Lasefiche EMPOWER Event Continues to Grow

LONG BEACH, CA – It was good to return to the Laserfiche EMPOWER Conference this year after a three-year hiatus. Last time I had the opportunity to attend was 2012. I had planned to go in 2013, but a snowstorm changed that. 

Since that 2012 event, I haven't really had a chance to connect with the Laserfiche executive team. And there have been big changes to that team over that time. In 2013, Tom Wayman, VP of marketing and product strategy, died. The next year, his mother and company founder and CEO Nien-Ling Wacker passed away. (Both had awards named after them that were presented at this year's conference.) Nien-Ling's husband Chris Wacker has taken over as CEO, with CTO Karl Chan having added president to his title. In 2014, Laserfiche named Thomas Phelps IV as its VP of corporate strategy and marketing.

During the last few years, Laserfiche has continued to grow. For the 2012 conference, which was held at the Anaheim Marriott, I reported 1,600 people attended. For this year's event, which was moved to the Long Beach Convention Center (a much bigger venue), Laserfiche announced 2,700 attendees. Chris Wacker also told me the company enjoyed 10-12%  revenue growth in 2015 over 2014, which was also a growth year.

Overall, 880 organizations were represented at EMPOWER. This included a mix of end users, resellers, and vendor partners. The big announcement was the release of Laserfiche 10, which features improvements in collaborative and mobile capabilities, as well as the introduction of a library of more than 100 pre-built workflows across several vertical markets and horizontal applications. New analytics tools for BPM were also introduced.

A few things that have not changed in the four years since I last attended EMPOWER:

1. Laserfiche remains very strong in state and local government market.
2. There is still a big push toward getting many of these government customers to expand their implementations enterprise wide. It seems to be working. For example, I attended a presentation by the City of Boca Raton, which has expanded its implementation from the clerk's office to the A/P department and now has 50 more projects either currently being implemented or that have been requested. Many of the attendees I spoke with were considering similar (if not quite as big) expansions.
3. Epson is still the event's premier sponsor, although Epson's scanner business has grown considerably since 2012. According to Mark Pickard, senior product manager, Document Scanners, Epson America (citing numbers from the NPD group) through the first 11 months of 2015, the company's revenue from commercial scanners grew 24% over 2014, which was twice as fast as Epson's nearest competitor. He credited Epson's relationship with Laserfiche and its channel as contributing to that growth.

We'll have more detailed coverage of the event in our next newsletter, but that's a quick summary for you.

Obamacare - My Experience and why SPA could have saved it!

Okay, so first off, hope everyone here stateside has/had/is having a great T-Giving holiday.

So, far my Holiday shopping has been focused on getting some new health insurance  - taking advantage of the Obamacare plan, which is technically named the Affordable Healthcare Act, or something to that effect. Full disclosure  - I am a Democrat (having switched parties when George W. Bush was first nominated as the Republican presidential candidate) and have voted twice for Mr. Obama as president. I also have a pre-existing medical condition that historically had made it impossible for me to switch insurance and shop for a better policy. As I own my own business and am self-insured, I really have had no leverage and my insurers keep raising my rates and there has been nothing I could do about it. So, I was looking forward to being able to do some comparative shopping through Obamacare.

Yes, I had heard all the nightmare stories about how hard it was to actually get the Affordable Healthcare Act Web site to work properly when signing up. But, I figured some of this had to be exaggerated, right? Media hype. I'm mean I'm fairly technologically savvy and the U.S. federal government invested at least $100 million in the Web site, so it couldn't be that bad, could it? I mean Web sites are somewhat mature technology.

Well, it turns out everything is as bad as advertised. Here's a list of the problems I've encountered so far:
1. Online form was not very intuitive: For example, whenever you change something, it takes you back to that part of the form and doesn't make it clear how you are supposed to skip refilling in the same information in the sections that follow the area that you've changed.
2. I am currently attempting to log-in the Web site right now and can't get in.
3. It took me literally two hours to fill out the unintuitive e-form
4. Received feedback that I would get a tax credit for my wife and I and that the state would have to check on eligibility for kids enrollment in a state-sponsored insurance program.
5. I then realized I needed to change some (I thought fairly minor) info about my current healthcare coverage.
6. Went back online but couldn't get back into my application form to make the change.
7. Went through chat service and phone call to try and make corrections- and while my questions were answered promptly, nothing was accomplished. I was told I'd have to wait for a call back within 2-6 business days before I could make any changes.
8. In the meantime, my application seems to be stuck somewhere in limbo, although it's not really clear where that is.
9. Waited three weeks and never got a call.
10. Got a bill from my current insurer which for reasons (perhaps related to Obamacare?) has increased its premiums 12% across the board.
11. Called the Affordable Healthcare Act customer support number this morning and the rep said they had no record my previous call and that, someone would call me in another 2-5 business days. If I miss that call, I am instructed to call back on the same number I called this morning and only then can they connect me to who I need to talk to.
12. Took me six tries to log onto the Obamacare Web site to double-check the status of my application, which appears to be in the same state I left it before, although for some reason (presumably because someone has to make changes to it, it is listed as "inactive," although it's not exactly clear what that means.
13. Now I guess I wait until next Thursday to hear from someone before calling back. And my deadline for applying for coverage effective Jan. 1 has been extended to Dec. 23. 

It has been my contention since I began this process of applying for healthcare coverage through Obamacare, that the on-ramp is clearly something that could have been better addressed by what Forrester, Kofax and others are calling Smart Process Applications (SPAs). From a Kofax press release on Forrester's definition of SPAs: "SPAs is a new category of application software designed to support industry specific business activities that are people intensive, highly variable, loosely structured, and subject to frequent change. SPAs automate both structured and unstructured work activities in support of collaborative processes."

SPAs combine technology like capture, BPM, collaboration, and analytics to help connect customer-facing systems of engagement - which is what the Obamacare Web site is supposed to be - with systems of record, which is presumably what sits on the back end of the Obamacare Web site and is supposed to come up with a selection of insurance plans I can choose from. There is obviously a breakdown in the current system for making this connection as I've been trying to get some quotes from several weeks now!

As I've said before, I think this whole Obamacare mess demonstrates the market potential for SPAs. Sure, some e-commerce sites, like Amazon, are great, but they have spend billions of dollars and multiple years ramping up to their current level of mostly automated customer service. For almost everyone else, most back end systems are based on some type of tradtional paper process and just gluing a Web site to the front end is not going to work. This is where SPA fits in. It can act as the glue between old processes and new e-commerce driven ones. And document imaging ISVs and SIs are the perfect people to sell and install SPAs because their businesses are rooted in taking traditional processes and making them more electronic through applications like capture and workflow.  Basically, they understand technology and they also understand processes - two key ingredients to making e-commerce systems work successfully in a real world full of legacy systems and old habits.

In conclusion, I hope I get this healthcare thing resolved and I hope all you capture, document imaging and SPA vendors and SIs can leverage the so-far disastrous results of the Obamacare service to convince organizations transitioning to more e-commerce that they really need your help. After all, they certainly don't want to make the same mistakes and be compared to Obamacare when trying to conduct business.

Best T-Giving wishes,

Ralph

MS Partnership Hightlights Kofax's Cloud Strategy

Not really sure how big a deal with this, but Kofax today announced it would make an insurance claims processing solution is available for demonstration as part of an engagement at Microsoft Technology Centers worldwide. The solution is built on Kofax's new Total Agility 7.0 platform, which is basically a combination of all its technology - capture, plus everything is has acquired over the past few years in areas like data analytics, BPM and Web interfaces - put together in one platform. The demo is set up an Azure, so this really represents Kofax's first full scale cloud-centric marketing.

The Microsoft Technology Centers are hosted in a number of brick-and-mortar locations around the world. They are designed to provide "collaborative environments that provide access to innovative technologies and world-class expertise, enabling you to envision, design, and deploy solutions to meet your exact needs." It sounds like Microsoft and Kofax plan on working more closely together in the future around KTA 7.0 and Azure. Said Kim Akers, general manager, Microsoft Corp, “Kofax continues to demonstrate its commitment to the Microsoft community with TotalAgility, the first BPM and case management platform hosted on Windows Azure."

It will be interesting to see how Kofax's revenue is going to break down between on-premise and cloud solutions in future years.

Kurzweil, the Wisdom of Harvey Spencer, & Kofax TA 7.0

A couple weeks ago at Kodak Alaris' excellent Global Directions 13 Conference, noted futurist and technology author Ray Kurzweil gave the keynote. As I noted earlier, he totally delivered on the hype, and gave an excellent talk discussing everything from his roots in the document imaging industry to how and why we are going to live much longer in the near future. The main theme of his talk was how information technology grows at an exponential, and not a linear, speed. This causes people to underestimate the improvements that will be made a few years down the road, and as a result, the effect these improvements will have on our lives.

Related to this, Kurzweil noted that people developing technology products need to be working on stuff that makes sense three to four years down the road. This made me reflect on the Harvey Spencer Associates' conference I had attended two weeks earlier. At the HSA conferences, Harvey likes to push the envelope of the capture industry. In fact, he will often have speakers that make you think, what the heck does this have to do with the market? This year, in fact, there were a couple speakers that focused on voice technology, which, aside from Nuance, wouldn't seem to affect anyone in the capture market. But, when you consider Kurzweil's sentiments, maybe it will.

For some perspective, I took a look at the agenda for the second HSA Capture conference, held in 2006. One of the sessions was "Check 21 and its Impact on the Convergence of Document and Transaction Processing." I remember telling Harvey at the time, I really didn't see the connection between payments and document processing. But, low and behold, some seven years later, at IOFM Payments Summit I attended recently, the convergence of documents and payments processing was one of the major themes.

Of course, Windows Vista was also a topic on the agenda at HSA Capture 2006, so you can't win them all, but, I think it's safe to say, in line with Kurzweil's strategy, looking ahead a few years when developing new technology is important, because it helps get you to market ahead of the competition, who can follow, but will have a tough time unseating an established leader. SharePoint 2007 was another topic discussed at HSA 2006, and by that time KnowledgeLake already had an established, if small, capture-to-SharePoint practice. As Spencer's vision of the influence of SharePoint proved correct, and it spread as a popular ECM repository, KnoweldgeLake blossomed from a start-up to a major player in our industry, while other vendors scrambled to catch up.

Which all brings us to Kofax's announcement today of Total Agility 7, a platform for implementing smart process applications (SPA). Kofax first unveiled its SPA strategy about a year ago. At the time I wondered what the heck they were talking about. Kofax's CMO Martyn Christian (who left the company about a month ago), however, did a pretty good job tying SPAs to the newly defined "first-mile" of business processes and the strategy started to make sense, but I was still wondering how Kofax planned to address it. Well, Total Agility 7, which has apparently (per Kurzweil's advice) been in the works for several years and some $125 million worth of acquisition and R&D investment, makes it all clear. Basically, it's a Web-based (eventually cloud-based) platform with all the tools needed to create SPAs.

I'll expound more on this in my next premium issue of DIR, as Kofax CTO Anthony Macciola gave me a great interview on the details of TA 7. In brief, it combines Kofax's existing capture technology, with its internally developed mobile tools, with the technology from the acquisitions Kofax has made over the past few years, and puts in all in a Webified, cloud-ready environment that appears ready to address what Kofax hopes is an emerging market for SPA solutions.

A Look at Kofax's First Mile Marketing Strategy

Just got back in the office from another Kofax Transform event. Don't know many years I've been covering this event - at least since 2006. This year's event was in San Diego, and the weather was fairly awesome. The event itself was strong too, with close to 600 attendees from 25 countries.

One of the themes was Kofax's introduction of  a new marketing message that is being built around the idea of building out the First Mile (TM) of customer interaction:

That picture is Martyn Christian, CMO of Kofax, presenting on "Delivering on the First Mile." Basically, Kofax's message is around connecting "systems of engagement" with "systems of record," and it was a good thing that John Mancini, president of AIIM, and Geoffrey Moore, author of Crossing the Chasm and other books, were around to help explain this marriage. Both Moore and Mancini have spoken and written on this topics for several years. But, from my standpoint at least, Kofax is the first vendor I've heard that has developed a coherent strategy for really connecting the two.

And this strategy is built around SPAs, or smart process applications. I'm not going to get into a huge explanation of what SPAs are right now, but Forrester's Craig LeClair does a pretty good job of it in this article that appeared in last week's premium DIR.

Basically, the First Mile message is that businesses need a set of technologies to connect their evolving set of customer interactions with their back-end line of business systems. In other words, customers are communicating with businesses in an increasing number of ways - paper, e-mail, social media, call centers, etc. And businesses are under increasing pressure (due to the potential speed and ease-of-use of properly executed digital transactions)  to process these communications in an efficient and customer friendly fashion. Capturing paper communications effectively is certainly one avenue to this, but so is capturing e-mail and mobile interactions - and not only capturing these communications, but enabling customers to input them in a way that is intuitive and user friendly. Kofax is attempting to deliver on this promise with a combination of multi-channel capture, BPM, and analytics technologies

All that was pretty cool, and there was a lot more that went on at Transform that I will be covering through various avenues (multi-channel communication?) over the next few weeks. Also, next week I'm headed to New Orleans for both the Canon's ICS Division (formerly IFS) national reseller meeting and the annual AIIM Conference, as well as a stop in at Microsoft Dynamics Convergence. Let me know if you are going to be in town and want to connect.

Kofax Acquires BI and Analytics ISV - Altosoft

It's a move Kofax has been talking about for about a year now - at least since last year's Transform Conference when CEO Reynolds Bish told DIR, "One technology we may be looking at is analytics that can be embedded in our solution.” This morning's announcement of the acquisition of Altosoft is the realization of that vision. Based in Media, PA (just west of Philadelphia), "Altosoft’s software provides rapid, no-coding development of near real time reporting and dashboard applications through the use of a data integration and analytics engine utilizing in-memory techniques."

Basically, here's how I see BI and analytics fitting within the Kofax capture and BPM platform (and some of this was laid out at Transform 2012. Kofax has a full suite of technology for capturing data from paper, electronic documents, e-mails, and mobile devices. With the acquisition of Singularity, it also has a BPM framework of building and executing processes related to captured information. The BI and analytics fit in between these two pieces and help the Kofax platform execute these processes more intelligently because users can now better make sense of the data being captured.

This all ties into Kofax's new focus on Smart Process Applications (SPAs), an emerging space defined recently  by Forrester. In a recent conversation with Craig LeClair of Forrester, he described SPAs as combining technologies like capture, analytics, and BPM to address specific pain points for business - rather than providing broad infrastructures like ECM and ERP systems. LeClair basically said the time for infrastructure systems has passed and businesses now care more about addressing specific applications with multiple technologies than about installing the technologies themselves.

LeClair gave me the example of a coffee shop improving its incident report process by replacing paper forms with e-forms on tablets, as well as utilizing the tablets picture taking capabilities. From a Kofax press release, "SPAs automate both structured and unstructured work activities in support of collaborative processes. SPAs contain all or most of the following core features: document and content capture for incoming documents, forms, and faxes relevant to the business activity; embedded analytical tools designed for the business activity; collaboration capabilities for people to create content needed for the activity; and BPM tools for executing the steps involved in the activity."

Forrester is projecting the SPA market to grow from $600 million in 2012 to $3.9 billion in 2016.

Kofax, which had $87 million in the bank as of Dec. 31, 2012, paid $13.5 million for Altosoft, with additional earnouts available in over the next three years. Altosoft's 2012 revenue was $3.4 million with an EBIDTA of $500,000.

A Closer look at Kofax's half-year numbers

Lot of interesting stuff in Kofax's report regarding its half year numbers .

First off, the Irvine, CA-based ISV's numbers were down fairly significantly:

• total revenue for the quarter was $63.7 million, which represented a decline of approximately 8% in constant currency from the previous year's second quarter (Kofax fiscal year ends on June 30, so its 2013 Q2 ended Dec. 31)
• software license sales were down significantly  - 24% - compared to the Q2 numbers for fiscal 2012. For Q2 2013, license revenue was just $25 million.

As usual, Kofax had plenty of reasons for this shortfall:

•  Apparently 2012 fiscal first half was unusually strong. CEO Reynolds Bish. "We noted that the prior year period had a very significant record. So the revenues for the first half of last fiscal year were significantly ahead of anything we had reported for that period in the past."
• That said, Bish gave two reasons why Q2 2013 revenue was lower than anticipated:

1. "We had a very large mid-seven-figure transaction slip out of the quarter into a future quarter. We still expect to close that at some point, but are not able to accurately forecast that."
2. "Our software license revenues in the Americas was also lower than we anticipated, principally because of all the changes that we began implementing in our overall sales organization during October."

Okay, so that's most of the bad news. Kofax EBITDA was also down almost 40%, but the company still managed to generate $15 million in cash through the first half of the year and has $87 million in cash in the bank.

Lot more interesting stuff that we'll get into some more details on in our upcoming issue of DIR, but basically Kofax hired Forrester to double-check some of Harvey Spencer Associates' numbers of the capture market. While Forrester's market size number were actually slightly larger than HSA's, their growth figures for capture were somewhat lower. And Bish blamed the Q2 software license decline squarely on Kofax's traditional capture business, while in the meantime spinning Kofax's future direction toward the newly defined SPA (smart process application) market.

SPA basically combines mobile and traditional capture with BPM and analytics to create high-end vertical applications. Forrester listed SPA as just a $600 million market in 2012, but with CAGR of close to 60% through 2016 - a much higher growth figure than it has for the individual capture and BPM spaces.

Bish concluded that he is optimistic in Kofax's immediate prospects for improving results, in part due to a revamped sales structure (we'll get into more detail in DIR), as well as, well, less than stellar Q3 2012 results that will be easy to improve on: "So, we certainly expect to report relatively significant year-over-year growth during the current quarter, expect that to continue into the half-year, and as a result of that, we have a pretty high level of confidence of returning to reporting more consistent software license and total revenue growth."

At last check, Kofax stock was trading at less than two and three-quarters British pounds per share on the London Stock Exchange, a drop of about 15% from what it was trading previous to the half year results being announced.

Kofax Introduces New Digital Mailroom Technology

Kofax has introduced a new application called Kofax Mailroom Automation. It basically introduces some of Irvine,CA-based ISV's BPM technology into the world of mailroom capture.

We've been talking about the digital mailroom in the document capture industry for years. In fact, current Kofax CEO Reynolds Bish was one of the first big proponents of the technology in his days back at Captiva. And there have been several implementations of the digital mailroom worldwide to date, in several different fashions. Most ISVs in our industry look at it as an extension of line-of-business capture in areas like claims processing - only adding more lines and document types into the mix. Of course, then there are companies like Earth Class Mail that advertise the ability digitize everything and distribute it electronically - or at least give users the option of turning down paper copies of magazines...it's complicated.

Kofax Mailroom Automation falls into the first category, as Dermot McCauley, VP, solutions product marketing, explained that Kofax is going after primarily transactional documents. Kofax has always gone after these types of documents and even has installed what it calls digital mailroom applications. But, the new application introduces the ability to both track and manage better what comes into the door.

McCauley gave us the example of a customer of a bank applying for a loan and sending in the application in the mail. But, in this case, the customer is a foreign citizen and doesn't realize that the loan application required a picture of his passport is included. With Kofax Mailroom Automation, the bank would be notified that a piece was missing and the customer could even automatically be sent a correspondence asking for a copy of the passport. "The problem with many [capture-only] digital mailroom solutions is that they end up sending an incomplete or erroneous set of documents to a line of business applications, where someone has to deal with it there."

There are also some other new features around tracking and monitoring all mail in Kofax Mailroom Automation. Pricing will be based strictly on page count and will embrace Kofax's multi-channel capture philosophy. 

More in next week's issue of DIR!

Kofax Q4 Details

As expected, Kofax has posted a strong Q4 for its fiscal 2012. This included 17.2% growth in terms of organic constant currency for applications software-the company's core business. Applications software generated $30.2 million for the quarter and software licensing overall was about 50% of Kofax's overall revenue of $75.3 million. To give you an idea of what positive trend this is, for the fiscal year 2012 (including Q4), software licensing made up just 45% of overall revenue.

Commented CEO Reynolds Bish in a press release, "“Our fourth quarter produced strong results, with software license revenues, service revenues and revenues in all geographic regions, our core capture business and acquired businesses being equal to or greater than our expectations. This allowed us to meet the guidance we had provided and realize record total revenues and Adjusted EBITDA for the fiscal year. In light of our transition from focusing on EBITA to Adjusted EBITDA and for purposes of clarity, during fiscal year 2012 we achieved an EBITA of $42.0 million compared to $40.2 million in fiscal year 2011.”

Good stuff.

For fiscal 2013 Bish is projecting "mid to high single digit total revenue growth on a constant currency basis and an adjusted EBITDA margin of at least that reported in fiscal year 2012."

Two geographic notes:
1. EMEA saw the strongest growth in Q4 with a 53.2% growth in software licenses contributing to $30 million in total revenue.
2. Kofax continues to struggle to gain a foothold in Asia-Pac, generating just $5.4 million in revenue for the quarter - a decline of 27% over fiscal Q4 2011.

For the second half of FY2012, Kofax reported 56% of application software license sales came through channel partners, which is pretty close the mix Bish envisioned when he took over the company.

Kofax released its results on Monday (a holiday here in the States) and its stock share price seemed to dip slightly before recovering today.

Study Exposes the Efficiency of Paper

Yes, I know that sounds counter-intuitive. After all, the tagline to my newsletter is "Business Trends on Converting Paper Processes to Electronic Ones." And, why would we want to go through all the trouble doing that if not to make the processes more efficient. Hold on a minute, and I'll explain.

Here's a quote from a recent IDC white paper commissioned by Ricoh, entitled, It’s Worse than You Think: Poor Document Processes Lead to Significant Business Risk.  Discussing the results of a survey on ineffective document processes, "The least effective processes are also the least paper based. This exposes the myth that simply driving paper out of processes necessarily makes them more efficient."

Basically, I think we all understand the second part - electronifying a bad processes doesn't necessarily improve it, it just codifies it. But, read that first sentence again. It indicates that the paper-based processes are actually more effective than the electronic ones. To me, this could be great marketing material for the document imaging industry. Logistically, it would follow maybe eliminating paper processes is not the most efficient route. Rather, improving them, through strategic capture might be.

Bottom line: In many cases paper processes are more efficient than electronic ones, so why try and replace them? Why not just improve them through document imaging? Does that make sense?

SaaS Features Highlighted in Kofax BPM

Kofax has announced a new version of its TotalAgility BPM software. Kofax is touting TotalAgility 6.0's ability to be deployed through a SaaS (software as a service) model. Kofax added TotalAgility when it acquired Northern Ireland-based ISV Singularity late last year. At the time, Kofax touted the ability of TotalAgility to be run as a SaaS, and the latest version seems to re-enforce that position.

According to the press release, "TotalAgility 6.0 has been also been enhanced to accelerate deployments through an intuitive process design and execution experience. TotalAgility Workspace and TotalAgility Builder are now completely browser-based, making it much easier for users to design, deploy and operate these solutions. Multiple form factors are also now supported, delivering better user experiences to mobile device users."

There is no mention of the introduction with cloud-based capture, which is something Kofax promised would be on the way, as part of TotalAgility - not as a standalone offering.

The SaaS version of TotalAgility runs on Windows Azure.

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.

Docville Event set for May 9

Michael Ziegler's Docville group has scheduled another event for Wednesday, May 9 in Brussels. Docville is a networking organization made up primarily of European ISV, integrators, and VARs that focus on the document management space. This will be the group's third event, with the one held last fall drawing approximately 90 attendees.

The highlight of the event are focused roundtable discussions that are led by topical experts. This event's roundtable topics include:

• From AP Invoice Processing to an Integrated P2P Approach - What are the Challenges & Opportunities?
•  The value of Business Process Management – a must have or has the battle been lost?
• From Scanning to Electronic Document Capture & Processing – Changing Platforms, Challenges & Solution Providers
  • Document Service BPOs – what are the global trends that promise profitable growth?
  • Is the Digital Mailroom having a renaissance?
  • SharePoint ECM: Leveraging Microsoft and Microsoft SharePoint Partners; Complementary or Competitive?
  • Changing Software Licensing & Delivery Models – Impact on Vendors and Customers
  • What can semantic technologies accomplish for document understanding & document management?
  • Document Service BPOs: Hybrid Records supporting business decisions and ensuring ROI is not killed by legacy – overcoming the challenge
  • What is Next for SharePoint ECM?
  • Process Automation in Human Resource Management – is the potential really there?
  • An International Government G-Cloud – What are the challenges and Opportunities for Suppliers?
  

Kofax Acquires BPM ISV

Kofax has finally pulled the trigger on its much anticipated acquisition of a BPM software provider. However, instead of being the SharePoint-focused ISV many of us thought it would be, it as Northern Ireland-based Singularity. Singularity, which does its business primarily in the U.K. reportedly did  $16 million in revenue for its fiscal year ended Sept. 30, with an adjusted EBITA of $1 million.

The reported acquisition price was a maximum of $48.1 million, with $30.3 million being paid up front. In a conference call with analysts, Kofax CEO Reynolds Bish, said his company should end up paying approximately 2.9 times annual revenue for Singularity, which he said compares with the multiples that Open Text paid Metastorm and Global 360 and Lexmark paid for Pallas Athena.

Bish discussed four main drivers behind the acquisition:
1.  the opportunity to extend the offerings of Kofax's global sales force--expanding the geographical markets for Singularity.
2. the natural integration of capture and BPM for automating processes,
3. the lower total cost of ownership for customers working with a single platform for both technologies,
4. and the tight integration that can be achieved going forward.

Basically, as more ECM vendors are getting deeper into capture with their own products, either through acquisitions, development or both, capture ISVs like Kofax are being pushed to expand into ECM - and with BPM, in my opinion, the highest value area in an ECM suite (along with capture of course), it makes perfect sense for Kofax to acquire a BPM player.

There will certainly be some challenges related to integration, not necessarily of technology, but of sales and marketing - but overcoming these challenges should help Kofax continue to grow and be profitable in the future. Much more on this in our upcoming premium issues.

Lexmark Announces Third-Quarter Results for Perceptive

For the quarter Perceptive saw 15% year-over-year growth to reach $23 million in sales. This was, however, "sightly below expectations," said Lexmark EVP and CFO John Gamble, on a conference call today discussing Lexmark's third-quarter results. (Here's s the transcript.)  Apparently, Perceptive's revenue did grow fast enough to completely offset Lexmark's increasing investments in the Perceptive business. This contributed to a non-GAAP operating loss of $3 million for Perceptive for the quarter.

"We are investing in Perceptive to drive expansion of international sales, accelerate the development roadmap and increase the industry solutions Perceptive offers to both Perceptive and Lexmark customers, including MPS customers," said Gamble. "To achieve this, we have increased both development and marketing and sales expense of head of revenue growth."

That said, Lexmark has hardly soured on the Perceptive acquisition. "We remain pleased with Perceptive's progress overall and believe the capabilities we are adding drive not only growth in Perceptive but also in our imaging business," said Gamble.

Those capabilities include the addition of the products of Dutch ISV Pallas Athena to the Perceptive portfolio, in a $50 million acquisition that was announced last week. Lexmark described Pallas Athena as "a leading provider of BPM, DOM (document output management) and process mining software."

According to Lexmark CEO Paul Rook on the conference call, "The combination of Lexmark and Perceptive and now Pallas Athena, creates a unique capability in a market that further strengthens and differentiates Lexmark's core industry focused workflow solutions and managed print services proposition to our customers. It expands our market for revenue growth and now provides cross-selling opportunities between imaging products, fleet management, content management, business process management and document output management solutions."

Canon USA Solutions Subsidiary Announces Oracle SOA Workflow Platform

Canon Information and Imaging Solutions (CIIS) recently announced an SOA-based imaging and workflow platform desigend to connect ERP, CRM and ECM systems. CIIS is a services and solutions focused wholly owned subsidiary of Canon USA that was launched earlier this year. The new solution will be built on Oracle's SOA platform.

From the press release, "Designed by Canon IT Solutions Inc. of Japan, the new platform was developed as part of the global alliance between Canon and Oracle announced on September 26, 2011, leveraging Oracle Fusion Middleware and Oracle software products including Oracle Database, Oracle WebLogic Server and Oracle SOA Suite with Canon’s globally recognized imaging technologies."

Target date for release is second quarter of 2012.

Kofax Partners with Pegaystems

Irvine, CA-based document capture software leader Kofax has signed a "technology and marketing alliance" with Pegasystems, a leading BPM software provider. I view BPM as the next generation of automated workflow, a pillar on which the document imaging industry was founded. BPM brings non-document related processes into the automation picture, taking what we've known as workflow to the next level. Kofax's capture technology can be used to pull paper documents, as well as e-mails and other electronic documents, into BPM applications.

As I've said before, I think IDR (intelligent document recognition)-driven capture and BPM are the two hottest potential growth areas related to our space - as SharePoint squeezes the repository and search and retrieval players - so I applaud this alliance between two leaders in their respective spaces.

Document Boss on Metastorm Acqusisition

Because the deal is not closed, apparently Open Text is not saying anymore than they already have (which hasn't been much) about the Metastorm acquisition. I really have not been able to find too much in depth analysis on the deal, but the best work I've seen is this piece from Document Boss.

Here's an excerpt: "BPM is increasingly being seen as the backbone of the ECM and related technology sector  - the glue for managing the processing,collaboration and workflow of documents and data.  Metastorm was a pure play BPM software provider, embracing Enterprise and Business Architecture, Business Process Analysis, and Business Process Management from a pure play platform approach...This acquisition is not only a good bolt- on to allow Open Text to further expand their ECM offering, but it allows them to be positioned as more of a major player in the BPM space, with access to increased market opportunities.


"In addition, the acquisition of Metastorm by Open Text speaks volumes about the importance of BPM and accompanying analytics, and we expect more core ECM companies to add robust BPM capabilities throughout 2011."

Global 360 Marketing Itself

With two BPM acquisitions still fresh in most people's memories Global 360 is pushing its growth in BPM revenue very hard. The Dallas-based ISV, which began life as a roll-up primarily of document imaging vendors, including Eastman Software, Kofile, Keyfile, ViewStar, and Identitech, recently reported a 49% growth in software in BPM software licenses for its first quarter, year-over-year. Recently announced AnyDoc partner Appian  announced 59% growth for its 2009 fiscal year. So the BPM market is hot.

 Also, at the end of 2009-beginning of 2010, two significant BPM acquisitions were announced -  IBM's buy of Lombardi and Progress Software buying Savvion. Speculation has been that Microsoft may acquire Global 360, which would likely be a happy day for Global 360's investors, based on the some of the multiple's floating around the BPM market. Global's recent partnership with KnolwedgeLake does nothing to dampen that speculation.

Bottom line is that BPM is a curious space to be in, with both ECM and capture vendors seeming to gravitate toward it. The longtime theory has always been, it's not capturing content and putting in a repository that is important - it's what you do with that captured and stored content - meaning it's how you automate the process that brings the ROI, and this is where BPM comes into play. FileNet realized this almost from the outset of its business and many other imaging vendors followed suit. I guess it's about time the content management and capture people made the same discovery.

TIBCO posts good profit

TIBCO, the enterprise application integration specialist that purchased BPM provider Staffware a few years back, recently announced its second-quarter results. Despite almost a 5% drop in revenue, TIBCO increased its operating profit by 56%. "We are managing our business tightly during the downturn and focused on delivering strong returns, as shown by a 40% annual growth in non-GAAP EPS through the first half of the year," said Vivek Ranadiv, TIBCO's chairman and CEO.

Just thought this was interesting and it may show two things:
1. The economy is stabilizing.
2. Businesses are learning how to operate under adjusted conditions.

TIBCO stock is up almost 10% since Tuesday.

Ralph