Monday, July 30, 2007

BoSacks Speaks Out: The Secret Adobe Plan to Rule the Printing World

BoSacks Speaks Out: The Secret Adobe Plan to Rule the Printing World

I find this whole Adobe-FedEx discussion just a little disturbing. Perhaps for the less experienced user of software an "Easy Button" is a good idea. In the short of it, Adobe and FedEx-Kinko's have a plan. Into all Adobe Acrobat PDF software is a button at the top that will forward any and all of your documents to Kinko's at the push of a button. Does that sound like a good idea to you?

Is the next step in the Adobe plan for INDESIGN to have a direct link to RR Donnelley? I'm not sure that my friends at Quad Graphics would appreciate that, not to mention all the other publication printers left on the planet.

Hold that thought and think of all the Mom and Pop printers left scrambling to make an honest living. I know that Dr. Joe Webb has the stats about this, but I can tell you having recently spoken to my local printer in the Hudson Valley (Pro-Printers) they are deeply concerned. I say that their concern is with good cause. What do you think? Is this a natural next step in the evolution of printing in a digital world, or an abuse of power?

Our scientific power has outrun our spiritual power. We have guided missiles and misguided men.
Martin Luther King Jr. (1929 - 1968), Strength to Love, 1963

Adobe-FedEx Link Pushes A Hot Button
July 30, 2007; Page B1

Adobe Systems Inc., the maker of Acrobat and Flash software, faces a wave of criticism from printing companies protesting a deal that gives FedEx Kinko's stores a prominent link on Adobe software.

The brouhaha could hurt Adobe's standing with important customers and partners and also throw a wrench into FedEx Corp.'s plans to revitalize Kinko's, the copy-and-print chain it bought in 2004.

At issue is a new button on some Adobe software, released in June, that lets people electronically transfer documents directly to a FedEx Kinko's store to be printed. The button appears on new versions of Adobe's popular Acrobat and Reader software, which display documents in Adobe's PDF format. There are no buttons for competing printers on the products.

The button on the software "is kind of hard to miss when you launch it -- it's right there," says Kim Turk, a manager with Imagers, a family-run printing business in Atlanta. Ms. Turk, who wrote a letter to Adobe last month protesting the move, said her company and others could lose business because of the direct FedEx Kinko's link.

Adobe is important to printing outfits because many of them now get much of their business directly from the Internet and computerized documents, rather than from walk-in customers. "Our members frankly feel betrayed," says Joseph P. Truncale, president and chief executive of the National Association for Printing Leadership, which he says counts about 3,400 printers, designers and graphic-arts companies as members.

Some critics liken the situation to a scaled-down version of the "browser wars" of the 1990s, when a U.S. Justice Department antitrust suit addressed Microsoft Corp.'s tactics in bundling its in-house Web browser with its ubiquitous Windows operating system, an attack on rival Netscape Communications. With Adobe, similarly, it's about "just not having a choice," said Ray Fusco, a vice president with printing and business-communications company RedmondBCMS Inc. in Denville, N.J.

Adobe says it is reviewing the matter and expects to officially respond to the printing industry's concerns on Wednesday. Top company officials, including Chief Executive Bruce Chizen, met with printing-company executives for about two hours at Adobe's headquarters in San Jose, Calif. on July 17 to hear their concerns.

Adobe called the meeting after hearing "some pretty robust feedback" protesting the new feature, said Adobe spokesman Russell Brady. FedEx Kinko's said in a statement Friday that the alliance with Adobe was "established with our customers in mind" and that it "provides a simple printing option for many users of Adobe Reader." FedEx and Adobe didn't reveal any financial terms of their deal.

Adobe declined to make executives available to comment. But on a corporate blog, Adobe Senior Vice President Johnny Loiacono said that at the July 17 meeting Mr. Chizen acknowledged the process for developing the new button feature was "flawed" because Adobe didn't talk to print-industry executives early on to get their ideas and feedback. Mr. Loiacono wrote that Adobe is "doing to do everything possible to find a way to deliver a win-win situation on all sides" and resolve the conflict.

For FedEx, the Adobe deal is the latest and most aggressive move by the Memphis, Tenn., company to resurrect Kinko's, a $2.4 billion acquisition that was criticized by some analysts as too costly and risky for a transportation company with no experience in the retail-printing field.

FedEx, which handles about 6.5 million packages a day, planned to use FedEx Kinko's stores to extend package-delivery services deeper into the retail sector, where small and medium-size companies and walk-in customers pay a premium because they lack high shipping volumes to negotiate discounts. But FedEx company officials have acknowledged they had to first learn the retail business and then begin to restructure the operating model as demand for traditional copying and printing services diminished.

The retail printing market is heavily segmented. Though there are a few other chains, including Kwik Kopy and Sir Speedy, it is dominated by mom-and-pop shops. Kinko's, founded in 1970, rose to prominence as a copy shop for college students, but was already feeling the pinch from dropping demand -- spurred by the rise of personal computers and printers -- when FedEx bought it. In the fiscal year ended May 31, Kinko's revenue declined 2% to $2.04 billion, while FedEx's three other operating units posted increases and overall revenue at the company gained 9%.

The Adobe partnership is part of a new plan to enhance online document services through a digital network that links all FedEx Kinko's stores in an effort to sell office-support services to small businesses and business travelers. FedEx Kinko's has around 1,675 shops around the world, with the bulk of them in the U.S.

The idea is that customers can send their printing orders directly from Adobe software -- without even going to FedEx Kinko's online site -- to any shop in the world. From there, the order can be picked up at the FedEx Kinko's store, or sent further via the FedEx services now at the shop locations.

Analysts say the backlash over the Adobe/FedEx deal is unlikely to affect the financial health of Adobe, which reported that profits jumped 24% to $152.5 million in the second quarter. Still, as it tries to generate revenue from more sophisticated graphics tools and, increasingly, compete with larger software companies like Microsoft, Adobe "needs to be making friends, not creating enemies," said Bill Whyman, an analyst with New York brokerage firm International Strategy and Investment Group.

1 comment:

eugenegs said...

This is an audacious move by Adobe that ignores the market that helped propel the pdf into its dominant position as the file that drives most printers' production lines.

Speaking for myself, I have been an enthusiastic Adobe booster and find Kinkos-FedX to be a great office away from home when I travel. I think they are both smartly managed and customer friendly companies. This move is customer-unfriendly, as it will take Adobe's market dominance and weaken other suppliers that are important in my professional life.

While this may be a healthy effort by Fed-Ex/Kinkos to enhance their customer service and create a marketing edge, it is an unfriendly move by Adobe.

The most palatable solution would be for Adobe to create an option under which the user can choose to incportate the button (or buttons) of choice. All printers (Office Depot, Staples, Donnelley, Malloy or Smith's in Kingston, NY, can then provide their customers with bottons that would one-click the transfer of files.

There is a negative marketplace solution that Office Depot, Staples and commercial printers can impose should Adobe/Fed-Ex ignore their marketplace.

They can require customers to send files in native form - the printer then converting to pdf for quality control purposes.

This may seem to be self-defeating - but it would encourage another vendor (microsoft perhaps?) to come up with a competetive product.

The printing industry would probably also find sympathetic support from various business, advertising and publishing trade organizations whose members would not want to see their favorite suppliers put out of business by competetive disadvantage.

Eugene G. Schwartz
Editor at Large
ForeWord Magazine