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Old, new unified, in digital strategy

Johannes Gutenberg did not invent printing. He put its principles together in a machine using movable type–and it changed the world.
Likewise, Eastman Kodak Co. is combining old and new in the service of a vision that could change everything.
The photo giant on Tuesday in San Francisco unveiled a digital imaging strategy that includes a range of high-octane industry alliances and new products. While many components of the strategy held a familiar ring, Kodak watchers said, together they stand to build revolutionary momentum.
“All the pieces really have existed,” said Frank Romano, a professor in Rochester Institute of Technology’s School of Printing Management and Sciences. “All (the pieces) when they come together is the vision.”
Kodak watchers long have said partnerships hold the key to development of digital imaging. This week, Kodak took the spotlight with a host of industry heavyweights:
–For development of the consumer market, Kodak is teaming up with Microsoft Corp. Together, they will offer software for home personal computers, and retail kiosks to make new prints from existing images.
–For the small-business and home-office market, Kodak is partnering with Hewlett-Packard Co. to develop products such as wide-format ink-jet printers and low-cost scanners.
–Kodak is to manufacture new optical storage media for IBM Corp., which will begin marketing Kodak PCD writers, writable CDs and related equipment.
–Kinko’s Corp. and Kodak over the next six months will test-market workstations that allow users to create documents incorporating color images. Behind-the-counter workstations will allow Kinko’s workers to write Photo CDs for customers.
–Wang Laboratories Inc. will work with Kodak and its subsidiary Imagery Software Inc. to develop document imaging archive architecture.
–Sega will incorporate the ability to play Photo CDs in its new Sega Saturn system due out in September.
–Adobe Systems Inc. is to incorporate Photo CD technology into software programs such as Photoshop, Illustrator, PageMaker and Persuasion.
“They’re all absolutely first-rate companies,” said Lawrence Matteson, a former senior vice president of Kodak who now is a professor at the University of Rochester’s William E. Simon Graduate School of Business Administration. “They’re well-established in their businesses and they possess the kinds of technologies Kodak needs to build the strategy they’ve outlined.”
Further, many of them–IBM and Hewlett-Packard in particular, along with Adobe–are longtime business associates of Kodak’s, Matteson said. The companies already share common value systems and a history of working well together.
“If you tried to start a rain dance with six different companies you hadn’t been working with before it would be very difficult,” he said. “(But) there’s every reason to think these joint ventures would work well if based on sound business principles.”
One element of Kodak’s strategy drawing praise is its open licensing policy for its Photo CD ImagePac format. Instead of keeping a close proprietary hold on the technology, Kodak will open the door for others to develop applications, thereby rooting the format as the industry standard.
“It helps stimulate the growth of Photo CD,” Matteson said.
Kodak also announced a number of its own digital products:
–the Kodak Digital Camera (DC) 40, a point-and-shoot offering priced under $1,000 and designed for use with desktop computers;
–new premium-grade paper and transparency film to provide color images from ink-jet printers, due out in May;
–a new lower-cost thermal printer, the Kodak XLS 8400 PS, under $7,500;
–Build-It Photo CD Portfolio Disc Production software for Macintosh and Windows NT, due out in May, enabling users to write Photo CD Portfolio II discs on desktop computers.
Douglas Ford Rea, an RIT associate professor of digital photography and imaging, says Kodak today stands ready to enjoy the rewards of its long development of expertise in digital imaging. He sees both great opportunity ahead and great risk.
Kodak might play a central role in defining digital’s future, he says, but the industry is still so young that even the clearest crystal ball cannot see all the shifts ahead.
“It’s a risk Kodak must make,” Rea says. “They can’t just stick their big toe in the water. They have to get in there and swim.”
RIT’s Romano sees all this adding up to a Kodak just now stepping into the digital age. He predicts additional alliances over the next 12 months–perhaps with multimedia companies, TV and video makers, telecommunications firms–as Kodak continues to build the infrastructure that puts it at the center of the emerging digital imaging industry.
“It’s the Switzerland of suppliers: It’s neutral,” Romano said. “Kodak will be the great integrator bringing it all together.”

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