http://www.capsystech.com/static.asp?path=5646

Friday, February 26, 2010

Millennium L.P. Carrires On

If you are one of the many people in the document imaging industry who has unwillingly donated to Dr. Mitch Medina's Kenyan missions, you shouldn't feel alone. According to a recent report by the group PatentFreedom, Millennium has been one of the busiest non-practicing entities (NPEs) pursuing patent suits over the past five years. In total Millennium has sued 110 companies with more than 90% coming since 2003.

Millennium, as many of you know, has some patents that seem to be related to automated forms processing. Although there has been a lot of talk about trying to stop them, eventually everyone seems to settle because the terms are made so agreeable. And Medina, who is apparently back in good standing with the Kenyan government after being exiled a couple years ago, marches on. For 2009, I found suits filed suit against SpringCM, A2iA, and eCopy.

Part of the settlement used to be that the defendant couldn't talk about it and had to name some competitors or other vendors to go after. Don't know if that's still the case, but, after a big year in 2005, Millennium seems to have settled down to going after a handful of companies per year. Not all its suits involved imaging, as according to the site "Patent Prospector," Medina has 17 U.S. patents, including one for retrieving dog poop (5,403,050). How apropos."

Ralph

Thursday, February 25, 2010

Accelerated I/O Update

Over the years, I've done some articles and briefings with a Colorado-based compression specialist called Accelerated I/O. I really thought they had some neat technology for compressing document images, which they planned to eventually leverage in audio and video applications. It was at least five years ago that I started talking them, however, and from what I can tell, they still don't have a shipping product.

Well, their story apparently sounded good to many other people as well, and the company has been able to raise more than $3 million in funding. However, that not having a product thing can get you into trouble with sed investors.

I know I've introduced several people to this company and I hope I haven't led them toward any investments they regret. I also hope that company principal Joe Doll's claim. "We never intended to do anything wrong.We were engineers who may not have known all the rules," is true.

I asked a couple of compression engineering experts to take a look at this technology and it never really went anywhere. Also, I find Accelerated's expectations regarding their opportunity in the document imaging market to be highly unrealistic - even moreso as the market has matured since the first I talked with them, but their expectations have not. Do I think they are a fraudulent operation? I never had that impression, but I guess you never know. Do I hope their technology is as great as they tout it to be? Certainly, because, if it ever does work, it could do some great things, but I'm still not sure about their business plan of starting in this industry.

That's all I have to say about Acceleated I/O for now. Does anybody else have an opinion/thought and Joe Doll and his proposition of compression through "continuous mathematical equations?".

Wednesday, February 24, 2010

Iron Mountain Buys Mimosa for $112 Million

We've been touting the potential of e-discovery in the Document Imaging Report for at least the last year. Well, Iron Mountain's acquisition of Mimosa would seem to validate some of our hype. After all, it paid $112 million for a company with 2009 revenue of $20.6 million and expenses of more than $30 million. So, Iron Mountain basically paid more than five times revenue for a company losing some serious money.

That said, it does give the $3 billion paper giant another stake in the digital world. Mimosa is best known for its e-mail archiving business, although it apparently offers some e-discovery tools as well - a natural extension in our opinion. While Iron Mountain has had technology in both these areas - it has primarily been of a hosted variety. Apparently, Iron Mountain felt it needed Mimosa's on-premise technology to complement its hosted options. 

Iron Mountain's biggest asset, of course, is it's install base. Recently, it has been focusing more and more on converting these paper customers to digital customers - with imaging part of the mix. Iron Mountain is an interesting company with a lot of advantages because of its size and market penetration. It will be interesting to see if it can make this large investment in electronic information technology pay off. We definitely think it has chosen a pertinent and valuable asset to acquire. Now, it will come down to execution.

Tuesday, February 23, 2010

Pixily Changes Name To Office Drop

Remember these guys? They offer that Netflix-send all your documents to them in an envelope, they scan, OCR them and make them all available on-line service. Well, it's a pretty cool service, but the name was a little vague, so they've done some surveys and stuff - I took one of them, and came up with Office Drop. I hope it works for them.

Brainware completes installlation with Sun Chemical

These are the types of deployments we hear about relatively often from Brainware, which is kind if a dark horse contender for large invoice capture applications. They don't quite have the same background as Kofax, ReadSoft, and Open Text, but seem to win their share of large implementations, often replacing competitive vendors' implementations. At Sun, they tout a Kofax replacement.

Here's a quote from the Director of Corporate Accounting at Sun Chemical that validates a lot of the stuff we hear directly from Brainware:

 “Brainware touted its ability to achieve 80-90% field extraction rates out of the box, but we realized that those were conservative estimates as we have experienced extraction rates as high as 93-99%,” said Ray Baer, Director of Corporate Accounting for Sun Chemical. “Once our team started to use the system, we quickly recognized how much more user-friendly it was compared with what was previously in place.”

Friday, February 19, 2010

Nuance Introduces Free PDF Reader

I just returned from a Nuance analyst conference in New York City. It was held at LDI Color Toolbox on Broadway, a very successful dealer that focuses on nationwide accounts. LDI also apparently sells a lot of eCopy, as eCopy hosted an analyst event there a couple years ago.

It's a great venue, but what was especially interesting to us was the Canon/eCopy message that Nuance was presenting. No, eCopy founder Ed Schmid was not there, although he is apparently still is a VP assisting with the transition, but Nuance Executive Robert Weideman talked extensively about the ShareScan and even the PaperWorks desktop products that were picked up when Nuance bought eCopy last year. Interestingly, Nuance's Paperport, definitely a more successful desktop product than PaperWorks to date, was hardly mentioned. It may just have been the crowd, as LDI is a Canon/eCopy dealer and Canon has some top execs on hand as well, but Nuance's voice recognition products got more play than their legacy imaging products. And Nuance certainly has some interesting ideas about integrating voice with imaging technology....

It's probably worth nothing that Ricoh, Xerox, and Nuance's Personalized Scanning Platform, which it kind of touted as an eCopy killer before the acquisition, were barely brought up. Well, Ricoh was brought up, but just as competition for Canon...More on all this in the first March newsletter.

One other thing, while the event was going on, Nuance introduced a free PDF reader to compete with Adobe's free reader. I'm mean, they're free, right, so what's the competition? Well, Nuance also introduced a PDF to Office conversion service available through the cloud to users of its PDF reader. It's also free, but eventually, I guess the plan is to charge for something. Weideman did note that Nuance is number two in the PDF conversion market behind Adobe (I assume he means revenues), and it at least seems to be cementing its position there.

Wednesday, February 17, 2010

New Scanners: Kodak Upgrades and Faster Front Office Scanning

Sorry if you read this earlier, before I completed it. I was in the Philly airport, heading to NYC for a Nuance analyst briefing, and had to board my plane. AT&T Internet access in Philly is a nice feature...anyhoo...

Kodak made three scanner upgrades announcements yesterday. Faster Trupers, a new entry-level LVP model - the i1405, and a network administration tool for its Scan Station 500s. The network admin tool is probably the coolest of the three announcements. Kodak held a conference call for press and analysts to discuss the news, and the IDC guy brought up an interesting question. Could the Kodak network management tool manage other MFPs. I thought Will Hebert of Kodak gave an interesting answer: "That was a bridge too far to cross for this release. It is certainly a possibility for the future.”


In other recent scanner news, both Fujitsu and Panasonic came out with new scanners that they touted as bringing more speed to the front-office. An interesting concept. I'm not sure the market is there yet, but heck, why not? People are certainly scanning more than ever. FCPA introduced its faster scanner yet, the 6800. Panasonic introduced a higher-level workgroup model, with a bigger ADF and a rated speed of 40 ppm/80 ipm.

Thursday, February 11, 2010

ReadSoft and KnowledgeLake Announce Partnership

Two companies that have been fairly busy on the partnership front, have gotten together. Transactional content management (TCM)/imaging for SharePoint specialist KnowledgeLake has announced a partnership with invoice capture leader ReadSoft. Not sure of all the details yet, but it adds some serious invoice capture technology to KnowledgeLake's portfolio. KnowledgeLake recently announced a partnership with Global 360 that will beef up its BPM capabilities, so all the pieces are being put in place for SharePoint-based invoice processing applications. ReadSoft U.S., which recently formalized a reseller strategy after years of focusing primarily on direct sales (and with Kofax's increasing focus on direct sales, you might say they are attempting to seize an opportunity), has also recently done partnerships with Hyland Software and Altec.

Tuesday, February 09, 2010

Smart phone scanning

Speaking of smart phone capture, check out this short YouTube video on technology from Canadian forms management specialist Crawford Technologies. I'd explain it, but it's easier to just watch.

Ralph

Unisys Payment Processing Business Acquired and Changes Name

Not sure if these guys do much full-page document stuff anymore, but they definitely were big back in the day....

Also, here's Steve McNair's musings on the Google Goggles mobile recognition apps.

CeBit to host Green Hall

Tuesday, March 2–Saturday, March 6
Venue: Hannover Fairgrounds; Hannover, Germany
Website: www.cebit.com

 From a press release:
"Green IT (Hall 8)
CeBIT Green IT is comprised of three thematic areas, two that focus on business and one that spotlights the consumer market. "Smart Infrastructure" is dedicated to energy- and resource-conservation, with subcategories such as virtualization, cooling, server-based computing, and intelligent outsourcing. "Green IT meets Business" looks at how IT can sustain cost-cutting measures by optimizing processes and improving energy efficiency. Examples will include zero-watt screens, resourceconserving output devices, and user-friendly mobile devices. "Green IT @ Home" addresses energy conservation at home, using PCs, notebooks and screens as examples. CeBIT Green IT will also feature a forum with highcaliber speakers from industry, science and government. More information is available at www.cebit.de/greenit_e"

Analysis: I've been skeptical about how much greener a document imaging operation really makes an organization, because of all the computing power used to access documents, but when you combine imaging with some of the innovations mentioned here like "zero-watt screens," maybe we're onto something.
.

Monday, February 08, 2010

Kofax reports 6-months results

There is a lot of information in the release.

Here's the stuff I boiled down as important:
  1. Overall software revenue increased by 17% to $101.5m compared to $86.7m in the prior year. Revenue on an organic and constant currencies basis increased 8%. Analysis: By our calculations, the September acquisition of 170 Systems, an approximately $7 million per quarter business, is being credit for about $8 million over four months, which, I'm guessing is pretty much what was expected.)
  2.  Applications software license revenue increased 11% while services revenue continued its strong performance with growth of 29%. Analysis: This is less impressive, as based on our calculations, 170 Systems could have quite possibly accounted for $4 million in software licenses sales over the six-month period - meaning there could have been no organic growth in software license sales. Of course, Kofax is telling us that the 29% growth in service revenue, which is now accounts for 54% of application software revenue (compared to 46% for licenses), made up for this. I'm not sure how this jives with the scuttlebutt we've been hearing about Kofax increasing maintenance fees. Does anyone know if Kofax accounts for maintenance as licenses or services? Either way, services traditionally produce lower margins than licenses.
  3. That said, even with a 15% increase in total expenses, almost all related to sales and marketing, Kofax did manage a 41% overall increase in the EBITDA for its software business, which checked in at a cool $8 million.
  4. VRS sales were essentially flat; they are actually included with software sales and were about 12% of Kofax's $101.5 million in half-year software revenue.
  5. The hardware business sucked, actually decreasing 1% in total revenue to $67 million and producing an adjusted EBITDA of just $2 million, after reporting a $5.6 million EBITDA for the previous year's six-month period. Analysis: Granted, I've never made $2 million in six months from my business, so I guess, $2 million is nothing to sneeze at, but comparing the profit and growth numbers of the VRS and hardware business to those of the software applications business, it's clear to me that a schism is going to have to take place for Kofax CEO Reynolds Bish to achieve the stock valuation he desires. Presumably dragged down by the hardware numbers, Kofax share value actually took a minor hit after the Interim report came out - even though the software numbers look pretty good.
Ralph

Thursday, February 04, 2010

ACS cuts costs in Illinois child support payment ops

ACS continues to do very well in the area of processing child support payments. As we've said many times, ACS does a great job leveraging imaging/capture/OCR technology as part of a larger business process improvement initiative.

Wednesday, February 03, 2010

News of the Day

Kofax has released a new version of the MarkView BPM for invoices app it acquired last fall. MarkView 6.5 features tighter integration with the Kofax capture suite of products. It is also certified for both Oracle and SAP environments, a sign that Kofax is aggressively pursuing SAP accounts. MarkView's legacy has been primarily Oracle Financials.

Also, Cabinet NG, a Huntsville, AL-based ISV that targets that mid-market, has announced a Green Awards program that "will award SMBs who demonstrate the best use of document management to improve their bottom line and operate their businesses in a more environmentally friendly means." We're not totally sold on how much greener document imaging can make a company - after all I don't exactly think silicon-based electronic equipment is the cleanest machinery in the world, but it's interesting to see somebody trying to measure the effects of at least how much less paper is being used.

Tuesday, February 02, 2010

ZyLab Introduces New E-Discovery Application

“Approximately one percent of organizations are prepared for full-scale eDiscovery activities,” says Johannes Scholtes, Chief Strategy Officer for ZyLAB. “As a result, the vast majority of organizations facing litigation are forced into a costly reaction mode in order to respond to discovery requests within court-imposed timelines."

Scholtes makes this statement in a press release about the new capabilities in the ZyLAB eDiscovery & Production system.  ZyLab, which began life as a search vendor, and transitioned to document imaging, is now very focused on this legal/e-discovery market. In the press release, ZyLab breaks down how its product addresses the five areas of the Electronic Discovery Reference Model (EDRM) and how addressing these areas can benefit businesses. ZyLab has had some significant success in this market recently and checking out how it applies its product to EDRM could be very instructive to imaging VARs, end users, and vendors looking to succeed in what is burgeoning opporunity.

Another Six-Figure Deal for Kofax

Kofax, which has made a fairly well-publicized transition toward more direct sales, today announced another large, six-figure deal. This is one is for $600,000 with a "a major global financial services firm headquartered in the U.S." In a recent conversation with CMO Andrew Pery, he indicated the Irvine, CA-based ISV has increased its number of six figure deals 25-30% since going to a "hybrid sales model" from its former strategy as almost purely channel driven sales. Kofax's six month report is due out soon.

Monday, February 01, 2010

Fujitsu buys out PFU shareholders

This deal make Fujitsu 100% owner of its scanner manufacturing business.

LuraTech Launches Capture Workflow

LuraTech, a document imaging capture and compression specialist, has become the latest vendor to announce an enterprise capture platform. InputAccel, back in the day, was really the first one of these types of products, which involve plugging in pieces of capture software to handle different process. LuraTech has its own image processing and data capture software, but has also introduced an API for introducing third-party technology. Monitoring capabilities are also key in these types of environments. I'm not sure of all  the details, but other vendors' offerings I've seen in this area has brought the concept of GUI process design to capture. As we've written before, although this isn't exactly BPM, the concepts of capture and workflow continue to move close together.