High-Profile AIIM Absentees

For the first time in our memory, heavy document imaging hitters Kodak and Kofax will not be exhibiting at our industry's largest annual get together. Citing reasons like "the most expensive leads you get come at AIIM," and "we've been thinking about pulling out for several years and the down economy gave us the impetus to finally go through with it," the industry's leading production scanner vendor and the leading capture software player have pulled out of the AIIM Expo (scheduled for end of March-early April). Neither one has even committed to having a meeting room.

I must admit , I have been hearing complaints for several years, with last year's being the most serious, about the lack of quality floor traffic at the event. I also received feedback that exhibitors have been making suggestions that have gone largely ignored by Questex, which purchased the show from AIIM (the trade organization) eight or nine years ago. And, although Questex has been offering increased targeted marketing services to exhibitors, by our observation, the event itself has changed little since started going to it in the late 1990s - and some pundits were already proclaiming that the event was dead then.

Across the board marketing cuts due the down economy may be the last nail in the coffin. Prior to this year, despite the complaints, and slowly dwindling attendance, little actually changed, except for maybe smaller booth sizes. Sure, some companies would leave for a year, but they'd always come back. We'll see of they come back after this year.

I've got a call with Questex set up for Thursday. We'll see what they have to say...

Ralph

Kofax first-half 2009 results

Seems like a mixed bag. I'll have to read them over in more detail later (as I'm getting ready to head out to a Kodak conference in San Antonio), but it appears that much of the 9% growth was driven by favorable currency exchange - meaning the pound (which Kofax reports in, lost some of its value against the currencies (Euro and U.S. Dollar), which it typically does business in. That said, it's a pretty detailed report, so they don't appear to be trying to fool anyone. Basically, it sounds like the U.S. (after a slow start) and EMEA businesses (with the exception of the U.K.) are on track and Asia-Pac continues to disappoint. There were also some problems in the VRS sector. The hardware business continues to be profitable if not growing... Not sure how much is now going direct vs. what is going through the channel.

Anyhow, hopefully I will have more on this later, when I have some conversations and time to read it over more closely. Check out the above link yourself though it you get a chance.

More on Kodak

I should have known better than to fly U.S. Air. Last time I flew with them, I ended up stuck in some two-star hotel near the Birmingham, AL airport overnight because of mechanical difficulties. Then, just last month, they narrowly avoided a disaster near New York. Now, of course, I'm stuck in Brussels, well not really in Brussels, but in an airport hotel outside of town for an extra night due to, you guessed it, "mechanical difficulty." But enough on airlines...

I'm out here because I attended the annual I.R.I.S. conference, which went well with a few hundred attendees and some significant announcements. Details in this week's DIR. The most imortpant announcement was probably that I.R.I.S. continued its profitable growth, up 13% over $100 million Euros for the first time and also generating cash. They run a pretty good business, with a lot of high-end document imaging focsued solutions installed Belgium, France, and Luxenburg, and some pretty good OCR contracts with the likes of HP, eCopy, and Adobe. Recently, they've been adding IDR technology to their mix and last year launchced their own capture software after working for several years as Kodak's OEM developer of capture technology.

Speaking of Kodak, here's an interesting quote from the press release they issued today:

"The success of Kodak’s core investments stems in part from the company’s ability to maximize its cash-generating businesses. These market-leading product lines represented approximately $6 billion in revenue in 2008, and include the following: Prepress Solutions and Document Imaging in GCG, Digital Capture & Devices and Retail Systems Solutions in CDG, and Entertainment Imaging from the Film, Photofinishing and Entertainment Group (FPEG). For these businesses in 2009, Kodak will focus on margin improvements, including cost reductions, as well as continuing its successful intellectual property licensing program."

So, it's good that Document Imaging is generating cash, but it's bad that apparently cost reductions are going to be made to apparently help make up for losses in other areas. Curiously, the press release didn't get into too many specifics about the money losing areas, of course that was probably done in depth enough with the fourth-quarter report.

Brutal fourth-quarter for Kodak

It was a not a good finish to 2008 at all for Kodak. Fourth-quarter total sales were off by 24%. This led to a $137 million loss for the quarter, compared to a $215 million profit a year ago. Document Imaging was not cited specifically as one of the poor performers, but the Graphics Communications business (hurt by a softer commercial printing market), where Document Imaging resides, posted a $4 million operating loss, compared to a $30 million profit a year ago. This was the result of sales falling 14%.

In conjunction with the year-end report, which dropped the company's stock more than 20% to just over $5 per share, Kodak also announced up to 4,500 upcoming layoffs, or 14-18% of the entire staff. We understand some of those layoffs are already affecting Document Imaging. We're not sure how this is all going to reconcile with the Bowe Bell + Howell Scanner acquisition the is supposed to close before the end of the quarter and the jobs that have apparently been promised to BBH employees.

We'll be catching up with Kodak Document Imaging execs at next month's Kodak Executive Summit in San Antonio.

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.

Dennis Retires From Visioneer

We must admit that this announcement caught us a bit by surprise. I mean, by all accounts, Murray Dennis helped turn around Visioneer, from a company caught in a market with rapidly declining sales and margins, to a leader in the emerging market for document scanners. Before going any further, let me first state that I have no insights at the moment was to why Dennis has left Visioneer.

I do know that he has been there a long time. I have him quoted in DIR as far back as 1998, when Visioneer was going through some intense battles over false advertising and intellectual property with its competitors in the consumer scanning market. I remember discussing with Murray Visioneer's planned transition from consumer to document scanners and his guiding it through the ramp-up phase. By all accounts, he was instrumental in Visioneer's brand-licensing deal with Xerox, which the company has always touted as a successful arrangement. Dennis also helped orchestrate the acquisition of JFL Perihperhal Technologies, the TWAIN development specialist that now spearheads Visioneer's OneTouch driver development. And OneTouch has emerged as the future of the company.

Not that there haven't been missteps. The biggest was probably the whole Don McMahan era at Visioneer. While McMahan, who was brought in by Dennis after he abruptly left competitor FCPA, did a lot to increase Visioneer's presence in the market, he left Visioneer after only a year-and-a-half in a less-than-ideal breakup. Visioneer hoped to continue to ride some of the momentum McMahan had created without having him on the payroll, but we're not so sure how well that has worked out. Meanwhile, McMahan has moved to Kodak and is targeting the same sales channels he helped build at Visioneer.

The bottom line is that Dennis in many respects helped make Visioneer what it is today - one of the leading players in the distributed document scanner market, and a company with some intriguing and potentially valuable intellectual property. J. Larry Smart, the long-time Chairman of Visioneer, as well as the owner, is now taking over the reigns as CEO. Smart has been way more than a figurehead over the years, so he knows the market, as well as his company, and we don't expect Visioneer to miss a beat. That said, depending on the reasons for Dennis' departure, we could also see some serious changes as Visioneer, as Smart has a history of success in the technology industry that he fully expects to continue at Visioneer.

Best regards,

Ralph

Kofax Wins IBM ISV Award

Congratulations to Kofax for recently being named IBM's Enterprise Content Management “Independent Software Vendor of the Year” for 2007. Kofax and IBM have been long-time partners, a relationship that was strengthened when IBM acquired FileNet, which has an OEM deal with Kofax. In our upcoming issue of DIR, Kofax CEO Reynolds Bish discusses his plans to increase Kofax's business development efforts, which are designed to improve Kofax's relationships with large ISVs and systems integrators. With Captiva having been acquired by IBM storage rival EMC a few years back, it seems the Kofax-IBM relationship should only get stronger... As for the prospect of IBM acquiring Kofax, let's wait a few years. Kofax has plenty of dance partners, and even though this could potentially create a bidding war, because of the company's relatively low market cap, the current starting price would likely be too low for Kofax's shareholders liking.

OB10, ReadSoft Partner

Interesting announcement yesterday about a partnership between e-invoicing specialist OB10 and forms processing leader ReadSoft. On the surface, you would think that OB10 would be the competition, as their charter is to reduce the number of paper invoices a vendor is dealing with. By all accounts, they handle this transition pretty well through the creation of what they call "vendor networks." Basically, they attempt to convert the print stream of any invoice output system into an e-invoice that can be integrated with the accounting systems of their vendor customers. Once you become part of their network, and they get used to working with your data streams, the challenge becomes easier.

According to Bob Fresneda, the president of ReadSoft North America, with whom OB10 has formed the partnership, there are still exception processing workflows that need to be executed for e-invoices, and this is where the ReadSoft partnership comes in. Over the past few years, ReadSoft has emerged as a leading vendor of not only automated data capture for invoices, but through a couple of acquisitions, workflow for invoices inside ERP systems from SAP and Oracle. With the OB10 relationship, ReadSoft is evolving further from its origins as a data capture vendor and moving more deeply into the BPM space. This gives brings the company into an additional, but related market, which is typically the most economical way to expand. Look for more BPM-related expansion from ReadSoft in the future.

Ralph

AIIM 2008

Just returned from our industry's annual technology fest. Unfortunately, it seems the show has turned into more a conference that a true, old-time exhibition. By that I mean, that nobody, but nobody, expects to get a good stack of leads out the event anymore. However, the reviews for the event are by no means all bad. There are still a few good leads that do come out of the event. This makes sense, as we've mentioned with the conference growing consistently, there are more educated, advanced users attending the show, rather than just tire kickers.

However, it did appear that overall attendance numbers were down. The first day, floor traffic seemed healthy, but for whatever reason, momentum didn't carry over into Day 2 (Wednesday). Thursday, of course, you had the usual tumbleweed rolling through the aisles, with the vendors treating the day as a mixer. It's always been my view that they should roll out the cocktails early on Day 3 and really let things fly. It would be interesting to see what kind of partnerships came out of that!

Anyhow. we'll have plenty more on the show in our next couple issues of our newsletter.

Cheers.

Ralph

Captaris-ODT

Captaris has agreed to acquire Oce Document Technologies (ODT) for some $15 million net, when considering ODT's $29 million in the bank. ODT brings fax-server market leader Captaris some serious document capture technology as it attempts to transition into the world of document capture. We first learned of Captaris' close ties with ODT when discussing a new capture-for-SharePoint module that is being introduced for their RightFax product. [See article in our latest issue.]

The deal also includes Captaris accepting responsibility for some $17 million in retirement and bonus obligations, so it will end up costing Captaris somewhere around $30 million. For this, Captaris' receives a 180-employee company, headquartered in Constance, Germany, with a run-rate of approximately $33 million. This is down from the 300-employee, $40 million company that we reported Oce acquired when it bought CGK in 2000 [see DIR 5/5/00]. Oce, does, however, through ODT's CGK roots, continue to develop some of the premier OCR/ICR technology for data capture on the market. Almost all the market leaders in the IDR and forms processing space utilize ODT's technology. It will be interesting to see how Captaris manages these relationships, while at the same time pursues its own distributed capture initiatives.

In North America, ODT focuses primarily on OEM sales, while in Germany, it has a full-service capture solutions business.

J&B Acquisition

Payment/remittance processing specialist J&B Software, out of Bala Cynwood, PA was recently acquired by India-based software and services provider 3i Infotech. According to a J&B press release, 3i has $300 million in annual revenue. According to 3i's latest financial report, 31% of the compay's business last quarter was in India, 25% in the U.S., with Western Europe, the Middle East and Africa, and Asia Pacific combining fo the remaining 44%.

J&B was founded by Indian-native Bala Balasubramanian, who resigned from the company following the completion of the acquistion.

One thing we will keep an eye on is the relationship between 3i and document and data capture specialist Top Image Systems (TIS). From all accounts, TIS and J&B had been executing fairly successfully on a recently formed partnerhip, which we expect to continue through the acquisition. Looking forther down the road, both TIS and 3i have global ambitions and global infrastructures. We suspect these shared visions could lead to an even tighter relationship.

Cheers.

Ralph

Lawsuits Down

Using a slower day to go through some back e-mails, I came across this fairly comprehensive summary detailing the results of a survey on corporate legal affairs. Surprisingly, it indicates that lawsuits in 2006-2007 were down from the previous year. The survey was conducted by a law firm, which corresponded with some 250 coroporations.

The summary doesn't speculate that improved RM is one of the reasons for the reduced rate of corporate lawsuits, but findings like, "...81% of U.S. companies said they had reviewed their retention policies over the previous 12 months," indicate to me that better RM might have something to do with it. Another interesitng tidbit I is the new Federal Rules of Civil Procedure are not having much effect on litigation practices to date. This is something we predicted a couple years ago, as the rules as we read them, didn't seem to have too much teeth.

As I said, the survey summary is fairly lengthy, but it's at least worth giving a cursory read-through. It touches on relevent topics like e-discovery, RM, records retention, and all that good stuff.

Cheers.

Ralph

Visioneer-BBH Scanners Announce Partnership

Visioneer and Bowe Bell + Howell Scanners have announced a development agreement, which will lead to products early next year. The companies aren't commenting specifically on products yet, but with BBH specializing in the higher end of the market and Visioneer in the distributed side, it definitely makes for some intirguing possibilities. BBH also seems very interested in leveraging Visioneer's OneTouch scanning interface and toolkit for application integration, as well as its Xerox OEM channel. If you take these two companies product lines and channels and combine them together, you have something that can go toe-to-toe against heavyweights FCPA and Kodak. They are also both very close partners with Kofax.

Bish named Dicom CEO

In a somewhat stunning development, the Dicom Group named Reynolds Bish as CEO this morning. DIR had first suggested this move when Dicom announced it was looking for a CEO late July. Dicom after all has been struggling to get its market capitalization above its annual revenue of $400 million - this despite being fairly conistently profitable and having over $100 million in the bank. Bish built his reputation on raising Captiva's market cap from less than $20 million in 2002 to more than $200 million by the time the company was sold to EMC for $275 million in late 2005.

Part of the problem with Dicom's current valuation on the London Stock Exchange where it primarily trades, may be that the company is still perceived as a distributor of hardware products, a business model that clearly isn't valued very highly by U.K. investors. U.K.-based distribution competitor Headway was recently sold for something like half its annual revenue. As Bish has a background in software, unlike his predecessor as Dicom CEO, Rob Klatell, whose background was closer to distribution, he is a much better choice to distance Dicom from its roots as a hardware distributor.

Dicom broke into the software business in 1999 when it acquired Kofax for $70 million. At the time, Dicom was a $123 million company and Kofax was generating $33 million in annual revenue. Now, software generates approximately 60% of Dicom's revenue, with Kofax's document capture business leading the way. Bish's hiring, and the fact that he will be based in Irvine, the site of Kofax's headquarters, firmly cements Kofax's position, as the crown jewel in the Dicom business portfolio. This is a position its held financially for years. It's good to see Kofax being handed over the adminstrative reins as well.

Check out our exclusive interview with Bish in next week's issue of DIR.

RG

Fujitsu-S300

Here's a preliminary review of the new Fujitsu S300 mobile scanner. It was announced today and lists for $295, which is slightly less than the Visioneer Strobe XP 300 lists for. Plus the Fujitsu scanner has an ADF. It's got the operating system as ScanSnap, execpt that it doesn't include Adobe Acrobat in the software bundle.

Headway Sold

European imaging distributer Headway has been sold to U.S.-based Avnet. Looks like they paid less than half of one-time revenue for the division that includes Headway.

Vignette hits bump

It looks like high-end document imaging/WCM specialist Vignette hit a small bump this quarter. At least they are still making money. I must admit that I was crediting a lot of their recent success to their acquisition of Autstrian imaging power Tower (was it Software or Technology?) and was a bit worried when they started talking about their hopes for next-generation WCM systems to boost revenue in the second half of 2007.

I love the reference to "cloud computing" (which I think is the SaaS model) in this article about Adobe's recent word processing acquisition.

Nuance and Iron Mountain both made recent acqusitions that move them further into the health care vertical. Nuance, which has a very successful speech-to-text business with its Dragon Naturally Speaking product line for medical transcriptions, acquired a medical imagnig (not document imaging) company. Iron Mountain bought on off-site medical records sepcialist. On a somewhat related note, our pediatrician's office is currently moving to an EMR system and actually told my wife they were trying to do more diagnoses on the phone to avoid havnig patients come in during the transition. Of course, our son had a double ear-infection that they couldn't properly diagnose over the phone, so we had to go in a couple days later anyhow. And then they supposedly electronically faxed the perscription to the pharmacy, which never got it, and the pharmacist made some comment along the lines of "that stuff never works when they try it." Oh well, score one (or two I guess) for the luddites.

Ralph

Ralph

Adobe Word Processing

Adobe is doing some pretty cool stuff to attack Microsoft Office:

From an e-mail I received from their PR agency:
"Adobe Systems Incorporated today announced that it has signed a definitive agreement to acquire Virtual Ubiquity and its ground-breaking online word processor, Buzzword. The acquisition furthers Adobe's commitment to foster a vibrant ecosystem for rich Internet application (RIA) development that delivers breakthrough experiences built on Adobe AIR. Separately, Adobe added a new file sharing service to its current online document services. Codenamed "Share," the beta service will make it easier than ever for people to share, publish and organize documents online....

"Buzzword, an elegant online word processor, enables individuals to work together to create high quality, page perfect documents. Because it was built with Adobe Flex software and runs in the Adobe Flash Player, Buzzword enables greater document quality, outstanding typography, page layout controls, and robust support for integrated graphics, regardless of the browser or device. The application also will run on Adobe AIR, offering users a hybrid online/offline experience and the ability to work with both hosted and local documents. The powerful collaboration capabilities in Buzzword enable multiple authors to edit and comment on documents from anywhere, at anytime, while document creators can set permissions that virtually eliminate version control chaos. For more information on the acquisition and access to Buzzword beta software, please visit http://www.adobe.com/go/buzzwordfaq....

"Adobe also made available today a free online document sharing service, codenamed "Share." Users simply select the documents they want to share, send a message to recipients, and set whether the files will be publicly accessible or restricted. Built with Adobe Flex technology, the rich interface provides a smooth experience, integrating simple workflows to upload and share documents with high quality online previews to speed up finding the right document. Additionally, the beta will include a set of REST APIs to let developers create mash-ups with their applications, including storing and accessing files, as well as creating thumbnails and Flash-based previews of documents. People can learn more about the service and sign-up for access at http://www.adobe.com/go/labs_share."

ACS SharePoint

ACS is entering the SharePoint customization business. SharePoint is an interesting ECM framework, but definitely creates some opportunities for development work on top of it. It kind of opens things up a bit in this market, making pricing/solutions delivery a bit more flexible. Would a user rather pay for services associated with Sharepoint or more developed ECM software from more traditonal vendors?

Procure-to-pay, order-to cash

For the past couple weeks, I've been trying to get my arms around the whole concept of procure-to-pay and order-to-cash and understand how capture, document imaging, and workflow can be used to increase efficiencies across the board and tie all these things together.

Had a great conversation recently with Mark Fairchild, a senior VP at BancTec, who explained how these elements can be employed in a shared services-type environment to maximize a user's investments in document imaging technology.

Indicative of the potential of this type of deployment for capture vendors are three recent deals announced by Top Image Systems (TIS) through its partnership with J&B Software. TIS is an Israel-based forms processing specialist and J&B is a Philly-area remittance/payments specialist. The impressive thing about these deals from the TIS perspective is their size, which averages $300,000 per installation. These are not just payment processing customers adding a little bit of forms technology to round out their solutions. These guys are obviously doing some pretty heavy duty capture.

We will continue to provide you with coverage on this emerging market for document imaging technology.

Ralph

SharePoint 2008 Show

Somebody recently pointed to us that Microsoft has a big SharePoint event scheduled the same time as AIIM 2008. Bill Gates is supposed to speak at this thing. Based on all attention that Microsoft and SharePoint received at AIIM 2007, this seems like an unfortunately coincidence. It is a conincidence, isn't it?

Ralph

Xerox Color; Open Text invoices

Xerox announced its latest color printing products today, which are being advertised as having the same cost over of ownership as comparable black-and-white models. The printers rely on the solid-ink sticks that Xerox has been developing for some five years. As with any first-generation product, we'll keep our fingers crossed as to how well these work out and how fast they are adopted, but we've always said that more affordable color printing will lead to more color scanning and the chance to apply more advanced compression technology to document images. Sounds like fun.

Open Text has introduced an updated version of its Vendor Invoice Management software for managing the workflow of invoices in an SAP environment. We've been doing a lot of coverage on invoice processing lately, and ReadSoft, the leading vendor in the invoice capture space, noted that it find itself most often competing with Open Text, as the companies go toe-to-toe for SAP-related business. ReadSoft bought a team of SAP workflow specialists last year and offers a product that competes directly with Open Text's VIM system. ReadSoft is enjoying great success in the this market, and it sounds like Open Text is doing okay as well. As we noted in our past issue, invoice processing has always been a good market for doucment imaging/workflow systems, and now advanced capture methods appear to be taking it to the next level.

Cheers.

Ralph

Invoice processing

We did a great couple issues recently on the state of the invoice processing market. We learned all sorts of neat things, from vendors who were very forthcoming with information. If you're interested in taking a look at our study, please get in touch with me.

Here's little bit of what we wrote that we've posted on our VAR Page.

Thanks.

Ralph

Automated book scanning made easy

For those of you who thought this was so hard...

Xerox Buys eMortgage specialist

This is kind of cool. It seems Xerox is buying a business that specializes in electronic mortgage processes. I guess it goes along with their DocuShare technology, in that it's designed to replace paper-driven processes, wiht electronic ones.


ROCHESTER, N.Y., and ATLANTA, Sept., 12, 2007 – Xerox Corporation (NYSE: XRX) plans to buy Advectis®, Inc. for $32 million. Advectis is the provider of one of the mortgage industry’s most widely-used solutions for electronic document collaboration.
Xerox’s expertise in document outsourcing and services led the company to Advectis, a privately-owned business based in Atlanta. In a predominately paper-based industry, Advectis’ Web-based BlitzDocs Collaboration Suite helps lenders, brokers and investors manage the process needed to underwrite, audit, collaborate, deliver and archive loan documents electronically. Taking paper out of the process, the BlitzDocs® patented technology helps users reduce costs associated with the lending process, deliver better service, decrease credit risk by improving documentation processes and build a competitive advantage in capturing new loan applications.
“Anyone who has ever bought a home knows that the mortgage business is dependent on paper. Filling out an extensive number of forms is time and labor-intensive work,” said John Kelly, president, Xerox Global Services North America. “We’re looking to help clients reduce costs and transform their business by offering a better experience for both end-users and operations. Xerox’s expertise in automating document processes is an ideal fit with Advectis’ BlitzDocs paperless solution for mortgages. In an industry that is ripe for change, Advectis offers technology that improves productivity for its users while giving lenders better control of their processes.”
According to Craig Focardi, research area director for the retail banking practice of research firm TowerGroup, “Enterprise content management systems are reducing the great paper chase in loan origination, where a lender controls the paper loan file and manually redistributes documents multiple times to multiple parties. Lenders are increasingly adopting document imaging and electronic content management as a major area of cost savings, faster loan processing and improved customer service.”
The amount of paper associated with this industry leads to inefficient processes which, best case, are productivity drains and, worst case, can lead to a loss of control in the quality of the loans. TowerGroup estimates document management costs in loan origination totaled $3.2 billion last year.
A BlitzDocs electronic loan folder mirrors the paper loan folder used today but improves efficiencies in the loan cycle, allowing mortgage participants to view and process online documents anytime, anywhere. Clients benefit from a network with more than 35,000 broker shops, the top seven mortgage insurance companies and four of the top due diligence providers.
“With this acquisition, Advectis is positioned to create even stronger offerings, services and technologies for our clients,” said Greg Smith, co-founder and chief executive officer of Advectis. “Partnering with Xerox makes perfect sense for the future of our business. Our combined expertise and resources means increased collaboration and decreased loan processing costs for BlitzDocs users.”
Advectis was founded in 2000 and currently employs about 41 people, most of whom are based at the company’s headquarters in Atlanta. Upon completion of the acquisition, all employees are expected to join Xerox. Smith will remain head of the organization, reporting to Kelly.
Xerox’s all-cash purchase of Advectis also includes an additional performance-based supplement to the sale price. The acquisition is expected to close in the next 30 days, subject to customary closing conditions.
Xerox’s industry-leading document technology and services portfolio includes consulting and outsourcing services, records management, digital imaging, e-discovery for litigation support and managed services in more than 160 countries.
Through its acquisition strategy, Xerox is identifying successful companies whose offerings align with Xerox’s commitment to innovation and reducing the complexity of document management. Last year, Xerox acquired Amici LLC, a leading provider of electronic-discovery services, primarily supporting litigation and regulatory compliance, and XMPie, which provides variable information software for the graphic arts and marketing industries.

Kofax

Yes, we've been giving Kofax a hard time lately because of its constant reorganizations and lackluster financial results. However, a couple press releases from last week indicate some of the potential that the capture marketshare leader has for turning things around. The first involved an invoice processing win and the second a significant distributed capture win. These are the two hottest segments within the document capture space, and Kofax conceivably could be a powerhouse in both areas - not something too many vendors can claim.

Cheers.

Ralph

HSA 2007

Just wrapping up Harvey Spencer's annual capture conference up here in Long Island. Another solid event. Speakers included Harvey, the head of technology from the State of West Virginia, a woman from Verizon's billing department, Prascilla Emery, and several others. I moderated a panel on the "next generaiton of distributed scanning," which I feel includes embedded apps, in MFPs and network scanners, as well as "single-button" functionaliy like Visioneer's OneTouch. These types of apps are tied together by the fact that they are designed to be easier to use than traditional scanning apps, and they also have an element of pull vs. push scanning. In other words, you can use them to launch some sort of enterprise/network driven workflow. I guess the Kofax DSS box also falls into this categorey. Anyhow, we had a bit of a tough time tying together the connection between scanners and digital copiers, but it's my believe that end users want one capture system they can run across both types of devices and that can be administered centrally. Call me crazy, but that's what I'd like to see delivered. I think middleware providers and eCopy and NSi can already deliver such a thing, so I guess there's hope, but the hardware vendors seem clueless as to this desire for a single, mixed environment hardware approach.

Anyhow, here's a list of some of the companies represented at the event:A2iA; Abbyy; Anydoc; Anacomp; Anoto; Autonomy/Cardiff, Banctec; Bell & Howell, Brainware; Captaris; Captovation; DataCap; DataIntro; Dicom/Kofax; eCopy; EMC/Captiva, Epson; Fairfax Imaging; HP; IBM; IBML; Iron Mountain; J&B Software, Kodak; Mitek; NCS/Pearson; Nuance; NSI; ODT; Omtool; Opex; Paradatec; PDI; Top Image Systems, and Visioneer. It's a great place for networking if you're looking to partner with these types of businesses.

Cheers. (Got to go grab my coffee now.)

Ralph

ECM valuations on the rise

It looks like Open Text's stock value is up is up like 25%, based on a very strong finacial report. Open Text's income grew like 75%, after the company apparently successfully digested rival Hummingbird, which it acquired last year, which apparently has surprised some people. Vignette and EMC are also pretty close to their 52-week high. Of pulically traded ECM companies, only Interwoven, seems to be struggling a bit. This is interesting of course, when contrasted to capture vendors like Dicom and ReadSoft, who as we noted in our last post, are struggling a bit with their valuations. Of course, Belgian OCR/ICR/capture specialist I.R.I.S. is doing well, as is Nuance. Take it all for what it's worth, but to us it seems ECM is up, basic capture is down, transactional capture is up (This view is of course, based on much more than these stock prices - in fact, it's a lot based on stuff that's appeared in DIR over the past few months.)

Cheers.

Ralph

Dicom-ReadSoft report results

A couple of European-based capture specialists recently reported their results of the period ending June 30. For ReadSoft, the period represents the first half of 2007; For Dicom, it's a year-end report for fiscal 2007. ReadSoft reported a strong second quarter with 11% growth, leading to 9% growth through the first six months of 2007. Dicom, meanwhile, reported a flat 12 months of sales, with a slight increase in profitability. Interestingly, although Dicom's Kofax subsidiary is often recognized as the capture market leader, ReadSoft's "transactional-based" processing applications are where Dicom wants to go. Also, it's probably worth noting that ReadSoft does its busienss primarily in Europe, where the Euro is now much stronger than it was against the dollar a couple years ago, while Kofax still does the majority of its business in the U.S. So, a combination of that and the devaluation of the batch capture applicaitons where Kofax reigns sumpreme has hurt its business. Interestingly, maybe because expecations were set low enough, Dicom's stock doesn't seem to have been negatively affected by the year-end financial announcement.

Ralph

SOX Musical Comedy Spot

Click on the MMVI picture. Apparently this video was made by billionaire business man Sam Zell, who makes a musical comedy video about economics (yes, a musical comedy video about economics) ever year. This year, he rips apart Sarbanes-Oxley. Pretty amusing.

First post of fall

Got the kids off to school today. Much quieter around here. Hopefully will leave me more time (and energy) to blog. Preparing to travel to the annual HSA Capture Conference next week. There I will be presenting on the top seven news trends of 2007, which got me thinking about two themes in particular:
1. The changing Interface of distribtued capture
2. The adoption of invoice processing - as outlined in my last issue, there are like some 500 North American installations of invoice capture, I'm guessing like a 1,000% increase over three years ago.

Distributed capture and invoice processing are two trends that we talked about a lot of years that have both now become an increasing reality. So, I guess there is some value to this speculation that we run in DIR.

Optical scan voting

I've always loved when document scanning is employed in voting and still strongly think that we should use more of it, because of the foolproof paper tails.

Iron Mountain RM

Looks like Iron Mountain has bought Accutrac, which develops records management software for both hard copy and electronic documents. Last issue, June 15, we talked with Iron Mountain about its increased focus on document imaging and the Accutrac software should help with that. Accutrac has partnerships with the likes of TAB, Omtool, and ImageTag, all of whom are in the document imaging space. Iron Mountain already has an investment in ImageTag.

Xerox Search

Xerox has introduced some new search technology. We're not sure how this fits in with the rest of its product lines, but as is typical with Xerox it seems like pretty cool technology.

Buyers Lab Scanner Rankings

This is kind of an interesting piece, although they did make sure they got almost everyone a mention in some categorey.

Cardiff, Standards

This is a fairly interesting announcement for a couple reasons: First off, it dicusses a standard that involves straight through processing (STP). STP is a great term for capture, workflow, document imaging processes. Also, it illustrates some of the advantageous Cardiff is starting to gain in the market with its combined e-forms/paper capture strategy. Mark Seamans, Cardiff's CEO, was in town today to meet with us, and he explained how Cardiff is leveraging Autonomy's presense, along with its fairly unique combination of technologies, to make some real headway. We admit we had some initial doubts about the ties between forms processing and e-forms, but Cardiff's recent success seems to be proving its on the right path. More from our interview with Seamans in our next issue.

Adobe -Kinko's

Feels good to be able to post again. I started having some major computer problems a couple weeks ago, regarding the power port to my laptop, which I use for almost everything I do. Turns out to be a common problem with Dell laptops that the power port comes loose from the mother board, or something along those lines, and Chuck over at Complete Computers here in Erie, soldered it back together for me, actually, according to him at least, improving on the original design of the machine. Hopefully this works, as I have been a bit crippled over the past week especially... that all said, I have been inspired to carry on by the talk given this week at ReadSoft's annual conference in New Orleans. That keynote is the GM of Superdome and oversaw its resurrection. We're talking a $200 million project, so I guess the $125 I spent to fix my laptop wasn't so bad afterall.

Anyhow, this deal between Kinko's and Adobe is probably one that should have been worked out long ago.

Electronic Health Care Records

This sounds like an important committee. Whether they can actually get anything done, who knows? We've been trying to establish a standard, national, portable, electronic health care record for years. HIPAA, as well as increased document imaging initiatives to improve efficiencies have definitely gone a long way towards putting some of the pieces in place, but there is still some serious work left to be done.

Ralph

Latest Cringely Column

My favoriate on-line columnist, Bob Cringely, is stuck on an anti-IBM rant lately, like for the last three weeks. It's interesting, however, because of the influence IBM has on the high-tech market. "You won't get fired for buying IBM, yada, yada, yada, etc." This week he manages to at least start his column by talking about Google and its vision for universal search. Extrapolating on this at bit, does this make Google the next big ECM player? No, they have no BPM, so it's probably wise that vendors like Documentum, FileNet, and Hyland have worked hard on beefing up their BPM capabilities, but stil,l companies like Open Text and ZyLab were built on searching for unstructured information, and it appears Google could eventually marginalize that technology. So far Google has made all the right moves, maybe they will eventually have something better than SharePoint.

As for IBM, it's interesting that Cringely rips their internal technology, as they are like the largest technology servies provider in the world. "It is possible to manage big organizations, but you have to have good processes and good management systems," Cringely says before ripping into IBM. "Process and management systems?" Does anyone find it ironic that Gartner just rated IBM as the leader in ECM marketshare at 24.1%-ahead of Open Text (17.5%) and Documentum (14.3%). What's that old saying about eating your own dog food, or is IBM's dog food the tainted stuff?

Best regards,
Ralph

Lason Update- Monroe sentenced

It appears the former Chairman and CEO has gotten his come-uppance as well. As to the matter of this $20 million in restitution, where does that come from and who does it go to?

Microsoft Yahoo!

Unless there's something here I don't see, I don't understand how Microsoft and Yahoo! getting together will pose a threat to Google! Putting together two also-rans (alright, maybe the number-two and three players) to take on the leader in a developing market just doesn't seem like a good idea. It almost reminds me of the Time-Warner/AOL thing. Two losers don't necessarily make a winner.
Also, here's a link to podcast of a roundtable on e-discovery that I participated in at the recent AIIM Conference in Boston. It's interesting for its diversity of opinions on the topic. Obviously, this is very much an emerging market, in which the rules and directions are still being determined. You also had a good mix of editors, lawyers, and consultants on the panel.

IKON numbers, etc.

IKON just posted some impressive second-quarter numbers. From my standpoint, the most impressive statement is that their Professional Services revenue grew 28%, which indicates impressive gains in the ECM/complex document management system front. It's been a long time coming for IKON, but they really appear to be making (slowly, but, they're a big company and big things move slowly, but powerfully) from a copier dealer to a VAR.

Captaris appears to be picking off a competitor/further cementing its status as the market leader in the fax server world.

Here's something about Microsoft's Longhorn Server. I can't make hide nor hair of it, but originally I thought Longhorn as to be the DM market killer.

SharePoint WCM

At AIIM, we heard SharePoint get dogged for its RM capabilities. In this press release (see below as there wasn't a like just text), CMS Watch slams its WCM capabilties. I guess there was bound to be some backlash after everyone was touting these wonderful ECM capabilties in SharePoint 2007. For the record, we still think it is going to be a force in the market, much moreso than SharePoint 2003, but it is not the be all and end all for ECM companies as we know them, as many feared.

CMS WATCH FINDS SHAREPOINT ILL-SUITED FOR
TRADITIONAL WEB PUBLISHING SCENARIOS
11th Edition of "The Web CMS Report" Critically Evaluates
Microsoft Office SharePoint Server
Silver Spring, MD, USA -- The latest semi-annual release of "The Web CMS Report" takes a close look at Microsoft Office SharePoint Server ("MOSS") 2007 and finds that, whatever its strengths in collaborative document management, the platform remains ill-suited for managing many traditional websites.
The Report was published by CMS Watch (www.cmswatch.com), an independent analyst firm that evaluates content technologies and strategies for prospective solutions buyers.
MOSS 2007 is the successor to SharePoint Portal Server 2003 as well as Microsoft Content Management Server, Redmond's former Web Content Management product, which has since been sunset by Microsoft.
"SharePoint has always been a good platform for managing Office documents and the new version is even better at that," said CMS Watch founder Tony Byrne, "but managing web content represents a very different challenge, and here, Microsoft has not hit the mark."
Research findings include:
- Like most portal software, MOSS natively generates non-standard HTML code with extraneous JavaScript and table-based layouts, which is problematic for enterprises wanting to employ standards-based design and code conventions. Licensees must pro-actively strip this extra code from their own websites.
- By default, MOSS 2007 employs a folder-based navigation structure that must be re-coded or replaced by optional controls for more traditional website navigation schemes.
- MOSS lacks strong native support for translation workflows, limiting its effectiveness out of the box for multinational web publishing efforts.
- For public-facing websites, the product lists for USD 41,000 per server, making it one of the most expensive licenses in its mid-market class.
- On the plus side, MOSS 2007 can be heavily customized and extended using traditional .NET approaches.
"MOSS 2007 might make sense for certain document-heavy Intranets," Byrne added, "but prospective customers should not assume that its ease of deployment for simple file sharing will equate to ease of implementation for managing complex web publishing operations -- for Web Content Management, MOSS is really more of a development platform."
Based on hundreds of interviews with web content management system (CMS) customers worldwide, the 11th Edition of the Web CMS Report includes detailed comparisons of 30 vendors across 18 key feature categories, as well as evaluations of individual product suitability for 12 universal CMS scenarios.
Vendors covered in the Web CMS Report include Microsoft, EMCDocumentum, Interwoven, Vignette, Oracle / Stellent, IBM, Open Text / RedDot, WebSideStory, Day, Mediasurface, Serena, Tridion, CoreMedia, Percussion, FatWire, PaperThin, Ektron, CrownPeak, Alfresco, Typo3, Drupal, and Plone. The Report is available for purchase online from CMS Watch (http://www.cmswatch.com).
The Report is designed to help enterprises make faster and better buying decisions. Like all CMS Watch offerings, The CMS Report does not rank "best" vendors, but instead details the strengths and weaknesses of the various suppliers, identifies their suitability for different use cases, and isolates vendor tendencies that may influence longterm product roadmaps.

Millennium Group

The subject of these patent trolls came up the other day, so I decided to do a Google search on them. Here's what I found. Apparently, their activities aren't restricted to the document imaging/forms processing industry. Although, I'm not sure what they mean by latches and fasteners - is that supposed to be forms processing?

ACS Sale

More on this private equity investment stuff. Somewhat related to this, I get a lot of question asking how big the image outsourcing market is. Does anyone have any idea. My best guess is $4-5 billion annually.

Google OCR

Google is sponsoring an Open Source OCR project.

Alfresco Blog

Someone hipped me to this pretty cool post by Alfresco co-founder John Newton, pertaining to Dave DeWalt's departure from EMC. Newton is a former Documentum developer -based in the U.K., who founded Alfresco a couple years ago. Alfresco is an open source ECM entrent.

U.K. imaging acquisition

Version One, one of the leaders in the imaging software market in the U.K. has been acquired by what looks like a large accounting/ERP software firm.

Xerox Global Imaging

Xerox has become the latest digital copier vendor to make an acquisiton to beef up its direct sales efforts. Yesterday, Xerox announced plans to acquire Global Imaging Systems for $1 billion. Global Imaging is a dealer roll-up founded in the 1990s by former Danka and Alco executive Thomas Johnson. It reportedly has a current run rate of around $1.5 billion. Curiously, it does not currently carry Xerox products. You might say Xerox is buying some serious market share with this acquisition.

Xerox competititors like Toshiba and Sharp have also been rolling up dealerships recently, and Ricoh recently announced a major re-org of its sales channels. It's our theory that as copier vendors are forced into solutions sales, they realize they need more control over their salespeople and buying dealers are one way to do this.

Oh yes, and we had a recent exchange on the blog about "the Great American Copier company," in which I proposed Global Imaging as a candidate and someone else suggested Xerox could make a comeback. Seems like this deal could create the best of both worlds - perhaps.

Ralph

TIS-J&B Team Up

Israel-based forms processing specialist Top Image Systems has signed on a J&B Software as a U.S. reseller. J&B is one of the largest software vendors in the remittance processing space. After a couple of earlier tries, TIS has been biding its time before making another run at the U.S. market. J&B seems like a solid partner, and we hope this deal works out for both of them. We still expect another bigger move by TIS this year as the company strives to achieve its goal of $30 million in revenue in 2007, after hitting its $20 million goal last year.

Document Fraud Prevention

This is an interesting story about document fraud protection technology - basically used to prevent people from reproducing documents that shouldn't be reproduced.

Lason

Couple interesting things related to the Lason deal:
1. We reported in July 2004 that investment firm Charterhouse Goup bought Lason, a $140 million company for something like $30 million and the assumption of some senior indebtedness. According to the HOV Services press release, it paid $148 million for the company. On the surface that seems like a nice deal for Charterhouse. Maybe that's why these guys are going private.
2. Also, former Lason President John Messigner was sentenced to a year in jail and ordered to pay $20 million in restitution for his part in the finacial scam that artificially ran up Lason's stock price in the late 1990s.

ACS Going Private

ACS is the latest oursourcer to go private. Seems to be some sort of trend. First Lason, then SourceCorp, then the biggest one of them all. I can understand that Lason was in dire straits and SourceCorp, was exactly blowing the market out of the water, but ACS has been pretty darn successful on the public market over the past five years. What's the motivation for going private? I read the same thing about another technology-driven industry recently - that a lot of the pubic companies were expected to go private. Is is that the market is so volitile right now?

Oh yes, speaking of Lason, it was recently acquired by an Indian BPO specialist.

Dicom Chairman

Dicom has hired a new non-executive Chairman. Interesting because he's a U.K. guy and also has a high-growth background. High-growth is interesting because Rob Klatell, the new CEO, at least he was new last year, also came from a company with a fairly aggressive growth strategy. Dicom has historically not been that overly aggressive. Also, the company was founded by Swiss and now it has an American CEO and English Chair. Of course, it's stock is traded on the London Exchange and has been for some time.

Regards,

Ralph

Ricoh reorg

Seems to make sense. Focusing their channels a bit. Anybody that does major acquistions like Ricoh has over the years typically needs to make some major moves into order to digest them. So far, Ricoh had avoided these moves. Sometimes it can be a tough pill to swallow for those affected, but such is big busienss.

Open Text Buys Federal Reseller

It seems Open Text has acquired one of its resellers that focuses on the federal government market. Four million for a 50-employee company that is familiar with your product line seems like a pretty good deal.

Intel e-mail mismanagement

This may or may not be the case the ZyLab is inovlved with.

Datacap Parascript form partnership

Automated data capture specialist Datacap, out of Tarrytown, NY, has officially announced a partnership with recognition specialist Parascript. Parascript, which was originally founded in Russia as part of the Glasnost initiative, is now based in Boulder, CO. It's claim to fame and biggest source of revenue is a contract with the USPS for reading addresses on envelopes. Parascript is noted for its ability to recognize cursive writing and has done a couple of installations with Datacap already involving hand-filled order forms for the Baltimore Sun and TV Guide. Parascript appears to be moving forward after a proposed merger with pubically traded Mitek fell through. Both Mitek and Parascript have strong technology in the check recognition market.

ZyLab system being used to support one of the Nation’s largest technology antitrust cases.

From a ZyLab press release:

ZyLAB and Marin IT Provide 65+ Law Firms and Attorney Generals with Web-Based eDiscovery Solution

ZyIMAGE Used to Collaborate in High-Profile California Technology Antitrust Case; System Currently Holding Five Million Case Documents

Vienna, VA, March 6, 2007 – ZyLAB, an innovative developer of Information Access Solutions and Marin IT, a leading provider of networking and application development solutions, today announced that the ZyIMAGE eDiscovery solution is currently in use to support one of the Nation’s largest technology antitrust cases. More than 65 law firms and 14 different Attorneys General are using the hosted application to collaborate on the documents produced by the defendants during the discovery process. In use already for 18 months, the ZyLAB/Marin IT eDiscovery solution allows lawyers to access data in real time and search on topics that have been discovered during depositions.

“This case has produced millions of pages of evidence that our clients must have access to in order to prosecute and prove our case,” said David Cooper of Marin IT. “The ZyLAB/Marin IT solution has dramatically streamlined their ability to locate the information they need in near real time, thus improving overall efficiency. There are hundreds of people working together on this case and without this solution it would have been quite a laborious and difficult process. This hosted eDiscovery solution should serve as a model of excellence for the legal world.”

ZyIMAGE eDiscovery enables organizations to capture, investigate, structure and disclose information in a simple, secure and efficient manner. Built on an XML data repository, the solution provides users with tools to store, search and retrieve vital information through a standard Internet browser. Marin IT is hosting the ZyIMAGE application/Web interface for the users at a data center in Northern California. Connected to the server which is running the application are large disk arrays holding approximately 5,000,000 case documents. Marin IT has installed ssl certificates on the Web server in order to deliver the content in a secure way using https/ssl.

Prior to using this implementation, all of the discovery documents for the cases were delivered in hard copy and then reviewed by the different lawyers and Attorneys General. As the “hot documents” were found they would then be added to a list and copies put into binders and sent via mail around the county for the different law firms to work with. There was no full text search ability, and there was no way to have central repository of data that everyone could use to share the data. As the case has progressed, the deposition summaries and transcripts have been added to a deposition index to make this information available to everyone involved.

“The key motivation for users engaged in eDiscovery is not to miss any archived e-mail, paper document, or electronic file that may have relevance to the case,” said Dr. Johannes Scholtes, President of ZyLAB. “Therefore, eDiscovery searching must concentrate 100 percent on recall rather than on precision. ZyIMAGE eDiscovery empowers users in the antitrust case to find the information they are looking for in seconds and provides sophisticated tools such as hit-highlighting, hit-navigation, customizable relevance ranking, optimized user interaction, text-mining and visualization.”

Attorneys General from Arkansas, California, Florida, Louisiana, Maine, Maryland, Michigan, New York, Ohio, Oregon, Pennsylvania, South Carolina, Texas and Washington and a variety of law firms Nationwide are working on this case and have real-time access to the system.

Scientigo

Remember Scientigo, the guys who said they had the patents on XML and were using the technology to do some advanced classifcation and extraction - in fact, they even signed partnerships with Boeing subsidiary CDG, as well as Canon MEAP partner Ribstone - well, it seems they are out of the ECM and capture business these days and focusing on phone directories. This comes after a change of CEOs late last year.

Ralph

Some of the latest news

Tim Corkery has been named the COO of eCopy. He had been at eCopy for seven years and was previously from senior vice president, worldwide sales and services...Bill Gates Kodak Document Imaging's former GM and VP of sales for US&C, has left the organization... Kofax recently announced a Scan Server installation with Randolph Brooks Credit Union. The implimentation facilitates the remote capture of loan related documentation from branch offices.

Surprise! An update

Once again, we apologize for being so remiss in publishing to this blog. We've been traveling for the past month of so pretty steadily, but that's not really a good excuse. The bottom line is that we are waiting until we can transfer the blog to our home page to really go after it again, and just need some help from Web hosting service. There has definitely been a lot of news, most of it we are trying to cover in the pages of the Document Imaging Report.

Anyhow, we hope to have a new and improved blog online before the AIIM 2007 show in Boston this April.

Best Regards,

Ralph.