Kofax Hires Former Captiva Exec Vickers

You can't say Reynolds Bish isn't loyal to his former lieutenants. Jim Vickers is the latest former Captiva VP that has been hired by Kofax. Based on his title, we're assuming he's in charge of VRS sales, but plan to tallk with Kofax to get confirmation of that. Interestingly, Kofax's stock value has risen by more than a third since late last month.

AJAX platform for mobile devices

Interesting story broke recently about the AJAX-like platform that Microsoft is introducing for mobile computers, like Blackberries and other types of phone-enabled devices. This, of course, is the hottest segment of the computing market and one that document imaging vendors have been trying to figure out their place in. AJAX, because of the fast and convenitent image viewing capabilties it offers, has become a hot platform for browser-based document image viewing. Kojax would seem to bring these two worlds together and offer some interesting opportunities for Document Imaging ISVs.

Any thoughts?

Top Image Signs New Workflow Partner

This whole purchase-to-pay, from document capture through ERP-connected workflow seems to be really hot right now. Of course, we've seen this coming for a couple years now, and ReadSoft, they were even way ahead of us. As we noted in this week's issue of DIR, Open Text is clearly gunning for Readsoft with its latest announcement of an OEM agreement with SAP, whereby SAP will now be reselling Open Text's entire invoice processing suite. This includes the ERP-centric workflow technology they aquired a few years back, as well as the invoice capture technology it recently acquired with Captaris.

Today, we saw that Top Image Systems has announced a partnership with Swedish ERP-centric workflow specialist Medius. Top Image has enjoyed success in the invoice processing market and this should bolster it even further. Brainware, Captiva, Brainware, and BancTec are among the other competing in this high-end space of capturing, approving, and posting invoices in SAP ERP environments. ReadSoft probably leads the market in big contracts won in this area, but clearly the competition has seen what they've done and is emulating it.

Economic conditions and industry

So, there has been a lot of talk about how the world macro-economic conditions are going to affect the document imaging industry. From the evidence I've seen so far, growth appears to be slowing, but certainly not going away.

This article about Perceptive Software laying off 20-plus employees, 4% of its workforce, despite projected 25% growth - they were originally projecting 50%, is fairly indicative of what I've heard.

Any other thoughts?

Information Zen

AIIM has set up what looks like a pretty cool networking site at called Information Zen. I just put a post on Earth Class Mail my blog over there. Check it out.

Thanks.

Ralph

Kodak Posts Third-Quarer Results

Kodak is making money, but apparently it's not enough. Sales shrunk by 5%, but the Rochester-based imaging giant raised profits almost three times to $96 million this quarter. (I'd take that.) However, Kodak also warned that it's year-end profits would be in the $200-250 million dollar range, after last quarter projecting the profit to be $400 million. I hope no one received bonuses based on those projections, which probablyl inflated the stock at the time.

Same story regarding digital vs. film. Revenue from digital business grew 2%, while film-based revenue dropped 18%. Kodak's digital sales are how more than twice as great as its film-based sales - $1.64 billion to $764 million.

Directly related to our industry, "Graphic communications sales fell 2 percent to $821 million and operating earnings fell from $36 million to $23 million, hurt mainly by a softer commercial printing market in the United States as well as higher raw materials costs than a year ago." - Nothing negative about the document scanner business, which is good.

Voting Machines and Fraud

Saw a fascinating movie last night that detailed some of the potential fraud that can be committed with electronic voting machines. I've actually been writing about this in DIR, since the wake of the disastrous 2000 election. By "disastrous," I don't necessarily mean the outcome (we'll leave that debate for the political bloggers). I mean the way the votes were counted, especially in Florida.

If you remember, all the hanging chads and the problems with the punch cards, prompted this vast movement toward electronic voting machines. Problem is, most of these machines intially, at least, had no paper trails. So, you were literally casting your vote into a "black box" and assuming it was gooing to come out the right way on the other side.

Well, this movie I saw last night, Uncounted, detailed some of the ways these machines can easily be hacked and the votes flipped. Meaning that if Candidate A received 200 votes and Candidate B received 100, it only takes about 20 lines of code written on a memory card, inserted into a fairly easily accessible memory slot, to flip the vote so it appears Candidate A had 100 votes and Candidate B had 200. There are other things you can do as well.

I'm not going to get into all the evidence the movie presented that this vote flipping has probably been done several times in the past eight years - as these people may have been just a bunch of liberal, conspiracy-theory crackpots- they were mainly academics, activists, and journalists - but there were some conservatives represented as well. My point is not to argue whether or not this stuff has been done - it's merely to ask why the $#%& are we designing systems with these types of potential flaws?

I mean, we all work in the ECM industry. We know all about security, auditability, records management, etc., yet none of this technology is being implemented in one of the most important business processes related to properly running our country. Why is this? Have we fallen down on the job? Has there been a deliberate conspiracy to keep ECM technology out of the voting process.

Any opinions on this are appreciated.

Ralph

SharePoint Video

This may explain some of the less than stellar reviews we've been hearing about people trying to do real ECM with SharePoint.

More Distributed Capture

As distributed capture is becoming an increasingly hot topic, I attended a couple presentations on it at the recent Kofax Transform event in Austin. Kofax has a pretty heavy duty distributed capture model for its traditional Ascent Capture, now Kofax Capture environment. This has both up- and down-sides. The upside is that you get plenty of functionality in areas like security and automated data capture. The downside is the administration required to support thick clients at each distributed site.

Kofax also has an interesting pricing model for its recently renamed Kofax Capture Network Server (KCNS). (That' s the product fomerly known as ACIS - Ascent Capture Internet Server). It lists for $2,200 per seat, whether it's being deployed as the centralized server or as a client. This is the same price as Kofax Capture. There is also volume-based licensing on top of the seat price. This could obviously get pretty expensive if you're rolling out a big application, especially if you have light volume at some of the distributed sites....

Which is what Kofax's Document Exchange Server (DES) is designed to address. This is Kofax's server-based capture platform designed to run in conjunction with MFPs. HP seems to be their major partner in rolling out DES, which we presume can be used to feed a KCNS server implementation. It's this type of hybrid environment that we think will dominate the capture landscape five to 10 years in the future.

One more distributed capture note. I recently authored a white paper Web-based capture for Oracle - which last year acquired Captovation - one of pioneers in Web-based distributed capture.

What's next for Open Text?

I'm assuming you all heard about Open Text's plans to buy Captaris. From a capture standpoint, this makes perfect sense, but Captaris is $125 million business with only $30-35 million coming from capture. Alan Pelz-Sharpe is one of my favorite ECM analysts and here's what he had to say about the acquisition. Like me, he questions what Open Text plans to do with the $80 million fax server software business it is acquiring. He also hints that it fits with Open Text's history of acquisition. We'll see. I'm not sure fax server is high-tech enough to fit with Open Text's business model. But we'll see.

Pelz-Sharpe also makes interestsing speculation about what will be next for Open Text. Will it be acqusition of an ECM competitor like Interwoven or Vignette? A good thought. Or perhaps, Open Text will be acquired by partnenr SAP - a scenario we think even more likely. However, if they are spurned by EMC, how about a reverse merger or something with Hyland Software? That sure would be an interesting way to create an ECM power that addresses both direct and channel sales and can span the market from top to bottom.

Ralph

IKON Acquisition

How about this? Digital copier/printer manufacturer Ricoh purchases arch rival Canon's top reseller IKON. This is part of a growing trend of copier manufacturers purchasing dealer channels. With these channels also representing one of the fastest growing channels for document imaging software, it will be interesting to watch the relatively conservative hardware manufacturers merge with the more progressive document imaging ISVs.

The IKON deal represents probably the largest acquisition yet by a hardware vendor of a dealer. IKON is more than twice the size of Global Imaging, which was acquired by Xerox last year. Also, vendors like Sharp and Toshiba have been acquiring smaller North American dealers over the past few years, Sharp only recently accelerating its activity in this area.

Of course, the big question is, where does the IKON acquisition leave Canon, which for years has been IKON's primary hardware vendor. Ricoh and HP have begun to figure more heavily into the IKON mix in recent years, but Canon was still the primary vendor. Canon, which has been the North American market leader in MFP units shipped will be hard pressed to replace this channel as it moves to Ricoh.

Meadville Copier Dealer Honored

I thought this was pretty neat. A couple years ago, I did a presentation in Meadville on document management for a locally-based state economic development group-eBizITPA. This Hagan Business Machines had like seven people show up. Now they are being honored by Toshiba for the innovative work. Good work guys.

Two Recent Distributed Capture Wins

Here's one from Kodak with its ScanStation at Kaiser Permamente. What's cool about this is that not only is it a distributed capture win, but it's an installation of multiple networked scanners. Kaiser and the Kodak reseller went with the version of the ScanStation that includes NSi AutoStore, which is a very useful distributed capture software application.

Of course, Oracle, which acquired Web-based capture pioneer Captovation this spring, also recently landed this huge deal with JP Morgan Chase. We're talking potentially 3,000 users by the end of next year. That's clearly starting to get to some of the potential of this stuff.

Ralph

Distributed Capture Best Practices

The distributed document capture market, despite having been discussed for a very long time, is still very immature. This is my conclusion after doing quite a bit of research on this market over the past couple months. Is there a best practices for distributed capture? I haven't found anything definitive published on the topic.

So, first off, what is distributed capture? Well, it's basically truncating-or electronifying paper documents as far up the workflow chain as possible. This means that if loan applications, for example, are filled out at a branch office of a bank, they are going to be scanned there and sent digitally to loan processing center for approval and archiving. The advantages are that
1. distributed capture can reduce the time it takes to get the paper forms to the loan processing center,
2. it can save money on courier charges if the paper forms were being overnighted,
3. it can reduce the number of documents lost in transit as well as increase security around the transfer of the documents,
4. and it can put data entry related to the loans into the hands of the customer service rep at the branch, who is going to be more invested in the loan than a data entry operator at loan processing center.

Yes, all of these can be advantages, but there are some disadvantages too. For example, do you want your mid-level salaried knowledge workers, like loan officers, doing scanning and data entry when they could be producing more loans?

I guess the reason I haven't really seen a definitive best practices on distributed document capture is because there are so many diverse approaches to it, and to me, this is the sign of an immature market. I think I talked with four vendors in the past two weeks, all of which are promoting and selling distributed capture, but all who are doing it very different ways. Daybreak ICS, for example, uses a client server approach with a universal client for document scanners and customized release scripts from its server into ECM applications. eCopy also has customized release scripts, or "Connectors," as well as a universal interface, but its interface is primarily used on MFPs. Oracle, which acquired Web capture pioneer Captovation in the the spring, has a Web-based client with dedicated release scripts. ImageTag picks up images from a watched folder and files them based on data assigned to a bar-coded tag applied to the document before it's scanned.

All these different approaches lead to different workflows associated with distributed capture. All these vendors have had success, of course, but perhaps one reason the market has not caught fire the way many people are projecting, is because there is no standardized best practices. In other words, there's too much solutions providing/customization going on in the distributed capture space and not enough product sales.

I think some sort of flow-chart/questionnaire for end users with multiple sites is in order.
Any thoughts on this?

Documentum 6.5

EMC has hit a couple of ECM market hot spots with the latest release of its Documentum ECM platform. Documentum 6.5, which was announced this morning, features improved user interfaces, as well as upgraded transcational content management capabilities.

The two major improvements directly related to document imaging applciations are an improved user interface for the TaskSpace transctional content management (TCM) client and a new Documentum High-Volume Server module.

The High-Volume Server is designed specifically for imaging-intensive applications like transactional content processing and archiving. Basically, it's designed to streamline meta data management to reduce database footprints related to objects like images and e-mails and as a result, improve performance.

"Let's say you're archiving e-mails," explained Andrea Leggett, a senior product marketing manager for EMC. "You don't necessarily need version control and a lot of meta data fields for those files. With Documentum 6.5, we've created a lightweight object model to more efficiently store those files within the High-Volume Server. This can dramatically reduce a user's database footprint and impact their software licensing in a positive way. It helps streamline and optimize file storage and lowers the amount of resources needed to support objects.

"It's also important to note that even though a user might not be utilizing all its object meta data in the High-Volume Server environment, that meta data is not erased. If the users needs to go back and get it for another process downstream, it is still available."

Leggett sees three use cases for the High-Volume Server. "The first is transactional content management, the second is archiving, and the third is being able to efficiently migrate content from other repositories into Documentum," she said.

TaskSpace TCM Client Improvements
Documentum first introduced its TaskSpace TCM client last year with Documentum 6.0. The new version incorporates some of the ease-of-use concepts that are prevelent throughout the release of Documentum 6.5. EMC is actually touting Documentum 6.5 as featuring "Web 2.0" capabilties. "We've embraced some of the consumer technologies that are out in the market and worked on ways to bring them into the enterprise," said Leggett.

One of the Web 2.0 examples that Leggett shared with us was the incorporation of technology similar to an iPod's Cover Flow interface for reviewing documents. "Because users are already comfortable with that interface through their consumer applications, it makes for a smoother adpotion in the enterprise," she said. "For knowledge workers, we've estianmated our improved UI can create a 25-37% improvement in the efficiency in which users can click through content."

Specific to TaskSapce, EMC has introduced integrated high-fidelity forms and monitoring capabilties into the client. "Through the same dashboard used to access transactional content, a user can now also design high-fidelity forms and set up customized monitoring processes," said Chris Preston, senior director, content management and archiving, for EMC.

The high-fidelity forms capability is brand new and enables Documentum 6.5 users to better design electronic forms that have the same look and feel as their paper forms. EMC has also incorporated 2-D bar code capabilities for forms that need to be printed signed and captured. Task-based monitoring has always been available with TaskSpace, but with the new version the design environment is accessible through the standard UI.

"TaskSpace was created as a great out-of-the-box tool for working with transactional documents," said Preston. "We've now added some more rapid application development tools to TaskSpace that will enable our customers to more quickly customize their interfaces."

EMC making the right moves to maintain position as market leader
Overall, we'd say that EMC continues to make great progress in its efforts to maintain its leadership position in the ECM market. Documentum began life years ago as a specialist in electronic document management, but has come a long way in the past five years in the imaging/TCM space, which, thanks to compliance concerns and the realization that paper problems need to be addressed because they aren't going away, has emerged as an important piece of the ECM equation.

EMC's acquisition of Documentum a few years back has really helped accelerate the evolution of the Documentum product line, by providing the company with resources to make strategic acquisitions like the Captiva purchase, as well invest more heavily in internal development. We are very impressed with EMC's stratetic view of the market and the dynamic stategy it has taken to address the evolving and emerging needs of customers, especially at the enterprise level.

Dennis Retires From Visioneer

We must admit that this announcement caught us a bit by surprise. I mean, by all accounts, Murray Dennis helped turn around Visioneer, from a company caught in a market with rapidly declining sales and margins, to a leader in the emerging market for document scanners. Before going any further, let me first state that I have no insights at the moment was to why Dennis has left Visioneer.

I do know that he has been there a long time. I have him quoted in DIR as far back as 1998, when Visioneer was going through some intense battles over false advertising and intellectual property with its competitors in the consumer scanning market. I remember discussing with Murray Visioneer's planned transition from consumer to document scanners and his guiding it through the ramp-up phase. By all accounts, he was instrumental in Visioneer's brand-licensing deal with Xerox, which the company has always touted as a successful arrangement. Dennis also helped orchestrate the acquisition of JFL Perihperhal Technologies, the TWAIN development specialist that now spearheads Visioneer's OneTouch driver development. And OneTouch has emerged as the future of the company.

Not that there haven't been missteps. The biggest was probably the whole Don McMahan era at Visioneer. While McMahan, who was brought in by Dennis after he abruptly left competitor FCPA, did a lot to increase Visioneer's presence in the market, he left Visioneer after only a year-and-a-half in a less-than-ideal breakup. Visioneer hoped to continue to ride some of the momentum McMahan had created without having him on the payroll, but we're not so sure how well that has worked out. Meanwhile, McMahan has moved to Kodak and is targeting the same sales channels he helped build at Visioneer.

The bottom line is that Dennis in many respects helped make Visioneer what it is today - one of the leading players in the distributed document scanner market, and a company with some intriguing and potentially valuable intellectual property. J. Larry Smart, the long-time Chairman of Visioneer, as well as the owner, is now taking over the reigns as CEO. Smart has been way more than a figurehead over the years, so he knows the market, as well as his company, and we don't expect Visioneer to miss a beat. That said, depending on the reasons for Dennis' departure, we could also see some serious changes as Visioneer, as Smart has a history of success in the technology industry that he fully expects to continue at Visioneer.

Best regards,

Ralph

Kofax Wins IBM ISV Award

Congratulations to Kofax for recently being named IBM's Enterprise Content Management “Independent Software Vendor of the Year” for 2007. Kofax and IBM have been long-time partners, a relationship that was strengthened when IBM acquired FileNet, which has an OEM deal with Kofax. In our upcoming issue of DIR, Kofax CEO Reynolds Bish discusses his plans to increase Kofax's business development efforts, which are designed to improve Kofax's relationships with large ISVs and systems integrators. With Captiva having been acquired by IBM storage rival EMC a few years back, it seems the Kofax-IBM relationship should only get stronger... As for the prospect of IBM acquiring Kofax, let's wait a few years. Kofax has plenty of dance partners, and even though this could potentially create a bidding war, because of the company's relatively low market cap, the current starting price would likely be too low for Kofax's shareholders liking.

OB10, ReadSoft Partner

Interesting announcement yesterday about a partnership between e-invoicing specialist OB10 and forms processing leader ReadSoft. On the surface, you would think that OB10 would be the competition, as their charter is to reduce the number of paper invoices a vendor is dealing with. By all accounts, they handle this transition pretty well through the creation of what they call "vendor networks." Basically, they attempt to convert the print stream of any invoice output system into an e-invoice that can be integrated with the accounting systems of their vendor customers. Once you become part of their network, and they get used to working with your data streams, the challenge becomes easier.

According to Bob Fresneda, the president of ReadSoft North America, with whom OB10 has formed the partnership, there are still exception processing workflows that need to be executed for e-invoices, and this is where the ReadSoft partnership comes in. Over the past few years, ReadSoft has emerged as a leading vendor of not only automated data capture for invoices, but through a couple of acquisitions, workflow for invoices inside ERP systems from SAP and Oracle. With the OB10 relationship, ReadSoft is evolving further from its origins as a data capture vendor and moving more deeply into the BPM space. This gives brings the company into an additional, but related market, which is typically the most economical way to expand. Look for more BPM-related expansion from ReadSoft in the future.

Ralph

AIIM 2008

Just returned from our industry's annual technology fest. Unfortunately, it seems the show has turned into more a conference that a true, old-time exhibition. By that I mean, that nobody, but nobody, expects to get a good stack of leads out the event anymore. However, the reviews for the event are by no means all bad. There are still a few good leads that do come out of the event. This makes sense, as we've mentioned with the conference growing consistently, there are more educated, advanced users attending the show, rather than just tire kickers.

However, it did appear that overall attendance numbers were down. The first day, floor traffic seemed healthy, but for whatever reason, momentum didn't carry over into Day 2 (Wednesday). Thursday, of course, you had the usual tumbleweed rolling through the aisles, with the vendors treating the day as a mixer. It's always been my view that they should roll out the cocktails early on Day 3 and really let things fly. It would be interesting to see what kind of partnerships came out of that!

Anyhow. we'll have plenty more on the show in our next couple issues of our newsletter.

Cheers.

Ralph