Tuesday, August 10, 2010

IBM Acquires Datacap

In kind of a surprising move, Big Blue has picked up document and automated data capture ISV Datacap, for an undisclosed amount. Why is this a surprise? Well, because everyone thought Kofax was the natural target for IBM. Kofax, after all, has had an OEM agreement with FileNet (which was acquired by IBM in 2006) since 2005. And Kofax CEO Reynolds Bish had sold his previous company, Captiva, to IBM/FileNet's big ECM competitor EMC.  But, it was not to be. (at least not yet???)

Datacap, it's worth noting, had a relationship with FileNet going back to 2002 (see story on page 8). I remember Datacap CEO Scott Blau being somewhat miffed by the OEM agreement with Kofax. But he always maintained that the relationship with FileNet/IBM remained strong. I guess that proved to be the case.

Maybe coincidentally, Datacap and IBM are headquartered about 15 miles from each other, just north of New York City.

Just last week, ReadSoft's Bob Fresneda was telling us that he expected more consolidation in the industry, so there must have been rumors floating about.

The deal makes sense if you look at Datacap's legacy business, which was primarily larger accounts with complex data capture requirements - technology IBM clearly did not have. Recently, Datacap had begun marketing some mid-market invoice/unstructured forms capture stuff targeted at the channel. We're not sure that will fit in with IBM's goals.

Paradatec, another advanced data capture specialist that has partnered with IBM worldwide, could also suffer some fallout from this.

More later.

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