I felt a bit queasy typing that title, however, it does increasingly look to be true.
I took the reins from Ralph just around the time when the pandemic was taking hold here and around the world. Many initial conversations went something like this:
Me: “Do you think this is going to be good for business?”
Industry Person: “Probably.”
Now that we’re entering the 8th month of the pandemic, the answer looks like it’s a solid “yes.” You all know that access to content, wherever the content is and wherever someone works, is essential for business and many of you provide those technologies. So let’s go straight to collection of data points that all point to a massive acceleration of “digital transformation”*, much of which will be enabled by capture and content services technologies.
97% of Enterprises Accelerated Digital Transformation Efforts
Research sponsored by Twilio (a cloud communications and customer engagement platform provider) is the source for this statistics. Two other stats interesting for this industry:
- 95% of all companies are seeking new ways of engaging customers as a result of COVID-19
- 92% say transforming digital communications is extremely or very critical to address current business challenges
While the focus of the research is on communication, given that achieving both of those objectives above relies in large part on documents and information, the opportunity for the vendors in this space seems massive.
Gartner projected an overall global decrease of 7.3% in IT spending in 2020 in July, slightly better than the 8% predicted in May. Within the overall decrease, they predict infrastructure-as-a-service to grow 13.5% to $50.4 billion in 2020 and overall cloud spending to reach $257 billion in 2020 compared to $242 billion in 2019; with continued growth in 2021 and 2022. Gartner also projects the pandemic will increase demand for RPA – from $1.4 billion in 2019; $1.58 billion in 2020; $1.9 billion in 2021.
Capture Hardware and Software
Infosource research also has shown an uptick in hardware and software sales focused on enabling work-from-home and digital transformation efforts.
In June, I spoke with Jim Roberts, President of DocuWare, who noted a huge jump in interest in their products based on marketing and Web stats [See DIR 6/19/20 for more]. The company recently shared a press release that put numbers to this, “Since March of this year, workforces have gone remote and demand for document management solutions soared. DocuWare grew their number of new cloud customers by 24.3 percent compared to the same April to August period in 2019.”
I did a quick search to look for available financials around the industry. OpenText stood out with a 37.5% increase in their cloud services and subscription revenue ($241.9 to $332.6 million) in 4Q19 compared to 4Q20 – they FY ended June 30, 2020. While not specifically stated in their release, some of that growth has to be attributed to pandemic spending.
During Fujitsu’s Mid-Year Channel Update, the company noted their commercial scanner sales are above pre-pandemic levels, led by their ScanSnap line.
While obviously not definitive, taken together a picture does begin to emerge of digital transformation actually happening in a “Big Bang.” I know that during my time at AIIM, getting attention for all of the technology “stuff” that comprises the industry felt like Sisyphus rolling his boulder uphill, but never getting over the top. Maybe we’re starting to glimpse the other side of that hill.
I also reached out to a few folks for their thoughts. I couldn’t’ get to everyone, so if you’d like to share your thoughts, I’d love to hear them, [email protected]
David Jones, VP of Marketing, AODocs: Covid-19 has had a completely polarizing affect on business as some industries (retail for example) have delayed projects for financial reasons. Others see the situation as an opportunity to push through projects that in the past have not necessarily had the backing of senior leadership. Now forced to work from home, those same leaders are now realizing how vital instant, remote access to content, workflows, and collaboration are to an organization.
These organizations are pushing projects of increasing complexity forward at a greater pace – starting with simple deployments to purely get things up and running, but progressively moving beyond this to projects that deliver significant benefits. Specific areas where we have seen this in action include:
- acceleration of paperless use cases (e-signature and other validation workflows)
- Entirely new use cases such as telehealth
- A realization from customers that cloud collaboration platforms are game-changer, and, by extension, products like AODocs which are built on cloud collaboration platforms are an agile, low-risk route to delivering this to their organization
Christina Robbins, Digitech, Marketing Manager: “The rapid shift to remote work caused by the COVID-19 pandemic shined a bright light on problems with remote data security and document sharing and collaboration for many organizations, and they’re scrambling to get solutions implemented before the end of the year. For us, this has meant that despite an initial slowdown in new sales opportunities in the spring, we’ve seen strong interest in our capture, cloud, and ECM products ramping back up through the summer and fall. The analysts agree that 2020 should end well for our industry:
- Aragon Research explains that we will see spending on collaboration, communication, and content management increase 300% in 2021.
- Technavio revised their market estimate for the worldwide Enterprise Information Management market upward just last month, noting a growth rate of 19% per year continuing through 2024. And it’s above 19% in 2020.”
Jim Roberts, DocuWare President: “DocuWare is seeing increased demand in the marketplace that did not exist prior to the pandemic. Businesses of every size needed to quickly digitize so that remote work forces could maintain core business processes. We consider ourselves very fortunate to be in a position to help and to educate. In April the Business Continuity and Mobile Workforce Webinar series we launched was our most popular series ever! We had more registrants in that 2-month time period than we do in a whole (normal) year.”
Ike Kavas, founder and CEO, Ephesoft: “With COVID-19 and the economic shakeup, we’ve seen an even greater demand for digital transformation and automation. More enterprises are realizing that ROI on digital transformation can be seen immediately and long term: these initiatives expedite business processes, significantly reduce expenses, and, as a result, enterprises are able to better serve their customers. We’ve made adjustments to our own business as a result of the pandemic and exceeded revenue goals due to demand for intelligent document processing and automation.”
*Personally, I despise the phrase “digital transformation” as it’s so broad as to be essentially meaningless — moving from a typewriter to word processing is digital transformation. However, it is useful shorthand, so, sigh, using it.
For more information: COVID-19 Digital Engagement Report, https://www.twilio.com/covid-19-digital-engagement-report;