lexmark's ecm play reaps rewards

7/27/2019 Lexmark's ECM Play Reaps Rewards

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Lexmark’s ECM Play Reaps Rewards Louella Fernandes, Associate Director,

Print Services and Solutions

Quocirca Comment

Lexmark’s ECM Play Reaps Rewards http: //www.quocirca.com © 2013 Quocir ca L td

Since its $280 million acquisition of

Perceptive Software in 2010, Lexmark has

been working hard to re-position itself,

transitioning from its traditional printing

roots to a provider of business process

automation solutions.

Its recent $54m acquisition of PACSGEAR, a

healthcare ECM (enterprise content

management) provider, announced on 3rd

October 2013, is the latest in a string of ECM

related acquisitions that have broadened

Lexmark’s reach and bolstered its Managed Print

Services (MPS) market position, both worldwide

and across vertical industries.

Overall, Lexmark has invested approximately

$540 million to acquire companies that now form

Lexmark’s Perceptive Software division with

annual revenue of around $170 million, which is

just under 5% of the company’s total business.

In August 2013, Lexmark announced its $72

million purchase of the German company

Saperion AG, a developer and provider of ECM

and business process management software. In

addition to Saperion, so far in 2013 Lexmark has

purchased Twistage, a San Franciso-based

company with a cloud software platform for

managing video, audio and image content;

Seattle-based AccessVia, which provides retail

signage and Acuo Technologies of Minneapolis, a

provider of clinical management software. In

2012, Lexmark acquired ISYS Search Software,

based in Australia; U.S.-based Nolij Corp; and

Luxembourg-based Brainware.

Having exited the consumer inkjet business in

late 2007, followed by the business inkjet market

in 2012, Lexmark has made great strides in

redefining its value proposition. Its increased

focus on helping its customers “manage the

unmanaged” (whether it is content, printers or

business processes) is paying dividends.

In Q2 2013, Lexmark’s MPS revenue reached

$170 million growing by 12%, with an estimated

total contract value per win of approximately $50

million, demonstrating its strong presence in

larger enterprises. Meanwhile, Perceptive

Software revenue reached $59 million, growing

by 34% compared to the same period in 2012.

Driving synergies between printing and business

process automation are now the hallmarks of

next generation MPS contracts as enterprise

customers look beyond print to drive further cost

savings and improve efficiency. Whilst some

businesses have taken initial steps to transition

to a “less-paper” office and digitise paper-based

processes, many are still heavily reliant on




paper-based processes, effectively operating

hybrid paper/digital business workflows.

Consequently, leading MPS providers are

increasingly offering solutions and services that

address the need to manage both unstructured

and structured content, across paper and digital

output. The most effective approach to bridge

the paper and digital gap is to leverage the

sophisticated document capture, routing and

archive capabilities of the new breed of smart

multifunctional peripherals (MFPs).

Lexmark is certainly well positioned to take

advantage of this and is already seeing success

in its cross-selling initiatives between its Imaging

Solutions and Services (ISS) and Perceptive

units. According to Lexmark it is already

maximising its large account ISS presence to sell

Perceptive software capabilities whilst growing

its MPS offering in Perceptive accounts. Over the

last two quarters of 2013, Lexmark indicates that

it has won over 20 new capture, content and

process software deals across a range of ISS

banking, retail, manufacturing, government and

healthcare accounts. Meanwhile it is also

capturing MPS deals in Perceptive Software

healthcare accounts.

Quocirca believes that Lexmark has taken the

right steps to build out its product and services

to address customer needs to drive workflow

efficiency. Lexmark has always prided itself on

its ability to deliver customised solutions due to

owning its technology and by virtue of its smaller

size relative to its competitors. Whether Lexmark

can maintain this customer responsiveness now

that it has such a large and mixed technology

portfolio remains to be seen.

Lexmark will undoubtedly face challenges in

integrating what is now a vast array of products

and solutions. As enterprises look to minimise

paper-intensive and labour-intensive processes,

business process automation will take centre

stage in the next evolution of MPS. To maximise

on the opportunity, Lexmark will need to

reinforce its brand and value proposition,

differentiating its solutions and services based on

its industry focus and broad ECM capabilities.

Market competition is intensifying, from both

well-established ECM vendors and MPS

providers, such as HP, Ricoh and Xerox that are

also actively focusing on expanding their

business process services footprint. Lexmark has

already made strong inroads and Quocirca

expects this momentum to continue in 2014 as it

refines its integration and go-to-market strategy.




About Quocirca Quocirca is a primary research and analysis company specialising in the business impact of information technology

and communications (ITC). With world-wide, native language reach, Quocirca provides in-depth insights into theviews of buyers and influencers in large, mid-sized and small organisations. Its analyst team is made up of real-world practitioners with first-hand experience of ITC delivery who continuously research and track the industry

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Quocirca research is always pragmatic, business orientated and conducted in the context of the bigger picture. ITC

has the ability to transform businesses and the processes that drive them, but often fails to do so. Quocirca’smission is to help organisations improve their success rate in process enablement through better levels of

understanding and the adoption of the correct technologies at the correct time.

Quocirca has a pro-active primary research programme, regularly surveying users, purchasers and resellers of ITC products and services on emerging, evolving and maturing technologies. Over time, Quocirca has built a picture of

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lexmark's ecm play reaps rewards

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