Mirror Imaging Patents

Not exactly sure what this is all about, but it appears two banks have settled with this Michigan-based company regarding the use of patented technology used to retrieve document images in financial environments. Reading the abstract for the patent it appears to be for some sort of hierarchical storage management that enables older documents to be stored on outside storage and accessed directly from there.

McMahan Leaving Kodak

Word has trickled down to us that as part of the recent management changes at Kodak Document Imaging, which were made on the heels of the closing of the Bowe Bell + Howell Scanners acquisition, Don McMahan will be leaving the company. McMahan had been Kodak's VP of sales and regional business manager, for Kodak's Document Imaging business in the U.S. and Canada. As part of the the recent re-organization, for BBH Scanners president Russell Hunt was named regional business manager. We understand that the VP of sales duties will be assumed by personnel already onboard.

McMahan has been a fixture in the document scanner industry since I began in the mid-late 1990s. He is known for his reseller focus and has previously help VP positions at Fujitsu Computer Products of America and Visioneer. He is also a past chairman of the AIIM Board and this year was named an AIIM Fellow.

HSBC redaction issues

Apparently the U.S. arm of international banking conglomerate HSBC had some problems with its redaction software. The bank recently announced it would be upgrading its capture app after at least one person complained that certain elements in their bankruptcy filing, which were supposed to be kept private, were made accessible to the public. We've written about weak redaction software practices in the past, which enable users to cut and paste the redacted material and have it show up in something like a word-processing file. (There was an embarrassing DoD incident a few years back). There is plenty of redaction software out there that can prevent this from happening, but apparently not everyone reads DIR. HSBC could have saved themselves a lot of money.

Apparently, the TSA made a similar screw-up recently as well.

AIIM 2010 Keynote Speaker Announced

Michael Rogers has been announced as the keynote speaker for next year's AIIM event. It seems after a fairly rough show last year, Questex is putting on the full court marketing press to generate interest in this year's event. It will be interesting to see who shows up. From my perspective, at least, Rogers sounds like an interesting speaker. He's listed as "Futurist-in-Residence for The New York Times Company, as well an interactive media pioneer, novelist and journalist. He also writes the popular Practical Futurist column for MSNBC. In addition, Rogers is a best-selling novelist whose fiction explores the human impact of technology."

Questex is also apparently offering educational passes for half of what they sold for last year. Hopefully, they can breathe some new life into the show. As the recent Microsoft SharePoint 2009 event showed, people will still show up in droves at trade shows if they are interested enough.

AIIM 2010 is scheduled to run April 19 through Thursday, April 22, 2010, at the Pennsylvania Convention Center in Philadelphia.

Another Big Deal in the MFP World

We're talking about the M&A activity that has taken place in this sector over the past couple years. It now appears that Canon is buying Oce in a deal that is being valued at approximately $1.1 billion. Canon has been under pressure since a buying spree by Ricoh recently culminated in Ricoh acquiring Canon's primary North American reseller partner IKON. Of course, a year earlier, Xerox had picked up another large Canon reseller, in Florida-based Global Imaging Systems.

Not that Oce equates with buying a dealer channel, but Oce does have its own sales force and channel, which will be subsumed into Canon. On the document capture front this deal probably means very little, although Oce does have some digital mailroom products and services it offers its customers. Oce was the former home of the CGK OCR technology, before it sold it to Captaris a couple years ago, as part of its efforts to concentrate further on the output market. Oce, of course, then turned around and developed/licensed new document capture technology to address the digital mailroom. Anyhow, at least Canon was able to buy someone, and Oce does have some pretty good stuff in its portfolio.

Ralph

Kofax releases Q1 statement

Kofax has released a statement regarding its fiscal first-quarter  (ended Sept. 30) numbers that sounds fairly positive to us. Apparently the distribution business continues to struggle but the software numbers seem acceptable. Here's CEO Reynolds Bish's statement:

"I’m pleased to report that we made good progress and performed better than expected in our software business this past quarter. Market conditions have stabilized and show early signs of improving to a limited extent but continue to be challenging and difficult to predict. As a result and excluding the effect of the 170 Systems acquisition, which should contribute approximately $22m of revenues after acquisition accounting, we continue to expect low to mid single digit organic revenue growth in our software business this financial year.”

Upcoming industry events

Here's a few we just posted on our Web site.

Let me know if there are anymore you'd like me to post.

Ralph

Questex Marketing AIIM Show

Questex, which recently filed for bankruptcy, has "has reduced the 2010 Conference registration fees by nearly 50%. The event is scheduled to run April 20-22 next spring in Philadelphia.

SharePoint Conference continued

Had to chance to attend a session yesterday given by the KnowledgeLake CTO and another KLake developer. They discussed some of the details behind SharePoint's improved document management features. A lot of scalability and search issues have certainly been addressed, as well as some records management stuff.We'll get into details in our newsletter, but suffice to say that with a few tools added on SharePoint can do a better job of image management than it historically has. Of course there is still no viewer and we're not sure the out-of-the-box workflow is quite there....

The session I presented on Imaging-enabling MOSS was a bit disappointing in the attendance. Of course, they moved the room following all eCopy's marketing efforts...anyhow, it sounds like some people are just starting to do basic document image and retrieval - at least our panel members from Nike and Arizona State were, but I still haven't seen much high-volume transaction content management in SharePoint.

Live From SharePoint Conference

This place is really alive. It's a nice change from most recent conference/exhibitions that I've been to. Instead of people complaining about how dead the event it, I'm seeing plenty of busy vendors here. I just sat through a full presentation in the Laserfiche booth - so the interest in imaging is obviously. I'm interested to see what sort of attendance I get at my panel presentation on image-enabling SharePoint in another hour or so.

The crowd is mostly an IT crowd, a lot of SharePoint integrators, both in-house and external contractors. The general consensus, granted, it's a fairly biased crowd, is that traditional ECM ISVs better embrace SharePoint or die. As expected SharePoint 2010 has plenty of document management upgrades. Apparently, even though 2007 represented a significant upgrade over past versions, it was still fairly short as Microsoft corporate VP Jeff Teper said the company tried to make as many improvements as possible based on the 20 document/content management suggestions it got.

This includes upgrades in areas like scabability, search, records management, workflow, and a few other areas.

More later.

SharePoint Conference

Well, we made it to Las Vegas for the Microsoft's second SharePoint Conference. Scheduled to be announced at this year's event is SharePoint 2010. The next generation of Microsoft' ECM/collaboration/portal platform. Preparing right now a keynote from Microsoft CEO Steve Ballmer on the launch. Last night's pre-conference exhibitor floor party was buzzing. Word is that there are something like 7,000 registrants here at the Mandalay Bay, and the registration lines certainly overwhelmed the staff. The exhibition floor was teeming with Microsoft developers and other IT types. There are quite a few document imaging vendors on hand. Last night we saw booths from KnowledgeLake, Hyland, Laserfiche, eCopy/Nuance, Kofax, Canon, Fujitsu, Kodak, EMC, GoScan, Psigen, AtalaSoft, Informative Graphics, SpringCM, BlueThread and I'm sure we're missing a few. Systems integrator KeyMark is also exhibiting.

Incidentally, we caught up with Mike Stuhley from GoScan who told us his company has developed a booming business capturing information on Swine Flu vaccines. He said GoScan, a fairly small Southern California-based ISV with a very easy-to-use capture interface, has landed something like five statewide contracts, as well as several counties...

This promises to be an exciting show, and we'll have complete coverage in our next newsletter.

How The Zumbox Works

Here's the explanation we received from Zumbox's PR team (They are the company being sued by Pitney Bowes for their paperless mail solution.):

As a paperless postal system, Zumbox allows for mail and other content to be sent securely as digital files. This means that a biller can send the same files that go to their printer directly through Zumbox in parallel to their paper mailings and manage the transition to paperless mail as recipients get comfortable with the new option. So in terms of technical details, the system is simply built to deliver print-ready (and other – any format) digital files to street addresses online. All mail is received at Zumbox.com where a recipient enters their street address to effectively claim their digital mailbox; there is one for every street address in the country. It should also be noted that Zumbox is a closed system, with bank-level security and complies with PCI, HIPAA and BITS security standards.

We also received a response from Pitney Bowes and the patents appear to have to do with electronic delivery and there isn't any talk about scanning or anything. 

However, we will say that we find Zumbox's digital mailroom concept very intriguing - especially when potentially coupled with a scanning/service bureau operation. 

Hyland's Take on the SaaS Model

Pretty good piece published today in AIIM's Infonomics Magazine. It's clearly got a Hyland bent to it, but it's well written and presents a couple sides to the story of SaaS vs. in-house solutions.

Pitney Bowes Sues Digital Mailroom Provider

This is interesting. The company being sued, Zumbox, doesn't seem to be a traditional digital mailroom provider in the way we think of it. Rather, they seem to have some sort of on-line network that ingests files before they are printed and then delivers them digitally to their addressee. We're not exactly sure how this works, as it's not really described on the Web site, so we've pinged them for more info. To us, it sounds like some kind of general mail version of OB10's e-invoicing network. PBI is suing Zumbox over some patents related to electronic delivery of messages. We're assume this doesn't apply to traditional digital mailroom environments, (or PBI would have sued Earth Class Mail, right?), but we really don't know.

Ralph

More OEM Deals

Couple of interesting ECM-related OEM deals were announced today, with major, major, large software vendors. First, you have Brainware announcing an OEM deal for its capture software with Oracle. The most obvious fit will be using Brainware for invoice capture in Oracle Financials implementations, but the announcement is pretty vague, so Brainware's capture could theoretically be used in a lot of ways. A couple years ago, Oracle picked up some strong distributed capture technology when it acquired Captovation, but Captovation doesn't do much data capture, so this is a great complement for that....Also, SAP has expanded its agreement with Open Text and is now offering Open Text's full ECM application. It had previously offered SAP's invoice capture and processing technology as well as its document archiving. This is another sign of how ECM is going mainstream.

Lason Spin-Off Acquired by DTI

Active Data Services, which spun out of Lason in 2002 via a management buyout, has been acquired by Scranton, PA-based Diversified Information Technologies (DIT). DIT is a $35 million service bureau with scnaning, data capture, and records management offerings. Active Data Services is a Raleigh-Durham-based entity with a combination of document input and output services, and a speciality in the healthcare vertical. It is run by former Lason employee Ken Eller. Its 2008 revenue was reportedly $15 million.

Nuance-eCopy

Nuance has acquired eCopy in a move that unites two of the largest players in the MFP capture space. Nuance's Imaging business also has other interests like OCR and PDF creation, but its PaperPort and Personalized Scanning Platform (PSP) platforms are OEM'd by vendors like Xerox, Ricoh, Konica, EFI and Konica Minolta. In fact, Nuance often disputed eCopy's claims to market leadership in the MFP capture space. eCopy itself has some powerful alliances with the likes of Canon, Ricoh, and Toshiba that helped it grow to more than $60 million in annual revenue in about a 10-year period.

There are definitely signs however, that the MFP capture space is in transition. One is the fact that the price Nuance paid for eCopy was less than eCopy's reported revenue for 2007 (and it was all stock). There has definitely been some price pressure as MFP vendors have become more aggressive about bundling scanning software with their hardware. Also, one of eCopy's largest North American resellers, IKON, was recently acquired by Ricoh - which although it partners with eCopy, does not have the history that Canon does and also offers several alternative capture products.

Couple interesting sidelights of this deal:
1. Does this make Canon, which had like a 20% stake in  Nuance, a major stockholder in  Nuance - a former Xerox spin-off?
2. This would seem to throw the longstanding relationship between eCopy and Belgian OCR ISV I.R.I.S. into a state of flux. Funny thing is, Nuance has filed suit against eCopy for using I.R.I.S.' technology, and I.R.I.S. had seemingly come to eCopy's defense.  And, oh yes, Canon just bought a stake in I.R.I.S.

I'm thinking something has to give here. Look for another related acquisition in the next six months.

This acquisition does create easily the largest developer of MFP capture software on the market. Nuance certainly now as a full stable of technology in this area. It will be interesting to see how they bring it all together. NSi and Omtool are currently the other major players with traditional batch capture vendor Kofax still trying to make inroads.

Best regards,

Ralph

New KeyScan

I don't know why, but this seems like a cool concept. Has anyone ever used one?

Ralph

TIS enjoys success in postal market

We're currently putting together a story on some of the success that Top Image Systems is having in the European and Far Eastern market. Of course, we've arleady discussed TIS' North American success as a partner with J&B Software. In the European market, TIS is enjoying success in three distinct areas: invoice capture, the corporate mailroom, and national posts. This press release that came out today discusses a deal with Swiss Post, PostLogistics that involves parcel sorting. Overall, TIS, which is like a $25 million company at best, expects to receive $4 million in revenue from postal-realted applications over the next year. The company is also ramping up its Far Eastern business- transitioning toward enterprise applications from lower-margin batch capture sales, which were the specialty of AsiaSoft, the comany it acquired a couple years back. (go to page 7)

Also, in today's news, JFL Peripheral Solutions, a Visioneer subsidiary that specializs in scanner drivers, has announced a SANE driver for Visioneer scanner. This enables Visioneer scanners to run with Linux and other open source applications. Apparrently, a TWAIN 2.0 driver, which also supports Linux (see page 3), is on the way.

Xerox buys ACS

Wow! Another hardware vendor jumps on a major outsourcing provider. Xerox, the $17 billion copier and document processing giant has acquired $6.5 billion outsourcing roll-up ACS. ACS, of course, has a huge document-centric outsourcing practice, but does all sorts of other outsourcing as well. Its current CEO Lynn Blodgett, is a former data entry outsourcing specialist, whose history actually goes back to Unibase, where he worked with current Kofax CEO Reynolds Bish.

Over the past couple years, ACS has generated more than $500 million in cash each year, but it also has $2 billion in debt that Xerox will assume. According to the Wall Street Journal, "Xerox's deal values ACS shares at $63.11 each, a 34% premium to Friday's closing price and 55 cents below the stock's record high set in February 2006. Holders would get $18.60 and 4.935 shares of Xerox for each ACS share. Xerox also will assume $2 billion of ACS debt and issue $300 million of convertible preferred stock."

The deal should make Xerox a $22 billion company with some $10  billion in worldwide service revenue. ACS' international revenue was very limited, like $.5 billion annually, while Xerox has a more mature international services business, so there should be some synergies there.

Here's a line from the presentation give by Xerox, "The lines between business process
and document management are blurring." - which makes a lot of sense. We've talked a lot recently about enterprise capture and how it needs to feed several areas of an organization, presumably with different workflows. Of course, the same can be said for document output world, where Xerox also plays.

The acquisition, of course, follows, HP's acquisition of EDS and Dell's of Perot Systems, so it's all pretty fascinating. Does this mean that people like Kodak and Fujitsu will buy document imaging service bureaus? BancTec and Scan-Optics have already started down this path.

Ralph

TIBCO Beats Street

A good sign for the BPM market, where many document imaging companies are moving their focus. Another good sign is that TIBCO noted strong performance in the financial services sector - a recovery trend which was discussed at the recent Harvey Spencer Associates Capture conference.- mainly offline, but somewhat by presenter Rich Payne, a VP and ECM manager at Carolina First bank. Payne indicated that his bank, at least, has money to spend, but he stressed that salespeople have to sell him benefits and not technology. He cited the bank's current distributed capture initiatives which reduce courier costs...

OCR Invoice Market Penetration

After Kofax just paid $30 million for an ERP-workflow specialist, we got to wondering how far penetrated the maturing market for invoice capture was. Henry Ijams of Paystream has it at about 16% for IDR adoption among Fortune 1000 companies with 45% having some sort of imaging for processing paper invoices.

HSA Capture Conference 2009

Out here at Harvey's annual Document Capture Conference. Despite some trepidation about attendance being down because of the economy, it looks like the HSA staff has pulled together another strong group of attendees. Companies represented include:

Company E-Discovery Institute A2iA A2iA Corp. ABBYY ABBYY Russia ABBYY USA ABBYY USA Anoto, Inc. Anoto, Inc. AnyDoc Software, Inc. Avnet Technology Solutions BancTec BancTec Canada BancTec Japan CVISION Technologies CVISION Technologies Document Imaging Report Eastman Kodak  Eastman Kodak Company EMC Corporation EMC Corporation Epson America Fairfax Imaging Fairfax Imaging Fujitsu Computer Products of America, Inc. Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Hewlett-Packard IBML IBML IKON Office Solutions IKON Office Solutions Intuit Inc. ITESOFT J & B Software, Inc. Kofax Austria GmbH Kofax, Inc. Notable Solutions Inc. Notable Solutions Inc. Nuance Communications Nuance Communications Opentext OPEX Corporation OPEX Corporation Panasonic Corporation of North America Panasonic Corporation of North America Paradatec Peripheral Dynamics, Inc. Peripheral Dynamics, Inc. Peripheral Dynamics, Inc. PFU Systems, Inc. Readsoft Ricoh Innovations Ricoh Innovations Ricoh Innovations Ricoh Innovations scanR, Inc. Tangent Systems, Inc. Tangent Systems, Inc. The South Financial Group Top Image Systems PayStream Advisors Talario EMC Corporation eCopy Copanion Thinking Phone Networks, LLC
More on this event upcoming.				Ralph

Kofax Makes Acquisition, Reports year-end results

Kofax has become the latest capture vendor to add ERP-based invoice workflow to its invoice capture portfolio, with the recent acquisition of 170 Systems. 170 Systems seems to compete with Ebydos, which ReadSoft bought a number of years back and which really helped catapult the Swedish document capture specialist into a leadership role in the market for SAP-based invoice capture. As Kofax moves upstream, it certainly want to challenge ReadSoft and Open Text, which had a workflow product and bought a capture company last year. Capture specialist BancTec also announced a new workflow partner for invoice capture recently.


Also, Kofax recently reported its fiscal 2009 year-end (June 30) results. They came in with the revised expectations.

Re-furbished scanner sales

Here's an interesting brief with some metrics discussing increasing sales of refurbished document scanners.

Distributed Capture update

I think it's safe to say that distributed document capture has reached maturity, as every new implementation is no longer a major news story. As the technology has matured, I think we've all realized that there are several different levels of distributed capture, from multiple regional centers doing batch capture to remote locations doing ad hoc capture with MFPs - with several variations in between. Here's a recent announcement from ISV GoScan that shows some of the potential benefits that distributed capture has, not just on business, but on life in general. It's about the State of North Dakota implementing distributed capture to help track swine flu cases. Sure, they could have done this without imaging, but it sure seems like it's going to be a lot easier to accomplish it with distributed capture. Hopefully, it can help save some lives.

On a bit of a sour note, it was pointed out to us recently that mortgage lender Taylor, Bean, and Whitaker, which as for a long time has been a marquee customer of Datacap's distributed capture solution, has gone out of business. Of course, it was not the imaging technology, which when we talked with them was saving great amounts of money on courier expenses, that drove them out of business, but bad loans - what else? The messes we've seen in the mortgage industry have certainly detracted from imaging sales over the past year. It will be nice when things finally stabilize.

NewWave to offer Sharp MFPs

Document imaging-focused value-added distributor NewWave Technologies has added MFPs to its line of products. Specifically, NewWave announced it will be distributing Sharp's Frontier DX Series. To us, Sharp has always been on the cutting edge of scanning from MFPs. It was one of the first MFP vendors introduce single pass duplex scanning on a multitude of devices. It's OSA platform for embedded applications was also fairly revolutionary and has been leveraged by multiple capture vendors.

This is actually NewWave's second MFP-related announcement that we've covered. Last year, it announced an agreement with Pitney Bowes to enable its VAR partners to offer maintenance contracts on HP MFPs. Presumably, Pitney Bowes will also offer maintenance for the Sharp devices through NewWave, as PBI is certified to service some Sharp devices.

A/R meets document Capture

One of the observations we came away with at the recent TAWPI Forum and Expo in Washington, D.C., is that the accounts payable and accounts receivable capture markets are moving closer together. Historically, payment capture specialists, whether it be service bureaus or ISVs, have focused on A/R, while traditional document capture guys have handled the A/P side of the house. This started to change a couple years ago with the introduction of full-page IDR technology into the wholesale remittance capture space. Then, our colleague Harvey Spencer, as well as some others, started extolling on the importance of a unified view of A/P and A/R data for the CFO. While this is the nirvana of the convergence of A/P and A/R capture, it's starting to show up on less-integrated levels as well. For example, at the TAWPI event, Pepsi Bottling Group was cited for its payment capture application, which was installed by VAR KeyMark and ISV AnyDoc-both of which traditionally come from the document capture space. We've also seen an increasing interest in applying advanced workflow, another traditional full-page imaging technology, to A/R and payment processing environments.

In fact, last issue, we ran a feature on J&B Software, traditionally a payment processing vendor, fleshing out its offering with full-page document capture and advanced workflow.

Finally, we'd just like remind you that Harvey Spencer Associates annual capture conference, where this concept of converging A/P and A/R capture has been discussed for at least two years, is scheduled to run Sept. 9-10 at the Glen Cove Mansion on Long Island. It's not only a great forum where cutting edge capture markets and concepts are covered, it's a great networking event, with several high-powered capture and imaging executives attending annually.

ACS Q4

There has been a lot of talk about how outsourcing/BPO services will benefit in a down economy as businesses look to cut costs by hiring other people to perform their non-core functions. Document management is, of course, one of the functions. In our last issue, we did a pretty extensive story on document management outsourcing specialist DataBank IMX. Databank CEO Dick Aschman explained how the down economy has been a bit of a mixed blessing - as business are certainly willing to outsource more, but that some of Databank's current customers had reduced volumes due to a fewer number of transactions. ACS' year-end/fourth quarter results would seem to confirm this, as they report a record amount of revenue coming from new contracts, but only a 6% growth overall. Now, granted a 6% overall growth is nothing to scoff at from a multi-billion company like ACS, but I'm guessing their overall growth figures would have been higher in a normal economy.

Any thoughts.

Howard Dean - The winner?

Did you know that Howard Dean actually won the 2004 Democratic primary. No, that's not what the history books say, but that's the real story according to Garrett Graff, executive editor for (the?) Washingtonian. Graff gave one of the keynotes yesterday at the annual TAWPI Forum and Expo. He also helped both the Obama campaign, as well as Dean's effort back in 2004. It's his theory, that while Kerry may have won the vote, Dean's influence on the Democratic party was much greater going forward. His talk was on how Obama's campaign did really unprecidented stuff with the Internet and text messaging as well, to beat McCain (although I think his biggest challenger was probably Hillary.) Anyhow, it was a fascinating talk. More in the next issue of DIR.

Canon invests in I.R.I.S.

Canon Europe has taken a 17% state in Belgian OCR/ICR/IDR and systems integration specialist I.R.I.S. In Feb., Canon announced it would reselling I.R.I.S. capture software products in Europe and this seems to be the next step in that relationship. Canon paid $31 million for its stake, which values I.R.I.S. at around $184 million, approximately a 40% premium over its market cap and about 1.2 times revenue. Remember, however, that the majority of I.R.I.S. revenue is from systems integration and not software.

Jukebox article

I remember writing articles in years past encouraging the use of optical disk jukebox storage for document images. Rich Payne, an end user who speaks at a lot of industry events, recently wrote this article in AIIM's Infornomics saying that jukeboxes have gone the way of dinosaurs. The writing has been on the wall for many years. Unfortunately, I often found myself swayed by the energetic pitches of jukebox vendors such as Plasmon, which pretty much bet its whole company on next-generation UDO optical disk jukebox technology. Plasmon's filing for bankruptcy last fall may have been the death knell for jukeboxes. There are just too many people out there developing better, cheaper, faster, magnetic technology for a niche technology like optical disk storage to remain viable.

Ralph

Interview with EMC's CMO

Whitney Tidmarsh, EMC's Chief marketing office for its archiving and content management division, and a former marketing VP at Documentum, talks with Fierce Content Management about several hot topics in this interview. She touches on the emerging e-discovery preparedness market and how it relates to content management, EMC's relationship with Microsoft and its SharePoint strategy, as well as its cloud computing initiatives.

Ralph

ACS--Vertical Focus Success

Affiliated Computer Services became one of the leaders in outsourced data capture by understanding that to utilized document imaging to its fullest potential, it needs to be thought of as a piece of vertical solution and not an end in itself. I think our industry still struggles sometimes to get this right today. Here's an example of ACS discussing a large outsourcing contract they won, where it appears imaging will be a very important part of the services provided -but it's never mentioned in the press release. Rather, the focus is on the business process of helping the state of Texas find these property owners. And from some of the vendors we talk to, whose technology is licensed by ACS, it sounds like they have some pretty top notch imaging technology. They just realize, to be really successful, you have to remember it's an enabler, not an end in iteself.

Consumers Favor Going Green

Interesting results of a survey on consumers perceptions of "going green"mainly dealing with their printing habits. One of the things that makes the press release so interesting is the fact that it is sponsored by Lexmark but seems to encourage less printing. I guess that gives it credibility, because it's probably not in Lexmark's interest to encourage less printing. Clearly, there is a consumer interest in doing less printing, which bodes well for the document imaging industry. We're assuming of course that this desire go "go greener" spills over into the corporate world, where imaging vendors have always made their money. Of course, in the corporate world, ROI typically trumps environmental concerns, but introducing environmental concerns as a factor when an imaging system is on the table can't hurt.

Ralph

Monetizing Facebook

Here's an interesting article about plans to monetize the current most popular Web 2.0 social networking site. These social networking (and I guess professional networking) sites are fascinating. I, even being the media mogul that I am (snarky laugh), still don't have a full handle on them, but they definitely seem pretty important going forward, as everybody is starting to leverage them. They're kind of like an on-line multi-media document.

Ralph

Hyland Pushes Further into EMR

With $20 billion in federal stimulus money earmarked toward hospitals that can prove they are using eletrononic healthcare record (EHR, which seems to be the new acronym replacing EMR- electronic medical records) in a meaningful fashion, document imaging and mangement vendors having been trying to figure out how to get a slice of that pie. Hyland Software, which already has a fairly successful healthcare business, focsued mainly on automating back-office/financial administration at providers, has made an acquisition designed to move it deeper into this market. Yesterday evening, Hyland announced it had acquired Salem, NH-based Valco Systems. Quite frankly, we're not certain what Valco brings to the table that Hyland doesn't already have, aside from some more vertical expertise in a potentially burgeoning market. But, then again, when the majority of Hyland's stock was acquired by the investment firm Thoma, Cressey, Bravo, the Cleveland-area based ISV announced an aquisition strategy of acquiring market share. Presumably this is what they have done with Valco.

Related to this acquisition, it still remains somewhat of a question how much the stimulus package will drive growth in our industry. It's my opinion that it will be significant, as I've always believed EHR was a great opporunity for our industry-even before the stimulus. I mean, a standardized accessible eletronic record is too much of a benefit to healthcare providers to pass up, isn't it? They've pretty much managed to pass it up for over 10 years now, but at some point, they have to get smart, don't they? If this stimulus package helps them get there, all the better.

Here's an interesting article that discusses some of the hurdles that have prevented EHR from being adopted enmasse so far, and some of the hurdles it is still facing -even with the stimulus money.

The bottom like is that I hope universal EHR happens, as I have always thought it would -just for the sake of better healthcare service, not to mention the growth it could bring to our industry. Maybe the stimulus package will help it happen a bit sooner rather than later - although there are still obviously many hurdles to clear.

Ralph

Fingerprint card scanning project

It appears Lockheed has one a $47 million contract with the FBI to convert fingerprint cards and other types of records to a digital format. A couple years ago at AIIM, we saw a demo of a 600 dpi version of BancTec's high-speed scanner, which, as they are listed as a Lockheed partner on the contract, we'll assume is being used here. At the show, BancTec told us they had interst from some people in just this type of applicaiton...

Legal Depts. Cutting Costs

Here's a press release about a survey that talks about the pressure that corporate legal depts. are under to cut costs. You can get a copy of the complete survey through a link at the bottom, and we hope to see it and check it out more fully this week. But, it promises "an overview of the strategies, systems and management tools that law departments for U.S. organizations are using to cope with current economic challenges." Just curious if any of these strategies involve improved records management, which should cut down on e-discovery outlay. We'll have an article on that in this week's edition of DIR.

Also, here's an interesting press release about ColorTrac providing multiple 40-inch wide-format scanners to the Lebanese government for scanning election results. We've never heard of the use of WF scanners in elections and have put in an e-mail to ColorTrac asking about the logistics behind the scanner choice.

Ballmer to Keynote SharePoint Conference

Microsoft's SharePoint Conference 2009 is shaping up to be a pretty big event. It's scheduled for Oct. 19-22 at the Mandalay Bay Convention Center in Vegas. Steve Ballmer, Microsoft's CEO, has been announced as the keynote speaker. EMC, Open Text, and KnowledgeLake all are sponsors, along with people like Hitachi, CA, Quest, and others. Exhibitors include the sponsors, as well as, Adlib, AtalaSoft, Canon, eCopy, GoScan, Hyland, KeyMark, Laserfiche, SpringCM and others.

Could be a fun event. Microsoft is promising to preview the next version of SharePoint, 2010, as well as discuss real-world implementaitons of the current, 2007 version. The 2008 conference was held in Seattle (the same week as AIIM 2008) and we heard mostly positive reviews. We're not exactly sure why Microsoft waited a year and a half to hold another conference, but maybe it has something to do with the move to Vegas. One thing is for sure, Microsoft seems firmly committed the ECM industry and most everybody we talk to seems to be embracing them - but certainly not conceding the market to them, because, as well all know, SharePoint certainly isn't an imaging solution - although it can be used as a platform for image management.

Ralph

TIBCO posts good profit

TIBCO, the enterprise application integration specialist that purchased BPM provider Staffware a few years back, recently announced its second-quarter results. Despite almost a 5% drop in revenue, TIBCO increased its operating profit by 56%. "We are managing our business tightly during the downturn and focused on delivering strong returns, as shown by a 40% annual growth in non-GAAP EPS through the first half of the year," said Vivek Ranadiv, TIBCO's chairman and CEO.

Just thought this was interesting and it may show two things:
1. The economy is stabilizing.
2. Businesses are learning how to operate under adjusted conditions.

TIBCO stock is up almost 10% since Tuesday.

Ralph

eWeek Enterprise Apps in the Future

Number seven on this list is pretty cool. It's kind of a tongue-in-cheek look (I think) at some prospective enterprise applications of the future.

Ralph

Deflation, Hyperinflation and Cloud Computing

Here's a link to a interesting article from the Motley Fool about the risk of hyperinflation in the U.S. economy and which types of companies are in the best position to survive even double-digit inflation, which seems to be a real possibility as the U.S. government debt/deficit increases. Hint: it seems to be companies that can fairly comfortably cover their debt with their profits.

Also, here's a link to the great Michael Lewis article on Iceland's hyperinflation, which is referenced in the the Motley fool article.

Interestingly, the Motley Fool article also talks about deflation the negative effects it can have on an economy. I know I've mentioned a few times that the document imaging industry is no stranger to a form of deflation, especially when it comes to hardware. It's no big secret that users are getting way more bang for their buck from scanners than they were 10, 5, and even two years ago. Fortunately, overall scan volumes have continued to increase, which means more scanners are being sold and keeps the demand reasonable for higher-volume production models. But, with some of this IDR (intelligent document recognition) technology starting to come downstream, we really have to be careful not to let our margins disappear, in what has historically been a good B2B market.

I also wanted to highlight this interesting press release from A/P document imaging specialist VersionOne Software. I couldn't find a link, so I've pasted the entire release below. But, it basically talks about the some of the uncertainty and mystery surrounding the term "cloud computing." It's a term that people have started to throw around as a future trend for our industry and others, but it still seems to be a ways off before the rubber hits the road, as a lot of IT professionals still apparently don't even know what "cloud computing" means, much less do they plan on investing in it.

Here's the release, which details some of the results of VersionOne's survey on cloud computing:

The findings of a survey by document management software company, Version One (www.versionone.co.uk), has revealed that 41% of senior IT professionals admit that they “don’t know” what cloud computing is. Version One carried out the research with 60 senior IT professionals (IT directors and managers) across a range of UK public and private sector organisations. This research follows-on from a similar survey carried-out by Version One which highlights that two-thirds of UK senior finance professionals (finance directors and managers) are confused about cloud computing.

Of the remaining 59% of IT professionals who profess to know what cloud computing is, 17% of these understand cloud computing to be internet-based computing while 11% believe it is a combination of internet-based computing, software as a service (SAAS), software on demand, an outsourced or managed service and a hosted software service. The remaining respondents understand cloud computing to be a mixture of the above.

Despite cloud computing being in the media spotlight, only a minority of respondents (5%) say that they use it “a lot” and less than a quarter of those surveyed (19%) reveal that they only use cloud computing sparingly. Almost half of respondents (47%) admit that their company doesn’t use cloud computing with the remaining 29% conceding that they “don’t know” whether their organisation uses it or not.

Julian Buck, General Manager of Version One, says, “Although this is only a small survey of IT professionals, the results are nonetheless very alarming, especially as IT professionals are the very people that need to understand cloud computing so that they can explain its benefits to management.”

Buck continues, “It is clear from the survey results that there are a number of contrasting views as to what cloud computing really is, which is hardly surprising in light of the many different cloud computing definitions in the public arena. For instance, Wikipedia defines it as ‘Internet-based computing’ while Gartner refers to it ‘as a service’ using Internet technologies. IT expert, John Willis, writing in his cloud blog says that ‘virtualisation is the secret sauce of a cloud’ and provides different levels of cloud computing. With so many definitions circulating, clarity is urgently needed.”

Only 2% of respondents say that their company is “definitely” going to invest in cloud computing within the next twelve months whilst 30% state that their organisations “may” invest in this technology. 45% admit that they “don’t know” whether their organisations will be investing in it or not with the remaining 23% stating that they currently have no investment plans. For those who definitely or maybe have plans to invest in cloud computing, some of the key business drivers cited include reduction in overheads and paper, ease of use, cost savings and the ability to provide collaborative tools for teaching and learning.

Buck adds, “If organisations are going to embrace cloud computing in the future it’s essential that a single, simplified explanation is adopted by everyone. Failure to cut through the confusion could result in organisations rejecting this technology and missing out on the benefits it provides.”

Document Imaging Install at Center of Scandal

Some interesting stuff out of El Paso. A few years ago we wrote about how convicted former California Congressman Duke Cunningham's road to ruin began with quesionable document conversion deals with Audre and later a company called ADCS. It seems there's a couple things that remain inherent when dealing with the government: paperwork and corruption.

Ralph

iPhone Camera upgrade

Somewhat good news out of the Apple Worldwide Developer's Conference for ISVs looking to leverage iPhones for document capture. The new 3G S, which is scheduled to hit the stores this month, will feature a 3 MP camera with auto-focus. Previous iPhones featured 2 megapixel cameras without any auto-focus.

We did receive feedback that there is some sort of image processing in current iPhones, but apparently it is difficult to work with anything below 14-point type when it comes to document imaging. The increased megapixels, new auto-focus features, along with Apple's image processing should make the 3G S a much improved document capture peripheral.

Also, we heard there are rumos that Apple is looking at licensing a 6 MP camera, which would clearly make its mediafile followers happier, as some of the reviews we read didn't seem satisified with the 3 MP camera. Of course, a 6 MP camera should be that much better for document imagiing applications.

Earth Class Fail?

It seems our favorite digital mailroom vendors has changed CEOs. We ran a feature on Earth Class mail last fall in DIR. They are a very ambitious company, but I'm not sure their customer value proposition can meet their infrastructure costs. Part of the fun of covering this company was checking out the TV show that was made about them. I do love their plan of taking an end-run around the USPS if they can't forge a partnership with them and offering digital mail services through a Kinkos or something.

Distributed Capture Wave

We recently came across a couple of stories discussing distributed capture installations that reflect favorably on Kodak's efforts in this segment of the market. This announcement comes out of Kofax and discusses the sale of more than $1.5 million worth of i1220 and i1320 scanners through Kofax's distribution business to an Italian partner that is doing a distributed installation with a division of the Italian police force. Then, there's this story about a distributed U.K. sales operation that is using some 90 Kodak i160s at distributed sites to capture orders and upload them to a centralized site for processing. (It's a fairly detailed story and worth reading.) The U.K. installation is using Kofax's distributed capture software.

In total, that's something like news of 1,100 Kodak scanners being installed in distributed scanning opertations within a week. Pretty cool stuff for Kodak. Both applications are also examples of net new imaging installations- meaning centralized capture was probably not a realistic offering. Just more evidence that distributed capture (after years of discussion) has finally arrived.

Capture reseller channel

Word out of Kofax, as you'll see in our upcoming issue, is that while its direct sales business continues to grow - now making up like a third of enterprise software sales, sales through its channel partners is on the decline - at a rate that has pretty much offset the revenue gain brought through increasing direct sales. In a recent interview with CEO Reynolds Bish, he indicated that he thinks mid-market sales, those historically perpetuated by the channel, are being affected more by the economy than the higher-end direct sales. As a result, Bish presents the transition to direct sales as pretty much having saved the company some significant revenue shortfalls.

This is, of course, a perspective that makes him look like a hero, and there is nothing wrong with that. On the flip side, however, it's quite possible to blame Kofax's increasing direct sales as negatively affecting channel sales because it has potentially alienated some VARs that have been very loyal to Kofax, because, in part at least, Kofax has always been very loyal to the channel. So, are Kofax VARs' capture sales really declining, or are these VARs just moving towards other capture products and away from Kofax?

Any feedback is appreciated.

Ralph

ACS Moving more personnel offshore

Interesting story here about Dallas-based outsourcing giant ACS wanting to more 50% of its personnel to offshore locations. At the end of last year, about 32% of ACS's 63,000 employees were offshore.

Metastorm

Metastorm is a BPM player that has played on the fringes of the document imaging space for more than 10 years. Heck, we wrote about them in 2000, when their market was still called "workflow." At that time, Metastorm was touting revenue of around $30 million, up five times from two years previous. While its growth hasn't maintained that level, it has still been impressive. We recently came across an article that said Metastorm is anticipating $90 million in revenue in 2009 compared to $77 million in 2008. This is projected organic growth (what recession?). The company is also seriously involved in aquisition talks.

We're not sure what sort of company Metastorm would be buying, but we have heard rumors that Global 360 is up for sale. On the flip side, apparently (according to the prior referenced article), Open Text is considering a BPM acquisition.

Anyhow, that's just a brief Metastorm update. Oh yes, apparently Metastorm filed an S-I last year before thinking better of going public and pulled back.

Open Text Acquires Vignette

I've seen quite a few analyst criticisms of Open Text's recent announcement that it plans to acquire Vignette for $310 million. Apparently, Vignette got killed last quarter, seeing its license sales drop 29% and its overall revenue drop 24%. Vignette was clearly in trouble, and as Open Text likes to do, it came in and bought the company when it was down.

People have questioned what Open Text really got, as Open Text has most of the technology is picked up already. I think these people are missing the point. First off, Vignette apparently has big-time WCM technology with several big-name Fortune 2000 users. Vignette is a market leader in this area, and it's always good to pick up a leader in a market that is not going away. Heck, Open Text, has even been known to pick up leaders in declining markets... Open Text also picked up some solid records management technology with Tower Technology stuff that Vignette picked up a few years back. Once again, I think this is an upgrade for Open Text in an area they have clearly targeted for future growth.

Finally, because of the market it's in, it is imparative for Open Text to continue to grow. Competing with the likes of IBM and EMC, size does matter. Open Text seems to understand this, and this latest acquisitoin should now have it approaching $1 billion in annual revenue. As long as it stands alone - and it is one of the last major ECM vendors standing - Open Text has to keep pushing forward so its Global 2000 customer base will not hesitate about doing business with it.

Per its history, we're confident Open Text will figure out how to cut costs at Vignette and fold it into its profitable growing business. Open Text has certainly come a long way in the 10 years we've been covering them- outlasting a ton of competitors, and a key part of its strategy has been acquisitions just like the Vignette buy. We expect to see more as well.

Electronic Medical Records

There sure has been a lot of buzz on this topic since the stimulus package with passed promising like $30 billion for doctors to move to electronic healthcare records. Here's a chat that showed up on Yahoo Finance with the CEO Aethena. Fairly brief. Fairly interesting.

Mitek Signs Deal with NCR

A little over a year ago, we ran an article discussing Mitek's release of technology for capturing and processing check images through mobile phones. Well, today Mitek announced a deal with NCR, which will offer Mitek's ImageNet Mobile Deposit to complement its APTRA Commercial Passport-- remote deposit capture software that allows deposits using check scanners from their businesses directly to the financial institution or via online banking web site.

This definitely seems like a step in the right direction, which might be a bit ahead of its time with this type of software- but as a toolkit vendor, also needs to anticipate the needs of its customers. NCR's offering both scanner and phone-capture based solution is indicative of where the market for mobile capture currently stands. It's a great idea, and probably will pick up momentum as phone cameras and processors continue to improve, but for now, the superior image quality of a scanner still offers many advantegous - if not the convenience and ubiquity of mobile phones.

Kofax Appointments - Book Scanner from Trash

There is no question Kofax has made a lot of changes over the past year, as CEO Reynolds Bish has really put his stamp on the company. One of Bush's main prerogatives has been to increase Kofax's average deal size by creating a strong direct sales force. Of course, this has created concerns about Kofax's dedication to the value-added reseller channel, which has historically served as its primary sales force. That's why it was refreshing to see today's announcement about the Irvine, CA-based software vendor hiring two industry veterens with substantial channel experience.

Dan Lucarini, who has been named senior director of business development, was for years a big advocate and marketing director for the Alchemy reseller channel. He left Captaris after its acquisition by Open Text. And Barbara Lanci, who has been named senior director of partner strategy and development, was a director of channel development for Kofax in the late 1990s. Both will report to Jim Vickers.

Also, a friend of ours sent us this cool link/video from a guy who basically built a DIY-type book scanners from some new cameras and 100% recycled materials. Check it out.

Ralph

CMS Watch Offers Valuable Advice

This is actually really funny. Good to see some humor related to ECM..

Article on Scan settings for OCR

This is a pretty insightful piece by OCR/data capture consultant Chris Riley of Living Analytics. One additional comment I'll make is that the scanning hardware vendors continue to introduce more versatile machines that address some of the demands that Chris mentions in his article. For example, Kodak has come out with a whole new series of scanners that capture in 300 dpi at the same speed as 200 dpi, and color speeds have almost caught up bi-tonal speeds.

We've also had many interesting conversations with vendors that specialize in the separation technology that Chris mentions and claim it can introduce OCR results on certain types of documents. As we've said before, we are entering a brave new world for recognition technologies.

Fujitsu Computer Products of America's Kevin Neal contributed these two helpful links on the same topic:

Increase ECM Automation Processes With Higher Resolution Scanning

Trends Towards Higher Resolution Scanning

Ralph

eCopy signs Chinese distributor

eCopy signed up a fairly large Chinese office equipment dealer as a distributor. Interestingly, they will be selling eCopy ShareScan along with Ricoh hardware. Good sign for the contiued diversification of eCopy, both in terms of hardware partners and geography.

Looking at TIS and Adobe numbers

Yes, Top Image Systems and Adobe are very much on the opposite end of the spectrum when it comes to publically traded document-imaging related stocks. Adobe is one of the largest software companies in the world with a very diverse portfolio that contains either a lot or a little bit of document imaging - depending on how you define the sector. And Top Image Systems (TIS) is very much a niche player, soley focused on image-based data capture (utilizing OCR), had annual revenue of around $30 million, and is very thinly traded on the Nasdaq. However, their financial reports shared a common theme: While the numbers may have looked bad at first glance, they were apparently better than what Wall Street was expecting... I think.

Both companies saw steep drop offs from the third quarter, but both also seemed prepared for this. Adobe saw its stock value rise 7% after reporting after seeng its revenue drop 12% and its earnings 29% from the previous year. Is this the first sign of an economic rebound. TIS situation was even more confusing as its revenue dropped 2% from the previous year and 23% from the third quarter, but a discontinuation of some lower-margin/unprofitable operations contributed to this, and all in all, TIS seems to have made money on the quarter, with a $5 million gain related to "financing income." Anyhow, I think you almost need to be a banker to understand what is going on in the market now, but my overall impression is that neither Adobe or TIS suffered as much as some other people in the fourth quarter, which is a good sign for our industry, as recently (the last week at least) macro-economic conditions seem to be on the rebound.

Alright, that's about it. But, if anyone can help me further understand this stuff, please post comments.

Ralph

Kofax hires U.S. Sales Chief

Kofax has hired former FileNet sales exec Steve Johnson as its Senior VP of software & solutions Sales for the Americas. Johnson will report to EVP of field operations Alan Kerr. He will oversee Kofax's implementation of its new hybrid model for its $50 million U.S. software business.

By our calculations, Kofax CEO Reynolds Bish now has also the pieces in place to attack the market in the way he outlined to us at last year's AIIM show. His intention is for Kofax's historically strong VAR channel to continue to win the small and mid-sized deals, with the direct sales force to take the high-end stuff that has historically gone to Kofax competitors like Bish's former company Captiva, as well as players like ReadSoft and recently Brainware. The trick, of course, is going to be keeping the VAR channel happy and not stepping on their toes too much with the direct sales. We still haven't heard too much negative feedback from the U.S. VARs at least, of course, without Johnson, maybe the direct sales force hasn't been fully ramped up yet.

Anyhow, Johnson seems well qualified to sell capture solutions. If he can manage a VAR channel well, we'll expect some strong results from Kofax.

High-Profile AIIM Absentees

For the first time in our memory, heavy document imaging hitters Kodak and Kofax will not be exhibiting at our industry's largest annual get together. Citing reasons like "the most expensive leads you get come at AIIM," and "we've been thinking about pulling out for several years and the down economy gave us the impetus to finally go through with it," the industry's leading production scanner vendor and the leading capture software player have pulled out of the AIIM Expo (scheduled for end of March-early April). Neither one has even committed to having a meeting room.

I must admit , I have been hearing complaints for several years, with last year's being the most serious, about the lack of quality floor traffic at the event. I also received feedback that exhibitors have been making suggestions that have gone largely ignored by Questex, which purchased the show from AIIM (the trade organization) eight or nine years ago. And, although Questex has been offering increased targeted marketing services to exhibitors, by our observation, the event itself has changed little since started going to it in the late 1990s - and some pundits were already proclaiming that the event was dead then.

Across the board marketing cuts due the down economy may be the last nail in the coffin. Prior to this year, despite the complaints, and slowly dwindling attendance, little actually changed, except for maybe smaller booth sizes. Sure, some companies would leave for a year, but they'd always come back. We'll see of they come back after this year.

I've got a call with Questex set up for Thursday. We'll see what they have to say...

Ralph

Kofax first-half 2009 results

Seems like a mixed bag. I'll have to read them over in more detail later (as I'm getting ready to head out to a Kodak conference in San Antonio), but it appears that much of the 9% growth was driven by favorable currency exchange - meaning the pound (which Kofax reports in, lost some of its value against the currencies (Euro and U.S. Dollar), which it typically does business in. That said, it's a pretty detailed report, so they don't appear to be trying to fool anyone. Basically, it sounds like the U.S. (after a slow start) and EMEA businesses (with the exception of the U.K.) are on track and Asia-Pac continues to disappoint. There were also some problems in the VRS sector. The hardware business continues to be profitable if not growing... Not sure how much is now going direct vs. what is going through the channel.

Anyhow, hopefully I will have more on this later, when I have some conversations and time to read it over more closely. Check out the above link yourself though it you get a chance.

More on Kodak

I should have known better than to fly U.S. Air. Last time I flew with them, I ended up stuck in some two-star hotel near the Birmingham, AL airport overnight because of mechanical difficulties. Then, just last month, they narrowly avoided a disaster near New York. Now, of course, I'm stuck in Brussels, well not really in Brussels, but in an airport hotel outside of town for an extra night due to, you guessed it, "mechanical difficulty." But enough on airlines...

I'm out here because I attended the annual I.R.I.S. conference, which went well with a few hundred attendees and some significant announcements. Details in this week's DIR. The most imortpant announcement was probably that I.R.I.S. continued its profitable growth, up 13% over $100 million Euros for the first time and also generating cash. They run a pretty good business, with a lot of high-end document imaging focsued solutions installed Belgium, France, and Luxenburg, and some pretty good OCR contracts with the likes of HP, eCopy, and Adobe. Recently, they've been adding IDR technology to their mix and last year launchced their own capture software after working for several years as Kodak's OEM developer of capture technology.

Speaking of Kodak, here's an interesting quote from the press release they issued today:

"The success of Kodak’s core investments stems in part from the company’s ability to maximize its cash-generating businesses. These market-leading product lines represented approximately $6 billion in revenue in 2008, and include the following: Prepress Solutions and Document Imaging in GCG, Digital Capture & Devices and Retail Systems Solutions in CDG, and Entertainment Imaging from the Film, Photofinishing and Entertainment Group (FPEG). For these businesses in 2009, Kodak will focus on margin improvements, including cost reductions, as well as continuing its successful intellectual property licensing program."

So, it's good that Document Imaging is generating cash, but it's bad that apparently cost reductions are going to be made to apparently help make up for losses in other areas. Curiously, the press release didn't get into too many specifics about the money losing areas, of course that was probably done in depth enough with the fourth-quarter report.

Brutal fourth-quarter for Kodak

It was a not a good finish to 2008 at all for Kodak. Fourth-quarter total sales were off by 24%. This led to a $137 million loss for the quarter, compared to a $215 million profit a year ago. Document Imaging was not cited specifically as one of the poor performers, but the Graphics Communications business (hurt by a softer commercial printing market), where Document Imaging resides, posted a $4 million operating loss, compared to a $30 million profit a year ago. This was the result of sales falling 14%.

In conjunction with the year-end report, which dropped the company's stock more than 20% to just over $5 per share, Kodak also announced up to 4,500 upcoming layoffs, or 14-18% of the entire staff. We understand some of those layoffs are already affecting Document Imaging. We're not sure how this is all going to reconcile with the Bowe Bell + Howell Scanner acquisition the is supposed to close before the end of the quarter and the jobs that have apparently been promised to BBH employees.

We'll be catching up with Kodak Document Imaging execs at next month's Kodak Executive Summit in San Antonio.

layoffs at IBM

Interesting story here on how IBM handles their layoffs. Not sure if this is affecting the CM/FileNet businesses, but software has definintely been affected. Of coursre, IBM has a huge software business. Apparently, these layoffs help IBM maintain impressive profitability which is great for shareholders-but not so great for employees.

Autonomy Acquires Interwoven

I guess you've probably seen this by now, but the search and artificial intelligence specialist Autonomy has announced intentions to acquire ECM player Interwoven for $775 million. Interwoven, which began life as a Web-content management vendor, added electronic document mangement technology a few years back with the acquisition of Interwoven. It is also fairly strong in the digital asset management world-also through an acquisition.

The iManage acquisition gave Interwoven a strong foothold in the legal vertical. Autonomy's has e-discovery technology and ambitions that make the entree into the legal market a natural.

One interestsing angle for us is how, and if, Autonomy plans to leverage the Cardiff capture technology it acquired with Verity as a front end to iManage. If it does, that could be bad news for long-time iManage partner Kofax, which also recently got some bad news when Open Text acquired Captaris. We're currently trying to get in touch with someone at Cardiff to find out what sort of shape the capture business is in-as we haven't heard much from them lately, and we understand that former GM and CTO Mark Siemens has left.

Autonomy also has a number of OEM agreements for search technology with potential Interwoven competitors that could be jeopardized if Autonomy isn't real careful. Google, we're sure would love to steal some of that business.

Finally, here's ECM analyst Alan Pelz-Sharpe's take on the acquisition. He's a bit critical of Autonomy.

Ralph

Outsourcing report

Here's an interesting press release I received last week:

"IBM bucked tech industry trends this week by reporting a healthy fourth quarter profit and even a feel-good forecast for 2009 - based heavily on the contributions of the company's software and service business. IBM registered a 20% jump in outsourcing contracts and related work - solid proof that while many companies are cutting back on overall IT spending, the recession appears to be giving a boost to IT and business oursourcing, particularly as a means to cut core operating expenses. For some industry context behind IBM's strong performance - we offer the latest annual review of Global Sourcing Trends by law firm Morrison & Foerster.

This is the third year that Morrison & Foerster has produced a macro year-end/year-ahead review of the global sourcing landscape. This year’s report comes amidst some extreme events impacting the industry – not only the economic crisis, but in the wake of the recent terror attacks in Mumbai and the startling financial fraud unfolding at India sourcing giant Satyam.
Among the current trend lines reported by Morrison & Foerster for the coming year:

A pronounced shift toward cost-driven deals: “Many companies are looking to drive further value and cost improvements on existing deals, often via re-negotiation, service levels and other key terms.” In other words, this could be a good sourcing buyer’s market;

A probable slowdown in new sourcing activity among financial service firms, which traditionally have fueled sector growth; instead, look for institutions to “maximize value and rationalize existing deals” – again putting pressure on cost structure;

Some shakeout is all but guaranteed among service providers, some of whom will endure not current market conditions; survivors will be those “that have sector and geographic diversity, well-managed overheads, and deep, long-term customer relationships.”

At same time, consolidation among largest sourcing firms will mean “less leverage for customers in future negotiations;”

Expect to see more attention on new risk and liability provisions in existing contracts regarding data and privacy breaches;

The Satyam scandal is certain to prompt a “flight to quality” by sourcing customers, with an attendant surge in due diligence;

An unfortunate bi-product of the financial crisis will be a rise in disputes, including litigation, as corporate purchasers become less inclined to waive or ignore potential liability claims.

Morrison & Foerster has one of the most active sourcing law firm practices internationally. Recent engagements include representation of the UK’s official Revenue & Customs authority as well as New York University Hospitals Center in its long-term IT sourcing agreement with IBM and Lenovo Group valued at more than $600 million. The group’s key members handle global projects primarily from the firm’s New York, London and Hong Kong offices.
Please click here to see the full 2009 Sourcing Trends "

Kodak to Acquire BBH Scanners

If you haven't seen it, here' s the announcement, which was made late yesterday. If the deal goes through, which it's expected to before the end of March (AIIM 2009 is in late March-early April), it could be the end of an era for one of the pioneers in the document scanner business. Bell + Howell entered the scanner business more than 20 years ago, in 1986, with the acquisition of Image Peripherals, Inc. (IPI)- the North American arm of a Belgian scanner company co-founded by Dan and Roland Borrey. Bell + Howell went on to tremendous success with its Copiscan and Copiscan II scanner lines, before hitting a rough patch, when it was nearly acquired by Kodak in late 2000. An inquiry by the U.S. Justice Dept. put off that sale, even as Bell + Howell sold its much large product services business to Kodak. BBH scanners then rebounded strongly, landing a huge deal with FedEx that was followed up by the launch of its successful Spectrum series of high-speed scanners.

The news out of BBH scanners over the past few years has always been positive, but that fact is, aside from the introduction of fairly revolutionary large format scanner a couple years ago, there hasn't been too much substantial to report on. And as scanning was not core to parent Bowe Systec's business, the writing was probably on the wall. Plus, we even predicted in last week's issue of DIR that the economy and market environment was ripe for some hardware consolidation. I guess we were right.

SOA and the value of the pound

Received two interesting and unrelated e-mails over the course of the past couple days:

Here's the first. (It discusses how you can save on software purchases by buying them through U.K. sites, because the pound is relatively right now)

Weak UK pound benefits US buyers of Scan2CAD raster to vector conversion software.

The worldwide credit crisis has resulted in the weakest British pound for many years. For US CAD and CNC software buyers, this provides a ray of sunshine in what is otherwise a generally gray and gloomy economic prospect. The current weak British pound allows US buyers of British software to take advanatage of a favorable strong dollar / weak pound exchange rate to save around 20% on their purchases.

Softcover International Limited, the UK publisher of the industry-leading Scan2CAD automatic raster to vector conversion software, has announced US buyers purchasing Scan2CAD Pro from its UK-based website, www.softcover.com, will save around 20% or approximately US $100 on the US $498 list price. A saving of about US $60 is to be had on Scan2CAD Regular (list price US $298).

These savings are only available while the British pound is in its current weak state. Any strengthening in the pound and the savings will be reduced. However, any further weakening in the pound and the savings will increase. Interested buyers wanting to save money should take advantage of this situation while the pound is weak to buy Scan2CAD now.

Today's (2009.01.12) opening exchange rate is GBP £1 = USD $1.49, among the lowest in more than six years, down from a peak of $2.1160 last November. The last time the pound fell at this speed was in 1992. Any US CAD and CNC buyers purchasing Scan2CAD now will get the biggest bang for their buck available in automatic raster to vector conversion today.
advice. - END OF RELEASE

Does this work for scanners too?

Release number two:

This is a release for a book on SOA implementations. As some background, I mentioned SOA as one the trends document imaging professionals need to be aware of in 2009. Despite some setbacks, I don't believe that SOA is DOA and apparently, the author of this book doesn't think so either.

Here the release, which is fairly comprehensive and includes some interesitng points:


"Seven steps to SOA nirvana…

'Adopting a services-oriented architecture should be undertaken as a gradual process, working toward your vision of a new IT enterprise which is more responsive to business drivers,' says expert Tom Termini.

Complex concepts have emerged over the past few years regarding the potential productivity an organization can achieve with their web site. But few take the mystery out of as well as a new book titled The Zen of SOA by Tom Termini.

Termini has created an executive blueprint which describes how top management can look and move forward with clear goals, appropriate resources and confidence. Termini explains how Zen can be applied in the development and deployment of a system architecture in a manner easily understood by managers making them more effective in the complex world of information technology.

The key in this quest is to act as a mediator who understands the roles of the critical actors and players and to adopt a posture that is both flexible and resilient.


Termini sees the adoption of SOA as a continuum.

Among the many ideas he recommends to successfully deploy an effective SOA:

1. Learn from others – study what worked for other organizations that may have had parallel processes, or similar objectives to yours. For example, at the Federal Trade Commission, we learned that commodity hardware and software promote the transition toward a fully-realized SOA. From the detritus of a failed EAI effort, the fruits of a SOA success can be found with the creative application of an “agile” approach.

2. Maintain a “baby-steps” approach toward a fully-realized SOA – expectations are more realistic, costs are spread over a longer period, risk is deferred, and you have the opportunity to foster organizational adoption. Cultural resistance is often the primary reason for failure in enterprise IT endeavors. If your adoption posture is incremental, you will lessen the impact on your organization, customers, and partners so they can assimilate change gradually.

3. SOA is more about the business customer than about IT innovation. Service-Oriented Architecture, when rolled out successfully, can empower the people driving the business processes in your organization, free up limited Information technology resources, and improve flexibility to meet change. While on task at the U.S. Department of Justice, we learned a portal is integral to Web-enabling the enterprise. Why? It provides the single, simple point-of-entry to the SOA-enabled systems for the less-technical business user. We found the portal was excellent at answering the question, where do I go to find what we already have? It also simplifies the human interface, since all Web applications share the look-and-feel or some derivative of the portal’s cascading style sheet. Finally, the portal simplifies single-sign-on access - and ease of access means greater acceptance by the user community.

4. ESB does not equal SOA. Providing an enterprise services bus (ESB) to your organization does not mean you have a SOA. Gaining a full grasp of this concept is key to embracing the Zen of SOA. Think commodity software as well as hardware: one of the keys to SOA success. While we’ve found the messaging layer to be critical, often time success can be achieved by simplifying a few key business processes and SOA-enabling with a web service. Example: customer record lookup, because so many systems touch on that process.

5. Manage the SOA as part of the whole enterprise. Think of the SOA approach as a layer to simplify complexity – as above, consider the customer lookup process. What vital information needs to be presented to a consuming service? This layer does not stand apart from the organization’s larger enterprise; rather, it supports the business architecture. The underlying services orchestrate and communicate business processes-these components are part of the technical architecture. Internal developers, external consumers and others will require access to reuse SOA services.

6. Measure progress and communicate results. The successful implementation of any SOA must be driven from the top down. This means gaining early wins that engage senior management. Define three or four metrics and regularly communicate results.

7. Promote SOA as the Future. Implementation of a SOA blueprint may never fully end, because business processes change or new ones are required. Your target architecture inevitably will evolve to accommodate changes in the external environment and corresponding adjustments to organizational goals.