Xerox opening up

Print Action, May 2003 by Robinson, Jon

When IBM reinvented itself as a company a few years ago it did the unthinkable, moving its software and hardware from a notoriously proprietary platform into open-source Java language. Soon Big Blue climbed back on top, leaving its competitors no choice but to follow suit. Until last month Xerox was a hold out.

With its new open-source workflow, called FreeFlow, Xerox is set to open up its systems for multi-vendor integration, but more importantly the move will likely drive an explosion in its graphic communications consulting arm, Xerox Global Services, much like the growth in IBM's business services division. The flexibility of a multi-platform will allow its consultants to better address the needs of corporate clients. This time last year, for the first time in its long history, IBM's services division - offering work like systems integration, product support and consulting - surpassed computer hardware revenues. This potential should help quash talk that Xerox success or failure relies solely on the success or failure of the iGen3.

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Success of the iGen3 falls on the shoulders of Gil Hatch, who four months ago moved from the office sector to become the president of Xerox' Production Systems Group. Hatch has been with Xerox for 34 years, watching it drive innovation through the Docutech and now Docucolor eras. Until now engines like the 6060 and 2060 have been the backbone of Xerox' push into digital colour, but the company feels releasing the iGen3 will truly transform digital colour business in the very competitive pockets of Canada's printing industry.

"Until iGen3 we haven't had a press with the capacity to drive the transition," says Hatch. "Our 6060 is a very nice product, we love it, it makes a lot of money for us, we have 7,500 of that class engine installed, but it's a limiting capacity just because of its speed. At a hundred pages a minute and with the media range we have available on the iGen press, we think we can do in colour what we did in black-and-white with the Docutech."

Cost per page may be the biggest challenge facing the iGen3 if it is to establish a market dominance in digital colour similar to the role in black-and-white that the Docutech played in the 1990s. Hatch says the current industry average of cost per colour page is around 7.9 cents, having made significant progress. "A lot of people say the holy grail is five cents but the interesting thing about that is that 75 per cent of the cost of a job is not on press," says Hatch.

Xerox hopes to improve much of that cost through its new FreeFlow workflow. With its open architecture, offset printers should have an easier time of bringing in digital equipment to link with legacy systems and expand their offerings. In other words, the open architecture will allow them to drop FreeFlow components into existing workflows so that they can cope with the continued trend toward short-run jobs. Xerox is counting on the fact that printers will want to look at incoming jobs and have the flexibility to go digital or offset. Hatch referred this predicament to data published by Frank Romano, a professor at the Rochester Institute of Technology, suggesting that 78 per cent of all jobs are less than the 5,000 run level.

Hatch says that Xerox, however, is looking beyond companies wanting to offer digital services in conjunction with their traditional services. While its Production Management Group concentrates on four main markets (in-plant, service bureaus, quick printers and commercial printing), it is initially aiming its first FreeFlow releases at publishing applications.

"Today if you look at those four segments, service bureaus are the ones in the digital space where we have privileged position already," says Hatch, adding, "and we intend to expand upon that with more colour. More service bureaus are moving into publishing as a way to expand their offers, this whole business of convergence."

The much sought after convergence strategy, which really had nowhere to go when companies jumped on it in the past, is clearly beginning to re-establish itself within print-on-demand and multi-channel distribution. Customers are beginning to realize what is available to them, how they can use multiple channels to improve return on investment, most notably through variable data.

Through XGS, Xerox has a business innovations services arm that provides consulting for creating communications services that can exploit variable data. The FreeFlow products, using Java language, will be XML-based so that variable data can be tagged and used through many different medium as convergence - on demand - takes hold. Hatch says Xerox has been working on this model for at least five years.

"We will be able to process all of the variable data streams, PPML, VPS, but we have sold 10,000 VIPPs, so it's a big number," explains Hatch. "If you look at our partnerships of all of the data streams basically we cover 85 per cent of them, a significant piece of that is our own data stream VIPP. We have a set of capabilities that we think are unique in VIPP but we are not going to build a barrier to our printer or our press so that we can't ingest someone else's."