*** From the Archives ***

This article is from April 12, 2000, and is no longer current.

Creo and Scitex Play Hardball

The prepress world shook last week when the merger -slash- acquisition -slash- “decision to unite our strengths and work together” became final: Creo and Scitex have combined digital prepress businesses. As a result of its new division, ever-so-creatively called CreoScitex, Creo Products dissolved its joint venture with Heidelberg, with whom it had been co-branding its thermal CTP (computer-to-plate) and workflow technologies. This is a big shift in the market, especially just a few weeks before Drupa 2000, the world’s largest trade show for the printing and paper industry held every five years or so in Dusseldorf, Germany.
Let me put it in more familiar terms: if we were talking about National League Baseball, this deal would be like Barry Bonds leaving the San Francisco Giants to sign with the Los Angeles Dodgers on the eve of playing each other on Opening Day at the new Pacific Bell ballpark.
Changing Partners
So another merger, you’re saying, why should I care? The fact is (and I’m not telling you anything you don’t already know) the creative print professional’s job doesn’t end when she sends a final file across a T1 line. If you’re really going to serve your clients well, you have to understand and be involved in its final output – making decisions about whether to go to film or directly to plate and determining how to proof, trap, and manage color accordingly. That means you should also know the players in the prepress market, because ultimately they’re accountable to you.
CreoScitex is billing itself as “a world leader in solutions for the graphic arts industry,” and indeed, the new company will offer a full spectrum of prepress technology, from copydot scanners to digital front ends, variable data systems, inkjet and digital halftone proofers, and imagesetters and platesetters. Creo contributes what few can argue is cutting-edge CTP technology; the company has been aggressively marketing thermal platesetters and complementary workflow solutions for several years, and its partnership with German printer manufacturer Heidelberg gave it even greater penetration – a few hundred sites at last count.
The partnership with Heidelberg also gave Creo a lot of revenue: one-third of its total revenue for 1999, to be specific. Creo, which went public last year, reported huge revenue increases for 1999, has an active users’ group, dramatic presences at industry trade shows, and evangelists who are actively involved in online CTP discussion forums. With Heidelberg, the agile company pioneered a high-end PDF workflow solution, Prinergy, and it also recently launched printCafe, an online B2B print service.
What about Scitex? It has sound but unexciting digital prepress technologies, such as RIPs and high-end scanners. But prepress is just one part of Scitex’s broader focus, which includes technologies that run the gamut from telecom to Internet imaging. But the shot-gun approach hasn’t served the company well. Although its stock and profits are on the upswing, the once-dominant company experienced substantial losses for much of the 1990s. Scitex didn’t exhibit at Seybold San Francisco last year, and its users’ group, once the premiere prepress users’ association, has evaporated.
Who’s the Real Winner?
Scitex appears to be the big winner here, having found a sugar daddy to salvage its prepress business. How Creo benefits puzzles me. Most likely both companies will realize savings in combined R&D, manufacturing, and sales efforts, but the merger doesn’t give Creo any greater presence in production environments – many of the prepress technologies offered by the newly combined companies overlap, such as Creo’s Prinergy and Scitex’s Brisque workflow solutions, and Creo’s Trendsetter and Scitex’s Lotem platesetters. Some product lines will have to be scaled back and refocused.
Plus, the deal didn’t include Scitex’s digital or wide-format printing divisions, or its interest in the 74 Karat digital offset press, and those are the technologies that would best complement rather than compete with Creo’s existing portfolio. Heidelberg suffers, too, because although it plans to negotiate an OEM arrangement with Creo regarding the Trendsetter, the German manufacturing giant loses the partner that helped it further its excellent reputation among digital publishers.
But business motivations are ultimately less important than the technology that results from the realignment of these vendors. Creo and Heidelberg have demonstrated that they care about and support their customers, and they’ve successfully developed products that give us what we need (sometimes before we realize we need it) to do our jobs more efficiently and elegantly, while also producing printed pages that live up to our clients’ demanding standards. Perhaps CreoScitex will be able to do this, too; my fingers are crossed. But in this mature market, there are bound to be some losers, and I can only hope that the team that wins is the one that develops the best technology and is also most responsive to its fans…er, customers.
All I can say is: “Play ball!”
 

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