Top Image Lands U.S. Invoices Deal

Top Image Systems recently landed an invoice processing deal with CNH America LLC, "a leading manufacturer of agricultural and construction equipment and a majority-owned subsidiary of Fiat Industrial S.p.A." The implementation involves some 1.5 million total invoices, including over a half-million paper documents and more than 1 million EDI transactions. The implementation is being integrated with an SAP system.

According to the press release, TIS' "eFLOW EDI Visualization functionality enables CNH to identify errors in EDIs before they are processed."

This is a significant deal for TIS for a couple reasons:
1. It's a fairly large U.S. deal, and the U.S. has not recently been a very strong market for TIS. That said, Fiat is based in Italy and I believe the home office may even being using TIS technology. I actually remember having a conversation with someone from CNH at the 2010 TAWPI/IAPP Fusion event, and they were considering TIS at the time.
2. The SAP and EDI integration is interesting and builds on what we wrote in our last premium issue about capture software technology being used more and more often to handle electronic documents.

Kofax Acquires BPM ISV

Kofax has finally pulled the trigger on its much anticipated acquisition of a BPM software provider. However, instead of being the SharePoint-focused ISV many of us thought it would be, it as Northern Ireland-based Singularity. Singularity, which does its business primarily in the U.K. reportedly did  $16 million in revenue for its fiscal year ended Sept. 30, with an adjusted EBITA of $1 million.

The reported acquisition price was a maximum of $48.1 million, with $30.3 million being paid up front. In a conference call with analysts, Kofax CEO Reynolds Bish, said his company should end up paying approximately 2.9 times annual revenue for Singularity, which he said compares with the multiples that Open Text paid Metastorm and Global 360 and Lexmark paid for Pallas Athena.

Bish discussed four main drivers behind the acquisition:
1.  the opportunity to extend the offerings of Kofax's global sales force--expanding the geographical markets for Singularity.
2. the natural integration of capture and BPM for automating processes,
3. the lower total cost of ownership for customers working with a single platform for both technologies,
4. and the tight integration that can be achieved going forward.

Basically, as more ECM vendors are getting deeper into capture with their own products, either through acquisitions, development or both, capture ISVs like Kofax are being pushed to expand into ECM - and with BPM, in my opinion, the highest value area in an ECM suite (along with capture of course), it makes perfect sense for Kofax to acquire a BPM player.

There will certainly be some challenges related to integration, not necessarily of technology, but of sales and marketing - but overcoming these challenges should help Kofax continue to grow and be profitable in the future. Much more on this in our upcoming premium issues.

IBML Hires Software Veteran as New CMO

Dan Lucarini, who was most recently senior director of business development of Kofax, has been named to the new position of chief marketing officer for IBML. When I first met Lucarini he was a VP at IMR- which developed the popular Alchemy mid-market imaging software package. Lucarini then left to help start-up an e-discovery company that was eventually acquired by IMR, which was eventually acquired by Captaris. Lurarini left after Captaris was acquired by Open Text before landing with Kofax. He also been a very active member of AIIM over the years and served on the Board of Directors.

He seems like a solid fit at IBML, as the high-end scanner manufacturer continues to evolve its business model to keep up with changes in the market. Said IBML President and CEO Derrick Murphy in a press release, ""Dan’s track record of developing and executing successful product plans and building strong industry alliances will provide key leadership as we expand our product offerings."

.

Kofax Invests in Mobile App Specialist

This morning Kofax announced it had made a $500,000 investment in MobiFlex, which develops the ViziApps set of tools for mobile application development. Kofax has also signed an OEM, whereby, "MobiFlex has granted Kofax the ability to ensure its exclusive global right to this technology for document centric mobile capture applications."

According to the press release, "The OEM agreement provides Kofax with the basic software tools and infrastructure needed to develop, market and deploy mobile capture applications for customers wishing to utilize smartphones and tablet computers as 'point of origination' gateways into their Kofax solutions." Said Kofax CEO Reynolds Bish, " Our customers have expressed a great deal of interest in these capabilities for some time now and we’re excited about being able to meet this demand with the release our first mobile capture software products during the first calendar quarter of 2012.”

ViziApps has apparently been used for both Android and iOS apps.

Coincidentally (or maybe not so coincidentally), MobiFlex was founded by Michael Kuperstein, who also apparently founded Symbus, and early automated data capture pioneer utilizing OCR in the document imaging industry. Symbus was acquired by Bish's TextWare back in the the mid-1990s - before I even got into this industry. They came together to become FormWare, which eventually became Captiva.

Brainware Lands Big A/P Deal

Intelligent data recognition (IDR) software specialist Brainware has landed another large deal in the accounts payable space. According to a press release that came out today, the Ashburn, VA-based ISV has implemented a system for a Fortune 50 company that is also one of Fortune's "15 Most Admired Companies." You can imagine some of the names on that list. Oh yeah, and the customer has apparently integrated Brainware's software "as part of the largest single instance of SAP in the world."

Pretty heady stuff. According to the press release, "This project was fully operational in less than 100 days of contracting with Brainware for invoice processing automation, and resulted in an immediate redeployment of 80% of the full-time manual data entry personnel previously being used to process this company’s 6 million invoices per year."

Brainware also recently issued a press release in which it stated, "Brainware is pleased that in the last year it has closed 15 transactions that exceed $750,000, of which 10 exceed $1 million."

Ephesoft Announces Large Deal

A couple months ago when we profiled the Ephesoft in our premium newsletter, CEO Don Field had told us that the open source intelligent data capture (IDC) start-up had recently bid-on and won a large deal in which it competed against several leading established capture companies. Not sure if this is the result of that, but, it nonetheless sounds like an impressive deal, involving 450 million pages of mortgage files for a BPO.

Apparently, this BPO is putting a big ephasis on Linux and open source which gave Ephesoft the advantage. From the press release, "The current Ephesoft system uses Linux-based web servers and Windows-based Application Servers," said Ike Kavas, founder and CTO of Ephesoft. "However, they are planning to have a 100% Linux platform to support their business. Since Ephesoft is the only platform today that can deploy an IDC system running on Linux and work with other open source systems such as Ubuntu and RedHat, partnering with Ephesoft was the logical choice. "


Also from the press release, "The solution will process over 450 million pages of mortgage files by automatically classifying and separating a wide variety of document types and then extracting key metadata for further processing. Searchable PDFs will be created in a tabbed format and deposited into their IBM Content Manager ECM."

Canon Singapore Integrates Nuance's Scan-to-Cloud

Nuance has announced that Canon Singapore will be making Nuance's eCopy Scan-To-Cloud technology available as a standard feature on its ImageRunner Advance MFPs. The technology takes advantage of Nuance's OmniPage cloud service to apply OCR to document captured with the MFPs. The documents can currently be captured to three destinations: Evernonte, GoogleDocs, and/or SalesForce.com. The application interface is embedded in the touchscreen of the MFP.

According to a Nuance spokesperson, "Canon Singapore is the first MFP distribution entity to offer access to the eCopy Scan-to-Cloud service, and the only one at the moment. Nuance is making this service available to other distribution partners, and they expect that additional partners will begin to offer eCopy Scan-to-Cloud over the coming year."

Crowley Acquires Wicks and Wilson

Imaging specialist Crowley Company has helped consolidate the microfilm scanning market with the acquisition of Wicks and Wilson. Crowley, which is based in Frederick, MD, got into the microfilm scanner manufacturing business with its 2003 acquisition of industry pioneer Meckel. As a result ,Crowley and U.K.-based Wicks and Wilson have been competitors for several years in the market for devices for digitizing microfilm, nmicrofiche, and aperture cards.

"This purchase will allow us to broaden our microform offering, strengthen our international presence and ensure that we continue to be at the forefront of microform capture technology," state Chris Crowley, president of Crowley Company, in a press release.

Crowley plans to maintain and the Wicks and Wilson brand. In addition to selling hardware, Crowley operates a service bureau that specializes in document archiving projects. "Having offices on two continents will allow us to take the next step in our expansion of services and technical support by allowing us to create production efficiencies and to solidify an international network of partners," added Chris Crowley.

Top Image Turns in Solid Numbers

Well, in the wake of Kofax's recent quarterly earnings report, we've been eagerly awaiting Top Image Systems (TIS) third-quarter results, which were released today. That's because TIS sells primarily in Eurpoe, which is where Kofax cited weakness that caused its quarterly numbers to fall short. Granted, TIS is probably one-ninth the size of Kofax, but still, its strong third-quarter number indicate TIS is not seeing any weakness in EMEA.

For the quarter, TIS reported a 32% increase in revenue compared to the previous year's Q3 and a 64% increase in operating income. This is pretty much in-line with the increases TIS reported in the first two quarters of the year. TIS CEO Ido Schechter gave no indication that the EMEA market was weakening and increased 2011 revenue guidance from $26 million - $27 million to $27.5 - $28.5 million. “This quarter we saw continued progress in our new growth geographies such as the UK and Asia Pacific, in addition to our traditional stronghold in Europe," said Schechter in a press release announcing the results.

So, there is certainly debate as to whether there is any significant weakness in Europe, especially to the level where it would force Kofax to lay off 60 people. There are certainly a number of people who view the weakness as a Kofax problem moreso than a market problem.

Michael Ziegler, a former managing director of Kofax EMEA who is currently working as a consultant and has co-founded the Docville group, acknowledged that whereas there may be some weakness in southern Europe due to macroeconomic conditions, the rest of the European market, including Turkey, seems very strong to him for document capture technologies. Ziegler blames Kofax's mismanagement of its formidable European channel for the company's current weakness in EMEA and said that ISVs like TIS and others have had success recently in recruiting Kofax resellers.

We'll have more on this discussion in our upcoming premium issue.

Adobe crashes Flash for Mobile

According to this article from Wired magazine, Adobe will stop development its Flash Player plug-in for mobile browsers, fulfilling a prediction made by the late Apple CEO Steve Jobs.  Apparently Adobe sent a letter to its partners yesterday telling them it will cease development of its Flash platform for mobile browsers. According to the Wired article, the e-mail says, "Our future work with Flash on mobile devices will be focused on enabling Flash developers to package native apps with Adobe AIR for all the major app stores."

According to the article, "The move indicates a massive backpedaling on Adobe’s part, a company who championed its Flash platform in the face of years of naysaying about its use on mobile devices. Despite Flash’s near ubiquity across desktop PCs, many in the greater computing industry, including, famously, Apple Computer, have denounced the platform as fundamentally unstable on mobile browsers, and an intense battery drain. In effect, Flash’s drawbacks outweigh the benefits on mobile devices."

Apple, of course, has refused to support Flash in its iOS for mobile devices, which created a chink in the armor of the previously ubiquitous multi-media technology. Personally, I have not had much luck utilizing Flash plug-ins on my Android device either.

So, why is this relevant to our market? It's probably worth noting again that Adeptol, the ISV recently acquired by AccuSoft Pegasus, originally developed its viewer on a Flash platform. Adeptol has recently expanded to embrace the HTML 5 platform, which also seems to be part of Adobe's strategy.

Weak EMEA Market Hurts Kofax

Kofax announced its fiscal 2012 Q1 results early this morning, and they were not particularly strong, with weakness in EMEA being blamed as the main culprit. For the three months ended Sept. 30, Kofax total revenues were $58.5 million, which represented 7% growth over 2011 Q1 revenue of $54.4 million. However, in terms of "organic constant currency" - which we assume means accounting for currency fluctuations and acquisitions, Kofax reported only 1% growth.

The growth was driven primarily by increased revenue from maintenance contracts, which was up 18%, while software license sales were down 4% - including a 7% drop in applications software licenses, which was offset slightly by a 7% increase in revenue from OEM/POS software license sales (which includes VRS and Kofax Express.)

"The first quarter of fiscal year 2012 yielded mixed results," said Kofax CEO Reynolds Bish in a press release. "Software license revenues in the Americas and Asia Pacific regions as well as our OEM / POS business, and maintenance and professional services revenues grew in line with our September 2011 expectations. The EMEA region conversely experienced a decline in software license revenues."


The current financial turmoil in Europe is no secret, and Kofax is taking steps to account for continued potential weakness in this geography.  “We are concerned about the continuing uncertainty and deteriorating economic environment throughout much of EMEA and the potential effect this may have on other markets, and we expect these challenges to continue or worsen until more confidence and stability return on a global basis," Bish said. "While our pipeline of opportunities continues to grow and management and the Board remain confident in our business, we are nonetheless lowering our expectations for fiscal year 2012 to low single-digit total revenue growth in U.S. dollars on a constant currency basis. However, in order to maintain the absolute EBITA reported in fiscal year 2011 during fiscal year 2012, we are restructuring our EMEA sales organization and also reducing operating expenses in other functions to a lower level while preserving our new product development initiatives and a strong balance sheet.”


Sounds like a plan.

Kofax competitor ReadSoft recently reported its third-quarter results  (same time period) as well. For the quarter, ReadSoft reported a 24% growth in software license sales in terms of local currencies and 15% growth in overall revenue. This was led by exceptionally strong numbers in its "U.S. and rest of the world" revenue (includes Australia, Brazil, and Malaysia), which showed 31% growth. Nordic markets and Benelux were also reported as strong for ReadSoft, which indicates, ReadSoft must have seen some weakness in the Germanic and other EMEA markets as well.

While Readsoft reported Nordic region growth of 10-15%, its sales "other European markets" was essentially flat.

Databank Acquires ECM Software VAR

Databank IMX, which is best know throughout our industry as a conversion services specialist, recently expanded on its solutions strategy with the acquisition of Information Access Systems, (that's a link to the investor's press release, here's the Databank release) a Florida based reseller of Hyland OnBase Solutions. The acquisition complements Databank's current software practice, which also includes Hyland software.

The acquisition was Databank's first since securing investment from Svoboda Capital Partners, which has brought on Fred Zaeske as the new CEO. I recently caught up with Fred and will have a more complete story on the acquisition and Databank's strategy in an upcoming premium issue of the Document Imaging Report. Databank's top brass, as well as the management from Information Access Systems all seem to be onboard as the company moves forward.

AccuSoft Pegasus Acquires Viewing ISV

Not sure how we missed this when it was announced, but Tampa-based imaging tools develop AccuSoft Pegasus has acquired Adeptol, which specializes in browser-based viewing technology. Adeptol,which is based in Santa Clara, CA, has some intriguing technology. It was being offered as an alternative to traditional viewing tools. Adeptol advertised its viewer's ability to work with more than 300 file types, and there was also a SaaS version available. See the feature starting on page 3 of our 2/5/10 edition.

Lexmark Announces Third-Quarter Results for Perceptive

For the quarter Perceptive saw 15% year-over-year growth to reach $23 million in sales. This was, however, "sightly below expectations," said Lexmark EVP and CFO John Gamble, on a conference call today discussing Lexmark's third-quarter results. (Here's s the transcript.)  Apparently, Perceptive's revenue did grow fast enough to completely offset Lexmark's increasing investments in the Perceptive business. This contributed to a non-GAAP operating loss of $3 million for Perceptive for the quarter.

"We are investing in Perceptive to drive expansion of international sales, accelerate the development roadmap and increase the industry solutions Perceptive offers to both Perceptive and Lexmark customers, including MPS customers," said Gamble. "To achieve this, we have increased both development and marketing and sales expense of head of revenue growth."

That said, Lexmark has hardly soured on the Perceptive acquisition. "We remain pleased with Perceptive's progress overall and believe the capabilities we are adding drive not only growth in Perceptive but also in our imaging business," said Gamble.

Those capabilities include the addition of the products of Dutch ISV Pallas Athena to the Perceptive portfolio, in a $50 million acquisition that was announced last week. Lexmark described Pallas Athena as "a leading provider of BPM, DOM (document output management) and process mining software."

According to Lexmark CEO Paul Rook on the conference call, "The combination of Lexmark and Perceptive and now Pallas Athena, creates a unique capability in a market that further strengthens and differentiates Lexmark's core industry focused workflow solutions and managed print services proposition to our customers. It expands our market for revenue growth and now provides cross-selling opportunities between imaging products, fleet management, content management, business process management and document output management solutions."

FCPA, ISV Parter to Standardize Integration of Images with EMR

Enterprise content management (ECM) technology has always advertised the ability to manage unstructured information. It turns out that "Clinicians in the U.S. create more than a billion clinical notes each year. More than 60% of the full patient narrative resides in these unstructured documents and outside of discreet data elements within an Electronic Medical Record (EMR) database. These notes are often used as the primary source of information for reimbursement and proof of service."

This is according to a recent press release issued by Fujitsu Computer Products of America (FCPA) announcing its partnership with Osmosyz, which seems to be a capture and workflow integrator specializing in EMR. FCPA has integrated its network scanner with Osmosyz's ChartMD software to create image files that meet the "Unstructured Document" standard "based on the HL7 Clinical Document Architecture (CDA)." The standard is being promoted by the Office of the National Coordinator for Health Information Technology (ONC) and the Health Story Project, a collaborative of healthcare vendors, providers and associations.

"Today, based upon the unstructured document standard, Fujitsu is launching the first and only solution of its kind designed to support Meaningful Use Stage 1 requirements and meet anticipated requirements for Stage 2, as defined in the Health Information Technology for Economic and Clinical Health (HITECH) Act....The Inofile interface on the Fujitsu network scanners allow hospitals and clinics to scan a batch of documents, perform a quality assurance check of the documents on the touch screen, index the documents with a few simple keystrokes, and upload the documents to a content repository or EHR without having to be tied to a workstation."

Also from the press release, "“Fujitsu and Osmosyz worked hard through Health Story to create a standard for managing unstructured documents within health information systems, and we couldn’t be happier about the current traction the standard is getting and the forth-coming recognition by the federal government for Meaningful Use,” said Victor Kan, executive vice president and chief operating officer, Fujitsu Computer Products of America, Inc. “The Fujitsu network scanners with Inofile are the first and only solution available today that use standards-based capture to create smart documents that can be easily integrated into any EMR system and support national goals for healthcare information exchange.”

Fujitsu Releases Wireless Scan-to-Mobile App

Fujitsu has announced some new destinations are available for its ScanSnap line of mobile and SOHO scanners. Fujitsu has also introduced an iPad and iPhone app for the ScanSnap. The ScanSnap Manager driver now has the ability to connect with Salesforce Chatter and SugarSync, in addition to GoogleDocs and Evernote, which is was able to connect with previously. In addition the new iPhone and iPad apps enable users to transfer images wirelessly from the device driving the ScanSnap (a PC or laptop) to mobile computers.

Reveille Ugrades Support for IBM FileNet

Reveille Software, which we featured in our Oct. 7 premium issue, has announed a new version of its monitoring software of IBM FileNet. According to the press release, "The new Reveille Management Console for IBM FileNet is a packaged software solution that can proactively monitor IBM FileNet components, application processes, actual end-user transaction response times, and core metrics to ensure a comprehensive view into the health of a business-critical application. The solution also identifies problem conditions, sends multi-level notifications, and performs automated diagnostics and repairs."

Our feature on Reveille focused on how advanced monitoring software can significantly improve customer sastisfaction for ECM and high-volume capture applications.

ReadSoft Signs Deal with IBM Partner

ReadSoft has announced that its accounts payable solution for SAP is "being jointly marketed and delivered to IBM customers in conjunction with PreferredPartner, an IBM Premier Business Partner specializing in IBM software solutions and IT services." Based just north of Indianapolis, IN, PreferredPartner, specializes in delivering IBM solutions around IBM's Information Management (which includes content management), Tivoli, Lotus, Websphere, and Rational product lines.

From the press release, "We have won major deals with large IBM customers lately, which demonstrate the strength and success of our partnership with IBM to date," says Peter Hörwing, Senior Vice President, Sales and Marketing for ReadSoft. "With this agreement, we will reach even more IBM customers who can benefit from ReadSoft’s SAP-based accounts payable solutions together with IBM’s Smart Archiving Strategy."

NSi Lands $3.5 Million Deal

Notable Solutions Inc. (NSi) has landed a $3.5 million deal with the Department of Defense (DoD) for document capture software releated to the DoD's Healthcare Artifact Image Management System (HAIMS). HAIMS is basically an electronic medical records applications designed to be utilized worldwide by military healthcare providers as well as the Veterans Administration.

NSi, an Rockville, MD-based ISV, which specializes in MFP capture, is being included in the second phase of HAIMS implementation, which will involve rolling out document scanning capabilities to some 6,000 users worldwide. The software could eventually be rolled out to 60,000 users worldwide, which would mean additional revenue for NSi.

The software deal was secured by a government contractor who was working with NSi. More on this story in our upcoming premium edition of DIR.

Visioneer Announces Wireless Scanner

Ask and you shall receive might be the new motto of our blog. A week ago we wrote the following in our "Wireless Scanners on the Way" post: "My vision would be a wireless scanner or MFP that could scan an image to your smartphone or tablet, where you could preview it and then upload it to your ECM system."

Visioneer seems to have answered the call with its new Mobility Air Scanner. The Air is basically a new rev of the original Mobility which we featured earlier this year. But, while the original Mobility was only "compatible" with the Eye-Fi memory card, the new device is integrated with the Eye-Fi and ships with it, all of the same list price of $199. Not bad, considering the Eye-Fi 4 GB card, which ships with the Air lists for like $50.

Basically the Eye-Fi contains a wireless radio that enables it to transfer images from the Mobility Air onto computing devices with wireless radios like laptops, smartphones, and tablets. Its integration with the Mobility Air enables it to automatically perform this task with document images. It can also transfer the images to cloud sites like Evernote.

So, basically, you capture a document image with the Mobility Air, and it automatically shows up on your mobile computer or cloud app, without you ever have to attach a cord to anything.

More on this in our next premium issue.