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.

eDiscovery Dispute Highlights ABBYY-Nuance OCR Patent Suit

This is kind of ironic - and thanks to our friends at Harvey Spencer Associates for connecting us with the link to this article, but it seems ABBYY has been ordered to pay Nuance $135,000 in a dispute over document discovery. Yes, it seems the two OCR ISVs are arguing over the exchange of documents.

U.S. District Judge Jeffrey White, whose office is in San Francisco where Nuance's lawsuit against ABBYY and Lexmark (Lexmark licenses ABBYY technology) over OCR patent infringement is being heard, ordered "Abbyy to pay Nuance $135,000 in sanctions for taking so much time handing over requested documents that the court reopened discovery and Nuance retook depositions that had already been completed."

Also from the article "ABBYY contended that it disclosed the information late because it was tied up responding to 'Nuance's multiple other discovery requests seeking massive amounts of irrelevant information,' but Judge White didn't buy that excuse. 'The court does not find the delay in production justified considering the scope of this case and the sheer amount of lawyering and the parties' investment of time and effort,' he said."

Alright, so it appears the game is on. This case has been in court since 2008, but it seems some headway is finally being made. According to the article, "All the parties were ordered to attend a settlement conference to be held no later than July 5."

If you remember, one of the predictions we made in DIR to start the year was "Some major market developments driven by ongoing patent lawsuits." Stay tuned.