When the rumors came out last year I looked at what could be meant by an acquisition of Lexmark Enterprise Software, now Kofax, by Thoma Bravo. It was a quick response to a rumor. But it seems the rumors are flying again. CMS Wire reached out for a quote for the article and I said, “All this [deal] will do is leave the combined companies with two ECM platforms and three scanning platforms to integrate.” Well I was wrong with my quick response thinking last year, so I thought I’d correct myself and give some new thoughts.
First off, these are my personal opinions and not those of Big Men On Content (BMOC) as a whole, any other BMOC blogger, nor our affiliated companies. This opinion has been formulated based on my years in the industry along with what I’ve seen or heard in the news.
With Hyland & Kofax – It’s really seven ECM and four scanning platforms
I got “called” on my statement that there would be just two ECM platforms. I was going from recently rereading my quote rather than doing a refreshed count in my head. I wrote my first article in 2016 one month before Hyland released ShareBase. Now just a few months ago Hyland announced its third new repository, AirBase. Still I had not taken a close look at Kofax. (it’s easier to do the summary as Lexmar.) So here’s the real story:
- In Enterprise Content or Document Management the combined repositories would be:
- Hyland has its own OnBase solution
- Lexmark has its own ImageNow (now Kofax Perceptive DMS)
- Lexmark acquired Saperion AG in 2013
- Lexmark acquired Acuo Technologies in 2013
- Lexmark acquired Kofax and with it Kofax Front Office Server in 2015
- Hyland launched ShareBase in 2016
- Hyland launched AirBase in 2017
- In Document Imaging the combined platforms would be:
- Hyland has its own Advance Capture solution
- Hyland acquired AnyDoc Software in 2013
- Lexmark acquired ReadSoft in 2014
- Lexmark acquired Kofax in 2015
But is it a bad thing?
No. With the OpenText acquisition of EMC ECD we see that combining ECM platforms under one vendor does work. Some call this a maintenance model, but it’s also a consolidation play. There’s no reason that some consolidation could work in the mid-market. If Hyland can figure out how to emulate OpenText this could be a good thing. But it does start by deciding who you are.
For example, on the internet there’s no direct way to get from Hyland OnBase to Hyland ShareBase to Hyland AirBase. If you try to find LawLogix, another Hyland company, it is hiding on the Hyland Acquisitions page on the OnBase site. There’s no Hyland umbrella site at all. Maybe it’s not a bad thing to be considered a small ECM vendor and fly under everyone’s radar?
The “spin-merge” is great for Kofax and ReadSoft, as they will again be vendor neutral. Hyland will still have the challenge of addressing multiple repositories.
Who else could buy Kofax?
While the rumors are out there saying it’s Thoma Bravo or Hyland, we do know there are others in this deal. Who could these be and why would they do it? I thought I’d speculate:
Regional Niche ECM Vendors – There are some large ECM vendors that dominate in markets outside the U.S. And while Kofax’s imaging solution is a global brand, none of its content platforms are known outside their individual core markets. These vendors could see value in an immediate market presence in the U.S. Of course, Hyland OnBase could benefit from a boost in market presence outside the U.S. with the Kofax name.
My list of possible candidates: Objective, Easy Software, Everteam, or Fabasoft
Thinking Outside the Box – I’m always amazed that data warehousing has not looked at content. As text analytics become more accessible, the information locked inside an ECM repository becomes valuable. Using that information in a data warehouse should be an obvious thought.
My list of possible candidates: Terradata or Microstrategy
What will happen? We’ll just need to wait and see. If we heard Kofax CEO Reynolds Bish we only need to wait a few weeks.
Great article… will indeed be interesting to see how all the bits/pieces get integrated (or ignored) once the dust settles.
I also agree with your insights re: ECM shift to Data Warehousing. It’s a bit tricky, and the content often needs a lot of prep-work, but there’s “gold” buried in ECM Dark Data if orgs are able to organize/prepare/extract it appropriately.