- NATIONAL HARBOR, MD—Lexmark Enterprise Software held the first event under its new name this week at the Gaylord National, just outside of Washington, DC. Close to 1,500 people, including more than 800 Lexmark customers, attended. Historically, the event, named Inspire, had been hosted by Perceptive Software, which, of course, was acquired by Lexmark in 2010, and then recently rebranded as Lexmark Enterprise Software [see DIR 4/10/15].
ReadSoft, which was acquired by Lexmark last year, also co-located its event, so this was easily the largest Inspire in its nine years of existence. Former U.S. Secretary of State General Colin Powell delivered a very engaging guest keynote touching on multiple topics including technology and leadership. Lexmark’s Enterprise Software leaders also spoke, discussing their vision for the future, as well as their product roadmap.
“When you combine Perceptive Software with ReadSoft and add in Kofax, it makes Lexmark the clear market leader in the management of unstructured information,” said Scott Coons, the president of Lexmark Enterprise Software. “We will have the broadest and deepest capture and content solutions in the market.”
It’s probably important to note that the acquisition of Kofax (for which Lexmark announced a $1B bid last month) has not closed. It is supposed to close some time this quarter, but there is still talk that one of Lexmark’s MPS competitors might try and top the bid.
A handful of top Kofax executives including CTO Anthony Macciola and CMO Grant Johnson were at Inspire. Lexmark executives sounded cautiously optimistic that the deal would close, but are by no means counting their chickens. Most of our discussions focused on the current product stack, which is fairly comprehensive already.
The most intriguing product related story was the continued evolution of Perceptive Evolution—the hybrid cloud platform that Perceptive announced at last year’s Inspire [see DIR 4/25/14]. Evolution basically consists of three parts: the interface, a layer of services, and connections to other applications. The interface has manifested itself in the Perceptive Experience, which features a cross-platform HTML 5-based architecture that is able to communicate with Evolution services.
Experience utilizes shells, which act as integration avenues for different types of devices. A Web shell, for example, should be able to run in any browser and connect to any Evolution service that a user has rights to. An iOS shell should offer the same functionality from Apple devices. “We’ve created these shells to avoid going down the path of having to create and maintain multiple apps and interfaces,” explained Brian Anderson, CTO of Lexmark Enterprise Software.
Evolution is still in its early stages and although some products have been released on the platform, they are not traditional ECM products. “We are not serving the traditional ECM market with our Evolution Platform today,” said Anderson. “We are currently looking to utilize Evolution to expand our market.”
One Evolution product previewed at Inspire was Workplace, which is a file, sync, and share system evolved from technology Lexmark picked up with its 2013 acquisition of German ECM ISV Saperion. Lexmark has also released some video management technology on the platform. Anderson indicated that the Perceptive ECM software, which is currently available as a hosted offering but not as a true-multi-tenancy cloud offering, is being ramped up to run on Evolution.
“We believe strongly that we need world-class capture, content, process, and search technology that can be run both on-premise and in the Evolution platform,” said Anderson. “The cloud offers multiple benefits for our customers. It really changes the model for how they can deploy and manage their software. They don’t have to worry about procuring hardware to run it on, for example. It also gets them into the cadence of rapid release cycles, where we can immediately give them the benefits of improvements that we make.
“We are starting to get quite a bit of interest from our customer base about moving to the cloud. We are even seeing it in industries like healthcare and government, which historically have lagged behind in many areas of technology adoption. I think people are realizing the benefits of the cloud. Over the next several months, you will start seeing more clearly how our path to ECM in the cloud will work.”
ECM as a service
At the event, I had the opportunity to see a presentation on the “The Evolution of Capture in Perceptive Content.” The presenters basically discussed how, through the Evolution platform, capture capabilities would be made available as services within Perceptive Content. One of those capabilities is scanning, a Web-based version of which is being developed utilizing EMC’s Captiva Cloud SDK.
Browser-based batch capture management was also demonstrated at Inspire—specifically for healthcare, but the plan is to roll out similar capabilities in other vertical markets. Vertical markets are key to Lexmark’s strategy—with its focus divided among seven different verticals, as well as cross-industry back-office solutions.
At Inspire, some vertically focused persona-based apps were shown, which leverage elements of Evolution and Experience to create specific nuggets of functionality. One was an approver app for A/P. “In an invoice process, certain users don’t need the full functionality—all they basically need are giant buttons that say ‘reject’ or ‘approve’ and enough information to make a decision,” said Anderson.
Another persona-based app was for student admissions. It enables a university employee to view transcripts, as well as connect to a student’s social media pages, and even view relevant videos. “We can create these persona-based apps for almost any process,” said Anderson. “The idea is that with the Evolution architecture, it should take very little time to put one together.”
Standardizing cloud management
Evolution is a hybrid platform. This means that apps built on it, like approval for A/P, can work with an on-premise version of Perceptive Content as well as a cloud instance. That’s as long as the on-premise software is version 7, which was introduced last year, or higher. (Previous versions won’t work with the Experience interface.) To better enable Evolution to run as a true cloud deployment, Perceptive has developed a new cloud application management platform—OpenAperture.
Built on open source tools, OpenAperture can be thought of as a layer between cloud services like Azure and AWS and cloud applications like Evolution. “Every cloud implementation needs functionality like provisioning, deployment, monitoring, maintenance, security, and metering,” said Bruce Wang, director of cloud services for Lexmark Enterprise Software. “OpenAperture provides tools for addressing these elements in a standardized way.”
Wang came to Lexmark through its 2013 acquisition of Twistage, a video and rich media management ISV that leveraged cloud technologies. “Every large ISV has the same problems,” he told DIR. “They have a huge stack of diverse products, and they are hungry to manage their deployment in the cloud in a standardized way. OpenAperture offers an avenue for doing this.”
OpenAperture has been published as an open source platform. “All we ask is that anybody that downloads it and makes improvements, shares those improvements with community,” said Wang. “For example, we utilize Dokker for deployment, but if someone wants to take the tools and deploy them in another open source container, that’s fine. We’re not trying to force anybody to use anything, we’re just trying to set up a standardized methodology.”
This methodology is designed to enable Lexmark to eventually move all its software functionality to the cloud. “Lexmark is all in on the Evolution platform as a core part of how it delivers value,” said Anderson. “Evolution not limited to Enterprise Software.”
The capture roadmap
Through the acquisitions of Brainware in 2012 and ReadSoft last year (not to mention the impending acquisition of Kofax) Lexmark has made itself into one of the leaders in the advanced capture industry. At Inspire, DIR caught up with both Chuck Kingston, Lexmark’s manager of capture products and Ailie Kofoid, director of back office solutions. Lexmark’s goal is to develop capture products that support all its vertical focuses. However, currently the majority of its capture implementations are related to the back office—especially for invoice capture in A/P solutions.
“Perceptive has sold A/P solutions for a long-time,” said Kofoid. “With the Brainware and ReadSoft acquisitions, we’ve really strengthened our offering and our position in the market. Other back-office financial processes we automate include sales order and remittance processing. We want to keep expanding the breadth of the order-to-cash processes we address. We also do a lot in HR.”
HR is often a natural place to expand once a customer has installed A/P automation. “Automating financial processes typically offers the greatest return on investment,” Kofoid said. “HR takes advantage of a lot of the same core competencies, but the ROI is softer. It’s more about compliance and providing better access to documentation.”
Kingston said Lexmark is working on a list of features included in an ideal capture platform. “Once the list is complete, our plan is to plug into place what we already have in our war chest and build what we don’t,” he told DIR. “The goal is to put in place capture that supports, through configuration and the licensing of components, small, medium, large, and mega-large customers with the same platform that can be deployed either hosted or on-premise—utilizing a workflow engine to tie it all together.
“We are proceeding with that blueprint right now, and if Kofax comes on board, we’ll see where their technology fits within it.”
Currently, Lexmark is also proceeding with what Kingston referred to as a “quick-win game plan.” “We are taking the things ReadSoft has that would be beneficial to Perceptive Intelligent Capture [the former Brainware product] and pulling them in,” he said. “ReadSoft is looking at things that Perceptive has that it could benefit from.”
ReadSoft’s INVOICES is basically being targeted at smaller and mid-volume customers for capture, with Intelligent Capture aimed at higher volume environments. “A lot of it depends on the use case,” Kofoid said. “If it’s a high-volume environment with a lot of POs, than Intelligent Capture is a good fit because of the high percentage of straight through processing it can deliver. For lower volume environments, with a lot of non-POs, INVOICES is a great fit. If the customer wants a cloud implementation, ReadSoft Online is the best fit.”
Kofoid added that there has been quite a bit of interest in, a well as some sales of, Intelligent Capture combined with ReadSoft’s PROCESS DIRECTOR A/P workflow for SAP. Siemens, which presented at Inspire, is already using this combination to process 2.5 million invoices per year. To further support this type of activity, Perceptive is creating a tighter integration between Intelligent Capture and both PROCESS DIRECTOR and PROCESSIT, which is ReadSoft’s Oracle Financials workflow.
In 2013, Perceptive introduced transcript processing for the higher education market [see DIR 9/20/13]. At Inspire, we heard a testimonial from University of Arkansas, which has implemented it, and Kingston said the application is starting to gain traction. “There is definitely a lot of activity in the pipeline,” he told DIR. “The development has been a two-phased approach. We started with college transcripts and are now working on high school transcripts, which are considerably different. We’ve also received a lot of inquiries from colleges interested in licensing the technology in the cloud, and we are building the infrastructure to enable Intelligent Capture to run there.
“In the past year, we also introduced a new application for capturing bills of lading in the transportation industry and a remittance processing solution.”
Bullish on cloud capture
Anderson is very bullish about opportunities related to making capture available in the cloud. “The real value in capture is about how much extraction you can automate,” he told DIR. “With on-premise solutions, our customers’ results are fairly sheltered from us. We really don’t know if they are getting the most out of their investments. Running capture on the cloud changes the dynamics. It improves our visibility and can increase our responsiveness.”
Anderson has a unique view on why not everyone is bullish on cloud-based capture. “Compared to document management, capture is not a very sticky technology,” he said. “It’s fairly easy to dethrone an incumbent if you can prove better results. If you take away the investment required to purchase software and the servers to run it on…you can see why cloud deployment would make some established vendors worried.
“We’ve found content management is a lot stickier than capture because no one wants to worry about losing their files when they switch systems. Our plan is continue to bring capture and content management closer together, which will increase capture’s stickiness.”
Anderson added that as more structured data applications move to the cloud, it only makes sense that applications for managing unstructured data move there too. “Basically, you find out where an organization’s structured data lives, then you build tools to manage the unstructured data around it.”
Odds and ends
We’ve only touched on part of what is currently going on at Lexmark Enterprise Software. Having made approximately 10 software acquisitions subsequent to Perceptive, you can imagine there are quite a few moving parts. As we mentioned last issue, for example, Lexmark is doing some interesting stuff in the healthcare space creating a single source for accessing the whole spectrum of medical records.
A couple more ECM related notes:
- Bob Fresneda, the former president of ReadSoft U.S., is now the VP of global channel for Lexmark Enterprise Software, which puts him in charge indirect sales for all products. Carl Mergele, former CEO at Brainware, is now International GM, EVP—commercial WW, Lexmark Enterprise Software. Per Åkerberg, the former CEO of ReadSoft corporate, has left the organization.
- Lexmark introduced Perceptive Content 7.1 at Inspire. “We’ve entered a new era,” said Anderson. “We’re switching from monolithic releases that come out every one to one-and-a-half years to a quarterly cadence through which we can deliver value. Every quarter we plan to enhance the software with additional features and functionality. Users don’t have to take it right away, but we want it to be available.”
- Perceptive Content 7.1 offers a greater than 20% improvement in scalability. “We ran tests where we got the software to capture 9,000 and view 15,000 documents per minute at the same time,” said Anderson. “That is enterprise-class scalability.”
We talked a lot about the interface and services layers of the Evolution platform. We didn’t much discuss the integration layer. According to Anderson, this layer builds on all the line-of-business integration Perceptive has done over the years. At Inspire, Lexmark showed Pretrieve 2.0, which is the next-generation version of its LearnMode integration. This enables indexing data to be automatically connected from line-of-business screens to content management files. Lexmark also showed Perceptive Interact, a way to embed the Perceptive Experience into other applications. The example shown was integration with Salesforce.
Challenges and opportunities
Lexmark Enterprise Software is clearly dealing with a lot of moving parts and the potential acquisition of Kofax will only increase the rate and complexity of that movement—as, remember, Kofax and Perceptive were similar in size. This certainly presents a challenge, but also an opportunity. Lexmark is trying to place itself miles ahead of its MPS peers when it comes to ECM and establish itself as the clear leader in that subsegment of the market—which many view as key to future MPS success. If all goes as planned, Lexmark will have re-invented itself from a second tier MFP player into a top tier MPS player—basically competing in the same market, just a newer version of it.
As for the traditional Perceptive/ReadSoft/Kofax/et al. business, so far Lexmark has done a great job allowing the leadership at the acquired software companies to continue to execute like they traditionally have and not killing their golden goose—like many predicted Lexmark would when it first acquired Perceptive. Lexmark Enterprise Software President Scott Coons ensured Inspire 2015 attendees that this will continue. “While our name and logo have changed, we will continue to operate the same,” he said. “It’s the same people, building the same software, and delivering the same deep industry expertise and focus on customers.”