Lexmark: Under Its Own Nose
March 20, 2012
I read “Lexmark Acquires Isys Search Software and Nolij (Knowledge, get it?) In 2008, Hewlett Packard acquired Lexington based Exstream Software. HP paid $350 million for the company, leaving Lexmark wondering what its arch printing enemy was doing. Now more than three years later, Lexmark is lurching through acquisitions.
On March 7, 2012, I reported that Lexmark purchased Brainware, a search, eDiscovery, and back office system. Brainware caught my attention because its finding method was based in part on tri-gram technology. I recall seeing patents on the method which were filed in 1999. I have a special report on this Brainware if anyone is interested. Brainware has a rich history. Its technology stretches back to SER Solutions (See US6772164). SER was once part of SER Systems AG. The current owners bought the search and technology and generated revenue from its back office capabilities, not the “pure” search technology. However, Brainware’s associative memory technology struck me as interesting because it partially addressed the limitations of trigram indexes. Brainware became part of Lexmark’s Perceptive Software unit.
Now, a mere two weeks later, Lexmark snags another search and retrieval company. Isys Search was started by Iain Davies in 1988. Mr. Davies was an author and an independent consultant in IBM mainframe fourth generation languages. His vision was to provide an easy-to-use search system. When I visited with him in 2009, I learned that Isys had more than 12,000 licensees worldwide. However, in the US, Isys never got the revenue traction which Autonomy achieved. Even Endeca which was roughly one-tenth the size of Autonomy was larger than Isys. The company began licensing its connectors to third parties a couple of years ago, and I did not get too many requests for analyses of the company’s technology. Like Endeca, the system processes content and generates a list of entities and other “facets’ which can help a user locate additional information for certain types of queries.
Now Lexmark, which allowed Exstream to go to HP, has purchased two companies with technology which is respectively 24 and 12 years old. I am okay with this approach to obtaining search and retrieval functionality, but I do wonder what Lexmark is going to do to leverage these technologies now that HP has Autonomy and Oracle has Endeca. Microsoft is moving forward with Fast Search and a boat load of third party search solutions from certified Microsoft partners. IBM does the Lucene Watson thing, and every math major from New York to San Francisco is jumping into the big data search and analytics sector.
Here’s a screen shot of the Isys Version 8 interface, which has been updated I have heard. You can see its principal features. I have an analysis of this system as well.
What will Lexmark do with two search vendors?
Here’s the news release lingo:
“Our recent acquisitions enable Lexmark to offer customers a differentiated, integrated system of solutions that are unique, cost effective, and deliver a rapid return on investment,” said Paul Rooke, Lexmark’s chairman and CEO. “The methodical shift in our focus and investments has strengthened our managed print services offerings and added new content and process technologies, positioning Lexmark as a key solutions provider to businesses large and small.”
Perceptive Software is now in the search and content processing business. However, unlike Exstream, these two companies do not have a repository and cross media publishing capability. I think it is unlikely that Lexmark/Perceptive will be able to shoehorn either of these two systems’ technology into its printers. Printers make money because of ink sales, not because of the next generation technology that some companies think will make smart printers more useful. Neither Brainware nor Isys has technology which meshes with the big data and Hadoop craziness now swirling around.
True, Lexmark can invest in both companies, but the cash required to update code from 1988 and methods from 1999 might stretch the Lexmark pocket book. Lexmark has been a dog paddler since the financial crisis of 2008.
Source: Google Finance
Here’s the Lane Report’s take on the deal:
Lexmark’s recent acquisitions have advanced its “capture/manage/access” strategy, enabling the company to intelligently capture content from hardcopy and electronic documents through a range of devices including the company’s award-winning smart multifunction products and mobile devices, while also managing and processing content through its enterprise content management and business process management technologies. These technologies, when combined with Lexmark’s managed print services capabilities, give the company the unique ability to help customers save time and money by managing their printing and imaging infrastructure while providing complementary and high value, end-to-end content and process management solutions.
I have a different view:
First, a more fleet footed Lexmark would have snagged the Exstream company. It was close to home, generating revenue, and packaged a solution. Exstream was not a box of Lego blocks. What Perceptive now has is an assembly job, not a product which can go head to head against Hewlett Packard. Maybe Lexmark will find a new market in Oracle installations, but Lexmark is a printer company, not a data management company.
Second, technology is moving quickly. Neither Brainware nor Isys has the components which allow the company to process content and output the type of results one gets from Digital Reasoning or Palantir. Innovative Ikanow is leagues ahead of both Brainware and Isys.
Neither Brainware nor Isys is open source centric. Based on my research and our forthcoming information services about open source technology, neither Brainware nor Isys is in that game. Because growth is exploding in the open source sector, how will Lexmark recover its modest expenditures for these two companies?
I think there may be more lift in the analytics sector than the search sector, but I live in Harrod’s Creek, not the intellectual capital of Kentucky where Lexmark is located.
Worth watching.
Stephen E Arnold, March 20, 2012
Sponsored by Pandia.com
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