As I describe in my blog post on the The Four Pillars of ECM I mention that Pillar 2 (DocMan/RecMan) and Pillar 3 (BPM/Workflow) have numerous companies building solutions today. And that pillar 4 is effectively locked up --- but not completely (opportunities exist for SaaS players – see Breaking into the Fourth Pillar – ECM Storage).
Companies that had a chance to own this space have faltered. The leading vendor of document capture for 20+ years is Kofax. They have fallen flat and cannot seem to get out of their own way to make anything significant happen. I’m sure there are wins in various places across the globe where Kofax products are being used to address the document capture needs of companies. My point is that Kofax as a company has not made the right moves to go after what I can see is easily a $3-5 million dollar opportunity in the first year and has the potential to be a $1B dollar business.
I would have expected such a smart company to jump on this opportunity. Especially when using my conservative 1:3:5 ratio for partnering with Microsoft when there are significant and long term growth scenarios across horizontal and vertical solution areas.
It’s sad to see a great company like Kofax** missing the boat here, but it seems they have other priorities these days.
Opportunity Found - Who will make an impact?
A few companies that have a chance to take this to the next level, perhaps on a grand scale if executed correctly are:
Each has made inroads into the Microsoft SharePoint partner community. Each are Microsoft partners. Each of these have smart, visionary leaders that see the opportunity. I wish them luck and offer my help to see them succeed.
What about the Big Three?
The traditional Big Three ECM vendors – FileNet (IBM), Documentum (EMC), and Open Text (still solo – until SAP buys them) – will continue to sell Document Capture and Document Imaging products and services. However, they will do it as an adjunct to their other core offerings.
The Document Capture market beyond 2010
By my definition Document Capture falls into the bigger ECM marketplace as the first of Four Pillars. The ECM market is big. According to Gartner the ECM market in 2007 was $2.9B for software license and maintenance revenue in 2007 with an expected growth rate of 12.2% CAGR through 2012. When the 1:3:5 ratio is attached here this number jumps into a range that gets partners and platform providers excited.
Microsoft’s SharePoint Server is already over $1B in revenues all by itself. This does not factor in the revenue partners will generate when they extend and enhance this “ecm” platform (lower case emphasis). When Microsoft Office 2010 (aka Office 14) ships in the next 12 months or so the market penetration of SharePoint will continue to increase. Smart companies are gearing up for this onslaught.
The AIIM “2009 State of the ECM Industry” report shows that document imaging is only expected to be used in less than 20% of the SharePoint solutions (see Figure 7). I think this is an oversight and highlights the Document Capture Gap. Companies still need document capture solutions. Smart partners will develop solutions to fill this gap.
Tim Mortenson, Director of Software Solutions at Eastman Kodak points out that 80% of business information comes from the Document Capture process in his June 2009 TAWPI article - Defining Success for Desktop Capture Solutions
The Gaping Hole
There is a a huge opportunity here for companies to fill the Document Capture gap. Realistically, Microsoft will not be filling this gap with their own products. They are relying upon the partner ecosystem to design, develop, and deploy solutions (ideally on the Microsoft stack) that help companies manage their front end capture needs. Microsoft has a solid product in SharePoint Server to handle Pillars 2 and 3. Leaving at least one question …
Which partners will step up to fill the Document Capture Gap?
|Additional Reading: |
Kodak is making a grab for the Document Capture space
What do you think?
- Is there really a Document Capture Gap?
- What partners do you think will fill the gap?
- I’d like to know who else is out there doing great things in the document capture space.
- Please comment here or via my contact info below.
- Especially in SharePoint partner ecosystem
Full Disclosure: I used to work for Kofax and would love to see them succeed in the Microsoft partner ecosystem. It just doesn’t seem be part of their master plan.
About The Author:
I have spent the better part of the last 16 years working in various aspects of the ECM space. I spent time at Kofax, Microsoft, FileNet, K2, and most recently Captaris (which was acquired by Open Text in Nov 2008). Prior to that I was a Unix VAR running my own company. Follow me on Twitter, check my blog, send email or find me on Facebook or LinkedIn.
** I am available for consulting projects and speaking engagements. My areas of emphasis are business development and alliance management at the Intersection of Enterprise Content Management and Social Media.
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