Use Efficient Document Service Providers to Offset High Document Management Costs - Whitepaper by Banctec

Making Leaders Successful Every Day

June 29, 2011 | Updated: July 5, 2011

Use Efficient Document Service Providers To Offset High Document Costsby Craig Le Clairfor Business Process Professionals

www.forrester.com

© 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email [email protected]. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

For Business Process Professionals

ExECUTivE SUmmaryDocument processing services (DPS) encompass a diverse set of specialized services, such as capture, printing, and office fleet management, for document-intensive business processes. Three distinct service segments — hosted repository, document output, and managed print services (MPS) — continue to address the decline of paper and help organizations tame business processes by using the full spectrum of structured and unstructured content. Technology advances and a sluggish economy have helped hosted repository services drive price points for capture and other document processes to the bottom, making in-house document processes increasingly untenable as CFOs sniff out their true cost. Business process pros should turn to DPS providers as a part of their enterprise strategy to reduce the costs of document-intensive processes.

TaBLE OF COnTEnTSThe DPS Market: Three Segments With A Mix Of Document Functions

Providers Fight Consolidation By Integrating Business Process Outsourcing

Hosted Repository Services Show Steady Growth

SaaS And Cloud Providers Make Small Inroads Into DPS

rECOmmEnDaTiOnS

Use Your Hosted Repository Vendor To Do More Than Just Save You Money

WHaT iT mEanS

Prepare For A New Wave Of Strategic Document Service Reviews

nOTES & rESOUrCESForrester interviewed several vendors, including BancTec, Cedar Document Technologies, ConsolidatedGraphics, DST Output, Hewlett-Packard, HOv Services, iron mountain, Océ, Pitney Bowes, raine media, rr Donnelley, Swiss Post, Unisys, vantive, Williams Lea, Wipro, WorkflowOne, and xerox. We also spoke with 30 enterprises about mPS, customer communications, capture, and process reform initiatives.

Related Research Documents“The State Of The Document Processing Services industry 2011”march 22, 2011

“implementing managed Print Services (mPS)”December 24, 2009

June 29, 2011 | Updated: July 5, 2011

Use Efficient Document Service Providers To Offset High Document Costsby Craig Le Clairwith Connie moore and Emily Fowler-Cornfeld

2

2

2

10

11

12

www.forrester.com

http://www.forrester.com/go?docid=57271&src=58355pdf



© 2011, Forrester research, inc. reproduction ProhibitedJune 29, 2011 | Updated: July 5, 2011

Use Efficient Document Service Providers To Offset High Document Costs For Business Process Professionals

2

THE DPS MARKET: THREE SEGMENTS WITH A MIX OF DOCUMENT FUNCTIONS

The DPS market is made up of three segments: hosted repository services, document output services, and MPS (see Figure 1). Revenues in all three segments are strong despite dramatic declines in some paper-intensive areas like commercial and transactional print, traditional fulfillment, and static forms.1 Historically, enterprises have successfully outsourced parts of these document processes, largely by keeping the functions in each segment separate. Now enterprises are crossing segment boundaries by outsourcing more of their document-centric needs to their existing DPS vendor, linking outbound marketing materials to inbound capture, or tying office multifunction peripherals (MFPs) into core business processes.

PROVIDERS FIGHT CONSOLIDATION BY INTEGRATING BUSINESS PROCESS OUTSOURCING

This report highlights the primary DPS offerings in the hosted repository services market.2 Consolidation is affecting some service providers, as when Sourcecorp merged with HOV to form SourceHOV. Others are fine-tuning their offerings — like when Iron Mountain sold off the majority of its digital services business. Some of these moves, like Xerox’s acquisition of ACS, send a clear signal about the strategic direction of the market: DPS providers must add higher-value capabilities that link to or combine with core business processes. Vendors are using offerings based on software-as-a-service (SaaS) to augment, but not disrupt, hosted services (see Figure 2).

HOSTED REPOSITORY SERVICES SHOW STEADY GROWTH

The hosted repository services segment provides business process pros with options for outsourcing document processes, including capture, records management outsourcing, report archiving, and other offerings related to enterprise content management (ECM). In our survey of the primary providers in the DPS market, hosted repository services surfaced as a steady growth area, particularly for outsourced paper capture and management.3 The provider market contains more focused DPS providers like Xerox and Sourcecorp, but also includes global services companies like Wipro and hardware manufacturers like Hewlett-Packard, Océ, and Ricoh whose hosted repository service capabilities are becoming more advanced (see Figure 3 and see Figure 4).

© 2011, Forrester research, inc. reproduction Prohibited June 29, 2011 | Updated: July 5, 2011


3

Figure 1 Document Processing Services Segments Show a mix Of Growth and Decline

Source: Forrester Research, Inc.58355

HOSTED REPOSITORY SERVICES

MANAGED PRINT SERVICES

Enterpriseprint services

Life-cyclemanagement

Distributedcapture

DOCUMENT OUTPUT SERVICES

Web-to-printand distributed

applications

Office managedservices

MFP anddistributedworkflows

Other

eDiscovery

Report and statementarchiving

Email hosting

Capture and intelligent content services

Physical and electronicrecords management

Process management Formsmanagement

(FM)

Print procurement

Transactionprinting

Print and mailroomFM and outsourcing

Commercial printing

Marketing communications

Fulfillment services



4

Figure 2 Leading Providers Of Document Processing Services


HOSTED REPOSITORY SERVICES

MANAGED PRINT SERVICES

Enterpriseprint services

Life-cyclemanagement

Distributedcapture

DOCUMENT OUTPUT SERVICES

Pitney Bowes

Canon/Océ

Xerox

BancTec

DST Output

KP Corporation

Williams Lea

Williams Lea

Xerox

ConsolidatedGraphics

Hewlett-Packard

Canon Lexmark Xerox

Toshiba

Unisys

Iron Mountain

SourceHOV

Ricoh/Ikon

DST/AWD

RR Donnelley

Broadridge

Hewlett-Packard

Canon/Océ

Wipro

Pitney Bowes

Se2

CSG Systems

SaaS providersSaaS providers

Hewlett-Packard

Ricoh/Ikon

Merrill Merrill

SaaS providers• SpringCM• Box.net• Hyland Software• Lexmark/Perceptive• Wipro

SaaS Providers• Infosys• Elixir• Cedar• Unisys• Wipro



5

Figure 3 Criteria For Hosted repository Services


Workflow Provision of labor as part of the document process for data entry, documentreview, indexing, and data transformation

BPO capabilities Business process hosted solutions such as payroll, cash management, andcontact centers

Email and message archiving The outsourced storage and management of email and message content

eDiscovery services Services to discover, collect, and prepare content needed to meet litigationand legal goals

Records management Provision of outsourced management (policies on retention and disposition)for paper or electronic content

Labor arbitrage Number of dedicated personnel employed for offshore processing

Capture Collection of content from paper, fax, and e-forms and transformation intodigital files

Data transformation Extent of value-added services for data extraction, correction, validation, andreformatting

Repository services Services that store and manage content for enterprises



6

Figure 4 Leading Providers Of Hosted repository Services

Large And Highly Focused DPS Providers Build Scale

Scale and focus are important for capturing and hosting content and providing sustainable pricing. Larger, more mature vendors have shown they can provide a reliable utility; third-party certifications like SAS 70 help make clients comfortable with vendors hosting important client data like account forms, statement and report archives, email, and other types of unstructured content. Based on market share and the completeness of their offerings, leading vendors in this space include Pitney Bowes, Sourcecorp, and Xerox. These vendors’ primary DPS characteristics are:

· Xerox’s hosted repository services are moving closer to BPO offerings. Xerox now has the most complete set of document services in the industry. On September 28, 2009, Xerox announced the purchase of BPO company ACS in a deal valued at approximately $6.4 billion.4 ACS’ $1 billion-plus capture, document review, and data entry operations business will easily quadruple Xerox’s previously modest hosted repository services revenue.5 Before the acquisition, Xerox had smaller, albeit growing, document services capabilities for mortgage origination,


Significant focus Moderate focus Limited focus No focusStrong focus

Xerox

Hewlett-Packard

DST/AW

D

Unisys

Canon/Océ

BancTec

Wip

ro

Pitney Bowes

SourceHOV

Iron M

ountain

Capture

Data transformation

Repository services

Workflow

Labor arbitrage

Records management

eDiscovery services

Email and messagearchiving

BPO capabilities



7

eDiscovery, and document capture. Xerox has moved these services under ACS’ organizational wing to leverage its operational skills and tie document processes to core ACS BPO functions. This will be a winning DPS strategy as the market develops, and one that will allow Xerox to focus like a laser on the fast-growing MPS business.

· Iron Mountain will focus on digital records centers and medical images. Iron Mountain, best known for its physical shredding and information management services, exited the commodity cloud file storage space and sold its eDiscovery assets to Autonomy. The company will now de-emphasize its SMB, consumer, and commodity digital businesses but continue to build out its digital records center information life-cycle management portfolio.6 For Iron Mountain, this includes core DPS services such as its digital record center for medical images (DRC-MI), digital record center for images (DRC-I), and intellectual property management (IPM/escrow). Healthcare is the firm’s second-largest vertical. IM Medical will be a growth area; it already stores more medical records, both paper and digital, than anyone. In July 2010, Iron Mountain announced an electronic medical records (EMR) enablement solution to scan and link paper records with EMR and other clinical systems.7

· Sourcecorp added HOV for processing strength. Sourcecorp was founded in 1994 to provide outsourced document management services, including electronic imaging, document conversion, data capture, and document storage. But the company has moved toward more complete BPO and consulting deliverables since 1999. Labor arbitrage from India, the Philippines, and Mexico and a “rightshoring” approach have fed Sourcecorp’s growth. For example, medical in-patient coding and claims services, with more than 1,500 customers, are onshore-only for security purposes; in other areas, offshoring puts processes wherever labor is cheapest. Sourcecorp offers a cloud-based repository with records management and is investing rapidly in analytics to reduce manual indexing. The firm provides capture and indexing services — although not eDiscovery —primarily in financial services, healthcare, government (state revenue departments), commercial, and legal. Sourcecorp’s hot markets continue to be insurance payers, government, and medical. HOV, a DPS company newly acquired by Sourcecorp, has seen its analog work and receivable business decline and is experiencing more demand for knowledge-based services, EDI, and data conversion services.8

· PBMS combines marketing databases with postal expertise. Critical communications solutions, which tie together mail services, transaction printing, fulfillment, and eProcurement, is the fastest-growing services segment at Pitney Bowes Managed Services (PBMS). Hosted content services will also grow with the expansion of its outsourced eDiscovery services. In addition, Pitney launched the Volly digital delivery service, a digital mail communications platform for consumers to receive, view, organize, and manage bills, statements, direct marketing, catalogs, coupons, and other content from multiple providers.9 Its strongest foothold is still in the mailroom, where the company processes more than 20 million documents a day. Pitney’s first digital mailroom initiative did not resonate with corporate customers, but its



8

new Digital Mail service offering now integrates with email and uses a SaaS ECM back end for document management and workflow. Pitney is well positioned to focus on higher-margin outbound campaign services by combining its MapInfo and Group 1 Software products with its deep mail processing expertise to provide complete direct channel output solutions.

Global Service Providers And Device Manufacturers Are Up And Coming

The top providers in DPS tend to be well-established companies with well-known brands. Scale, dependability, and brand recognition are important, but several companies are revising their market approaches and taking a stronger, more aggressive approach to hosted repository services. For example:

· Global service providers are extending into the DPS segment. Wipro launched hosted document management (HDM), which provides customers with end-to-end infrastructure through a SaaS model. The firm uses EMC’s ECM Suite for its clients’ enterprise content management needs and local partners or Wipro BPO centers for scanning; it emphasizes its complete ECM and business process management (BPM) solution and its experience in a number of domain-specific applications. HCL, while primarily a traditional offshore BPO provider, has moved aggressively to capture outsourced document services, such as invoice processing and customer onboarding in financial services.

· BancTec is extending its process value chain beyond capture. Irving, Texas-based BancTec provides document, content, and payment processing services for 1,800 customers in 50 countries, across 19 operations centers split evenly between the US and Europe. The vendor targets the banking, insurance, government, healthcare, transportation, utilities and telecommunications, and manufacturing verticals. BancTec is transitioning from providing hardware and technology for the banking industry — check sorting and capture systems — to BPO services. The vendor’s DPS solutions focus on payment cycle management: accounts payable, loan origination, credit cards, insurance, and inbound management — general document processing and hosted archives — for mail, claims, and proxy. It also has a proven ability to transition existing clients from on-premises technology to BPO.

· Manufacturers and office giants also provide hosted services. Ricoh/Ikon, which uses a California-based facility but will also work on site, provides a capable invoice-processing solution with return on investment models and migration paths to electronic invoice presentment and payment (EIPP). Océ Business Services operates on-site imaging centers for loans, claims, litigation, accounts payable, and student records. Océ’s integration services often feed enterprise document repositories like FileNet, Documentum, and HP’s Tower ECM solution, and its Records, Compliance, and Legal Solutions (RCLS) division provides integrated paper and eDiscovery services. This year, Océ launched digital mail, which targets general corporate mail and distributes it to employees wherever they are: in the office, at home, or on the road.



9

· HP is building DPS from its BPO business. Hewlett-Packard has a full suite of hosted repository services, including eDiscovery and records management via its TRIM ECM software, along with solutions for the financial, healthcare, manufacturing, government, retail, and transportation industry segments. HP Enterprise Services (formerly EDS) has a DPS unit with four data centers: one in Plano, Texas for e-presentment; Tulsa, Oklahoma and New Zealand, which use hosted HP Exstream; and a Colorado Springs, Colorado data center that stands up TRIM.

· Unisys is a systems integrator with an open strategy. Unisys has a few hundred traditional ECM and BPM customers and a growing client base for hosted repository services, principally in financial services and the public sector. The company has various ECM service and support contracts with half of the US state governments and many country and regional governments, such as the European Union. Unisys provides strong integration and consulting services and has a renewed focus on the intersection of hosting, cloud, information technology outsourcing (ITO), and ECM. Globally, Unisys has deployed hundreds of projects with diverse ECM platforms, like EMC’s Documentum, IBM/FileNet, OpenText ECM technologies, and — for basic content needs — Microsoft SharePoint.10 With around 350 ECM subject matter experts, Unisys has a strong consulting methodology in vertical areas such as interagency and court-case management, justice and public safety, health and human services, and banking and insurance. We expect considerable activity and a number of announcements from Unisys in 2011 around its application-modernization-platform-as-a-service (AMPS)/ECM services and solutions offering.

Other DPS Providers Offer Strong Repository Services, But Not As Their Primary Focus

A diverse set of other DPS companies provides hosted repository services. Many of these companies do not focus mainly on this area of DPS; others are emerging companies with smaller market shares. Strong providers in this category include Sourcelink SSG, DST Technologies, Merrill Corporation, Swiss Post Solutions, and Williams Lea. These vendors’ primary DPS characteristics are:

· SourceLink built its business on critical documents. SourceLink’s 500 employees spend their time on direct marketing that results in 1 billion pieces of mail annually. It specializes in important documents that need to be completely and thoroughly verified, such as a disconnection notice for an important service and transactional documents whose content must be printed on paper, like insufficient funds notices and 1099 forms.

· DST hosts content and uses AWD for workflow. DST Systems, whose Global Systems group provides investment management solutions, is the primary record-keeper for mutual funds transactions. It has two important DPS offerings: DST Output and the hosting services supported by the AWD workflow platform. DST’s primary hosting center in Kansas City, Missouri — where millions of mutual fund, insurance, and other financial transactions are processed. Tours of the data center tours put any security concerns to rest. AWD orchestrates people, process, and work by providing capture, dynamic work allocation, BPM, and outbound



10

communications activities along with a wide range of hosted repository services. The AWD workflow product has quietly been in this market for more than 20 years and currently supports approximately 225,000 licensed users in 12 countries.

· Merrill targets cyclical applications. While Merrill primarily focuses on document output services, it offers a variety of solutions in the hosted repository services segment. For example, Merrill Data Publishing Architecture (MerrillDPA) is an Internet-based content management, document planning, and document production tool that supports the production of both print and web documents. It provides a production platform for cyclical, data-driven financial, compliance, and marketing documents like contracts and enrollment kits.

· Swiss Post Solutions has moved far beyond traditional mail delivery. Many postal services around the world are experiencing declining transaction and direct marketing mail volumes and feel the pressure to privatize. Most are diversifying, and DPS is a natural extension of that. But few have been as successful in this effort as Swiss Post’s Solutions division, which now exceeds $500 million in annual revenue and provides mailroom and office services, print services, loyalty programs, and billing and BPO services. A fully integrated platform combines traditional outsourcing with cloud-based solutions.

· Williams Lea’s expertise is also in hosted repository services. Williams Lea provides data capture and indexing solutions to the UK and US markets; these solutions use workflow and are integrated with clients’ own databases. The firm has offshore teams that provide word, document, and legal processing support to numerous clients, particularly in the banking and legal sectors.

SAAS AND CLOUD PROVIDERS MAKE SMALL INROADS INTO DPS

SaaS and cloud are game-changers for some, but not all, document technology areas. For example, in the near term, SaaS will have a limited effect on traditional content areas like document management, records management, business intelligence (BI), search, and BPM. Currently, SaaS augments these services but is not a disruptive force.11 The degree of customization, integration, data sensitivity, and IT focus are the root causes of poor SaaS adoption.12 We will see the following SaaS trends in the DPS market:

· DPS providers will be slow to offer SaaS document services. DPS providers have been slowly repositioning to the cloud, but many have yet to get beyond the marketing department. Few have invested in building a true cloud solution embracing self-deployment, complete web-based access, and integration and partnership with other SaaS offerings — particularly packaged applications and multitenancy. Tepid customer demand and large development efforts means this is not likely to change in the near term.



11

· The DPS industry will partner with ECM SaaS providers to target basic content needs. Unlike traditional DPS providers, emerging ECM SaaS players focus on technology, provide no labor support, and are less driven toward BPO and more complete solutions. Nevertheless, the ECM SaaS players offer a quick, low-cost way to store documents in and print from the cloud and have started to partner with DPS providers.13 SpringCM, which is growing steadily, is the best-known SaaS brand for ECM, providing a preintegrated solution across the ECM suite. Cedar Document Technologies, a 60-employee SaaS company, helps customers design better communication strategies. Elixir Technologies is another customer comunications management provider introducing SaaS for correspondence management. Box.net’s ECM Cloud Connect links on-premises ECM systems to Box’s cloud content management platform.14 Hyland Software’s OnBase has been quietly building SaaS capabilities for several years. And recently, Perceptive Software, now owned by Lexmark, has seen the share of its orders that are for SaaS rise to 25%. A host of companies offer specialized storage solutions for checks, email, and other content, and companies such as Wipro and Unisys have chosen to OEM leading ECM products, such as EMC Documentum, for ECM-as-a service.15

· DPS providers will package BPM and dynamic case management platforms for the cloud. Forrester expects DPS providers to further package business solutions for the cloud with emerging BPM, ECM, and case management platforms. These applications will require less customization and integration, aim to be more departmental than enterprise solutions, and combine BPM with transactional processes. For example, contract management that replaces file cabinets, HR onboarding, or lower-value customer onboarding will become a target.16 Dynamic case management in the cloud provides an opportunity for providers — such as Pegasystems, Appian, and Global 360 — that have strong horizontal case platforms and can use them for service requests or incident management.17 For example, the Unisys AMPS-ECM uses the EMC Documentum suite as the foundation of simple or complex ECM solutions and hosting.

r E C O m m E n D a T i O n S

USE YOUR HOSTED REPOSITORY VENDOR TO DO MORE THAN JUST SAVE YOU MONEY

When selecting DPS providers for hosted repository services, look first to existing suppliers with good track records for service. in particular:

· Put incentives or guarantees for e-adoption in your contract. Select an output provider that understands multichannel requirements — not just how to send an email with a PDF attachment.18 This product category is less about paper and more about managing customer engagement and communication. Be sure your selected enterprise solution has the capability to transform content for emerging mobile device specifications — and make them put skin in the game.



12

· Combine document services from existing suppliers. most providers in our review provide services in at least two of the document service areas — for example, combining capture with output to address the needs of the entire document life cycle. Global contracts that combine services are often the easiest to manage and develop consistent SLas for. Plus they’re most likely to support corporate solutions that you can share across departments.

· Approach sourcing using SOWs instead RFPs. an rFP approach to procuring complex document services often resolves to a set of responses that are difficult to score objectively. Build your requirements into a statement of work (SOW) that will form part of the signable contract with clear requirements for security, SLas, SaaS and hybrid pricing models, governance support, integration with key systems, and escalation procedures.

· Create cross-functional teams for document service procurements. Document services now touch many stakeholders, including lines of business, iT, compliance, finance, and procurement. assemble a working group early before shortlisting providers and developing the SOW.

· Regard hosted repository services as process management, not just capture and store. Paper capture may still be the driver for hosted repository services, but consider the broader skills of data management and workflow processing when selecting a supplier. Suppliers with proven continuous improvement methods for data quality will be the best value in the long term.

W H a T i T m E a n S

PREPARE FOR A NEW WAVE OF STRATEGIC DOCUMENT SERVICE REVIEWS

Over the next two years, look for DPS providers to acquire or develop more BPO and iTO assets and competencies and offer them at lower and more compelling price points. The economy has driven price points for all document services to new lows; in-house capture and printing plants, with their challenging or unworkable business cases, will no longer be tenable. as CFOs increasingly sniff out the true costs of in-house facilities and services, operations staff will no longer be able to gloss over them. But even more importantly, this new wave of DPS providers for hosted repository services will create new opportunities to tame more untamed processes that have stubbornly resisted automation because of their document component. Use new developments in the DPS provider market as an opportunity to tackle thorny untamed processes that have been difficult to manage in the past.

ENDNOTES1 For market growth trends in the hosted repository segment, see the March 22, 2011, “The State Of The

Document Processing Services Industry 2011” report.





13

2 To be included in our research, the DPS provider needed to be of significant size in the market, have a broad set of services, and be subject of frequent inquiries from Forrester clients.

3 Capture continues to be a popular process to move off-premises. See the March 22, 2011, “The State Of The Document Processing Services Industry 2011” report.

4 For a review of this acquisition and importance to the DPS community, see the October 5, 2009, “Xerox Jolts The Document Processing Services Market With A Major BPO Acquisition” report.

5 ITO, BPO, and DPS have increasing points of overlap. For a more complete description of how these previously distinct markets overlap, see the March 22, 2011, “The State Of The Document Processing Services Industry 2011” report.

6 Bloomberg reported that Iron Mountain’s management “concluded that the company could not continue investing in technology development and meet its return requirements and that exploring strategic alternatives for the digital business was in the best interest of Iron Mountain’s stockholders.” Options include a potential sale of the company’s digital archiving and online backup services. Source: Danielle Kucera, “Iron Mountain To Return Cash, May Sell Digital Assets,” Bloomberg, April 20, 2011 (http://www.bloomberg.com/news/2011-04-19/iron-mountain-may-become-reit-to-avoid-elliott-proxy-contest-2-.html).

7 Iron Mountain’s medical records capture system scans images to the McKesson Horizon Patient Folder and to HL7 format. This is a practical business solution rather than a technological breakthrough and will accelerate conversion, as new paper generated will be pushed into EMRs directly.

8 Sourcecorp and HOV, a medium-size Indian BPO provider, completed their merger on May 2, 2001. HOV had previously purchased Lason, which had focused on document-centric applications, workflow management, finance and accounting, and electronic publishing and knowledge processing services. The combined entity delivered services from 49 locations, including the US, Canada, India, China, and Mexico. Source: “Sourcecorp, Incorporated And HOV Services Completes Its Previously Announced Merger,” Sourcecorp press release, May 2, 2011 (http://www.sourcecorp.com/Newsroom/Press-Releases/SOURCECORP-and-HOV-Services-Complete-Merger).

9 The Volly secure digital delivery service, announced in January 2011, is a cloud-based digital mail communications platform that allows consumers to receive, view, organize, and manage bills, statements, direct marketing, catalogs, coupons, and other content from multiple providers using a single application. This opt-in, consumer-focused consolidation service also includes online bill payment.

10 Unisys has its own ECM software (InfoImage), but increasingly strategically deploys the EMC Information Intelligence Group (IIG) suite, i.e., Documentum, for government, financial services and other verticals like telecommunications and transportation.

11 Software-as-a-service (SaaS) is an important new set of capabilities and engagement models in the IT industry, particularly in the emerging world of cloud computing. We project that SaaS offerings will grow from 7% of total software revenues in 2010 to 17% in 2013. But our analysis of 123 software market segments shows that SaaS will have little or no effect on many of them. Moreover, some new and emerging









14

software products like blog and wiki platforms began as SaaS products with no disruption of existing vendors. SaaS will only be a disruptive force in software products that make up about 25% of the total global software market, especially in customer relationship management, human resource management, IT management, and security software. See the January 12, 2011, “Which Software Markets Will SaaS Disrupt?” report.

12 To view this model or use it to determine whether to go to the cloud for your content application, see the July 8, 2009, “How SaaS-Able Are Content, Collaboration, And Data Software Categories?” report.

13 As an example, Pitney Bowes Managed Services has partnered with Hyland’s OnBase SaaS offering. Lexmark will link Perceptive’s SaaS offering to its managed services.

14 Box.net, in partnership with EntropySoft, introduced ECM Cloud Connect, which enables customers to integrate local ECM platforms with Box’s cloud-based storage for access from mobile devices and improved collaboration.

15 Certain content types, such as email, checks, and digital assets like video, tend to elude IT’s focus or have specialized requirements that lend themselves to cloud management. For example, Viewpoint specializes in checks and other financial records. ClearStory Systems, for example, provides SaaS digital media communications and digital asset management (DAM). Autonomy, Global Relay Communications, and Perimeter E-Security all offer cloud-based message (email) archiving. Also look to file storage companies like Nirvanix to extend their offerings to include higher-value storage. And Unisys, which has been in the systems integration, ITO, and DPS arenas for years, is introducing an application-modernization-platform-as-a-service (AMPS) suite, which will offer ECM-SaaS along with strong consulting and center of excellence (COE) skills and resources.

16 Low-value customer onboarding refers to transactions performed over the Web for commoditized products. See the April 27, 2009, “Best Practices: Customer Onboarding” report.

17 Forrester has reviewed the major case management platforms and explained the target areas for case-based applications. See the April 27, 2009, “Best Practices: Customer Onboarding” report.

18 “Cross-channel” refers to the ability to move the same content to multiple output channels without editing the source content or templates on a per-channel basis. Channels include print, SMS, email, RSS, HTML, and PDF. Each channel will have output features that add value to that channel, like email management for email and white space management for print. From an operational perspective, multichannel should refer to the base transformation of content required to consistently distribute content rapidly across interactive and passive media outlets.





Forrester Research, Inc. (Nasdaq: FORR)

is an independent research company

that provides pragmatic and forward-

thinking advice to global leaders in

business and technology. Forrester

works with professionals in 19 key roles

at major companies providing

proprietary research, customer insight,

consulting, events, and peer-to-peer

executive programs. For more than 27

years, Forrester has been making IT,

marketing, and technology industry

leaders successful every day. For more

information, visit www.forrester.com.

Headquarters

Forrester Research, Inc.

400 Technology Square

Cambridge, MA 02139 USA

Tel: +1 617.613.6000

Fax: +1 617.613.5000

Email: [email protected]

Nasdaq symbol: FORR

www.forrester.com

m a k i n g L e a d e r s S u c c e s s f u l E v e r y D a y

58355

For information on hard-copy or electronic reprints, please contact Client Support

at +1 866.367.7378, +1 617.613.5730, or [email protected].

We offer quantity discounts and special pricing for academic and nonprofit institutions.

For a complete list of worldwide locationsvisit www.forrester.com/about.

Research and Sales Offices

Forrester has research centers and sales offices in more than 27 cities

internationally, including Amsterdam; Cambridge, Mass.; Dallas; Dubai;

Foster City, Calif.; Frankfurt; London; Madrid; Sydney; Tel Aviv; and Toronto.

www.forrester.com

mailto:[email protected]