(Print) Volumes Shrinking, (Print) Volumes Shifting – To Where?

The “Photizo Group” is involved in the MPS (managed-print-services) business, and, since the MPS business is of interest to reprographers, the IRgA has, again this year, arranged for Ed Crowley, CEO of The Photizo Group”, to present at the upcoming IRgA Convention.

This is the title of the “breakout session” that Ed will be presenting:

“MPS – Why This Is Key to the Growth of Your Firm”

Today, I found an article at “mpsinsights.com” (which is operated by the Photizo Group) that I think reprographers would be interested in reading, especially those who are interested in “MPS.”

This is the title of the article:

“Volumes Shrinking, Volumes Shifting – To Where?”

By: Rob Sethre | February 28th, 2011

And, here are the two “lead in” paragraphs:

“Most imaging experts agree that overall output volumes are declining. But for several reasons (see previous blogs), this is not the end of the world – or even the end of the industry. In its most straightforward version, MPS is the key strategy to capture a bigger piece of a smaller pie – actually, the whole pie. Also, MPS offers additional new revenue streams in the software and services space to compensate for dwindling revenues in the core business area.”

“But there is still another aspect. While MPS has traditionally concentrated on unifying the printer and copier/MFP worlds, the central print room (CRD) is still often overlooked.”

You can access the complete article at this link:

http://www.mpsinsights.com/our-insights/volumes-shrinking-volumes-shifting-to-where/

Questions I think Financial Analysts should have asked ARC Management

Several “financial analysts” follow, and issue reports (for investors), on ARC and/or Service Point Solutions. Other “financial” people who follow ARC are investment analysts who work for institutional investors and mutual funds. Both ARC and SPS are players in the “reprographics” industry, and both are publicly-traded companies. (ARC trades on the NYSE; SPS trades on the Bolsa/Spanish Stock Exchange. In fact, ARC and SPS are the only publicly-traded companies who are players in the “reprographics” industry, at least that I’m aware of.)

Every quarter, ARC’s Chairman/CEO (Suri) and Chief Financial Officer (Jonathan) host “earnings calls”; these earnings calls give them the opportunity to talk about ARC’s recently released results (be it for a quarter or for the full year), enable them to talk about ARC’s sales and growth-strategy initiatives, and, after they’ve concluded their comments, financial analysts who participate in the earnings calls are allowed to ask questions, and ARC’s guys respond to those questions, as best they can, confidentiality considered. (Suri, for sure, does not want to reveal ARC’s plans and initiatives in great detail, for that would be “spilling all the beans”, and no CEO would want to, or should ever, do that. ARC’s competitors do listen to the earnings calls and do read the transcripts of the earnings calls.)

I don’t take the time to listen in on the “live” calls. But, I do read the “transcripts” of the earnings calls; they are prepared and posted on SeekingAlpha.com, and they are available for free (at www.seekingalpha.com)

I read the transcripts to find out what Suri and Jonathan said about ARC’s “results” and to find out what Suri says about ARC’s achievements and about ARC’s plans and initiatives going forward. I also find it very interesting to find out “what questions the financial analysts are asking” and to see how Suri responds to the questions he’s asked.

Every time I read a transcript of an ARC’s earnings call, I find myself asking, (a) do the financial analysts know what questions to ask?, and (b) when they get “this or that” response to questions they did ask, do they know what follow-up questions they should be asking? So, after reading the most recent earnings call transcript, I decided that I would compile a list of questions that I think analysts should have asked, either initially or as “follow-up” questions to responses that were given. I will also try, as best I can, to elaborate on my suggestions for questions.

A. Questions about “FM’s””

1) Question: What is ARC’s definition of an “FM”?

2) With respect to the newly added FM deals, what’s the “net new incremental” revenue expected from the “#” FM deals?

During the earnings call, Suri mentioned that ARC added another 100 FM’s. That’s an impressive number. But, in terms of “sales revenues”, what does that number really mean? If you speak to 10 different reprographers, you will get at least 3 different definitions of “what an FM is.”

A “staffed FM” is, typically speaking, where the reprographer has entered into a relationship with a customer whereby the reprographer will be providing equipment, one or more FM operators, supplies, consumables, service for the equipment and, very often, accounting for output generated on the equipment that’s provided. Some “staffed FM” relationships require (but some do not require) that the customer use the reprographer “exclusively” for reprographics orders than cannot be, or would best not be, accomplished “on-site” at the customer’s office. Typically, a “staffed FM” is a “larger” deal than would otherwise be the case with an “unstaffed FM” deal. (That’s not always the case, for some unstaffed FM’s could be considerably large in scope and in terms of revenues generated.) Some “staffed FM” deals include all of the imaging equipment on-site at the customer’s office, but some deals only include equipment for a “central print room.” In the latter case, a customer would still, on its own, provide all of the other equipment needed at its office. So, as you can see, the “scope” of a “staffed FM” can vary quite a lot.

An “unstaffed FM” is the same as I’ve explained above, with the exception that the reprographer does not provide “FM operators” to work at the customer’s office. Again, like a “staffed FM” deal, an “unstaffed FM” deal may or may not include a requirement that the customer use the FM-vendor-reprographer for “off-site” reprographics work. Some reprographers ask for exclusivity, but not all do. I have no idea what ARC asks for, or requires. (We always asked for exclusivity; we did not like to “share” our accounts with our competitors.)

Further “unstaffed FM’s” can be large deals or small deals, and sometimes the small deals are very small deals. Such as would be the case if the FM-vendor-reprographer is only going to be providing one small-format multifunction copier/printer, or one inexpensive large-format HP plotter, or one HP laser printer. Revenues for an “unstaffed” FM could easily range from as much as thousands of dollars per month to as little as $100 per month. Scope varies widely. Revenue opportunity varies very widely.

One other point is that, if a reprographer commits to doing an “FM” for a customer who was already a customer before the FM deal was signed, is the “FM” revenue going to replace some of the revenue the reprographer already had, or is the “FM” revenue going to be incremental (additional, new) revenue?

Some reprographers consider “FM’s” to be any deal where customers are going to pay “per copy”, “per sq foot”, in other words, for “output generated”. However, some reprographers consider equipment rentals and equipment leases to be “FM’s” (if they continue to own the equipment during the rental or lease term and even it output isn’t billed “per copy” or “per sq ft.”)

So, with respect to “adding 100 FM’s”, what’s that really mean in terms of revenues? Were those net new 100 FM’s big deals, medium deals, small deals?

B. Questions about “Global Solutions” deals (or “Premier Accounts” deals)”

1) Question: What is ARC’s definition of a “Global Solutions” (or “Premier Accounts”) deal?

2) With respect to the newly added “Global Solutions” deals, what’s the “net new incremental” revenue expected from the new, “#” “Global Solutions” deals?

My understanding of an “ARC” global solutions (or premier account) deal may be very different from ARC’s definition. My own personal definition is completely irrelevant.

During the earnings call, Suri talked about “global services”. According the transcript of the call posted on SeekingAlpha.com, Suri said this …..

“The first is global services, already a strong contributor to our top and bottom lines. Global services added nine new accounts to its roster in 2010 including AECOM, a $7 billion industry giant in design and engineering. These new customers represent $14 million of annualized revenue. In total, global services brought $46.8 million in sales, for 2010. We have exciting prospects in the pipeline for 2011 and we are targeting some of the largest companies in the design and engineering space as well as smaller, regional targets to help fill in the gaps.”

During my time as the COO of T-Square, which was in 1997, (T-Square was formerly an independent reprographer purchased by ARC in 2006 or 2007, can’t recall which year it was), T-Square had a “staffed FM” relationship with the largest A/E firm in the South Florida market. By the time I joined T-Square, that relationship was already more than 20 years old. That particular customer was “exclusive” to T-Square, meaning that that firm used only T-Square for its reprographics requirements, on-site and off-site. That firm had long been T-Squares largest account. A few years ago, that large A/E firm was acquired by DMJM. DMJM was/is the “core” of AECOM. T-Square’s relationship with that Miami A/E firm was still in place at the time ARC acquired T-Square. Also as to AECOM, it is my understanding, and of course I could be wrong about this (but I don’t think I am), that Ford Graphics (one of ARC’s operations in L.A.) has, for years, been providing services to AECOM’s huge DMJM office in L.A. In addition, a former ARC-insider mentioned to me, last year, that, when an existing customer of an ARC division commits to an ARC “global solutions” (premier accounts) deal, forward sales to that customer are counted as “global solutions” revenues, meaning that the revenues that were already being generated from the existing account are simply ‘transferred’ from the “division’s sales” to “global solutions’” sales.

So, where Suri said this, “these new customers represent $14 million of annualized revenue”, does the word “new” mean “new customers to ARC” or does the word “new” simply mean “customers newly committing to ARC global solutions deals, some of whom were already doing business with ARC?” Of the “nine” new Global Solutions customers, how many of those customers were already doing business with ARC before they signed on as “global solutions” accounts? Of the $14 million of annualized revenue, how much business was ARC already doing with those customers prior to those customers signing on as global solutions accounts? I would imagine the same questions could be asked about the $46.8 in sales reportedly generated by ARC’s global solutions accounts? If one has one “bucket” of customers, goes out and buys a second bucket and then pours some of its customers from the first bucket into the second bucket, what’s that really mean in terms of real growth?

Further, is a “global solutions” account a customer who has committed to use ARC “exclusively”? Or, is a global solutions account a customer who has been given “preferred pricing” and “preferred status” by ARC, but who is not required to use, nor has the intention of using, ARC exclusively? The other evening, when I asked a ReproMAX organization guy about that issue, he said, “our member companies continue to do business with many of ARC’s “global solutions” accounts; it varies by market area and it depends on customers’ local management decisions.

Don’t get me wrong. I applaud ARC’s efforts and initiatives to pursue larger customers. They are doing it the right way. It was a great idea for ARC to put together a team of people devoted to pursuing “national” account deals, and it’s the right approach to develop a national “account strategy” to pursue each and every large target. My questions have to do with the numbers put forth in the earnings call. So my question remains, and this is the question I think analysts should have asked, “with regard to the $14 million in annualized global solutions revenues, does that number represent “net new incremental” revenues? Or not? And, if not, what’s that number?”

C. Questions about Re-Branding and about Divisional management changes:

1) At the beginning of 2011, ARC rebranded all of its divisions (all of its locations throughout the U.S. and maybe even outside of the U.S.) with the ARC name. Early on, ARC maintained that it was beneficial to ARC’s business model that, post-acquisition, each acquired company continue to operate under its long-standing brand name (and ARC gave several reasons why that was a good idea). Given ARC’s rebranding initiative, does that mean that ARC feels that there will be no negative repercussions from discontinuing the use of the acquired companies’ brand names?

2) Some (maybe even several) ARC divisions are, by now, no longer managed by the former owner/managers who sold their businesses to ARC. Early on, and even after that, ARC said that it had or was retaining 90% of the owner/managers who sold their companies to ARC, and ARC explained that the benefit to ARC was that these people were the ones who built their companies and established and grew relationships with their customers, …. and that the latter was very important to ARC. Given the changes in management (at divisions where former owner/managers have departed), is it ARC’s position that the replacement of those owner/managers with ARC team members who have never before owned their own businesses presents minimal risk to ARC? Elaboration on that point would be useful.

3) Have their been any instances, yet, of former owner/managers, who previously sold their companies to ARC, coming back into the industry to join companies ARC competes with or to start up their own new companies to compete with ARC? If yes, please elaborate.

D. Questions about iShipDocs:

It’s my understanding that Mahil Maurice is the ARC team member who is Product Manager for ARC’s iShipDocs product. Mahil is a very smart young man, has a terrific personality and has a passion for what he’s involved in.

During the earnings call, Suri talked about iShipDocs. Pulled from the transcript on SeekingAlpha.com, here’s what Suri said …..

“iShipDocs generated more than $4 million in sales in 2010, and several of our larger customers are now insisting on its use over conventional shipping services. A new version of iShip Docs incorporating managed file transfer, storage and sharing services is schedule for the release in second quarter of 2011.”

Later on in the earnings call, one of the financial analysts (Brad Safalow) who follows ARC, asked Suri about iShipDocs. Here’s the “back and forth” (questions and answers), pulled from the transcript of the earnings call:

Brad Safalow – PAA Research

And then just on iShip Docs I want to make sure I understand that number correctly. Is the $4 million was that total revenue for the iShip Docs eco-system versus what you actually generated for ARC?

Suri Suriyakumar - ARC

Say that again? I didn’t quite understand the question.

Brad Safalow – PAA Research

The $4 million number you disclosed for iShip Docs in terms of revenues, was that revenues to ARC or just revenues of printing volumes on the platform – across the entire platform? Because I know – obviously, your network participates with our third-parties that also participate?

Suri Suriyakumar - ARC

Oh yeah, yeah exactly. So remember in our business model, Brad, everything is done inside ARC – at least 95%. We might actually sometimes use a third party vendor maybe when we are in Poland or Hungary or someplace like that. So this total $4 million is our revenues, out of which about 60% I would estimate to be print revenues. About 40% of that would be related to the digital shipping itself. So it is very attractive in terms of gross margins.

Brad Safalow – PAA Research

Do you have the – I guess I can extract – okay I got it. The total print revenues are simply if I take the 60% I can get to the total print revenues across the -

Suri Suriyakumar - ARC

Yeah.

Brad Safalow – PAA Research

Actually, I don’t know the royalty rate, but okay. I can try and work with that.

I think Brad Safalow did a good job getting to the main point he was apparently interested in getting to, which, I think, is best summed-up by this question (which would have been the question I would have asked Suri):

Regarding the more than $4 million in sales that iShipDocs generated in 2010, of which apparently 60% (approximately $2.4 million in sales) were revenues from “printing”, how much of that printing work represented “new” (meaning, incremental) printing revenues to ARC, as opposed to printing revenues that ARC would have had, anyway, even without iShipDocs?

With respect to the other 40% of iShipDocs revenues (approximately $1.6 million in sales), were those revenues purely attributable to iShipDocs “cloud” services, or were some of those revenues generated from fees/charges for the “ground delivery” service required to get the printed order to the recipient’s office?

(Please note: even when orders are submitted to the ARC’s iShipDocs cloud-printing-service, the ARC division on the receiving end of an order has to physically deliver the completed order to the recipient’s office. For many, many years, many reprographers use to offer “free” pick-up and delivery. But, most reprographers, including most ARC divisions prior to their purchase by ARC, charged for delivery of completed orders.)

So, all in all, my primary questions about iShipDocs revenues in 2010.

1) What portion of the $4 million in “total” iShipDocs revenues were just for the use of the iShipDocs software, network, cloud? (All printing charges and physical delivery charges excluded.)

2) What portion of the $4 million in “total” iShipDocs revenues were “new incremental” revenue to ARC (in other words, revenues that ARC would not have generated if it had not implemented iShipDocs?

If you have any comments, please post them (or you can e-mail them to me, if you would rather not use the comment-posting feature.)

Thank you for bearing with me; I realize this was a long, very-wordy post.

ARC may renew acquisition growth strategy during 2011

For Owners in the Reprographics business who are interested in selling their companies. When Suri (of ARC) was asked a question about ARC’s interest in looking at acquisitions, Suri’s response was “yes.” Due to the downturn in the A/E/C reprographics business, ARC has not, at least that I’m aware of, completed an acquisition of a reprographics company since 2008. Looks like ARC may resume that part of its growth strategy in 2011.

I say that because of a question Suri was asked during the ARC earnings call that took place on Feb 22^nd, 2011:

from “Questions ….. from Scott Schneeberger – Oppenheimer”

“And then the second being it seems a little bit early for you to be opportunistic with regard to doing tuck-ins. But you did mention that you’re putting your sales force aggressively out basically going after those smaller than you that may have struggled more. Is tuck-ins now part of the story there? Or is it more just grab their share directly, without the formal engagement? Thanks.”

from “Response from ….. Suri Suriyakumar - ARC

“Right. So to address your first question, Scott, obviously cost reductions is always mindful because we are continuing to fine-tune our operating costs. Now when you are talking about cost reductions, we close locations, branches – there can be two approaches. One is we close a branch because we simply want to cut cost, because we are compelled to cut cost, we want to reduce our operating costs. So we would just cut the branches. And we did some of that at the early stage, but we refrained from doing too much of that because we want to position the company for growth. Second reason we would close a branch is because of the technology transition which is going on, combined with the fact that we are becoming more and more with the single identity as one company. There is a lot of savings we can gain by centralizing the back offices, by centralizing some of the branches. So technology is driving that. We are seeing more and more customers employ technology. So we are starting to see benefits of that. So those kind of branch closures or consolidations we continue and we continue to do that aggressively because it actually makes us more efficient and reduces our costs and allows us to actually leverage our existing assets.”

“So that will continue. We don’t see any reason for drastic cut in branches yet and thanks to the high yield we have we feel like we have a stable debt structure so that we can focus on the growth and investing on technology. With regard to tuck-in acquisitions – absolutely. It’s more and more on our radar screen and we are watching it and we will continue to work on those, because we are constantly bumping into companies – either they are really lost a large amount of sales, finding it difficult to continue to operate, looking for the exit strategy. And most of these are private companies and where we find that we can provide an exit strategy for an existing owner, we will pick them up, because that wouldn’t be like a traditional acquisition, it would be much more attractive.”

The issue of “market share growth” in the reprographics industry

This article is “required reading” for financial analysts, institutional investors, mutual fund managers and other “non-reprographers” who are interested in the reprographics business and industry. For blog visitors who are reprographers, please don’t bother reading this post; you already know the points we’re going to make in this post.

Several years ago, not long after ARC went public, ARC developed its concept for selling to “national” (and, I would guess “international”) accounts, and, in conjunction with that, ARC established a team of business development/sales people and called those ARC team members the “Premier Accounts” sales team. Today, when I looked on Linkedin.com, I noticed that several of ARC’s team members use the term “Global Solutions” to describe their positions with ARC, instead of using the term “Premier Accounts”. (However, note that at least one person’s tag line – in an e-mail I received – still uses this title, “Executive Director, Premier Accounts.” Others use these titles, “Global Solutions Executive” and “Director, Global Solutions” and “Senior VP, Global Solutions.”) Collectively, people within ARC who refer to themselves as “Premier Accounts” or “Global Solutions” are members of the ARC sales team that pursues “national” and “international” accounts. For example, in the most recent “earnings call,” Suri mentioned that AECOM became a “Global Solutions” account during 2010. (I will make a comment about this later on in this post.) AECOM is a huge A/E firm. AECOM conducts operations out of offices in and around the country (and internationally as well.)

During ARC's most recent earnings call, Suri talked about ARC' s five main initiatives for 2011: He said, "The second initiative is our core business aimed squarely at gaining market share from competitors who are floundering or failing. Most of these competitors are 5 million to 10 million companies. In many cases, they are struggling with the loss of more than half their revenues. Armed with new tools, technology and buying power, we are reenergizing our local sales teams to target this market share."

I've pointed out in previous posts that ReproMAX and RSA are both “national” in scope, but I also pointed out that those organizations are “associations” comprised of individual member (reprographics) companies. For that reason, the possibility of “ReproMAX” or “RSA” competing for large “national” accounts relies totally on ReproMAX’s ability and RSA’s ability (the management teams and boards of both of those associations) to bring together all of their respective individual member companies to agree on what’s offered in “national” proposals and, in conjunction with those proposals, to agree on “national” standards for service delivery and pricing. If I’m recalling these statistics correctly, ReproMAX and RSA both have over 100 individual member (reprographics) companies. Just a guess, but I would imagine that it is not an easy task, by any stretch of the imagination, to get 100 (or more) individual companies to agree on what’s going to be offered in a proposal to a large, national account. (Reportedly, the “collective annual sales” of all ReproMAX members combined exceeds ARC’s annual sales. I am not at liberty to reveal the exact number.)

Unlike RSA and ReproMAX, ABC Imaging is not an association; it is an “individual” company with its own locations across the U.S. (and a couple of locations outside of the U.S.). ABC’s national footprint is considerably smaller than ARC’s, but ABC has, even during the “Great Recession,” shown a willingness to expand to wherever its larger-account opportunities require it to go.

But, when you consider the sheer size of ARC and the extensive national footprint ARC created by rolling-up over 100 formerly independent reprographics companies in the U.S., ARC has a 1) size advantage (over ReproMAX , RSA and ABC Imaging), 2) a geographic advantage (over RSA and ABC Imaging, but not over ReproMAX), 3) a “national” sales team (I don’t recall hearing that RSA and ReproMAX have “national” sales team members; ABC Imaging might), and 4) the advantage of being able to come up with a definitive “account strategy” for a large, national prospect (or customer) without having to resort to negotiating a definitive account strategy with a whole host of different member companies, which would be the case with ReproMAX or RSA. This would not be a problem for ABC Imaging. This would also not be a problem for Service Point Solutions, but SPS’s geographic footprint in the U.S. is much smaller than ABC Imaging’s footprint.

While ARC does have certain advantages when competing for business (I mean, “deals”) with large, national accounts, ARC does not, in my opinion, have an advantage over the others when it comes to developing relationships with customers in individual market areas, nor does ARC, in my opinion, have an advantage over the others when it comes to service delivery. Many, many of the individual companies who belong to ReproMAX and RSA, and this would also be the case with ABC Imaging, are tenacious and relentless when it comes to developing (and maintaining) customer relationships, and when it comes to servicing the needs and requirements of their customers. Within each individual market area, “size does not matter” as much as “performance” matters. In this sense, independent reprographers may actually have an advantage over ARC-operations in their markets, simply because the owners of each independent company are at risk for their “net worths”, whereas ARC’s local managers do not have that risk. When everything is on the line, don’t (ever) underestimate the resilience and competitiveness of an, or any, independent reprographer.

All of the above relates to ARC’s stated objective to grow its “market share”; this implies that ARC, in order to move forward with this objective, will have to increase its market share in each and every “market area” in which ARC operates. Growth in “market share” is not easy, nor is it assured. Market share growth comes by taking away customers from independent reprographers ARC competes with. Independent reprographers aren’t going to make it easy for ARC to take away their customers, and, as I said earlier, independent reprographers may, in my opinion, have an advantage over ARC (see previous comment about that), individual market areas considered. Thomas Reprographics, NRI, ABC Imaging, C2 Reprographics, Duncan Parnell, Lynn Imaging, Service Point Solutions, CyberCopy, Gilmour Reproductions,, Astley-Gilbert, and Universal Reprographics, just to name a few, are formidable competitors in their respective markets.

Based on what I've read, so far, in reports issued by financial analysts who follow the reprographics industry (because of their interest in ARC and/or Service Point, the two publicly-held companies who are considered players in the reprographics industry), I’m not positive that “investors” and “financial analysts” have a good understanding of the issue of “price” in the reprographics industry. In the reprographics business (in the U.S.), “price is not the only factor” that customers consider when choosing which reprographer to do business with. Many A/E firms are “reimbursed” for a good portion of the reprographics services they purchase from reprographers. (ARC pointed that out in its IPO prospectus.) A/E firms who are reimbursed are less sensitive to price. (Any reprographer who sells “price” to an A/E firm that it is reimbursed for much, if not all, of the expenses that A/E firm incurs, should have his/her head examined! Doing so would be flat out dumb.) My very first customer, the senior partner of a large Architecture firm, told me that, my first year in the business (1970.) Construction companies and sub-contractors are concerned about “price”, but they will not accept poor quality or poor performance. So, even for them, price is not the only factor they consider. Non-A/E/C customers who buy color services (large-format or otherwise) are certainly concerned about price, but they, too, will not go with low price or lowest price if performance and/or poor quality is the trade-off.

All of the blah-blah-blah above was put forth in an effort to shed a bit more light – for the benefit of financial analysts, institutional investors, mutual fund managers and other “non-reprographers” who are interested in the reprographics business and industry – as to the issue of “market share” and the difficulty that any company, whether it be ARC, Service Point, ABC Imaging, Thomas, NRI, etc., faces in its efforts to grow by “increasing market share” (taking away business from competitors.) Short and sweet, “it ain’t easy.”

The U.S. Reprographics Industry needs a barometer of wide-format b/w A/E/C plan printing volume

Yesterday, I ran into someone I know who works for OCE “wide-format”. I asked him about OCE’s wide-format “black and white” click volume.

He said:

(1) On a U.S.-country-wide-basis, OCE’s wide-format “black & white click volume” in 2010 was 50% off its peak (peak, meaning, before the recession kicked in.)

(2) On a Florida-wide basis, OCE’s wide-format “black & white click volume” in 2010 was 70% off its peak.

“Click volume” = in the U.S, most OCE (and KIP and Xerox wide-format black & white, toner-based) printing systems record “square foot usage”.

In the U.S., OCE sells direct to customers and OCE also sells through “dealers”. Quite a number of reprographics companies are OCE wide-format printing systems dealers. It is my understanding that the “percentage” numbers, peak to 2010, that I mentioned above, are for systems OCE, itself, provides service for. The numbers would not, therefore, include the click volumes (square foot usage) of all OCE wide-format b/w systems in the U.S., because I seriously doubt that OCE’s reprographer/dealers, some of whom provide service on the systems they sell, lease, rent and “FM”, provide their click volume numbers to OCE.

Xerox and KIP are the other two equipment manufacturers who offer “wide-format black & white, toner-based, printing systems” on the U.S. market. (Yes, I know that there are other brands who offer wide-format, b/w, toner-based systems in the U.S., such as Ricoh, but OCE, KIP and Xerox systems probably add up to 90% of total market – click - volume.) I’ve not heard anything about the click volumes of KIP and Xerox systems in the U.S. Like OCE, KIP and Xerox sell direct to end-user customers and to dealers who sell to end-user customers.

To me, the absolute “best barometer” of “A/E/C plan printing” in the U.S. would be the “total click” volume (square foot usage) of “all” (well, maybe not all, but most of the) wide-format, black & white, toner-based printing systems, OCE + KIP + Xerox + all reprographers who are “servicing” dealers of OCE, KIP and Xerox equipment (and, as to reprographers who are “servicing” dealers, both IRgA members and non-members as well.)

How about the IRgA suggesting to the industry’s major equipment vendors, OCE, KIP and Xerox, that they report (to someone at the IRgA) their respective monthly “click volume” (square foot usage) numbers – for the wide-format, b/w, toner-based systems that they directly service?

And, how about the IRgA suggesting to all reprographers who are OCE, KIP and/or Xerox “servicing” dealers that they report (to someone at the IRgA) their monthly “click volume” (square foot usage) numbers – for the wide-format, b/w, toner-based systems that they directly service?

The compiling and publishing of those numbers would, in my opinion, be a fantastic way for reprographers to track trends (up and down) in “A/E/C plan printing” volumes. As I said, the “best barometer.”

The compilation would have to be done by someone who will keep totally confidential the individual numbers reported by OCE, KIP and Xerox and who will keep totally confidential the individual numbers reported by all of the servicing dealers. The number that would be published monthly would be the total U.S.-wide click volume (square foot usage) number, without any further breakdown.

This is the type of barometer that is very much needed for reprographers and for the reprographics industry as a whole.

Cisco Reaches 3,000-Customer Milestone in Digital Signage

SAN JOSE, Calif. (Feb 25, 2011) – Cisco today announced that more than 3,000 customers have deployed Cisco® Digital Signs technology. Recently named the new worldwide market-share leader in digital signage software by Frost & Sullivan in the firm’s forthcoming report, “World Digital Signage Systems Market,” Cisco joined the digital signage market in 2007 and has rapidly introduced innovations around digital signage scalability and reliability, network integration, and content development. To date, Cisco digital signage solutions are broadly deployed in 85 countries, with customers benefiting from Cisco technology across a variety of industries including retail, financial services, hospitality, education, health care, and sports and entertainment, among others.

To read the full press release, click on this link:

http://www.vadvert.co.uk/business/9872-cisco-reaches-3000-customer-milestone-in-digital-signage.html

January 2011 AIA ABI Index right at 50.0

January 2011 AIA ABI Index right at 50.0, down 3.9 points from December 2010.

Kind of like Humpty-Dumpty sittin' on a wall .... which way will "it" fall?

Personally, I think Kermit should have fudged the numbers just a wee bit this month, either way, wouldn't matter. When the number is above 50, that indicates demand is going to be rising; when the number is below 50, that means that demand is going to be declining. If the number is "right at" 50, WTF! does that mean?

Okay, here's the press release.....

* Cautious optimism for design industry: AIA

NEW YORK, Feb 23 (Reuters) - A leading indicator of U.S. nonresidential construction activity weakened last month after two months of improving numbers, an architects' trade group said on Wednesday.

The monthly Architecture Billings Index fell almost 4 points in January to 50.0, a level that indicates neither expansion nor contraction of demand for design services, the American Institute of Architects said.

The billings index is considered a predictor of construction spending about nine to 12 months in the future, since buildings are designed long before they are erected. The latest readings suggest an anticipated recovery in U.S. nonresidential construction may not gain traction this year.

A separate index of inquiries for new projects fell more than five points to 56.5, according to the AIA.

"This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year," said AIA chief economist Kermit Baker. "We've been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook."

The AIA's billings index dropped below 50 in January 2008, indicating falling demand, and stayed below that mark until last November. The separate inquiries index only fell below 50 briefly in 2008. It is typically higher than the billings index, as prospective customers solicit bids from multiple architecture firms.