Tuesday, April 24, 2012

Nuance Promotes Rich

Nuance has named Mike Rich as the new GM of its Imaging Division, with Robert Weideman being tabbed as the GM of the billion-dollar ISV's Enterprise Division. Rich is the former CEO of Equitrac who joined Nuance through an acquisition about a year ago. Nuance has portrayed the Equitrac acquisition as having been a very successful one, helping draw both Equitrac and Nuance's eCopy business into larger deals.

Equitrac is a print management solution, while eCopy handles scanning from MFPs. "Studies are showing that more than ever users are looking to buy scanning and printing at the same time," said Rich, who indicated that he has no major plans for changing the operations of Nuance Imaging, which is on target for $230 million in revenue in Nuance's fiscal 2012 (ending Sept. 30).

Weideman,who joined Nuance from forms processing and e-forms ISV Cardiff Software in late 2001, will now oversee a $300 million a year enterprise solutions business that has to date primarily focused on voice-recognition and some natural language recognition-driven solutions. He plans to bring Nuance's imaging products more to the forefront in that division.

Rich spent five years as the CEO of Equitrac, which was generating $60 million in annual revenue when Nuance acquired it for $160 million last May. Prior to that he was the president and CEO of Voice-over-IP ISV NetSpeak. He had previously held high-level positions at AT&T.

On the surface, these moves appear to be Nuance strengthening its management team - being able to keep Rich on board by promoting him and keeping Weideman as well by moving him to a division that can benefit from his expertise. Of course, it's hard not to notice that Rich's two previous companies, Equitrac and NetSpeak, where both sold.  True, in recent years, Nuance has put quite a bit of investment into its Imaging Division, but it still makes up only around 20% of the company's overall revenue (the majority coming from speech recognition-type technology). I guess the $200 million question is, will Nuance spin-off its document imaging division under Rich?

Let me stress that nothing the Weideman or Rich told me during an interview yesterday indicated that this was a possibility, I'm just reading between the lines a bit here.

Anyhow, we'll have a more complete article based on our interview in next week's premium edition.


Tuesday, April 17, 2012

DocuWare Takes on Funding

German document imaging ISV DocuWare has secured a round of financing from Morgan Stanley Expansion Capital LP. The financing will be used to help the company pursue its aggressive international growth strategy. Last year, we ran an article in our premium edition of DIR where we interviewed Steve Behm, who had recently been promoted to the new position of VP of Americas. Behm discussed the investments the company was making in expanding its sales channel to improve on the already impressive 19% growth the company reported for 2010. This had brought DocuWare to to just over $20 million in annual revenue worldwide.

DocuWare also recently announced a DocuWare Europe subsidiary and named a worldwide marketing VP, as well as appointed a Canadian sales director.

The amount of the investment by Morgan Stanley was not announced, but a six-member board of directors has been created that includes two Morgan Stanley execs, as well as DocuWare's co-presidents Jurgen Biffar and Thomas Schneck. The other two members seem to be technology industry veterans, including the Chariman, who served previously as a supervisory member of the DocuWare board.

Said Peter Chung, Managing Director and Head of Morgan Stanley Expansion Capital: "DocuWare has built a tremendous, international franchise, servicing an impressive base of customers through a broad network of highly trained, go-to-market partners.  Given DocuWare’s proven success and long-term investment in quality software and partner development, Morgan Stanley Expansion Capital believes the company is well-positioned to capitalize on the significant market opportunity available to provide document management solutions to middle-sized enterprises and government agencies."

If you remember, a couple years ago, DocuWare also made a major investment in SaaS product development with an eye toward the future of the market.

Square 9 Introduces A/P Product

In conjunction with the latest version of its SmartSearch software, Square 9 Softworks has introduced a purchase-to-pay (P2P) suite. The new product combines several elements of Square 9's existing product line, including its capture, repository, workflow, and e-forms technology. It also leverages a new Web interface that is designed to help take the New Haven, CT-based ISV's product to the next level.

For higher volume P2P applications, customers can leverage Square 9's partnership with Artsyl Technologies to automate data capture. Square 9 P2P starts at $27,000 for a five-user system. Square 9 CEO Stephen Young said that for 75% of the ISV's customers, accounts payable is one of the use cases.

Square 9 has been growing rapidly since coming onto the scene with an affordable document management systems targeted at MFP dealer reseller channel. "Early on we positioned ourselves as targeting the SMB," said Young. "And, while we can still sell a three-user system starting at 2,300, we are also now focusing on scaling out and selling further upstream."

More on this in our next premium edition.

Friday, April 13, 2012

Mitek Fights Back

Mitek has fired back against USAA's allegations that the San Diego-based capture ISV stole USAA's technology. According to a statement issued yesterday, "Mitek believes that the evidence will ultimately show that Mitek's engineers independently developed its Mobile Deposit software and related patents based on Mitek's own ideas. Far from concealing the facts from USAA, Mitek launched its Mobile Deposit product in January 2008 and repeatedly and openly made USAA aware of the product at multiple points during 2008 and afterwards. USAA launched its own mobile check deposit application utilizing Mitek's patented technology in or around August 2009, more than a year after Mitek, and long after it first learned about Mitek's product."

Basically, it boils down to this:
1. Somewhere around 2005, Mitek and USAA sign contract for USAA to license Mitek's CAR/LAR technology
2. Both Mitek and USAA say they then go to work independently developing capture technology utilizing mobile phones.
3. Mitek launches its Mobile Deposit SDK
4. USAA launches mobile check capture technology
5. Mitek starts asking USAA to pony up for patented technology the bank is using in its check capture application.
6. USAA says, "peshaw, you stole that technology from us" and turns around and sues Mitek, attempting to invalidate its patents.
7. Mitek says, "What are you talking about? We're going to fight this thing."

As we've said before, this is so important to our industry because Mitek has two patents related to full-page document capture that are among those being challenged by USAA.

Wednesday, April 11, 2012

LEAD Technologies Announces Mobile SDK

Long time document imaging SDK vendor LEAD Technologies has announced LEADTOOLS Anywhere, an SDK designed to to help customers deploy their imaging applications on mobile computing devices like smartphones and tablets. LEADTOOLS Anywhere incorporates HTML5, JSON Web Services and native libraries for the Android and iOS platforms.

The initial release " will include a new zero footprint HTML5 viewer and extendable JavaScript library for viewing images on any browser, operating system, platform and device that supports HTML5. This viewer will include many interactive features with multi-touch and gesture support including pan, zoom, magnifying glass, annotations, window leveling for DICOM, PACS communication and more."

LEADTOOLS Anywhere comes in the wake of LEAD's recent release of LEADTOOLS 17.5, which features significant improvements in areas like PDF, OCR, and SharePoint integration.We recently took a deeper dive into those improvements in a story in our premium edition of DIR.

Monday, April 09, 2012

Mitek Patents Called into Question

Mitek's entire portfolio of patents around mobile check and document capture are being challenged by USAA The U.S. military insurance company is basically saying Mitek lifted its "Remote Deposit Capture" technology from it, while USAA was working with Mitek to license its CAR/LAR technology. Mitek has six patents related to mobile capture, the first one granted in Aug. 2010. Mitek has ridden these patents and the mobile capture technology it has developed in conjunction with them, to double its revenue in 2011, from $5 million to $10 million and a market capitalization of almost nothing to a peak of over $300 million.

Mitek's value crashed to about half the level of that peak in the wake of the USAA allegations, which were file on March 29. Basically, USAA, which was working with Mitek as far back as 2006, is claiming that Mitek stole technology (which USAA had already filed patents for) and that Mitek incorporated that technology in in its own patent applications. To add insult to injury, USAA is saying Mitek recently came back to USAA and told USAA that it would have to license the stolen technology from Mitek.

There are also some other arguments about the contract between USAA and Mitek involving page counts, so this relationship has definitely soured on several fronts.

One of the interesting sidenotes for our industry as a whole is that USAA is seeking to have all of Mitek's patent claims invalidated, which would certainly enable ISVs developing remote capture applications to breathe a little easier. After all, Kofax' Mobile Capture, which as such a hot topic at its recent Transform event, seems in certain violation of at least one Mitek patent. Not sure, if USAA would then try to enforce similar patents.

Mitek CEO James DiBello responded to the USAA claims, "We believe these claims are without merit and we intend to vigorously defend our intellectual property rights, as necessary."

Wednesday, April 04, 2012

Kofax Lands BPM Deal with Stock Exchange

As we discussed at length in our last premium issue, Kofax has staked a lot on sales of BPM software going forward. CEO Reynolds Bish told DIR that the Irvine, CA-based document capture specialist should do $20-25 million in BPM revenue for calendar 2012, with that figure doubling by Kofax's fiscal 2014 (ends June 30). The foundation for this growth is Singularity, a Northern Ireland-based ISV that Kofax acquired late last year. Singularity had annual revenue of $16.1 million.

So, today's announcement of a $400,000 BPM sale to "one of the largest stock exchanges in North America," is certainly good news for Kofax. According to the press release, "a leading multi-asset class financial exchange group will implement Kofax TotalAgility as its BPM and dynamic case management solution to improve the execution and efficiency of its listing processes. The software will enable the customer to automate the administrative processes needed for a company to list on the exchange in order to reduce process latency and also route the supporting documentation to its Microsoft SharePoint and EMC Documentum content management applications for easy access by employees."

Organizations utilizing SharePoint for document management are clearly one of Kofax's BPM targets, so this deal makes sense in that regard. Doesn't seem to be a capture component here, but that's not a big deal. Kofax's two technologies are complementary, but not co-dependent.

Monday, April 02, 2012

IKON Re-branded as Ricoh

It's official. This is the culmination of the 2008 acquisition when Ricoh paid $1.6 billion for the digital copier super dealer that was also the largest North American partner of its chief rival Canon. The deal seemed like an expensive proposition at the time, but it also seems to have achieved what Ricoh was looking for - increasing its U.S. distribution significantly, while putting a bit of a hurt on its fiercest rival. Xerox, which paid $1.5 billion for ACS, may have been the biggest winner in the deal.

There have clearly been some bumps in the road involving the integration of  IKON and Ricoh, including the resignation of Jeff Hickling as president and CEO of Ricoh U.S. last year. Hickling had been the president and COO of IKON and initially much of IKON's executive management was given huge roles within Ricoh's U.S. services business. We're not sure how much of the ex-IKON management structure is still in place, as the Hickling change took place shortly after the Ricoh Convergence event, which I attended and was the last time I had a briefing on Ricoh management.

Suffice to say, the acquisition of IKON should now be considered completed. It always made sense from a strategic standpoint, as MFP vendors have been forced to move from a hardware to more a services model. Hopefully, now all the logistics have been worked out.