DocVille Roundtable Event Set for Nov. 17

Michael Ziegler's Docville.net networking organization is planning its second conference on Nov. 17 in Brussels at Thon Hotel Bristol Stephanie. Ziegler has organized eight roundtable discussions for the event, which focuses on interactive conversation amongst those attending - rather than PowerPoint presentations. Attendees sign up for the sessions which are most interesting to them and there will a subject matter expert acting as a moderator at each session.

The roundtable topics have been "crowd sourced" by Docville, so they are relevent to prospective attendees. They are

•From Sourcing to Pay - an extended Business Value Chain


•Gaining a Foothold in Turkey & in countries of the Middle East

•BPM meets SMB: Trends & Challenges

•SharePoint in the eyes of ECM vendors & System Integrators– the decade long transformation from a friend to an enemy and back again

•Deployment of Next Generation Classification software

•Document Capture - The Most promising Vertical Markets in Europe

•Document Service & Scan Service BPOs- What is the best strategy for survival?

•Cloud Services – How can Channel Partners benefit, work together and charge for cloud computing services?

•Is SAP outsourcing its ECM capability

Click here for more details on the sessions.

Ziegler expects between 60-80 attendees. The event is targeted at those in the document imaging and management market that wish to do business in multiple European countries and overcome the challenges of working across borders.

Brainware and KnowledgeLake get together

Document imaging for SharePoint specialist KnowledgeLake has added Brainware as a partner. KnowledgeLake offers document capture and image management for SharePoint, but does not have any ADR - advanced document recognition technology, which Brainware offers. From Brainware's standpoint, the deal makes sense for Brainware as it attempts to increase its footprint in the Microsoft market. Earlier this year, Brainware announced it was making its ADR software available on Windows Azure.

Laserfice Resolves Trademark Suit vs. SAP

From the Laserfiche ACE (analystis, consultants and experts) blog:
"Laserfiche is pleased to announce that its litigation against SAP America, Inc., SAP AG and SAP Global Marketing over SAP’s use of the company’s Run Smarter® trademark has been resolved. The lawsuit was filed by Laserfiche in the United States District Court in Los Angeles on October 25, 2010 and was scheduled to go to trial this week.

"The terms of the settlement are confidential, but Compulink can disclose that the Parties settled the Action amicably and that the settlement involved a license of Compulink’s trademark for 'Run Smarter.'
Laserfiche’s complaint against SAP contended that SAP’s unauthorized, unlicensed use of “Run Smarter” infringed upon Laserfiche’s registered Run Smarter® trademark. Laserfiche owns United States Trademark and Service Mark Registration No. 3,085,357 for Run Smarter® and is also the owner of registrations for “Run Smarter” in other countries.

The federally registered Run Smarter® trademark has been the centerpiece of Laserfiche marketing campaigns since 2004. It is a strong trademark and service mark and a valuable asset of Laserfiche.

Here's an example of SAP using "Run Smarter."

Of course, they also seem to be using a "Run Better" campaign as well.

Here's Laserfiche announcing its "Run Smarter" awards.

Kofax Reaffirms Microsoft Focus

At the AIIM show in April, we caught up with a Kofax exec who told us the document capture ISV had some 200 implementations of users scanning into SharePoint repositories. This included British Waterways, which was touting savings of some $17 million credited to a SharePoint ECM implementation that included Kofax and some other third-party software products.

At Harvey Spencer's recent Capture Conference , we touted two reasons we believe it makes sense for indepentent capture vendors to get on board the Microsoft SharePoint train:

1. While other ECM players increase their capture technology, Microsoft will never get into capture
2.  SharePoint Continues to Grow in Importance as Windows desktop faces marginalization from mobile device

Kofax is exhibiting at the current Microsoft SharePoint Conference and issued this release today, touting itself as a leader in capturing to SharePoint environments. All signs point to Kofax contiuing to focus on image-enabling SharePoint environments and we look for more news on this front in the near future.

ABBYY Signs Reseller Agreement with Xerox

Xerox will now be selling ABBYY's Flexicapture document and data capture and Recognition Server OCR and PDF software, in connection with its DocuShare Web-based document management platform. Introduced as primarily an electronic document repository at least 10 years ago, Xerox has introduced records management and workflow features in recent years. With the ABBYY software Xerox is adding intelligent data capture and server-based OCR to the mix.

Xerox represents ABBYY's largest reseller partner. More on this in an upcoming premium issue of DIR.

Vertical Specialization Increasing

The sign of a maturing market is when you take proven technologies, such as document imaging and OCR and start to package them into soluitons. Invoice processing for accounts payable has been one of the big ones in our industry over the past few years. Recently we saw two announcements about imaging vendors moving more deeply into vertical solutions.

One is from Konica-Minotla, which has announced "customized electronic document management suites developed in conjunction with Prism Software to address workflow demands across key vertical markets." These include legal, education (both secondary and higher), healthcare, and legal.

The suites seem to be a combination e-forms/document mangement system. "The suite is powered by a robust document and forms management system that improves workflow efficiency by eliminating paper- based forms, while providing a low-cost document management solution for office environments of all sizes."

Recognition technology specialist Orbograph has acquired Correct Claims Now (CCN), a Dallas-based company, "that provides services in the field of Healthcare Revenue Cycle Management (RCM)." Basically the acquisition seems to enable Orbograph's recognition technology to the RCM processes that CCN specializes in. These include claims and EOB processing.

From the press release, "“Orbograph has extensive field experience and strong operational capabilities in deploying effective recognition-centric automation solutions for mission-critical financial environments. CCN provides deep expertise and know-how in healthcare payments processing”, said Barry Cohen, General Manager at Orbograph. “By joining forces, we can achieve an unprecedented level of revenue cycle efficiency that will provide critical advantages for providers including: lowering the cost of collecting and posting a payment, reducing aging of receivables, and increasing reimbursement amounts.”

Perceptive Discusses Content in Context

This week I came acorss this article on Fierce Content Management by Perceptive Software CTO Darren Knipp discussing how important it is for ECM vendors to embrace and control the context of conent. Knipp makes the point,  "Personas, processes, application integration and content types describe the context that we as ECM professionals need to design into our solutions in order for real value to be derived."

This reminded me of an article I wrote based on an interview with Perceptive VP of marketing Glenn Cross a couple months ago. Cross also discussed the importance of content in context and stressed that that is how Percpetive is going to differentiate itself from the big ECM ISVs like Microsoft, IBM, EMC, and Oracle going forward. "“Perceptive understands how people use content and the processes they use it in. Our software operates between content repositories and applications in areas like ERP, HR, and marketing. We serve up content, and try to anticipate what content is needed in processes related to those applications.”

It's good to see that Perceptive's CTO and VP of marketing are on the same page.

Autonomy-HP Deal Still on

At least according to this report, because it's an all-cash deal, it doesn't require shareholder approval. Says Bernstein Research analyst Toni Sacconaghi, who is quoted in the link:  “While disastrous quarterly earnings from Autonomy in November could open the door for HP to claim a [material adverse change], we see the likelihood of successfully doing so – even under such as a scenario – as remote."

This article explains some of the confusion that Autonomy founder CEO Mike Lynch is facing. I'm not sure how to feel for Lynch in this scenario. If he owns 8% of the business as reported, he's getting something like $800 in cash in the buyout, but Meg Whitman running Autonomy - I'm not sure that's what he had in mind. Ousted CEO Leo Apotheker was a software guy at least, and clearly had some serious investment in making the Autonomy acquisition work. Whitman's only software credentials appear to me a mostly disastrous acquisition of Skype while at eBay.

Kofax , Top Image Land Large Census Contracts

Kofax landed theirs with the Indonesian Bureau of Statistics. It's a $1.9 million deal that includes Kofax Capture, VRS, and the KTM data capture modules. According to the press release, the implementation will be used to "process approximately 700 million documents used for statistical data collection from over 460 cities each year in the world’s fourth most populous country." (I didn't realize Indonesia had that large of a population. Jakarta, the capital, has almost 10 million people.) Also, to "scan and capture data from surveys, census forms and other statistics related documents and then export the images and data to an SAP system to be used as a repository and for access by employees."

TIS, which has worked on multiple census projects throughout the world over the past 10 years, recently landed the German Census. TIS' "eFLOW platform will be used  to digitally capture and process approximately 180 million questionnaire pages by seven statistical offices." Census projects that TIS has completed include Argentina 2011, Belarus 2010, Brazil 2000, Cyprus 2002, Czech Republic 2011, Hong Kong  2001 and 2006, India 2002 and 2011, Ireland 2002, 2006, and 2011, Italy 2002, Kenya 2000, Romania 2011, Scotland 2011, Slovak Republic 2001 and 2011, Slovenia 2006, South Africa 2001, South Africa  2007 and 2011, Thailand 2010, Turkey 1997 and 2000, and Vietnam 2009.

Dicom to distribute KnowledgeLake in EMEA

European-based value-added distributor Dicom has announced it will act as KnowledgeLake's distribution arm for the Europe, Middle East, and Africa territory. KnowldgeLake is a St. Louis-based ISV that has emerged as a market leader for adding document imaging to SharePoint deployments. KnowledgeLake has more than 1,500 customers using its software, but almost all of those are in North America. Dicom, the hardware distributor that spun off from Kofax earlier this year, adds KnowledgeLake to a growing portfolio of software products that also include Kofax Express, Kodak Capture Pro, and most recently,CaptureBites.

More on this in this week's premium edition.

The deal was announced at DMS, which is being held this week in Germany.

Laserfiche Offers to Trade-In Program

In the wake of HP's announcement that is acquirinig Autonomy, which owns the Interwoven and iManage document management software code and install base, Laserfiche has announced "a trade-in program designed to help customers of acquired enterprise content management (ECM) vendors easily and cost-effectively upgrade to a full-featured—and fully supported—Laserfiche ECM system."

Accoridng to a press release, "Laserfiche’s trade-in program allows new customers to receive credit for the value of their existing ECM systems when converting from a competitor’s product to Laserfiche." Not sure who is coming up with that "existing value," but it's a great idea by Laserfiche. It kind of sounds like the "Cash for Clunkers" Laserfiche was promoting a couple years ago in conjunction with the federal government's buying of old, gas-guzzling cars.

We've seen ISVs take a similar approach with VARs and offer to give their customers software for free if they can just switch their base over to the new vendor's maintenance program - and then also sign on for new software sales. We understand there is some of this going on in the capture market right now in fact.

Scan-to-Malware?

This isn't too cool: "E-mails claiming to come from a Xerox WorkCentre Pro photocopier have been spammed widely across the internet, containing a malicious file as an attachment."

Presumably, this is another reason you buy the third-party capture software rather than going with the bundled scanning app.

Copanion Acquired

Remember these guys? They basically leveraged the Tesseract OCR technology and some internal software development to create a SaaS for capturing images and data of/from forms related to tax returns. Companion is focused on the professional returns market, and we estimated it did about $3 million in business during the 2010 tax season (2009 returns.) Here's a story we did on Companion last year after meeting CEO Ed Jennings at Harvey Spencer's annual Capture Conference.

Jennings was targeting something like $10 million in annual revenue for this year's tax season. We're not sure how they made out, but we did find that the company was recently sold to Drake Software - "a leading tax preparation software vendor." Strategically, the deal makes a lot of sense.

According to the press release, the "aacquisition accelerates Drake's calculated move into the SaaS space." "GruntWorx [Copanion's product brand] allows us to rapidly expand our offerings into the cutting-edge document automation technology arena. This enables us to provide tax professionals with a true end-to-end paperless tax solution and deliver extremely high accuracy rates," said John Sapp, Vice President of Strategic Development at Drake Software.

"Cutting-edge document automation technology arena," -- Like that description.

Aapparently Drake is privately held, so we couldn't find any info about how much it paid for Copanion, but we reported last year that Copanion had raised at least $16 million in venture financing, including a $10.2 million round that closed just two years ago. So, we're guessing Drake paid at least $25 million. (Does anyone have any insights into a typical multiple paid for a company just two years after taking on such a large round of financing?) If that's the case, if certainly proves out the value of a vertical focus.

Kofax Signs $2.6 million Check Capture Deal

With the Brazilian subsidiary of one of its global banking customers.

From today's press release: "The Brazilian subsidiary will implement Kofax Capture, Kofax Transformation Modules and Kofax Monitor to automate and accelerate the processing of approximately 240 million checks it receives annually. The Kofax software will enable the customer to perform digital check scanning at the branch level, thereby removing the need to physically ship paper checks from branches to a central location for processing. Following the truncation process, the check images and data will be routed to the bank’s proprietary financial processing application."

Didn't know they were in that business, but it seems like a great deal for Kofax.

Also thought the news earlier this week was interesting that Kofax, "has entered into a new, three year $40 million revolving line of credit facility with Bank of America Merrill Lynch. The credit facility replaces the company’s prior $16 million facility with another bank." It's no secret that in the wake of the sale of its hardware distribution business, Kofax has been interested in using it close to $100 million in the bank to make an acquisition.  You would think the new line of credit would further facilitate such a move. Stay tuned.

Document Boss on HP Acquisition of Autonomy

Thought they did a fairly good job on this:

Few highlights from it:

Price: "$10.3B, (HP's) largest technology acquisition to date. This reflects premium valuations of 8.3 x Revenue; 16.5x of EBITDA, and 26.8x of P/E, all based upon 2012 consensus estimates for Autonomy results. As a public company, this reflects an approximate 60% premium over today’s share price and, in excess of a 50% premium, over average share price in 2011."


Key Effects:
 
Valuations will continue to hold and increase in the (ECM) sector. Larger companies will continue to pay enhanced multiples for companies they truly desire. This fact will be positive for all sector companies as they pursue exit strategies."


"While consolidation persists, the sector will continue to expand! In every major deal, key people will leave. In many cases, they will eventually start new companies aimed at solving highly specific business problems. We see this trend continuing; perhaps a new “replace Autonomy” market will emerge."

Don't mean to plagerize, but I think they did a great job discussing some of the stuff related to this partifular move.

AnyDoc and Image Integration Systems Advance Partnership

Document capture specialist AnyDoc has announced announced a partnership with Image Integration Systems (IIS). IIS is a document imaging and workflow specialist that has traditionally focused on image-enabling J.D. Edwards environments and recently picked up some venture funding to help it expand into the Oracle market.

According to the press release, "To complement this solution, IIS leverages the advanced data capture of AnyDoc®INVOICE™ as the intelligent “on ramp” to integrated AP automation."

Dilbert on Mobile Computer

Check out today's, Aug. 3, Dilbert. Reminds me of a lot of the conversations I've been having recently about mobile computers.

TIS Posts Strong Half -Year

With Kofax apparently struggling a bit in the second quarter, Top Image Systems, a competitor of theirs in the capture market (albeit a much smaller organization, but clearly focused on the same space) delivered exceptionally strong second-quarter and half-year numbers this morning. TIS reported six-month 2011 revenue of $14.2 million - representing close to 40% growth over the previous year. TIS also reported income of close to $2 million, more than double its total from the 2010 first half.

TIS CEO Ido Schecther commented (in the press release), "We continued to successfully implement our growth strategy by focusing on our banking platform and digital mailroom solutions along with our channel partner program. Significant projects awarded this quarter included a partnership with Konica Minolta Spain, the recently announced selection of Digital Mailroom by leading UK financial outsourcing firm HML, and a joint win with Williams Lea at a major German bank.


"This quarter we saw progress in new growth geographies such as the US, UK and Asia Pacific, in addition to our traditional stronghold in Europe, the Middle East and Africa. The debenture activity that the Company recently executed was another step in the Company’s program to reduce its debt. As a result, we are maintaining our guidance for revenue of 20% - 25% and, considering efficiencies in our operations, are increasing our guidance for profitability from our prior range of 17% - 23% to 40% - 60% for the year.”

Kodak Capture Pro Integrated with Contex Scannners

Contex, a leading vendor of wide-format scanners, and Kodak recently announced an extension of their partnership through which Kodak Capture Pro can now be used with Contex scanners. Back at AIIM 2011, Contex announced it had licensed ISIS drivers from Pixel, which have made this new integration possible. We'll have more on this in our upcoming premium issue, but we thought this quote (included in the press release) by Howard Gross, President of  service bureau E-BizDocs appropriately sums up the strategy behind this agreement.

"Prior to this solution, the scanning of large format documents was detached and separate from our workflow," said Gross. "The integration between Kodak and Contex makes it easy to combine documents into a single file, and route them to specific locations. Since implementing the technologies, we have vastly improved our workflow efficiency."

Kofax Stock Gets Slammed

Not exactly sure why this happened but Kofax's stock value dropped 17% today and closed at its lowest level in almost 6 months. I'm sure it was related to the release issued today by Kofax that stated, "The Company ended the fiscal year with record total software business revenues in the range of $244 to $246 million, which is in line with financial analysts’ consensus estimate but below Kofax’s 14 percent organic, constant currency revenue growth target. Noting that the Company’s revenue growth exceeded the capture market growth in 2011, Kofax attributes this shortfall to slower sales cycles caused by continuing uncertainty in the global macroeconomic environment."

Kofax's software business revenue for fiscal 2010 was $215.8 million, and my calculations show that to reflect pretty close to 14% growth for fiscal 2011 (ending June 30, 2011.) However, I guess a few months of 170 Systems revenue would not be reflected in the fiscal 2010 revenue (it was acquired in September 2009), so that's what I'm figuring accounts for the "organic" shortfall," but it stills seems as if there has been a bit of an overreaction. Looks like a couple blocks of 100,000 shares each were sold.

Kofax "will announce its preliminary unaudited results for the fiscal year ended June 30, 2011 on Monday, September 5, 2011 before the opening of the London Stock Exchange."

Mitek Launches Cloud-Based Document Capture

Mitek Systems, the recognition tools and software developer, which has recently had some success in the market for capturing check images with mobile phones, has branched out into document capture. Jim DiBello, Mitek's CEO, previewed this expansion to us three years ago [see story on page 7].

According to the press release, "Created by Mitek and hosted at Amazon's multi-tenant, enterprise-class EC2 platform, the Mitek Mobile Imaging Cloud (MIC) provides mobile application developers, systems integrators and businesses with a fast, cost-effective way to create smartphone and tablet apps that use the camera as an input method for a wide variety of tasks."

Sounds like an interesting opportunity. We'll see what sort of apps are developed on MIC.

Capture Podcast

Check it out, I've hit the big time. I've got my own podcast. It's actually not my own. Thanks to James Lappin and Alan Pelz-Sharpe at the Real Story Group for putting this together as part of their ECM Talk series. I guess it was a natural that I speak on this show - due to the name of my blog.

I thought the conversation went well. Alan is a great resource for ECM end user information and brings a lot to the table from that perspective. I'm listening to the podcast now and it's quite entertaining. Some of the stuff is pretty basic, as apparently there is still a great need for market education around document capture, but we also delve deeper into some areas like market leaders, popular applications, and user expectations.

IBML Upgrades SoftTrac

For a long time, IBML has focused on faster throughput of documents. And, yes, this strategy has led them to create some very high-speed scanners. But, probably because of their experience in high-volume document capture environments, the Birmingham, AL-based manufacturer, was one of the first vendors to begin promoting the message that true document throughput was about more than rated scanning speeds.

One way IBML has helped improve throughput is through improvements to its SoftTrac capture suite. The latest version was announced today and includes improvements in areas like managing image quality control, integration with third-party systems and analytics and reporting.

Iron Mountain Partners with GimmalSoft for SharePoint Offering

Iron Mountain is getting into the SharePoint act. It has signed a "Memorandum of Understanding" with GimmalSoft "to develop a solution for managing both physical documents and electronic files from within SharePoint 2010." The proposed solution apparently integrates Iron Mountain's Accutrac records management sofware with SharePoint 2010. It certainly fits with Iron Mountain's revised strategy for advancing into the digital age. As discussed in our last premium edition, this strategy involves leveraging best-of-breed third party software and focusing on applications where Iron Mountain can differentiate itself through combining its physical and electronic document management services.

Open Text Buys Global 360

In an aggressive move, ECM ISV Open Text has acquired Global 360. Global 360's history is as a roll-up of document imaging and management software ISVs, but in recent years, it has moved its messaging more toward the higher growth BPM space. Open Text also has a history of rolling up distressed ISVs, although its last two acquisitions, Global 360 and Metastorm, have involved paying a premium for BPM-focused ISVs.

Open Text has paid $260 million for Global 360, which is almost three times Global's reported annual run rate of $90 million. This is almost $80 million more than Open Text paid for Metastorm, which was a little smaller than Global 360.

Global 360 seems to fit nicely into Open Text's portfolio for a couple reasons. First, Open Text clearly views BPM applications, like the case management apps that Global 360 touts, as a differentiator against SharePoint. (Check this story, starting on page 3 of our post-AIIM 2011 premium edition where VP of product marketing Lubor Ptacek discusses Open Text's strategy for differentiating from SharePoint.) From the scuttlebutt I've heard, when an ECM platform is replaced by SharePoint, it's most often Open Text's Livelink, so this certainly seems like a valid concern for Open Text.

Second, Global 360 probably still produces a fair amount of revenue from the couple thousand maintenance contracts it had at last count, related to the half dozen or so imaging and document management ISVs it rolled up in the early 2000s. Having done quite a few acquisitions itself, Open Text certainly knows how to successfully manage this sort of business.

The acquisition announcement also seems to indicate that Open Text is restructuring its debt and securing some more financing for future acquisition. Could Open Text be trying to position itself for an acquisition by Microsoft?

According to the acquisition press release, “The major, case-based operations in large organizations are heavily dependent on content and process management, for example, loan processing, complaint management, claims processing and customer on-boarding. All of these solutions can benefit from dynamic case management, which more effectively combines content, processes and collaboration,” said Eugene Roman, Chief Technology Officer, Open Text. “Dynamic case management is the kind of technology customers are moving to and it ties together the strengths we’re building in our ECM and BPM portfolios.”


Definitely sounds like stuff that is at least complementary to SharePoint.

Brainware Launches SaaS Option on Azure

Intelligent document recognition specialist Brainware has launched a SaaS-version of its IDR software, which is being hosted in Microsoft's Azure platform. We are certainly intrigued by the potential of Azure, and some of the data integration potential a Windows cloud platform presents. Some of that potential is discussed in this article on M-Files, a document management software vendor that has also selected Azure for its SaaS platform.

Not exactly sure of the details behind the Brainware SaaS deployment, although they did announce that invoice automation will be the first application. (Makes sense as that is there  We plan to talk with Brainware to get some more details for an upcoming article in our premium edition.

Hyland Releases OnBase 11.0

Hyland Software has released a new version of its flaghip ECM platform OnBase. OnBase 11.0 features improved image and data capture capabilties and "new data-level integrations with applications such as Lawson, PeopleSoft and Datatel, in addition to its existing SAP integration."  It also has new mobile viewing and workflow capabilites as well improved e-forms/workflow features.

Former IKON Exec Out as Head of Ricoh U.S.

Here's a great article discussing the departure of Jeff Hickling from Ricoh, U.S. Hickling was the president and COO of IKON when it was acquired by Ricoh in 2008. He was named president and CEO of Ricoh U.S. in 2010. I haven't found any confirmation of his resignation, but the link I have listed seems like a reliable source.

The article discusses some of the problems Ricoh has had with the IKON acquisition. While it certainly was a great way to punch Canon in the stomach, it seems it also peeved quite a few of Ricoh's dealers. I can't say I had the opportunity to interact with too many dealers at the recent Ricoh event I was at, as press and analysts were mainly given briefings prior to the dealers arriving en masse. But the linked article says something about Ricoh's percentage of sales through dealers dropping from 70% to 20%, which can't be good.

Yes, IKON has brought a great increase in direct sales, certainly, but I personally heard multiple times about some of the conflicts it created with Ricoh Business Solutions, which managed a lot of direct business before the acquisition. This conflict is also discussed.

The article doesn't indicate who would be in line to replace Hickling, but it will be interested to see what kind of background they have.

Coincidentally? Ed McLaughlin, who had been president of Sharp Imaging and Information Company of America (SIICA) since 2003, resigned last month.

Wonder how much of this all has to do with copier vendors' attempted transition away from boxes and toward more services-oriented business spearheaded by MPS.

DocPoint Recognized as Top SharePoint Integrator

DocPoint Solutions was recently recognized by TopSharePoint.com on a list of SharePoint consulting companies. From the press release, "According to the website, the list serves as a resource for organizations seeking a consulting company with SharePoint branding experience and a history of successful project implementations using the SharePoint platform. The complete list contains 53 U.S. and international firms known for their SharePoint expertise."

DocPoint, which was recently featured in our premium edition of DIR, specializes in building document imaging applications on top of platform. It is a spin-off of long-time imaging service bureau and systems integrator QAI. Both organizations are based in Fulton, MD.

Dubes Named VP of Marketing at NovoDynamics

NovoDynamics, the Ann Arbor-based recognition software specialist has named industry veteran Tim Dubes as its new VP of marketing. Dubes was most recently at ReadSoft and before that served in executive sales and  marketing roles at Cardiff, Kofax, Captaris, and Scantron. NovoDynamics, which has roots as a research lab specializing in pattern recognition, markets two products to the document imaging. These are its Verus OCR, which is noted for its Arabic language capabilities, and its Coronado auto-classification software.

KOM Honoroed for Junk-A-Juke

Gotta love the name of KOM's current promotion to get people to upgrade to more current archival storage technology. Funny thing is that back in the day, KOM was heavily in the optical jukebox business. Can't remember if they sold the actual hardware, but I know they had software for managing those beasts. But, then again, you don't stay in business in the technology market for 42 years without being adaptable.

It seems KOM has been honored by Computerworld for "promoting positive social, economic and educational change." From the press release, "KOM Networks created the  Junk-A-Juke Upgrade Program to provide a very affordable vehicle to help customers overcome the upgrade costs for secure archive storage solutions without utilizing any capital expenditures while at the same time  responsibly recycle obsolete and antiquated storage (Optical, RAID, SAN  & NAS) including other electronic waste keeping it out of our landfills and donate the proceeds generated from the resale of usable components to Feed The Children US and Speroway (formerly FTC Canada) to help children in our own communities and around the world."

Okay, that's pretty cool. We get rid of "obsolete technology" - I guess that's what MO and UDO and have become -  and feed children. A win-win.

Study Says Consumers Place

Mitek, the document recognition specialist that has transitioned its focus to check capture - and now mobile check capture - over the past couple years, is touting the results of a recent independent study that cited mobile check capture as the most compelling mobile banking feature that would influence a consumer to switch primary banks.

From a press release: "Accorindg to the study, which was conducted by Mercatus LLC, a financial services strategy firm in Boston, in response to the question, 'What are the most important features of mobile banking that would cause you to switch primary banks,' 43 percent of consumers interested in mobile banking cited mobile check deposit, according to the study, which was completed in May and previewed last week at the Mobile Banking and Emerging Applications Summit in New Orleans. Paying bills and checking account balances via mobile devices ranked second, both with 28 percent."

Mitek's stock value has increased significantly with the rise in visibility of mobile check capture. Mitek's shares are now trading arounnd $6 per share, after trading for well below $1 less than a year ago. At last check, the San Diego-based ISV, which was on pace for less than $10 million in sales through the first six months of its fiscal 2011, had a market cap of $143 million.

Kofax Partners with Pegaystems

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

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

Ricoh Launches MDS Tour

At last week's Convergence conference for its dealer channel, Ricoh spent a good bit of time discussing its new initiatives in the area of managed document services. MDS is clearly an area of focus for the Japanese MFP manufacturer, and it recently announced a $300 million investment in its MDS architecture. We'll have more on this in next week's premium issue.

Today, Ricoh announced "a multi-city U.S. tour designed to show companies how to improve their bottom line through effective information and document management. The events will discuss the challenges companies face in meeting their cost reduction, productivity and sustainability goals as well as showcase Ricoh’s Managed Document Services (MDS) approach."

The tour starts next week, on Thursday, June 9, in Chicago, and has about a dozen stops scheduled through March of next year. For more info, go to http://www.ricohandu.com/.

Cranel Partner Event

Over here in Columbus for a couple days at value-added distributor Cranel's annual North American Executive Partner Event. I was invited to give one of the keynotes and discussed "How not to Choke on Your Alphabet Soup:  Your guide to successfully navigating emerging trends in the areas of MPS, IDR, and BPM," which I consider to be three of the most important acronyms facing our VAR community. I think about 80 VAR representatives in all will be attending the event. Talk seemed to be well received, even if no one in the room could come up with the answer to the question of what IDR stands for. That just gives you a little idea of the disconnect between the vendor and VAR communities.

I received some good feedback on my talk, especially from one gentleman who is the president of a copier dealer brokerage that is transitioning to "document solutions." He explained to me some of the difficulties that copier dealers have with the up front investments and long sales cycles associated with taking on a document management practice. He was lucky in picking up a salesperson with several established accounts that he brought over from his former employers, so he hit the ground running.

Chad Stigall, a product marketing manager for Cranel, spoke before me. His focus was SharePoint (which is also part of my focus as well). His comment about VARs needing a SharePoint strategy, even if they don't necessarily build SharePoint imaging solutions, struck me as especially poignant.

Kofax Acqires Atalasoft

In an effort to further expand its enterprise capture capabilities, Kofax has acquired Easthampton, MA-based SDK ISV Atalasoft. Atalasoft is a .NET imaging SDK specialist that has some innovative zero-footprint, browser-based technology.

The press release provides some insights into how Atalasoft's technology will be utilized in Kofax's KTM capture software: "Using a mortgage application process as an example, most lenders allow prospective borrowers to apply for mortgages via traditional, paper based processes or online via portal and internet browser based applications. Applicants using the latter approach still have to provide paper copies of documents evidencing their proof of identity, income and other supporting information to the lender for processing. Capture enabling these web applications will allow applicants to easily scan those paper documents and submit all information electronically."

Atalasoft was founded in 2002 and for 2010 reported revenues of $3.6 million, an EBITA of $1.0 million. It lists some 2,500 users of its SDK. Its business compares favorably to the Pixel Translations scanning and capture tools business that Kofax CEO Reynolds Bish ran while at Captiva.

Bill Bither, Atalasoft's founder and CEO, said he will continue as GM of the operation. He will also be receiving a good portion of the close to $10 million Kofax is paying for Atalasoft.

In the wake of its sale of its hardware distribution business, Kofax has been on the hunt for acquisitions. This is just a small (but very strategic) one, so we expect more to follow.

EMC Partners with Box

Probably should have seen this coming, ever since former EMC Chief Marketing Officer Whitney Tidmarsh was named the general manager at Box.Net. Last week, at EMC World, EMC and Box.Net announced a partnership. According to the press release, "EMC is working with Box to deliver integrated content management in the cloud."

I think this paragraph from the press release best describes what the partnership could accomplish: "The Post PC era gives birth to the 'new user,' who interacts with information from a variety of sources, across a multitude of devices, and considers Microsoft applications as part of the experience, not the driver. Integrating Box's cloud layer and user-friendly interface with EMC Documentum delivers the new mobile and external collaboration capabilities required for businesses to make better, faster decisions. These cloud-enabled joint solutions strike the right balance in giving users easy-to-use tools for accessing information regardless of device, with the control IT expects for capturing, managing, processing and preserving content."

Basically, at the AIIM show this year, where Box made a big splash, it received high marks for its user interface, but the ECM-savvy AIIM crowd was not at all impressed with Box's traditional content management capabilities. Hence, the marriage with Documentum. Good stuff I think.

Autonomy Acquires Iron Mountain Digital Assets

I'm not sure why this is a good move for Iron Mountain aside from the fact that it generates some cash. According to a press release, Autonomy has agreed to pay $380 million in cash for a business with a run rate of $130-$140 million that includes "selected key assets of Iron Mountain's digital division including archiving, eDiscovery and online backup." I'm assuming this includes Iron Mountain's growing document scanning business, which was certainly integrated with the e-discovery business.

I like the deal for Autonomy and have echoed the setiments of CEO Dr. Mike Lynch in the past: ""In 2007 we correctly predicted the merging of regulatory archiving and search, and we believe we are now seeing the next phase where the convergence of regulatory archiving, back-up and data restoration with operational processing of data in the cloud is coming to pass." - A lot of my view was formed by conversations with Dr. Johannes Scholtes, the CEO of Zylab, another vendor with a focus on search, so I guess it would make sense that I agree with Autonomy's strategy.

Apparently, Iron Mountain felt it couldn't compete in the emerging cloud-based storage market.

Quest Buys RemoteScan

In addition to the more publicized Nuance acquisition of Equitrac, there was another smaller, but still somewhat intriguing acquisition recently in the document imaging industry. Quest Software, which appears to be an approximately $800 software and services roll-up, recently bought RemoteScan.

I did a story on RemoteScan a few years back, and at the time, they had a pretty unique product for enabling scanning in Citrix environments, where it is hard to work with conventional scanning deployments and drivers. [Go to page six on the link.]

From the note I received from the RemoteScan/Quest management team: "Quest is thrilled to add RemoteScan’s innovative products to its growing desktop virtualization business. Quest vWorkspace is already one of the industry’s leading virtual desktop management solutions, and RemoteScan’s products make for a natural addition. As you know, seamlessly connecting and managing peripheral devices for local and remotely connected users is a critical element in virtual desktop environments."

Nuance Buys Equitrac

As you probably saw, yesterday, Boston-area recognition specialist Nuance agreed to acquire print management ISV Equitrac. Kind of a cool deal on several fronts. First off, eCopy, which was acquired by Nuance in 2009 has a long-time partnership with Equitrac. The Equitrac Connector for tracking scanning for billing purposes in law firms, has traditionally been the most used of eCopy's third-party integrations. So, there is a natural connection there.

Robert Weideman, the GM of Nuance Document Imaging, who did most of the talking during the analyst conference discussing the deal, talked about the strength of both companies' desktop technologies. Of course, Nuance has its PaperPort, PDF, and OCR desktop apps that are either market leader or in the case of PDF, second. I'm not as familiar with Equitrac, but assume they have some sort of desktop print management application. And that's where it really starts to get interesting.

I came across an IDC report on Equitrac from 2006 and it said something about Equitrac expanding outside of  the cost-billback market and into the area of helping customers realize savings through print management. If that is indeed the case, the puts Equitrac's technology squarely in emerging managed print services (MPS) space, an area Nuance really wants to play in as well.  

I'll admit, it's kind of hard for me to think of the current offerings of Equitrac and Nuance as being a complete MPS offering, but I also had an interesting conversation earlier this week with  Doug Johnson of cloud-based MPS pioneer  Supplies Network. Basically, he brought up that only a relatively small percentage of organizations who say they are offering MPS are really delivering an advanced MPS solution. Most people are just offering pieces of MPS and calling it MPS. From that perspective, Nuance now certainly has two pretty important pieces. 

Michael Rich, president and CEO of Equitrac, who was also on the conference call, said something along the lines of  "Both Equitrac and Nuance have a  very substantial,  large install base of global clients. Those companies are looking for solutions in area of MPS. We have many opportunities to build on that strong base, and we already have a very broad value proposition that covers a lot of what customers want to do."


I think that makes sense and immediately entrenches Nuance as player in the MPS market.

DocuWare Reports Strong 2010

The DocuWare Group, a German-based ISV with a strong North American presence, recently announced a 19% growth in revenue for 2010. The brought the company, which specializes in document image management applications to 14.3 million Euros on annual revenue, the equivalent of more than $21 million. Almost all its sales come through a reseller channel, which had an estimated income of 66 million Euro, or $98 million related to DocuWare sales.

DocuWare Corp., the company's U.S.-based subsidiary reported 19.5% growth, after leading the company with 14% growth in 2009. In 2010, smaller subsidiaries in Latin America and the U.K. reported higher growth rates than the U.S., with growth also coming in EMEA and German-speaking markets.

In the U.S. market, DocuWare was a pioneer in selling document imaging solutions through the digital copier channel and continues to have success in that segment. The company also continues to invest in its technology, especially in its Web client. Work on a SaaS version is also well underway.

Canon Announces New Solutions-Focused Subsidiary

In a move that may have been somewhat previewed (check out the last two paragraphs) during our recent meeting with Canon at the AIIM On Demand show in March, Canon USA has lauched a new, wholly owned subsidiary dedicated to expanding Canon’s overall solutions business." Known as "Canon Information and Imaging Solutions, Canon USA "is targeting the company to exceed $500 million in sales by 2014."
Imaging and records management, business process optimization, security, ERP, cloud computing, IT services, and healthcare are all mentioned in the release. It doesn't say if M&A will be involved. Canon technology and that from leading "third party partners" will be utilized. We hope to have more on this in an upcoming premium issue.

DocSolid Signs Distribution Agreement with Supplies Network

DocSolid, an ISV promoting a universal document capture platform for managed print services implementations, recently announced a partnership with Supplies Network, which will be offering DocSolid's
Airmail2 platform to its MPS partners. Supplies Network bills itself as "the largest privately-owned wholesaler of IT consumables in the U.S. and an early innovator in MPS."

DocSolid was founded by document imaging industry veteran Steve Irons, a former reseller who also launched another ISV ImageTag. AirMail2 employs some of the same bar-code recognition concepts as ImageTag, but the eventual destination for scanned documents is a cloud-based computing environment, which currently manages e-mailing but will be made available for integration with other cloud-based applications.

Looking to take advantage of the MPS wave, Irons told us that instead of building a distribution channel for his software this time around, he was going to try to leverage one that already exists. He views capture as a natural extension of MPS with a cost of fractions of a cent per print - which is what the MPS charges are based on. More on this in an upcoming premium issue.

PBMS Partners With EMC Captiva

Pitney Bowes Management Services (PBMS) has signed a deal to utilize EMC's Captiva software for both its on-premise and hosted document capture solutions. PBMS is the $1.2 billion outsourcing arm of Pitney Bowes, Inc. It focuses on mailroom and document services for large, Global 1000 organizations.

Last year, we did an article (go to page 7) on PBMS's partnership with Omtool to increase its breadth of on-premise capture offerings. At the time, PBMS, which certainly does a lot of work around outgoing mail was focused on expanding its presence in records management and document processing. The partnership with EMC appears to be another move in that direction.

Imaging ISVs Report Strong Quarters

Kofax and Snowbound Software, two developers of document imaging-related software, have announced strong quarters for the first three months of 2011. Kofax, which specializes in document capture software, reported that revenue was in-line with projections of 14% growth for its fiscal 2011, which ends June 30. Snowbound, which markets imaging SDKs and viewers, reported record quarterly sales that were 10% higher that sales in Q1 2010.

Kodak Introduces New SharePoint Tools

Kodak continues to innovate on the SharePoint front, introducing two new tools for integrating document imaging technology with Microsoft's ECM platform. Kodak has introduced a Document Viewer Software for previewing documents returned by SharePoint searches. It works with 300 document types, so it's not liminted to images. Kodak has also introduced a Scan and View component, which enables users to enhance scanned images, run meta data searches, and mark-up and annotate documents.

This is exactly the type of functionality users need to turn SharePoint into an true document image management application. The new tools are designed to be integrated with Kodak's Capture Pro Software. Kodak recently introduced the ability to to import SharePoint Server library columns (meta data fields) to be used for indexing fields when capturing documents. All good moves on Kodak's part to capitalize on the growing desire to implement imaging functionality within SharePoint environments.

From the press release: "KODAK Document Viewer Software and KODAK Scan and View Software will be available beginning in May of 2011. Availability will vary by geographic location. For more information about KODAK Document Viewer Software and KODAK Scan and View Software, go to www.kodak.com/go/sharepoint."

DocuLex Announces New Education Program

From the press release:  DocuLex, Inc.(http://www.doculex.com/), creator of award-winning, business-ready document management software, announced today the initiation of its Customer Experience Program, a program that will revolve around further education for DocuLex Dealers and Partners on the benefits of owning DocuLex software.  Aspects of the program will include increases in educational email, mail and other communications, regular webinars on newly released and forgotten features of the Archive Studio Software Suite, post-service surveys, prompt follow up to requests for upgrades and annual support (maintenance bundles), information on professional services available, as well as a venue for escalating outstanding issues.

"There was a gap in our existing processes that was becoming increasingly obvious – the need in the channel for more education on the benefits of the DocuLex Archive Studio Software Suite for document management."

Couldn't agree more that there is significant opportunity around education to take full advantage of document management software features - especially when you sell through the digital copier channel, like DocuWare primarily does. 

DocuWare Upgrades Web Client

DocuWare's new Web client is being advertised as now having most of the key featuures of its Windows client. An announcement about DocuWare 5.1c was made this week at DocuWorld, the German-based ISVs annual reseller conference being held in Orlando. DocuWare has a zero-footprint client that it introduced in 2008. Last year, co-president Juergen Biffar told us that the zero-footprint client was being deployed in about half the company's new sales. We can only assume that has increased since.

When we talked with Biffar, DocuWare had recently announced it had set aside one million Euros for Web-based development. "“To transfer the entire functionality and quality of our traditional client to a browser-based environment is a huge effort, and we want to accelerate that process,” Biffar told us at the time. “That’s where half our additional spending will go. The other half is related to SaaS. We will have new challengers in this area that we do not know from our traditional business. To overcome these challengers will require money.”

Brainware Lands $4.1 Million Deal

This is a mailroom application with a "U.S.-based energy provider." It involves auto-classifcation of more than 1,000 document types.

Kofax Releases New Version of Express

Kofax has announced a new version of its SMB/departmental batch capture software. Kofax Express 2.5 includes automated data capture improvements, as well as certification with SharePoint 2010. On the data capture front, users can now do zonal OCR as well capture fields by rubber-banding text on images.

Former Perceptive A/P Expert Joins Brainware

Former Perceptive Software accounts payable solutions manager Chuck Kingston has joined Brainware. Kingston helped set up an OEM deal between Perceptive and Brainware to pair Perceptives image management and workflow technology with Brainware's automated capture. In a few discussions with him, I was really impressed at how much he knew about the A/P market. From what I remember, something like 40% of Perceptive's business came in that space.

With Brainware, Kingston will be a product manager. According to the press release, "he will be guiding Brainware’s product strategy and vision, leveraging extensive industry knowledge to deliver new product capabilities, capitalizing on opportunities for effective partnerships and product positioning, developing compelling product demonstrations and ensuring the company’s product development, sales strategies, professional services and technical support are aligned with customer needs." Sounds like a pretty big job.

Perceptive, of course, was acquired by Lexmark last summer and seems to have been investing considerably in growing the business. This is the first higher profile exit that I'm aware of since the acquisition.

Closing of Sale of Kofax Distributor Delayed

It doesn't seem like a big deal, but apparently the closing of the sale of Kofax's hardware distribution business has been delayed for a couple months. According to this article, the deal, which was announced in January and originally expected to close in March, will now close next month. According to an analyst quoted in the article, "Kofax has confirmed that the delay is due to a combination slightly longer timescales to create the required legal entities and to complete the necessary regulatory filings in order to complete the spin off and transfer of the business to the new owners, Hannover Finanz. The delays have been particular issues in the United Arab Emirates, South Africa and certain other countries."

The sale of the $130 million, slightly profitable business, will net Kofax some $20 million that it is expected to use for acquisition. Interestingly, when I talked with Tony Barbeau of Kodak Document Imaging, we compared Kodak's sale of its microfilm business to Kofax's sale of the hardware distribution business. Both businesses were actually the foundations of the entities that are now selling them. In the early days, profits from each were used to fund new businesses that have now overtaken the legacy operations.

Kodak Sells Micrographics Business

Yesterday, Kodak announced it had "completed the sale of certain assets of its microfilm products and equipment business to Eastman Park Micrographics, Inc." Eastman Park is a Dallas-based entity founded by former Kodak executive and long-time document imaging entrepreneur William "Sonny" Oates. Basically, Eastman Park will be taking over all sales and distribution of Kodak microfilm and micrographics equipment. However, the film will continue to be manufactured by Kodak in Rochester and carry the Kodak brand name.

I caught up with Tony Barbeau of Kodak Document Imaging who indicated the move was designed to enable Kodak to focus more completely on its digital business - which is the strategic direction of the company. Kodak's document scanner and imaging business grew out of the micrographics business in the late 1980s and 1990s. In early 2001, we reported that Kodak's digital document imaging and micrographics businesses combined were approaching $1 billion - with digital sales poised to overtake micrographics sales for the first time that year.

Barbeau indicated that the sale would affect about 10 Kodak employees. He said that while sales of many forms of traditional microfilm are shrinking, archive, preservation microfilm sales continue to grow.

More in our next premium issue.

Document Image Management Market Study

I'm not exactly sure who these guys are, or how they conducted their research, but I thought it was pretty cool that someone tried to size the document image management market. This comment in the press release announcing the report struck me as a bit odd:  "witnessing relatively slow growth rate of 12 percent in comparison to the overall document management systems market." Personally, I don't think 12% is that slow. I'm not exactly sure what they're comparing our market to, if that's slow.

Does anyone have additional info on the quality of this report?

Tidmarsh Joins Box.net

I haven't seen any confirmation of this yet, but it was certainly the talk of AIIM. The CEO of Box.net, which advertises itself as an on-line content management firm, apparently gave a great keynote at the recent AIIM/Global 360 event. From what I've picked up, it has a cool interface for on-line file collaboration and a SaaS sales model. Tidmarsh worked at Documentum and then EMC's Content Management division, for some time, most recently as a chief marketing officer.

At the event, she told us she was leaving EMC and handed off her keynote to Jeetu Patel, CTO of EMC's Information Intelligence Group. Box.net is apparently pretty hot, and according to this Forbes article has raised somewhere around $70 million in venture capital. So, I guess they can afford someone with Tidmash's experience. I'm guessing Tidmarsh is being brought on board to help expand the breadth of the company's content management offering and wouldn't be surprised to see them add some capture technology in the near future.

AIIM Wrap-up

Just finished up another great week at the AIIM show. This year's show was held in Washington, DC - a great city, but it can be a very expensive place to go for an event. Next year's event is apparently scheduled for June 12-14 at the Javits Center in New York City. New York in early June seems like a great time for the event, but, per our last post, it will also be the first year when the "AIIM" name will not be used. The event has been re-branded as Info 360. On Demand looks like its keeping its name.

From what we understand, ITEX will not be co-located with the two events next year. The feedback we got this year was that you had pay an extra $250 for an ITEX badge and that the monitors were checking badges. I know I tried to get on the ITEX floor and had to point out that my press credentials were good for both events. Anyhow, I heard ITEX is heading back out to Vegas.

This year's AIIM show was certainly the quietest I've ever seen. Yeah, there were still more than 130 vendors there, but almost nobody, except for Canon, had a large booth. And the number of presentations and booth shills to attract attendees' interest was very low. There were times when I almost felt I had to whisper to avoid from being overheard. The few exhibitors that gave me positive feedback about the attendance indicated that they had made several appointments ahead of time to create their own traffic. (In show organizer Questex's defense, this is what they have been telling people to do for years.)

The Microsoft Pavilion, which we figured had about the fifth of the exhibitors looked crowded, but that may have just been because there were so many vendors crowded into a relatively small space, and each vendor had multiple staff there.

For me, the event was once again a great networking opportunity, although there were certainly less people there to network with than in years past, but still enough to fill up my dance card for three days. We'll have plenty of coverage in upcoming issues of DIR.

AIIM Being Dropped from Show Name

Just got an e-mail from AIIM - the trade organization today to that effect: "The Info360 event taking place from March 21 – 24 in Washington, DC will be the final "AIIM" Show to bear the AIIM name."

I'm really not sure that this means or what exactly AIIM was doing for the show anyhow, aside from holding it's annual awards dinner in conjunction with it. And if AIIM stops doing that, it would probably hurt the networking aspect of the show, which is really the best part for many people

I'm sure we'll find out more next week.

Sharp Introduces New MFP Interface

According to the Sharp press release, "Operating in a manner similar to today's most advanced smart phones, Sharp's new user interface provides easy access to all MFP features, each of which are viewed as familiar icons. Users can perform all tasks using "flick," "tap," "slide" and "drag" gestures on the color LCD touchscreen. Icons perform the tasks the user expects them to, and the system guides the user based on the previous commands to help them execute desired functions more quickly. This "smart" user experience dramatically reduces the learning curve, leading to more widespread use of advanced functions like duplexing, staple sorting and others."

There is a video on the press release link that does a good job showing some of the features that are described. The page preview and manipulation features are especially cool. In conjunction with the release of the new interface, which is debuting on three A3 products and will eventually be available throughout Sharp's product line, Sharp is debuting its OSA 4.0 platform - designed specifically to work with the new interface. OSA, for open systems architecture, is Sharp's toolkit for integrating applications, like ECM and capture, with its MFPs. It was one of the first Web-based platforms for achieving this type of integration.

SourceCorp Merging With HOV Services

SourceCorp, which began life as a document imaging service bureau roll-up, has entered into an agreement to merge with HOV Services. HOV Services is an India-based document services outsourcing specialist that acquired SourceCorp competitor Lason back in 2007. Back in the late 1990s, Lason and SourceCorp (then known as FYI) engaged in a bit of a bidding war for service bureaus. SourceCorp, which was founded by executives from outside our industry, took a more fiscally responsible to the roll-up. I remember a conversation with a few SourceCorp execs at AIIM 1998, who accurately predicted the impending fall of Lason - which actually had three ex-execs go to jail for stock fraud, or something along those lines.

Lason was eventually bought by the investment group Charterhouse for something like $25 milllion and some assumed debt. Charterhouse, which also had an investment in document capture ISV Top Image Systems, then flipped Lason for $148 million to HOV three years later. At the time, the combined company was estimated to have more than $200 million in annual revenue. SourceCorp, which reported revenue of greater than $400 million in 2005 as a public company, was sold to the investment firm Apollo Management in 2006 for $475 million. I thought SourceCorp had dispersed some of its businesses since then to narrow its focus, but we'll estimate that the new HOV/SourceCorp entity is worth at least $500 million annually. Definitely an interesting starting point for a BPO business.

Big Capture Projects Continue

By most accounts, the last three months of 2010 were a good time for the capture industry. ReadSoft, Kofax, and Top Image Systems, three publicly traded companies, each announced strong calendar fourth quarters. And that momentum appears to have flowed over into the first part of 2010. Top Image recently announced this $760,000 deal for the Argentinian Census. According to Omri Gelb, executive VP, it is TIS's 11th census win in the last year.

Utilizing automated data capture on census forms seems to have become a no-brainer. In a census that was fraught with budget overruns in other areas, scanner vendor ibml has announced that "its high-speed document scanning technology played a key role in helping the Lockheed Martin-led Decennial Response Integration System (DRIS) team complete the 2010 U.S. Census forms processing operation on schedule and under budget." From the ibml press release, "the team was able to process as many as 2.5 million 2010 Census forms every 24 hours during peak production. Lockheed Martin used 44 ibml ImageTrac scanners across three data capture centers to capture images from more than 165 million 2010 Census forms."

Finally, what report on the document capture space would be complete without mention of Kofax, which recently announced a $900,000 invoice processing deal. It's a combination Kofax Capture/KTM and Markview workflow deal - the type Kofax envisioned when it bought 170 Systems about a year and a half ago.

MS SharePoint 2011 Conference Registration Open

I mainly note this because the 2009 conference, at which SharePoint 2010 was previewed, was one of the best conferences I've ever been too. There were more than 7,500 people there, it was sold out, there was a waiting list, and it was well run. Plus, we all got to see what was going to be included in SharePoint 2010 and why it is going to have such a large effect on the ECM industry as we know it.

I know I vacillate back and forth over how much influence SharePoint is going to have on the document imaging market, but after talking with a pair of SI's today, I am lifted back out of the trough of disillusionment and into being a believer again. Basically, it seems that to do true ECM in SharePoint, in anything close to an out-of-the-box way, you need to have 2010 installed. Currently, as the product just came out last year, that is not the case at many sites. Also, there seems to be a bit of a lack of knowledge out there about how to actually unleash SharePoint's true ECM capabilties.

Basically, the solution seems to be (and more on this in my next premium issue) marrying people with ECM process knowledge to SharePoint - so they can apply that knowledge to SharePoint applications. There are reasons this isn't happening full-force yet, but that could/should change in the future. (This is the kind of stuff I'll discuss.) Anyhow, here' s the link to the SharePoint 2011 MS Conference.

A lot of imaging players are sponsors, of the MS SharePoint event, incluidng KnowledgeLake, who's a platinum sponsor. KLake will be holding its own first ever user event in conjunction with the Microsoft event. The MS event runs Oct. 3-6 at the Anaheim Convention Center, with KLake's event being held the preceding weekend.

Speaking of events, SharePoint looks like it's going to have a huge presence at the upcoming AIIM Info 360 event being held at the D.C. Convention Center later this month. The floor plan shows like 25 ISVs (maybe some integrators in there) in the Microsoft Partner Pavilion, not to mention KnowledgeLake, which is next door. A quick look at the exhibitor list, shows like 138  total exhibitors, so once again it should be a good show for DIR and anyone else looking to do some networking.

Apparently, Hyland Software will be missing for the first time since I started covering the event for DIR back in 1998. That show was in Anaheim and from what I understand that was Hyland's first big coming out party after they had gotten a bunch of money from someone for their check imaging technology. At the show, then CEO Packy Hyland, Jr. handed me a card on which he listed his position as "One Happy Dude" and told me his goal was to grow Hyland larger than FileNet. They've certainly come pretty close. I'm not sure how much their really big AIIM booths over the years helped them, but apparently, they've moved on from that strategy.

Anyhow, ping me if you want to get together at AIIM

Kuwait Document Management Conference

Just got an e-mail announcing the Kuwait Documentation and Archiving Conference and Exhibition, being held April 4-5. Thought this was kind of cool because we've been discussing the Middle East as an emerging market for our technologies. From the speakers, it appears the technology is very much in the early stages of adoption, as it seems at least half are academics. I also only see one exhibitor - Sultan Records Management ( gotta like that name) signed up so far. They have like five media partners though, so let's hope some publicity leads to more interest. It seems to be being put on by group called Promedia International that does quite a bit of Kuwait. It's also being held under the "under the patronage of" H.E. Dr. Mohammad Mohsin Al Busairy, Minister of Communications, Kuwait.

Harvey Spencer has also tentatively scheduled a speaker from the Middle East at his upcoming capture conference.

Jan Andersson Leaving ReadSoft

You've probably already seen the report that ReadSoft's Jan Andersson is giving up his position as CEO of the company he co-founded 20 years ago. Instead, Andersson is taking a seat on the board of the $96 million document capture and business process automation specialist. The official word from Bob Fresneda, the managing director of ReadSoft's North American operations, is that Andersson wants to be able to lead from a board position, rather than having to focus a considerable amount of time on ReadSoft's day-to-day operations.

"Taking a company from a start-up to a $100 million company is a different job than trying to double that $100 million business," said Fresneda. "It takes some of the same vision, ability, and desire, but you can't do that while worrying about the day-to-day operations of the company."

That seems like a fair statement. 

Andersson's announcement came after the company announced a successful fourth quarter, for which it reported 7% revenue growth (13% measured in local currencies) over the 2009 fourth quarter and a 73% growth in operating profit. For the year 2010, revenue growth was nearly flat, with ReadSoft reporting a 6% growth when measured in local currencies. Operating profits were up 93% to almost $9 million. Clearly, however, when compared to Kofax's reported 20% growth in software revenue for the final six months of 2010, ReadSoft was losing some market share to its top competitor.

While 2009's 6% growth could be attributed to the economy, flat growth in 2010, while your competition is growing well into double-digits, is tough to swallow.

Andersson has certainly done a great job at ReadSoft for a number of years. ReadSoft was clearly an innovator in document-capture-based invoice capture systems, as the first ISV to realize how important a workflow piece was to the invoice equation, when it bought the SAP-experienced development organization Ebydos. But, in recent years, the rest of the market has been catching up, and ReadSoft hasn't been able to answer with another big move. Maybe Andersson felt it was time to give someone else a shot at doing that as CEO.

There's a lot of speculation I can make, and I'll do some of that in next week's premium issue, as well as have some more insights from Fresneda. For now, we wish Jan and the rest of ReadSoft the best with this transition. As a $100 million software vendor with a worldwide footprint and multiple Global 200 accounts, this is not an organization in trouble, but if ReadSoft wants to keep up with the aggressively moving Kofax, it's probably a good time to make some changes.

BancTec Names President for Americas

Maria L. Allen has been named to what I believe is a new post as the Dallas-area-based document and transction capture specialist. Allen is Banctec's new president for the Americas, as well as a corporate senior VP.

Like a lot of the management staff that BancTec has brought on in recent years, Allen is a former EDS employee who was VP of global financial services outsourcing for HP Enterprise Services (where she oversaw worldwide BPO operations, portfolio strategy, and business development) before joining BancTec in August 2010. For the past six months, she had been serving as BancTec's group VP of global strategy and market development.

BancTec CEO and Chairman J. Coley Clark is also an ex-EDS exec who joined BancTec in 2004. Since Clark has joined the company, BancTec has increased its  BPO revenue more than 10-fold, through a combination of acquisitions and internal growth. In 2009 (the most current public filing), BancTec listed $93 million in BPO revenue. This accounted for more than a third of BancTec's overall revenue of $273 million. BPO is obviously an important part of BancTec's strategy going forward, as the other three areas of its business all reported a decline in 2009.

In 2009, $147 milllion was reported as coming from the Americas region, which Allen will oversee, and $126 million from EMEA.

Document Boss on Metastorm Acqusisition

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

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


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

Open Text Buys Metastorm

So, by now, you've probably seen the announcement that Open Text has bought Metastorm. The question I have is why. Not that Metastorm isn't a good company in a good market - it's just that this seems like a bit of an odd deal for Open Text - most similar to the ECM ISV's acquisition of IXOS way back in 2003.

Why is the deal odd? Well, Open Text, which usually drives a pretty hard bargain, agreed to pay $182 million in cash for Metastorm, which depending on who you believe is 2 to 2.5 times Metastorm's annual revenue. My information had Metastorm on track for more than $90 million in 2009. The Seeking Alpha Web site apparently had the same info that I did, but is also reporting that "Open Text indicated that Metastorm was generating $70-75m in sales....However, we suspect that guidance assumes a bit of revenue write-downs and (perhaps) a bit of sandbagging."

Either way, Open Text does seem to be paying a bit of a premium by its standards, even if Metastorm has shown some impressive growth- it was reportedly a $25 million company just five or six years ago - and is in the fairly hot BPM space. The fact that Open Text is buying anyone that large for 2 to 2.5 times revenue in a still shaky economy comes as a surprise. I remember being similarly surprised by the 1.5 times revenue premium Open Text paid for IXOS eight years ago (IXOS was not in a hot space), but that deal's primary driver was that it gave Open Text an in with SAP, which it has certainly leveraged successfully.

Was the Metastorm deal something orchestrated by SAP, similar to Open Text's acquisitoin of Captaris for the capture technology that was immediately embedded in an SAP OEM offering? I don't know, but I certainly suspect there is more to this deal than meets the eye.

Any thoughts?

Xerox Acquires ISV/SI

Last week Xerox acquired DocuShare systems integrator WaterWare Internet Services. Water Ware, which is based in Northern California, near the Palo Alto Xerox office where DocuShare is developed, will do professional services and software development related to implementations of Xerox DocuShare implementations. They were doing this on their own previously, but now will do it in conjunction with the Xerox sales team.

WaterWare has already developed some software applications around  DocuShare, including at least a couple that include some document capture functionality. We did a story last year on one of WaterWare's implementations at an L.A.-area hospital. WaterWare is named after founder Mark Waters who is now Xerox's DocuShare Solutions manager. We'll have more on this in our next premium issue.

The acqusition of an ISV/SI like WaterWare is another indication of MFP vendors' desire to move more deeply into software and services. I'm not sure that this fufills my beginning of the year prediction that an MFP vendor will buy a capture ISV, but on a small scale, this is certainly an example of that.

Kofax Posts half-year results

The much-anticpated Kofax six-month results have been announced. As expected, they are impressive. Kofax reported 20% growth in its software business, up to $121.7 for the half-year period ending Dec. 31. Kofax also reported an adjusted EBITA of $23.5 million - up 192% from the previous year's six-month period. Kofax now has $69 million in cash (and from what I gathered talking to him a couple weeks ago, CEO Reynolds Bish is itching to invest that money, plus the $20 million from the distribution business sale, in an acquisition.)

Bish said in a press release related to the results that he expects, "our software business revenues to grow by approximately 14% on an organic, constant currency basis during this current fiscal year....we have now raised our longer term, sustainable target closer to a 20% margin."


CFO J.R. Arnold had this to say on Kofax's renewed success through its channels, "We continue to realize benefits from our hybrid go-to-market model with revitalized performance in our indirect channel, which generated 56% of applications software license revenues....OEM/POS revenues increased 6% to $12.7 million from $12.0 million in the prior year, reflecting a continuing recovery in this area of our business."

The hardware business, which was recently sold, continued to struggle. Said Arnold, "Revenue in the hardware business decreased 10% to $59.9 million in the first half of fiscal year 2011 from $66.8 million in the prior year, and its adjusted EBITA decreased to $0.2 million from $2.0 million."

Bish had previewed some of this success a couple weeks ago, but apparently for investors, the proof is in the pudding. As of this post, the stock had jumped 18% today, from somewhere around 3.5 pounds per share to over 4.25. Good momentum at Kofax. Let's hope it's a sign of strength throughout the industry...although at the recent Transform event in San Diego, Bish did say his goal was to "crush the competition."

OCR Accuracy Benefits

One of the often under-rated benefits of automated data capture technology is the accuracy improvement it can bring to a process. I was just typing a colleague's business card info. into Outlook (yes, I still sometimes use Outlook), and I accidentally typed the fax number into the field for cell phone. Luckily I caught it and saved myself the pain of hearing a loud screeching sound when I thought I was dialing a mobile phone number. As I typed in the correct number, I realized that would not have happend had a I scanned the card and used my OCR-enabled business card software, which I typically use for batch capture only.

So, yes, while we usually like to stress the productivity benefits - less manual keying - of OCR applications, there are certainly accuracy benefits as well, that can potentially further contribute to the ROI - how much depends on the value of your downstream data. Which brings me to a second instance of inaccurate data entry that I ran into this weekend: My wife had recently purchased a memorial service (I don't know if purchased is the right word, but...) for her father-in-law in our family's name. Well, wasn't it quite a surprise, when I received the church bulletin this week and saw the service was being held in memory of me! Whoops. The flowers have certainly brightened up the house though.

Recent ECM Headlines

Lot of great news stories moving over the past few weeks, that you'll see links to in our free e-mailer tomorrow. If you're not getting it, you can sign up by signing up for a free trial subscription to our premium newsletter.

Some of the featured ECM headlines in tomorrows e-mail will include:

IIS Secures Venture Funding


Open Text Earns DoD 5015.02 Joint-Certification with SharePoint 2010

Major Publisher Licenses CVision's PDFCompressor

Square 9 Softworks Partners with Pintey Bowes Canada

New Kennedy Digital Archive

Today is being celebrated as the 50th anniversary of John F. Kennedy's inaugural address. That is the one that contains the line, "Ask not what your country can do for you – ask what you can do for your country," among others. In honor of this anniversary, last week, the John F. Kennedy Library Foundation and the National Archives and Records Administration unveiled a digital presidential archive "providing unprecedented global access to the most important papers, records, photographs and recordings of President John F. Kennedy’s thousand days in office."

The new archive contains approximately 200,000 pages, 300 reels of audio tape containing over 1,245 individual recordings of telephone conversations, speeches and meetings, 300 museum artifacts, 72 reels of moving images and 1,500 photos. Technical details are available in this white paper. Technology partners participating include AT&T, Raytheon, Iron Mountain, and EMC. There are plans to digitize more materials as "staff and resources" become available. The library can be accessed at www.jfklibrary.org.

We'll conclude with this visionary quote by Kennedy, who seems to have predicted the rise of the document imaging industry, "through scientific means of reproduction…and this will certainly be increased as time goes on, we will find it possible to reproduce the key documents so that they will be commonly available…” Who knew?