HSA Capture Conference 2009

Out here at Harvey's annual Document Capture Conference. Despite some trepidation about attendance being down because of the economy, it looks like the HSA staff has pulled together another strong group of attendees. Companies represented include:

Company E-Discovery Institute A2iA A2iA Corp. ABBYY ABBYY Russia ABBYY USA ABBYY USA Anoto, Inc. Anoto, Inc. AnyDoc Software, Inc. Avnet Technology Solutions BancTec BancTec Canada BancTec Japan CVISION Technologies CVISION Technologies Document Imaging Report Eastman Kodak  Eastman Kodak Company EMC Corporation EMC Corporation Epson America Fairfax Imaging Fairfax Imaging Fujitsu Computer Products of America, Inc. Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Harvey Spencer Associates Hewlett-Packard IBML IBML IKON Office Solutions IKON Office Solutions Intuit Inc. ITESOFT J & B Software, Inc. Kofax Austria GmbH Kofax, Inc. Notable Solutions Inc. Notable Solutions Inc. Nuance Communications Nuance Communications Opentext OPEX Corporation OPEX Corporation Panasonic Corporation of North America Panasonic Corporation of North America Paradatec Peripheral Dynamics, Inc. Peripheral Dynamics, Inc. Peripheral Dynamics, Inc. PFU Systems, Inc. Readsoft Ricoh Innovations Ricoh Innovations Ricoh Innovations Ricoh Innovations scanR, Inc. Tangent Systems, Inc. Tangent Systems, Inc. The South Financial Group Top Image Systems PayStream Advisors Talario EMC Corporation eCopy Copanion Thinking Phone Networks, LLC
More on this event upcoming.				Ralph

Kofax Makes Acquisition, Reports year-end results

Kofax has become the latest capture vendor to add ERP-based invoice workflow to its invoice capture portfolio, with the recent acquisition of 170 Systems. 170 Systems seems to compete with Ebydos, which ReadSoft bought a number of years back and which really helped catapult the Swedish document capture specialist into a leadership role in the market for SAP-based invoice capture. As Kofax moves upstream, it certainly want to challenge ReadSoft and Open Text, which had a workflow product and bought a capture company last year. Capture specialist BancTec also announced a new workflow partner for invoice capture recently.


Also, Kofax recently reported its fiscal 2009 year-end (June 30) results. They came in with the revised expectations.

Re-furbished scanner sales

Here's an interesting brief with some metrics discussing increasing sales of refurbished document scanners.

Distributed Capture update

I think it's safe to say that distributed document capture has reached maturity, as every new implementation is no longer a major news story. As the technology has matured, I think we've all realized that there are several different levels of distributed capture, from multiple regional centers doing batch capture to remote locations doing ad hoc capture with MFPs - with several variations in between. Here's a recent announcement from ISV GoScan that shows some of the potential benefits that distributed capture has, not just on business, but on life in general. It's about the State of North Dakota implementing distributed capture to help track swine flu cases. Sure, they could have done this without imaging, but it sure seems like it's going to be a lot easier to accomplish it with distributed capture. Hopefully, it can help save some lives.

On a bit of a sour note, it was pointed out to us recently that mortgage lender Taylor, Bean, and Whitaker, which as for a long time has been a marquee customer of Datacap's distributed capture solution, has gone out of business. Of course, it was not the imaging technology, which when we talked with them was saving great amounts of money on courier expenses, that drove them out of business, but bad loans - what else? The messes we've seen in the mortgage industry have certainly detracted from imaging sales over the past year. It will be nice when things finally stabilize.

NewWave to offer Sharp MFPs

Document imaging-focused value-added distributor NewWave Technologies has added MFPs to its line of products. Specifically, NewWave announced it will be distributing Sharp's Frontier DX Series. To us, Sharp has always been on the cutting edge of scanning from MFPs. It was one of the first MFP vendors introduce single pass duplex scanning on a multitude of devices. It's OSA platform for embedded applications was also fairly revolutionary and has been leveraged by multiple capture vendors.

This is actually NewWave's second MFP-related announcement that we've covered. Last year, it announced an agreement with Pitney Bowes to enable its VAR partners to offer maintenance contracts on HP MFPs. Presumably, Pitney Bowes will also offer maintenance for the Sharp devices through NewWave, as PBI is certified to service some Sharp devices.

A/R meets document Capture

One of the observations we came away with at the recent TAWPI Forum and Expo in Washington, D.C., is that the accounts payable and accounts receivable capture markets are moving closer together. Historically, payment capture specialists, whether it be service bureaus or ISVs, have focused on A/R, while traditional document capture guys have handled the A/P side of the house. This started to change a couple years ago with the introduction of full-page IDR technology into the wholesale remittance capture space. Then, our colleague Harvey Spencer, as well as some others, started extolling on the importance of a unified view of A/P and A/R data for the CFO. While this is the nirvana of the convergence of A/P and A/R capture, it's starting to show up on less-integrated levels as well. For example, at the TAWPI event, Pepsi Bottling Group was cited for its payment capture application, which was installed by VAR KeyMark and ISV AnyDoc-both of which traditionally come from the document capture space. We've also seen an increasing interest in applying advanced workflow, another traditional full-page imaging technology, to A/R and payment processing environments.

In fact, last issue, we ran a feature on J&B Software, traditionally a payment processing vendor, fleshing out its offering with full-page document capture and advanced workflow.

Finally, we'd just like remind you that Harvey Spencer Associates annual capture conference, where this concept of converging A/P and A/R capture has been discussed for at least two years, is scheduled to run Sept. 9-10 at the Glen Cove Mansion on Long Island. It's not only a great forum where cutting edge capture markets and concepts are covered, it's a great networking event, with several high-powered capture and imaging executives attending annually.

ACS Q4

There has been a lot of talk about how outsourcing/BPO services will benefit in a down economy as businesses look to cut costs by hiring other people to perform their non-core functions. Document management is, of course, one of the functions. In our last issue, we did a pretty extensive story on document management outsourcing specialist DataBank IMX. Databank CEO Dick Aschman explained how the down economy has been a bit of a mixed blessing - as business are certainly willing to outsource more, but that some of Databank's current customers had reduced volumes due to a fewer number of transactions. ACS' year-end/fourth quarter results would seem to confirm this, as they report a record amount of revenue coming from new contracts, but only a 6% growth overall. Now, granted a 6% overall growth is nothing to scoff at from a multi-billion company like ACS, but I'm guessing their overall growth figures would have been higher in a normal economy.

Any thoughts.

Howard Dean - The winner?

Did you know that Howard Dean actually won the 2004 Democratic primary. No, that's not what the history books say, but that's the real story according to Garrett Graff, executive editor for (the?) Washingtonian. Graff gave one of the keynotes yesterday at the annual TAWPI Forum and Expo. He also helped both the Obama campaign, as well as Dean's effort back in 2004. It's his theory, that while Kerry may have won the vote, Dean's influence on the Democratic party was much greater going forward. His talk was on how Obama's campaign did really unprecidented stuff with the Internet and text messaging as well, to beat McCain (although I think his biggest challenger was probably Hillary.) Anyhow, it was a fascinating talk. More in the next issue of DIR.

Canon invests in I.R.I.S.

Canon Europe has taken a 17% state in Belgian OCR/ICR/IDR and systems integration specialist I.R.I.S. In Feb., Canon announced it would reselling I.R.I.S. capture software products in Europe and this seems to be the next step in that relationship. Canon paid $31 million for its stake, which values I.R.I.S. at around $184 million, approximately a 40% premium over its market cap and about 1.2 times revenue. Remember, however, that the majority of I.R.I.S. revenue is from systems integration and not software.

Jukebox article

I remember writing articles in years past encouraging the use of optical disk jukebox storage for document images. Rich Payne, an end user who speaks at a lot of industry events, recently wrote this article in AIIM's Infornomics saying that jukeboxes have gone the way of dinosaurs. The writing has been on the wall for many years. Unfortunately, I often found myself swayed by the energetic pitches of jukebox vendors such as Plasmon, which pretty much bet its whole company on next-generation UDO optical disk jukebox technology. Plasmon's filing for bankruptcy last fall may have been the death knell for jukeboxes. There are just too many people out there developing better, cheaper, faster, magnetic technology for a niche technology like optical disk storage to remain viable.

Ralph

Interview with EMC's CMO

Whitney Tidmarsh, EMC's Chief marketing office for its archiving and content management division, and a former marketing VP at Documentum, talks with Fierce Content Management about several hot topics in this interview. She touches on the emerging e-discovery preparedness market and how it relates to content management, EMC's relationship with Microsoft and its SharePoint strategy, as well as its cloud computing initiatives.

Ralph

ACS--Vertical Focus Success

Affiliated Computer Services became one of the leaders in outsourced data capture by understanding that to utilized document imaging to its fullest potential, it needs to be thought of as a piece of vertical solution and not an end in itself. I think our industry still struggles sometimes to get this right today. Here's an example of ACS discussing a large outsourcing contract they won, where it appears imaging will be a very important part of the services provided -but it's never mentioned in the press release. Rather, the focus is on the business process of helping the state of Texas find these property owners. And from some of the vendors we talk to, whose technology is licensed by ACS, it sounds like they have some pretty top notch imaging technology. They just realize, to be really successful, you have to remember it's an enabler, not an end in iteself.

Consumers Favor Going Green

Interesting results of a survey on consumers perceptions of "going green"mainly dealing with their printing habits. One of the things that makes the press release so interesting is the fact that it is sponsored by Lexmark but seems to encourage less printing. I guess that gives it credibility, because it's probably not in Lexmark's interest to encourage less printing. Clearly, there is a consumer interest in doing less printing, which bodes well for the document imaging industry. We're assuming of course that this desire go "go greener" spills over into the corporate world, where imaging vendors have always made their money. Of course, in the corporate world, ROI typically trumps environmental concerns, but introducing environmental concerns as a factor when an imaging system is on the table can't hurt.

Ralph

Monetizing Facebook

Here's an interesting article about plans to monetize the current most popular Web 2.0 social networking site. These social networking (and I guess professional networking) sites are fascinating. I, even being the media mogul that I am (snarky laugh), still don't have a full handle on them, but they definitely seem pretty important going forward, as everybody is starting to leverage them. They're kind of like an on-line multi-media document.

Ralph

Hyland Pushes Further into EMR

With $20 billion in federal stimulus money earmarked toward hospitals that can prove they are using eletrononic healthcare record (EHR, which seems to be the new acronym replacing EMR- electronic medical records) in a meaningful fashion, document imaging and mangement vendors having been trying to figure out how to get a slice of that pie. Hyland Software, which already has a fairly successful healthcare business, focsued mainly on automating back-office/financial administration at providers, has made an acquisition designed to move it deeper into this market. Yesterday evening, Hyland announced it had acquired Salem, NH-based Valco Systems. Quite frankly, we're not certain what Valco brings to the table that Hyland doesn't already have, aside from some more vertical expertise in a potentially burgeoning market. But, then again, when the majority of Hyland's stock was acquired by the investment firm Thoma, Cressey, Bravo, the Cleveland-area based ISV announced an aquisition strategy of acquiring market share. Presumably this is what they have done with Valco.

Related to this acquisition, it still remains somewhat of a question how much the stimulus package will drive growth in our industry. It's my opinion that it will be significant, as I've always believed EHR was a great opporunity for our industry-even before the stimulus. I mean, a standardized accessible eletronic record is too much of a benefit to healthcare providers to pass up, isn't it? They've pretty much managed to pass it up for over 10 years now, but at some point, they have to get smart, don't they? If this stimulus package helps them get there, all the better.

Here's an interesting article that discusses some of the hurdles that have prevented EHR from being adopted enmasse so far, and some of the hurdles it is still facing -even with the stimulus money.

The bottom like is that I hope universal EHR happens, as I have always thought it would -just for the sake of better healthcare service, not to mention the growth it could bring to our industry. Maybe the stimulus package will help it happen a bit sooner rather than later - although there are still obviously many hurdles to clear.

Ralph

Fingerprint card scanning project

It appears Lockheed has one a $47 million contract with the FBI to convert fingerprint cards and other types of records to a digital format. A couple years ago at AIIM, we saw a demo of a 600 dpi version of BancTec's high-speed scanner, which, as they are listed as a Lockheed partner on the contract, we'll assume is being used here. At the show, BancTec told us they had interst from some people in just this type of applicaiton...

Legal Depts. Cutting Costs

Here's a press release about a survey that talks about the pressure that corporate legal depts. are under to cut costs. You can get a copy of the complete survey through a link at the bottom, and we hope to see it and check it out more fully this week. But, it promises "an overview of the strategies, systems and management tools that law departments for U.S. organizations are using to cope with current economic challenges." Just curious if any of these strategies involve improved records management, which should cut down on e-discovery outlay. We'll have an article on that in this week's edition of DIR.

Also, here's an interesting press release about ColorTrac providing multiple 40-inch wide-format scanners to the Lebanese government for scanning election results. We've never heard of the use of WF scanners in elections and have put in an e-mail to ColorTrac asking about the logistics behind the scanner choice.

Ballmer to Keynote SharePoint Conference

Microsoft's SharePoint Conference 2009 is shaping up to be a pretty big event. It's scheduled for Oct. 19-22 at the Mandalay Bay Convention Center in Vegas. Steve Ballmer, Microsoft's CEO, has been announced as the keynote speaker. EMC, Open Text, and KnowledgeLake all are sponsors, along with people like Hitachi, CA, Quest, and others. Exhibitors include the sponsors, as well as, Adlib, AtalaSoft, Canon, eCopy, GoScan, Hyland, KeyMark, Laserfiche, SpringCM and others.

Could be a fun event. Microsoft is promising to preview the next version of SharePoint, 2010, as well as discuss real-world implementaitons of the current, 2007 version. The 2008 conference was held in Seattle (the same week as AIIM 2008) and we heard mostly positive reviews. We're not exactly sure why Microsoft waited a year and a half to hold another conference, but maybe it has something to do with the move to Vegas. One thing is for sure, Microsoft seems firmly committed the ECM industry and most everybody we talk to seems to be embracing them - but certainly not conceding the market to them, because, as well all know, SharePoint certainly isn't an imaging solution - although it can be used as a platform for image management.

Ralph

TIBCO posts good profit

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

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

TIBCO stock is up almost 10% since Tuesday.

Ralph

eWeek Enterprise Apps in the Future

Number seven on this list is pretty cool. It's kind of a tongue-in-cheek look (I think) at some prospective enterprise applications of the future.

Ralph

Deflation, Hyperinflation and Cloud Computing

Here's a link to a interesting article from the Motley Fool about the risk of hyperinflation in the U.S. economy and which types of companies are in the best position to survive even double-digit inflation, which seems to be a real possibility as the U.S. government debt/deficit increases. Hint: it seems to be companies that can fairly comfortably cover their debt with their profits.

Also, here's a link to the great Michael Lewis article on Iceland's hyperinflation, which is referenced in the the Motley fool article.

Interestingly, the Motley Fool article also talks about deflation the negative effects it can have on an economy. I know I've mentioned a few times that the document imaging industry is no stranger to a form of deflation, especially when it comes to hardware. It's no big secret that users are getting way more bang for their buck from scanners than they were 10, 5, and even two years ago. Fortunately, overall scan volumes have continued to increase, which means more scanners are being sold and keeps the demand reasonable for higher-volume production models. But, with some of this IDR (intelligent document recognition) technology starting to come downstream, we really have to be careful not to let our margins disappear, in what has historically been a good B2B market.

I also wanted to highlight this interesting press release from A/P document imaging specialist VersionOne Software. I couldn't find a link, so I've pasted the entire release below. But, it basically talks about the some of the uncertainty and mystery surrounding the term "cloud computing." It's a term that people have started to throw around as a future trend for our industry and others, but it still seems to be a ways off before the rubber hits the road, as a lot of IT professionals still apparently don't even know what "cloud computing" means, much less do they plan on investing in it.

Here's the release, which details some of the results of VersionOne's survey on cloud computing:

The findings of a survey by document management software company, Version One (www.versionone.co.uk), has revealed that 41% of senior IT professionals admit that they “don’t know” what cloud computing is. Version One carried out the research with 60 senior IT professionals (IT directors and managers) across a range of UK public and private sector organisations. This research follows-on from a similar survey carried-out by Version One which highlights that two-thirds of UK senior finance professionals (finance directors and managers) are confused about cloud computing.

Of the remaining 59% of IT professionals who profess to know what cloud computing is, 17% of these understand cloud computing to be internet-based computing while 11% believe it is a combination of internet-based computing, software as a service (SAAS), software on demand, an outsourced or managed service and a hosted software service. The remaining respondents understand cloud computing to be a mixture of the above.

Despite cloud computing being in the media spotlight, only a minority of respondents (5%) say that they use it “a lot” and less than a quarter of those surveyed (19%) reveal that they only use cloud computing sparingly. Almost half of respondents (47%) admit that their company doesn’t use cloud computing with the remaining 29% conceding that they “don’t know” whether their organisation uses it or not.

Julian Buck, General Manager of Version One, says, “Although this is only a small survey of IT professionals, the results are nonetheless very alarming, especially as IT professionals are the very people that need to understand cloud computing so that they can explain its benefits to management.”

Buck continues, “It is clear from the survey results that there are a number of contrasting views as to what cloud computing really is, which is hardly surprising in light of the many different cloud computing definitions in the public arena. For instance, Wikipedia defines it as ‘Internet-based computing’ while Gartner refers to it ‘as a service’ using Internet technologies. IT expert, John Willis, writing in his cloud blog says that ‘virtualisation is the secret sauce of a cloud’ and provides different levels of cloud computing. With so many definitions circulating, clarity is urgently needed.”

Only 2% of respondents say that their company is “definitely” going to invest in cloud computing within the next twelve months whilst 30% state that their organisations “may” invest in this technology. 45% admit that they “don’t know” whether their organisations will be investing in it or not with the remaining 23% stating that they currently have no investment plans. For those who definitely or maybe have plans to invest in cloud computing, some of the key business drivers cited include reduction in overheads and paper, ease of use, cost savings and the ability to provide collaborative tools for teaching and learning.

Buck adds, “If organisations are going to embrace cloud computing in the future it’s essential that a single, simplified explanation is adopted by everyone. Failure to cut through the confusion could result in organisations rejecting this technology and missing out on the benefits it provides.”

Document Imaging Install at Center of Scandal

Some interesting stuff out of El Paso. A few years ago we wrote about how convicted former California Congressman Duke Cunningham's road to ruin began with quesionable document conversion deals with Audre and later a company called ADCS. It seems there's a couple things that remain inherent when dealing with the government: paperwork and corruption.

Ralph

iPhone Camera upgrade

Somewhat good news out of the Apple Worldwide Developer's Conference for ISVs looking to leverage iPhones for document capture. The new 3G S, which is scheduled to hit the stores this month, will feature a 3 MP camera with auto-focus. Previous iPhones featured 2 megapixel cameras without any auto-focus.

We did receive feedback that there is some sort of image processing in current iPhones, but apparently it is difficult to work with anything below 14-point type when it comes to document imaging. The increased megapixels, new auto-focus features, along with Apple's image processing should make the 3G S a much improved document capture peripheral.

Also, we heard there are rumos that Apple is looking at licensing a 6 MP camera, which would clearly make its mediafile followers happier, as some of the reviews we read didn't seem satisified with the 3 MP camera. Of course, a 6 MP camera should be that much better for document imagiing applications.

Earth Class Fail?

It seems our favorite digital mailroom vendors has changed CEOs. We ran a feature on Earth Class mail last fall in DIR. They are a very ambitious company, but I'm not sure their customer value proposition can meet their infrastructure costs. Part of the fun of covering this company was checking out the TV show that was made about them. I do love their plan of taking an end-run around the USPS if they can't forge a partnership with them and offering digital mail services through a Kinkos or something.

Distributed Capture Wave

We recently came across a couple of stories discussing distributed capture installations that reflect favorably on Kodak's efforts in this segment of the market. This announcement comes out of Kofax and discusses the sale of more than $1.5 million worth of i1220 and i1320 scanners through Kofax's distribution business to an Italian partner that is doing a distributed installation with a division of the Italian police force. Then, there's this story about a distributed U.K. sales operation that is using some 90 Kodak i160s at distributed sites to capture orders and upload them to a centralized site for processing. (It's a fairly detailed story and worth reading.) The U.K. installation is using Kofax's distributed capture software.

In total, that's something like news of 1,100 Kodak scanners being installed in distributed scanning opertations within a week. Pretty cool stuff for Kodak. Both applications are also examples of net new imaging installations- meaning centralized capture was probably not a realistic offering. Just more evidence that distributed capture (after years of discussion) has finally arrived.

Capture reseller channel

Word out of Kofax, as you'll see in our upcoming issue, is that while its direct sales business continues to grow - now making up like a third of enterprise software sales, sales through its channel partners is on the decline - at a rate that has pretty much offset the revenue gain brought through increasing direct sales. In a recent interview with CEO Reynolds Bish, he indicated that he thinks mid-market sales, those historically perpetuated by the channel, are being affected more by the economy than the higher-end direct sales. As a result, Bish presents the transition to direct sales as pretty much having saved the company some significant revenue shortfalls.

This is, of course, a perspective that makes him look like a hero, and there is nothing wrong with that. On the flip side, however, it's quite possible to blame Kofax's increasing direct sales as negatively affecting channel sales because it has potentially alienated some VARs that have been very loyal to Kofax, because, in part at least, Kofax has always been very loyal to the channel. So, are Kofax VARs' capture sales really declining, or are these VARs just moving towards other capture products and away from Kofax?

Any feedback is appreciated.

Ralph

ACS Moving more personnel offshore

Interesting story here about Dallas-based outsourcing giant ACS wanting to more 50% of its personnel to offshore locations. At the end of last year, about 32% of ACS's 63,000 employees were offshore.

Metastorm

Metastorm is a BPM player that has played on the fringes of the document imaging space for more than 10 years. Heck, we wrote about them in 2000, when their market was still called "workflow." At that time, Metastorm was touting revenue of around $30 million, up five times from two years previous. While its growth hasn't maintained that level, it has still been impressive. We recently came across an article that said Metastorm is anticipating $90 million in revenue in 2009 compared to $77 million in 2008. This is projected organic growth (what recession?). The company is also seriously involved in aquisition talks.

We're not sure what sort of company Metastorm would be buying, but we have heard rumors that Global 360 is up for sale. On the flip side, apparently (according to the prior referenced article), Open Text is considering a BPM acquisition.

Anyhow, that's just a brief Metastorm update. Oh yes, apparently Metastorm filed an S-I last year before thinking better of going public and pulled back.

Open Text Acquires Vignette

I've seen quite a few analyst criticisms of Open Text's recent announcement that it plans to acquire Vignette for $310 million. Apparently, Vignette got killed last quarter, seeing its license sales drop 29% and its overall revenue drop 24%. Vignette was clearly in trouble, and as Open Text likes to do, it came in and bought the company when it was down.

People have questioned what Open Text really got, as Open Text has most of the technology is picked up already. I think these people are missing the point. First off, Vignette apparently has big-time WCM technology with several big-name Fortune 2000 users. Vignette is a market leader in this area, and it's always good to pick up a leader in a market that is not going away. Heck, Open Text, has even been known to pick up leaders in declining markets... Open Text also picked up some solid records management technology with Tower Technology stuff that Vignette picked up a few years back. Once again, I think this is an upgrade for Open Text in an area they have clearly targeted for future growth.

Finally, because of the market it's in, it is imparative for Open Text to continue to grow. Competing with the likes of IBM and EMC, size does matter. Open Text seems to understand this, and this latest acquisitoin should now have it approaching $1 billion in annual revenue. As long as it stands alone - and it is one of the last major ECM vendors standing - Open Text has to keep pushing forward so its Global 2000 customer base will not hesitate about doing business with it.

Per its history, we're confident Open Text will figure out how to cut costs at Vignette and fold it into its profitable growing business. Open Text has certainly come a long way in the 10 years we've been covering them- outlasting a ton of competitors, and a key part of its strategy has been acquisitions just like the Vignette buy. We expect to see more as well.

Electronic Medical Records

There sure has been a lot of buzz on this topic since the stimulus package with passed promising like $30 billion for doctors to move to electronic healthcare records. Here's a chat that showed up on Yahoo Finance with the CEO Aethena. Fairly brief. Fairly interesting.

Mitek Signs Deal with NCR

A little over a year ago, we ran an article discussing Mitek's release of technology for capturing and processing check images through mobile phones. Well, today Mitek announced a deal with NCR, which will offer Mitek's ImageNet Mobile Deposit to complement its APTRA Commercial Passport-- remote deposit capture software that allows deposits using check scanners from their businesses directly to the financial institution or via online banking web site.

This definitely seems like a step in the right direction, which might be a bit ahead of its time with this type of software- but as a toolkit vendor, also needs to anticipate the needs of its customers. NCR's offering both scanner and phone-capture based solution is indicative of where the market for mobile capture currently stands. It's a great idea, and probably will pick up momentum as phone cameras and processors continue to improve, but for now, the superior image quality of a scanner still offers many advantegous - if not the convenience and ubiquity of mobile phones.

Kofax Appointments - Book Scanner from Trash

There is no question Kofax has made a lot of changes over the past year, as CEO Reynolds Bish has really put his stamp on the company. One of Bush's main prerogatives has been to increase Kofax's average deal size by creating a strong direct sales force. Of course, this has created concerns about Kofax's dedication to the value-added reseller channel, which has historically served as its primary sales force. That's why it was refreshing to see today's announcement about the Irvine, CA-based software vendor hiring two industry veterens with substantial channel experience.

Dan Lucarini, who has been named senior director of business development, was for years a big advocate and marketing director for the Alchemy reseller channel. He left Captaris after its acquisition by Open Text. And Barbara Lanci, who has been named senior director of partner strategy and development, was a director of channel development for Kofax in the late 1990s. Both will report to Jim Vickers.

Also, a friend of ours sent us this cool link/video from a guy who basically built a DIY-type book scanners from some new cameras and 100% recycled materials. Check it out.

Ralph

CMS Watch Offers Valuable Advice

This is actually really funny. Good to see some humor related to ECM..

Article on Scan settings for OCR

This is a pretty insightful piece by OCR/data capture consultant Chris Riley of Living Analytics. One additional comment I'll make is that the scanning hardware vendors continue to introduce more versatile machines that address some of the demands that Chris mentions in his article. For example, Kodak has come out with a whole new series of scanners that capture in 300 dpi at the same speed as 200 dpi, and color speeds have almost caught up bi-tonal speeds.

We've also had many interesting conversations with vendors that specialize in the separation technology that Chris mentions and claim it can introduce OCR results on certain types of documents. As we've said before, we are entering a brave new world for recognition technologies.

Fujitsu Computer Products of America's Kevin Neal contributed these two helpful links on the same topic:

Increase ECM Automation Processes With Higher Resolution Scanning

Trends Towards Higher Resolution Scanning

Ralph

eCopy signs Chinese distributor

eCopy signed up a fairly large Chinese office equipment dealer as a distributor. Interestingly, they will be selling eCopy ShareScan along with Ricoh hardware. Good sign for the contiued diversification of eCopy, both in terms of hardware partners and geography.

Looking at TIS and Adobe numbers

Yes, Top Image Systems and Adobe are very much on the opposite end of the spectrum when it comes to publically traded document-imaging related stocks. Adobe is one of the largest software companies in the world with a very diverse portfolio that contains either a lot or a little bit of document imaging - depending on how you define the sector. And Top Image Systems (TIS) is very much a niche player, soley focused on image-based data capture (utilizing OCR), had annual revenue of around $30 million, and is very thinly traded on the Nasdaq. However, their financial reports shared a common theme: While the numbers may have looked bad at first glance, they were apparently better than what Wall Street was expecting... I think.

Both companies saw steep drop offs from the third quarter, but both also seemed prepared for this. Adobe saw its stock value rise 7% after reporting after seeng its revenue drop 12% and its earnings 29% from the previous year. Is this the first sign of an economic rebound. TIS situation was even more confusing as its revenue dropped 2% from the previous year and 23% from the third quarter, but a discontinuation of some lower-margin/unprofitable operations contributed to this, and all in all, TIS seems to have made money on the quarter, with a $5 million gain related to "financing income." Anyhow, I think you almost need to be a banker to understand what is going on in the market now, but my overall impression is that neither Adobe or TIS suffered as much as some other people in the fourth quarter, which is a good sign for our industry, as recently (the last week at least) macro-economic conditions seem to be on the rebound.

Alright, that's about it. But, if anyone can help me further understand this stuff, please post comments.

Ralph

Kofax hires U.S. Sales Chief

Kofax has hired former FileNet sales exec Steve Johnson as its Senior VP of software & solutions Sales for the Americas. Johnson will report to EVP of field operations Alan Kerr. He will oversee Kofax's implementation of its new hybrid model for its $50 million U.S. software business.

By our calculations, Kofax CEO Reynolds Bish now has also the pieces in place to attack the market in the way he outlined to us at last year's AIIM show. His intention is for Kofax's historically strong VAR channel to continue to win the small and mid-sized deals, with the direct sales force to take the high-end stuff that has historically gone to Kofax competitors like Bish's former company Captiva, as well as players like ReadSoft and recently Brainware. The trick, of course, is going to be keeping the VAR channel happy and not stepping on their toes too much with the direct sales. We still haven't heard too much negative feedback from the U.S. VARs at least, of course, without Johnson, maybe the direct sales force hasn't been fully ramped up yet.

Anyhow, Johnson seems well qualified to sell capture solutions. If he can manage a VAR channel well, we'll expect some strong results from Kofax.

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