E A R L Y A D 0 P T E R C A 5 E
`
`5 T U D I E .S
`
`'HE FUTURE
`
`MARKET RESEARCH STUDY
`
`REPORT
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`EXECUTIVE SUMMARY
`
`Rich (non·texiuol) content is on increasingly important
`compo1:enl of all forms of publishing, but especially
`those that promote goods and services and provide
`entertainment. High quality visual content is rapidly
`becoming more than a key competitive differentiator,
`it's now a business imperative. At the same time,
`there is increasing pressure to develop systems that
`can publish that content anywhere, any time, to any
`a capability now referred to as Network
`device -
`Publishing.
`
`The downside is that creating and preparing images
`and other rich media for publishing in multiple chan·
`nels is expensive, labor-intensive, and generally a
`management nightmare. Dataware Technologies
`estimates that 12 to l 5 percent of a typical carper
`ration's revenues is currently spent on various pub·
`fishing activities, and the percentage is rising. Web
`siles in particular are becoming more complex and
`costlier to maintain because Web pages continue to
`multiply -
`from seven billion in 200 l to 40 billion
`in 2005 (Forrester/ AT Kearney) -
`and publishers
`ore finding it difficult to keep up with the growing
`appetite for better, more timely, more personal con·
`lent. Network Publishing may be a business impera·
`t;ve, but it's neither simple nor inexpensive.
`
`Enter a new crop of tools that streamline the pub(cid:173)
`lishing process and deliver better. more consistent
`content. These tools -
`hardware, software, and ser·
`vices -
`that prepare and serve up visual content are
`commonly known as image servers and are a vital
`component of any company's overall' publishing
`strategy. They are the only tools available today that
`will assist with serving up rich content across multiple
`access points and scale as required to meet the chal·
`lenges of a rapidly evolving marketplace.
`
`nearly 20
`Accordingly, a number of companies -
`as of this writing -
`have in recent years leveraged
`their technical expertise in imaging to bring to mar·
`ket image server products
`[For coverage of those
`vendors, please see our series of comprehensive
`company and product profiles: image Servers - A
`Competitive Analysis.] The market for these image
`servers today can definitely be characterized as in
`the formative stage. Use cases ore being developed
`and validated (or invalidated) by early adoplers, to
`the great benefit both of vendors, who can study
`these experiences to refine their value proposilions,
`and of other users, who can learn from the trailblaz·
`ers. The data gathered by Fulure Image reveals that
`the value propositions for image servers come under
`two broad headings:
`
`1, In front of the firewall or Top Line
`The ability to offer pictures on the Web, to offer high·
`er-resolution pictures that let the user zoom and pon,
`image editing features, easier content submission, or
`the ability to offer faster or more consistent imoge
`all conlribute 10 a better user experience.
`display -
`Digital imaging allows the consumer to zoom in on
`a picture, pan around, experimenl with different
`options, combinalions, colors and patterns, try it on
`a face or body model that can be made to resem·
`ble his/hers, spin an object, or move around inside
`a space. These activities make the VVeb experience
`more tangible and more personal, ·more like shop·
`ping al a slore or physically visiting a location They
`also make it more interactive, creating a deeper and
`the very essence of suc(cid:173)
`more lasting impression -
`cessful branding.
`
`Delivering more compelling, interactive, and per·
`sonalized content delivers a better shopping experi·
`ence, which translates into a better top line for retail·
`ers. More shoppers become buyers and those buy(cid:173)
`ers are generally more satisfied wilh their purchases,
`which means fewer returns. A study by the National
`Purchase Diary claims that nearly 30 percent of ail
`apparel items purchased online are returned due to
`"limitations
`in pre·scile product information" By
`comparison, Forrester says the re!urn rate for appar·
`el sales in general is 14 percent. Shoe manufactur·
`er Nine \'Vest credits use of MGI Software's interac(cid:173)
`tive imaging technology with decreasing their prod·
`uct relurns by nearly 50 percent and increasing their
`conversion rate significantly. [For more information
`on MGI, see Image Servers - A Competitive
`Analysis ] For the customers in our study who cited
`these as the primary benefits. the Web is their pri·
`mary business channel.
`
`2. Behind the firewall or Bottom line
`Production efficiencies, asset repurposing, brand
`lhese are the benefits that
`control, and the like -
`accrue behind the firewall AT Kearney estimates
`that workforce inefficiencies related to publishing will
`cost organizations around the globe approximately
`$7 50 billion in 200 l . Early adopters of irnoge serv·
`er technology are finding that they can increase the
`bottom line by reducing costs and making better use
`of resources.
`Image servers streamline workf!ow,
`shorten time to markel, reduce storage requirements,
`and can either mitigate the effects of downsizing or
`make existing staff more productive. Creative per·
`sonnel can spend their lime being creative, not
`doing what image server vendor MediaBin calls
`"post"\:reative busywork." [For more information on
`
`Image Servers - Early Adopter Case Studies ©Tony Henning and Future Image, Inc. 200 l www.futureirnage corn
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`iii
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`ln1oge Servers - A Competitive
`1\t\ediaBin, see
`Ano!ysis.] The customers in our study who cited these
`benefits exclusively, like Ford and l/V.W. Grainger,
`tend to be larger companies for whom the VVeb is
`but one aspect of their business or one channel in
`their distribution strategy.
`
`uur in-depth sludy of the use cases of seven irnpor·
`tanr early adopters, presented
`in
`the
`fo!iowing
`pages, explores these users' purchase motivotions,
`their purchase and implementation process, and
`their evaluation of the benefits.
`
`Image Servers - Early Adopter Case Studies © Tony Henning and Future Image, Inc. 200 I www.futureimage com
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`DEFINITIONS AND METHODOLOGY
`
`DEFINITIONS
`
`Image Server
`In the most general terms, on image server is soft(cid:173)
`ware
`that automates otherwise manual
`image
`manipulation tasks. The software may run on a ded(cid:173)
`icated machine or on the Web or opp server. In at
`least one case, the server software is bundled with
`hardware and delivered os a server appliance. In
`all coses, the image server is but one component of
`a network infrastructure.
`
`The functionality provided by the software may be
`as simple as rendering an image or graphic on the
`server rather than a desktop computer. The rendering
`may toke place on demand or as part of a botch
`preparation process (see Dynamic imaging). More
`often the server software provides for considerably
`more sophisticated functions like sub-region extrac(cid:173)
`tion, zoom and pan, colorization, layer controls, text
`overlays, easier content submission, and more.
`Goals common to virtually all image servers are opti(cid:173)
`mized delivery and higher-quality images, regard(cid:173)
`less of the platform.
`
`Early Adopter
`from Geoffrey Moore's
`token
`This
`familiar term,
`Crossing the Chasm, is used lo describe those who
`embrace new technologies, who con understand
`and appreciate the benefits of the technology and
`relate those benefits to their own concerns. They rely
`on their own intuition and vision when, making buy(cid:173)
`ing decisions and ore key to opening up high-tech
`market segments. Early adopters tend to be those
`who will toke a new technology that might be char(cid:173)
`acterized by the more conservative segment of the
`market as immature or "not ready for prime time"
`and work with the vendor to develop it info a fully(cid:173)
`funcfionol solution. They typically derive huge com(cid:173)
`petitive gains from being first to deploy a new solu(cid:173)
`tion and their experiences are crucial in crossing the
`chasm and selling these new products to the more
`"tech-averse" early moiority market.
`
`In front of the firewall benefits
`These ore benefits generally associated with a Web
`site and ore usually "customer-facing." They tend to
`improve the user experience in some way and make
`the site more engaging, more satisfying, and ulti(cid:173)
`mately more valuable to the end-user, and, not coin(cid:173)
`cidentally, the company that has deployed the serv(cid:173)
`er. Stickier Web sites, better click-through roles
`!resulting in a successful transaction), happier, more
`
`!oyoi customers, and premium services o!I contribute
`to the corporate top line.
`
`Behind !he firewall benefits
`These are the benefits experienced within the cor(cid:173)
`porate environment, including suppliers, collabora(cid:173)
`tors, outside marketing agencies, and other third(cid:173)
`party constituents who use the system. Streamlined
`workflow, shortened time to market, improved pro(cid:173)
`ductivity, easier repurposing, and tighter control a!/
`help to reduce or contain costs and improve the cor(cid:173)
`porate bottom line.
`
`Dynamic imaging
`This refers to just-in-time delivery of visual content.
`Typically a single core asset is retrieved, manipulat(cid:173)
`ed to suit the occasion or device, and delivered only
`when called for. Content served up in this fashion
`con be personalized and optimized on-the-fly
`according to database input or a variety of current
`location,
`time, bandwidth.
`conditions such as
`device, traffic, or user preferences - optional layers
`can be hidden or mode visible or transparent. colors
`and patterns con be changed, and text con be
`changed and overlaid. Content becomes interoc
`tive, with the user .;:onfiguring the final image
`
`Contrasted with dynamic imaging ore systems or
`applications that prepare images in advance, gen(cid:173)
`erally as port of a botch process .. A.n example would
`be a new product shot added to a "hot" folder that
`is automatically converted from a 300 MB Ct\WK
`TIFF suitable for traditional four-color printing for a
`catalogue to RGB JPEG thumbnails. previews, and
`full-screen derivatives suitable for a Web site. While
`most image servers con be deployed for either
`application, some ore focused on the delivery of fin(cid:173)
`ished imagery -
`in multiple resolutions. formats, and
`details to be sure -
`but not on last-minute modifica(cid:173)
`tions.
`
`METHODOLOGY
`
`The interviews that ore the basis for this report were
`conducted by telephone over a six-week period,
`starting in June 200 l . The companies and contacts
`interviewed were selected from a list of customer ref(cid:173)
`erences provided by the image server vendors them(cid:173)
`selves. The list was prioritized to involve as many dif
`ferent vendors and use coses as possible. Final
`selection was ultimately based on those criteria as
`we!I as willingness and availability to participate.
`
`Image Servers - Early Adopter Case Studies ©Tony Henning and Future Image, Inc. 200 I www.futureimoge.com
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`Highlights of the interviews were summarized by our
`researchei; Sydney Price.
`In addition, the author
`reviewed all the interview tapes and added to ihose
`highlights. In a number of cases, follow-up interviews
`were conducted io clarify certain issues or investi(cid:173)
`gate topics more thoroughly, For some of the larger
`corporate customers, review by the corporaie com(cid:173)
`munications or public relations deportment was
`required before the case study was approved for
`publication.
`
`All the interviewees were cooperative, some volun(cid:173)
`teering additional information when it become avail(cid:173)
`able subsequent to the interviews. Future image is
`grateful to all the participants for their time and effort
`in completing this study
`
`The customer interviews were conducted in coniunc(cid:173)
`tion with our research into the image server market
`in general and the primary vendors and their image
`results of that
`server products in particular The
`research -
`in the form of comprehensive profiles of
`the vendors and their products and a thorough
`analysis of the current market for image servers -
`are found in our companion series of reports, Image
`Servers - A Competitive Analysis.
`
`The irrfervie·NS 1 vvhich took frorn 30-___JOO minutes
`each,
`folbned a comprehensive quesiionnciire
`developed in advance of the scheduled research
`period. The questionnoire was divided into three
`general sections:
`there were two
`l . Corporate decision making -
`dozen questions in this section, half of which
`were designed to determine why the company
`decided to implement an image server; how they
`learned about the product they ultimately chose
`ond why they chose it; who and what were
`involved in the trial, decision, and implementa·
`tion processes; and what the network environ·
`ment was. The remainder of the questions in this
`section were designed to identify what the inter·
`viewee fell was the "killer opp" or key benefit of
`the image server for their company.
`2. Behind the firewall benefits - the questions in this
`section sought to ascertain which benefits lypi(cid:173)
`colly associated with the corporate bottom line
`the customer hod experienced. Production effi(cid:173)
`ciencies, time to market improvements, staff pro(cid:173)
`ductivily, storage cost reductions, and tighter
`asset management and brand control were some
`of the areas explored.
`the goal of the
`3. In front of the firewall benefits -
`questions in this section was to find out which
`benefits usually associated with the corporate top
`line the customer had experienced. A better user
`experience, improved customer satisfaction and
`loyalty, enhanced product presentation, and
`reduced customer support needs were some of
`the topics covered in this section.
`
`Image Servers - Early Adopter Cose Studies ©Tony Henning and Fulure Image, Inc. 200 I www.fulureimage cam
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`vi
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`TABLE OF CONTENTS
`
`. I N .
`..
`C
`opyngnt ot1ce ........................................................................ 11
`Executive Summary ..................................................................... iii
`Definitions and Methodology ........................................................ v
`Table of Contents ....................................................................... vii
`Table of Figures ........................................................................ viii
`About the Author / Future Image ................................................... x
`
`I. Early Adopter Case Studies ........................................... l
`Ancestry.com .............................................................................. 2
`Business Description ................................................................................ 2
`Reason for Image Server Purchase ............................................................ 2
`Purchase Process .................................................................................... 2
`Benefits .................................................................................................. 3
`eBay Inc.
`.. .............................................................................. 5
`Business Description ................................................................................ 5
`Reason for Image Server Purchase ............................................................ 5
`Purchase Process .................................................................................... 5
`Benefits .................................................................................................. 6
`Ford Motor Company .................................................................. 8
`Business Description ................................................................................ 8
`Reason for Image Server Purchase ............................................................ 8
`Purchase Process .................................................................................... 8
`Benefits .................................................................................................. 9
`NextOffice.com ................................................... »~ ................... 13
`Business Description .............................................................................. 13
`Reason For Image Server Purchase .......................................................... 13
`Purchase Process .................................................................................. 1 3
`Benefits ................................................................................................ 14
`PhotoChannel Networks ............................................................. 16
`Business Description ............................................................ _ ................. 16
`Reason for Image Server Purchase ......................................................... _ 1 6
`Purchase Process .................................................................................. 16
`Benefits ................................................................................................ 17
`SPACE.com .............................................................................. l 9
`Business Description .............................................................................. 19
`Reason for Image Server Purchase .......................................................... l 9
`Purchase Process .................................................................................. 20
`Benefits ................................................................................................ 20
`W. W. Grainger ....................................................................... 22
`Business Description .............................................................................. 22
`Reason for Image Server Purchase .......................................................... 22
`Purchase Process .................................................................................. 23
`Benefits ................................................................................................ 23
`
`II. Conclusions & Summary Charts ................................... 25
`Conclusions & Outlook .............................................................. 26
`Summary Charts ....................................................................... 28
`Companies, Vendors, & Products ............................................................ 2 8
`Key Benefits ........................................................................................ 2 8
`Adoption Process .................................................................................. 30
`
`Image Servers - Early Adopter Case Studies ©Tony Henning and Future Image. Inc. 200 l wwwfutureimage.com
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`TABLE OF FIGURES
`
`Fig. 1 -- ,i\ncestry.com - text·-only version of Federal census
`index (1840) .............................................................. 2
`fig. 2 - Original document scan [and detail] of Alabama
`census (1900) ............................................................ 3
`Fig. 3 - eBay picture submission before deployment of
`iPIX Rimfire ................................................................. 5
`Fig. 4 - eBay picture submission after deployment of
`iPIX Rimfire ................................................................. 6
`Fig. 5 - Some examples of Ford's large format displays
`at the Texas State Fair ................................................. 9
`Fig. 6 - Costs for conventional vs. fractal scaling for the
`Texas State Fair ........................................................ 10
`Fig. 7 - Costs for burning and shipping CD-ROMs for ad
`insertions ................................................................. l l
`Fig. 8 - NextOffice.com home page ......................................... 13
`Fig. 9 - NextOffice.com office planning page ........................... 13
`Fig. 10 - Sample chair, blue fabric, with wheels .......................... l 4
`Fig. 11 - Sample chair, burgundy fabric, no wheels ..................... 14
`Fig. 12 - PhotoChannel.com home page ..................................... 16
`Fig. 13 - Crop demo 1 ............................................................. 17
`Fig. 14 - Crop demo 2 ............................................................. 17
`Fig. 15 - Crop demo 3 ............................................................. 17
`Fig. 16 - Crop demo 4 ............................................................. 17
`Fig. 17- SPACE.com home page ............................................... 19
`Fig. 18 - Aerial photo of Venice, Italy at 12.5%, showing
`the Grand Canal with the Piazza San Marco
`as dark rectangle center left ....................................... 19
`Fig. 19 - Aerial photo of Venice, Italy at l 00%, showing
`the Campanile in the Piazza San Marco .................... 19
`Fig. 20 - Aerial image of Karachi, Pakistan at 12.5%, with
`banner ad for the SETI Institute ................................... 20
`Fig. 21 - Aerial image of Karachi, Pakistan at 25%, with
`banner ad for the Gap .............................................. 20
`Fig. 22 - Aerial image of Karachi, Pakistan at 50%, with
`banner ad for eBay ................................................... 20
`Fig. 23 - Aerial image of Karachi, Pakistan at 100%, with
`banner ad for TFAW.com (Things From Another
`World) ..................................................................... 21
`
`Image Servers - Early Adopter Case Studies ©Tony Henning and Future Image. Inc. 200 l wwwfuiureimoge.com
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`Fig. 24 - Grainger.com, listing l 59 categories of
`2'"'
`.
`1·
`I
`c ean1ng supp 1es ...................................................... L
`Fig. 25 - Item details, belt sander [with picture] ........................... 23
`Fig. 26 - Companies, Vendors, and Products covered
`in this report ............................................................. 28
`Fig. 27 - Chart summarizing in front of the firewall benefits .......... 29
`fig. 28 - Chart summarizing behind the firewall benefits .............. 30
`Fig. 29 - Chart summarizing the adoption process
`for image servers ...................................................... 31
`
`Image Servers - Early Adopter Cose Studies ©Tony Henning ond Future Image, Inc 200 I www.futureimoge.com
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`EBAY INC!I)
`
`Customer: eBay Inc.
`Server Installed: Internet Pictures - Rimfire
`
`PURCHASE PROCESS
`
`BUSINESS DESCRIPTION
`
`Founded in September 1995, eBay is the leading
`online marketplace for the sale of goods and ser(cid:173)
`vices by a diverse community of individuals and
`businesses. Originally described as "an online flea
`market," eBay has developed into that rarest of
`species -
`a very successful and profitable pure
`Internet play. Now praised as "electronic middle(cid:173)
`man to the world" by Hoover's Online, eBay is a
`cyber-forum for selling more than 9,200 categories
`of merchandise,
`from Pez dispensers
`to
`fine
`antiques.
`
`One of eBay's core goals is to "increase the veioci~/
`and "reduce the friction" of trading transactions.
`
`The decision to purchase an image server involved
`numerous individuals from the top to the bottom of
`the organization. eBay knew imaging technology
`was needed, and it wasn't a core competency, so
`they went looking for the right service provid~r !T.
`product development, operations, legal. business
`units, product management, and others were ali
`involved in the decision-making process. eBay went
`through a long (four to six months) and thorough
`evaluation process, looking at proposals from many
`
`The company, which generates
`revenue through listing and sell(cid:173)
`ing fees. boasts some 37 million
`registered users conducting near(cid:173)
`ly $27 million in soles each day,
`and is the most popular shopping
`site on the Internet when mea(cid:173)
`sured by
`total user minutes,
`according to Media Metrix. Fast(cid:173)
`growing eBay is offering new ser(cid:173)
`vices (wireless access, used car
`auctions) and expanding
`into
`new areas (Australia, Germany,
`Japan, Korea, and Switzerland)
`th;ough site
`launches, acquisi(cid:173)
`tions, and joint ventvres. It also
`owns traditional auction house
`Butterfields and
`fixed-price site
`Half.com (which it will slowly inte-
`grate into its main site).
`
`Fig. 3 - eBay picture submission before deployment of iP!X Rimfire
`
`REASON FOR IMAGE SERVER PURCHASE
`
`The killer opp for eBay is the drag and drop picture
`submission feature of Rimfire. According to Randy
`Ching, Director, eBay Services, imaging is cr'itical to
`the eBay community. eBay believes that listings with
`pictures sell more frequently and at higher prices
`than
`those without.
`"Providing better
`images
`absolutely creates more customer confidence,"
`Ching says. "It's intuitive. People prefer to see some(cid:173)
`thing before they place a bid" Consequently eBay
`wanted to make it easy for sellers to add pictures to
`their listings - a task that Ching described as requir(cid:173)
`ing "an Electrical Engineering degree" before the
`deployment of Rimf1re
`
`including some companies in· the stor(cid:173)
`vendors -
`age/photo-hosting business -
`before choosing
`iPIX. In an interview with Future Image shortly after
`the deal was announced, iPIX president and CEO
`Don Strickland said, "eBay was a huge deal for us
`-
`the biggest deal in the industry All the big play(cid:173)
`ers were in there talking lo eBay, trying to get this
`business, and we got it because we were able lo
`provide an infrastructure that could handle these vol(cid:173)
`umes.
`
`After thorough diligence, eBay determined that iPIX
`had the best technology for their needs -
`1t was
`user-friendly and could scale to accommodate the
`millions of
`transactions
`that eBay generates.
`(Strickland recently noted that 1PIX takes in 480,000
`
`Image Servers - Early Adopter Case Studies ©Tony Henning and Future Image, Inc. 200 l www.futureimoge.com
`
`5
`
`Exhibit 2015, Page 10
`Apple Inc. and Twitter, Inc. v. Summit 6 LLC
`IPR2015-00685, Summit 6 LLC
`
`

`

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`I
`
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`image submissions a day and serves up 75 million
`image views a day for eBay.)
`
`for, thereby creating incremental revenue slreoms for
`eBay (and for iPIX)
`
`In addition to user-friendly submissions and serious
`scalability, o key consideration for eBay was how
`easy the system was to integrate with their site.
`Ching said they took their time implementing the
`solution because they wanted to "do it right so that
`the user experience was optimized-" Not only is the
`seller experience improved with Rimfire, but the
`buyer experience has improved as well -
`picture
`presentation and quality are more consistent and the
`optimized images load faster.
`
`At the Future Image Internet imaging Symposium ot
`Internet World in March 2001, *Jeff Jordan. Senior
`Vice President & General Manager, eBay U.S.,
`iPIX,
`elaborated on the benefits of working with
`including those incremental revenue streoms.
`
`* The complete proceedin.gs of that symposium,
`imaging Drives eCommerce and Enterprise Profits,
`ore available in PDF formoi at the Future Image Web site
`http: //\"1vvvv. futu1eimuqe .corn/ sfrn.O.Ji?1-=p/lf':,Jl:\l\.
`
`"There are four benefits we hove
`from working with
`iPIX on our
`imaging products. Three of them
`are around revenue. First, it pro(cid:173)
`vides a better user experience. It
`helps us attract sellers ~nd buyers
`to our platform. For sellers, it's just
`eosier to list. They can be more
`productive. For buyers. it's a iot
`more entertaining and
`fulfilling
`and accurate experience with
`pictures."
`
`Fig. 4 - eBay picture submission after deployment of iPIX Rimfire
`
`"Secondly, it improves our core
`economics. Listings with pictures
`sell more frequently and they sell
`at higher yield It is amazing, but
`it is true. It's hard for us to quanti(cid:173)
`fy because all those 79 million
`listings ore unique listings But I'll
`show you some examples of a
`well-merchandised listing and a not well-merchan(cid:173)
`dised listing, and you will understand from a buyer's
`perspective that you'd be interested in buying."
`
`"Thirdly, it's generating a new incremental revenue