Lexmark: The Former IBM Printer Unit Prints Pink Slips
July 22, 2015
I live in rural Kentucky. Hopefully the layoffs at Lexmark will not cause new trailers to appear adjacent my property and my spiffy Clayton mobile castle.
I read “Lexmark Announces 500 Layoffs Worldwide as Revenue, Earnings Are Flat.” I know that the Lexington, Kentucky based company is trying. The firm is nosing into healthcare. The company is building facilities to cater to the new work force.
Lexmark is even nosing into the search and content processing sector which interests me. I don’t pay much attention to printers. My Lexmark laser went to the local thrift shop a decade ago. Come to think of it. I just create PDFs. I assume that other people find that printers are no longer must-have devices.
Lexmark splashed some cash for search and content processing companies. The firm bought the quite wrinkled and aged search technology founded by Ian Davies in 1988. That works out to more than a quarter century ago. Lexmark bought the Brainware technology, which is based on a rather nifty concept of trigrams. When content is processed with the trigram numerical sausage machine, it becomes easy to match the patterns. The higher the pattern overlap percentage, the more likely the documents are about the same thing. At least, that’s the idea as I understand the explanation given to me face to face before the deal went down. Lexmark also snagged Kofax, which itself had purchased Kapow, an outfit into the normalization of content and some other “interesting” functions.
Lexmark is a sponsor of the Bluegrass Disc Golf Association competition to be held in August 2015. This is an event of note in these here parts.
When I learned about these deals in 2012 and the 2015 Kofax purchase, I realized that Lexmark was emulating the thinking at two other companies. Hewlett Packard bought Autonomy in the hopes of riding a revenue rocket. I still marvel at the shallowness of HP’s understanding of how Autonomy grew to $700 million in revenue in 15 agonizing years of effort and perspiration. But HP caught spreadsheet fever and has not yet recovered. IBM allegedly bet $1 billion that Lucene, home grown code, and acquired technology could create a computing revolution. IBM touts the cognitive revolution at the same time it reports its 13th quarterly decline in revenues. I learned today that IBM is pushing the cooking angle via a partnership with Welltok.
Lexmark, I submit, did the same thing: Looked at search and decided, “Our management team can make more money that these acquired outfits ever did.” The result is that Lexmark is probably: [a] Doomed to suffer cash outlays in order to keep the search and content processing systems current with alternative software; [b] going to struggle to develop organic revenue streams which deliver profits to stakeholders, and [c] reposition itself the way Sprylogics has. As you may know, Sprylogics shifted from an intelligence oriented content processing system to a mobile fantasy sports app.
I have to stop now. I hear the sound of a four wheel drive’s wheels slipping. Yikes. Someone is putting a 2006 Fleetwood 14×70 across the pond from my Clayton. One of the people is wearing what looks like a Lexmark disc golf logo on a T shirt.
Stephen E Arnold, July 23, 2015
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