Does the Industry Need Another Print MIS Supplier?
Late last week, I had a phone briefing with a software company called Cole Systems on its DynamicsPrint software product. The 50-employee company implements enterprise resource planning (ERP) and business management system based on Microsoft products, such as Dynamics AX, Dynamics GP, Dynamics CRM, and SharePoint. The company identifies printing, non-profit, healthcare, distribution, manufacturing, shipping, logistics, and lottery as verticals that it serves.
Cole Systems’ DynamicsPrint is a relatively new solution in the U.S. market. The solution is described as an ERP or business management system customized for the printing market. Based on the Microsoft Dynamics AX platform, DynamicsPrint has specific features such as estimating, production, shop floor control, and JDF support to address the needs of larger printing operations ($20M+ revenue). I only had a brief demo, but from what I saw, the print specific features look good and comparable to other large MIS systems in the U.S. market. What stands out from the demo is the use Microsoft platform, which provides a broad range of capabilities from financial accounting, reporting & analytics, and CRM to warehouse management. As you might expect for these types of solutions, the price tag is not small. The solution starts at around $100,000 and goes up from there based on the number of user licenses.
After the call, I wondered “Does the printing industry need another print MIS supplier?” There are at least 40 print MIS software vendors that I could easily identify selling into the United States market. That’s a lot of vendors for any industry. That number would be even higher if not for the string of acquisitions made by PrintCafé and then EFI over the years. These acquisitions have made EFI the largest MIS vendor in the U.S. market today. Nevertheless, the newer entrants, such as Cole System are seeing an opportunity.
The approach of customizing a general ERP solution such as Microsoft or SAP for the print market is a notable trend among the newer entrants to the U.S. MIS market. Cole Systems is not the only Microsoft-based vendor out there. Computer Productivity Services, while not a new player, leverages Microsoft Dynamics GP to cater to the flexographic converters market. Kodak EMS leverages Epicor. Inextrama, a company based out of Spain, which is also starting to expand to the U.S. market, leverages SAP for its graphic arts solution.
This approach allows vendors to latch onto the brands, marketing, and development teams of well-known ERP solution brands such as Microsoft and SAP. In the past, printers have not really bought into these types of more general ERP solutions due to a lack of customization for their specific business requirements. It will be interesting to see whether these new entrants will see different results this time around.
Despite these differentiations, it will be quite a challenge for new vendors to penetrate the market. The economic downturn has really put a damper on the growth of the MIS software market in the United States within the last 12 months. Print MIS is a fairly significant investment, and many printers are deferring major investments due to credit scarcity and economic uncertainty. Regardless of whether you are a new or old vendor, it has been pretty tough to convince printers to invest in a new system over the past year. The good news? With the economy rebounding in the second half of 2009, we are hearing a lot of optimism from MIS vendors regarding their sales pipeline (meaning that most printers are looking around, but not necessarily buying – yet).
So, does the U.S. printing industry need another Print MIS software supplier? If I just look at the number of vendors in the market today, my answer would be no. But, the answer is obviously not as simple as referencing a list of vendors.
The printing industry is a very fragmented market consisting of small to large establishments. The existing (over 40) MIS vendors serve various segments of the industry. Cole Systems mentioned that it is targeting establishments with $20M+ revenue level with its solution. In this market segment, there is probably about a dozen or so systems that are really contenders. Additionally, some of these establishments are using EFI solutions. EFI’s decision to phase out development of its mid-market products, PSI and Logic, will likely trigger fairly large user bases of these solutions to shop around. Many printers will follow the prescribed path and migrate to the EFI Pace solution, while others might switch to competitive MIS systems. This opens opportunity for new entrants.
Nevertheless, competition is still pretty fierce. Each MIS vendor will have their own claim to fame, but overall, most of the larger MIS systems provide similar levels of capabilities. Solutions built on general ERP platforms such as Microsoft and SAP provide strong value propositions, especially to larger print establishments. It will be interesting to see whether these newer general ERP-based solutions can convince significant number of mid to large printers to invest in a new system and go through the pain of switching.
Additionally, many existing MIS solutions, especially ones that cater to mid-to-large establishments, are adopting more service-based architectures, such as Microsoft .NET. This approach makes the solution easier to integrate with other enterprise solutions, making it even tougher to build a strong case for switching.
Overall, print MIS software has evolved over the years. Today’s systems offer an increased focus on scheduling/planning, e-enablement, reporting, integration (JDF/JMF support), and mailing/fulfillment capabilities (versus the more common estimating functions). Some of these features are driven by market requirements, while others are by competition. Whether the industry needs a new MIS software supplier, the market will decide over time. From my perspective, competition among vendors is generally good for customers. It keeps the rate of innovation moving.
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InfoTrends InfoBlog » Does the Industry Need Another Print MIS … ERP Terms — October 15, 2009 @ 3:10 pm
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InfoTrends InfoBlog » Does the Industry Need Another Print MIS … ERP1 — October 15, 2009 @ 4:55 pm
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InfoTrends InfoBlog » Does the Industry Need Another Print MIS … — ERPSCOUT — October 15, 2009 @ 11:13 pm
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