Wednesday, June 24, 2009

Document Capture in SharePoint is up for grabs

In the world of Microsoft’s SharePoint Server there is a gaping hole today. There is a huge opportunity to provide document capture products and services. There is a Document Capture Gap.

imageAs 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).

Opportunity Lost

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.

imageI 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 imageacross 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 vendorsFileNet (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 AIIM2009 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.

imageTim 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.

clip_image002About 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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10 comments:

Anonymous said...

Jeff, just read your post, and while I enjoyed the reading I think you are working with incorrect information. We have been dominating this market since 2004, we were just announced the 2009 Partner of the Year in ISV/Software Solutions and in ECM and between us an our partners we completely fill out the Document Capture needs for SharePoint.

To be quite frank, we built this market and based on our revenue in this space alone, I know we are the dominant player based on how much revenue is even available in the space. Our competition barely have a trace of revenue in this space.

The other companies you mentioned also confuse me. Beside the obvious Kofax, who we beat to this market by several years, you mentioned Bluethread, who is not a capture vendor, SpringCM who is a SharePoint competitor and Atalasoft who is a toolkit company with a very low volume product.

KnowledgeLake software also ships with all Fujitsu scanners, and I believe they own about 50% of that marketplace worldwide, so I'd say we have taken full advantage of the Document Capture in SharePoint market and have no plans to stop anytime soon.

Best Regards,
Chris Caplinger

Bill Bither said...

Chris,

Atalasoft has millions of implementations worldwide using our scanning and capture technology, hardly low volume.

I agree with Jeff that Document Capture (Imaging) for SharePoint is up for grabs - it’s still an immature market. We’re just starting to see serious ECM and capture implementations built on top of SharePoint, and it’s positioned for rapid future growth. Most companies Jeff mentioned could take it to the next level. However, I wouldn’t discount the 500 lb imaging gorilla, Kofax, with the recent release of their Desktop product that captures images directly from Office clients into SharePoint for just $29.

Bill Bither
Atalasoft

Anonymous said...

I don't think we should necessarily overestimate Kofax either. I don't think they quite get it and/or are not convinced SharePoint is a real ECM solution. They underestimate it like most of the ECM platform vendors do.

I have to agree with Chris' assesment of KL's dominance in this space for many years and his very correct observation that we are not a capture vendor...we in fact resell their products. Regarding his comment on Atalasoft being a low volume product, he probably means from a capabilities (i.e. not a high volume production scanning solution) perspective not a sales volume perspective. If that's the case then I would have to agree with him as well, as we have not seen Atalasoft-based scanning solutions in high volume production scanning environments. That's not to say they aren't out there, I just haven't seen 'em. If he's talking about sales volume...who the hell knows...all I know is we did just under $1b last year.

He's also spot-on about SpringCM. We're at the SUGDC show and have a table about 15 feet away from SpringCM...I'm definitely not seeing it or feeling it. Hearing these guys describe their product and trying to somehow hang it on SharePoint is painful.

JerseyBob (CTO BlueThread)

sboals said...

Jeff,
The reaction to SharePoint in traditional Document Management circles is one of denial. I hear it over and over, in working with resellers and software companies..."SharePoint is not a true Document Management System." It definitely has its limitations, but they can be easily overcome by adding technology from vendors like Atalasoft for viewing and PSIGEN for advanced capture. I am of course slightly biased. Take a look at PSI:Capture for SharePoint.

Stephen Boals
PSIGEN

document scanning said...

Thanks for sharing...
Regards,
Document management service

John and Stacy said...

You are right Jeff, there is a huge "hole" in Document Management for SharePoint and Kofax has missed the mark in recent years, but not because of missing the SharePoint wagon. To capitalize on SharePoint, you need a search strategy (product). Kofax would never get into search and it would be a mistake if they did. While we're on it, why isn't there a COLD product (mainframe print report output) for SharePoint? Anyone?

Kevin said...

Search is part of the KnowledgeLake stratagy for SharePoint, and don't forget a document viewer with metadata updates and workflow integration.
http://www.knowledgelake.com/presentations/KnowledgeLakeSolutionIntroduction/player.html

How about LOB integration for scanning and search, got that too with Connect 4.0
http://www.knowledgelake.com/connect/default.asp

Document Scanning said...

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document scanning said...

The only reason other repliers here talk badly about SharePoint is because it's a successful software that raise high expectations.. I can certainly see it filling the Document Capture gap.

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