Surprise! An update

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

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

Best Regards,

Ralph.

Al Shugart

I'm sure you all saw this last month, but here's a good brief story on the life and times of Al Shugart. I'll always remember Al because he got fired from Seagate and formed his own investment company about the same time we were launching a newsletter called Mass Storage News. And Al developed a close relationship with our upstart editor, Dr. Mike Downing and would always make himself available to in depth conversations on the storage industry. Al was truly one of a kind and an IT pioneer.

McMahan at Kodak

Hey, it's been awhile since I've been on the blog. Been busy with a few things like upgrading our home page, adding a some new content and just doing a better overall job organizing it. We've been also cleaning some administrative house on this end. Hoping for a big 2007. Hope you are too.

Couple of significant personnel announcments in the industry
Kodak has apparently hired AIIM Chair Don McMahan to head its North American scanner and service sales. Official announcment doesn't appear to be out yet, but the internal breifing was done yesterday. McMahan spend several years as the VP of sales and marketing at Kodak rival FCPA (Fujitsu Computer Products of America) before a sudden departure in 2005. He quickly resurfaced at Visioneer where he spent just over a year and built a strong VAR channel before leaving in late 2006.

Kodak would seem a good fit for McMahan's skill set - as historically he has focused on what Kodak refers to as the "distributed" part of the market -FCPA and Visioneer being strong players in the fast growing workgroup of sub-$2,000 end of the market. Despite some strong products in the workgroup space, Kodak has mainly struggled to gain significant market share - and McMahan could be the tonic to break that slump. We're looking forward to catching up with McMahan and the Kodak brass at the annual Breakaway event scheduled two weeks from now in Nashville...between now and then we'll be traveling to St. Petersburg for Visioneer's annual partner event, which ironically was started by McMahan last year.

Also, some cool stuff at Iron Mountain http://biz.yahoo.com/prnews/070111/clth024.html?.v=88. They made their Digital guy a president, so that shows you somewhat where their focus is going.

Finally, did you see that Kodak sold its Health Imaging business?

SOA wave

We recently posted a new section on our Web site, focusing on some of the SOA initiatives now so prevelant in the ECM industry. We recently posted white papers from both Kofax and Captiva that discuss each company's capture-based SOA strategy. Some interesting reading.

Blodgett Named ACS CEO

Looks like data entry software pioneer Lynn Blodgett is in as CEO of ACS.

New Discovery Procedures

Dr Johannes Scholtes, president of document search and retrieval specialist ZyLAB, sent us a link to this article yesterday. It's written by Kevin Roden of Iron Mountain. It covers a lot of the issues we covered back in January when we spoke with Information Nation Warrior author Randy Kahn, but it serves as a good reminder that these new discovery procedures, that first the first time explicitly take into account electronic information, are on the way.

Ralph

SAP ECM

Did I miss something here?

This is from a recent eWeek article on the Oralce/Stellent deal: "Oracle, on this front, is playing a bit of a catch-up game. SAP has had an ECM suite for some time." What suite is that?

Sue Clarke, a senior analyst with the Butler Group, of Butler Direct, based in Hull, England, seems to validate the existance of an SAP ECM suite: "For years SAP has benefited from the lack of ECM functionality from Oracle as it has its own capabilities," Clarke says in the article.

However, she goes on to say she believes the Stellent buy is just one more merger amongst others on the horizon—and that SAP needs to act accordingly to keep up. "In view of the fact that it is unlikely that any of the independent pure-play ECM vendors will survive intact much further into the future … if SAP wishes to regain the initiative over Oracle it needs to become a major ECM player, which can only be achieved through acquisition."

Oh. Does that mean Open Text or may Seperion?

Ralph

Parascript Mitek

The proxy statement has been posted online. In 2005, the combined company had some $30.4 million in revenue ($24 million of which can be attributed to Parascript's operations) with an operating income of $5.6 million, which was negated by $11.5 million in interest expense. The deal is supposed to close sometime early next year. From the best we can tell, the deal values the combined company at somewhere north of $140 million. This is based on investor Plainfield OffShore Holdings receiving 23% of the company in exchange a $35 million investment in 21.9 million shares of Mitek common stock at a conversion price of $1.60 per shares. Of course, Plainfield also get $55 million in senior secured debt in the terms of the deal, so while that number of shares may have a $140 million valuation to Plainfeld, it probably does not truly relfect the open market valuation of the combined company, which will be known as Parascript. Does that make sense?

Ralph

PaperClip

So, it appears PaperClip is selling out to a company that distributes nutritional supplements in China. I'll need to follow-up on this one, but this could be yet another sign of the growing interesting of document management technology in the emerging Chinese market. But then again... well, we'll see.

Voting Machines vs. OCR/OMR

Yet another in the litany of events that make me think our industry could have come up with a better solution for voting. Personally, I was a big fan of the VoteFiler system introduced a year and a half ago by Comfidex, which is a spin off from document imaging super systems specialist R2K, but haven't heard that it's gained much traction since its initial introduction. I guess their in a very tough market controlled by politicos - but when all is said and done, paper ballots a much cleaner than touchscreens.

Office 2007 set for manufacturing

It seems the much anticipated Office 2007 suite is one step closer to becoming a reality. From our perspective, the fun thing about Office 2007 is that, when coupled with SharePoint, for the first time, you can achieve some real document management functionality right out of the box with Microsoft products. Of course, it won't get you very far, but it's enough to get users started and introduced to the concept of ECM, which is where Microsoft's partners can take over.

Authentidate Secure e-mail

We always thought this was a potentially great service offered by this German-U.S. conglomorate that also plays in the traditional document imaging industry with its docStar product line, where former Captiva VP Blaine Owens now works. Authentidate itself has some technology similar to the Fujitsu stuff we highlighted last issue-to ensure that a scanned or other type of electronic document is not altered after a specified date and time. Authentidate also has this stuff, which they have tried unsuccessfully for the most part to market through the USPS. Any ideas on why this doesn't catch on? The ROI seems like a slam dunk.

Stellent Oracle

New Dicom VP of marketing Andrew Pery looks like quite a prophet after he made this statement a couple weeks ago at a Kofax Transform event in Prague. "As players like Microsoft and Oracle are introducing ‘just-good-enough’ content services, pure-play ECM vendors are being forced to consolidate. In the next six months, I expect to see consolidation involving the rest of the mid-tier vendors like Hyland, Interwoven, Vignette, Stellent, etc."

Well, Stellent was the first to go.Who's next? One thing we can say is that, based on the recent FileNet and Stellent deals, the going price for a profitable ECM company seems to be 2.5 times revenue - when you subtract out cash in the bank. FileNet was on track for some $450 million in revenue, had an equal amount in the bank, and was acquired for $1.6 billion. $1.2 billion divided by $450 is 2.5. Stellent, which was probably on track for $140-150 million in annual revenue, had $70 million in the bank, and got $440 million. $370 million divided by $150 rounds to 2.5. Of course, a few years back, EMC acquired Documentum for some 4 times revenue - but that was an all-stock transaction. The more recent Captiva acquisition worked out to somewhere just north of 2.5 times annual revenue.

We did think it was a bit curious that of all the ECM players out there, Oracle opted for Stellent. Now, we've always thought Stellent had good technology, and they have some interesting stuff with their whole Outside In universal viewer, but we thought Oralce would have purchased someone with a larger footprint. Open Text seemed like the most logical choice, especially after Oracle and Open Text announced a strengthened partnership around Oracle's Content and Records Database products released this summer. For whatever reason, that deal didn't take place. Of course, Oralce is rumored to have also turned down FileNet three times, before IBM took them off the market. It's also probably not coincidental that the Stellent deal ocurred only shortly after Open Text closed its acquisition of Hummingbird. That deal may have been the straw the broke the camel's back when it came to Oralce's intent to acquire Open Text. And then there was long-time Oracle partner Documentum, but that ship sailed a few years back, of course. But Stellent? Interwoven, admittedly, would have surprised us less... but now here's the document imaging pitch... One thing Stellent had going for it over Interwoven is a strong document imaging/BPM product line that it picked up from Optika. Maybe, this had nothing to do with it, but I'd stand the Optika imaging technology up against anything Open Text has, probably the old Gauss/Magellen stuff is the closest match, and Oracle sure got it a lot cheaper than if they'd paid $1 billion for Open Text. The Optika imaging stuff, in fact, is the only real current connection we see between these two companies, as Optika has specialized in recent years in J.D. Edwards integration.

Anyways, congrats on the folks at Stellent, on a solid step, hopefully, in the evolution of their business, and we look forward to seeing who is going to hop on the consolidation train next.

Ralph

DITA

Here's a story regarding the DITA (Darwin Information Typing Architecture) standard that we were first introduced to at Harvey Spencer Associates recent conference. At the event, Peter Roden, OASIS diretor of technology development, expressed his opinion that all XML-based content management systems wouold be leveraging DITA. It seems to have something to do with enabling content reuse, which is a great and necessary idea for the evolution of ECM to continue.

Electronic postmark

This electronic postmark stuff is pretty cool. It's like certified e-mail. I did a briefing with Authentidate on it a few years ago. They also own a document imaging company, as well as some technology for timestamping document images. Unforunately, I've also read that their stuff with the USPS, for whatever reason, hasn't taken off. Maybe it has to do with the USPS marketing program for it, as I haven't really seen too much advertisting for it. Apparently the USPS is looking at alternative providers and Authentidate is applauding the decision.

ARMA

Back stateside after a week in Prague for Kofax Transform '06 - the European version. Well attended event. I think there were close to 400 resellers (individuals, not companies, but still a lot of companies) represented. Interesting thing about the European market - it's still doesn't seem to be one market. Although the Euro seems pretty well accepted, language barriers, at least, still exist. Even though everyone does speak some kind of common language, it's still cumbersome to converse in other than a native tongue (for many people). Dicom CEO Rob Klatell explained that this type of environment mean it's advantageous for Dicom to maintain its distribution infrastructure in Europe.

Unfortunately, I'm not attending ARMA this week, although that's typically a fairly small show. There was a lot of talk a month ago about AIIM and ARMA getting together, but apparently it all fell through, and now ARMA has recently announced an alliance with SNIA - a storage newtorking organization. Sorry, but I think AIIM would have made more sense.

Oh, yes, wanted to link you to an interesting Iron Mountain announcement from ARMA. Obviously, Iron Mountain holds quite a bit of sway in that world. I like their direction because they aren't afraid to invest in electronic infrastructure, while at the same time, they aren't quick to dismiss their paper roots as archaic. They seem to understand the balance that exists between paper and electronic documents - something we try very hard to be concious of here at DIR.

Finally, I apologize for the lack of recent posts on the Web site. We were really getting on a roll there, but have run into some technical difficulties - this is the reason for the ugly code line that may be displaying across the top of your browser. I've been trying to get this fixed and promise to get us back up to speed there shortly.

thanks.

Ralph

Questex InfoTrends

It appears that Questex and InfoTrends are merging. Questex is the Advanstar spin-off that runs AIIM/On Demand as well as some other IT-centric trade shows. InfoTrends, we best know as the compilers of information on document scanner trends and sales. InfoTrends actually was acquired by an organization called CAPVentures a couple years ago and CAPVentures founder Charlie Pesko started the On Demand show - so there is some definite synergy...

E-mail mismanagement- again

Now, we recognize there is a major problem with mismanagment of e-mail, and even IM, messages as records, but is it really appropriate to cite the Mark Foley case as evidence of this, as AIIM does in this release? I mean, after all, if you are trying to promote better e-mail management, aren't you kind of saying that ECM could have helped Foley hide is tracks? And do we really want our technology associated with that. Imagine the commerical you could do with John Mark Karr or someone. "If it wasn't for ECM technology, I'd be doing time with Jack Abranoff...

That all said, AIIM does provide some telling statistics even in its preview of the study results.

AIIM ARMA talks

It seems AIIM/ARMA had some merger talks that didn't bear any fruit and now AIIM is letting it's members know this a couple weeks before the ARMA show. Here's Alan Pelz-Sharpe's view on it. He's a pretty good ECM analyst.

Arobat 8 review

Here's a link to a pretty useful review of Adobe Acrobat 8. We wrote about the recently announced product in our Sept. 22 issue. Like us, this reviewer is impressed with the ability to combine multiple document types in a single PDF wrapper, while maintaining the original file format. That is a very useful document management feature. And of course, she also cites the upgraded collaboration funcationality. It's this kind of stuff that's going to keep Microsoft's XPS on the backburner for awhile, in terms of adoption.

Ralph