Posted by Craig Le Clair on January 22, 2008
In October of last year, I published "Give DOM its Due" and argued that for years, document output management (DOM) had been pegged as a back-office operation that produces customer statements and bills. And that now, customer experience demands will thrust DOM into a major software category supporting the growing and diverse content that enterprises must assemble and deliver to customers. A few weeks ago EMC purchased Document Sciences. And now on January 22, HP has signed a definitive agreement to acquire Exstream Software, a privately-held provider of document creation and publishing software for print, mail and online channels. HP expects to close on this transaction in the second quarter of HP's 2008 fiscal year.
Exstream continues to be a leading choice for the high-volume segment of the DOM structured market and will greatly strengthen HPs document automation capability. Initially targeting service providers — a tough crowd — Exstream followed an object-oriented development model to allow re-use of document components, which was quickly adopted by service providers to provide similar applications to many customers. Today's focus is heavily in the interactive and on-demand DOM segments with strong direct sales. While revenue numbers were not available, Exstream has 300plus employees.
In an analyst briefing on the acquisition today, HP was clear that Variable Data Publishing (VDP), referring to the combination of specific customer data to a structured output format, is not just printing but a complete publishing infrastructure for capture, retaining, securing and extending digital content creation for the on line, mobile and the interactive environment - although there was little mention of the acquisition in the context of HP's well-publicized Print 2.0 initiative. HP intends to incorporate not only structured and unstructured information into future output applications, but also rich media such as audio and video.
Exstream fills a gap in HP's document automation capability which largely consisted of HP Output Server with roots in print infrastructure output management, and derived from the Dazel product. Exstream moves well up the value chain providing complete output creation and management with the ability to add value to the customer through TransPromo and highly personalized communications. As part of the Web Services and Software business unit within the Imaging and Printing Group, it will become an integral part of the overall IPG SW strategy and help link capabilities across HP's Technical Solutions Group and the office solutions area.
Yet, HP will have challenges and opportunities with this acquisition. They must carefully navigate very productive hardware channels, providing a more complete solution, but not directly competing with service bureau HW customers. They are also wading into the high-volume AFP and transaction printing market, traditionally not a sweet spot. And they must continue Exstream's support for non-HP hardware platforms, and to fully leverage the combination, they must train a sales force more accustomed to hardware then complex document automation sales like correspondence management.
Yet the pros far outweigh the cons for this combination. HP has greatly extended its capabilites at a time when DOM — particulalry for interactive applications — is heating up. Exstream customers get stronger worldwide sales and support and deeper R&D pockets. HP is to be commended for showing vision in the document output space and yes — helping give DOM its Due.