By Tod Newcombe Contributing Editor In July, the number of vendors in the imaging market abruptly shrunk as Wang Laboratories Inc. announced plans to purchase Sigma Imaging Systems Inc., and FileNet Corp. signed a deal to acquire Watermark Software Inc. In a related move, banking systems vendor BancTec announced in June the acquisition of document management and OCR vendor Recognition International. The shakeout heralds a long-anticipated consolidation of the imaging market. "These moves were inevitable," said Connie Moore, director of workflow, document and imaging strategies at BIS Strategic Decisions, a market research firm. "The imaging and workflow market has a lot of players. The market is now growing, so it consolidates." Bruce Silver, principal consultant for Bruce Silver Associates, agreed. "There's a sense that imaging could be a profitable business if there weren't so many people chasing after it," he said. The $20 million purchase of Sigma gives Wang workflow and imaging software for Windows NT, Microsoft's network-based operating system. Similarly, FileNet's $60 million acquisition of Watermark gives the Costa Mesa, Calif.-based firm workflow and imaging software products that run on Windows NT. For Wang, the move signals a shift away from UNIX as its open systems platform for imaging systems. "It looks like their strategic platform is moving toward NT from UNIX," said Silver. He added that FileNet appears to be staying with UNIX as its strategic platform, but has purchased Watermark to expand into the middle and lower-tier markets for imaging. Watermark's Enterprise Edition Windows NT software costs between $250 and $500 per seat. In both cases, the actions by Wang and FileNet appear to result, in part, from the deal struck last April when Microsoft Corp., agreed to put Wang's image viewer in both Windows 95 - the global operating system for PCs - and Windows NT. The deal not only opened up imaging as a software tool for everybody's desktop, it also expanded the number of open system platforms for imaging. "UNIX has been the dominant platform in imaging ever since the industry began to shift away from proprietary to open systems," said Moore. But since Microsoft struck its deal with Wang in the Spring, NT has taken on much greater importance as an operating platform for imaging. However, Moore said that despite all the attention these deals have garnered, Novell's NetWare operating system is still considered a viable platform for imaging. She pointed out that FileNet and Novell have put together a joint distribution and product strategy and that Wang has a deal to use Kodak's Novell-based imaging products. The bottom line is that both FileNet and Wang are moving aggressively to expand the number of platforms on which their imaging products will run. Their goal, according to Moore, is true interoperability of imaging on all platforms, from UNIX and NT to NetWare, OS/2 and even Macintosh. Once that happens, then market share starts to grow.
The Good and the Bad For government agencies, the recent acquisitions present some opportunities and concerns. According to Moore, Wang and FileNet are both very active in the state and local government market. (Unisys, another active imaging vendor in the government sector, has also become allied with Wang because the acquisition of Sigma included a marketing deal with Unisys). By expanding the number of products and platforms they provide and support, Wang and FileNet could make it easier and more cost-effective for agencies and departments to adopt and use imaging. Imaging technology has been singled out as an effective tool in streamlining paper-choked operations. But so far, it has been used modestly by the public sector due in large part to high costs and the government's use of heterogeneous computing platforms, which thwarts the sharing of data, text and images. By offering products that run on a variety of platforms, Wang and FileNet could help agencies deploy imaging solutions more broadly. At the same time, however, agencies that use other imaging products might be concerned about whether or not they will end up with an orphan system.
Strategies The other leading imaging vendors have yet to announce or clarify their strategies in the face of the recently announced acquisitions and alliances. Smaller vendors remain vulnerable to acquisition by larger vendors or to dropping out of the imaging market altogether. Before they start worrying, however, said Silver, government agencies need to examine their own imaging strategies. "They have to decide whether they want a single supplier to cover all their needs or will they mix and match products, as well as how to fit things like workflow into the organization," he said. "Once they have done that, then they can go eyeball-to-eyeball with their vendor or prospective vendor in terms of where they are going over the next two years."
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Florida Community Affairs Adds Imaging TALLAHASSEE, Fla.- Florida Community Affairs, Florida Housing Finance Agency (FHFA) has awarded Unisys Corp. a contract to develop an imaging system with workflow capabilities to automate its financial and compliance areas, and a host of housing-related programs. The value of the contract was not announced. The contract calls for two Unisys object servers, one fax server, two jukeboxes, one stand-alone optical disc drive, four scan stations, four scanners, 10 index monitors, one print server, two printer accelerator cards, comprehensive user training, database development and project management support. Implementation was scheduled to begin in July. Since 1981, the FHFA has financed approximately $4 billion of low-income housing in Florida. For fiscal year 1995/96 the Agency will lend nearly $350 million for low-income housing.
Wildlife Agencies Reel in Forms Recognition AUGUSTA, Maine - Two state wildlife agencies have turned to handwriting recognition technology to help process hunting and fishing license applications. The Maine Department of Inland Fisheries and Wildlife has announced the purchase of the Intelligent Forms Processing System (IFPS) from Wheb Systems Inc., to automate the processing of 40 different types of fishing and hunting license applications. Driven by a federal mandate to capture demographic information on license applicants, the agency decided to use Wheb's intelligent character recognition technology to scan and read the mostly handprinted and typed applications. The state handles approximately 500,000 forms per year - 75,000 per month during peak times. The system, which is expected to cost $230,000, will increase the speed and accuracy of data entry. IFPS uses intelligent character recognition and forms processing technology to convert hand-printed and typewritten characters into computer-coded text. Tennessee has also purchased IFPS from Wheb Systems to process its hunting license applications. The federal government requires demographic information on license applicants in conjunction with the Migratory Bird Harvest Information Program, which is chartered with gathering data on approximately 130,000-200,000 species of migratory birds. The Tennessee Wildlife Resources Agency handles between two and three million licenses each year.
