layoffs at IBM

Interesting story here on how IBM handles their layoffs. Not sure if this is affecting the CM/FileNet businesses, but software has definintely been affected. Of coursre, IBM has a huge software business. Apparently, these layoffs help IBM maintain impressive profitability which is great for shareholders-but not so great for employees.

Autonomy Acquires Interwoven

I guess you've probably seen this by now, but the search and artificial intelligence specialist Autonomy has announced intentions to acquire ECM player Interwoven for $775 million. Interwoven, which began life as a Web-content management vendor, added electronic document mangement technology a few years back with the acquisition of Interwoven. It is also fairly strong in the digital asset management world-also through an acquisition.

The iManage acquisition gave Interwoven a strong foothold in the legal vertical. Autonomy's has e-discovery technology and ambitions that make the entree into the legal market a natural.

One interestsing angle for us is how, and if, Autonomy plans to leverage the Cardiff capture technology it acquired with Verity as a front end to iManage. If it does, that could be bad news for long-time iManage partner Kofax, which also recently got some bad news when Open Text acquired Captaris. We're currently trying to get in touch with someone at Cardiff to find out what sort of shape the capture business is in-as we haven't heard much from them lately, and we understand that former GM and CTO Mark Siemens has left.

Autonomy also has a number of OEM agreements for search technology with potential Interwoven competitors that could be jeopardized if Autonomy isn't real careful. Google, we're sure would love to steal some of that business.

Finally, here's ECM analyst Alan Pelz-Sharpe's take on the acquisition. He's a bit critical of Autonomy.

Ralph

Outsourcing report

Here's an interesting press release I received last week:

"IBM bucked tech industry trends this week by reporting a healthy fourth quarter profit and even a feel-good forecast for 2009 - based heavily on the contributions of the company's software and service business. IBM registered a 20% jump in outsourcing contracts and related work - solid proof that while many companies are cutting back on overall IT spending, the recession appears to be giving a boost to IT and business oursourcing, particularly as a means to cut core operating expenses. For some industry context behind IBM's strong performance - we offer the latest annual review of Global Sourcing Trends by law firm Morrison & Foerster.

This is the third year that Morrison & Foerster has produced a macro year-end/year-ahead review of the global sourcing landscape. This year’s report comes amidst some extreme events impacting the industry – not only the economic crisis, but in the wake of the recent terror attacks in Mumbai and the startling financial fraud unfolding at India sourcing giant Satyam.
Among the current trend lines reported by Morrison & Foerster for the coming year:

A pronounced shift toward cost-driven deals: “Many companies are looking to drive further value and cost improvements on existing deals, often via re-negotiation, service levels and other key terms.” In other words, this could be a good sourcing buyer’s market;

A probable slowdown in new sourcing activity among financial service firms, which traditionally have fueled sector growth; instead, look for institutions to “maximize value and rationalize existing deals” – again putting pressure on cost structure;

Some shakeout is all but guaranteed among service providers, some of whom will endure not current market conditions; survivors will be those “that have sector and geographic diversity, well-managed overheads, and deep, long-term customer relationships.”

At same time, consolidation among largest sourcing firms will mean “less leverage for customers in future negotiations;”

Expect to see more attention on new risk and liability provisions in existing contracts regarding data and privacy breaches;

The Satyam scandal is certain to prompt a “flight to quality” by sourcing customers, with an attendant surge in due diligence;

An unfortunate bi-product of the financial crisis will be a rise in disputes, including litigation, as corporate purchasers become less inclined to waive or ignore potential liability claims.

Morrison & Foerster has one of the most active sourcing law firm practices internationally. Recent engagements include representation of the UK’s official Revenue & Customs authority as well as New York University Hospitals Center in its long-term IT sourcing agreement with IBM and Lenovo Group valued at more than $600 million. The group’s key members handle global projects primarily from the firm’s New York, London and Hong Kong offices.
Please click here to see the full 2009 Sourcing Trends "

Kodak to Acquire BBH Scanners

If you haven't seen it, here' s the announcement, which was made late yesterday. If the deal goes through, which it's expected to before the end of March (AIIM 2009 is in late March-early April), it could be the end of an era for one of the pioneers in the document scanner business. Bell + Howell entered the scanner business more than 20 years ago, in 1986, with the acquisition of Image Peripherals, Inc. (IPI)- the North American arm of a Belgian scanner company co-founded by Dan and Roland Borrey. Bell + Howell went on to tremendous success with its Copiscan and Copiscan II scanner lines, before hitting a rough patch, when it was nearly acquired by Kodak in late 2000. An inquiry by the U.S. Justice Dept. put off that sale, even as Bell + Howell sold its much large product services business to Kodak. BBH scanners then rebounded strongly, landing a huge deal with FedEx that was followed up by the launch of its successful Spectrum series of high-speed scanners.

The news out of BBH scanners over the past few years has always been positive, but that fact is, aside from the introduction of fairly revolutionary large format scanner a couple years ago, there hasn't been too much substantial to report on. And as scanning was not core to parent Bowe Systec's business, the writing was probably on the wall. Plus, we even predicted in last week's issue of DIR that the economy and market environment was ripe for some hardware consolidation. I guess we were right.

SOA and the value of the pound

Received two interesting and unrelated e-mails over the course of the past couple days:

Here's the first. (It discusses how you can save on software purchases by buying them through U.K. sites, because the pound is relatively right now)

Weak UK pound benefits US buyers of Scan2CAD raster to vector conversion software.

The worldwide credit crisis has resulted in the weakest British pound for many years. For US CAD and CNC software buyers, this provides a ray of sunshine in what is otherwise a generally gray and gloomy economic prospect. The current weak British pound allows US buyers of British software to take advanatage of a favorable strong dollar / weak pound exchange rate to save around 20% on their purchases.

Softcover International Limited, the UK publisher of the industry-leading Scan2CAD automatic raster to vector conversion software, has announced US buyers purchasing Scan2CAD Pro from its UK-based website, www.softcover.com, will save around 20% or approximately US $100 on the US $498 list price. A saving of about US $60 is to be had on Scan2CAD Regular (list price US $298).

These savings are only available while the British pound is in its current weak state. Any strengthening in the pound and the savings will be reduced. However, any further weakening in the pound and the savings will increase. Interested buyers wanting to save money should take advantage of this situation while the pound is weak to buy Scan2CAD now.

Today's (2009.01.12) opening exchange rate is GBP £1 = USD $1.49, among the lowest in more than six years, down from a peak of $2.1160 last November. The last time the pound fell at this speed was in 1992. Any US CAD and CNC buyers purchasing Scan2CAD now will get the biggest bang for their buck available in automatic raster to vector conversion today.
advice. - END OF RELEASE

Does this work for scanners too?

Release number two:

This is a release for a book on SOA implementations. As some background, I mentioned SOA as one the trends document imaging professionals need to be aware of in 2009. Despite some setbacks, I don't believe that SOA is DOA and apparently, the author of this book doesn't think so either.

Here the release, which is fairly comprehensive and includes some interesitng points:


"Seven steps to SOA nirvana…

'Adopting a services-oriented architecture should be undertaken as a gradual process, working toward your vision of a new IT enterprise which is more responsive to business drivers,' says expert Tom Termini.

Complex concepts have emerged over the past few years regarding the potential productivity an organization can achieve with their web site. But few take the mystery out of as well as a new book titled The Zen of SOA by Tom Termini.

Termini has created an executive blueprint which describes how top management can look and move forward with clear goals, appropriate resources and confidence. Termini explains how Zen can be applied in the development and deployment of a system architecture in a manner easily understood by managers making them more effective in the complex world of information technology.

The key in this quest is to act as a mediator who understands the roles of the critical actors and players and to adopt a posture that is both flexible and resilient.


Termini sees the adoption of SOA as a continuum.

Among the many ideas he recommends to successfully deploy an effective SOA:

1. Learn from others – study what worked for other organizations that may have had parallel processes, or similar objectives to yours. For example, at the Federal Trade Commission, we learned that commodity hardware and software promote the transition toward a fully-realized SOA. From the detritus of a failed EAI effort, the fruits of a SOA success can be found with the creative application of an “agile” approach.

2. Maintain a “baby-steps” approach toward a fully-realized SOA – expectations are more realistic, costs are spread over a longer period, risk is deferred, and you have the opportunity to foster organizational adoption. Cultural resistance is often the primary reason for failure in enterprise IT endeavors. If your adoption posture is incremental, you will lessen the impact on your organization, customers, and partners so they can assimilate change gradually.

3. SOA is more about the business customer than about IT innovation. Service-Oriented Architecture, when rolled out successfully, can empower the people driving the business processes in your organization, free up limited Information technology resources, and improve flexibility to meet change. While on task at the U.S. Department of Justice, we learned a portal is integral to Web-enabling the enterprise. Why? It provides the single, simple point-of-entry to the SOA-enabled systems for the less-technical business user. We found the portal was excellent at answering the question, where do I go to find what we already have? It also simplifies the human interface, since all Web applications share the look-and-feel or some derivative of the portal’s cascading style sheet. Finally, the portal simplifies single-sign-on access - and ease of access means greater acceptance by the user community.

4. ESB does not equal SOA. Providing an enterprise services bus (ESB) to your organization does not mean you have a SOA. Gaining a full grasp of this concept is key to embracing the Zen of SOA. Think commodity software as well as hardware: one of the keys to SOA success. While we’ve found the messaging layer to be critical, often time success can be achieved by simplifying a few key business processes and SOA-enabling with a web service. Example: customer record lookup, because so many systems touch on that process.

5. Manage the SOA as part of the whole enterprise. Think of the SOA approach as a layer to simplify complexity – as above, consider the customer lookup process. What vital information needs to be presented to a consuming service? This layer does not stand apart from the organization’s larger enterprise; rather, it supports the business architecture. The underlying services orchestrate and communicate business processes-these components are part of the technical architecture. Internal developers, external consumers and others will require access to reuse SOA services.

6. Measure progress and communicate results. The successful implementation of any SOA must be driven from the top down. This means gaining early wins that engage senior management. Define three or four metrics and regularly communicate results.

7. Promote SOA as the Future. Implementation of a SOA blueprint may never fully end, because business processes change or new ones are required. Your target architecture inevitably will evolve to accommodate changes in the external environment and corresponding adjustments to organizational goals.

Kofax Hires Former Captiva Exec Vickers

You can't say Reynolds Bish isn't loyal to his former lieutenants. Jim Vickers is the latest former Captiva VP that has been hired by Kofax. Based on his title, we're assuming he's in charge of VRS sales, but plan to tallk with Kofax to get confirmation of that. Interestingly, Kofax's stock value has risen by more than a third since late last month.

AJAX platform for mobile devices

Interesting story broke recently about the AJAX-like platform that Microsoft is introducing for mobile computers, like Blackberries and other types of phone-enabled devices. This, of course, is the hottest segment of the computing market and one that document imaging vendors have been trying to figure out their place in. AJAX, because of the fast and convenitent image viewing capabilties it offers, has become a hot platform for browser-based document image viewing. Kojax would seem to bring these two worlds together and offer some interesting opportunities for Document Imaging ISVs.

Any thoughts?

Top Image Signs New Workflow Partner

This whole purchase-to-pay, from document capture through ERP-connected workflow seems to be really hot right now. Of course, we've seen this coming for a couple years now, and ReadSoft, they were even way ahead of us. As we noted in this week's issue of DIR, Open Text is clearly gunning for Readsoft with its latest announcement of an OEM agreement with SAP, whereby SAP will now be reselling Open Text's entire invoice processing suite. This includes the ERP-centric workflow technology they aquired a few years back, as well as the invoice capture technology it recently acquired with Captaris.

Today, we saw that Top Image Systems has announced a partnership with Swedish ERP-centric workflow specialist Medius. Top Image has enjoyed success in the invoice processing market and this should bolster it even further. Brainware, Captiva, Brainware, and BancTec are among the other competing in this high-end space of capturing, approving, and posting invoices in SAP ERP environments. ReadSoft probably leads the market in big contracts won in this area, but clearly the competition has seen what they've done and is emulating it.

Economic conditions and industry

So, there has been a lot of talk about how the world macro-economic conditions are going to affect the document imaging industry. From the evidence I've seen so far, growth appears to be slowing, but certainly not going away.

This article about Perceptive Software laying off 20-plus employees, 4% of its workforce, despite projected 25% growth - they were originally projecting 50%, is fairly indicative of what I've heard.

Any other thoughts?

Information Zen

AIIM has set up what looks like a pretty cool networking site at called Information Zen. I just put a post on Earth Class Mail my blog over there. Check it out.

Thanks.

Ralph

Kodak Posts Third-Quarer Results

Kodak is making money, but apparently it's not enough. Sales shrunk by 5%, but the Rochester-based imaging giant raised profits almost three times to $96 million this quarter. (I'd take that.) However, Kodak also warned that it's year-end profits would be in the $200-250 million dollar range, after last quarter projecting the profit to be $400 million. I hope no one received bonuses based on those projections, which probablyl inflated the stock at the time.

Same story regarding digital vs. film. Revenue from digital business grew 2%, while film-based revenue dropped 18%. Kodak's digital sales are how more than twice as great as its film-based sales - $1.64 billion to $764 million.

Directly related to our industry, "Graphic communications sales fell 2 percent to $821 million and operating earnings fell from $36 million to $23 million, hurt mainly by a softer commercial printing market in the United States as well as higher raw materials costs than a year ago." - Nothing negative about the document scanner business, which is good.

Voting Machines and Fraud

Saw a fascinating movie last night that detailed some of the potential fraud that can be committed with electronic voting machines. I've actually been writing about this in DIR, since the wake of the disastrous 2000 election. By "disastrous," I don't necessarily mean the outcome (we'll leave that debate for the political bloggers). I mean the way the votes were counted, especially in Florida.

If you remember, all the hanging chads and the problems with the punch cards, prompted this vast movement toward electronic voting machines. Problem is, most of these machines intially, at least, had no paper trails. So, you were literally casting your vote into a "black box" and assuming it was gooing to come out the right way on the other side.

Well, this movie I saw last night, Uncounted, detailed some of the ways these machines can easily be hacked and the votes flipped. Meaning that if Candidate A received 200 votes and Candidate B received 100, it only takes about 20 lines of code written on a memory card, inserted into a fairly easily accessible memory slot, to flip the vote so it appears Candidate A had 100 votes and Candidate B had 200. There are other things you can do as well.

I'm not going to get into all the evidence the movie presented that this vote flipping has probably been done several times in the past eight years - as these people may have been just a bunch of liberal, conspiracy-theory crackpots- they were mainly academics, activists, and journalists - but there were some conservatives represented as well. My point is not to argue whether or not this stuff has been done - it's merely to ask why the $#%& are we designing systems with these types of potential flaws?

I mean, we all work in the ECM industry. We know all about security, auditability, records management, etc., yet none of this technology is being implemented in one of the most important business processes related to properly running our country. Why is this? Have we fallen down on the job? Has there been a deliberate conspiracy to keep ECM technology out of the voting process.

Any opinions on this are appreciated.

Ralph

SharePoint Video

This may explain some of the less than stellar reviews we've been hearing about people trying to do real ECM with SharePoint.

More Distributed Capture

As distributed capture is becoming an increasingly hot topic, I attended a couple presentations on it at the recent Kofax Transform event in Austin. Kofax has a pretty heavy duty distributed capture model for its traditional Ascent Capture, now Kofax Capture environment. This has both up- and down-sides. The upside is that you get plenty of functionality in areas like security and automated data capture. The downside is the administration required to support thick clients at each distributed site.

Kofax also has an interesting pricing model for its recently renamed Kofax Capture Network Server (KCNS). (That' s the product fomerly known as ACIS - Ascent Capture Internet Server). It lists for $2,200 per seat, whether it's being deployed as the centralized server or as a client. This is the same price as Kofax Capture. There is also volume-based licensing on top of the seat price. This could obviously get pretty expensive if you're rolling out a big application, especially if you have light volume at some of the distributed sites....

Which is what Kofax's Document Exchange Server (DES) is designed to address. This is Kofax's server-based capture platform designed to run in conjunction with MFPs. HP seems to be their major partner in rolling out DES, which we presume can be used to feed a KCNS server implementation. It's this type of hybrid environment that we think will dominate the capture landscape five to 10 years in the future.

One more distributed capture note. I recently authored a white paper Web-based capture for Oracle - which last year acquired Captovation - one of pioneers in Web-based distributed capture.

What's next for Open Text?

I'm assuming you all heard about Open Text's plans to buy Captaris. From a capture standpoint, this makes perfect sense, but Captaris is $125 million business with only $30-35 million coming from capture. Alan Pelz-Sharpe is one of my favorite ECM analysts and here's what he had to say about the acquisition. Like me, he questions what Open Text plans to do with the $80 million fax server software business it is acquiring. He also hints that it fits with Open Text's history of acquisition. We'll see. I'm not sure fax server is high-tech enough to fit with Open Text's business model. But we'll see.

Pelz-Sharpe also makes interestsing speculation about what will be next for Open Text. Will it be acqusition of an ECM competitor like Interwoven or Vignette? A good thought. Or perhaps, Open Text will be acquired by partnenr SAP - a scenario we think even more likely. However, if they are spurned by EMC, how about a reverse merger or something with Hyland Software? That sure would be an interesting way to create an ECM power that addresses both direct and channel sales and can span the market from top to bottom.

Ralph

IKON Acquisition

How about this? Digital copier/printer manufacturer Ricoh purchases arch rival Canon's top reseller IKON. This is part of a growing trend of copier manufacturers purchasing dealer channels. With these channels also representing one of the fastest growing channels for document imaging software, it will be interesting to watch the relatively conservative hardware manufacturers merge with the more progressive document imaging ISVs.

The IKON deal represents probably the largest acquisition yet by a hardware vendor of a dealer. IKON is more than twice the size of Global Imaging, which was acquired by Xerox last year. Also, vendors like Sharp and Toshiba have been acquiring smaller North American dealers over the past few years, Sharp only recently accelerating its activity in this area.

Of course, the big question is, where does the IKON acquisition leave Canon, which for years has been IKON's primary hardware vendor. Ricoh and HP have begun to figure more heavily into the IKON mix in recent years, but Canon was still the primary vendor. Canon, which has been the North American market leader in MFP units shipped will be hard pressed to replace this channel as it moves to Ricoh.

Meadville Copier Dealer Honored

I thought this was pretty neat. A couple years ago, I did a presentation in Meadville on document management for a locally-based state economic development group-eBizITPA. This Hagan Business Machines had like seven people show up. Now they are being honored by Toshiba for the innovative work. Good work guys.

Two Recent Distributed Capture Wins

Here's one from Kodak with its ScanStation at Kaiser Permamente. What's cool about this is that not only is it a distributed capture win, but it's an installation of multiple networked scanners. Kaiser and the Kodak reseller went with the version of the ScanStation that includes NSi AutoStore, which is a very useful distributed capture software application.

Of course, Oracle, which acquired Web-based capture pioneer Captovation this spring, also recently landed this huge deal with JP Morgan Chase. We're talking potentially 3,000 users by the end of next year. That's clearly starting to get to some of the potential of this stuff.

Ralph

Distributed Capture Best Practices

The distributed document capture market, despite having been discussed for a very long time, is still very immature. This is my conclusion after doing quite a bit of research on this market over the past couple months. Is there a best practices for distributed capture? I haven't found anything definitive published on the topic.

So, first off, what is distributed capture? Well, it's basically truncating-or electronifying paper documents as far up the workflow chain as possible. This means that if loan applications, for example, are filled out at a branch office of a bank, they are going to be scanned there and sent digitally to loan processing center for approval and archiving. The advantages are that
1. distributed capture can reduce the time it takes to get the paper forms to the loan processing center,
2. it can save money on courier charges if the paper forms were being overnighted,
3. it can reduce the number of documents lost in transit as well as increase security around the transfer of the documents,
4. and it can put data entry related to the loans into the hands of the customer service rep at the branch, who is going to be more invested in the loan than a data entry operator at loan processing center.

Yes, all of these can be advantages, but there are some disadvantages too. For example, do you want your mid-level salaried knowledge workers, like loan officers, doing scanning and data entry when they could be producing more loans?

I guess the reason I haven't really seen a definitive best practices on distributed document capture is because there are so many diverse approaches to it, and to me, this is the sign of an immature market. I think I talked with four vendors in the past two weeks, all of which are promoting and selling distributed capture, but all who are doing it very different ways. Daybreak ICS, for example, uses a client server approach with a universal client for document scanners and customized release scripts from its server into ECM applications. eCopy also has customized release scripts, or "Connectors," as well as a universal interface, but its interface is primarily used on MFPs. Oracle, which acquired Web capture pioneer Captovation in the the spring, has a Web-based client with dedicated release scripts. ImageTag picks up images from a watched folder and files them based on data assigned to a bar-coded tag applied to the document before it's scanned.

All these different approaches lead to different workflows associated with distributed capture. All these vendors have had success, of course, but perhaps one reason the market has not caught fire the way many people are projecting, is because there is no standardized best practices. In other words, there's too much solutions providing/customization going on in the distributed capture space and not enough product sales.

I think some sort of flow-chart/questionnaire for end users with multiple sites is in order.
Any thoughts on this?

Documentum 6.5

EMC has hit a couple of ECM market hot spots with the latest release of its Documentum ECM platform. Documentum 6.5, which was announced this morning, features improved user interfaces, as well as upgraded transcational content management capabilities.

The two major improvements directly related to document imaging applciations are an improved user interface for the TaskSpace transctional content management (TCM) client and a new Documentum High-Volume Server module.

The High-Volume Server is designed specifically for imaging-intensive applications like transactional content processing and archiving. Basically, it's designed to streamline meta data management to reduce database footprints related to objects like images and e-mails and as a result, improve performance.

"Let's say you're archiving e-mails," explained Andrea Leggett, a senior product marketing manager for EMC. "You don't necessarily need version control and a lot of meta data fields for those files. With Documentum 6.5, we've created a lightweight object model to more efficiently store those files within the High-Volume Server. This can dramatically reduce a user's database footprint and impact their software licensing in a positive way. It helps streamline and optimize file storage and lowers the amount of resources needed to support objects.

"It's also important to note that even though a user might not be utilizing all its object meta data in the High-Volume Server environment, that meta data is not erased. If the users needs to go back and get it for another process downstream, it is still available."

Leggett sees three use cases for the High-Volume Server. "The first is transactional content management, the second is archiving, and the third is being able to efficiently migrate content from other repositories into Documentum," she said.

TaskSpace TCM Client Improvements
Documentum first introduced its TaskSpace TCM client last year with Documentum 6.0. The new version incorporates some of the ease-of-use concepts that are prevelent throughout the release of Documentum 6.5. EMC is actually touting Documentum 6.5 as featuring "Web 2.0" capabilties. "We've embraced some of the consumer technologies that are out in the market and worked on ways to bring them into the enterprise," said Leggett.

One of the Web 2.0 examples that Leggett shared with us was the incorporation of technology similar to an iPod's Cover Flow interface for reviewing documents. "Because users are already comfortable with that interface through their consumer applications, it makes for a smoother adpotion in the enterprise," she said. "For knowledge workers, we've estianmated our improved UI can create a 25-37% improvement in the efficiency in which users can click through content."

Specific to TaskSapce, EMC has introduced integrated high-fidelity forms and monitoring capabilties into the client. "Through the same dashboard used to access transactional content, a user can now also design high-fidelity forms and set up customized monitoring processes," said Chris Preston, senior director, content management and archiving, for EMC.

The high-fidelity forms capability is brand new and enables Documentum 6.5 users to better design electronic forms that have the same look and feel as their paper forms. EMC has also incorporated 2-D bar code capabilities for forms that need to be printed signed and captured. Task-based monitoring has always been available with TaskSpace, but with the new version the design environment is accessible through the standard UI.

"TaskSpace was created as a great out-of-the-box tool for working with transactional documents," said Preston. "We've now added some more rapid application development tools to TaskSpace that will enable our customers to more quickly customize their interfaces."

EMC making the right moves to maintain position as market leader
Overall, we'd say that EMC continues to make great progress in its efforts to maintain its leadership position in the ECM market. Documentum began life years ago as a specialist in electronic document management, but has come a long way in the past five years in the imaging/TCM space, which, thanks to compliance concerns and the realization that paper problems need to be addressed because they aren't going away, has emerged as an important piece of the ECM equation.

EMC's acquisition of Documentum a few years back has really helped accelerate the evolution of the Documentum product line, by providing the company with resources to make strategic acquisitions like the Captiva purchase, as well invest more heavily in internal development. We are very impressed with EMC's stratetic view of the market and the dynamic stategy it has taken to address the evolving and emerging needs of customers, especially at the enterprise level.