fluid. When you speak of printed electronics,you are speaking of manufactured products, whether anantenna or transistor, as discussed in these pages a while back(December, 2004).

“Further ahead is a new frontier, proteomics. Proteomics isan emerging application which allows you to take a skeleton ofsomething and jet living cells onto it to grow, say a body part,in the correct shape. And there’s 3D modeling, which everyoneknows about. These are manufacturing techniques that usedto be looked upon as a bit weird. But there’s a suggestion in

Digitally printing mobile phone antennas directly onthe casing is one of many inkjet microdeposition applica-tions being commercialized by Conductive Inkjet Technol-ogy (CIT) of Royston, U.K. The process is said to besuitable for printing in line with assembly or moulding,and for rapid prototyping. CIT is a partnership betweeninkjet technology developer Xennia and Carclo plc, a large(2,000 employees) high-tech precision engineeringgroup. The CIT partnership was formed specifically todevelop and commercialize technology for direct write ofconductive metals onto non-porous materials. Theirtechnology is said to embrace a range of metals includ-ing copper, silver, gold, nickel and cobalt. Both piezo andthermal inkjet can be used as appropriate for specificapplications. Image courtesy of CIT.

Cell Phone with Digitally Printed Antenna

the air now that manufacturing using fluids is becoming anaccepted avenue in its own right, and inkjet is becoming thepreferred mode. Why? Because it is the mode where you canaddress each individual drop element, totally integratable withinformation flow. So from a manufacturing perspective, for veryfine, low volume manufacturing, it’s incredibly interesting.”

Marco makes it graphic. “Maybe this isn’t the bestanalogy, but it’s a very simple one. Imagine a slurry wall, wherepeople are pouring cement into a form. That’s how things aredone today in a lot of manufacturing, right? Now, withmicrodeposition, you have bricks that you can use to buildany shape or form. The downside of the technology is that,because it is ‘artisan,’ it probably lends itself initially to verysmall scale stuff rather than high volume manufacturing. Todayit’s not going to be used to create a million flat screen displaypanels a year—that’s probably a way off. But, if you want tomake ten prototypes, that’s here now.

[Microdeposition] is not about representing something graphically. It’s about creating the thing itself.

“The point is to expand inkjet away from just graphicsprinting and into physical manufacturing. This is the conceptbehind microdeposition. It’s not about representing something graphically. It’s about creating the thing itself. It’smoving the head business away from graphics, which hasbecome somewhat static, to something that’s much moreinteresting, more alive, more dynamic.”

“The idea has gone abroad. The concept is spreadingrapidly. Now the work has to be done,” Mark adds.

So where do you make your bets here? Do you bet onmicrodeposition as the wave of the future? Or on modules? Doyou bet on branded products? A lot of these things we’vebeen talking about depend on channels. Someone like Xaardoesn’t have distribution channels to sell branded products.Someone like Panasonic or Samsung does, but now it’s too latefor the consumer market. So they push on offset replacement.Panasonic has demonstrated a direct mail printing press withMiyakoshi, and so forth.

But this will be a tough road for them, since the estab-lished vendors like Xerox and HP are already there. So itbecomes a distribution access problem for even a big companylike Panasonic, no matter how slick its technology, without theestablished access channel. Presumably, it seems, building anaccess channel once established competitors are there isextremely difficult.

Leveraging the TechnologyUltimately, Mark and Marco agree, vendors will have to

find something completely different. This brings us to “thenew industry” model. But not directly. They circle around moreor less as follows:



SPECTRUMJuly 2005

MB: Things will have to change. Looking at distribution,going indirect will happen because as average selling pricegoes down, you can’t afford to go direct anymore.

MH: Everyone is in trouble if things are premised on thissame fragmented market.

MB: You say that, but you may not have a choice. As theindustry is now structured, that looks like the way most of it’sgoing to be.

MH: By leveraging this technology, you make a differenceto the users of infinitely greater value.

Path Three Pioneers

Impika. CEO Paul Morgavi at a recent IMI seminaroverviewed the near to long term markets for inkjetheads. He sees printing continuing to be near termapplications including card printing, coding, overprinting,and decorating. Next, beginning around 2005, “materialjet” applications open up for microelectronics includingmicropackaging, connections, LCD display, OLEDs.Further out—he predicts beyond 2007 material jetting willinclude bio jet, biotechnology applications such as DNAtest arrays and in situ testing, and Impika apparentlyintends to be part of it.

Cabot is another example. This leading chemicalcompany has been supplying inkjet inks almost since thebeginning. Cabot has now diversified with the acquisitionof SMP, described as a leader in nano/micro particlematerials research and manufacturing. SMP opens up forCabot not just pigment particles for inks, but alsoconductive nanoparticles for printable electronics anddisplays and electro-chemical products for resistors, fuelcells and other power products.

Xennia Technology Ltd. has introduced severalsystems for materials deposition. Their Enjet 5000 isdescribed as a coating and decorating print engine for avariety of applications, among them printed electronicsand anti-scratch/optical coatings. Xennia’s Enjet 3000 isa system for inert dispensing of biological fluids forapplications that include clinical trial products, medicaldiagnostics, forensics, and other high purity materialsdispensing. The Enjet 4100 is a generalized materialsdeposition system said to handle a range of specialistmaterials, lab/pilot scale functional materials develop-ment and 3D rapid prototyping.

Conductive Inkjet Technology(CIT), a new venture setup by Xennia and Carclo plc, has developed metallizationprocesses said to be suitable for digital printing of RFIDtags, mobile phone antennas, PCB components, andeven solar panels. Xennia has announced their Enjet5000 coating and decorating print engine for a variety ofmaterials deposition applications, among them, printedelectronics and anti-scratch/optical coatings.

enues have skyrocketed. By giving an injection of new life, anelixir, into PDF, it has sustained a huge base of customers forother things it does.

Mark runs with it. “It’s an organic whole. And that willalso be the case as we merge into this new industry. Whetherprinting graphics or doing programmed material deposition,you are actually enabling a manufacturing industry to comeinto existence and have a long life. You are creating anecosystem in this new industry you serve that provides acustomer base for you later on. The biggest single vector ofchange here is technology—print technology or depositiontechnology—however you want to see it. That’s the vector ofchange. Just as PDF was the most important vector of changethat enabled the graphics industry and Adobe to thrive.”

But a note of caution. As Marco remembers it, whenAcrobat was introduced no one understood it very well, and ittook maybe ten years to grow into the product it is today. So itwill be with microdeposition. It will take time for it to grow.

What’s happening is a universal, long term trend thatsees a technology first defining an industry and then in

time merging into the industry it serves.

There are, however, major pull factors. One is a desire inthe electronics industry—not a small business—to extend thefunctionality of electronics into large areas. This meansflexibility, throwaway cost, and the path to liquid engineering.What’s happening, as we noted back in our 2004 article onprinted electronics, is a universal, long term historic trendwhich sees a technology first defining an industry and then intime merging into the industry it serves.

Unlike some industrial applications such as textiles, Markfeels we don’t need to try to educate potential users about theadvantages of microdeposition as a manufacturing technique.They are keenly aware of the technology and its possibilities.They are not going to apply it right away, but they know it willplay a growing role in coming years. It’s no longer ‘printing,’but rather a precision deposition technology that is part of theindustry it serves. It’s a kind of archipelago of industries thatdo new forms of manufacturing, a market base that is muchbigger than just inkjet products.

It’s a vector of change, an enabling product. It can’thappen right now. But there are a lot of people out there whoknow about it and that’s something new.

Value CreationConsider today’s office printer market, where we have

gotten to maybe around $100B and can’t seem to get beyondit. The expectation, or hope, has been that it can grow to asecond $100B. This appears increasingly unlikely. But now, asreframed by Mark and Marco, that doesn’t matter! The marketfor industrial inkjet systems may become only single billions ofdollars. But like Adobe, it represents a key technology vector



SPECTRUMJuly 2005

MB: Yes, but you may not be able to harvest that value.MH: I’m just raising the issue. As things stand, what

we’re talking about is that when it’s all over, the total value ofthe industrial Inkjet print systems market may only everamount to $10B to $20B, which is no substitute for the officerevenues of digital print vendors at $100B.

MB: But even as the head business is structured today,it’s easy to overlook the fact that as prices decline a lot, youhave people buying stuff that gets used less intensively. Onthe consumer level it’s like cars and TVs today.

MH: I think you’re a bit printer-centric there. If you’re justsupplying printers, or print heads for that matter, it’s not goingto be that huge. But what you’re doing really is altering abigger process. In the industrial market you’re printing thingsthat used to be manufactured, whether it’s a package or atransistor. Printing is part of a larger manufacturing process. Ithink this kind of technology will enable small-scale, localized,more flexible manufacturing. This will give rise to an industry, anew industry which in itself will be larger and more localized.

MB: Hmm, yes, it would be like Acrobat for Adobe.Acrobat itself generates only around $400M in revenues. Butthe value that Acrobat creates is in the billions of dollars!! It’schanged how people communicate, saving people billions ofdollars.

MH: That’s right. Acrobat and the PDF created anindustry within an industry that didn’t exist before. It hastransformed parts of the print industry.

MB: Absolutely! And that’s the same thing that willprobably happen here.

MH: You’re enabling the transformation of various partsof manufacturing, and that’s where the bigger dollars will be.

MB: Ultimately, you’re going to see things we cannoteven dream of because we’re just not wild enough. Cosmeticsurgery–using inkjet to grow new body parts, things like that.But we will enable it because the price of entry will be so low.

MH: What it means is that the print industry transformsitself to become part of manufacturing industries in both itsprint and manufacturing functions. Both the graphic anddeposition function, part of integrated manufacturing tech-niques. They are building the box of a different industry that ispart channel, part machine, part user-accessible technology.

Profiting from an Enabling TechnologyBut how do the participants get revenue from all that, we

ask.Acquisition on good terms may be one model. Business

history is filled with industrial evolution as one industrymerges into another. When this happens supplier companiesoften get acquired. That’s one option as this technologyvector unfolds.

We look for role models, and return to Adobe.Adobe may get only $400M in revenue from Acrobat, but

based at least partly on this product, as a company its rev-



SPECTRUMJuly 2005

on which to build a future business base. It’s not the revenue.It’s the value creation. Our industry is ceasing to be one, andis becoming, say, five industries!

Marco sees a parallel in the film industry, noting it’sessentially done, no matter how you look at it. “So Kodak saysthey are no longer in the photo business. Photos are just oneelement of publishing, or rather one part of a broader“infotainment” business. So it’s no longer just $30B, ratherperhaps $250B.

Mark agrees, noting that the photo business has diffusedinto a lot of peripheral industries that are all connected by theimage. So now Kodak has a choice, the potential to put theirmark on a variety of industries rather than being fixated on thisone thing that got them to where they are today. “Its fragmen-tation driven by technology vectors created out of a group ofkey developments. Digital photography, CCDs created thedestruction of the film business and the creation of all theimage-driven industries we see springing up today, just as PDFhas done for publishing and inkjet will do for manufacturing.’’

It looks like the consultants are acknowledging a “limits togrowth” challenge. Once that is accepted, they see new lifebeing created. Not problems, but opportunities—much moreproductive than just trying to squeeze continued growth outof today’s maturing markets.

Mark’s final pronouncement? “This has been much moreinteresting than I thought it would be!”

SUMMARY

Consultants Mark Hanley and Marco Boer meet with usthis month to explore how over the coming decades inkjet printhead vendors can access a market base that extends farbeyond inkjet printing.

Today, as a component business, growth prospects arelimited. There are only a few large customers plus lots of small,scattered users that are tough to access through currentdistribution channels. The small customers may be largecompanies looking to develop in-house packaging systems,but to access them the inkjet modules have to be easier tointegrate. China as an inkjet head market for wide format isstrong, but now well established so future growth thereappears limited.

They see three general strategies to respond to the realityof ever more competition and downward pricing pressures:

-Move up the value chain by developing and marketingmodules that will broaden the market by making print headseasier to integrate.

-Engineer complete systems to brand and market, orsupply OEMs.

-Develop new applications that are not printer-related,namely new microdeposition technologies.

A number of head vendors have begun to engineer or atleast talk about modules including Spectra and Xaar. Also,

I.T. Strategies, Inc.A leading market consulting and research firm serving thedigital printing industry, specializing in

· Worldwide Market Research· Worldwide Market Consulting

· Business Strategy Formulation· Partnership Introductions and Facilitation—

Technology, Marketing, and Distribution· Acquisition Analysis

I.T. Strategies has offices in North America and Japan:Boston Ph: +1 781 826 0200, Fax: +1 781 826 0151Tokyo Ph: +81 3 3433 0691, Fax: +81 3 3437 5503

SPECTRUM Editors: Marco Boer, Barbara Budak, HiroshiHakozaki, Mark Hanley, Mary Robins, Jessica Stone, Ted Webster,Patti Williams, Liz Ziepniewski

❑❑❑❑❑❑❑

there are several large Japanese vendors including Ricoh,Konica, Olympus/TTEC and Canon/FineTech. Engineering andmarketing looks appropriate for large companies and somehave already invested in head technology for internal pur-poses. This gives them the potential to launch their ownsystems.

What Hanley terms “liquid engineering” shows greatpromise as an incredibly interesting frontier for our technol-ogy. This means making functional components using fluids asthe raw material and inkjet as the means of depositing the fluid.A major application is expected to be printed electronics, suchas antennae or transistors as discussed in our December 2004issue. A number of head companies and at least one inkcompany are exploring this direction. Spectra has established anew “Materials Deposition Division.” In the biomedical areamicrodeposition technologies are being used to jet living cells.

This technology vector is expected to grow into animportant industry in its own right, or a cluster of industries.But no matter how huge the industry becomes, it would seemdirect revenues for print heads will not be spectacular. But thatdoesn’t matter. The vendors will have triggered somethingmuch larger than themselves and will become part of it. AdobeSystems with its Acrobat/PDF technology is seen as ananalogous model. Adobe’s direct revenues from Acrobat arenot large, but through this product it has acquired a huge baseof customers for other products. Looking at business history, ahistorical trend has been a technology defining an industryand in time merging into the industry it serves.

The office printer market seems more or less plateaued ataround $100B, and future growth is likely to be ever moredifficult. But this doesn’t matter if we reframe our businessmodels to support this new path. Future profit generated byvalue creation will far exceed what we can expect as ourindustry is currently structured.



SPECTRUMJuly 2005

Associations as Windows to the WorldThis year we profile a selection of associations that we feel

have strategic planning relevance to our industry. Associationshows, seminars, publications and perhaps membership canserve as helpful windows to the user world in given markets,and to our own industry. But the view is limited. Only by know-ing the background of each, its agenda and its biases can oneevaluate the association’s services and determine whether itsprograms are worth investment in time and money.

NPES, GASC and PRINT 05:Print Association Complex Hoststhe Year’s Biggest Industry Bash

It comes up only once every four years. So if you want tomix with a sea of users…visit with a huge assortment of analogand digital vendors …check out what’s billed as the year’slargest collection of hardware in action all in one place, thenChicago from September 9-15, 2005 is the place to be.

This event, Print 05, is hosted by three major printingindustry associations, PIA/GATF, NAPL and NPES andmanaged by GASC, the Graphic Arts Show Company. SinceNPES via GASC appears to be the mother of this majorindustry event, and because the show comes up soon, thismonth looks like a good time to overview this association andthe show itself.

Even more than some other associations we’ve profiledthis year, NPES might be seen as a role model in the way it hasadapted to changing realities. In terms of the big picture, NPES,like our industry, is committed to print, and the breadth of itsprograms reflect this.

There is a lot of outreach in terms of networking withaffiliated organizations and setting up programs overseas. Tonourish the health of the industry, NPES has establisheddomestic and overseas educational programs. NPES launchedGASC in 1982 to serve the industry directly, but also indirectlyby channeling revenues into a variety of institutions dedicatedto the long term strength of the industry. Over the years thisprogram has raised $4.5M used to fund over 125 projects at 45institutions via the Graphic Arts Education and ResearchFoundation. In the face of an industry that by some standardsis shrinking, NPES appears to be sustaining its programs andcontinuing to evolve.

NPES stands for National Printing Equipment Supply. Itsformal name is now NPES, The Association for Suppliers ofPrinting, Publishing and Converting Technologies. First set upin New York City, it moved to the Washington, DC area in 1972.Membership swelled from 300 in 1990 to over 400 by 1990.Current membership is still said to be “over 400.”

Programs and PublicationsNPES lists a staff of over 20 in its DC-area office and a

wide assortment of programs typical of many associations.These include conferences, government affairs, internationaltrade, market research, standards, professional developmentand safety.

Less typical are the education programs and overseasoutreach programs. It’s a no-brainer in a way: to increase themarket for print, increase the number of readers around theworld. So NPES through ProLiteracy Worldwide helps adultsfunction at a higher level and increase the audience for print.Member companies, including Xerox, have joined ProLiteracyWorldwide. The association supports Skills USA Champion-ships and has set up a scholarship foundation for the familiesof member companies. There’s a Print Partner program andmember companies are encouraged to support literacy programsat their local levels through the NPES publication “LiteracyChanges Lives—New Readers Are Print Consumers.”

Internationally, they have reached out to China and in 1983were admitted as the only non-European member ofEUMAPRINT, the European Committee of Printing and PaperConverting Machinery Manufacturers. This is an association ofassociations with one member from each country. NPES iscurrently listed as the secretariat. As early as 1988 NPESreached out to the Soviet Union and opened an office inMoscow in 1990. A bit later the NPES U.S. – China trainingcenter opened in Shanghai. With Trade and DevelopmentAgency funding NPES launched the American TechnologyPrint Center in Moscow. And just this year, NPES became whatit believes to be the first U.S. trade association to open a fulltime office in India.

On the NPES web site (www.npes.org) a wide variety ofpublications are listed, some members-only, but many offered tonon-members at a premium. Topics include government affairs,education and foundation news, international trade, marketresearch, product safety and U.S. and international standards.

Print OutlookMost of the NPES conference activity is through GASC.

Two specific NPES events are the Annual Conference, sched-uled this year for October 8-10 in Florida, and Print Outlook2006, this December 1-2, in Arlington, VA. The latter looks like agood opportunity to get a sense of the print industry’s view ofthe future. Resources include a wide variety of economists,public policy wonks, academics and market experts from fieldssuch as advertising, direct mail and newspapers.

Membership is open to all companies that market directlyto industry users at rates scaled to the dollar volume of graphicarts industry sales. Members receive special rates to exhibit atPrint 05 and annual GraphExpos, plus priority space selection.A lot of members from the digital printing industry are takingadvantage of this at September’s Print 05, among them Xerox,HP, HP Indigo, Océ, Kodak Versamark, Konica-Minolta and theJetrion Division of Flint Ink.

SPECTRUMJuly 2005



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Regis DelmontagneAnother unique aspect to the NPES story is how its

growth has been guided in large part by one man, Regis J.Delmontagne, the CEO who joined the association in 1976when it was known as the National Printing EquipmentAssociation. He also heads GASC and the Graphic ArtsEducation and Research Foundation.

He’s been in the news lately having announced hisretirement from these positions effective at the end of this year.According to Kathy Marx, VP of key member company FlintInk, “Many events and programs that are now fixtures of theindustry were either created or achieved their greatest growthunder his guidance, including GASC, GAERF, and the NPES.[He played] a leadership role in the development of…standardsand a worldwide network of cooperative relationships.”

His replacement has yet to be named, but his retirementlooks like a watershed event for the association and its futuredirection.

Print 05When: September 9 – 15, 2005Where: McCormick Place Complex, ChicagoSponsor: GASC, owned jointly by NPES, NAPL, and PIA/

GATF

This is billed by GASC as the largest and most compre-hensive event for the printing/converting industries in theworld, with “more running machinery under one roof than anyevent anywhere.”

According to GASC, at this year’s expo there will be-almost 800 exhibitors-80,000 attendees from over 75 countries-90 seminar sessions-750,000 square feet of exhibit space bookedSo, this year, it really does look like the “world’s largest.”

DRUPA is quite a bit larger, the 2004 edition tallying 394,000attendees and 1,862 exhibitors. But there’s no DRUPA thisyear, and the European event is not “under one roof.”

Besides hardware exhibits featuring both analog anddigital technologies, there is a program of seminars coveringdigital markets and technologies, market outlook, and manage-ment. For the flavor, among the titles that look inviting to thiseditor—

-Printed Electronics and RFID Are Coming-VDP Mailing Issues-The Marriage of Offset and Digital Printing-On Demand Printing: Show Me the Money-Globalizing Your Business-Digital and Wide Format Printing Things Your Mother

Never Told You-Mud Wrestling for ManagersCo-located with Print 05 is the Seybold Chicago Digital

Publishing Workflow & Asset Management Conference. This

program offers a curriculum covering up-front metadata andJDF tools and project workflows; variable data publishingsystems; and digital asset management focusing on catalogs,direct marketing and packaging.

Registration or information on Print 05 is available via theNPES web site or by contacting Tina Scott, GASC Director ofSales at 703-264-7200. We understand there is still exhibit spaceavailable.

SNAPSHOT:National Association for Suppliers ofPrinting, Publishing and Converting Technologies

NPES bills itself as the only U.S. trade association forcompanies that manufacture or distribute systems,software and supplies for all processes used in printing,publishing and converting, from desktop design andimage generation to all classes of output options.Membership is open to manufacturers, systems integra-tors and importers who distribute to the ultimate cus-tomer.

Home base:1899 Preston White DriveReston, VA 20191-4367703-264-7200fax: 704-620-0994email: [email protected]: www.npes.org

Staff: Over 20 listed, includingRegis J. Delmontagne, PresidentSteve Prejsner, Manager of TechnologyCarol Lee Hawkins, Assistant Director for MembershipAdditional staff at the same location for GASC, includingTina Scott, Director of Sales

Membership: Currently over 400 companies. Open to anymanufacturers, systems integrators and importers whodistribute to the ultimate customer.

Programs and Services: Wide variety of programsincluding government affairs, international trade, marketresearch, standards, professional development andsafety. Large catalog of publications on the web site,available to non-members as well as members.Sponsor or co-sponsor of leading industry expos throughGASC, Graphic Arts Show Company, a program thatoperates out of the NPES offices. These include Print XXevery four years; GraphExpo/Converting Expo annually inother years; Gutenberg & Digital Outlook (in Los Angeles);and VuePoint, an annual vendor/user exchange. TheGASC VuePoint Conference comes up again in April,2006 with the rather vague but catchy theme “Truth fromthe Trenches.”

now that was a printing show. the industrial inkjet …...tough for companies like xaar. they would...

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