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The midmarket segment—defined as customers with between 100 and 1,000 users—has different needs than the small business or enterprise company, and more midmarket customers in a variety of vertical industries are turning to digital imaging, according to solution providers.
For Hal Petschke, vice president of business development at BizTech Solutions, a solution provider in Freehold, N.J., solutions pitched and sold vary by vertical industry, namely health care and finance, where cost is an issue. "One of our major focuses going forward is the health-care space, and almost all of the hospitals and nursing homes we deal with are in that midmarket world, and all under tight budgets," he said.
Petschke's company does nearly half of its business in the midmarket, and imaging, workflow and forms processing solutions are all in demand, he said. In the health-care market, medical-coding and patient-registration applications are popular, while in the financial sector—midsize banks and credit unions—BizTech sells a lot of check-scanning and retrieval solutions, mortgage and accounting applications.
"It's all dealing with removing paper from the process as much as they can. Paper still comes into all of these various businesses, but they like to get it out of their process handling as quickly as they can. We typically put in capture solutions to put in these paper documents, and then build an imaging system and an automated workflow to process these documents within whatever business process is being addressed," Petschke said.
The sales cycle in health care is long for BizTech, and business that was won in 2005 is just coming to fruition for the solution provider as customers enter into a new budget year. Sales representatives now are beginning to work on projects that will be completed in the 2007 budget year.
"Almost all hospitals seem to have their budget cycles commence on Oct. 1 of [every] year. If we catch them at the right time, that's great. Otherwise, it gets put in the budget for the next fiscal year, but sometimes we can get around [that] with leasing. Sometimes they'll be able to get around that because it's not a capital expenditure," Petschke said. "We try to work that out wherever we can to try to get around that problem, but certainly in the midmarket, budgets are an issue because they're very tight."
Dan Rotelli, president of Business Imaging Systems, a solution provider in Edmond, Okla., said he finds that his customers prioritize creating business efficiency in their quest for the paperless office.
"Cost is not so much a factor as a measurable business value," Rotelli said. "People are now in their third- or fourth-generation of systems in some cases, and they're trying to get more efficiency in what they're doing. They're realizing that the technology isn't enough. They're looking for something to improve their work processes."
Business Imaging Systems does about 50 percent of its business in the midmarket, and nearly 70 percent of its customers are not first-time document imaging solutions customers.
Business Imaging Systems' most popular solutions are in the document capture space, but customers are looking for more than they have in the past.
"Companies traditionally looked at the deployment, and they realized they handled 100 percent of their paper documents at the capture phase," Rotelli said. "Most of their paper handling comes in at capture, but you're not going to retrieve 100 percent of the data that's in the system. [Customers are] demanding more statistical data in the systems," he said.
David Langemak, vice president of WaterWare Internet Services, an imaging solution provider in San Jose, Calif., agreed. WaterWare is a reseller of Xerox's DocuShare products, and Langemak said that midmarket customers are looking for more advanced deployments than before for larger customers.
Scanning is still WaterWare's sweet spot, but sales of the latest DocuShare applications are helping the company move up from the small-business customer into the midmarket.
"[For] most of our customers in this space, cost isn't so much of an issue as getting it widely available and used in a rapid fashion [is]," Langemak said. "In that tier, it's more that they're making a corporate commitment—headquarters is making the decision to implement this system and then the subsidiaries now have that platform, which they can leverage to do their projects."
While revenue, sales cycle and solution varies by vertical industry and by customer, solution providers agree that document imaging solutions are flourishing in the midmarket.
"It's a great market because there's lots of opportunity; they're in the middle there," said BizTech's Petschke.
