Adobe Acquires ECM Specialist Day Software

Adobe has announced plans to acquire Swiss ECM specialist Day Software for $240 million. I covered Day when it was a start-up back in 2002 (see story on page 6), At the time, Day was marketing something called a ContentBus and here's what we said: "The ContentBus,which is designed to apply a single set of content management controls to the multitude of data and document repositories that presumably exist within large companies. 'The goal of most ECM vendors is to get their customers to move all their content into a single repository. We offer all the benefits of content integration without the heavy lifting it takes to move the content,' said Day's VP of markering. Day boasts of 110 customers worldwide, mostly in Germany and Switzerland. It’s North American customers include the consumer electronics division of Sony and sportscaster Jim Rome’s Web site."

Day was also high on integrating multiple content repositories through the JSR (Java Specification Request) standards.

Quite frankly, I hadn't heard much about them until Adobe announced its acquisition, which seems to be for something like 5 times revenue. Day reported revenue of approximately $25 million for its last, which represents 47% growth.

Day has apparently found its niche, as here's what the Wall Street Journal article has to say:

"Day Software's products help companies manage the unstructured content–including files containing animation, video, photos or text–that are used to power company websites.


"The software also helps with social media by managing content gathered from external sources, such as customer reviews or blog postings. For example, companies can use the software to trigger a business response to content gathered from Twitter or Facebook.

"Day Software counts General Motors Co., McDonald's Corp. and Intercontinental Hotels Group as its clients. Within the last quarter, Day Software signed a host of new clients, including BMW AG and Hyatt Hotels Corp., said Day Software Chief Executive Erik Hansen in the interview. The company, which has seen licensing revenue grow at least 70% in each of the past four quarters, has doubled its sales and marketing presence in the U.S. over the past nine months, Hansen added.

Check Fraud Scheme Utilizes Images

I guess it it had to happen sooner or later. We spend a lot of time touting the security of electronic document technologies over paper, but now it appears that Russian hackers have broken into major check image repositories and used the images and associdated data to create some $9 million in couterfeit checks. I guess this isn't the first time there have been security breaches associated with document imaging. I remember a few years back there was a redaction screw up with some secure DoD documents, but this one is way bigger in scope. It also leverages modern print technology, which is very closely tied to the imaging market.

Remember a few years back when Frank Abignale- the guy the movie Catch Me if you Can spoke at a TAWPI event? Frank is now an expert in preventing check fraud. I'd be interested to hear his opinions on the latest generation of check scammers and what we can do to stop them. eWeek seems to suggest throwing more technology at the problem, which makes sense, as long as the good guys can keep moving faster than the bad guys.

Ralph

Atalasoft Reports Strong Growth

We also need to give props to MA-based ISV AtalaSoft, which recently reported 56% growth for the second quarter. AtalaSoft has some great zero-footprint imaging tools and also has launched a growing SharePoint viewer business. It recently hired industry vet Paul Yantus to help manage and accelerate its growth.

This last three blog posts tell us the imaging industry is bounding back nicely over the first half of the year and especially in the last three months.

Lexmark reports strong quarter

Lexmark had an extremely profitable quarter. "For its second quarter, Lexmark said it earned $85 million, or $1.07 a share, on $1.03 billion in revenue, compared with a profit of $17 million, or 22 cents a share, on sales of almost $905 million in the same period a year ago."

Now, Lexmark only acquired document imaging ISV Perceptive in May, so we're not certain how much this contributed to the strong quarter, ended June 30, but it is a good sign that Lexmark's business plan seems to be working....and Perceptive is certainly part of that business plan.

According to press release: "Lexmark said its results were spurred on by strong sales of printing hardware and supplies, as well as managed-print services for business customers." In the MFP world, document imaging seems to fall fairly close to the MPS initiatives, so, as I said, this is a good sign for Perceptive and our market I think.

Kofax Reports Strong Software Sales

Just back from vacation, and it appears not a minute too soon, as the news reports have been rolling in. Yesterday, you probably saw that Kofax announced a strong second-half and 2010 fiscal year for software sales - saying year-end results will between $213 and $215 million. This represents over 25% growth from fiscal 2009, when Kofax reported $169 million in software sales. That's a gross growth of some $45 million, at least half of which was organic. Kofax did acquire 170 Systems in Sept. 2009, and based on 170s trailing revenue of $28 million, maybe $20 million in growth can be attributed to that acquisition, but even a $25 million increase in software sales is quite impressive.

Kofax's hardware distribution business did decline from fiscal 2009, but only slightly, as it's projected to come in at $125 to $127 million, down from $129 million. Kofax CEO Reynolds Bish has always cited the hardware business as low-margin but profitable, and in the wake of the shortfall he seems to be cutting costs to maintain that profitability, as Kofax announced it will be eliminating 20 hardware redundancies (jobs?) to improve efficiencies.

Kofax clearly faces challenges related to its hardware business, but if it can keep growing the software business at 25% annually, the hardware business will continue to become a smaller and smaller percentage of overall revenue and eventually investors will stop paying attention to it.

Perhaps in answer to some of its hardware challenges, Kofax has announced that it will now be reselling IBML scanners in EMEA. If you remember, Bish had a lot of success reselling IBMLs when he was with Captiva. In fact, I believe at one point Captiva was IBML's leading reseller.

KnowledgeLake Honored by Microsoft

For the second straight year, St. Louis-based document imaging ISV has been honored by Microsoft in its Information Worker Solutions, Enterprise Content Management Partner of the Year category. For 2010, KnowledgeLake was named a finalist, after winninng the award last year. This year's winner was a company called Content and Code, out of the U.K., which seems to specialize in EDM and intranet solutions. KnoweldgeLake was one of three finalists.

KnoweldgeLake Partner and ECM/imaging roll-up, Global 360 was named the Visio Partner of the Year.

IKON to Resell Kofax Front Office Server

Digital copier/MFP dealer IKON has added Kofax's Front-Office Server to its product list. IKON, which has sold scanning solutions around its MFPs for several years, also carries capture products from vendors like Nuance eCopy, EFI, and NSi. Front Office server can run as an embedded application on multiple Ricoh devices. Of course, Ricoh now owns IKON..


IKON also sells solutions built around dedicated scanners and lists Kofax Capture in its product portfolio, as well.