Let’s Talk Lexmark

I have to apologize that I have not been contributing to this blog recently. To be honest, besides the fact that I have been insanely busy actually selling, most recently I have been avoiding it because of the many acquisitions, rumors and bears (oh my) and I do not want to run afoul of the powers that be. I just can’t stand it anymore. It has been years since there has been this much to talk about in the ECM market and sitting on the opinion sideline is no longer an option. – Let’s Talk Lexmark 

Disclaimer – Everything you read here is solely my own opinion based on my twenty years of experience in the ECM market place. I do not know what or when anything will happen.(seriously – I really don’t) This is not in any way to be considered an official position of the company.

Let’s Talk Lexmark

Picture this. Hardware vendor acquires enterprise software as a hedge against pending market decline of its mainline portfolio. hmmm… Anyway… Fast forward a few years and it becomes apparent that despite the margin it can not grow fast enough in a mature and saturated segment to make up for what lies ahead for the larger entity so time to recapitalize and change directions. The big question is, and it is an important one, will the new owners have any interest at all in pieces of the portfolio that were intentional departures from the company’s core?

Put simply, Lexmark did not execute OpenText’s strategy nearly as well as OpenText does integrating redundant acquisitions into its portfolio to drive maintenance while not disrupting revenue of core elements. Lexmark had picked up a hodgepodge of components (Search,BPM,Medical Imaging,etc.) after investing in Perceptive and had a good upturn in perception (pun intended). Ironically it seemed to waver when they filled in that huge blank space on their ECM feature chart – Enterprise Capture.

As an external observer it seemed the ECM core was greatly overshadowed (overpowered?) with the Kofax acquisition. Just a year after the acquisition of ReadSoft (which made sense despite the bidding war with Hyland) they executed what can easily be described as a Magic Quadrant land grab with the Kofax. From that point forward there seemed to be a loss of focus for Perceptive, overlapped Readsoft and others takes a back seat and Kofax loses a stability it had enjoyed in the market for a decade.

Now we find the Lexmark ECM portfolio buried in a higher order acquisition, led by a Chinese consortium. What follows is the inevitable restructuring. It would not surprise me in the least to see the software components of the company, most good competitors in their own ways, back on the block  in very short order.