ReadSoft 2013 Revenue Growth Flat; Recurring Revenue Percentage up 6%

ReadSoft announced its Q4 2013 and year-end numbers on Friday. Some highlights:

• 2013 revenue was $118 million, which was basically flat, when considered in local currencies, compared to 2012.
• License sales, when considered in local currencies, grew 1% to $38 million, or about a third of total revenue.
• Recurring revenue, which includes both maintenance and subscription software and hosted software sales grew to $55 million, or 47% of total sales, up from 40.4% in 2012.
• "U.S. and rest of the world" sales were basically flat in 2013 - at $35.5 million.

From CEO Per Åkerberg's comments:

•  The global roll-out of XBOUND during 2013 took longer than expected and consequently we didn’t reach our full sales potential for this area
• Although our 2013 results are not where we ought to be, we believe the investments we made and actions we took in acquisitions, employees, products and organization are essential to our long -term growth, results and margins
• It is very gratifying to see that all the hard work on increasing our recurring revenues is continuing to pay off. This will have a very positive impact on ReadSoft’s future profitability. Our cash flow from operating activities remains strong. 
• During the fourth quarter our markets in North America, Asia and South Africa have shown the way with good growth and profitability. 

TIS Announces P2P Deal with European Biopharma Company

One of Italy’s leading biopharmaceutical companies has selected Top Image Systems' eFLOW platform to  automate its P2P processes. This will include the capture of invoices, orders, contracts, and proof of delivery notes from thousands of suppliers at two locations in Italy. The eFLOW implementation will be integrated with the company's existing SAP and Microsoft SharePoint systems.

Read the full press release.

Perceptivce Lands $1.6M Invoice Processing Deal

Perceptive Software announced it has landed a $1.6 million invoice processing software contract with Doosan Infracore International. Doosan will implement Perceptive's Intelligent Capture (powered by Brainware), as well as Perceptive Content, which will manage workflow. Doosan is a Global 2000 company based in Seoul,  South Korea. It manufactures construction machinery. 

The Perceptive technology will be integrated with Doosan's Oracle and SAP systems. For the complete press release, click here.

“EDI provides a great deal of efficiency in reducing our paper volumes, but it will not work without a clean three-way match, and it’s simply not a feasible solution for our lower-volume vendors—which is to say, most of them,” said Jim Adkins, director of materials for Doosan. “Perceptive Software’s technology offers a great capability for keeping exceptions manageable, standardizing the workload for all territories and converting diverse paper documents to electronic data that is visible and processed with efficiency. We anticipate this project will remove a considerable amount of manual data entry from our routines, giving our staff more opportunities to pursue improvements for the shared services center.”

Large Mobile Capture Deals

Last week, we had Top Image Systems, in conjunction with its reseller partner Xerox Brazil, announce they had closed a deal for a 3,000 site mobile capture application involving the processing of contracts - presumably for mobile communications services. Today, Kofax announced it had landed a $1 million contract with a bank that is licensing its mobile capture technology. The bank is looking at deploying it an apps for check capture and deposit, bill paying, and new customer onboarding, and more.

These two deals are signs that the mobile capture market has evolved beyond checks and that mobile document capture is moving out of the planning and discussion stages and into the early real world adoption stage. This is also good news for vendors like Mitek and EMC, which also both recently launched new mobile capture initiatives. Mitek announced new bill paying app technology, while EMC launched the new Captiva Mobile Capture SDK-initially targeted at enabling its Captiva Capture customers to add mobile capture to their on-ramps.

Perceptive Software Shows Significant YOY Profit Improvement

From Lexmark's year-end/Q4 2013 report:

For 2013: Perceptive Software revenue was $224 million. Perceptive Software revenue, excluding acquisition-related adjustments of $16 million, was a record $239 million and grew 48% compared to 2012.

For Q4 2013: Perceptive Software revenue growth of 60% in quarter (70% non-GAAP, 15% organic growth), 43% in full year (48% non-GAAP).

From transcript of conference call (on SeekingAlpha.com):

"We delivered strong year-to-year improvement in Perceptive Software's profitability for the quarter and the year, and we expect continued Perceptive Software operating margin expansion in 2014 and beyond."

"Perceptive Software, delivered significant year-to-year improvement in profitability this quarter, up $9 million, driven by the 2 factors we've been focused on. First, we delivered solid Perceptive Software growth year-to-year, including good license revenue growth. Second, with the actions we started to take last year, we've been able to reduce Perceptive Software's organic cost and expense growth without negatively impacting revenue growth. And for the full year 2014, we expect to achieve double-digit software revenue growth and remain committed to delivering a positive and expanded software operating income margin."

FY2013:
"Perceptive Software had a slight operating loss of $2 million, an improvement of $23 million versus 2012. We expect continued substantial improvement in Perceptive Software operating income in 2014."

For 2014: "Perceptive will grow a bit faster than 15%, MPS a little less than that."

Spigraph Acquires Dicom-Initial Thoughts

In what is being billed as a merger of Europe's top two value-added distributors (VAD) in the document capture space, Spigraph has acquired Dicom. Spigraph, based in France was founded in 1997 and has been expanding rapidly in recent years after taking on some venture capital in 2011. Dicom, which was founded in 1991, acquired the ISV Kofax in 1999 and then was spun off by Kofax in 2011.

When we talked last year with Dicom executives last year in the wake of the appointment of former software executive Rudolf Gessinger as chairman, they positioned a then recent announcement of a partnership between Kofax and Spigraph as non-threatening to Dicom's business. The Dicom execs positioned ALOS (which had been acquired by Spigraph and expanded at VAD's presence significantly in Dicom stronghold's Switzerland and Germany) as primarily in the systems integration business and Spigraph as stronger as a VAD in geographical regions like France, where Dicom was not particularly strong.

This absence of overlap was reenforced in a quote from Joe Froning, CEO of Dicom International, which appeared in the recent press release announcing the merger with Spigraph, "Even though our two companies have been working on the same markets until now, the geographical and functional areas that have overlapped are minimal," he said. "This merger therefore represents a uniting of our respective forces."

Froning will stay with the company as Senior Vice President of Dicom/Spigraph Distribution.Wayne Davey, previously CEO of Spigraph, becomes CEO of the group. The group’s head office will be at Spigraph’s headquarters in Saint-Quentin-Fallavier.

The press release lists the combined company's turnover as €130 million, or approximately $175 million. In its final full fiscal year as part of Kofax (ended June 30, 2010), Kofax reported $125 million was generated from its hardware distribution business. When Spigraph acquired Swiss-German document imaging systems integration specialist ALOS in 2011, the combined entity's revenue was listed at over $65 million. So, there has apparently been erosion in revenue in the past couple years, which is not surprising considering the state of the scanner market today, which is how VADs have historically generated the majority of their revenue.

As prices and margins continue to drop on scanners and related service contracts, VADs, especially in more mature markets like North America and Western Europe, have had to look to new avenues to generate revenue. (Although VADs in emerging markets like the Middle East, such as Forefront Technologies seem to still be growing at a healthy rate.) Gessinger's software background is what made him attractive to the Dicom board, which brought him in. And, Spigraph, through its acquisition of ALOS, has a systems integration practice that helps further diversify that its offerings, which is a good thing.

Between the two organizations, Spigraph and Dicom will now cover a good portion of EMEA, including both mature and developing countries, with a single entity, that offers a combination of document capture-related hardware and software sales, support, and professional services. This variety and geographical infrastructure, along with the resources of a 400-person entity, should make the organization a more valuable asset to resellers and end users, as well as create more profits, than either company would be able achieve on its own.

DIR to Partner with Xamcor

You may have seen this press release that moved across the wire last week. From the article that appears in this week's premium DIR, "Xamcor [is] a leading M&A firm focused on the Information Management industry. DIR Editor Ralph Gammon will be providing content for the Xamcor Web site, including regular columns, executive interviews, and commentary on news releases.

"[I am] looking forward to helping Xamcor accomplish its mission of helping companies looking to be acquired receive maximum value for their entities, and, for those acquiring, finding good fits for their strategic plans. Xamcor was founded in 2012 by experienced ECM industry professionals Paul Carman and Harvey Spencer, along with Ike Fattal, who has a strong background in finance, deal structuring, and M&A."

I think that is all going to be fun, but, also check this out, which Xamcor apparently got with the issuing of the press release - yes, that's the Xamcor logo posted on a sign at Times Square. Cool.

From this Week's DIR: ECM as a Service and Enterprise Archiving

Here's a couple quotes that were thought were pretty cool from stories appearing in this week's premium edition of DIR:

From our story on the evolution of mobile scanner manufacturer Document Capture Technologies (DCT) towards more of a cloud-based services strategy: "“Basically, the goal is to take all the features of ECM and expose them as APIs that application developers can consume like any other service. This will change the economics of how ECM is delivered. Users will be able to pay as they go and add services.”

- Karl Etzel, COO, DCT

From a story on EMC's new InfoArchive enterprise archiving system: "Putting e-mail content in one silo and database content into another does not enable organizations to get their arms around all their information very effectively. InfoArchive represents a single unified archive that can support any unstructured content source and structured data source in one place. It’s a game changer in terms of providing full visibility into all information. It will enable next-generation solutions that are not isolated to leveraging one type of data.”

- David Mennie, EMC, IIG

Cool Stitching Feature in Kodak Alaris-HTI EOB Offering

Yesterday, Kodak Alaris announced it has teamed up with HTI Healthcare to offer an explanation of benefit (EOB) solution. The solution basically involves healthcare providers and third-party bill payers utilizing Kodak scanners and Capture Pro Software to feed HTI's system--which is a cloud-based EOB processing service. HTI then returns relevant extracted data to the providers and billers, along with - get this - "fully indexed patient claim 'stitched' images—a single image showing only the needed patient claim record, including all required EOB header information to identify the payer. Stitched images are a vast improvement over the outdated redaction process that left large gaps in the content of the document." We thought that was pretty cool. Bottom line is that it's good to see continued improvements in the evolving paper EOB processing market. 

Panasonic introduces new Departmental models

Panasonic flies under the radar a lot in the document scanner market, but they continue to come out with some impressive new technology. Check out these new departmental models (80 and 100 ppm, list price  $5,195, and $6,195) that were introduced this week.

An impressive list of features in the press release:

• ToughFeed: Stapled Document Detection, Ultrasonic Double-Feed Detection, Intelligent Feed Control and High Quality Feed Rollers ensure a smooth supply of paper into the scanner for efficient scanning.
• Mechanical Deskew: Physically adjusts and corrects the skew of documents before scanning by the paper feed mechanism to reduce the need for rescans.
• Paper Ejection Control: Paper exit roller reduces the speed of ejected paper and aligns it to prevent paper jams or the loss of originals.
• Hardware Image Processing: Performs image enhancements and prevents scanning speed degradation by maintaining workflow efficiency at 300 and 200 dpi
•  Auto-Preview / Auto-Rescan: Automatically produces nine different versions of a scanned document and displays them as thumbnails. Users select the most suitable image with a single click with no time loss. Similarly, users can adjust the quality of an image via the thumbnails without having to rescan the original thereby saving time and improving productivity.
•  Notification Function: Automatically detects problems with scanned images including binary/color, binary image, blank page and unique page detection using four notification functions and displays warning icons using Panasonic Image Capture Plus software.
• Additional productivity features include Automatic Glass Cleaning, Self Cleaning Ionizer, and One Touch Scanning for up to 100 programmable scanning workflows.
• The new models include Panasonic’s proprietary Active Double-Feed Roller Prevention, LED scanning illumination, Advanced Image Processing, and Image Capture Plus technologies (easy-to-use data formats, automatic image orientation and OCR Zone function).

Websocket to Replace NPAPI for Chrome Scanning

DynamSoft, the developer of the Dynamic Web TWAIN SDK for embedding scanning capabilities in Web-based applications, is in the process of developing a WebSocket solution to enable its customers' applications to continue to work with Chrome browsers. DynamSoft was forced to go this route due to Google choosing to no longer support NPAPI in its latest Chrome browser versions.

From a recent article provided by DynamSoft to DIR: "Google’s decision to no longer support NPAPI required a quick address by Dynamsoft. As a result, we at Dynamsoft have concluded we will leverage the WebSocket protocol to enable document scanning in newer non-NPAPI Chrome browser versions. The WebSocket protocol is part of HTML5 and the latest versions of Chrome support HTML5."

Read a full explanation of DynamSoft's WebSocket strategy for creating browser-based scanning.

DIR Top Stories of 2013: 7 thru 10

Here are the final three of our top 10 Document Imaging stories for 2013 as covered in DIR. (Here are links to posts on our top, second, and third, as well as fourth through sixth top stories):


7. Captricity Secures Round of Financing: Berkeley, CA-based ISV that specializes in automating data entry leveraging crowdsourcing, announced a $2.4 million round of financing led by The Social+Capital Partnership, a Palo Alto-based group founded by former Facebook executive Chamath Palihapitiya.

8. Kofax Hires New CMO; Former Kofax CMO Joins ReadSoft: Okay, it wasn't quite that cut and dried, but these hirings happened within about a month of each other. Former FileNet and Pagasystems executive Grant Johnson joined Kofax in October in the wake of the resignation of Martyn Christian. Then a month later, Andrew Pery, who worked as Kofax CMO from 2006-2010, joined ReadSoft full-time after working there as a consultant for almost a year. Additionally, in 2013, former ReadSoft Marketing Manager Alayne Pregeant joined TIS.

9. BancTec Lands Its Largest Scanner Deal Ever: This was a cool story as the Dallas-based imaging hardware, software, and service provider sold more than 30 high-volume scanners, through a reseller partner, to a Japanese shared services center. The kicker is that the center was opened in the Fukushima Prefecture, where a partial nuclear meltdown occurred in 2011, in the wake of an earthquake and tsunami.

10. TWAIN Working Group Launches Driverless Scanning Initiative:  Pam Doyle, Chair: "We are working on changing the conversation and taking out native drivers. We want to make the conversation occur directly between an application and a scanner. This will eliminate the need to develop drivers for multiple platforms.”

 

Top DIR Stories 4 thru 6: A Pair of Acquisitions & Flesh Eating Bacteria

Top DIR stories of 2013, numbers 4 through 6:

4. Hyland Acquires AnyDoc Software: Hyland, a BPM and ECM specialist with strong document imaging technology, had been developing its own advanced capture technology. It decided to ramp up its development efforts with the acquisition of forms processing industry pioneer AnyDoc. "We’ve been really pleased with the progress of our capture product," said Bill Priemer, long time Hyland sales exec who was promoted to CEO in 2013 with the retirement of A.J. Hyland. "But, we only had three years of development in advanced capture, which, by industry standards, gives us an application that is considered rather basic."

5. JBIG2 Compression Causes Major Headache for Xerox: The implementation of this advanced compression technology in Xerox's MFPs caused quite a stir when a German computer scientist found that it had altered the numbers on several blue prints he was scanning. One journalist went so far as to compare a “document-altering scanner” to “flesh-eating bacteria." This was probably an exaggeration, and the character changes apparently occurred only when more aggressive compression settings were turned on with smaller font and "stressed" documents. Nonetheless, Xerox eventually pulled non-lossless JBIG2 compression from its devices - kind of a bummer because the technology really has some tremendous document compression potential and is still utilized by many organizations through software implementations.

6. DocuWare acquires Westbrook: Westbrook was apparently up for sale due to some financials obligations by its principal owner - Allen & Co. Like AnyDoc, Westbrook was a pioneer in the document imaging industry, but had fallen on some tougher times recently. It did, however, maintain a strong relationship with Ricoh -  a partnership that was orginally formed with IKON more than 10 years ago. This relationship was very attractive to DocuWare, which has had much success in recent years through partnerships with MFP dealers, but did not have a formal relationship with Ricoh. Westbrook is currently operating as a wholly owned subsidiary of DocuWare.

Top DIR Story #3 of 2013: Another Strong AIIM Conference

Here's our third top story of the year for 2013 (DIR's Top and second top stories from 2013): 

3. Strong AIIM Conference - For the second year in a row, AIIM pulled off a very strong event. It drew more than 600 attendees and 30 exhibitors to the Hyatt Regency in New Orleans - representing a 50% growth over the previous year, when the initial event was held. Yes, there was an AIIM show for decades previously, but that show was sold by the trade organization in 2002 and was eventually re-branded as info360 in 2012, as AIIM pulled its branding. Along with its branding, AIIM also pulled its annual awards dinner - and all the executive power that it draws - and moved the gala to the site of its own re-booted conference.

The new AIIM Conference is not as ambitious in scope as the event that eventually became info360, but the new event has sold out both years (there are no "Show only passes), and AIIM is planning an even bigger conference for this year in Orlando, April 1-3. The plan is for the event to remain a hotel-hosted educational focused conference, but its success seems to have been enough to put the failing info360 event out of business - as the 2013 version of that event was cancelled.

We'll look forward to seeing quite a few of year in Orlando in a few months.

Second Top Story of 2013: ABBYY Beats Nuance in Court

In a case that went on for more than five years, ABBYY finally prevailed in a lawsuit related to OCR patent infringement. The case was heard over two weeks in August in a federal court in San Francisco. ABBYY was awarded a "clean sweep," in the words of its general counsel. "The jury found no infringement on any of Nuance's patent or trade dress claims."

Nuance had been seeking $107 million from ABBYY and its customer Lexmark. Nuance's claims were related to OCR patents that were filed for in the late 1980s and early 1990s and granted in the 1990s and and early 2000s. The case started with six patents in question, but was narrowed down to three by the time it came to trial - two of which Nuance had picked up in its 2000 acquisition of Caere.

ABBYY's defense was "non-infringement." The patents had been through a reexamination, so arguing
that they were invalid was not an option,” said LeighAnn Weiland, VO and general counsel for ABBYY USA.“If you look at ABBYY’s methods as compared to the very simplified processes in the patents that Nuance is alleging we violated, it’s very clear that ABBYY is not infringing. What Nuance has patented is analogous to building a bicycle, while we are building jet airplanes.”

There are not that many developers of OCR technology left on the market, but ABBYY's win was certainly a victory for those that are left, as well as end users - including those who utilize Google's Open Source OCR. Had Nuance won, we're assuming it would have gone after patent licensing agreements with everyone else in the market. And while Nuance still could go after patent infringement by other vendors (whose development methods presumably differ from ABBYY's), ABBYY is their biggest and most direct competitor, and this loss will certainly take the wind out of Nuance's sails - in addition to money out of its pockets that could be used for further litigation.

It's probably worth noting that Nuance's legal team for the case included outside counsel from Morrison & Foerster LLP, the same firm that represented Apple in its patent suit against Samsung. “We were up against the best of Silicon Valley,” said an elated Weiland. “It’s quite gratifying that our team could work like a little machine to convince a jury of what we believe are the actual facts of the case."

The verdict brought to an end an important case that we had been covering since 2008.

Sale of Kodak DI - Top Story of 2013

I apologize for being a few days late with this but I was busy enjoying holidays with my family, as well as dealing with living in the snowiest city in the U.S. so far this year: and yes, it is certainly coming down as I write the first draft of this post on Thursday evening (We're at 70 inches and counting- more than twice as much snowfall as Anchorage Alaska!). Anyhow, in between holiday cheer and bouts of flu and cold, I've been going over my annual article index for 2013, which will get published along with my 2014 predictions next week.

Going over the index is a great way to review the top stories and events of the previous year, which is inevitably leads to a top 10 list or something like that. For 2013, it seemed there were certainly two stories that stood out above all others, and maybe eight more that I thought were fairly significant.Today I'll share with you my top story in the document imaging industry from 2013 and follow up shortly with number 2, and the rest thereafter.

Without further ado, here is a summary of the top story we covered in DIR in 2013:

1. Kodak Document Imaging is acquired by the Kodak U.K. Pension Plan (KPP).

In a deal that was announced in May 2013, one of the leading players in our market was sold to an organization that is roughly the equivalent of an equity investor, but with a longer-term vision. Not coincidentally, KPP, which operates independently of Eastman Kodak, also happened to be Eastman Kodak's largest unsecured creditor. KPP agreed to pay Eastman Kodak $650 million in cash and non-cash considerations for DI and Kodak Personalized Imaging (PI), which combined generated $1.46 billion worth of profitable revenue in 2012. As part of the deal, Eastman Kodak was also relieved of $2.8 billion in claims that KPP had made against the bankrupt organization. So, in all Eastman Kodak received a potential net $3.45 billion for the two businesses, which KPP renamed Kodak Alaris, when the sale was completed in early September.

This brought to an end a saga which began in early 2012, when after months of rumors, Eastman Kodak filed for bankruptcy. Originally, DI was positioned as a "core business" that Eastman Kodak would hang on to help fund its emerging "growth businesses." That changed in August when Eastman Kodak realized it needed to sell more assets to pay off its creditors and get them to agree to the terms of its bankruptcy. Per bankruptcy laws, a formal process was put in place for selling DI that included accepting a "stalking horse" bid that would serve as a starting point in an auction.

The stalking horse bid came in April from Japanese manufacturer Brother, which offered $210 million, plus the assumption of $67 million worth unfulfilled service contracts for DI. However, that bid was trumped less than two weeks later by KPP's much higher bid for both DI and PI.

Just a few weeks after the sale to KPP was closed, the recently renamed Kodak Alaris DI put on its second annual Global Directions educational conference, where the keynote was noted author and futurist, and current Google Director of Engineering Ray Kurzweil. The event focused on a more software-centric future for Kodak DI. "In five years, we’d like to have at least one third of our revenue coming from software,” said Tony Barbeau, DI VP, products and services. “It could be higher depending on how much investment the organization makes. We could possibly choose to complement our organic growth through acquisition."

Barbeau and most of the Kodak DI management team, including President Dolores Kruchten, stayed on through the acquisition, so we don't expect any major shake-ups in the way DI will be doing business going forward. That said, everyone in the organization seemed relieved and somewhat elated that the sale to KPP was completed. They are looking forward to the opportunity to run free of the burden of their failing parent and the increased nimbleness and aggressiveness their new position should bring. We expect more exciting news from Kodak Alaris DI in 2014, but we're not sure if it can top the exciting events of 2013.

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

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

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

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

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

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

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

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

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

Best T-Giving wishes,

Ralph

Kofax Extends What's Covered in Mobile Capture Patent

Key quote from the press release: "the technology embodied in this patent allows us to expand our mobile capture capabilities to include using a postal database to correct addresses captured from driver licenses and using a biller database to correct data captured from consumer bills.”

Make Sure You Read the End of This - ARMA Notes & More

ARMA - the Records Management Association  - held its 58th annual conference and exhibition last week in Las Vegas. I didn't attend, but wanted to share with you a couple insights from people who where there:

1. ARMA produced this podcast, which is an interview with IBML EVP, Worldwide Sales and Business Development Robert Sbrissa. Sbrissa has been in our industry for a few years and has a good perspective on how things have evolved. Here's a quote by him from that podcast that I really liked:


"We are seeing this year customer looking for not only what’s new but what’s simplified and improved – as our technology is evolving and becoming more efficient and easier to deploy. Customers  now realize that the technology exists. The question is how to choose technology that is simpler, easier to implement and easier to maintain."

2. Also, Art Nichols, VP of sales at recognition ISV NovoDynamics shared this insight with us: "Document classification to the ARMA folks is as likely to mean dealing with existing text files (word, excel, email) as it is they way we use it in forms /image capture."

I thought this was interesting because it jives with the content/first tack that  that Content Analyst, an ISV with a specialty in semantic understanding, seems to be taking as it attempts to expand its market from the e-discovery space, where it has had its initial success. And that seems to be part of the issue with semantic understanding in general as we attempt to apply it to the ECM market - where does it fit best? In a capture or an RM process, i.e. in the front-or-the back-end of the application? Of course, this is kind of the same issue that Kofax is broaching as it introduces BPM into it capture/SPA frameworks. It's all a bit muddled, but will likely make sense in the end when capture is finally subsumed by ECM - or vice-versa, and it all ends up as some sort of real-time, on-demand indexing/retrieval workflow paradigm that gets the right info to the right person at the optimal time - isn't that all we're after anyhow.

Kofax: A Go-To Partner for MS in SPA

A couple weeks ago, Kofax announced it would make an insurance claims processing solution available for demonstration as part of an engagement at Microsoft Technology Centers (KTC) worldwide. Here's our blog post discussing that announcement. It mainly focuses on Kofax's moving its technology to a cloud environment.

We were also wondering how significant this was regarding Kofax's relationship with Microsoft. Here's the reply we received from Dermot McCauley, VP, solutions product marketing, for Kofax: "The Kofax Agile Claims demonstration supports the Microsoft partnership by providing innovative technologies that allow us to offer a more complete customer solution and meet their customer’s exact needs. These resources shorten the time required to develop a customer demonstration by removing traditional barriers and reduces the total cost of solution acquisition while providing compelling customer value. Drawing on the integrated innovation of Kofax Total Agility, the Microsoft Technology Center can be a powerful resource for customer organizations.  

"Additionally, the KTA offering potentially influences Microsoft licensing including Azure, Dynamics, SQL Server, SharePoint, O365, Exchange, Lync, and Bing. As we continue to roll-out this demonstration globally, Microsoft team members in the field will look to Kofax as a leading provider of smart process applications for the business critical First Mile of customer interactions."

It seems as if he is trying to position Kofax as a go-to partner for MS in the SP space. That's not a bad thing.

Partnerships Take Technology into new Geographies

This week both NovoDynamics and KnowledgeLake announced interesting partnerships that will help them expand into new geographical markets. In conjunction with the recent GITEX show, held in Dubai, Novo, a recognition technology specialist, announced that ForeFront Technologies, a VAD that focuses on the Middle East and Africa, will be carrying its OCR software. KnowledgeLake, which develops software for document image-enabling Microsoft SharePoint, announced that PFU will be introducing its technology into PFU's ECM practice in Japan.

Novo, which first came onto our radar screen because of its Arabic OCR technology (it currently supports Chinese, Korean, Russian, Spanish, and English languages as well), exhibited at GITEX. "This show covers all areas of IT and expects over 140,000 visitors before the week is over," reported Art Nichols, Novo's VP of Global Sales, who attended the event. "Forefront is a large Fujitsu and Kodak distributor that also sells Kofax and now NovoDynamics NovoVerus."

Georges Mehchi, CFO and Managing Partner for ForeFront sounded pretty excited about the partnership. As quoted in a press release,  “The intelligence that NovoDynamics has built into NovoVerus’ software truly raises the bar for language detection, recognition and data extraction, taking Arabic and multilingual OCR to an unparalleled level! Introducing this technology into Middle Eastern and African markets will be life changing, not only for Arab nations, but globally.”

 The KnowledgeLake-PFU partnership was a natural, seeing how the ISV is now a wholly owned subsidiary of PFU. Said Ron Cameron, president of KnowledgeLake in a press release, "“This natural progression of our partnership with PFU will extend their already successful ECM practice to include SharePoint ECM. As SharePoint continues to gain momentum in the Japanese marketplace, we hope this partnership promotes the profile and perception of Microsoft’s platform by providing value around its robust ECM capabilities. We are grateful for this opportunity and I couldn’t think of a more suiting partner in this effort than our parent company, PFU."

I don't think there is any question that we are truly working in a global economy today. Yes, there are certainly hurdles to be cleared to be successful doing business in multiple countries, but working with strong partners, like the ones that NovoDynamics and KnowledgeLake have chosen, represents a great way to clear these hurdles.

Business Imaging Expo Less than Five Weeks Out

The Business Imaging Expo, being put on by 1105 Media, is set for Dec. 10-12 at the Mandalay Bay Convention Center in Vegas. The event is aimed at Office Imaging vendors, dealers, and channel and is expected to draw around 1,500 total attendees, including 75-100 vendor exhibitors.

A pair of executive summits kick things off on Tuesday, Dec. 10: one on MPS, and the other on workflow, which has a focus on ECM and document imaging technologies. Featured speakers include Pam Doyle of Fujitsu, Bruce Orcutt of Kofax, and Ron Glaz of IDC.

“This is a brand new event that is a mix of everything we cover,” said Amy Weiss, editorial director for 1105 Media’s Office Technology Group. Weiss oversees three publications: Recharger Magazine, The Imaging Channel, and Workflow. “We see this event as really representing the future of the office imaging market. The tagline features ‘service, supplies, and solutions’ and we see opportunity where those three areas converge. We hope to provide some cutting edge content and information for attendees looking to address the future of the market."

Early-bird rates are in effect until Nov. 15. You can register online at businessimagingexpo.com/events/bix2013

MS Partnership Hightlights Kofax's Cloud Strategy

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

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

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

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

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

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

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

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

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

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

Live from Kodak (Alaris) DI Global Directions

About 400 people here at the event being held in the Gaylord National Resort & Convention Center at the National Harbor in Washington, DC. Mix of Kodak employees, resellers/channel, end users, ISV partners and media/analyst. The great Ray Kurzweil gave the opening keynote.

Kurzweil, a renowned futurist, discussed the exponential growth of the information technology market. He also said that companies competing in this market need to be looking 3-4 years out. This coincided nicely with the Big Data message that seems prevalent at the conference. Speakers from big-time software companies like Google, IBM, Microsoft, and Salesforce.com took the dais on Day 1 and there overwhelming message was that Big Data is coming.

So, what does this mean to the attendees? Two things as far as Kodak Alaris Document Imaging is concerned:

1. The emergence of a multi-channel/source capture model to deal with an increase in information being received by organizations through an increasing number of input sources.
2. The need to add some sort of intelligent processing to efficiently manage this increasing volume of incoming information - which is the point of the Info Insight software that Kodak first discussed last year and recently made available as a product.

Cloud-based Capture Benefits Food Service Provider

“When you are processing from multiple locations 2,500 - 3,000 invoices a week, with some being as many as 10 pages long, having a distributed, web-based capture system that works to expectations is a real benefit."

- Chris Beckman, IT and Customer Service Administrator for Food Authority -- a fine foods service and produce distributor, based in Oceanside, New York

Check out this case study, which includes technology from CAPSYS, Fujitsu, and KnowlegeTree.

Also, here's a short piece on how moving their IT infrastructure to the cloud helped Food Authority maintain its business in the wake of Hurricane Sandy.

 

Jury Rules in Favor of ABBYY, Lexmark, in OCR Patent Trial

(Some updates since first post)
The long-lasting OCR patent lawsuit filed by Nuance against ABBYY and Lexmark is finally over. Yesterday, a jury appointed by the U.S. District Court of San Francisco, ruled unanimously in favor of ABBYY and its partner Lexmark. It ruled that neither company owes Nuance anything in damages related to patent or trade dress infringement. 

The way I understand it, Lexmark, which manufactures printers and MFPs, was a partner of Nuance, but at some point, prior to 2008, when Nuance filed the suit (I guess the suit was originally filed in Wisconsin in 2002, but moved to California in 2008), Lexmark switched out its bundled Nuance OCR technology in favor of ABBYY's. Nuance accused both Lexmark and ABBYY of attempting to create packaging that resembled Nuance, and also accused ABBYY of violating five six patents that Nuance picked up in its 2000 acquisition of Caere. ABBYY promptly filed a countersuit, accusing Nuance of violating two of its patents, as well as violating anti-trust act. The whole thing was combined in one trial in the Court of Judge Jeffrey S. White.

In 2009, eCopy and it's OCR partner I.R.I.S. were dragged into the suit, but that was apparently resolved when Nuance acquired eCopy later that year and replaced the I.R.I.S. technology with its own.

Apparently before the case went before a jury, in a trial that started earlier this month, it was narrowed down to three patents.

I've read Nuance's OCR patents and they are pretty broad based - meaning that if ABBYY were found in violation of them, it could have affected everyone else developing (and licensing non-Nuance) OCR technology. So, this decision should have many people in the document imaging market breathing a collective sigh of relief. 

No word yet if Nuance plans to appeal, if they can, and/or if they will go after anyone else for patent infringement related to OCR . We expect to talk with ABBYY reps later today and I know Nuance is planning on issuing a statement. We'll keep you posted as more news on this develops.

Mobile, Cloud, on MFP Dealers', Users' Minds.

From this week's premium DIR:

 “Our new app fits the needs we have been hearing about from our dealers for some time. In addition, we like to bring in our VIP accounts to the TABS corporate office—and nine out of 10 of them have been asking what our plans are for mobile and cloud applications. It’s something that’s clearly on the mind of all Toshiba’s customers.” 

- Tony Venice, manager, strategic product management, Toshiba America Business Solutions, 

discussing TABS' new e-BRIDGE Print & Capture Mobile Software

EPM and Crowley Announce Partnership

Eastman Park Micrographics (EPM), the media and equipment business that was spun out of Kodak DI in 2011, this week announced a partnership with the Crowley Company, which will provide worldwide sales and marketing for EPM's equipment line, which currently includes the IMAGELINK Archive Writer, the IMAGELINK Archive Processor, as well as a pair of OEM'd film to image scanners.

Technically, Crowley's partnership is with EPM Equipment, which was spun off of EPM this week as well. EPM will continue to sell media/film through its agreement with Agfa. Apparently, the Rochester-based Kodak film production operations, where EPM historically got its film, are winding down.

We'll have more in depth coverage of these announcements in our next DIR premium issue, which is due out Aug. 23.

Kapow Helps Kofax Address SPA/First Mile

Okay, so here's my first stab at explaining Kofax's acquisition of Kapow Technologies which was announced earlier today. Based in Palo Alto, Kapow is a data integration ISV with some $16 million in annual revenue. Kofax agreed to pay a net of approximately $46 million. (We'll get into more of the financial details in our next premium issue of DIR.)

On a conference call today, Kofax CEO Reynolds Bish explained that Kapow has three primary lines of business:

• enterprise application integration
• content migration from one ECM-type system or database driven application to another
• competitive or marketing intelligence involving monitoring social networks and tracking trends occuring on them

He also noted that over the past four years, Kapow has transitioned from an on-premise software model to a subscription model and that, including maintenance, more than 70% of Kapow's revenue is currently generated through a recurring billing cycle. Kofax plans to continue to sell into all of Kapow's current markets.

But, the really exciting part from a Kofax standpoint is how Kapow's software will help Kofax better pursue its Smart Process Application (SPA)/First Mile of the customer interaction strategy. SPA is a market defined by Forrester sometime between late last year and early this year. Kofax embraced it because of its higher growth potential than document capture.

 Here's some of what Forrester principal analyst Craig LeClair had to say about SPA (excerpted from a previous DIR article.): “SPAs are packaged apps designed to address end-to-end process needs. They can be used to address processes that businesses have been struggling with like invoice and claims processing, and customer onboarding....SPAs combine capture, BPM, social tools, and analytics as enablers to build focused applications."

Kofax is then trying to combine an SPA focus with its aforementioned strategy of addressing the "First Mile" of customer interactions. Here's how Kofax CMO Martyn Christian described this "First Mile:" “The First Mile is really that bridge between systems of engagement and systems of record,” he said. “It involves processes like scanning paper, but it could also involve an app on a cell phone. Our goal is to capture customer information and start to look at building cases and collaboration around it, before the data ultimately ends up in an ERP system or whatever system of record it’s headed towards.”

Basically the First Mile is about most effectively connecting systems of engagement on the front end with the back-end systems of record. But, one of the catches to doing this is that it involves connecting multiple disparate systems - something which Kofax, as primarily a document capture ISV, didn't really have a legacy in.

So, the first step in addressing this shortcoming was acquiring BI and data analytics ISV Altosoft. Altosoft gave Kofax the ability to pull data from disparate system for analyzation and decision-making. The acquisition of Kapow builds on that by enabling Kofax to more easily connect to multiple applications.

During today's conference call, Bish did a fairly good job of explaining the advantages of simplifying application integration when you are competing in the SPA space. "When we talk about SPA, we talk about being able to bridge the gap between systems of engagement and systems of record," he said. "To do that means we have to integrate our technology with both of those types of systems. For example, as part of an SPA you might have to do look-ups into your systems of records to validate information coming from your system of engagement. You also have to export data to a system of record or some other repository.

"Historically, to make those connections, we've had to rely on API programming, which can be time consuming as well as expensive, as it can require extensive professional services. Kapow will enable us to do integrations better, faster, and cheaper, which will accelerate deployment of SPA solutions. Reducing our professional services will also enable us to remove some potential barriers to selling SPA solutions."

The bottom line is that the Kapow acquisition seems to be an important step toward Kofax's goal of transitioning from a document capture specialist to an SPA vendor with a broader market to address. It is another example of how Bish continues to push the company forward through investment in new technology of the profits earned primarily through Kofax's current capture business. Clearly Bish (and the Kofax board) see the capture market as evolving and are not satisfied and stand pat and let it pass them by. 

Imaging 411 Targets VARs, Offering Higher Margins on Service

Following is an excerpt from an article entitled, "Imaging 411 Pumps Life into Hardware Service Market" that appeared in our July 19, 2013 premium edition of DIR.

There are several components to a document imaging sale. We typically talk a lot about the hardware, software, and professional services associated with a deal, because those items typically produce the big upfront price tag. (Unless of course it’s a SaaS or MPS driven deal—but, while gaining momentum, those are still exceptions rather than the norms in our market.) But, there is also typically recurring revenue that can be earned through software maintenance and hardware service contracts.

One difference between these recurring revenue sales and the upfront sales, however, is that while any number of vendors may be competing for the upfront sales, the number of options for maintenance and service is typically limited. Software maintenance, for example, because of the nature of the beast, is usually offered only by the ISV who developed the software. As a result, the ISV typically gets to set the terms with no questions asked.

Hardware service has historically been somewhat more flexible, and at one time many resellers were actually certified to service scanners, which enabled them to control their own pricing. However, while some scanner vendors like Canon still certify VARs, other market leaders like Kodak and Fujitsu have increasingly encouraged resellers to offer only the manufacturer’s authorized service at a price dictated by the manufacturer. The result has been successful service programs for the manufacturers, which has helped them offset some of their falling margins on hardware sales, but it has also put the squeeze on resellers who also have to deal with falling hardware margins and now have to deal with more restrictive service margins as well.

Imaging 411 is attempting to reverse that dynamic and once again make scanner service an important profit center for VARs. The Long Island, NY-based organization is offering scanner service packages to VARs—advertising significantly higher margins than the VARs get reselling similar service packages from leading scanner manufacturers. Imaging 411 recently brought on board long-time scanner industry sales and marketing executive Don McMahan as its VP of sales to help it drive some aggressive channel growth.

McMahan was originally hired by Imaging 411 as a consultant in 2010 when he launched the service provider’s Maintenance VAR Program (MVP). “One of the big components of the MVP program is that we offer deal registration,” said McMahan. “This signifies that we are not competing with our resellers. In addition, we are offering VARs two to three times the margins they get on service contracts from leading scanner vendors.”

Imaging 411 was launched in 2004 as a VAR, with the value-add of being able provide its own service. Its co-founders, Gary Armstrong and Joe Paradiso, are former Lason executives who helped manage service for a large conversion services and imaging systems integration business. Over the years, Imaging 411 began to increase its focus on service on both microfilm and document scanner equipment.

“In each of the past five years, Imaging 411 has enjoyed at least double-digit growth in terms of revenue and new accounts,” said McMahan. “We’ve landed some major national accounts with more than 100 locations—including Databank, which we publicized last year. We also landed a contract to provide in-house scanner service for one of the biggest office integrators in the U.S.”

A lot of the Imaging 411’s early customers are former Kodak Service & Support customers. “We went after Kodak customers and partners first because the dollar values associated with some of their accounts are so high and Kodak’s programs aren’t very flexible,” said McMahan. “One of our differentiators is that we pride ourselves on being easier to do business with."

McMahan said that Imaging 411 currently has about 20 reseller partners. “We are definitely growing our channel,” he said. “That said, I think 30 partners, that really want to do a good job, would be plenty."

Imaging 411 offers coverage throughout the United States through a combination of its own field engineers and contractors. It also provides Level II support to supplement its field personnel. “Our price book is basically the same as the manufacturers’,” said McMahan. “We match all the service SKUs sold by Kodak, Fujitsu, Canon, etc., and we offer more flexible pricing.”

“The bottom line," McMahan added, "is that even if the service market is shrinking, for a smaller company like Imaging 411, the opportunity is too great to pass up. We think the market is plenty big enough to support another major player.”

Kodak Event to Focus on Leading Edge Information Management

Here's an excerpt from an article that appeared in last week's premium edition of DIR:

From Sept. 22-25, Kodak DI will be hosting its second annual Global Directions Conference at the Gaylord National Resort and Convention Center in Washington D.C. The event features a keynote by Ray Kurzweil, the noted technology inventor, author, and visionary who is currently employed as the director of engineering at Google. Kurzweil, who is probably most widely known for his work on artificial intelligence, but was also an early pioneer in the area of applied OCR, will talk on “The Next Wave of Intelligent Information Management.” According to the Global Directions Web site, the talk “sets the stage and explores the exponential increase in computing power, computing intelligence, and the inexorable impact they will have on transforming information management for the enterprise.”

This is in line with the event’s theme of intelligent information management. “We look at Global Directions as an educational conference,” explained Tim Palmer, VP of worldwide marketing for Kodak DI. “We want to help advance the thinking of the whole industry around understanding information and taking friction and cost out of business processes.”

The other opening day keynotes reflect this broad focus that expands well beyond the traditional areas of business for Kodak DI. In additional to Kurzweil, high level executives from IBM, Google, Salesforce.com, and Microsoft will take the dais to discuss topics like big data and analytics, smarter enterprise search, the death of the desktop, and the future of business collaboration. There will also be a panel discussion moderated by Michael Hickins, editor, Wall Street Journal/CIO Journal, that will pull together multiple keynote speakers, including Kurzweil.

“We are taking a very broad view of where Kodak DI intersects with traditional business and new business going forward. We are looking to have our brand and division associated with end users, service providers, manufactures, resellers, etc., as they think about what they need to do to go to market in the future.

“If you consider the concept of information workflow, traditionally capture for us has meant scanning paper documents. But, we realize that information is coming from more and more sources and the growth of digital information as input is increasing exponentially. In the future, we need to help businesses capture information not only from paper, but from multiple other sources.

“‘Collecting’ is probably a better term than ‘capture,’ when you talk about taking this one large stream of information and getting it all to the right places, routing it, understanding it, semantically and contextually, and making sure you have the right associations and the right conclusions are being made.”

We asked Palmer, if Kodak’s Info Insight platform, which brings semantic and contextual understanding to the table, will be prominently featured at Global Directions. “It certainly fits on the far right of the information workflow model,” he said. “But, the event is focused on themes that are much wider than our current product offerings.”

A look at the agenda
After a Sunday evening reception, the full first day of Global Directions, Monday, Sept. 23, will be full of keynotes presented in a general session followed by an exhibitor showcase where dinner will be served. Tuesday and Wednesday will feature four tracks of breakout sessions, with no more than two or three sessions overlapping at a given time. Tuesday evening will feature a “Monuments by Moonlight” bus tour of downtown D.C.

Kodak is hoping for 300-400 attendees, or about double the number from last year’s inaugural Global Directions, which was held in Las Vegas [see DIR 9/28/12]. “We are looking to make a giant leap forward with this year’s event,” said Palmer. “We felt last year was pretty successful, and we definitely learned a lot, but this year we feel we are really offering a world class conference.

“We think we have a strong enough program to attract senior IT executives at end user organizations and business process owners. Primarily we are marketing to end users with the understanding that if they show up, systems integrators and resellers will certainly follow. We are marketing the event throughout the U.S., as well as internationally. We expect a decent turnout from Central and South America, and our team in Europe is looking to bring over some top end users customers—at least a double-digit number. Just because of logistics, we think it may a little tough to attract attendees from Asia-Pac.”


Kodak is also looking for sponsors and exhibitors. It is looking for a total surpassing 20. “Anyone that believes they can make a contribution to the future of intelligent information management is encouraged to exhibit at Global Directions,” said Palmer. “We expect plenty of end users to be on hand looking for those types of partners. We are taking a broad view of this conference as an educational opportunity, and we are looking for a similarly broad representation of exhibitors.

“The bottom line is that I think we are at the beginning of a very exciting period of time that will play out over the next 5, 10, and even 25 years. I sense another revolution in the way we are going to use information. With the presentations and networking at Global Directions, we hope to help attendees bridge the gap between this revolutionary vision and the practical first steps that need to be taken. We are hoping people are able to come away from our event energized and with at least a few things that they can put into action when they get back in the office on Thursday [Sept. 26].”

Plustek Introduces New Departmental Scanner

Today Plustek announced its new SmartOffice PS456U document scanner. It's a color duplex model rated at 80 ppm. Has hard card and longer document capabilities and a 100-page ADF. Software bundle includes ABBYY FineReader for OCR and PDF creation, as well as NewSoft Presto PageManager and BizCard and some other Plustek stuff for Asian OCR as well as one touch "button" scanning. There is also some solid image processing, including auto-thresholding and multi-image output. All this comes at a list price of $849.

It's available from authorized Plustek resellers and Value Added Distributors NewWave Technologies and Ingram Micro.

Cool logo for Mobile Capture App

Got to love Scanny,....logo for a mobile capture app that utilizes OCR to transform static text (from like books, for example) into text messages. It does other things too. Runs on iPhones. Free version here.

Has Lexmark Found Formula for Software Success?

Lexmark announced its second quarter 2013 earnings (click on Q2 2013 Earnings) yesterday, with both revenue and income exceeding analyst guidance.This is certainly good news for Lexmark and its shareholders, who saw their stock jump approximately 5% in yesterday's trading. However, the most interesting thing from our perspective was how much credit Perceptive Software is being given for the strong quarter.

Perceptive is a suite of ECM software products that Lexmark began acquiring back in 2010 when it bought Kansas City-based Perceptive Software. At the time, Perceptive was a traditional document imaging/workflow ISV with about $85 million in annual revenue. Since then, Lexmark has rolled up several other ECM-related software companies under the Perceptive umbrella, including advanced document capture specialist Brainware. In Lexmark's latest quarter, Perceptive generated approximately $60 million in revenue, including 34% growth. It also achieved "a modest operating profit for the quarter."

This last point is significant because in previous quarters, while Lexmark had reported some strong growth for Perceptive, it was losing several million dollars per quarter. Here's an explanation of the Perceptive turnaround from Paul Rooke, Chairman and CEO of Lexmark, as quoted from the Seeking Alpha transcript of today's investor call. "We delivered improved Perceptive Software profitability this quarter, up $10 million sequentially and up $4 million year-to-year, driven by two factors. First, we delivered record Perceptive Software revenue, growing more than expected, driven by record licensing revenues as we closed several large enterprise customer licensing deals during the quarter. Second, this increased licensing revenue contributed to a larger gross profit margin increase than expected.

"We also stated last quarter that we were taking additional actions to further reduce Perceptive Software's cost and expense growth to improve profitability without negatively impacting revenue growth.We started to execute that in the second quarter, and we'll begin to see the benefits of these actions starting in the second half. Going forward, we expect to continue driving double-digit software revenue growth and remain committed to delivering a positive software operating margin in 2013."

That's encouraging sign number one for Perceptive.

The second positive sign are synergies that Rooke discussed, which are being developed between Lexmark's Imaging Solutions/hardware business unit and Perceptive. From the Seeking Alpha transcript: "As proof of these synergies, we're beginning to win software solution deals in ISS accounts across a range of industry segments. In fact, over the last two quarters, we've won over 20 new capture, content and process software deals across a range of ISS banking, retail, manufacturing, government and healthcare accounts, and our sales funnel continues to strengthen. We're also beginning to see the reverse happen as well, where ISS is capturing MPS deals in Perceptive Software healthcare accounts."

Basically, this was always the vision - that ISS' large global presence would be able to turn what was essentially a North American SMB-focused ISV like Perceptive, which strengths in a few vertical markets, into a worldwide, cross-industry ECM power. What's neat is that if the Perceptive success continues, the Lexmark blueprint could provide a plan that will be copied (no pub intended) by other printing hardware vendors - all of whom have at least been dipping their toes in the water regarding an increased software focus. If Lexmark can jump all in and succeed (it really has invested a ton of money and resources in Perceptive - and made more of a commitment to software than any of the other hardware vendors), perhaps the other vendors will follow.

What will this mean? It could mean acquisition/buying sprees by hardware print vendors of ECM and capture ISVs. Hyland, DocuWare, Open Text, Kofax? Could they all and more be swept off the table by hungry hardware vendors in the next couple years? If Lexmark's Perceptive plan continues to pay dividends (and admittedly, one quarter does not a successful business make, but Rooke is projecting the success to continue), then why wouldn't the other hardware vendors follow suit?

One more thing, I thought was interested that came out of the Rooke's call with financial analysts. I thought he did a very good job expressing exactly that the big vision is for a combined print/MFP/ECM conglomerate like Lexmark is evolving into. Here's a quote from the Seeking Alpha transcript:

"Lexmark is rapidly moving its value proposition from a provider of only printing solutions, a partial response to the unstructured information challenge that all of our customers' face, to a provider of unstructured information solutions, a more holistic response to this challenge, encompassing: output management, to optimize paper output, a big part of the unstructured information challenge for the time and place it's needed; content management, to make unstructured content, both paper and digital, available at the time and place it's needed; and process management, to automate and integrate those manual, often paper-based disconnected process challenges to improve workflow efficiency."  - I think that makes a lot of sense and does a good job explaining the synergies, from a technology and marketing standpoint, between print and ECM technologies.