Kofax Acqires Atalasoft

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

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

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

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

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

EMC Partners with Box

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

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

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

Autonomy Acquires Iron Mountain Digital Assets

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

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

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

Quest Buys RemoteScan

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

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

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

Nuance Buys Equitrac

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

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

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

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

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


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

DocuWare Reports Strong 2010

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

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

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

Canon Announces New Solutions-Focused Subsidiary

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

DocSolid Signs Distribution Agreement with Supplies Network

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

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

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

PBMS Partners With EMC Captiva

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

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

Imaging ISVs Report Strong Quarters

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

Kodak Introduces New SharePoint Tools

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

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

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

DocuLex Announces New Education Program

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

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

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

DocuWare Upgrades Web Client

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

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

Brainware Lands $4.1 Million Deal

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

Kofax Releases New Version of Express

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

Former Perceptive A/P Expert Joins Brainware

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

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

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

Closing of Sale of Kofax Distributor Delayed

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

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

Kodak Sells Micrographics Business

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

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

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

More in our next premium issue.

Document Image Management Market Study

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

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

Tidmarsh Joins Box.net

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

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