“Time to Close the Printer Patent File?”
The oft-repeated story
that the Commissioner who said back in 1899 that the US Patent Office should be closed since “everything that can be
invented has been invented” is apocryphal. But I’m starting to wonder if a variant of that sentiment might not
be true when it comes to technologies associated with hardcopy devices.
I know, I know. That’s
overly simplistic and cynical, even for me. But stay with me. Consider the main axes along which one might posit there is
either a need or an opportunity for technological improvement in the design of MFPs and printers. It all basically come down
to print speed, image quality, hardware cost, output cost, device management and serviceability, connectivity, application
integration, user interaction, and lifecycle environmental considerations.
a look at each of these, particularly from the perspective of what changes might spur organic growth in overall placements,
total pages, or relative market share among vendors. My main focus here is on the consumer, SOHO, office
and light production market segments; not commercial, production or industrial markets.
It’s best to start with the economic drivers: purchase price and running
cost. In theory, dramatic reductions in either might spur added sales or usage, respectively. But it’s far from clear
there’s much price elasticity left in these segments of the hardcopy business. Nor is it clear whether vendors or channel
partners would pass any savings on to customers, or pocket most of it.
So the industry
could spend a bunch of money on R&D, only to find that delivering modest reductions in hardware prices or page costs to
customers simply reduces the total size of the printing revenue pie. That would limit the upside to possible large shifts
in market share among vendors. But as HP has learned with its PageWide technology, that’s tough to accomplish.
It’s much the same thing with device management and serviceability. Yes, technical improvements in these areas
could help lower operating costs, but it’s anyone’s guess whether customers would ever see much financial benefit
or react to those changes. Vendors (e.g., HP) who talk about reducing service costs are generally advising dealers to pocket
most or even all of the savings
I also don’t really see significant pent-up demand
for devices that are faster or that produce better quality output. Both metrics have long been in the “good enough”
category. Further improvements are likely to prove costly to develop and implement, and they’re unlikely to spur new
sales or usage. So why bother? And it’s pretty much the same when it comes to reducing energy usage, carbon footprint,
That leaves device connectivity, integration with solutions, and the overall
user experience. This trio is a bit different. Yes, there’s some reason to believe significant improvements in any or
all of these areas could shift sales amongst current suppliers. At the same time, such improvements are unlikely to boost
total placements or pages.
Moreover, these types of secondary innovation are not being drive
from within the confines of the hardcopy industry. They’re really more a case of MFP makers picking and choosing from
developments in mobility, app creation, wireless connectivity, web standards, voice recognition, and ergonomics. And while
such improvements have helped advance the overall usability, flexibility, adaptability and personalization of MFPs, there’s
little evidence so far of any fundamental growth in overall sales, usage, industry economics, or vendors’ market shares.
Whether or not they say so publicly, incumbent hardcopy vendors have been behaving in accordance with the points
I’ve outlined above. They’ve been cutting R&D spending. Keep in mind as well, a lot of what gets classified
as R&D has more to do with manufacturing and manufacturability, rather than fundamental research.
A lot of the real research vendors are funding — for better or worse in many cases — is in completely
unrelated domains. Consider the story this month on two of Konica Minolta’s so-called BICs (“Business Innovations
Centers”), which have just announced an Ideation Platform in Europe and a Value-Based Care Platform in the US. It’s anyone’s guess if this R&D will pay off, but the investment clearly has little to do with
I’m also not waiting for some white knight to sweep into the hardcopy
industry and disrupt the incumbents. The last one who tried that was Memjet ... and we all know how that turned out. In fact,
look no further than the story this month on the development by researchers at Harvard of something called “acoustophoretic printing.” It’s a completely new printhead technology that uses sound waves to eject
droplets of liquid. But the focus is biotech and industrial applications, and it’s unclear if any meaningful benefit
might obtain when it comes to putting ink on paper.
None of what I’m arguing
from a logical or strategic perspective is contradicted by the fact that hundreds of print-related and MFP-related patents
continue to be filed each year. That just goes to show there’s modest correlation between patent filings, R&D and
“Will the Last MFP Tech Provider Please Turn Off the Light?”
We’re coming up on the two-year
anniversary of HP’s current attack — its seventh in two deal.
One of the biggest
and most underappreciated changes I’ve seen over the past quarter-century in the hardcopy market is easy for vendors
to overlook, and it’s transparent to buyers and users of MFPs and printers. I’m talking about the massive consolidation
and overall decline in number of embedded technology vendors who wholly or partly serve the needs of this industry.
mid-90s, when I started The MFP Report, there were a few dozen companies developing various
embedded technologies and components for companies who were creating the latest MFPs and printers. New companies entered the
business, even as others got acquired. These firms offered processors, specialty chips, printer languages, image enhancement
software, color management tools, fonts, whole embedded controllers, customized external RIPs, and more.
interesting and important now to look back and see how the hardcopy industry got from there to here in the span of a couple
decades. Some of the factors are obvious, but others are a bit more elusive, even in retrospect.
First, the demise of some
technology suppliers had little to do with the hardcopy market or how it evolved. Instead, the problems were internal ones.
It takes more than a few technical folks with an idea to succeed. Some companies were too small, underfunded or lacking in
business acumen. Others overpromised and undelivered.
Second, MFP vendors individually got much better during the first
decade of the march toward multifunctionality about developing and doing more on their own. These capabilities were mostly
gained from internal development, hiring and licensing, rather than acquisition (e.g., Kyocera buying Peerless). The net result was there was less need for so many outside suppliers.
Third, there was an increase
in collaboration among hardcopy vendors in selected technical domains, which obviated or at least curtailed the need for new
commercial alternatives from outside firms. This happened with Internet printing (Printer Working Group); mobile printing (Mopria); security standards (IEEE); and other related technical imaging standards (TWAIN,
Fourth, the number of individual purchasing and procurement decisions has decreased.
Some of this is from consolidation among printer/MFP vendors: fewer companies; fewer models. More importantly, vendors
now use fewer engines to satisfy a range of speeds and features, and engines are increasingly shared for color and B&W
devices. In addition, vendors have developed flexible and expansive controller architectures that work for much of a product
line, eliminating lots of previous one-off products and deals.
Fifth, the overall size of the office hardcopy market —
in terms of unit placements — is relatively small compared to many other categories of IT and electronics hardware.
This isn’t so much an issue for embedded software, but it’s a bigger challenge for companies wanting to develop
and sell custom or application-specific silicon. With chips, it’s all about economies of scale.
Sixth, there’s the
“elephant in the room.” Placements of print devices have been heading down for years. The consumer market —
which accounted for the bulk of unit sales — has undergone a quiet semi-collapse. Placements in the office market are
on a more gentle decline, but it’s anyone’s guess if the slope of that decline will remain gentle for very long.
New technology suppliers do not target shrinking markets, and incumbent suppliers diversify.
Seventh, these trends and developments
have inexorably led to consolidation among the panoply of hardcopy tech suppliers via mergers, acquisitions and plain old
exits. Ironically, M&A activity has been both a cause and an effect. Companies pair up in a declining market, and a smaller
market supports fewer suppliers.
So where does that leave the industry today? It’s sort of a mishmash. There are very
large companies like Intel who have succeeded selling standard chips for use in MFPs and printers. Meanwhile, big specialty
chip vendors, like Marvell and Synaptics, don’t appear to be developing any new hardcopy chips. And huge diversified
IT companies, such as Adobe and Qualcomm, get only the tiniest sliver of their total sales from embedded software designed
specifically for hardcopy devices. However, that revenue can still add up to some tens of millions of dollars.
standbys are gravitating away from their original OEM printing businesses. The Fiery unit generated barely one-fourth of EFI’s
nearly one billion dollars in sales last year. And embedded printer fonts were perhaps one-third of Monotype’s $236
million in revenue in 2017.
And there are still those relatively few and small embedded tech vendors still out there,
although their place in the office and consumer printing markets is a tiny one. We’re talking about companies like Global
Graphics and Artifex.
So all of this raises two fundamental questions. Are there still important technological challenges left
to be addressed in the hardcopy business? And if there are, will vendors be the only ones left to develop the requisite technology?
June 2018: “Has HP Already Won the War?”
We’re coming up on
the two-year anniversary of HP’s current attack — its seventh in two decades by my count — on the business
and product norms of the A3 office MFP market. In fact, it’s actually been only about a year since HP shipped most of
the models that comprise its new A3 lineup. So while HP still has a very long way to go when it comes to achieving substantial
market share and revenue in the A3 MFP business, HP has already largely succeeded in turning the tables on competitors when
it comes to redefining the conversation with channel partners and end-user customers alike. The MFP competition is now very
obviously and awkwardly in a reactive mode. And that’s a big deal.
HP has done two things well. It’s redefined
the industry conversation with dealers by focusing on how to lower service costs by reducing labor in favor of more highly
automated device monitoring. And as a corollary to that message, HP touts to end users that its “printer-centric”
MFPs have fewer parts and deliver better uptime than “copier-centric” models from competitors. More notably, HP
has shifted the conversation with end users to focus foremost on making sure hardcopy devices are secure network denizens.
be clear, HP isn’t the first vendor to emphasize either lower cost of service or better device security in the office
MFP market. In fact, both items are pretty much in the “mom and apple pie” category. But HP has been touting these
twin themes better, louder, more aggressively, and more consistently than anyone else for a couple years. That’s left
competitors sounding pouty as they protest, “We did it first!” or “Me too!”
Look no further than Ricoh’s
ConvergX dealer meeting and Lexmark’s dealer roadshow in June. Both vendors found themselves with talk tracks that were
implicitly created to counter the messages HP has been out there telling the world. And these vendors aren’t the only
ones. Xerox says a lot of the same things as regards security, and other vendors are responding, too.
A couple of things have
really helped HP. First, at a time when competitors have had to tap dance around explaining lower revenue or weaker profits
(or both), HP has recently had a string of strong quarters in which most metrics in its printing business have been heading
in the right direction. So HP’s reputation has been rising.
Second, HP has actually been spending money on advertising
for its A3 MFP business. We’re not talking big bucks like P&G or GM or AT&T, but the bar for ad spending in
the printing world currently rests on the floor. Whether it’s The Wolf video vignettes, its Step Aside Copier print
ads, or its various online ads, HP is investing in getting itself and its twin themes known in the market.
It also doesn’t
hurt that while HP has been doing all this, competitors have struggled to string together a few words about their new products
or express coherent thoughts about what their next act will be. And then add to this the embarrassing soap opera that’s
consumed everyone at Xerox, and the major missteps over at Ricoh. Is there any wonder dealers and customers alike are tuning
in to what HP has to say?
But this isn’t the end of the story with HP. It’s just as interesting what HP hasn’t
been saying this time around in the context of its latest MFP push. HP’s themes of better security and greater reliability
evoke a better way of doing what every other A3 vendor already does. And in stark contrast to its various prior pushes into
this market, HP this time isn’t trying to upend any tried-and-true norms.
Think about it. HP isn’t saying a word about
customers switching from A3 devices to A4 models. It isn’t saying copying is stupid (although copiers still are), or
that customers really only need printers and a few network scanners. There’s no change-the-world mantra about switching
from laser to inkjet technology. And there’s definitely been no overt message about reducing page costs in the office
Having said this, HP continues to struggle with the if, how and when of where its new line of A3 PageWide
inkjet MFPs fit in the overall marketplace, in a dealer’s portfolio, and in a customer’s office. On one hand,
HP has come up with this really obtuse positioning of its 40 to 60 ppm PageWide models being equivalent to other 25 to 45
ppm “price class” laser devices without ever explaining what that means. Customers are meant to understand they
can get 40-60 ppm inkjet units for prices that are comparable to 25-45 ppm color laser MFPs. But do they get it?
One has to take
HP’s price claims on faith since it doesn’t disclose hardware or page pricing. Some buyers may even think HP is
saying its 40-60 ppm PageWide MFPs are no better than 25-45 ppm color laser MFPs. And while HP says its A3 PageWide devices
deliver “low-cost color,” that’s purely a subjective measure. A customer can’t quantify the savings
without going to an HP dealer and obtaining a full-blown proposal.
As for HP’s overall lower-cost-of-service pitch, that’s
strictly for dealers, who are pretty much being advised to pocket the savings and share just a few crumbs with customers.
Yup, there’s raising the bar (which HP sure wants to do), and there’s rocking the boat (which HP is loathe to
May 2018: “Dominoes in Reverse”
wisdom” in the hardcopy market has long been that we’re heading towards a last round of bottom-up industry consolidation,
with the first vendors to go likely to be the smallest and weakest companies. But what if that’s only half-right? What
if we’ve gotten it backwards? Yes, consolidation is almost certainly coming, but maybe it’s going to be a top-down
I can now postulate multiple paths by which all of the world’s largest hardcopy vendors could in rapid succession
be on the buying or selling end of a massive consolidation tsunami that takes just a year or two to finish. All we need to
start is for that first big domino to fall. Hello, Xerox!
After all that’s happened at Xerox this year, the ultimate fate of
the company is anyone’s guess. What’s clear now is that outside agitators are firmly in charge at one of the largest
and certainly the most iconic printing company in the world. And that’s created an unexpected industry disequilibrium
that can’t last all that long. In fact, remaining a healthy independent company seems to be the least likely outcome
Messrs. Icahn and Deason, the new Xerox CEO, and the mostly new Xerox Board of Directors are on the same page when
it comes to the idea of shopping the company around. And it’s a pretty good bet HP’s door will be the first on
which the new Xerox folks come a-knocking. After all, it was HP that apparently approached Xerox late in January about a possible
last-minute deal. But at the time, the old team at Xerox was deeply enthralled with Fujifilm as its one true love.
now that HP is worth about $36 billion, has $4.3 billion in cash, and could raise or borrow many billions more. Meanwhile,
Xerox is worth closer to $7 billion, has about $1.5 billion in cash, and is probably hasn’t ruled out using Tinder to
look for its next transaction.
Then there’s the messy matter of Fuji Xerox. It’s too soon to tell, but at this
point one can’t rule out a formal break between Xerox and Fujifilm. And protracted litigation — either over the
failed transaction, the breakup fee or the Fuji Xerox “crown jewel” lockup — is somewhere between possible
and likely. But HP may be the only incumbent hardcopy vendor that could acquire Xerox without needing to buy Fuji Xerox as
Think about it. HP’s A4 business is far too important for Canon to throw it away in a snit. And between its
Samsung A3 laser devices, its own PageWide A3 inkjet models, and its production systems, HP could do without a lot of what
Fuji Xerox makes for Xerox today. HP could cherry-pick what it needs from Fuji Xerox or others to fill the gaps. Xerox would
also certainly bolster HP’s coverage and gravitas in A3 and graphics.
With Fuji Xerox then untethered from Xerox
and in need of a top-tier partner outside of Asia, Fujifilm could very well team up with Canon. In fact, I can make a pretty
good case why Canon would benefit mightily from buying either Fuji Xerox (with over $9 billion in sales) or perhaps even Fujifilm
(with about $22 billion in revenue). Canon and Fuji are successful in printing and increasingly well
diversified. Sure, Canon’s like your grandma when it comes to doing deals, but it has over $5 billion in cash and a
$45 billion market cap. And pairing Canon and Fuji would create a Japanese colossus
with sales nearing $60 billion.
Now let’s turn to Sharp, or should I say Foxconn? Sharp last fall brazenly
proclaimed it wants to buy its way from also-ran to the top-tier in printing, and Foxconn is certainly the kind of sugar daddy
that could pay the tab. So if HP doesn’t buy Xerox, then Sharp certainly could and might. Or Sharp instead might opt
to purchase Ricoh. Foxconn could easily afford such a deal — Ricoh is worth around $7 billion today — and a confused
and flabby Ricoh would definitely benefit from some Foxconn-style discipline and direction.
That leaves Konica Minolta in
search of a beau. Our hunch is this vendor would rather spend its slimmer budget at the high end of the market. EFI would
be easy pickings for less than $2 billion, and it would move Konica Minolta towards its goal of being a production and industrial
print powerhouse. Conversely, one could also make a case why either Konica Minolta and Brother or Konica Minolta and Epson
would be nice complementary pairings, and it’s possible that any of these three could be the buyer.
That takes care
of the biggest hardcopy vendors, but what about the smaller ones? That’s where my revised top-down consolidation scenario
has a major impact. Instead of companies like OKI, RISO, Toshiba TEC, Kyocera or even smaller niche print vendors being the
first to be bought up by bigger vendors, these companies could end up left on the sidelines. And in a hardcopy industry dominated
by leviathans, smaller vendors would face even steeper odds of survival.
Under this revised scenario (thank you Xerox)
the printing industry could experience a belated but quick game of catch-up, such that only a few large vendors — probably
just three or four — will be left dominating the declining office/consumer printing era and be poised for growth in
the rising business of industrial digital inkjet printing. And those smaller vendors would unfortunately find themselves on
the path toward extinction.
April 2018: “Be Careful
What You Wish For”
Some old-timey sayings fall by the wayside, but others never seem to lose
their luster. A case in point is that old standard, “Be careful what you wish for.” It’s occurred to me
recently that this axiom is particularly apropos to what we see going on today as MFP vendors gently nudge (or blatantly harangue)
their dealers to “get with the program” and make some life-altering changes in the fundamentals of their businesses.
logical for vendors to want dealers to broaden their focus beyond print. And there are few surprises on the list of the most
common areas of business that MFP vendors choose to promote, whether it’s IT and managed network services; ancillary
IT offerings like cloud storage and IP telephony; document management software; workflow and business process related consulting;
or deeply vertical solutions.
But what’s surprising is there’s been so little public attention to the no-win
situation MFP vendors face as they pursue this approach with dealers.
First, there’s the rather obvious and reasonable expectation
that dealers will heed their vendors’ warnings, as well as what they’re already seeing and hearing on their own.
As a result, many dealers will materially shift their efforts and investments to non-print areas in their businesses.
will feel little allegiance to the limited and often ineffectual offerings MFP vendors haphazardly try to promote as the best
way to achieve diversification. At the risk of mixing my metaphors, once the beyond-the-MFP diversification genie is out of
the bottle, there’s no good reason for dealers to limit their non-print business options to just those few specific
offerings sanctioned and sold by their MFP vendors.
Moreover, these twin effects feed off each other, thereby compounding the
overall risk to vendors. Essentially, the more that dealers invest in the non-MFP parts of their businesses, and the more
they obtain growth and rewards from diversification, the more they’ll accelerate their investment in opportunities further
afield from printing. Likewise, the more expert and confident dealers become in those other domains, the more likely they’ll
stray even further from what their suppliers are offering them beyond print.
It also doesn’t help that MFP vendors today
are pretty blatantly using their investments in IT services, ECM software, and business process automation services largely
as a “hook” to sell more MFPs and printers. Hardcopy vendors like to talk about their non-print offerings, but
they still measure success mostly in boxes and pages.
In fairness, it’s not as if MFP vendors have a lot of other choices.
On one hand, companies like Xerox and Lexmark spent lots of financial and organizational capital in their attempts at significant
but supposedly adjacent diversification. But they discovered they weren’t good at running non-print businesses, and
they still had little to offer dealers who were looking beyond print.
On the other hand, it’s not like MFP vendors can simply
stay the course and not make any real effort to encourage or help their dealers expand beyond traditional office and production
printing. Savvy dealers know they have no choice but to diversify, with or without the aid of their print suppliers. So it’s
a classics case of “Damned if you do and damned if you don’t.”
As difficult as this dynamic would be under the
best circumstances, two other changes in recent years are making the entire process of channel evolution even more daunting
for hardcopy vendors.
For one thing, the MFP channel pendulum is swinging back from direct to indirect sales. Some of this is
because of major initiatives at Ricoh, Xerox, HP and Lexmark to aggressively recruit or shift business to dealers. It also
partly reflects a growing desire by vendors to enable IT resellers to offer MPS to SMB customers. And the rest reflects the
simple fact that dealers have outperformed branches across the MFP industry.
On top of all this, there’s the massive
increase in dealer acquisitions that’s accelerating each month. We’re clearly moving toward a final wave of dealer
channel consolidation. A combination of acquisitions, customer absorption, and organic growth is putting unprecedented distance
between dealer haves and have-nots.
Among other things, this is quickly changing the relative balance of power between vendors
and dealers in the MFP industry. Today’s regional US dealers doing $100 million, $200 million,
or even $300 million and more in revenue are in the catbird’s seat. Vendors quiver and kowtow to what these big guys
want, say and do. Even the mere suggestion they might switch an MFP product line or expand in a new direction beyond traditional
MFPs and printing can be calamitous for their incumbent hardcopy suppliers.
So what are MFP vendors left to do?
I can really provide only two directives. Focus on truly diversifying acquisitions without regard to the fit with MFPs or
dealers (like Canon and Konica Minolta have done in medical), and be honest top to bottom, internally, and with channel partners
about what’s happening. That’s it. Wishing won’t help.
2018: “Cat Got Your Tongue?”
More and more these days, the single biggest part of my
job has shifted. It’s now less about interpreting and analyzing what vendors say they’re doing. Instead, I have
to interpret the vacuous statements they proffer, and increasingly I must overcome the total absence of any communication
whatsoever precisely when vendors should be saying something ... anything!
Yes, I’ve often railed against the
declining quality of communication from MFP vendors when it comes to mundane announcements of products, solutions and programs.
But the antics this month just about pushed me over the edge. Ricoh was the final straw, but its actions — or the complete lack thereof — sadly are not unique.
March, Ricoh in Japan ignominiously blamed its US operation
for just about everything bad that’s happened to it this entire fiscal year. That includes the biggest write-down in
its history, and the largest operating and net losses it’s ever recorded in more than eight decades of existence. It
was all because of IKON, and mindSHIFT, and the inability of the US to focus on
profitability, and the failure of the US organization to adapt to a changing market.
Meanwhile, there hasn’t been one word from Ricoh in the US. Not an “Oops” or a “Wait.” Not “Let us explain” or “Here’s
what we plan to do.” Nope. Bupkis!
Who does that? And why? In fairness to the
US folks at Ricoh, it could be the company’s investor relations team or legal counsel in Tokyo simply won’t allow the US to speak.
But that merely shifts where to lay the blame. And it begs this key question: Who’s been minding the store in
Japan? It certainly doesn’t justify the lack of a reasonable explanation
or any communication in the US. It doesn’t help that Ricoh has never been
at a loss for words when blathering on about its inscrutable “Workstyle Innovation Technology.” I’d gladly forego one posting on that topic for real answers to these very real issues.
As for other
culprits, look no further than Fujifilm. The company looking to take control of Xerox and its iconic brand and legacy has
basically ceded all of the public commentary to Xerox, even though its own credibility and capabilities are critical issues
in the debate over the proposed transaction. And even when Fujifilm does say something, it looks like Xerox wrote the script.
I can’t think of any other instance in which a public company doing the buying has left it to the public company being
bought to explain the deal to investors and the world. How is one to believe Fujifilm can handle the massive challenges inherent
in the deal if it won’t take the lead to justify this contentious transaction?
This deal has also put Xerox
in the unenviable position of having to speak repeatedly but belatedly about how it really has no other options for growth
— or perhaps even survival — and
how it’s utterly dependant on Fuji Xerox for nearly everything it sells. That’s an awkward about-face from the
company’s past bravado. Indeed, if Xerox had been more matter-of-fact and forthcoming about the fundamental nature of
its hardcopy business, it likely would have been better for the company in the long run.
Nor is this phenomenon
limited to major vendors. Look at the case of little old OKI. A year ago, the powers that be in Japan
fundamentally altered (i.e., curtailed) OKI’s printer/MFP business,
particularly in the office market. There’s nothing wrong with that, but one might have thought it was newsworthy ...
or at least deserving of comment or communication by OKI sales companies in the US
and elsewhere. But one would have been sadly disappointed. And don’t get me started about the utter confusion in Panasonic’s
The same problems can also afflict software companies in our industry. More than a year ago, Nuance had
to acknowledge that an appreciable dip in sales in its Imaging division was self-inflicted, the unforeseen impact of some
vague kind of sales reorganization. But Nuance’s Imaging sales had already been stagnant for a few years, and neither
that situation, the nature of the sales reorg, nor what the company was doing in response to the problem has ever been discussed,
certainly not in any proactive sense. In fact, Nuance has said barely a word to press or analysts about the nature or direction
of its imaging business in two years.
At a more general level, the hardcopy industry as a whole has only very recently (and
also very reluctantly) begun to acknowledge openly that the problems it faces from slowing demand
for products and pages is not just a “someday” matter. It’s already here. And it’s bigger and badder
than vendors are presently ready to let on. But so far not a single MFP vendor is discussing in a complete, clear, credible
or quantitative manner where it goes next. A few are doing an “OK” job, particularly HP and Canon, and to a lesser
degree Konica Minolta as well. But there’s a lot of room for — and
a desperate need for — better communication all around.
The bottom line is that I can’t think of a single instance anywhere at anytime in which a company that’s
in the midst of a turbulent environment, or one that’s weathering a big self-induced mess, has ever been well served
by zipping its corporate lip. So speak up!
2018: “No Collusion!”
The phrase has become part of the political vernacular, although it remains to be seen if anything
comes of it all. Meanwhile, in the hardcopy world, we’ve also got an oddly unanticipated outcome that begs the question
whether the players were secretly and illicitly in cahoots to assure the result they all wanted.
What I’m talking about is the complete failure of compact, economical A4 MFPs to supplant significant swaths
of the market for oversized, overpriced A3 MFPs in offices. It ain’t gonna happen. Not now. Not tomorrow. Not ever.
But did this outcome result from dreaded collusion? Nope, it’s not. That’s because
Collusion is just one of the “Three C’s” that can explain how an unexpectedly irrational outcome can occur. The other two are pure Coincidence
and simple Common Interest.
Collusion entails intentional, often secretive efforts among coconspirators to achieve a desired outcome. Coincidence
is the complete opposite. Stuff just happens randomly in parallel to produce a particular result, even if it’s unexpected,
unlikely or flawed. Common Interest is an in-between explanation. It’s when shared preferences operate independently
to nonetheless produce a commonly desired outcome.
With the failure of A4 devices to supplant A3
devices in the office MFP market, there’s no need for an investigative committee or a special counsel. Hardcopy vendors
didn’t get together in a smoke-filled room and agree on a common strategy. But this also wasn’t just some random
throw of the dice. Rather, it has resulted from the overwhelming shared financial interests of hardcopy vendors, as well as
It also certainly helps when there ceases to be any credible threat
from capable and disruptive outsiders intent on spoiling the fun. So “everyone” is getting what they wanted. Oh
yeah, except for those pesky customers. Those stupid rubes continue to pay through the nose for A3 hardware that delivers
far more than they need.
I’m actually hard-pressed to think of a similar circumstance
from another market in IT or elsewhere. Generally speaking, we’re accustomed to seeing “free” markets respond
to unmet demand or underserved customers with new players, new products, or new platforms. No small cars from GM and Ford?
We got Toyota and Honda. Music albums are too pricey? We got iTunes. Taxis are expensive and inconvenient?
We got Uber.
The fact that collusion wasn’t needed to forestall a meaningful A3-to-A4
transition doesn’t make the end result any less suboptimal for individual customers or for the economy as a whole. Just
think of all the more productive things customers could do with the money they’re wasting on A3 devices when comparably
equipped A4 models could easily suffice. How about investing in IT security? Or developing new products? Or perhaps giving
raises to employees? It’s what academics refer to as “economic inefficiency.”
While A3 copiers and MFPs have been the office norm for decades, that wasn’t always the case. Mimeo and Ditto
machines were mostly letter or legal size. And the seminal Xerox 914 launched in 1959 wasn’t an A3 machine. Frankly,
I’m at a loss as to why the industry long ago settled on the idea that A3 paper handling was a sine qua non of design up and down the product line.
Was it the idea a customer would
only buy one or a few of these things, so each one had to be able to handle everything? Was it a carryover from the world
of printing presses? Or was it a way copier vendors could emphasize how they were different from what came before? Regardless,
it was a really bad deal for customers. And it stuck. Even in the copier boom years, no one championed the idea that customers
could buy twice as many machines that cost half as much, although it’s something HP figured out when it launched the
first LaserJet printer in 1984.
Instead, the ongoing prevalence of A3 devices in the
office MFP market is a case study in how the power of sellers’ shared business models and marketing have won out over
common sense and customers’ own financial self-interest. From the advent of complex leasing arrangements in the 1960s,
to a singular focus on cost-per-page in the copier-versus-printer wars of the 1990s and early 2000s, to the click-focused
MPS transition over the past decade, the dominant business norms in office imaging have all served to mask the massive A3
hardware price premium.
Of course, it didn’t help that the top printer vendors were
so excessively naive, simplistic, ill-prepared and mistake-prone in their efforts to push A4 alternatives. After years of
overpromising, underdelivering, and ignoring channel and business model issues, HP, Lexmark, Samsung and OKI to varying degrees
gave up or proved ineffectual. And not a single A3 MFP vendor has ever more than halfheartedly put forth an occasional competent
A4 platform without almost immediately disowning it and assuring failure.
So unless some
nervy incumbent vendor goes for broke in the industry’s future waning days, we’re all gonna ride those A3 MFPs
into the sunset. But perhaps it’s time to tone down the smarmy “We’re all about the customer” rhetoric?
“Let the Games Begin!”
Something tells me this time things are different
... real different. I’m talking about the announcement that Fujifilm is sorta-kinda buying Xerox. I expect this deal
— even if it gets modified and perhaps even if it falls through — will prove to be the long-awaited catalyst that
triggers a final round of hardcopy industry consolidation.
Printing has had its share of
boy-who-cried-wolf moments when it comes to predicting the time is nigh for industry consolidation. Previous M&A announcements
never ended up triggering a rash of other deals. Not Konica buying Minolta back in 2003. Not Ricoh purchasing IKON in 2008.
Not Canon acquiring Océ in 2009. And not the twin 2016 announcements that a Chinese consortium would buy Lexmark and
that HP would acquire Samsung’s printing business.
So what’s different this
time? Five things. First there’s the size of the deal. About $8.6 billion will change hands (a big part of that several
times) in order to create the “New Fuji Xerox.” That’s small potatoes in the gluttonous world of corporate
M&A these days, but it’s much more money than in any previous print-related transaction.
Second, there’s the timing of the deal. In some ways, it’s counterintuitive. After a frighteningly miserable
2016, 2017 turned out to be an OK-ish year for the majority of the industry, with improvements in both sales and profits.
And it was an almost good year for a few vendors. But clearly printer companies now see this as just a temporary lull; it’s
the eye of a hurricane. Things will only get worse, so it’s time to hunker down. And vendors see safety in bigger numbers.
Third, there’s the context of the deal. For two decades, there’s been a subtle but significant and continual
shift in the locus of power in the office printing industry from channel players to vendors. But that’s changed abruptly
in the past year or two. While everyone was obsessed with which vendors might buy each other, the real M&A action (and
money) quietly shifted to the dealer side. We’re fast heading toward a much “lumpier” landscape with a lot
fewer, larger and more powerful dealers who together will determine which hardcopy companies win and lose. There won’t
be room for all of today’s suppliers.
Fourth, it’s Xerox. The brand and company
ain’t what they used to be, but Xerox is inextricably linked with office imaging. And when Xerox does something —
anything — it tends to get more attention from both inside and outside the industry. And even in the face of considerable
challenges, the New Fuji Xerox is likely to be a more formidable competitor than the old Xerox.
fifth. There’s a palpable sense of disequilibrium paired with a scent of blood in the water.
So who’s the next contestant on “Let’s Make a Deal?” I don’t know, but I do believe
the industry is coalescing into four distinct groups of companies. It’s the dynamics within and between these groups
that will determine the next dealmakers.
First, there are the Mega Vendors. That’s
HP, the New Fuji Xerox, Canon, Ricoh and Konica Minolta. Their sheer scale ($10-$20 billion in printing revenue), channel
footprint, and breadth of offerings mean they’re here for the duration. They’ll be able to expand into adjacent
“document” services. And more importantly, they’re moving into industrial inkjet printing. These companies
are probably too big and too print-centric to be acquired, although Ricoh might prove to be a wild card. More likely, these
vendors will themselves become serial acquirers, but their prey will be mostly smaller industrial print technology add-ons.
Then there are the Twin Tweens. That’s Epson and Brother. They’re moderate in size, and each performs
pretty well in its own domain. They’re trying to move upstream and into new channels to grab a bigger piece of the office
market. Each has a toehold in industrial printing. While both are somewhat diversified, printing is still their largest business.
And although M&A has not been part of their DNA, Epson and Brother may well confront a new eat-or-be-eaten dynamic.
Next is the Fish-or-Cut-Bait Crowd. That’s Kyocera, Toshiba TEC, Sharp, OKI and also Lexmark. Each is part
of a larger diversified company, although much less so in the case of Lexmark. Their hardcopy revenues range from under $1
billion to over $3 billion. Kyocera, Toshiba TEC and Sharp are decently stable with a good range of office devices, but they’re
not much on the desktop or in industrial printing. OKI is smaller and perpetually struggling. And Lexmark is in its own world
these days. Sharp (with its sugar daddy Foxconn) has spoken of making a big buy that will move it up the printing ranks, but
OKI is likely to wither away. So does that leave Toshiba TEC and Kyocera in a Mexican standoff?
there’s the Industrial Crew. You recognize names like EFI, RISO and Memjet, but there are lots of lesser-known players,
such as Xeikon and Screen, and a panoply of niche vendors in everything from textiles, to labels, to boxes, to signage. They’re
smaller companies who hope that industrial digital printing grows fast enough and soon enough — before their funds are
depleted or their investors grow too weary from the wait.
Yup, it’s gonna be the
race of a lifetime.
December 2017: “Our Own
At any given moment these days, my inbox seems to be flooded with
results from various surveys and polls conducted by or on behalf of MFP vendors and imaging solution providers. Along with
fact-free blog posts, vacuous tweets, and self-congratulatory Facebook missives, producing data on “what real people
really think” has apparently become obligatory in the cool new world of B2B marketing. But just because this trend is
hardly unique to the hardcopy industry, doesn’t mean we shouldn’t hold our own accountable for jumping on the
“fake news” train.
Here’s a sampling of items that have crossed my desk
in recent months. Canon in December proclaimed that a survey it sponsored found “60% of enterprises will implement digital
transformation strategies by 2020.” HP in September released results from a consumer photography survey that found “Germans
like to photograph a lot.” Ricoh, also in September, revealed results from a survey of European workers that found “81%
believe new technologies such as automation and AI are changing how we work.” In November, a Brother survey found two-thirds
of SMB companies feel they need to do a better job “increasing the efficiency of business processes,” and about
half said “cutting corners on office equipment sometimes backfires.” And YSoft in August determined that 52% of
younger US workers thought their companies had “too many paper-based processes.”
Can you say, “Duh ?” I admit I’m cherry-picking these findings, but such “insights”
are typical of what vendors rush to tell the world. Sadly, these divinations are right up there with “people like mom
and apple pie,” and “most folks prefer lower taxes.” Will these genius revelations never cease?
It’s not that these efforts are necessarily intended to mislead or disappoint, but far too many of these surveys
and polls end up doing one or both of those things because they suffer from two serious and intertwined flaws.
First and quite strangely, there’s often no compelling reason why a particular hardcopy vendor or solutions
company is bothering to sponsor or conduct such an information-gathering activity. All too often, the topic is some variation
of workplace/workforce/workstyle meets technology/solution/service to produce innovation/transformation/evolution. Yet the
questions asked are so vague — and the likely answers so obviously predictable — that one wonders why a company
would go to the trouble and expense.
Other times, it’s like the vendor is hoping
to position itself as a source of “basic research” regarding the IT landscape. Or it expects to discover some
psycho-sociological “truth” that academic researchers have missed. But that thin veneer of pseudo-selflessness
all too often yields “findings” that are of little or no value and have minimal applicability to the vendor’s
present customers or its future business. Moreover, I’ve yet to see a single one of these polls that explicitly —
or even implicitly — tries to answer that most fundamental of all questions: “So what?”
Second, even if the underlying goal or premise of the polling activity has merit, very often the methods employed
by the vendor or on its behalf are somewhere between questionable and laughable. It can be everything from a weak survey design,
to badly worded questions, to poor sampling methodology, to minuscule sample size. For example, one of the snippets I referenced
earlier came out of a mere 100 responses to an online SurveyMonkey questionnaire. Really?
these problems together, and you get our industry’s own version of what I call “fake news.” Vendors produce
surveys that by design are unlikely to reveal any meaningful findings or actionable information. And they compound this by
employing methods and tools that are incapable of assuring the findings are reliable or even real. It’s sort of a new
and unwelcome spin on an old saying. “Those who can, do; and those who can’t, sponsor surveys.”
That’s why in my role as an industry analyst and newsletter editor, I pay little attention to these increasingly
common PR pronouncements. And I have to wonder if anyone else pays them heed. Aside from the vendors who want to create a
vague aura that they’re on the leading edge of momentous change, one has to wonder why the companies bother with these
activities at all.
And then there’s the matter of opportunity cost, which to me is the most
frustrating aspect of these misbegotten polls and surveys. Instead of spending time and money trying to be seen as disinterested
market observers, vendors should be collecting and sharing data on what their customers, sales prospects and channel partners
are doing “down in the trenches,” so to speak.
I’m still waiting for the
first MFP vendor who produces a credible report on why customers chose their products over those of the competition. Or what
about a poll on how low color page costs will really need to go before companies are comfortable shifting en masse to color
devices and output? Or how about a survey on the kind of suppliers companies feel comfortable turning to for ECM, or managed
IT services, or consulting services? These are the kind of results I’m interested in seeing. How about you?
November 2017: “The Hospice Option”
As I’ve often remarked to subscribers of The MFP Report, the editorial page is typically the last, most challenging
and most invigorating part of each issue I write. After more than two decades and over 260 issues, I wonder occasionally if
I’ve exhausted the list of available topics on which to pontificate. To help allay that anxiety, I keep a folder of
possible subjects, tidbits and reminders to inspire me. It’s a simple system that works.
case in point is an article I put aside during the summer. The title was “Why It Might be ‘Dangerous” for
IBM to Turn Itself Around.” It was written by Daniel Howely, and appeared on the Yahoo Finance news page on July 22.
The article was inspired by the fact that IBM four days earlier had announced its 21st consecutive quarterly revenue decline.
But what particularly intrigued me were some quotes from Aswath Damodaran, a professor who teaches corporate finance and valuation
at the Stern School of Business at NYU.
Damodaran was quoted stating the following:
“Not all companies last forever. There is a life cycle to a company. They are born, grow and then decline.” He
added that “Trying to force growth in older companies like IBM could actually have a negative impact on them, because
they might end up simply throwing good money away.” Wow! In what other industry have we seen companies experience years
of revenue declines and billions wasted on misguided strategies to reinvigorate growth? As Damodaran concluded, “When
you’re 75, you’d love to be 35 again, but you’re not going to.”
was lacking in the article was advice on what geriatric companies are actually supposed to do when additional investments
made in the hope of rejuvenation simply don’t or won’t pay off. At the risk of sounding tasteless, impractical
or even insensitive, I’d like to suggest an option. I call it Corporate Hospice Care. Absent a competent strategy to
regain growth, aging companies in declining industries at some point will need to come to terms with death. So why not make
it easy, dignified, and as painless as possible?
I speak from some experience. Sort of. In the
past four years, I’ve lost two parents and a dear friend to cancer. In each case, we relied on some form of hospice
care. Although the specifics can vary, hospice care is generally an approach that focuses on palliation of the chronically
ill, terminally ill, or seriously ill patient's pain and symptoms, while also attending to the patient’s emotional
needs. In an era in which the law increasingly ascribes personal rights to corporate entities, why not hospice care for corporations?
Fundamental to the concept of hospice care is the idea that death is just a part of life. At some point, the focus
must shift from remedies and cures, to acceptance and a managed demise. In that context, hospice care for corporate patients
would seem to be a natural and even logical next step consistent with Professor Damodaran’s view that ”Not all
companies last forever.”
It goes without saying the hardcopy companies most vulnerable to
terminal print-itis are those who have the greatest dependence on hardcopy revenue. There’s still a pretty long-list
of vendors who obtain roughly 50% or more of their sales from printing: Fujifilm, Epson, Brother, Canon, Ricoh, Konica
Minolta, RISO, Xerox and Lexmark. And the degree of print dependency becomes more disconcerting as one goes down this list.
Perhaps ironically, while HP is certainly a top-tier hardcopy company, printing generated just 36% of its total revenue in
This is not to argue that all of these companies are doomed, or that each faces
an equal chance of mortality. But it’s certainly true that past efforts by Xerox and Lexmark to diversify away from
printing have not exactly panned out. Indeed, Xerox, Ricoh, Lexmark and RISO presently have shared no significant or credible
path to lessen their hardcopy dependence, except for some efforts to grow industrial printing. Conversely, expansion in the
medical/biological field by Canon, Konica Minolta and Fujifilm seems so far to be more promising.
what might corporate hospice care actually look like? Foremost, it would require acceptance of a continued downward trend
in revenue, quite possibly with an accelerating level of decline after some negative inflection point. It would also necessitate
a laser-like focus on maximizing operating profit. Fortunately, that’s easier in printing than in many other industries.
To accomplish this, one would likely see further slashing of R&D expenditures, even lower capital investment, reduced
headcount, greater outsourcing of manufacturing, and further de facto “outsourcing” of sales to channels. There’s
also something to be said for treating remaining employees with the utmost compassion.
one might argue Xerox, Ricoh and Lexmark are to varying degrees already operating in accordance with such a prescription.
But of course, this kind of trajectory is easier to pursue for private firms than for public companies. Because of that, I
would expect to see one or some hardcopy companies undergo private equity buyouts. Indeed, one might argue it’s more
likely for some print-centric companies to go private than to be acquired by competitors in that oft-predicted final wave
October 2017: “Go Fourth
and prosper? … I Hope Not”
As the old saying goes, “Once is an incident,
twice is a coincidence, and three times is a pattern.” So what do you call it when the same stupid scenario plays out
in the hardcopy industry for the fourth time in 15 years? Well, I call it a fiasco.
talking here about the massive financial fraud that’s engulfed Ricoh India and Fuji Xerox New
Zealand (and Australia) in recent months. But lest we forget, these twin disasters
were preceded by the original “Blame It on Brazil” debacle Xerox revealed in 2002 — which actually entailed
problems across Europe, Latin America and Canada — and the “Pain in Spain” mess OKI confessed to in 2012.
These four events clearly evidence a pattern of inattention at best and malfeasance at worst when it comes to basic financial
controls and fundamental management oversight among multiple vendors in governing various overseas sales subsidiaries.
Just to recap, although none of these disasters alone was life-threatening to the company involved, each was a major
mishap with serious repercussions for the respective vendor. And the implications extended beyond just one territory.
Even after fifteen years, the Xerox situation remains the mother of all messes. Issues in Brazil
and other overseas sales subsidiaries were at the heart of Xerox being forced in 2002 to restate its revenue for 1997 through
2001 downward by $1.9 billion, with a corresponding $368 million reduction in pretax earnings. Meanwhile, Xerox was dealing
with its “unsustainable business model” and was nearly on the brink of collapse.
Five years later in 2012 — and at the other end of the printer industry — OKI had to restate its results
for the prior six years because of irregularities in Spain. OKI took a hit of nearly $400 million on
net income and $100 million on sales.
In contrast, the messes at Ricoh India and Fuji Xerox New Zealand remain “works in progress.” Both
vendors would like to think all the bad news is out and accounted for, but no one really knows. What we do know is that between
last fall and next spring, Ricoh could end up taking a hit well in excess of a half-billion dollars to address years of fraud
in India. And Fuji Xerox has already taken a $340 million charge to net income
for six years of fraud in Oceania.
a combined total of more than $1.6 billion in reduced earnings just for these four incidents! And that doesn’t include
the consequences of reductions in stock prices, market cap, headcount and sales. What’s so striking is the common themes
I see across these four situations. Despite different eras, vendors and locales, so much of what happened, why it happened,
and how it was handled is strikingly similar.
Consider that in each case, the underlying malfeasance
was widespread, long-standing, and significant in scope. The overstatements to sales and income were so egregious as to very
clearly be “too good to be true.” Yet even when employees raised questions — as they did invariably in each
instance — their concerns were easily and quickly ignored. In effect, the key constituencies in both the local sales
companies and the corporate headquarters were so vested in assuring that the subterfuge continued, it was nearly impossible
to recognize the underlying fraud and address it.
Of course, one could argue that for each of
these vendors, the particular problems were geographically isolated and have not been repeated ... at least as far as one
knows. Indeed, it’s tempting to believe that hardcopy vendors both individually and collectively have learned the requisite
lessons from these past blunders. But one wonders why the first one or two instances would not already have been sufficiently
didactic. So I’m left to ponder. Who’s next? Where? And when?
Putting that worry
aside for now, there remain far more pressing questions that the hardcopy industry as a whole must consider. From my perspective,
the egregious lapses that transpired at Xerox, then at OKI, next at Ricoh, and then at Fuji Xerox reveal three disturbing
First, we’ve witnessed excessive readiness by management to accept unreasonably
positive outcomes as evidence of superior operational performance. Second, we’ve seen a willingness by executives to
brush aside uncomfortable information when it’s conveyed by outsiders, from those in the field, or from those who are
lower down in the organization. And third, we’ve observed how an underlying current of desperation during difficult
times can cause leaders in effect to say “Don’t look a gift horse in the mouth.”
We’ve also seen the same tendencies play out in situations that didn’t involve fraud but still proved
to be very detrimental. Look no further than Xerox’s unwillingness to confront the big problems in its former BPO business;
Lexmark’s failure to realize it was overspending to buy underwhelming software firms; or the refusal by Dell or Panasonic
or other vendors to admit their total irrelevance to the hardcopy industry.
At a time
when the industry and every hardcopy vendor must truly question old assumptions, diversify in uncomfortable new ways, and
pursue change sooner rather than later, it’s time now to consider the lessons from this sordid history.
September 2017: “Buy, Buy EFI”
Let’s face it. We’re well into the “everybody needs somebody” stage in the printing industry.
Acquisitions and diversification are the name of the game. But consolidation is proceeding at a glacial pace. Vendors are
more interested in businesses that are further afield. That can be good news (Canon and medical) or bad news (Xerox and BPO).
But there’s a much closer-in company that hardcopy vendors are ignoring at their own peril as possible prey. And that
company is EFI.
I’m not putting on my financial advisor hat. I don’t even own one.
But what I am saying is that from a strategic, tactical and competitive point of view, EFI could be a very logical acquisition
for almost any print vendor around today.
Folks who think of EFI mostly as that pricey
Fiery supplier for color office and production MFPs might be surprised to know those RIPs are rapidly declining in importance
at EFI. Fiery generated just 27% of EFI’s revenue in the most recent quarter, and Fiery revenue was flat in the first
half of the year versus three years ago. It’s just that the rest of EFI has been growing so much faster, both organically
and from acquisitions.
As a result, 2017 is expected to be the year EFI finally surpasses
a billion dollars in revenue. The company now gets twice as much revenue from its diversified industrial inkjet hardware and
supplies business as compared to the Fiery business. The rest of EFI’s sales are from its vast collection of software
used by all sorts of print providers to run their day-to-day operations.
All three of EFI’s
businesses present interesting opportunities for hardcopy companies in the context of a would-be acquisition. Let’s
start with the Fiery business, since it’s the most familiar to MFP vendors. EFI is on track to do around $250 million
in Fiery sales this year. And with a 70% gross margin, the Fiery unit performs more like a software operation than a hardware
business. Not only are Fiery RIPs used by nearly every maker of A3 color MFPs, EFI has gradually expanded its Fiery sales
into the world of digital presses and inkjet devices, not to mention supporting its own diverse industrial printer lineup.
The benefits of a printer vendor taking control of the Fiery business would be twofold. It would cut out the middleman
and some markup, and it would put all competitors at a worrisome disadvantage. And those other vendors couldn’t simply
stop buying Fiery controllers. They have no ready alternatives in the short term, and perhaps not even in the longer run.
Over time, a new owner could even create differentiation between the features in its own Fiery RIPs and those available to
competitors. And a new owner would be ideally positioned to leverage all that Fiery technology for its own industrial printers.
Then there’s EFI vast and growing array of industrial inkjet and LED printers and supplies. It’s everything
from signage and labels, to textiles and tiles. And it should produce $600 million in sales this year. That’s a lot
more than small industrial digital print competitors like Xeikon, and it’s arguably more than any of the big diversified
hardcopy companies are doing in the industrial market. Adding EFI’s industrial printing revenue would catapult Xerox,
Canon, HP or Konica Minolta to the very top of the industrial print world.
And then there’s
EFI’s easier-to-overlook “Productivity Software” business, which will do around $150 million in sales this
year. While this is EFI’s smallest business by far, it does have the highest margins. More importantly, these tools
put EFI in the enviable position of enabling industrial print providers to go digital, and wedding them to an EFI print ecosystem.
There are also very important but less quantifiable pluses for EFI as a potential acquisition. Both the company and
its management are exceedingly well-known to hardcopy vendors. Moreover, EFI has demonstrated an effective and reassuringly
conservative ability to make one acquisition after another ... and leverage them. The deals have mostly been small, and all
of them were paid in cash. Yet EFI still had $431 million in cash on June 30. There have been no big failures on the list,
and all these deals have helped EFI grow 2.5x in size since the Great Recession. Talk about reducing the risk in a deal.
Still, EFI remains barely a mid-cap company in a stock market in which investors like large-cap firms. Moreover,
one has to ask how truly disruptive or dominant a company with $1 billion in sales across three businesses can be in a truly
massive industrial printing market transition.
Of course, timing can be everything, especially
since EFI has an awkward history of pretty big swings in its stock price and valuation. For the past five years, the stock
has mostly bounced between $40 and $50. But this year, the stock has careened from a high of $51, to a low of $26. A day after
EFI scared the bejeezus out of investors on August 3, when it warned of revenue recognition issues that turned out to be nothing,
the stock plummeted 45%. That gave EFI a market cap of just $1.2 billion. By the end of September, the share price was back
up, pushing EFI’s valuation to $2 billion. But that’s still below a recent peak of $2.3 billion back in April.
So who’s gonna open up the checkbook? You?