Speech by Holger Reichardt, Marketing and Sales Director of Heidelberger Druckmaschinen AG, at the CeBIT Press Conference Given on 22.03.2001 in Hanover.
03/22/2001
(The spoken word applies)
Ladies and Gentlemen,
Welcome to Heidelberg at CeBIT! That's a phrase you'll have heard before, but this year it has a new, different meaning. That's because our participation in the world's largest computer trade fair has changed radically. And there's good reason for this.
Heidelberg at CeBIT. Two or three years ago, we still looked like something of a niche player here in Hanover. Now our stand is five times as large.
Heidelberg at CeBIT. Decisive changes to our product portfolio have broadened our client base.
When we look back now, we can see that our entry to the digital environment came around ten years ago and, more specifically, with the Quickmaster DI at the drupa exhibition in 1995. These years of exploration in the graphic arts industry - during which none of our competitors followed us - have now paid off. We recently delivered the 1,500th Quickmaster DI, our digital offset press, to a customer in the UK. For Heidelberg this means that we have gained not only acceptance, but also experience in the digital environment of our industry.
At this point I would like to quote Charles Pesko, CEO of CAP Ventures, one of the leading market research companies and analysts in the sector. As he put it, "Heidelberg basically redefined the cost-effectiveness of offset printing in the nineties. DI technology provided general commercial printshops with a simple point of entry to the quick print market" with minimum turnaround times.
This positive entry to the sector not only encouraged us, it also led us to undertake other activities. For example, Heidelberg made its entry to the digital black/white market through its acquisition of the Office Imaging division of Kodak, and has greatly exceeded even its own expectations by selling 2000 Digimasters in just 20 months.
The next, logical step is to expand our activities towards digital color printing. In September of this year, the NexPress digital press, the result of our joint venture with Kodak, will be released for sale at the Print exhibition in Chicago.
Heidelberg at CeBIT. Not just a new meaning, but also a whole new look. With a stand area of around 900 square meters in Hall 1, we've changed the way we look. And we haven't just given ourselves a face lift, we've taken a new strategic direction! We'll be demonstrating an integrated print and media company focussing on data management and data handling.
Heidelberg at CeBIT. We're playing a decisive role in developing interfaces to the Internet for the graphic arts industry. And we're addressing the companies from the graphic arts industry in this sector in particular, since more and more printers are looking at these issues. But we're not just focussing on the printers. We're also talking to creative professionals and agencies, i.e. the people at the beginning of the process.
Heidelberg at CeBIT. We're in favor of open interfaces in the industry because we're convinced that isolated solutions lead to customer dependence, thereby restricting their room for maneuver.
Here, we're clearly demonstrating our commitment to the graphic arts industry. Well before CeBIT, we acquired a software package from CSP of Karlsruhe which now enables us to break up monopoly positions in the interests of our customers. With this tool for the Digimaster, we're in a position to process different industry standards, particularly those of computer centers. This also gives us the opportunity to compete for new investments in over 12,000 systems which have previously been closed to us because of proprietary data formats and which are installed all over the world by our rival Xerox.
We're already delighted with the print quality of the Digimaster and the unique features this offers. The new software tool allows us to install the Digimaster in a wide range of different sectors, including commerce, banking and insurance.
Now I'd like to make a few comments on the strategic importance of this new situation. It is important to better control the development of the open standards we have promoted. We need data formats that can be used as a basis for all applications and support open interfaces. We're already on the right lines with PDF (Portable Document Format) and JDF (Job Definition Format).
Heidelberg at CeBIT. We're no longer in a niche market. We offer completely digital solutions and are now considerably closer to our aim of achieving a 30 percent share of the digital printing market. Indeed, Ladies and Gentlemen, we have made more progress here than even our own forecasts predicted. With a market share of over 16 percent, we're already half way there (after just two years) and are set to win a greater share even more quickly.
Heidelberg at CeBIT: It's the software that makes the difference.
The processes of change in the graphic arts industry show just how important digitization already is and how important it will be in the future. If you look at the printing process as a whole - i.e. prepress, press and postpress - the actual printing stage only takes up around a third of the total time. As a result, the focus has been shifted to the prepress and postpress stages. The reason is that the number of orders is rising, but print runs are getting shorter. And this is a growing trend. So that's why we're committed to these areas; that's why we're committed to the integrated printing and media company; and that's why we're making a stronger appearance at the CeBIT exhibition.
Many printshops are awaiting the arrival of a universal provider of software in the graphic arts industry with a complete product portfolio, high quality levels and one eye firmly on the future. So, with our commitment to software, we're not only securing our core business and the future of the printing industry, we're also opening up new areas of growth for ourselves.
The graphic arts industry invests some 1.1 billion D-Mark each year in business workflow alone (costing, order management, PPS (production and planning systems)). Most of this investment - over three-quarters of the total - is made by small and medium-sized general commercial printshops. In Germany alone, medium-sized printing companies - those with between 10 and 100 employees - invest some 250 million D-Mark per year in PPS software (according to a study by Pragma IS GmbH in 1999).
Heidelberg at CeBIT: And what are we actually doing in concrete terms? We're getting printing and media companies in shape. We're actively supporting our customers when it comes to data management.
This means:
It is particularly important to make conscious, sensible use of the Internet for the graphic arts industry so as to improve defined flows. With short print runs and faster availability, there will be an increasing number of print jobs handled over the Internet. This is an important area for marketing. Business cards and headed paper can be selected by the customer, proof-read and paid for directly over the Internet. The advantage is added speed and lower cost.
Here are some statistics which highlight the size of the field opening up before us: The variable content of digital printing is currently at a level of around 6 percent. This means that the potential of a digital press has not been fully exploited by any means. We're doing some pioneering work here, and are supporting our customers as they tap this potential.
Heidelberg at CeBIT. I've already mentioned "brainware", our knowledge, which is something we believe in passing on. Let me remind you, Ladies and Gentlemen, of our two year advanced Print Manager MBA course. The new Print Manager certificate will be awarded by the Print Media Academy from the autumn of 2001. This meets the needs of our customers who do not have formal qualifications but have many years of professional experience.
Now let me come to some details about the products themselves.
Digimaster 9110
As I've already mentioned, Heidelberg has sold 2000 Digimasters in just 20 months, and the second 1000 of those were sold in only eight months. Here at the CeBIT exhibition, Heidelberg will be presenting additional equipment for the Digimaster. This includes the Imagedirect 665 high-performance scanner for the prepress stage and the Inserter and the Perfect Binder for the finishing stage. The ImageSmart 1.5 software for document management is now available too.
The status which digital finishing now enjoys at Heidelberg is demonstrated by the fact that we have our own site in Mühlhausen near Stuttgart. We've taken some major steps forward here, and have considerably improved the workflow. The performance of the Digimaster in the finishing stage is another factor which makes it stand out from the competition's products.
The Inserter adds colored documents to a black/white print job without slowing the workflow down. This means that print speeds of 110 pages per minute can still be achieved on different colored paper. The Perfect Binder facilitates the production of brochures and books up to 40 mm thick in different formats.
You can see for yourself how well the machine handles personalized print jobs when you pick up your personal Marco Polo guide at the end of this press conference. Alternatively, you can collect your copy from our stand. You are naturally all invited to visit Heidelberg in Hall 1. Our stand is so big this year that you won't need any maps to find us!
NexPress 2100
Heidelberg is now forging ahead in color digital printing, which brings me to my last point. NexPress, our joint venture with Eastman Kodak, is now well underway. At our CeBIT stand you can see the NexPress 2100 in action. The press will be released for sale at the Print 2001 exhibition in Chicago this September. Heidelberg will start by installing the press in various test markets in the USA and Europe. Once this phase is complete, world-wide sales will begin on a step by step basis. The fully digital color press is being produced in Germany at our Kiel site.
In view of the high demand for small, high-quality, personalized color print runs, i.e. around 200,000-500,000 copies per month, I am very optimistic that Heidelberg will manage to become market leader in digital color printing in the next five years. In any case, the NexPress 2100 is the optimum press with which to meet the demands of the market.
By way of conclusion, I would like to add that Heidelberg is setting new standards with this press, in that it was developed in just four years from first sketch to market launch. So you can see that we really are a standard bearer in terms of quality, service and availability.
Ladies and Gentlemen,
Welcome to Heidelberg at CeBIT! That's a phrase you'll have heard before, but this year it has a new, different meaning. That's because our participation in the world's largest computer trade fair has changed radically. And there's good reason for this.
Heidelberg at CeBIT. Two or three years ago, we still looked like something of a niche player here in Hanover. Now our stand is five times as large.
Heidelberg at CeBIT. Decisive changes to our product portfolio have broadened our client base.
When we look back now, we can see that our entry to the digital environment came around ten years ago and, more specifically, with the Quickmaster DI at the drupa exhibition in 1995. These years of exploration in the graphic arts industry - during which none of our competitors followed us - have now paid off. We recently delivered the 1,500th Quickmaster DI, our digital offset press, to a customer in the UK. For Heidelberg this means that we have gained not only acceptance, but also experience in the digital environment of our industry.
At this point I would like to quote Charles Pesko, CEO of CAP Ventures, one of the leading market research companies and analysts in the sector. As he put it, "Heidelberg basically redefined the cost-effectiveness of offset printing in the nineties. DI technology provided general commercial printshops with a simple point of entry to the quick print market" with minimum turnaround times.
This positive entry to the sector not only encouraged us, it also led us to undertake other activities. For example, Heidelberg made its entry to the digital black/white market through its acquisition of the Office Imaging division of Kodak, and has greatly exceeded even its own expectations by selling 2000 Digimasters in just 20 months.
The next, logical step is to expand our activities towards digital color printing. In September of this year, the NexPress digital press, the result of our joint venture with Kodak, will be released for sale at the Print exhibition in Chicago.
Heidelberg at CeBIT. Not just a new meaning, but also a whole new look. With a stand area of around 900 square meters in Hall 1, we've changed the way we look. And we haven't just given ourselves a face lift, we've taken a new strategic direction! We'll be demonstrating an integrated print and media company focussing on data management and data handling.
Heidelberg at CeBIT. We're playing a decisive role in developing interfaces to the Internet for the graphic arts industry. And we're addressing the companies from the graphic arts industry in this sector in particular, since more and more printers are looking at these issues. But we're not just focussing on the printers. We're also talking to creative professionals and agencies, i.e. the people at the beginning of the process.
Heidelberg at CeBIT. We're in favor of open interfaces in the industry because we're convinced that isolated solutions lead to customer dependence, thereby restricting their room for maneuver.
Here, we're clearly demonstrating our commitment to the graphic arts industry. Well before CeBIT, we acquired a software package from CSP of Karlsruhe which now enables us to break up monopoly positions in the interests of our customers. With this tool for the Digimaster, we're in a position to process different industry standards, particularly those of computer centers. This also gives us the opportunity to compete for new investments in over 12,000 systems which have previously been closed to us because of proprietary data formats and which are installed all over the world by our rival Xerox.
We're already delighted with the print quality of the Digimaster and the unique features this offers. The new software tool allows us to install the Digimaster in a wide range of different sectors, including commerce, banking and insurance.
Now I'd like to make a few comments on the strategic importance of this new situation. It is important to better control the development of the open standards we have promoted. We need data formats that can be used as a basis for all applications and support open interfaces. We're already on the right lines with PDF (Portable Document Format) and JDF (Job Definition Format).
Heidelberg at CeBIT. We're no longer in a niche market. We offer completely digital solutions and are now considerably closer to our aim of achieving a 30 percent share of the digital printing market. Indeed, Ladies and Gentlemen, we have made more progress here than even our own forecasts predicted. With a market share of over 16 percent, we're already half way there (after just two years) and are set to win a greater share even more quickly.
Heidelberg at CeBIT: It's the software that makes the difference.
The processes of change in the graphic arts industry show just how important digitization already is and how important it will be in the future. If you look at the printing process as a whole - i.e. prepress, press and postpress - the actual printing stage only takes up around a third of the total time. As a result, the focus has been shifted to the prepress and postpress stages. The reason is that the number of orders is rising, but print runs are getting shorter. And this is a growing trend. So that's why we're committed to these areas; that's why we're committed to the integrated printing and media company; and that's why we're making a stronger appearance at the CeBIT exhibition.
Many printshops are awaiting the arrival of a universal provider of software in the graphic arts industry with a complete product portfolio, high quality levels and one eye firmly on the future. So, with our commitment to software, we're not only securing our core business and the future of the printing industry, we're also opening up new areas of growth for ourselves.
The graphic arts industry invests some 1.1 billion D-Mark each year in business workflow alone (costing, order management, PPS (production and planning systems)). Most of this investment - over three-quarters of the total - is made by small and medium-sized general commercial printshops. In Germany alone, medium-sized printing companies - those with between 10 and 100 employees - invest some 250 million D-Mark per year in PPS software (according to a study by Pragma IS GmbH in 1999).
Heidelberg at CeBIT: And what are we actually doing in concrete terms? We're getting printing and media companies in shape. We're actively supporting our customers when it comes to data management.
This means:
- Being available 24 hours a day
- A comprehensive technology portfolio and e-portals
- Customer information tools (e.g. web sites and call centers)
- Continual support with consumables
- Advise with software solutions
- Remote maintenance for complex systems
It is particularly important to make conscious, sensible use of the Internet for the graphic arts industry so as to improve defined flows. With short print runs and faster availability, there will be an increasing number of print jobs handled over the Internet. This is an important area for marketing. Business cards and headed paper can be selected by the customer, proof-read and paid for directly over the Internet. The advantage is added speed and lower cost.
Here are some statistics which highlight the size of the field opening up before us: The variable content of digital printing is currently at a level of around 6 percent. This means that the potential of a digital press has not been fully exploited by any means. We're doing some pioneering work here, and are supporting our customers as they tap this potential.
Heidelberg at CeBIT. I've already mentioned "brainware", our knowledge, which is something we believe in passing on. Let me remind you, Ladies and Gentlemen, of our two year advanced Print Manager MBA course. The new Print Manager certificate will be awarded by the Print Media Academy from the autumn of 2001. This meets the needs of our customers who do not have formal qualifications but have many years of professional experience.
Now let me come to some details about the products themselves.
Digimaster 9110
As I've already mentioned, Heidelberg has sold 2000 Digimasters in just 20 months, and the second 1000 of those were sold in only eight months. Here at the CeBIT exhibition, Heidelberg will be presenting additional equipment for the Digimaster. This includes the Imagedirect 665 high-performance scanner for the prepress stage and the Inserter and the Perfect Binder for the finishing stage. The ImageSmart 1.5 software for document management is now available too.
The status which digital finishing now enjoys at Heidelberg is demonstrated by the fact that we have our own site in Mühlhausen near Stuttgart. We've taken some major steps forward here, and have considerably improved the workflow. The performance of the Digimaster in the finishing stage is another factor which makes it stand out from the competition's products.
The Inserter adds colored documents to a black/white print job without slowing the workflow down. This means that print speeds of 110 pages per minute can still be achieved on different colored paper. The Perfect Binder facilitates the production of brochures and books up to 40 mm thick in different formats.
You can see for yourself how well the machine handles personalized print jobs when you pick up your personal Marco Polo guide at the end of this press conference. Alternatively, you can collect your copy from our stand. You are naturally all invited to visit Heidelberg in Hall 1. Our stand is so big this year that you won't need any maps to find us!
NexPress 2100
Heidelberg is now forging ahead in color digital printing, which brings me to my last point. NexPress, our joint venture with Eastman Kodak, is now well underway. At our CeBIT stand you can see the NexPress 2100 in action. The press will be released for sale at the Print 2001 exhibition in Chicago this September. Heidelberg will start by installing the press in various test markets in the USA and Europe. Once this phase is complete, world-wide sales will begin on a step by step basis. The fully digital color press is being produced in Germany at our Kiel site.
In view of the high demand for small, high-quality, personalized color print runs, i.e. around 200,000-500,000 copies per month, I am very optimistic that Heidelberg will manage to become market leader in digital color printing in the next five years. In any case, the NexPress 2100 is the optimum press with which to meet the demands of the market.
By way of conclusion, I would like to add that Heidelberg is setting new standards with this press, in that it was developed in just four years from first sketch to market launch. So you can see that we really are a standard bearer in terms of quality, service and availability.
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