A few weeks ago Lexmark presented a Webinar for press and analysts, updating us on what’s going on. There was a lot of information to sort through, some of it old, some of it new, but none borrowed and none blue, all painting a vivid portrait of the current state of affairs at Lexmark, primarily from a solutions perspective.
Earlier this year Lexmark announced a new global branding campaign in an effort to position itself as more than just a hardware provider. Many of us who have attended Lexmark press and analyst briefings in the past kind of saw that coming. As Mike Johnson, vice president North American Business Channels & SMB, said when discussing the company’s new tagline, ‘Open the Possibilities,’ “based on the acquisitions we’ve made Lexmark has much more value to offer its partners and customers.”
Those acquisitions are exclusively software companies. And if Johnson’s message wasn’t clear enough, he further emphasized that Lexmark is no longer just a printer company.
“We’re changing to focus on the higher value solutions business,” Johnson added. “All acquired companies and the Lexmark organization are coming together under one company and one brand.”
For example, under the new branding, Lexmark’s Perceptive Software is now part of its Enterprise Software division. Among the products in that group are Perceptive Intelligent Capture, Perceptive Search, and Perceptive Content, so the Perceptive name isn’t being completely retired.
“Perceptive will transform from a company to a brand in Lexmark,” added Johnson. “It’s all part of our global transformation, one company under one brand.”
That initiative makes perfect sense since promoting the Perceptive Software brand didn’t draw a direct connect to Lexmark, at least for the unperceptive.
Lexmark hasn’t been hesitant about investing in software companies, starting with Perceptive in 2010 and culminating with this year’s Kofax acquisition. Overall the company has invested more than $2 billion in software companies.
The Kofax acquisition, which closed on May 21, ranks as one of the top stories in the document imaging industry for 2015. As previously reported the acquisition doubles Lexmark’s software business from $350 million to $700 million. Coinciding with the closing was the news that Kofax CEO Reynolds Bish will take over as president of Lexmark Enterprise Software upon the retirement of Scott Coons in July.
Asked how Lexmark sees its software business growing beyond $700 million and what factors will contribute to further growth, Johnson replied, “Our goal as an organization is to grow that business organically and get it over a billion dollars. That’s the focus for the next couple of years and Reynolds has a proven track record in the software industry and we think he’s going to be a significant addition to the overall Lexmark team.”
Lexmark’s solutions mission these days seems to be centered around unstructured data, which makes a lot of sense considering some of its acquisitions.
“Our goal is to solve that unstructured data challenge,” observed Johnson. “We want to be able to connect people with the information they need to run their business more effectively and efficiently.”
The Perceptive products within the Enterprise Software division will remain the flagship products for meeting the unstructured data challenge that Johnson was referring to.
Following Johnson’s presentation, Phil Boatman, business alliance manager; Sean Endicott, senior manager, North American Channel Business Development, and Doug Frazier, manager, solutions engagement, North American Channel, dug deeper into Lexmark’s 2015 solutions strategy, which includes continued investment in strategic software acquisitions.
A couple of interesting developments include an increased focus and packaging of vertical solutions, an emphasis on opportunity based engagements for the Perceptive products, a shift in Lexmark’s strategic solutions roadmap such as focusing on added feature/function/value, and accelerating the ReadSoft Online introduction to the third quarter of 2015.
A good portion of the Webinar was devoted to ReadSoft Online, which is a multitenant, cloud-based invoice capture and accounts payable automation solution that is reportedly extremely secure and scalable and is device agnostic. It automates the accounts payable process in an organization and integrates with various on-premise and cloud-based ERP, software and hardware partners’ applications and MFPs.
This software should be of interest to dealers as it provides what Lexmark describes as a highly differentiated solution platform that targets core business areas across all verticals. Plus it’s scalable and suitable for small to enterprise class accounts. According to Boatman, ReadSoft Online broadens Lexmark’s expertise in the accounts payable arena.
“This is where we are getting a lot of that Cloudshare focus,” he says. “Adding more expertise into a core area of business that all verticals have—invoices and accounts payable. Whereas ReadSoft’s Accuread software was device driven on the MFP—for classification, sorting, and extracting information—ReadSoft Online takes it to the next level in terms of the detail it can pull from the document and different media it can collect, whether from an electronic invoice or e-mail.”
It also allows for integration with backend systems in the SMB space. Plus it is vendor neutral and scalable from a large office to a large organization processing thousands and thousands of invoices per month.
Lexmark feels that dealers will embrace this solution because it’s user friendly and allows for easy on-boarding of customers. Plus it has a low cost of ownership.
“It’s a highly engaging solution from a customer perspective, something that will compliment their existing systems as far as how it interacts,” adds Frazier. “It has the ability to operate within the context of the systems they currently use.
ReadSoft currently has a 4 percent share of this market today and Lexmark is looking to grow that number with this introduction.
Another interesting initiative is the Accelerated Opportunity Program, which will help partners uncover and close opportunities for the Perceptive solutions, with Lexmark personnel working alongside them and training them as resellers for its various solutions.
For Lexmark’s partners, the Accelerated Opportunity Program eliminates upfront investment to gain the expertise and the dealer doesn’t carry financial risk of investing in these packages. Lexmark will provide additional staffing to get the dealer started.
With all this software on the menu Lexmark plans to focus on a core set of dealers with the appetite and resources to drive these offerings.
“We’re working on helping our dealers focus on opportunities in the market that they can capitalize on with a set of tools from Lexmark—our software solutions, consulting, services, whatever we can help them with to address a particular market need,” added Doug Frazier. “In looking at where Lexmark has built strength through acquisition and consistent focus the area of accounts payable becomes a ripe area for our partners to look at. This is available for every account our dealer might focus on or are focusing on. We’re already targeting it in mid enterprise customers with workflow solutions. This offers a packaged way to address this market, a market with enormous growth potential.”
Lexmark will assist them in capitalizing with expertise, tools, and training on how to engage with accounts payable, finance, etc.
Finally, and something that the folks at Lexmark are excited about is the new Corporate Briefing Center in Lexington. Described by Greg Chavers, director Value Channel, as “an interactive forum to share Lexmark technology solutions and business differentiators and gain valuable customer/partner insights that impact the bottom line.”
Press and analysts will see that when they visit Lexmark in October.
There’s a lot going on at Lexmark and plenty of possibilities for the future, many of which are opening up now. It’s safe to assume that there will be more to report on in October.