What's Next for E-Commerce?

Impresse executive analyzes developments on the graphic arts dot-com scene.

By Lisa Leland, Associate Editor -- Graphic Arts Online, 11/1/2000

GAM asked Hal Hinderliter, director of print technologies for Impresse, Inc., Sunnyvale, Calif., for his impressions regarding the current dot-com marketspace in the graphic arts.

Hinderliter, a consultant who is a frequent speaker at Seybold publishing conferences, Graph Expo, and other major industry events, was interviewed for this article to tap his 22 years of experience in the graphic arts industry. In his previous position as director of the Center for Imaging Excellence at the Graphic Arts Technical Foundation, he was responsible for prepress and printing technology education.

GAM: What's the current mindset of today's printer?

Hinderliter: Printers everywhere are quickly coming to the realization that transacting business over the Internet soon will be a necessity for dealing with the majority of their customers, not just a special request from a few "cutting-edge" users.

Even in situations where the initial point of contact remains a face-to-face meeting, all subsequent communication will need to happen over the Internet.

While some printers will slowly build their own ad-hoc workflows around standard e-mail tools and laboriously build custom Web pages, others will recognize the tremendous efforts that have been expended by e-commerce vendors to create robust solutions.

GAM: The collapse of the IPO market in April 2000 greatly reduced the rate at which new e-commerce companies have entered the print industry sector. What do you anticipate happening by the end of the year?

Hinderliter: The incredible, unrealistic exuberance that surrounded business-to-business stock offerings in the winter of 1999 and the spring of 2000 was actually harmful to serious enterprises such as Impresse.

The overall effect of having had dozens of new companies arrive on the scene--many with little more than a dot-com moniker and a business plan that called for instant wealth the day the stock went public--is a strong skepticism among printers toward all things e-commerce.

Times have been tough for companies that don't have a viable operating business, and we can expect to see some of the current players merging or going out of business soon. Consolidations at fire-sale valuations are much more likely than outright failures, since the venture capitalists will want to hang on to their share of "something" rather than admit an outright loss.

All of this churning, however, only serves to strengthen the market position for those that survive.

GAM: Many Fortune 1000 companies have entered into negotiations or actually signed contracts with print e-commerce vendors, strengthening the position of the early dot-com players. Also, CoBAMs (coalitions of brick-and-mortar players) have been announced, most notably the new Gang of Four (Banta Corporation, R.R. Donnelley & Sons Company, Quad/Graphics, and Quebecor World). At the same time, traditional BAMs (such as Fuji) have prepared their own entries into the e-commerce arena. How will all this play out?

Hinderliter: Unlike the automotive industry, where BAMs and CoBAMs have had a major impact, the printing industry is characterized by a lack of supplier concentration. If you add up the revenues of the "Big Four," the result is still less than a single-digit percentage of the total print market.

Examining recent developments (such as the post-Graph Expo postponement of R.R. Donnelley's Digeno service), printing's BAMs and CoBAMs have their work cut out for them. In some cases, their desire to enter the e-commerce fray may be driven only by a fear of losing relevance in their own industry rather than a specific business plan.

GAM: How does the PrintTalk initiative fit into all this?

Hinderliter: The previous scenario, in which the fleet-footed dot-coms somehow outwit the muscle and deep domain expertise of the existing industry giants, is given even greater credence by the enormously successful PrintTalk initiative.

This approach allows procurement/production/billing products to plug-and-play as individual components within the e-commerce workflow, much like various products (such as PostScript, desktop publishing applications, and RIPs) work together in the current graphic arts workflow.

This extremely cooperative effort among most, but not all, major dot-coms and the non-printCafe business management system vendors will strengthen the hand of all participating players.