Ricoh recently announced that they have purchased PTI. Since they had already made a sizeable investment in PTI, this was not exactly unexpected news. But it has still triggered some internal discussion here at Pageflex that can be summed up as “Pageflex is the last independent company in our space.”
In the last eight or so years, there have been a number of acquisitions of web-to-print/VDP providers, generally by very large companies, often better known for their hardware solutions than their software. To do a quick review, there was the Xerox purchase of XMPie back in 2006, and then more recently the EFI acquisitions of OPS and Direct Smile, and now the Ricoh purchase of PTI. Of course there was also the Bitstream/Pageflex acquisition of Press-sense in 2010. This is something of an anomaly since we are definitely not a large hardware-oriented company! Although there are an ever growing number of smaller players in this market, at this point we are undoubtedly the only vendor with significant market share that is still independently owned and managed.
So what does this mean? It depends of course on who’s delivering the message. The statements in these acquisition announcements have been remarkably consistent. We are told that the company being bought will remain independent or semi-independent, key personnel will stay in place, and that everyone will benefit from the additional resources and money that the buyer is bringing to the table. For the buyer, they can state with reasonable credibility that they are moving beyond hardware and are becoming a solution provider. It’s a pretty good story.
However, what we hear from customers – both our customers and a competitor’s customers – and from others, such as prospective customers, partners, and knowledgeable observers, is a little different. They express more concern and anxiety. Does a large company with roots in manufacturing understand software development? Can they successfully manage, support, promote and sell software solutions? The track record so far is at best mixed.
Even more critical is the question of product direction and priorities. The reality is that these large companies try to leverage the business and technical connections between their hardware and the software. Of course for companies like Ricoh, revenue coming from equipment and consumable sales will always be significantly more than software revenue.
So the real risk is that product development will inevitably be driven by hardware requirements and by the goal of developing as seamless a connection as possible. Yes – this can offer value to a customer. They only have to deal with one company (although perhaps with multiple departments and/or people), and they might end up with a highly integrated system or workflow
But in our viewpoint, the true aim of the parent company in these scenarios is to lock in the customer, making it difficult, if not impossible for them to ever switch to a different vendor. And whether you look at it from the business side or the product side, the value of bundling software with hardware is questionable.
We think that there’s enormous benefit in dealing with an independent company like Pageflex. Think of us as the Switzerland of vendors. We are neutral, play well with everyone, and even speak many languages. Our product roadmap is based on the needs and requests of our customers, and our assessment of broader market requirements – not on what a big hardware company thinks is important. We value the importance of print, but have no “favorites” in terms of the devices and workflows our customers implement. And of course we are very aware of the numerous services and technologies beyond print that are critical for our customers’ success now, and will likely be even more important in the future.
Maybe the best way to put it is to say that we are a small company with a big picture viewpoint.
