Technology Marches On - And Opens Up Vast New Opportunities
The maturity and falling costs of imaging technology will open up a wealth of opportunities for VARs who target small businesses and departments.
I recently attended my 25-year college reunion. A couple of observations from the experience:
1. On the way to the reunion, it occurred to me (follow me on this; I know it's a little complicated) that my relationship to the current students was equivalent to someone from the class of 1952 stopping by when I was in school. This was very depressing.
2. As a general rule (sorry if this sounds sexist), the women seem to have held up better than the men.
3. We all still felt that we were just as cool as when we were in school. No one else in the same ZIP code remotely shared this opinion.
There are obviously some things that do not get better with time. However, some things do, most notably technology.
I was recently looking through an old program guide from the 1993 AIIM Show. A line from the copy of one of the ads caught my eye: "To date, electronic image management systems have been very expensive. And getting one online has involved hundreds of man hours and a lot of esoteric, dedicated hardware."
Before even thinking about scanners, think about how the hardware infrastructure on the desktop in most organizations has changed since 1993 (source: www.archivebuilder.com). In 1993, the cost for a gigabyte of magnetic disk storage (enough to hold two scanned file cabinets) was $550. Now, the average cost is $1.39. Most desktop computers were powered by an 80486 DX2 microprocessor with 1.2 million transistors. A typical Pentium 4 PC today has 55 million transistors. The gigabyte of RAM that cost $16,000 in 1993 now costs $64. My 1993 program guide lists 44 suppliers of "display devices." A wide variety of suppliers in the 1993 guide offered special "custom" viewers to display images on the desktop. The Web was not a part of most business infrastructures. A 1993 survey of Web users by Georgia Tech noted that 97% of those surveyed used Mosaic for browsing, and 92% had UNIX as their primary platform. Broadband connectivity was beyond the reach of most businesses.
All of which brings me to the main point of my trip down memory lane. Given all the investments necessary in 1993 to implement imaging - in storage, memory, processing, display, and communications, not to mention the scanner itself - it's a miracle anyone bought any of this! And it should come as no surprise that those who did tended to be big users, mostly in Fortune 500 companies. My, my, how things have changed.
On the scanner side, in 1993, a 40 ppm (pages per minute) scanner cost about $14,000 - just for the scanner. Companies like Fujitsu Computer Products of America, Panasonic, Kodak, and Bell & Howell now routinely offer scanners for 1/3 to 1/4 the cost with the same or greater speeds. The contemporary models also have dramatically improved paper handling, grayscale, and image enhancement, and they scan in color as well as black and white.
As Scanning Volume Grows, So Does Potential Customer Base
The environmental movement used to have a slogan, "Think globally, act locally." When it comes to ECM (enterprise content management), particularly in the current tough IT market, VARs need to take this to heart. They need to encourage users to think strategically, but to implement quickly and tactically.
Within those companies already using imaging, InfoTrends reports that 69% of respondents expect scan volumes to increase in 2003. More than 1/3 expect to purchase another scanning device within the next year. Of the 50% of respondents that have centralized scanning operations, 18% plan to move to a decentralized structure. All of this is good news for the capture market.
Among that massive potential market of users who are not currently employing the technology, I believe there is a once-in-a-generation opportunity for VARs who know something about imaging to dramatically increase their pools of customers. All of the various direct and indirect costs associated with imaging have collapsed to the point where you have the ingredients for a mainstream technology. You can almost literally take a scanner out of the box and hook it up. Unlike 10 years ago, this is a proven and stable technology that can potentially deliver rapid and immediate ROI to millions of new customers, including small businesses and departments, which are drowning in paper. With an ever-increasing amount of content to manage and minimal implementation and capital costs, the ROI of an imaging solution for even the smallest of companies becomes obvious.
Capture technologies are the wedge VARs can use to build immediate solutions for millions of smaller businesses - solutions that can be built over time into more comprehensive enterprise solutions and deep, long-term, and profitable customer relationships. This opportunity isn't very sexy, and it isn't very complex. But then again, most mainstream technologies aren't.