Kodak’s Judi Hess Speaks Out Following Creo Acquisition

By Cary Sherburne, Senior WTT Editor

October 27, 2005 -- At the recent Print 05 trade show, WhatTheyThink took the opportunity to speak with Judi Hess, formerly President of Creo, and now the General Manager and Vice President, Workflow & Prepress Equipment, a strategic product group of Kodak’s Graphic Communications Group. Our objective was to get an update as to the integration process now that Kodak’s acquisition spree has come to a close, and to learn what the future has in store for this critical group within Kodak.

WTT:   It's been about 90 days since the Kodak's acquisition of Creo closed.  Can you give us an update on Creo's integration into Kodak's Graphic Communications Group?

JH: Much of what was Creo has moved into the Workflow and Prepress Equipment (WPE) Group, one of three strategic product groups in the Graphic Solutions & Services (GS&S) unit headed up by Jeff Jacobson. On the organizational side, we have announced our leadership team and have all of our leadership in place for the WPE team. We have incorporated a number of elements from the former KPG into this team in addition to former Creo resources, and in the last couple of months, we have been working to rationalize the product portfolio. There was not a huge product overlap when we brought these companies together, but there was a need to develop go-forward strategies—defining what the team needs to do to deliver on strategic imperatives, what the full organization will look like, and our roadmap going forward.

WTT: So where do you take it from here?

JH: Now we are in the process of implementing all those plans, so that everything is rationalized, implemented and ready to go prior to 2006, with everything put together and everyone clear about what they need to do. We are focused on enabling the digital transition for our customers, making sure we are the leader and have a leading market share in all the product categories we are in, and making sure we execute with excellence. In terms of next steps, we will be taking a bit more time understanding how we work with the worldwide sales regions, because we are now organized as product groups and the sales regions are organizationally separate. We haven’t spent a lot of time in that area yet. We also will work with other strategic product groups, like Consumables and Digital Printing, to capitalize on opportunities across strategic product groups, as well as with Sales and Service in the regions.

WTT: What is the people impact of all of this?

JH: There are overlaps, and we are making sure we are rationalizing all of that before the end of the year.

WTT: What about your alliance with Screen? At the analyst briefing, you mentioned that you would be terminating the relationship, but I didn’t see any formal announcement.

JH: From our perspective, we would much prefer to sell our own output devices. We believe they are better, easier to sell, and more cost effective for our customers, as we can offer a full solution with other Kodak products. Screen did make the decision to terminate the relationship it had with KPG earlier this year.

WTT: Now that you are heading up the Workflow and Prepress Equipment strategic product group, will you be moving to Rochester?

JH: My plan is to stay in Vancouver. We have quite a large group of people in Vancouver, and I don’t think it makes any sense for me to go anywhere else. There is also a large group in Israel and other locations as well, outside of Rochester.

WTT: What are your near-term and long-term objectives for Kodak in Workflow and Prepress and what is Kodak's strategy in workflow?

JH: We are looking to develop core offerings that deliver a unified workflow. The former Creo didn’t really have a unified workflow offering—meaning seamless offset/digital workflow—other than our partnership with Xerox, and we didn’t have a real market rationale to develop that complete unified workflow. Now we have brilliant reasons to drive this to its fullest. We want to help our customers enable the digital transition. We believe that digital print can be very complementary to offset. As I was talking to people at the show, I found it surprising but refreshing that of the people that started out as digital printers, the majority of them end up adding offset as well. They find they need a way to produce longer runs, so they add offset assets into a digital shop. Our strategy is to provide a unified workflow for these blended production operations. We can and do traditionally provide a complete workflow solution for conventional offset, but we will also provide a unified workflow solution that will encompass offset and digital, all the way through to making last-minute choices in a blended production environment. And we will also have a completely digital offering. We already have one today, but there are more things we can add to make products like DI even more integrated. Everything we do will be aimed at improving print quality, improving color and color workflow, reducing cycle times and enabling all the different last-minute decisions a print operation is required to make. In addition, we have announced the beta phase of the Kodak Enterprise Management Solution (EMS) as an integrated business system we will deliver to our customers. So when we look at our workflow strategy, we feel we can cover pretty much all the needs, and we want to remain open as we do that, from JDF all the way through to color workflow. Our announcement from our Print On Demand Systems group about our new relationship with HP to provide a print-on-demand color server in front of the Indigo, which we plan to have in the market in the first half of 2006, is another example of how we are open and continuing to build partnerships.

WTT: What are some of the other areas you will be looking at?

JH: Another area we will explore is moving upstream to the creative side with color management tools and content management solutions to increase their connectivity into the production area.

WTT: What will happen to NGP under the new Kodak structure?

JH: We are going to continue to be a member of NGP and work with the partners. We see a lot of value in making sure that the integration promised by JDF becomes a reality for our customers, and we don’t believe we should leave it to them to test it all. So we will continue to work with that group and enhance connectivity. If we hadn’t driven it in the first place, we wouldn’t be where we are in implementing JDF. If you don’t get people in a room and say, “How are we implementing, how are we testing,” it just doesn’t get done. NGP offers a framework to do this with real customers. It is still working, still vibrant, and people are benefiting.

WTT: How did MIS members of NGP react to EMS? Some 50% of the member companies have MIS products, which the former Creo did not compete with.

JH: People who were not members reacted more to EMS than the people who are. Some of the members were a little concerned. But Kodak EMS is a fabulous system. It will deliver capabilities that have not been delivered in the past, and efficiencies that haven’t been in the printing industry before. But there are going to continue to be a myriad of solutions that printers are going to use—we know that, and the partners know that. So we will continue to integrate with all of our third parties. EMS is definitely competitive, but the partners still want to integrate with Kodak unified workflow solutions based on our position in the market, and we still want to integrate with them, because we know our customers will want some of those solutions. We definitely can coexist. I can assure you we won’t take 100% market share in Print MIS systems in the next couple of years.

WTT: Where do you see the CTP business going in terms of the blend of thermal and violet  plates? And what do you see as the long-term impact of processless technologies? 

JH: In terms of CTP, we will continue to focus on speed and quality. That’s what we have been doing and will continue to do. That applies to both thermal and violet. We have the highest quality printing and process control with our systems now, and we will continue to lead that area. Our customers will look to us to deliver more affordable solutions, and we will do that. We will be leading with our Thermal and Staccato technologies. We will provide some OEM violet solutions, particularly in newspapers and different geographies where that is the preference, although we never have seen—and continue not to see—a huge violet story. We believe that customers get better value, higher quality and more process control with thermal and we have been driving that from the beginning. As far as processless plates, going back to when Creo and Kodak brought out thermal in the first place, processless was the Holy Grail. We are back together now under the same banner and are delivering thermal processless. Thermal Direct really is a processless solution; you simply image and put the plates on press. There is no gumming, no water wash, no imager or press adjustment; nothing like that. I can’t overemphasize the excitement of seeing processless plates coming out from everywhere, bringing the technology mainstream.

WTT: Any final comments you would like to offer?

JH: At the show, you saw the company—the new Kodak—come together as one. It is very exciting. The booth was great, and it really showed how we have brought everything together. The team did a great job, and I am very impressed. We had an investor tour on the first day of the show, and the reaction to seeing how all of the companies have come together was very positive. We still have lots to do, but it has been a good start!

This Interview was conducted by Cary Sherburne. She can be reached via email at cary@sherburneassociates.com, online at www.sherburneassociates.com and by telephone at 603-430-5463.

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