Thursday, February 28, 2013

Hyland Acquires AnyDoc

Well this is one that might have occurred 10 years ago...Document imaging-centric ECM ISV Hyland Software has acquired AnyDoc Software. It's always been a good fit, as both companies have sold primarily through reseller channels and certainly have complimentary technology. Hyland and AnyDoc, in fact, share several channel partners who integrate AnyDoc's capture on the front end with Hyland's ECM on the back.

A couple years ago, Hyland made a move to go more aggressively after the capture space and even introduced some proprietary invoice capture technology that was designed to leverage its OnBase repository's integration with line of business systems. On top of that, there were rumors that Hyland was doing a fairly efficient job replacing AnyDoc capture technology with its own capture at some of the customer sites of Hershey Systems- a higher education integrator that Hyland acquired in 2010. But, our question for Hyland has always been, "Why re-invent the wheel when there is already a market full of great capture software out there?"

Of course, all that should be under water under the bridge now, as AnyDoc and its mature and proven capture technology are now part of Hyland.

Back in the mid-1990's, AnyDoc was one of the pioneers in automated data capture from documents. And, in the late 1990s, it was about the same size as Hyland. Since then, Hyland has grown to more than $230 million in annual revenue (per a recent article in the Plain Dealer), while our estimates have AnyDoc still at under $20 million. The reasons for this are likely multiple, but one definitely is that Hyland has done a much better job cultivating and growing its channel than AnyDoc has.

For example, while AnyDoc was one of the pioneers in automated invoice capture, it decided to go primarily direct with the initial version of its invoice capture software because it felt the technology was too complex for its reseller channel at the time. You can imagine the conflict that created. Meanwhile, while Hyland has introduced some direct sales into its mix, it's also done a good job moving upstream and really securing a lot of the top resellers in the document/imaging workflow space.

The synergies between the two companies should be great. AnyDoc's software, which was never its weakness, will now be available to the entire Hyland channel. Plus, Hyland larger support and development team will be able to help it move forward. In fact, there are already some ex-AnyDoc employees working for Hyland. Hyland gets a mature and robust capture product, which should only assist with their efforts in the ECM space - where leaders like Documentum, Open Text, and IBM, have also acquired capture ISVs.

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