KEEPING YOUR PRINT BUSINESS THRIVING IN

TODAY’S MARKET

White Paper January 2019

How to overcome complexity and be ready for future growth

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The modern production digital print market brought a world of opportunities for micro-runs and variable data printing into the hands of Print Service Providers (PSPs). With print available in any quantity to anyone, print is being democratized, resulting in ever-greater numbers of increasingly smaller jobs. The old print model of high-volume static print is being replaced with a myriad of micro-runs and micro-jobs.

Automation that allows PSP owners to master the ensuing complexity and respond faster than ever before is enabling them to refocus on market development and on delivering value.

Production Digital Print Today: Focus & Value

No one’s job is too small for digital print and nearly everyone in business can gain from the new targeted and

efficient communication that modern digital print can be

The modern (digital) print world is busy exchanging large volumes of static print content for micro-runs below 1,000 of

variable content

PSPs are free as never before in an automating digital print

world to re-focus on market development and customers

DEMOCRATIZATION OF PRINT

FROM VOLUME TO MICRO-RUNS

RE-FOCUS FROM MANUFACTURING

TO MARKETING

3KEEPING YOUR PRINT BUSINESS THRIVING IN TODAY’S MARKET

INDUSTRY 4.0

Production Digital Print Meets Industry 4.0

The digital print market is becoming an exemplar of what Industry 4.0 is all about – showcasing what can be achieved when systems and manufacturing processes are connected and integrated to work in sync, through the cloud. Taking place across platforms and locations, this new level of connectivity for print is empowering brands to focus on their new reality of fragmented demographics and diversity in today’s markets.

After twenty-plus years of digital printing, the print market has reached a point where we have:

• On the one hand, a diverse, fragmented, and now large market of micro-runs (with a maximum of 5,000 sheets, but mostly under 1,000 sheets), based on creative and value-rich development of what is often an original and new set of print users

• On the other hand, a new technology dynamic pushing into higher production volumes (5,000-10,000-50,000 sheets) looking to deploy much more personalization and variable data within these runs – in effect, micro-runs within long runs

Essentially made up of many small print jobs, in varying production modes, data formats, digital capture and output processes, this is an inherently complex market that will need to move in the direction of cloud-based automation and a higher level of IT integration with print.

With faster presses coming to market we also see longer jobs involving more and more complex variable data. But this complexity has the potential to threaten future growth just when the transformation from analog to digital is gathering pace.

PRINT 4.0

Convergence IT/OT

Autonomous machines

Advanced robotics

Big Data/Analytics

Internet of Things

Digital ubiquity/Cloud

Smart factory

Machine learning & AI

Cyber-physical

CLOUD-BASED SERVICES & AUTOM

ATION

BENEFITS

Web-To-Print

Dynamic Data Access

File Management

Pre-Flight

Live Press Monitoring

Color Management

Predictive Maintenance

Press Allocation

Fulfillment Logistics

Job Ordering

Apps, API Marketplace

Reduced overheads

High-volume personalization

Fast response

Micro-runs

Automated resource sharing

Efficient planning

Transparency/real time adjustment

Smart data analytics

Insight-based decisions

Instant mobile access from anywhere

Minimized unplanned downtime

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

25% Digital Share OF PSP REVENUES

35% Digital Share OF PSP REVENUES

6% Digital Pages SHARE OF OFFSET

14% Digital Pages SHARE OF OFFSET

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Production Digital Print by Numbers

PROLIFERATING CREATIVITY AND PRINT COMMUNICATIONS EFFICIENCYAs offset print markets have declined in recent years, digital print’s comparable share of the commercial offset print market has risen to 6% of output and an estimated 25% of printers’ billing value. By 2020, this is expected to rise to 14% and 35% respectively. This makes digital print a significant source of profit for printers. But, to keep pace, the new digital business involves high job counts, fast turnarounds, and increasingly, the deployment of multiple technologies in varied locations.

Source: I T StrategiesAcross the commercial and book printing markets, digital is gaining ground as a substantial part of the mix, and an even more significant source of profits for PSPs.

COMMERCIAL PRINT MARKET & BOOKS A4 Equiv. Simplex Pages Printed Units by Technology Over Time

Digital Printing

Offset Books Offset Marketing Collateral Offset Direct Mail Offset Transactional

5KEEPING YOUR PRINT BUSINESS THRIVING IN TODAY’S MARKET

The Changing Face of Production Digital Print

MICRO-RUNS AND CUSTOMIZATIONThe fact that the new digital print markets are complex is great news. At the base of the complexity is high value through customization and diversity. This allows printers, like never before, to match the differentiated needs of smaller and smaller groups, whether printed in shorter or longer runs. The ‘intimate engagement’ so long dreamed of by marketers, is now being achieved through digital print.

To this end, HP Indigo print has become the globally dominant accepted digital performance peer of offset and flexo print. We are going to examine its market more closely as a leading indicator of trends in production digital print.

HP Indigo’s market has generated a market of micro-runs, and now, with many technological breakthroughs, is increasingly driving a higher volume production market. The following graphic shows what the micro-runs market of millions of jobs looked like in 2017 for HP Indigo in terms of pages, job count, and jobs/day by run length.

PROLIFERATION OF DIGITAL PRINT MICRO-RUNS – HP INDIGO, 2017

The experience of HP Indigo users in 2017 provides a clear indication of the trends: small jobs account for a significant portion of business and are major drivers of growth.

1000

500

250

100

3,313,200,000

8,283,000,000

11,596,200,000

9,939,600,000

A4 Pages/Yr at Select Average Run Lengths

33B A44/0 pages

Run length

# of pages per year

“WE GREW OUR BUSINESS FROM 30,000 TO 230,000 JOBS A YEAR” Ulrich Schätzl, Managing Director, Schätzl

“WE‘VE GOT LOTS OF NEW CLIENTS WHO ARE KEEN TO COME ON BOARD AND IT’S ENABLED US TO GROW 22 PER CENT YEAR ON YEAR FOR THE LAST FOUR YEARS” Rob Plampton and Andy Fothergill, Managing Directors, IPS Ultraprint

“WE EXPECT ORDERS OF 100 OR LESS TO GROW FROM 30% OF OUR DIGITAL TO BECOME A LARGE PART OF THE BUSINESS” Ken Freek, Senior Project Manager, Webcom

1000

500

250

100

3,313,200

16,566,000

46,384,800

99,396,000

Jobs/Yr at Select Average Run LengthsRun length

# of jobs per year

1000

500

250100

3

13

35

75*

Jobs # /Press/Day at select Average Run Lengths

# of jobs per press per day

Run length

* Some PSPs print 1000s of jobs/press/day

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Much of what HP Indigo has enabled has been new, and welcomed as such by PSPs, who themselves want to generate an additional, often separate source of profit untainted by the commoditization and purely economic drivers of the offset market. It has worked out well so far.

Now, as HP Indigo’s newer B2+ format and faster continuous feed production systems have extended the productivity of the technology, the next market of mid to longer runs is coming into view, increasingly leveraging variability of content within runs. This has brought a different kind of complexity to digital print around IT and data management issues.

The following is a schematic representation of what print was, and what it is becoming in its production digital incarnation:

Infrastructure for Production Digital Print

It’s important to note, while digital enables more efficient print communications, it also facilitates many more small jobs. The price is much higher job-flow and applications complexity, which in turn requires more extensive automation.

THE NEW PRINT MARKET Complex Creative Micro-runs

JOBS PLANT PRINT USERS

PAST

Relatively Simple - Human-Manageable

Massively Complex and Dynamic

Fewer Jobs/Day

Single Location Offset Press

Local User

Micro-runs 1-1000-5000Maybe 1000’s of Jobs Per Day

10K 20K 50K

Production Runs 10K/20K/50K

PRES

ENT

Print Output to Multiple Users Globally

Digital Non-Print Output to Multiple Sites

7KEEPING YOUR PRINT BUSINESS THRIVING IN TODAY’S MARKET

Value Propositions of Production Digital Print

Now that we understand the new print market and how it is composed, let’s dig deeper into what makes production digital print offerings attractive. That is: what are the perceived value propositions in the market? The list on the left reflects the unique scalability and custom capabilities of digital print in creative hands. The list on the right represents a summary of some of the most important things digital print customers have said, taken from user research.

We should mention one more market dynamic. Millennials have many social agendas that reflect their own diversity, and they want to communicate them to a wider audience and hear about them like never before. Digital print is an optimal vehicle for enabling this “information spread” within a commercial environment, and thus is itself a driver of digital print.

Source: IT Strategies

Favors small brands, corresponding to modern consumer demographics Small brands beat large brands more and more in creating loyalty

Promotes intimate engagement with the print addressee The sense of being personally addressed

Favors sustainability in print Allows efficient print physically closest to demand, minimizing shipment costs

Favors new & small businesses New and small businesses with low-scale demand have a disproportionate influence in business relative to their size as companies

Lessens the impact of PSP consolidation Allows economic integration of increased site counts under fewer owners

Favors immediacy The digital ethic is print now for use tomorrow

Favors relevance The digital ethic is also print while it is on specific people’s minds, and only for them

Enables manageable complexityThe fear of too many systems in too many places with too many disparate parameters goes away allowing technology and sector access at will

Enables technology & sectoral convergence

Standardization and exact predictive measurement of performance and costs allow investment for multiple sectors

Favors embellishment processes or profitable ‘superconversion’

Small-scale-capable technology integrated in terms of process, economically and technically allows easy add-on processing at any scale

THE VALUE OF DIGITAL PRINT IN THE WORDS OF USERS

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Migrating into the Digital Market

HP PrintOS, the cloud-based print production operating system introduced by HP in 2016, addresses these needs and aspirations, helping PSPs acclimate themselves to the new digital reality.

The production digital print market is reaching a growth inflection point driven by its accelerated new capabilities. The opportunity for existing and new entrepreneurs to create themselves in the mold of the new technologies and markets is expanding. It’s a process we have seen evolve out of the tension between natural conservatism, aspirations for a new kind of identity, and the need to have a concrete new skillset once the decision is made. We’ve learned a lot talking with digital print adopters in recent years. Below, we’ve summarized their predominant characteristics and motives. These are the people/companies and the needs they want to see addressed by digital print solutions.

DIGITAL PSPS: THE PATH FORWARD

RELUCTANCE ASPIRATIONS THE NEW PSPS

• Not sure they can make money from digital

• Labor – Not enough nor the right kind of staff

• Fear of transition - Digital can’t match offset parameters

• Fear of change / fear of a wrong investment

• Aspire to leave a legacy by creating a sustainable, future-proof business

• FOBO – The fear of being obsolete

• Relish in creating new innovative solutions that solve complex customer problems

• Value close partnerships – Family, employees, clients, technology vendors

• Will take calculated risks to stay ahead

• Are passionate and proud of what they do

• Their biggest concern is staying ahead of the crowd and offering their unique service to their customers

• Exceed client expectations: Deliver on their promises no matter what. Do their utmost to get jobs in and out in the shortest time frame

• Obsessive value orientation

• Understand and consciously leverage the communications efficiency of digital print: speed, content, integrated data flow and analytics

• Embrace complexity and its accompanying enablers’ automation and systems integration

• Understand and participate in the underlying communications dynamic, of which print is the jewel in the crown

• Knows their business skill is a market orientation based on IT-driven automated business and process analysis

9KEEPING YOUR PRINT BUSINESS THRIVING IN TODAY’S MARKET

What Does HP PrintOS Do?

As the complexity of the business and manufacturing of digital print rises, a solution for both handling the complexity and generating more value is required. HP PrintOS, from HP’s Graphic Solutions Business, was developed to fill this gap. As a print production operating system with web and mobile apps, PrintOS is positioned to help PSPs streamline and automate production, provide an infrastructure to induce creativity, and open new ways for them to collaborate with others and connect with customers.

An open, cloud-based automation and community exchange software, PrintOS is a strategic initiative to simplify job capture, press management and manufacturing flow. It also answers PSPs’ need for digested real-time information and gives them the tools to make fast, informed decisions, for improved productivity and the freedom to better focus on business generation.

Until recently, running a digital press efficiently required a server-based digital workflow. To this end, products managing order intake, press performance, job flow, accounting and fulfilment have existed at the print shop level for some time. But more micro-runs and variable data print make job-flow harder to manage, stretching the capabilities of such products to their limits. Adding more strain, the new print environment more and more frequently includes use of multiple presses and production sites, merged applications, and management of external digital assets and information, as well as access to third parties’ products and knowledge. This is what PrintOS is intended to facilitate.

Easy setup and low implementation cost

Sustainability – Minimizes carbon

footprint

Data disaster recovery and loss

prevention

Secure system with no risk to customer data

Self-maintenance and automatic

software updates

Less IT hassle – Free of

data storage issues

Actionable insights, fueled by the power

of data and analytics

Increased intra-organizational collaborative space

Simple integration with plant and

partners

PrintOS is primarily targeted to PSPs deploying HP production digital print systems and services. It is, however, possible to extend functionality to non-HP systems, and integrate with external systems and software. Its cloud-based architecture provides these specific advantages:

CLOUD-BASED SOFTWARE: THE BENEFITS

Inspires and facilitates innovation

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While PrintOS is of course available via a desktop computer, one of the best aspects of the solution is that it can be fully accessed on a mobile device from anywhere. We have tested it ourselves and found the look and feel and usability on a smartphone to be excellent. Here is a self-explanatory example of statistical analysis around daily and weekly press production reports, as they appear on a smartphone – quick, up-to-date information presented in a highly usable format.

How PrintOS Works

PrintOS’ Place in the New Print Shop

Because many printing functions have migrated to a digitized workflow, the role of the press operator has shrunk. With the proliferation of time/event-specific, versioned and personalized campaigns, and micro-runs, the new print market is characterized by fragmentation, growth and complexity. At the same time, there is a new need, driven by the increased capacity of newer HP Indigo systems, to rapidly and automatically manage and cycle variable content into batch-printed longer runs – i.e. high-volume digital production. With PrintOS fitting right in the middle of these parallel drivers, the server-based workflow itself is becoming a component within a wider digital access and control system.

HP PrintOS

Server based digital shop wor

kfl o

w

Process Com

plexity

Dataflow

M

anagement

Press Operation

Current Production Status Weekly Production Stats

New Print Market Micro-runs CREATIVE DYNAMIC MASSIVE DIVERSITY

High-Volume ProductionBIG DATA DYNAMIC

PROCESSING POWER

TIME/EVENT-SPECIFIC Versioned/ personalized

MICRO-RUNS

STATIC CONTENT TO Versioned/ personalized

MID-LONG RUNS

PrintOS addresses the parallel drivers of increasing process complexity and growing need for dataflow management.

11KEEPING YOUR PRINT BUSINESS THRIVING IN TODAY’S MARKET

8,500Monthly active

users

3,500Daily active

users

8150Registered

PSPs

19,500Registered

users

12,200Connected

presses/ printers

5,800Weekly active

users

PrintOS Adoption

PrintOS is a fully integrated system of applications. It already has large PSP implementers who best exemplify what it can bring to a PSP, as well as early single-press adopters. Other then HP Indigo digital press customers, PrintOS also supports HP PageWide web press, HP Scitex press, HP Latex and DesignJet printer customers. This is the base of global PrintOS users as of January 2019:

ConclusionToday’s print market, which requires efficient production of increasing numbers of ever-smaller jobs, leaves print service providers with little choice. To not just survive, but thrive, PSPs, regardless of size and market focus, need to automate more. HP’s PrintOS system provides a proven and adaptive enabler in this new market reality.

PrintOS can seem overwhelming for new adopters – so comprehensive as if intended only for large PSPs. In reality, PrintOS offers something for all levels of users, even at a strategic level as an investment in scaled, future growth capability. Every HP Indigo customer can gain by implementing PrintOS, and as such, should do so.

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