Analysis. Océ Showcases Expanded JetStream Family at Production Printing Summit. June Service Areas. On Demand Printing & Publishing

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1 Analysis June 2011 Océ Showcases Expanded JetStream Family at Production Printing Summit Service Areas On Demand Printing & Publishing On Demand Printing & Publishing Europe Comments or Questions?

2 Table of Contents Key Highlights... 2 Recommendations... 3 Introduction... 3 Océ s 2011 Production Printing Summit... 4 Océ Launches the JetStream 1400 and The ColorStream 3500 Revisited... 9 Other Hardware News ColorStream Flex Enhancements The VP 6000TP Software News The Ongoing Océ/Canon Merger InfoTrends Opinion About the Authors Key Highlights Océ s recent Production Printing Summit was a massive customer event primarily targeted at the continuous feed market. This dedicated continuous feed event hosted a total of 2,000 attendees. Océ continues to operate quite independently, but now with the support of its larger corporate parent (Canon). At its Production Printing Summit, Océ launched two additional members of its JetStream family, the 1400 and the During the event, the company also clarified the positioning of its entire JetStream and ColorStream families. Océ highlighted 11 continuous feed production lines with partners across the supply chain. Océ announced a new member of the VarioPrint 6000 family that is targeted at the transaction market. InfoTrends

3 Recommendations For Vendors: Determine how you can best promote an application-oriented view of production. Consider similar simplified positioning (compact, twin, dual, and wide) to clarify the positioning of your products. Assess the importance of process direction (left-to-right vs. right-to-left) in your customers workflows. For End-Users: The price differential of pigment versus dye inks is a significant factor in running cost. Ask yourself if the benefits of pigment inks override the cost advantages of dye. For those with toner-based monochrome continuous feed systems, Océ is making it easier to transition to color. Now is a good time to consider such a move. Introduction Océ has a long history of market leadership in high-speed continuous feed printing. Nevertheless, the shift toward inkjet and color is disruptive and presents an opportunity for competitors to capture market share. In the three years since Océ announced its first inkjet color machine at drupa, the JetStream, the company has expanded its range to meet a broader range of applications and volumes. The success of the JetStream helped Océ secure the top spot in the continuous feed color market in At the end of 2010, the firm launched its ColorStream 3500 product line, which is designed for sites currently running continuous feed monochrome to facilitate a simple path to full color. In June 2011, Océ held a new Production Printing Summit at its Poing factory. During this event, the firm added two new machines to its JetStream range, the 1400 and These new machines bring Océ s total number of continuous feed color inkjet products to nine. While such a broad range ensures that there is a device for almost any conceivable application, this can also make things confusing for those trying to identify the correct product for their needs. To simplify the purchasing process, Océ has sub-divided its range into four categories: compact, twin, dual, and wide. In addition to providing greater clarity about its product range during the Production Printing Summit, Océ showcased various JetStream and ColorStream lines as part of 11 end-to-end production systems that were running recreations of customer applications in the transactional/direct mail and graphic arts spaces. While it has historically been strong in the transactional and direct mail markets, the burgeoning graphic arts space is also crucial to success in the high-speed continuous feed market. To that end, partner manroland was also very visible at Océ s event, InfoTrends

4 providing an executive presentation for analysts on day one. The two firms also provided more information on their alliance. The scale of the Production Printing Summit and the raft of solutions and partnerships on display highlight Océ s strength in the sector. Clearly, the company has no intention of relinquishing its position as the market leader. Since its acquisition by Canon, Océ has retained its strong identity and is following its own strategy, but with the security of a committed and strong parent company. For other vendors in the continuous feed market, the Production Printing Summit highlighted that Océ is a formidable. This event also illuminated the steps that are necessary to show a comparable range of solutions and breadth of application experience. Océ s 2011 Production Printing Summit Océ s first Production Printing Summit was held from 7-10 June at its facility in Poing, Germany in the same enormous building that has housed Océ Open Houses in the past. After Océ s smaller scale Home of Color events, the Production Printing Summit returned to larger scale, although without showcasing office and large format solutions. The Production Printing Summit is a customer event that a large group of industry analysts were invited to attend and report on along with customers, prospects, and Océ staff members from around the world. Of the 2,000 attendees to the event, a total of 1,250 were external. Figure 1: Océ Production Printing Summit Show Floor View InfoTrends

5 During the Production Printing Summit, Océ designed its displays around applications and invited a number of partners to participate. In addition to its JetStream 1400 and 3000, Océ showcased a range of mostly continuous feed products with extensive in-line finishing, including: Three ColorStream 3500 systems (two Twins and one Single) Two JetStream 1000 systems A VarioStream 7120 A VarioStream 8750 Twin A ColorStream Flex A Canon imagepress C7010VPS Software partners represented at the event included Bitstream, CGS, EFI, and Objectif Lune. Pre- and post-processing partners included CMC, Ehret, Horizon, Hunkeler, Ibis, Kern, Lasermax Roll Systems, Matthias Bauerle, MBO, Palamides, Polar Mohr, Tecnau, and Weitmann & Konrad. Substrate partners included Crown Van Gelder, Holmen, M- Real, Mitsubishi, Norske Skog, UPM, and Ziegler. Océ s Production Printing Summit was of a scale that was unmatched by any other singlevendor event. The closest comparable event would be the Hunkeler Open House, which probably will not be repeated until after drupa There were 11 digital print production lines at Océ s show, all based on a real-world application being produced by customers. Of those eleven products, five were data center/transactional/direct mail applications and the remaining six were graphic arts. The show floor was clearly divided into two sections for production equipment, reflecting the split between data center and graphic arts applications. There were also separate areas devoted to software (Océ s own and that of its partners). Supporting the two production areas were two application zones, one for transactional and direct mail and the other for graphic arts, which highlighted examples of successful applications produced by Océ customers. A number of media producers were also present, displaying paper grades suitable for continuous feed color printing. InfoTrends

6 Océ Launches the JetStream 1400 and 300 On the opening day of its Production Printing Summit, Océ announced two new members of its JetStream family to round out its color continuous feed range. The new JetStream 1400 and 3000 produce speeds of 100 and 200 meters per minute, respectively. The paper transport in both of these devices has been modified to move the print web faster and also to provide the additional drying power required for this added speed. Both devices also have new operator panels integrated in the print cabinet. The catwalk around the print towers has been removed, which is possible because the towers are lower. Océ s experiences with the earlier design were an important input of this redesign. The JetStream 1400 and 3000 use next-generation 40-kHz Kyocera inkjet heads that produce what Océ calls 1,200 dpi perceived image quality based on a 600 x 600 native resolution (the previous generation of heads are 30-kHz and also a perceived 1,200 dpi resolution). To achieve a higher apparent resolution, Océ offers multi-level imaging capabilities as an option. At the same time, however the advantages of dot size modulation are best exploited on higher-quality papers. The JetStream 1400 and 3000 will start shipping in October The JetStream 1400 is based on the same compact design as the JetStream 1000, which was announced in 2009 and started shipping in Although the JetStream 1000 will remain in the portfolio, the single-sided option (JetStream 500) will be dropped as simplex installations are better covered by a single-engine ColorStream Figure 2: Océ s JetStream 1400 InfoTrends

7 The JetStream 3000 is derived from the 2-up width dual tower design of the JetStream 1500 and The JetStream 1500 and 2200 have been in the market for several years, but the 3000 offers an updated paper transport design. The JetStream 1500 and 2200 will remain in the portfolio, while the simplex versions (JetStream 750 and 1100) have been dropped. Océ notes that the redesigned dryer of the JetStream 3000 allows drying at the higher speed without increasing the energy consumption of the earlier models. Older installations of the JetStream 2200 cannot be upgraded, though upgrades to the JetStream 3000 will be possible for versions that are currently shipping. MICR is possible as an option via a 5 th station. Figure 3: Océ s JetStream 3000 Concurrent with this event and the new product announcements, Océ clarified the positioning of its inkjet products by categorizing them in one of four areas: Compact, Dual, Wide, and Twin. Compact Products that achieve a small footprint through a duplex print engine in a single box (includes the JetStream 1000 and the new 1400) Dual Two-engine system (includes the JetStream 1500, 2200, and the new 3000) Wide Dual-engine products that offer a 30 web (includes the JetStream 2800 and 3300) Twin Two-engine systems that offer greater configuration flexibility, for example for simplex, L, H, and U configurations (includes the ColorStream 3500 Single and Twin engine versions) InfoTrends

8 Table 1: Océ s Inkjet Portfolio at a Glance 1 Product Name Océ Product Category Speed (mpm) Throughput (A4) Web Width (inches) Announcement Date Other Differentiators JetStream 1000 Compact 75 1, JetStream 1400 Compact 100 1, New (June 2011) JetStream 1500 Dual 100 1, JetStream 2200 Dual 150 2, Reduced footprint; 1 to 6 colors Reduced footprint; 1 to 6 colors Dual engine 20.5 system; up to 5 colors Dual engine 20.5 system; up to 5 colors JetStream 3000 Dual 200 2, New (June 2011) Dual engine 20.5 system; up to 5 colors JetStream 2800 Wide 130 2, JetStream 3300 Wide 150 3, Dual engine 30 system; up to 5 colors Dual engine 30 system; up to 5 colors ColorStream 3500 Single ColorStream 3500 Twin Twin Twin Process direction*, pigment inks, configurability; 1 to 6 colors Process direction*, pigment inks, configurability; 1 to 6 colors *The ColorStream process direction is right to left while JetStream is left to right 1 Notes: Though all of the JetStream products currently use dye inks, Océ announced at this event that the JetStream series would also be available with pigment inks. All of the Océ inkjet devices can be equipped with MICR in the fifth imaging station. All of the Océ inkjet devices have 600 x 600 dpi resolution and with the multi-drop option can achieve an apparent 1,200 dot per inch resolution. Similar to Océ s toner-based continuous feed devices, the ColorStream 3500 can print at variable speed, stopping and starting while maintaining image integrity (this capability is not possible with JetStream). The JetStream 500, 750, and 1100 are no longer sold; they have been replaced by the ColorStream InfoTrends

9 The announcement of the JetStream 1400 and 3000 at the Production Printing Summit signals improved speed and allows the products to compete more effectively with other offerings. The announcements also signal an ongoing commitment to the JetStream series and help to close the productivity gap of other offerings. The ColorStream 3500 Revisited Océ first launched its ColorStream 3500 in November 2010, interestingly at a Canon Expo event in Tokyo. Like the JetStream product family, the ColorStream 3500 uses Kyocera inkjet heads, but this printer was designed and is built at Océ s continuous feed operations in Poing, Germany. There are several features unique to the CS 3500 within Océ s inkjet portfolio: Small Footprint of a Single Unit and Low Weight: The small footprint and low weight allow the device to replace existing twin-engine black & white roll-fed installations. With the heavier JetStream models, floor weight has occasionally been an issue. The size of the device has also limited the ease with which it can be brought into sites with access only through standard-sized doorways. Twin Configuration with Two Independent Units: The ColorStream 3500 is designed as a full twin system, with each unit being a self-contained system. This makes it comparatively easy to make a simplex installation, while the simplex versions of the JetStream presses always carried some overhead for a second imaging unit with them. Being fully modular, the ColorStream can also potentially be deployed in mixed color/monochrome installations and flexible setups with multiple unwinds, engines, and finishing modules and a flexible paper path in-between. Printhead Protection Units Called Head Safe : Head safe is a special parking position that enables the inkjet heads to remain in an encapsulated environment for a relatively long time before nozzles get clogged or have to undergo a lengthy purging process. Head safe can applied to each color independently. In practice, this usually means that the other heads will be kept enclosed and protected for a black-only print job. Ability to Print Speed Ramps: The ability to print ramp up (i.e., print at variable speed) allows the printer to start printing while the paper web accelerates or decelerates. This saves paper given that the length of the paper path contained inside a continuous feed printer can be many feet in length. It also allows setting up in-line finishing equipment or doing any checks on the web during a run at very low speed while continuing to print. Right-to-Left Production Direction: The right-to-left production direction (as seen from the operator side) is typical for web systems produced in the United States and Europe (and hence for the existing fleet of Océ printers). Meanwhile, Japanese companies have typically built web printers that use a left-to-right process direction. This can be a consideration when using existing in-line finishing modules that are set up for right-to-left, because operators will not need to switch sides to access the user interfaces for printing and finishing equipment. InfoTrends

10 Overall, Océ positions its ColorStream 3500 not as replacement for any of the JetStream models, but as an extension of its inkjet offering especially for transactional markets. Much of the design has been with existing working processes at current transaction printing sites in mind. Also, the strategy to more gradually move black & white volumes to color is reflected in the naming of ColorStream (which includes the color-capable ColorStream Flex). Accordingly, all five features listed above should help transaction printers to move into color inkjet. The use of pigmented inks is the only factor that does not currently align well with the needs of transaction printers. Because pigmented inks are generally more expensive than dye-based inks, dye inks are typically preferable to cost-conscious transaction printers. However, Océ announced that dyebased inks will be available soon for the ColorStream During its Production Printing Summit, Océ reported that it had delivered 20 ColorStream 3500 units to date with a further 40 on order. As a result, the company s production plans for the device increased by 50% in Océ also mentioned that the first ColorStream 3500 line was installed in February 2011 at Corus in France. 2 Dye-based inks are the norm for the JetStream products, but Océ is planning to expand the support of pigment inks for these products too. See Table 1. InfoTrends

11 Other Hardware News ColorStream Flex Enhancements While the main thrust of the event was inkjet, there were some toner-based developments as well. Océ also highlighted a number of enhancements to its ColorStream Flex. Multiple spot modulation is now supported at the maximum web speed of 105m/min for improved image quality in monochrome production. For improved color operation, the company has introduced a new magenta toner that offers a much closer match to offset magenta ink. Océ reported a strong uptake of the ColorStream in the on demand book production market, especially in the U.S. and in paperback production. The VP 6000TP Océ also introduced a new version to its VarioPrint 6000 line of printers. The 6000TP has been optimized for transactional and direct mail applications, which was identified as a requirement for sites that have combined their data centers and printrooms. Like the rest of the VarioPrint 6000 range, the TP uses Océ s Gemini single-pass duplexing print engine to ensure tight front-to-back image registration. Good page-topage registration is also key since this is an important consideration for any transactional application where the monochrome digitally printed data needs to line up accurately with design elements on pre-printed shells. The difference between the TP and standard VarioPrint 6000 models is the inclusion of two additional post-print fusing units, one for each side of the sheet. These were introduced because the slightly raised toner image of the Gemini print technology can be damaged and marked by some inserters. To overcome this marking, the additional postprint fusers use heat and pressure to flatten the toner further into the paper and apply a thin coating of oil. The result is an image that is robust enough to handle insertion and provides a slightly richer black and a more glossy print. It is possible to bypass this last step if desired. The other addition to the TP range is a PRISMA controller that can handle the necessary PCL and AFP/IPDS datastreams in addition to PDF and PostScript. The controller can be switched on-the-fly between datastreams without rebooting. During ON DEMAND 2011, Océ launched a MICR-capable toner for the VarioPrint 6000 range. With the more complete offering in the 6000 range, the VarioPrint 5000 has been discontinued. The TP option is available on all versions, from the 171-ppm 6160 through the 200-ppm 6200, 250-ppm 6250, and 314-ppm InfoTrends

12 Software News During the Summit, Océ hosted a dedicated workflow zone in the center of the show floor between the data center and graphic arts production demonstration areas. Within that zone, it had eight workstations showing the software and workflow used in 8 of the 11 production lines at the event. Within those demonstrations were products from 6 partners out of the total 35 that the firm works with. Through its alliance with manroland, Océ realizes the importance for commercial printers within the graphic arts space to be able to integrate continuous feed high-volume digital color with their existing prepress workflows. To that end, the company showed how PRISMA for Graphic Arts could be used in those environments. According to a manroland survey, more than 80% of its customers use the workflows of the big three litho prepress firms Agfa s :Apogee, Fuji s XMF, or Kodak s Prinergy. For these customers, the preferred option is to drive PRISMA via their existing prepress tools, allowing operators to follow familiar processes for creating and checking PDFs including proofing and imposition. PRISMA can accept an imposed PDF from these systems along with a JDF job ticket. Depending on the sophistication of the systems and the integration, PRISMA can act as a basic spooler to RIP the PDF or carry out some more complicated workflow management. In addition to the prepress workflow, manroland s own production management system for newspapers (supplied by subsidy ppi Media) can be used to control and drive the whole production flow. It is also possible to integrate a number of third-party MIS solutions. During its event, Océ was showing strategic partner EFI s Pace MIS alongside PRISMA. Book production was highlighted as a key application that PRISMA Production is optimized for as part of the Océ Professional Book Production system. This takes JDF and PDF files and automatically splits color sections from monochrome, then groups books into job baskets with similar properties and stocks for efficient batch production. It also creates barcodes to enable recombination of the color and monochrome sections and via the Scan2reprint module to reprint any damaged or incorrect sections. For transactional customers moving from pre-printed forms to a white paper solution (an important market for the ColorStream 3500), Océ demonstrated a workflow where PRISMA could be used to process PDF shells and insert the data into the print stream, in effect replacing pre-printed shells with a database of digital shells. InfoTrends

13 The Ongoing Océ/Canon Merger Océ s Production Printing Summit provided little information on the Canon/Océ merger situation. Canon currently owns around 90% of Océ s shares, with the rest remaining with private investors. Canon defied investor community expectations when it did not exercise its option to buy Océ s remaining shares in March 2011 at a higher price. Canon has stated that it feels comfortable having a controlling stake, but not fully owning Océ. As a result, all transactions will be conducted at arm s length for the foreseeable future, with Océ remaining a legally separate company. It is interesting to note that Canon s presence at the event was low-key, with almost no Canon products on display (apart from one imagepress 7010 VPS) and no distinct Canon participation in keynotes, presentations, or displays. Nevertheless, there are marked signs of an ongoing integration between Canon and Océ (even though these were not presented at the event itself). On 10 June, Canon acquired all shares of Océ Switzerland, Océ s Swiss distributing arm, which accounted for 3% to 4% of all Océ s revenues. Océ Switzerland, which was acquired for 15.9 million, will be merged with Canon s own Swiss direct organization. On 23 June, Canon and Océ announced plans for Canon Marketing Japan to acquire Océ-Japan Corporation for about 9.6 million. Océ-Japan, which represented less than 1% of Océ s overall revenues, will be integrated into Canon Marketing Japan to form a combined sales and service organization for Japan. InfoTrends

14 InfoTrends Opinion Rokus van Iperen, Océ s CEO, believes that the merger with Canon will make Océ stronger, bigger, and more distinct. The Production Printing Summit was surely a sign of a stronger and bigger firm that is well-positioned to maintain a leadership position in the continuous feed market as it transactions to color. With the new additions to the JetStream range and the recently introduced ColorStream 3500, Océ now offers the broadest range of continuous feed inkjet offerings on the market. Organizations in the graphic arts, transactional, and direct mail markets can leverage these solutions as they transition to white paper and color. Océ s clarification of the positioning and application suitability of the JetStream and ColorStream ranges will help customers to identify the most appropriate devices for their operations. By showing a wide range of applications that are already being produced by its customers, Océ highlighted real-world expertise in its target markets. By demonstrating these applications as running production lines, the company also highlighted the strength of the partnerships that it has formed with consumables, software, and post-press vendors to deliver total solutions. A single supplier-led showcase like the Production Printing Summit makes it possible to show a broad range of end-to-end solutions. The similar Hunkeler Innovationdays event showcased a very wide range of vendors, but it didn t have as much of an application focus. Meanwhile, a visitor to the Production Printing Summit could receive an excellent end-to-end view of Océ s continuous feed technologies and the company s interaction with workflow, materials, and finishing to deliver a finished product. Any future Océ event of this scale (or perhaps drupa 2012) will provide a platform for the firm to show progress on a number of fronts. Océ s partnership with manroland with manroland customers investing in Océ technology and integrating it into their workflow certainly bears watching. A future event would also provide a forum for Océ and manroland to share some more concrete evidence on technologies that play to both companies strengths. Many will be monitoring drupa 2012 closely for additional insight on the Océ/manroland partnership as well as Canon s acquisition of Océ. Océ s Production Printing Summit was a landmark event. The scope and scale were remarkable, as was the focus on applications rather than print engines. It was a high point for Océ, particularly since it came not long after some tough economic times. It s encouraging to see such a compelling and extensive display. InfoTrends looks forward to continued progress and is eagerly anticipating the next steps leading to drupa This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our material is based are reliable and we have applied our best professional judgment to the data obtained. InfoTrends

15 About the Authors Jim Hamilton Group Director Follow me on Twitter Connect with me on LinkedIn Jim Hamilton is Group Director responsible for InfoTrends Production Hardware consulting services in the areas of production copying and digital printing, wide format, and labels & packaging. Mr. Hamilton is responsible for market research, providing forecast analysis, supporting the consulting service, and creating analysis reports. Ralf Schlözer Director ralf_schlozer@infotrends.com ext. 201 As Director of the On Demand Printing & Publishing Consulting Service Europe, Ralf Schlözer is responsible for all service related publications and research in Europe. He is responsible for market trend analysis and forecasting, as well as creating research projects, presentations, and analysis reports. Barney Cox Senior Consultant barney_cox@infotrends.com Barney Cox is a Senior Consultant for InfoTrends European On Demand Printing & Publishing services. Mr. Cox is responsible for conducting graphic arts market research, providing forecast analysis, consulting with clients, and creating editorial content for product and market analysis reports. Comments or Questions? InfoTrends