FuturePrint Podcast
FuturePrint is dedicated to and passionate about the power of print technology to enable new opportunities and create new value. This pod features deep-dive discussions with the people behind the tech as well as market analysis, trends, marketing and storytelling!
FuturePrint Podcast
#225 - The 5 Transitions Driving Print pt. 2 with Amir Raziel, HP Industrial Print
Join us for a compelling conversation with Amir Raziel, Director of Strategy and Sustainability for HP Industrial Print, as he revisits the 5 Transitions Driving Print from our April 2024 podcast. Backed by new research from North America and Europe, Amir explores how these long-term, steady transitions are reshaping the future of printing.
He highlights contrasts between commercial print, which is adapting through automation, skill shortages, and increased investment per employee, and the growing labels and packaging sector, which thrives on consumer demand. Amir also examines how fragile supply chains present opportunities for print service providers (PSPs) to become critical partners in mitigating risks for major brands.
Our discussion delves into evolving business models, where PSPs are shifting from transactional operations to strategic service providers, adding value beyond print. Amir underscores print’s unique ability to evoke emotional responses, building trust and loyalty in ways that digital media often cannot.
Looking ahead, we challenge the notion of print’s obsolescence, exploring its vibrant coexistence with digital media, the role of AI, and the rise of service-oriented models. This episode provides valuable insights for PSPs aiming to navigate a sustainable and innovative future in the print industry.
Amir Raziel Bio
Amir Raziel is the Director of Strategy & Sustainability for HP Industrial Print. He is a passionate evangelist for value creation in digital print and driving growth for HP and HP’s customers through a combination of technical and commercial innovation.
Over the last 20 years he has held various management positions at HP, specializing in Strategy, Product management, Sales, and Key Account Management. Gaining in-depth experience in sales leadership, executive relationship, and market strategy on a global scale.
Amir holds an M.B.A and B.Sc. in Industrial Engineering, both from the Tel-Aviv University and is based in Israel, his home country, after spending years abroad. Amir is an avid Sci-fi and fantasy fan, loves photography and enjoys spending time with friends and family, ideally over a bottle of wine.
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FuturePrint TECH: Industrial Print: 21-22 January '26, Munich, Germany
um, welcome to the future print podcast. For our next episode, I'm happy to have with me back for the second time, uh, mr amir raziel, who had a really interesting conversation with him last year. It was last year, april 24, and we're kind of like time flies, doesn't it, and things have changed a lot since then. It's amazing how quickly time does go by and how much changes. Welcome back to the podcast, amir.
Speaker 2:Thank you, really happy to be here.
Speaker 1:Fantastic, amir.
Speaker 1:I'm going to give you a little bit of an introduction, because you are the Director of Strategy and Sustainability for HP Industrial Print strategy and sustainability for hp industrial print.
Speaker 1:So that's a that's a big, big job and one that I, I imagine, needs a lot of attention, given how fast moving changes and how things develop so quickly hp. So I'm really looking forward to the um, the conversation we're going to have, which is kind of almost like a part two, isn't it? Because when, back in april, we had an initial conversation around the theme really, which was the five great transitions in print, and given the fact that I've just said, things change and develop so quickly, we're gonna we're gonna perhaps refresh that or even to some extent reboot it looking ahead to the year, this year. So I'm pleased that we're going to go into that, because I think you, like you said, you've really enriched the content and things have developed, and last year in itself was a big year. So, yeah, amir, refresh a memory. Just to start off, really, with a little bit of background about yourself, as you've just said, you've just celebrated 19 years at HP, which is a big thing, right.
Speaker 2:Yeah, and I think what I also said is that I never expected if you, if we go back 20 years into when I was looking my career, I never expected to stay 19 or 20 years in the same industry, not not to mention the same company yeah, yeah uh, so so print and and hp digital print, I think and and. Hp have really been good to me and really interesting. It's kept my life on the move and fascinating through it all. And yeah, last month was 19 years. I'm looking forward to completing the 20th.
Speaker 1:Fantastic, yes, fantastic, yeah, and I imagine, um, just the scale and also the speed and the innovative culture, hp's quite likely kept you stimulated and engaged and not needing to move, I would imagine. Um, so yeah, there we go, 19 years. But if you wouldn't mind, just sort of refreshing up, I sort of thought your journey into the printing industry was actually quite serendipitous. Looking back, what perhaps has surprised you most about this industry?
Speaker 2:I think what you know, we're all, or most of us are veterans of print, so we're not really surprised by, you know, by the level of technology. But for me as a young engineer going into back then, was the HP Indigo business. What I was surprised by was the variety and depth of technology that goes into print. I mean, look, I'm an amateur photographer so I know all about lighting and exposure and chemistry and I've done my own development and photos and I've worked at a photo lab so I knew all that. But there were a few aha moments along the way. I think one of them was one of the first projects I was involved in with an Indigo WordPress that was printing transactional documentation and suddenly the data verification and validation that we needed to go through was completely not, you know, wasn't print, it was data, and I was surprised.
Speaker 2:Another one is when I started working in the labels and packaging part of the business. The amount of technology, chemistry that goes into a pouch is incredible and you know you've gotten addicted when you're walking along the supermarket and you grab a pouch and start flipping it open and checking. Well, okay, you know how have they got the seam going on? Is there any ink, bleeding and so forth. So you know you're hooked into it. But print is both an art form and, you know, incredible technology in one, and that's what's kept me interested in going all along.
Speaker 1:Yeah, and like you say, it's a lot around sort of data management and being able to work with lots of different sort of digital inputs and outputs and everything else, and it's, uh, engineering, it's. It's actually extremely diverse as well, right?
Speaker 2:and in the end of it there is something physical right there is, there is, you know, a photo book, a brochure, a label, a box, a pouch that you can look at and you can say, well, I like it, I don't like it, you interact with it. And that connection between technology and the physical manifestation of it is what really excites me.
Speaker 1:Yeah, and it's incredibly relatable. Of course as well. We all come into contact with print, every human that consumes anything and it connects with print in some way, shape or form. So, as an industrial engineer, that's where you began, wasn't it? That's where your education is of industrial engineering. I guess print kind of played to that rather well. Yes, I guess Prince kind of played to that rather well.
Speaker 2:Yes, look, I mean I started as an industrial engineer as what we call planning and control, right, project management, budget. You know, there is this triangle of scope, schedule, resources that everyone needs to meet to in order to hit goals and objectives. And, as an industrial engineer, that's what you learn. You learn to look at a system or an ecosystem, you take it apart and then you put it back together. You look for interfaces, dependencies, efficiencies, and again, how do I get in the best way from point A to point B, using the minimal amount of resources and getting the best outcome? Well, that's strategy. It's strategy, right? You're asking yourself the same questions when should I be in business in order to maximize my goals and what's the right way of going about it?
Speaker 2:I think another aspect is that, as an industrial engineer, I tend to look. You know, I go into a print site, into the production floor, and I start looking at machines and I look at the amount of pallets and rolls on the floor and I look for bottlenecks along the production. And how are they doing their planning and what advantages digital print can bring to them? Right, shortening lead times, more effective supply chains. You know that's what industrial engineers do. And now I'm taking that and implementing that into the strategy that we drive for HP. You know, because I know how critical that is for business to succeed. That's a big part of what we do at HP.
Speaker 1:And obviously, as I said at the beginning, five great transitions. I like the word transitions. It sounds more somehow gentle than revolution or anything like that. So it's kind of like, and I guess transition is also one of those words that you sort of you know. Let's be honest. Change occurs and all of a sudden becomes normalized, doesn't it? But maybe that pace is quicker. Give us a run through the five great transition in print and, if you have any proof, points to underline perhaps, why these transitions are really so important to understand understand.
Speaker 2:So, yeah, happy to. Uh, I think, first of all, we call we don't, we didn't call it transitions by accident, right, we call them transitions because it's a long journey and, as such, you know, if we were to come and say and every year change it and say no, no, that transition is now different, it wouldn't be a transition, it would be maybe a trend, it would be a prediction for the coming year. But we try to take things a little bit broader than that and we try to look at long-term impacts or effects and we try to imagine print in 10 years, 5, 10 years from now, and where it will be. And we spoke about five transitions, right From manual labor to AI-driven automation, from low-cost to low-risk supply chains, from exploitative to sustainable production, from information to experience and from product to service, and each one of those is critical.
Speaker 2:I think the manual labor to AI-driven automation is a huge one that is very popular these days because it deals with this intersection of challenges that print is going through the labor shortage right, which we're all dealing with, the shortening job basket, so as we have less people, we need to deal with more jobs that are shorter and require more setup and the maturation of new technologies and it's this interesting which is AI and automation and AMRs and all of that. So this intersection between the three of them is what makes it critical to understand, and the proof point is that the investment ratios are changing. Labels and packaging companies are investing 34% more in capital investment per employee since they were a decade ago in capital investment per employee since they were a decade ago, and commercial print is doing the same, around 30%, but they've also reduced the number of people by 25%. So it almost balances out, but the investment cycle is changing. So if you look into the future and you want to understand, you know where to invest and how to direct your business.
Speaker 2:You have to understand this trend. You you have to learn and and envision print as a fully automated lights out production business and how you are going to prepare yourself for that. Um, you know, should we go into supply?
Speaker 1:chain. Well, just just summarizing that really. So what you said there is really interesting. So you're saying there's a trend where there's an increase in investment in technology that's almost equates exactly to the decrease in the number of, or the investment in, people or the investment in paying for labor. Is that right?
Speaker 2:Is that right? I think so. Commercial print in the decade leading up to COVID and afterwards and that's data we have from NAPCO, we worked with them on this Decreased the number of employees per plant on average by 24% and at the same time they increased the capital investment per employee by 29%. So I mean you're decreasing the number of employees but you're increasing the investment per employees at a bit higher ratio. It's almost the same, but a little bit more investment. It's almost the same, but a little bit more investment In labels and packaging. That's significantly different, because the number of employees has increased a little 4%, but then the rise in capital investment per employee on top of that is another 34% increase. Those are big numbers and that's the direction that the industry is going into.
Speaker 1:It's becoming more automated, it's investing more in equipment that's interesting as well and I would imagine with the labels and packaging segment it's just faster moving, generally right, compared to perhaps the commercial printing industry, really faster moving in terms of you know the output and what it's directly linked to, and it's in a more buoyant state, right. It's an industry that's growing perhaps in a more substantial way compared with commercial. Is that fair to say?
Speaker 2:Yeah, labels and packaging is the growing part of printing right. Where commercial print is relatively stagnant, labels and packaging is growing at give give or take GDP growth rates 4%, 3%, 4%, 2% a year. So that's where the energy is going, and it's at least in the near future. We don't see a replacement to the physical presence of the package, both on the shelf and at home, so that's going to continue.
Speaker 1:Yeah, absolutely, and you just mentioned the word supply chain and we kind of had a good look at that in a previous podcast with some of your colleagues. But this is part of the transitions right, the complexity around supply chain.
Speaker 2:Yeah, I think you're probably going to end up having discussions with a lot of my colleagues around this but yeah, around supply chain.
Speaker 2:I think our work is very simple in explaining why it's so important. I mean, look at what we went through during COVID or in the last year and a half, with the shutting down of, the near shutting down of the Suez Canal. Supply chains are fragile and they're dependent on macroeconomic and the geopolitical environment. I mean, I was talking about Swet's canal. Look at what's happening with Trump and the Panama Canal these days. So these supply chains, they are fragile.
Speaker 2:Companies are understanding that and they're starting to look for multiple vendors. If you're a vendor, if you're supplying big brands in the industry, especially around packaging, you need to be close to the plans of your customers and you need to understand that sometimes they will be looking to de-risk themselves and so what are your options? In some cases, we're seeing consolidation and globalization over the last few years in the labor industry, because some of the companies realized if I want to supply the Procter Gamble, the Nestle's, the Unilever's of the world, I need to have a global presence and I need to be able to operate in Brazil and in Vietnam and in the US, but also in Spain and Portugal and, by the way, nigeria and Dubai. So now there aren't many companies, but there are more than one or two and they're doing well.
Speaker 1:And that's a direct response perhaps to, as you said, the volatility, geopolitical and economic volatility, supply chain complexity and so on. It's that this force or this transition really is an essential move. Right. It's a failure to address. Is really you're really exposing yourself to potential? You know, losing a huge amount of business and not being able to respond to demand, right?
Speaker 2:And there is a conscious side to it, which is the opportunity right, Because in a world with globalization, in a world where the supply chains are not fragile or strong, you would go for the lowest cost per unit.
Speaker 1:And as an industry.
Speaker 2:We know what happens when people push for the lowest cost per unit. Right, it leads to commoditization. It leads to many things that aren't good for us as businesses. Once the quantification of risks under them, once you start looking at things beyond the pure cost per unit but at risk of scrap inventory cost, capital cost, it starts to become a bigger point. And then there are opportunities for you to increase for vendors, for print service providers, for converters, to generate more revenue or profit by de-risking parts of the supply chain, and that's outside our current value chain. That's where the benefits to our industry are.
Speaker 1:And, like you say, the Unilevers, the Procter Gamble and so on really are looking for people that can solve those problems for them, right? That's also the opportunity, isn't it? It's like being able to do something that others can't. Because you've made that investment, you've moved that. You can't certainly try new things with new technology.
Speaker 2:I think they're looking at it right. Is it easy? I think we still haven't cracked the way to address it. But I think a lot of the potential of the labels and packaging industry, especially around digital print, lies around the end-to-end supply chain and not just around the per unit cost.
Speaker 1:Absolutely so. Five great transitions, obviously the supply chain is on. So where are we on that journey? So we've covered a couple, at least two or three of them now.
Speaker 2:We've covered. Yes, we've covered two, at least two or three of them. Now We've covered. Yes, we've covered two. The next one is sustainability. And here look, I think, the key point here on this transition of print into a more sustainable industry. 80% of decision makers consider sustainability a key factor in print buying decisions 80% 80%.
Speaker 2:This is data from NAPCO, based on your service that they've done in 2023, based on the work that we've done with them. I think this was more to leaning towards commercial print, but we know also in labels and packaging. In Europe, ppwr regulation is coming on board and will be challenging. So, whether it's coming from consumers, who are demanding sustainability and there are proof points there as well or from government regulation, or from the buyers, who are now starting to consider sustainability as a key factor in their decision, you need to be ready to adjust it and you need to ask yourself how am I positioning myself towards the future?
Speaker 2:Because, you know, the classic example that we usually give is we believe that in a few years from now, you're going to have to hand over a carbon footprint you know bill along with the invoice. This is the job and here's how much carbon footprint it costs and, by the way, here's how you can improve it. And then we think that PSPs and conver converter is gonna have to supply that now. If you're not getting ready for that, it might not hurt you next year and two years from now, but eventually it will come, and then either either you're ahead or you're behind and do you get the impression it's difficult to perhaps put a figure on it your community of PSPs or whatever?
Speaker 1:do you get the impression that you know half, 50% of them perhaps, are really getting on board with the journey, or how do you feel that that is really? I mean, are you suggesting most aren't, or some are, some aren't? What kind of? If you were going to put a guesstimate on something like that difficult, I suppose I think it's quite difficult.
Speaker 2:I think that the first question that we ask and that that our customers ask is okay, well, our, you know, are people willing to pay more for it? That's a big question around sustainability, right, and some business models have succeeded in doing that. Others, by the way, haven't, and we'll need to see with the new regime or the new government in the US, we'll need to see if that changes, right? I mean, that's one of the things that, while I don't think the long-term transition will change, we could be facing a slowdown for the next few years. But the big question is is it more profitable? Does it help us do business better? Are people willing to pay more?
Speaker 2:We're getting more and more indications that people are willing to pay for it, but, quite frankly, it's not yet translating into the day-to-day business. Yes, it's a factor. So if I were to pay, if the price was the same for two proposals and one of them would be more sustainable, you would go for the more sustainable one. But if you had to pay 2x for a more sustainable solution, unless there was a clear revenue generating impact, I think it would be difficult to see brands make that call. So I think that's the one that will take a bit more time to realise.
Speaker 1:Yeah, and I think that's something that is a issue, isn't it? That fact that sustainability I think most people not everyone I know, but most people agree it's a really critical factor and that we want to do the right thing, we we on many levels. But that um, when it comes to economic necessity, that sometimes gets, you know, more of a priority because of the tension between that um and, like you say, given a choice between two and the cost is similar, then why wouldn't you go sustainable? And I guess eventually that is what will happen, won't it? The cost of production will match cheaper options.
Speaker 2:I think that's one. I mean definitely the cost of production. The other part is that regulation will force us that way. Yeah, it will, and we're already seeing sustainability become a regulatory topic in many countries. Definitely right in Europe. You're seeing regulation in France, you know California is a big one, and then the example of the PPWR regulation that I was talking about. That's a big deal. So, yes, for the next couple of years you could probably get along with it, but you do need to keep an eye out and understand how you're addressing future regulations, because you may wake up one day and realize that you're not allowed to sell PVC-based shrink sleeves somewhere in the world PVC-based shrink sleeves somewhere in the world right?
Speaker 2:No exactly. Or that your shrink sleeve business for beverage cans is losing out because it has a recyclability issue. There are examples here that people need to watch out for.
Speaker 1:Brilliant. So sustainability a big transition that won't be going anywhere. But, like you say and I've seen this sometimes it's rising at the top of the agenda and other times it falls down a bit, but it does return, it continually does come back and, like you say, it is linked to politics in a way, isn't?
Speaker 2:it. It is linked to.
Speaker 1:It really is. It is a. So there's the consumer trend, which is powerful, and a lot of them are adopting um, you know, they're asking their suppliers to become more sustainable. But law, I mean, you can't really get around that no, and and and we've seen this.
Speaker 2:We've seen this. We've seen the flexible packaging industry go through a big transition, right with the plastic scare, and it's still going through. They've slowed down a bit, but there was a big shift to developing monomaterial solutions and recyclable solutions. Part of the focus is now going into recyclability itself as well. Recyclability itself as well. But, marcus, we, if we want to talk about sustainability, I think we could spend, you know, hours and hours and hours.
Speaker 1:Just about, just about that absolutely, but it isn't going away, it's a transition. So, yeah, what next? So, next transition, and what we'll probably do is revisit the transitions and have I'll fire some questions to you uh, a bunch of it once we've got through the five.
Speaker 2:Yeah, uh, the, the. The next one is one of my favorites. It's the one from information to to experience, um, and it's one where, where we believe print is really changing its function and and you know it's it it's about going from what we were in the past, where we communicated information, to communicating values, memories and experiences. And if you do not realize that and if you continue with, you know, trying to sell print as a medium of information and we'll go into the next transition that we talk to you're going to find yourself commoditized because you're competing against digital media. It's very difficult to compete against the digital media that is in our phone and is highly addictive. It's also not needed and in order to attract people, in order to maintain this, we started the discussion.
Speaker 2:We talked about the physical characteristics of print and what makes it unique and the ability to take it in your hand and look at it. That's only part of it. If that doesn't convey a feeling, an emotion, a message, that will go away. And I think you were talking about this with Philippa Sulin right A few sessions ago. You were talking about the importance of invoking emotion, the importance of invoking feelings as a base to any rational decision making, and print enables you to do that, and that is what will enable it to maintain its place in the marketing mix of the future. So the future of print and that's why it's important the future of print is in communicating emotions, experiences, and integrating between physical and digital, and, and, and you need to realize that in order to, as we call it at hp, to be future ready right to be ready for what's coming up now.
Speaker 1:You mentioned that um philip's really interesting conversation. But he said humans are more emotional now partly by the highly addictive technology you mentioned, digital. Is that that's driving us to be more emotional perhaps than we were before and maybe sometimes irrational? But that um, and and he also said that actually anxiety is on an all-time high generally. He said it doesn't make sense in one regard, but it is stems, does stem from social media and so on, higher anxiety. But there's a there's also a direct relationship between a printed document or a book or a magazine. It actually so proven scientifically to reduce anxiety. It's amazing, um, so so I'm just underlining what you're saying, really that it's very grounding. I mean, obviously it depends on the book or the media or whatever you're reading but, generally it chills you out.
Speaker 1:It's phenomenal, really. But yeah, so I think there's a huge, huge opportunity there that print has.
Speaker 2:I think so, and I think that one of the reasons for the rise in publishing right, or why books are still alive, what we saw direct mail is increasing throughout COVID times and volumes is because throughout this whole electronic clutter you need you know print stands out suddenly. You need you know print stands out suddenly because it's quiet, it's not, you know, constant, ongoing, and there that's one of the things that will keep it going for the future.
Speaker 1:Absolutely yes, that's a really good point, and so that's fourth and the fifth, unless there's anything. You wanted to finish up on that before we move on.
Speaker 2:No.
Speaker 1:I think.
Speaker 2:The last one is the product-to-service aspect, and I was really struck by this because I think, as an industry, we are very, very transactional. Even when you think about online printers, right, that's still a very transactional approach. You need something, you go online, you click on it, you look for the cheapest price, maybe you order faster or slower, you get it and you're done. There's no relationship beyond that, and that leads to price competition and compromise and quality and commoditization, but, but, but.
Speaker 2:But the number to to think about, and where I'd like you to to look back, is this new research by by printing industries of America, pia, a couple you know, about a year and a half ago or a bit less, general commercial printers who had additional non-print revenues had 45% higher income before tax than those that didn't. 45%, right, that's almost half more. And so that ability to add these non-print services and to integrate the package to deal with the problem that your customer has generates higher margins and allows you to do more. And the analogy that I use is baking a cake. I don't know, marcus, if you dabble in baking, I don't.
Speaker 1:I don't, it's quite hard actually. You have to be really accurate, don't you? Apparently I'm not a very accurate cook, but I'm creative. I don't, it's quite hard actually. You have to be really accurate, don't you? Apparently I'm not a very accurate cook, but I'm creative. I don't bake cakes rather.
Speaker 2:So my wife cooks. They even had a boutique bakery with her cousin and when she wants a cake she knows exactly what she wants. She will give me a shopping list to get. I will go in. I will go to the supermarket. She will give me a shopping list to get. I will go in. I will go to the supermarket, I will buy the greens, I'll come back, she'll sit down, she'll make the ketchup that she wants. She'll get it perfect, the way she wants it, the taste she wants it, the right flavors, all right, easy. That's good for her.
Speaker 2:If I want to have something sweet, I don't try to make it myself. Sometimes I don't even know what I want and I definitely don't know what to do with it. If I have flour eggs, at best I can make pancakes for my kids on Saturday morning. So I'll go into a shop, I'll go into a bakery that's specialized in what I'm thinking about and I'll take advantage of their knowledge, skills, all of this to get exactly what I want. And then, if I like the service, I'll come back to it. And if they have a delivery service, then I'll order it and I'll make it more convenient. And every step I'll pay more and more and more, and that is part of the way that I like to look at this.
Speaker 2:If you're a print service provider, you need to become a marketing service provider. You need to manage critical business services. If you're into publishing, you need to start looking into managing your publisher's inventory and to backfill their you know their, their, you know their, their, their lists Right. Or if you're in in packaging, you might want to manage the inventory and deliver just in time to your, to your consumer, or sell them, you know, sell them, peace of mind, authentication.
Speaker 1:But there is more to be done than just the, the ink on paper or ink on film itself yeah, and, and that you know, that's really about my first mindset, and willing willingness to change or willing willingness to. You must see a difference in the type of person that's willing to do that or the type that isn't for some reason. Is it or is it? You know what? It's an inevitable thing. You already have customers that do this, right. Yeah, so yeah it's not.
Speaker 2:It's not new, marcus, I mean it's. It's. You know it's been going on for the last five or ten years and some of some of really have been have been doing this. But for everyone that has a lot hasn't. And from time to time when you visit the customers you go into someone who hasn't made that shift and that can get a bit depressing Because you see the direction that their business is going and you see them being commoditized, you see them trying to deal with the giants and not having enough differentiation into what they treat them. Selling, selling print used to be very easy. I mean, print used to be a very easy business and I I had this discussion, I don't remember a couple of weeks ago, I don't remember who, but I remember someone telling me look, print was a very easy business. You would buy paper, you have a machine, you take that paper, you convert it into something else and you sell it for a margin. Very easy business. That's not enough today, where we are just not enough no, and I'll tell you.
Speaker 1:But I've talked with people that were in business I mean 90s, 90s, yeah and they would say they just couldn't keep up with demand and the demand was just so high. It was the people were driving around in, you know, porsches and so on, and and without having to adopt this kind of approach. But that demand has shifted and changed and it's a different world now, isn't it? And I guess what's stopping these people from changing, in your view?
Speaker 2:Some of them are just used to doing things the way they are. Some of them are, you know, are at an age or a point in their life and their career that they don't want to make the change. And we are. I mean, we talked about labor at the beginning. The industry is, you know, print is not a young industry in essence, right, a lot of the business owners that we talked to or that we talked to 10, 15 years ago were maybe 50, 60, but they're now 65, 70, right.
Speaker 2:And unless the next generation comes into the business and starts taking a refreshing look, or unless people have started to do something differently, then people might not be ready to make that shift, or they might just be very, very comfortable in where they are, which is good for now. But then what will happen five or 10 years into the future? So, and, by the way, the customers that you know, if I look back at my, you know the engagements we've had, the customers who have pushed us the most with you know. And then this is digital print, right. So we deal primarily with those who want to change, but those who have pushed us the most, who have been most curious, who have been the most, you know, challenging to us to make things happen are the ones who are the most successful, right, because they challenge, they continuously challenge the status quo. Well, why are we doing it like this? We need to be able to do it better okay, so how you know what are we changing?
Speaker 2:how are we doing it differently?
Speaker 1:that's mindset that people need to adopt yeah, and I guess that's that can be inherent with some people, and it's something you can still learn, though, right, if you have a willingness to it's all about.
Speaker 2:It's all about the mindset and and the willingness and and and understanding, or or understanding deeply right, that that you need to change or the change is coming.
Speaker 1:Yeah, I think as well yeah, yeah, and if you do that and it's a preparedness to not know the answers and learn new things, right?
Speaker 2:Yeah, for sure.
Speaker 1:Yeah.
Speaker 2:Curiosity for sure.
Speaker 1:Yeah, yeah, absolutely so we've got the five, so that's really about business model, mindset, leadership, culture, doing things differently and, like you say, in a way, HP, because you're innovating digital. The people that are attracted to that tend to be of that mindset. The people that are attracted to that tend to be of that mindset. But you know, the whole industry, if it hasn't already got some form of digital, must be pretty close to having to have it. Given the big changes you've said in terms of demand shorter runs, much more fragmentation of supply chain it's inevitability, isn't it?
Speaker 2:Indeed, and there are industries that have made nearly a full transition into digital print, like ceramics. There are industries like commercial print, where you know most of the companies have some sort of digital print or another. And there are industries like folding cartons, flexible packaging, like rigid packaging, that aren't digital yet, or maybe at 0.5, 1, 2% of overall volumes. So it really really depends on which industry or which segment of the print industry you're in.
Speaker 1:They're all quite different, aren't they Just rewinding a bit, because clearly a topical subject or a technology or discussion point or buzzword is artificial intelligence or AI. Have you got anything you could share perhaps around that, because I obviously saw your booth or not your booth your hall at Drupal with an area that was really dedicated to software and development.
Speaker 1:So is there anything you could share about ai driven automation, how that's progressed, uh, up to last year and so on, and how and how that's, um, perhaps poised to solve some of the multiple challenges you've mentioned, like skill shortages, like supply chain complexities, um, any, any sort of thoughts around or any kind of stuff you could share around AI?
Speaker 2:Well for sure. But I mean, I think you had a very interesting discussion with our master of AI and software, or the one who's leading all the transformation. For me, ai over the last year has gone from a buzzword and from something that people didn't really understand what it was about into a realization that it is a path forward for our industry and it's being taken very seriously. I think at Drupal and at HP, we've had AI and we've introduced a portfolio of products that has AI-driven components into it, and we shared our vision of the Intelligent Automation Platform, and there are a few companies who share, or who share, that vision. Some, by the way, even had it before us. Most companies were still back in April and even Drupal were still trying to figure out where they were heading with this.
Speaker 2:I think, looking six, seven months ahead, it's gone from buzz into a bit more implementation. Six, seven months, you know, ahead. It's gone from buzz into a bit more implementation. Right, just last, you know, last night, I saw a commercial in my home country, in Israel, where the biggest bank is offering to small businesses an AI-driven marketing manager to do all of their online marketing posts and content Fear of charge.
Speaker 2:I think I saw Goldman Sachs starting to implement an article last night, starting to implement AI tools to replace bankers and AI tools to replace bankers. So you're starting to see these steps that from a year ago and six months ago, people were saying, oh yeah, it's very nice, it's going into literal implementation and the realization of this, now that we're not just talking generative AI but we're talking agents, that suddenly AI can help connect the pockets of automation that we have. My good friend, jan de Rook from ESCO was talking about it. There are a few others who share that vision and there is a realization of what it can do. So, despite the fact that our industry is relatively slow in doing this, I think we're starting to see people understand where it can take us. We're starting to see more and more and more use cases and it's been taken very seriously.
Speaker 1:Yeah, yeah, and also, and also I guess as well you're you're able to provide that kind of level of insight to your customer base, your psp community as well, because, like you said, in the space of a year we're starting to perhaps understand its potential and use it more.
Speaker 1:But that um how it can solve some of those problems. So it isn't really really exciting, really exciting things. A lot of lot of the final transition around business models and and service, as you know, if you're able to help people, and ai, as you've just said, is being used to even solve service problems itself, I guess um really around sort of um, the, the business model, uh, kind of a shift from products to services, obviously not just at HP, but generally is becoming a thing enabled by technology. How do your sort of customers you know in terms of this approach, what kind of feedback do you do on a more of a general level, because you know you have events like DSKIP. You've done that for years and years and years. Is that you know? Do you sort of look at that and think away that's what we've always done, or do you think that's like a, an essential ingredient for success in the future?
Speaker 2:so, first of all, I mean we've done, we've, indeed, we've done dsq, indeed we've done Dscoop for many, many years and Dscoop has been a critical component in the growth and the success of HP and the HP Indigo and the page-wide businesses and I'll come back to Dscoop in a minute. But I think that the base, uh, the base of from product to service, when you look at what hp does, um, it's, you know, our business model is inherently a service oriented business model, since we we don't just sell presses or ink or service. No, you know, we provide the press, the supplies that power it, the services that generate it, software that helps automate functions of it. And in the end of the day, we only succeed if our customer prints. And if our customer prints, that means ideally that they sell, and so they succeed. So our success through our business model, and if our customer prints, that means ideally that they sell, and so they succeed. So our success through our business model is tied to our customer success. If someone buys our press and it sits there and doesn't do anything, we are most probably losing money, and so that is already a very significant step into a service-oriented model.
Speaker 2:Now, if you look at the click-based supplies model of the Indigo business. That's even a step further, because we aggregate all of the complexity and simplify it for the customer and then page-wide, do something similar, even though it's not a click. But at the end of the day, our entire approach is based on this pure win-win business model. And once you start there, then you start asking yourself okay, so what do I need to do in order to make sure that my customer succeeds? What do I need to do in order to make sure that my customer succeeds? And then you go into this group because you want the people who are challenging the status quo, who want to change, who want to innovate. You want to get them to talk to each other and you want to get your customers to drive you into further innovation. And this group has been pretty incredible about that.
Speaker 1:So it's a fantastic thing, isn't it? And I think it's in California or the next one.
Speaker 2:The next one is in May, I think 14th, in Long Beach, california. We're going to have a fantastic event. I've been, you know, I've been offered to speak there, so you can actually hear me talk about these transitions and where they are at the School Page. Long Beach in May.
Speaker 1:Fantastic.
Speaker 2:So just finally finally looking ahead.
Speaker 1:Amix, you've covered the five transitions and perhaps summarizing that and just looking ahead maybe sort of five, ten, even twenty years how do you see kind of these transitions materializing and sort of and integrating into our world? You kind of got a vision that far ahead or well, and integrating into our world.
Speaker 2:You kind of got a vision that far ahead. Well, yes, so we believe, first of all, that print, like so many industries, is undergoing a fundamental transition. If you look 10, 15, 20 years into the future, you simply won't have a long-term option to continue as you did. So the choice is up to you. You either embrace the change or you have it thrust upon you. I know what I would recommend people to do, and when you look at print production into the 2030s, you know if we try to imagine where it will be. It will be automated, it will be integrated between supplier and buyer. It will be sustainable. Sustainable, it will be delivered as a, it will deliver experiences and be more connected between digital and physical and it will be provided as a service.
Speaker 2:And you know a lot of people say print is that no, there isn't a future for print over time. Well, things aren't black and white. It's not a binary choice of zero or one, a yes or a no. The world isn't just like that. We have a world where we have theaters and we have cinemas, we have paintings and photographs. We had radio and TV and streaming and cinema. We had radio and TV and streaming and cinema books flourishing physical books, flourishing along e-books and Internet. So it's a mix and a balance.
Speaker 2:I think print has a secure place in our world for the next 20, 30 years. I think it's something that it's a medium that provides credibility, that provides authority, and it will take more and more of a place of communicating values and memories. It's physical and enduring, it's tactile, it's engaging, it's something that you know'll always want to sit and pick up something and look at it, and not necessarily have it to the screen. So I think print does have a great future ahead of it is how do we adapt to and where do we want that future to be and how do we make sure we prepare for it and we bring it on? That's our responsibility as an industry. That's what we need to do if we want to keep this alive.
Speaker 1:Yeah, absolutely. And again, going back to that, it's about reinvention and being able to reinvent yourself the way you think, and so on, because things that worked five years ago are not necessarily working now. Right, I mean, it's that fast-moving change and being flexible and adaptable, isn't it?
Speaker 2:It's fast, but at the same time it's slow. So in many cases, even if you're afraid of the big leap ahead, you don't need to go a mile in one step. Start one small step after another and start playing around and asking questions. And you don't need to start investing huge amounts, but you do need to start looking at these options and ask yourself how to do it. And the beauty of as-a-service models is that they allow you to start playing with a relatively low minimum investment. So that's how it starts.
Speaker 1:Like you say, the data, the work you've done with NatCon and so on, reveals nearly 50% higher profit. Or is it higher revenue Either, or really, frankly, it doesn't matter the people that have invested and the ones that haven't. I mean, that's pretty significant proof and evidence that you know people are making those changes and are moving forward in a different way and benefiting.
Speaker 2:Digital. When you look at long-term trends, the volumes, especially around commercial print, will decline, but somehow the overall value of the industry is expected to remain more or less the same, because you print less but what you print is worth more. So you're generating higher value through digital print, and that's where we want to be. I think that's where print service providers and converters should look to be and, as vendors, that's where we want to push the industry to be.
Speaker 1:And the other word that you mentioned is about a difference between making smarter production versus transactional, making it much more of an experience, much more of a service, much more of a value. And your bakery analogy, I thought, was a really good one from that point of view. That gives you that, that that essence of I'm getting value from this exchange.
Speaker 2:I'm prepared to invest in this and the more you're integrated into your customer systems, the more you're plugged into his decision making process, the more you're part of you what they're thinking about when they're launching a new product, the more secure you are in a way, and you know or the less likely it is that they will go and search for someone else.
Speaker 1:Yeah, you're a strategic partner. Yeah.
Speaker 2:Yeah.
Speaker 1:Really interesting. Thanks so much, and, looking back at the five transitions, you obviously, at some point, you'd be able to perhaps access that, and I know that you've invested quite a lot of time in creating this content as well, haven't you?
Speaker 2:We do. We have an e-book that is out with the content and explains a little bit more of what we're doing. There's a landing page that you can access and take a look and download it and read a bit. And wherever you are in the world 120, 130 plus countries there's an HP office or an HP channel partner that you can talk to and sit down for a minute and imagine what print production is going to be like in the 2030s and how you can prepare for that, and I think, as business leaders, that's part of our responsibility. So we're here to help fantastic.
Speaker 1:Well, listen, thanks for joining us. Really interesting conversation, covered a lot of ground and, um, yeah, looking forward to uh reconvening with you at a future date to perhaps update them even further. And perhaps you know that as you go through this journey, like you say, it's uh we're gonna get lots of points of learning and perhaps, um, most importantly, huge opportunities. So thanks for joining us thanks for having me.
Speaker 2:Marcus, really appreciate it.
