Lexmark Chases New Revenue: Printers to DTM
September 11, 2015
I know what a printer is. The machine accepts instructions and, if the paper does not jam, outputs something I can read. Magic.
I find it interesting to contemplate my printers and visualize them as an enterprise content management system. Years ago, my team and I had to work on a project in the late 1990s involving a Xerox DocuTech scanner and printer. The idea was that the scanner would convert a paper document to an image with many digital features. Great idea, but the scanner gizmo was not talking to the printer thing. We got them working and shipped the software, the machines, and an invoice to the client. Happy day. We were paid.
The gap between that vision from a Xerox unit and the reality of the hardware was significant. But many companies have stepped forward to convert knowledge resident systems relying on experienced middle managers to hollowed out outfits trying to rely on software. My recollection is that Fulcrum Technologies nosed into this thorn bush with DOCSFulcrum a decade before the DocuTech was delivered by a big truck to my office. And, not to forget our friends to the East, the French have had a commitment to this approach to information access. Today, one can tap Polyspot or Sinequa for business process centric methods.
The question is, “Which of these outfits is making enough money to beat the dozens of outfits running with the other bulls in digital content processing land?” (My bet is on the completely different animals described in my new study CyberOSINT: Next Generation Information Access.)
Years later I spoke with an outfit called Brainware. The company was a reinvention of an earlier firm, which I think was called SER or something like that. Brainware’s idea was that its system could process text which could be scanned or in a common file format. The index allowed a user to locate text matching a query. Instead of looking for words, Brainware system used trigrams (sequences of three letters) to locate similar content.
Similar to the Xerox idea. The idea is not a new one.
I read two write ups about Lexmark, which used to be part of IBM. Lexmark is just down the dirt road from me in Lexington, Kentucky. Its financial health is a matter of interest for some folks in there here parts.
The first write up was “How Lexmark Evolved into an Enterprise Content Management Contender.” The main idea pivots on my knowing what content management is. I am not sure what this buzzword embraces. I do know that organizations have minimal ability to manage the digital information produced by employees and contractors. I also know that most organizations struggle with what their employees do with social media. Toss in the penchant units of a company have for creating information silos, and most companies look for silver bullets which may solve a specific problem in the firm’s legal department but leave many other content issues flapping in the wind.
According to the write up:
Lexmark is "moving from being a hardware provider to a broader provider of higher-value solutions, which are hardware, software and services," Rooke [a Lexmark senor manager] said.
Easy to say. The firm’s financial reports suggest that Lexmark faces some challenges. Google’s financial chart for the outfit displays declining revenues and profits:
The Brainware, ISYS Search Software, and Kofax units have not been able to provide the revenue boost I expected Lexmark to report. HP and IBM, which have somewhat similar strategies for their content processing units, have also struggled. My thought is that it may be more difficult for companies which once were good at manufacturing fungible devices to generate massive streams of new revenue from fuzzy stuff like software.
The write up does not have a hint of the urgency and difficulty of the Lexmark task. I learned from the article:
Lexmark is its own "first customer" to ensure that its technologies actually deliver on the capabilities and efficiency gains promoted by the company, Moody [Lexmark senior manager] said. To date, the company has been able to digitize and automate incoming data by at least 90 percent, contributing to cost reductions of 25 percent and a savings of $100 million, he reported. Cost savings aside, Lexmark wants to help CIOs better and more efficiently incorporate unstructured data from emails, scanned documents and a variety of other sources into their business processes.
The sentiment is one I encountered years ago. My recollection is that the precursor of Convera explained this approach to me in the 1980s when the angle was presented as Excalibur Technologies.
The words today are as fresh as they were decades ago. The challenge, in my opinion, remains.
I also read “How to Build an Effective Digital Transaction Management Platform.” This article is also eWeek, from the outfit which published “How Lexmark Evolved” piece.
What does this listicle state about Lexmark?
I learned that I need a digital transaction management system. A what? A DTM looks like workflow and information processing. I get it. Digital printing. Instead of paper, a DTM allows a worker to create a Word file or an email. Ah, revolutionary. Then a DTM automates the workflow. I think this is a great idea, but I seem to recall that many companies offer these services. Then I need to integrate my information. There goes the silo even if regulatory or contractual requirements suggest otherwise. Then I can slice and dice documents. My recollection is that firms have been automating document production for a while. Then I can use esignatures which are trustworthy. Okay. Trustworthy. Then I can do customer interaction “anytime, anywhere.” I suppose this is good when one relies on innovative ways to deal with customer questions about printer drivers. And I cannot integrate with “enterprise content management.” Oh, oh. I thought enterprise content management was sort of a persistent, intractable problem. Well, not if I include “process intelligence and visibility.” Er, what about those confidential documents relative to a legal dispute?
The temporal coincidence of a fluffy Lexmark write up and the listicle suggest several things to me:
- Lexmark is doing the content marketing that public relations and advertising professionals enjoy selling. I assume that my write up, which you are reading, will be an indication of the effectiveness of this one-two punch.
- The financial reports warrant some positive action. I think that closing significant deals and differentiating the Lexmark services from those of OpenText and dozens of other firms would have been higher on the priority list.
- Lexmark has made a strategic decision to use the rocket fuel of two ageing Atlas systems (Brainware and ISYS) and one Saturn system (Kofax’s Kapow) to generate billions in new revenue. I am not confident that these systems can get the payload into orbit.
Net net: Lexmark is following a logic path already stomped on by Hewlett Packard and IBM, among others. In today’s economic environment, how many federating, digital business process, content management systems can thrive?
My hunch is that the Lexmark approach may generate revenue. Will that revenue be sufficient to compensate for the decline in printer and ink revenues?
What are Lexmark’s options? Based on these two eWeek write ups, it seems as if marketing is the short term best bet. I am not sure I need another buzzword for well worn concepts. But, hey, I live in rural Kentucky and know zero about the big city views crafted down the road in Lexington, Kentucky.
Stephen E Arnold, September 11, 2015
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