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Table Of Contents Quick DIR Update 2 Infosource Worldwide Scanner Market – 2022 Year in Review 3 Early Birds Get a Discount to Our Capture & IDP Conference! 10 As Classic Scanning Apps Age, Thin Scanning Becomes Even More Desirable 10 The NEW Infosource Global Capture and IDP Vendor Matrix 14 Quick DIR Update We owe you an apology. Historically, DIR has published its normal run of 15 yearly issues roughly every three weeks for years. We’ve gotten a bit off-schedule in the recent past. For the remainder of 2023 and into the future, we’re recommitting to our normal publishing cadence. Fourteen issues remain for 2023. While the exact publication date may vary by a day or two on either side of these dates, here is the publication schedule for the remainder of the year. Should this change, we’ll make an announcement in DIR as well as on our LinkedIn page. March 21 (today) April 3 April 24 May 15 June 5 June 26 July 17 August 7 August 28 Sept 18 October 9 October 30 November 27 December 11 or 18 Thank you for your continued support and interest in the news and information that DIR delivers to you. It’s de□nitely an interesting time in the industry (isn’t it always!). We look forward to covering the ins and outs, ups and downs, and twists and turns over the remainder of this year and beyond. Thanks for reading, Bryant Duhon Editor-in-Chief bdu@info-source.com Comments, criticisms, and witticisms welcomed. Infosource Worldwide Scanner Market – 2022 Year in Review Infosource has □nalized and published the full year 2022 data for its Global Document Management Scanning Report. Globally, DMS sales have consistently grown since before the COVID pandemic. Recent research by Infosource shows that in 2022 this growth has stalled for the □rst time in a number of years. Within this article we will look at the market dynamics within the key regions. The Global Market Figure 1 shows the relatively stable growth of the global DMS market over the period of the pandemic to 2022. During 2019, the approximate beginning of the Covid pandemic, there was a 25% growth in scanner sales as the “new” home worker/ hybrid worker sourced scanning hardware to be able to work from home. Scanner sales continued to grow during the pandemic until 2021; at which time global shipments stabilized. Figure 1: Global sales of DMS Scanners (2018-2022) It is our opinion that the global market will return to a growth phase once projects that were postponed over the COVID period are initiated once again. Secondly, advancements in Capture Software and Cloud Computing that facilitate a new □exibility in the workplace (which is increasingly catering to the growing home / hybrid worker) will further drive the demand for digital input and, therefore, scanners. Now for a closer look at what happened at the regional level. Western Europe The total European market remained relatively stable over 2022 - declining by <1% to 471K scanner sales. Figure 2 shows that within Europe both shipments of Distributed and Production scanners declined over 2022. Figure 2: European Shipments (2019-2022) For Distributed scanners , there was high demand from the home/hybrid worker over 2021 (which produced a growth of >6% to 465K units shipped). With the relaxation of COVID rules it should be of no surprise that demand for Distributed scanners has dampened somewhat. The demand for Production Scanners (Low-Volume Production, Mid-Volume Production, and High-Volume Production) continues to decline. There is anecdotal evidence from the VAR and System Integrator channels that the slow-down in Production shipments experienced over the COVID period is now beginning to reverse as both work□ow and print management projects have started to pick up as former home and hybrid workers head back to the corporate workplace. However, Figure 2 shows this uptick has still not been enough to reverse the overall decline in Production scanner sales. East Europe Figure 3 below shows the same pattern of shipments occurred in Eastern Europe as occurred in Western Europe. However, it is interesting to note that in 2022 the volume of shipments of Distributed scanners in Eastern Europe fell below what was shipped prior to the pandemic. This net loss of Distributed scanners can be directly attributed to Japanese and Western brands pulling out of Russia (the largest East European market) due to the Russia-Ukrainian war. Figure 3: East Europe Distributed Scanner Shipments (2019-2022) North America In 2022, the total North America hardware scanner market grew 1.1% YoY from 1,065,276 units to 1,076,735 units. The Distributed Scanner segment, which consists of the Personal, Workgroup & Departmental categories rose 1.3% YoY. The Workgroup category continued to outperform this segment and unit shipments rose 6.7% from a year ago. Furthermore, in 2019, this category represented 49.6% within the Distributed Scanner segment, by 2022 it now represents 53.5% share of total shipments.(see □gure 4 below). Fujitsu is the market leader within the Distributed Scanner segment with 35.5% share due to their market dominance in the Departmental segment with (73.8%) share and primarily the success of the □-7160 scanner in this space. Overall, the Departmental segment sales in 2022 were □at to slight decline - 0.1% year over year. The 4 quarter of 2022 was strong as units rose 16.3% from the previous quarter and up slightly form 2021 Q4 shipments. th Figure 4: NA Distributed Scanner Shipments (2019-2022) Meanwhile, the Production scanner segment in this region continues to underperform as units shrank 19% YoY. All three categories (Low Volume, Mid Volume, High Volume) had YOY declines in 2022. Within the LV Production category, some vendors managed to outperform the previous years’ declines as both Canon and HP unit shipments grew 8.8% and 9.8% respectively. Additionally, in 2022, Canon gained the # 1 market share position from Fujitsu with 40.1% share up 19.5% YoY while Fujitsu’s market share declined to 16.2% in this segment. Canon’s market growth can be attributed to the success of the DR-G2110 scanner, which offers both a USB only and UBS +Ethernet dual interface connectivity version. While USB scanners still represent the vast majority of devices, network scanners share continues to grow. In fact, in the LV Production segment USB & Ethernet connectivity scanners grew 12.8% YOY. Additionally, the Distributed Segment has seen a rise in network scanners in recent years, and in 2022, USB and Ethernet-only Distributed scanners grew 51.6% YOY. The pandemic shifted tech buying trends for end users and the scanner market is not immune to this shift. Buyers needs have changed, the ability to integrate to cloud services, a small footprint, and user-friendly intuitive color LCD touch-panels are top purchasing requirements especially within the Distributed scanner segment. The total Latin America scanner market grew 7.8% YOY in 2022. Within the Distributed scanner segment, all three categories showed YOY growth. The Desktop Workgroup category grew 9.3% and represents 35.9% of total Distributed scanner shipments in this region followed by the Departmental category at 32.9 share and the Personal segment with 28.5% share. The Departmental category showed strong growth in 2022 up 14.3% year over year. At a country level, Brazil is the top market with 49.1% share followed by Mexico with 13.8% share. Both countries showed YOY growth in 2022 up 17% and 5% respectively. Within the Distributed segments, Kodak Alaris is the market leader in Latin America with 23.1% share followed by HP with 17.5% and Canon 16.5% Figure 5: Latin America Market Share by Country Breakout – Distributed Scanner Segment Within the Production Scanner segment, total shipments fell 23% YOY as both LV and HV scanner shipments were down year over year. However, the Mid-Production category grew 11% YOY. Furthermore, within the MV segment, Avision’s market share grew 62% as unit shipments rose 66.2% from the prior year and bumped out Fujitsu as the #1 market leader in this segment for the □rst time with the success of the brands AD-8120P and AD-8120U models in this region. Latin America Asia Pacific The Asia-Paci□c region is geopolitically divided into East Asia (China, Hong Kong, Japan, South Korea, and Taiwan) and Southeast Asia (Indonesia, Singapore, Thailand, Malaysia, the Philippines, and Vietnam). The global shortage of semiconductors that began around 2021 and supply chain disruptions caused by the closure of cities, factories, and of□ces due to COVID-19 continued to outstrip the massive backorders in 2022. Although manufacturers were able to resolve this situation by making design changes and □nding new suppliers in the second half of 2022, the back orders could not be completely eliminated. This situation was not resolved, as manufacturers were forced to prioritize their suppliers. APAC Scanner market is stabilizing overall, but with regional differences. Distributed Scanners in APAC decreased -0.8% from 2021 to 702,491 units. Actual demand would have been much higher in 2022, as the supply shortage of scanners was not resolved. The personal segment grew by 11.9% to 129,919 units, the workgroup segment grew by 5.8% to 361,916 units, and the departmental segment declined signi□cantly to -17.4% to 185,421 units. While this situation was largely the result of regional differences in APAC, a common trend can be seen in the strong performance of the personal and workgroup segments and the large decline in shipments in the departmental segment. A common trend is that the scanner market in East Asia and Oceania, where there is a high concentration of developed countries, has passed the maturity stage as a scanner market and is showing a slight decline year by year. However, Southeast Asia and South Asia, where social digitalization and IT infrastructure development are still behind, are characterized by a strong growth trend. The top brand in the overall Distributed Scanner market in terms of shipments was Fujitsu with 33.0% of the total, followed by Epson with 24.2%. In the Personal segment, the top brand was Epson with 40.6%, and the top-selling model was Epson’s ES-50, which captured a 22.5% share in this category. In the workgroup segment, the top brand was Fujitsu with 29.7% and the top-selling model was Fujitsu's ix1600, which captured a 12.8% share in this category. In the departmental segment, the top brand was Fujitsu with 48.2% and the top selling model was Fujitsu’s □-7140, which captured a 20.7% share in this category. Figure 6: APAC Distributed Scanner Shipments (2020-2022) Conclusion Infosource’s new data gives us clear evidence that the growth of Distributed scanner sales, driven by the demand of the hybrid worker, has stabilized across all regions. Perhaps what is of more a concern for the VAR and Systems Integrator channels is that the demand for Production scanners does not seem to have bounced back now that Covid restrictions have come to an end. The outstanding question for them is whether work□ow projects that were initiated at the beginning of the pandemic and subsequently put on hold have been cancelled permanently. News of recession across the various regions, combined with the continued global shortage of semiconductors, continued supply chain disruptions caused by the closure of cities, factories, and of□ces in China are a major treat to continued growth in our industry. This article and the research is the work of Infosource’s Document Management Scanning Team: Mark Nicholson (Europe): mn@info-source.com Shinichiro Oda (Asia): so@info-source.com Barbara Richards (North and Latin America): br@info-source.com As we round the corner into spring, our annual conference is also rounding into shape. We have a preliminary agenda ready to pique your interest. . Click here to see what’s in store for you As with every year, seats are limited. Save the date. Save your spot. Our early bird offer runs through May. Contact Erin Dempsey at now to secure your spot early so you can relax knowing you’ll be networking with your peers and industry leaders in the autumn. ed@info-source.com TWAIN Working Group is once again a proud Technology Sponsor of the event. We have three additional sponsorships available. Please contact Erin for conference sponsorship details. As Classic Scanning Apps Age, Thin Scanning Becomes Even More Desirable Just like the Pontiac Firebird classic car (last manufactured in 2002), or Froot Loops Cereal Straws classic food (discontinued in 2009), or the Microsoft 98 classic operating system (extended support ended on July 11, 2006), eventually there comes a point in time where the laws of diminishing return come into play for classic products. These were all great products that were very popular in their time but, as with most things and especially technology-related, there comes a time where newer and more modern versions are demanded by consumers. This consumer demand for modern versions of products causes manufacturers to shift technology investment, R&D and product development to more modern solutions and cut-back on maintaining these classic products. Will we see you on September 6 & 7? Early Birds Get a Discount to Our Capture & IDP Conference! Thin Scanner Technology Is on the Rise Thin-Client Scanning has already been desirable for many reasons including the cost savings of not having to use a PC as well as the IT support burden to maintain PCs. Therefore, the value of a PC-less solution was primarily a bene□t for the IT department and not generally a tangible bene□t that could be measured for the more general business units within an organization. The Challenges of Maintaining Classic Document Scanning Technology While the value for IT remains as described above, what the TWAIN Working Group (TWG) is now seeing as a trend is more often technical issues with classic desktop scanning applications that are now causing lost productivity for business users. After all, if an accounting worker (for example) can’t scan their documents ef□ciently then this typically receives a lot of unwanted attention within an organization because payables and receivables are not being updated in real-time. These technical issues are caused by various factors, but primarily it’s just because of less support for these classic technologies such as 32-bit or 64-bit scanner drivers. Or Windows Updates causing unexplained and intermittent USB crashes, or desktop scanning applications programming language updates not being applied. As you can tell, maintaining these sorts of classic document scanning applications is a daunting task. It’s expensive and relies heavily on vendors to maintain their code. With so many technology variables it’s hard to pinpoint the cause of issues, which creates a lot of □nger-pointing and frustration. At the TWAIN Working Group (TWG), we are seeing a sincere shift from classic desktop document scanning applications to Thin Client/Web-based document scanning applications, and this was one of the main considerations when we created the TWAIN Direct RESTful API speci□cation. Since TWAIN Direct is an API speci□cation, it eliminates so many potential issues that had to be considered with classic applications. For example, there is no 32-bit or 64-bit driver version consideration because there IS no software driver installed on a traditional computer! TWAIN Direct requires only a network connection and is completely operating-system agnostic. Also, since Thin Scanner is a Web-based application, one server can support many users, is easily updated in real-time, and there is no software installation! This means that organizations can literally deploy Thin Scanner to hundreds or thousands of users in minutes and then provide updates/enhancements without the traditional time- consuming task of updating classic desktop applications one computer at a time. Events to Learn More About the Thin Scanning Megatrend As the Thin Scanner technology trend continues to gain momentum, end-user organizations, technology enthusiasts, and technology providers should participate in industry groups and events to fully understand best practices for creating these new types of modern document capture solutions. Two events that the TWAIN Working Group would advise attending are the Infosource Capture & IDP Conference 2023 on September 6 and 7 in Chicago and the second is our very own, TWAIN Direct Developers Day 2023 on June 6 and 7 in Safety Harbor, Florida. Both events are focused heavily on the topic of capture but also slightly different with the Capture & IDP Conference providing a higher-level, broader view of the market with a full day of expert presentations including case studies and industry research data. th th th th TWAIN Direct RESTful API to Overcome Classic Technology Issues Whereas TWAIN Direct Developers Day is a full-day primarily focused on hands-on software development using the TWAIN Direct RESTful API protocol plus simultaneous business roundtable discussions of several hot industry topics. Each of these events is equally valuable in that they both provide excellent personal and business networking opportunities. We hope to see you at Capture & IDP 2023 and Developers Day! For more information, please contact . erin.dempsey@twain.org How Much Is Your Legacy Document Capture System REALLY Costing You in Tangible Hard and Soft Dollars? Now it’s time for you to participate and provide some feedback on our unof□cial survey of “ ?” We ask for you to participate in several ways: How much is your legacy document capture solutions costing you in tangible hard and soft dollars □. Send your response via email to Bryant Duhon directly at bdu@info-source.com □. TWAIN Working Group survey on costs of legacy capture system: . Click here to take the survey □. Join the TWAIN Working Group (TWG) webinar on Thursday, March 30 at 1pm ET for a TWAIN Direct update and Developers Day 2023 preview: . th Click here to register THANK YOU GIFT for your time! Share your thoughts or register for the webinar and TWG will send you a worksheet that you can use to model your own real costs of your capture system. Ralph Gammon, Market Analyst for Capture Software, Infosource We recently published our annual Global Capture and IDP (Intelligent Document Processing) Vendor Matrix – and accompanying report. The Matrix ranks 20 of the leading vendors in the market, dividing them into four categories: Stars, Disruptors, Competitors, and Explorers. Vendors are ranked on their Strategy and Capabilities, as well as their market Execution. The increasing number of vendors in the market continues to make our matrix a greater challenge to compile each year. A decade ago, there were probably less than 50 Capture vendors to consider globally. Today, there are several hundred. This expansion has been driven by the introduction of more AI and machine learning, which has created a subset of the market known as IDP. Infosource de□nes IDP as the application of AI and machine learning to unstructured input for automated classi□cation and data extraction. Applied intelligence is one factor we consider in our rankings under the umbrella of Strategies and Capabilities. We also look at areas like cloud services and multi-channel input, as well as the vendor’s vision for end-to-end automation. Related to Execution, we consider market share, strength of partner channel, ease of implementation, and competitive advantages. The NEW Infosource Global Capture and IDP Vendor Matrix The three Stars in this year’s rankings remain the same (ABBYY, IBM, and OpenText), although, as Infosource put increased weighting on market share, there was some shuf□ing in the leaders’ positions. According to our market sizing analysis, OpenText and Kofax combine to make up about one-third of the market, which cannot be discounted. IBM, ABBYY, Hyland, and I.R.I.S. come next but none of them have a double- digit share and everyone after that is less than 3%. Kofax leads the Competitor category, thanks to its strong Execution and market share. It has improved its Strategy and Capabilities through its improved cloud offering and also a couple of interesting acquisitions in 2022. As a result, Kofax is on the cusp of joining the market Stars. Our Competitor class is primarily made up of vendors that have established themselves in the traditional Capture space and have introduced features like IDP and cloud capabilities to expand their use cases and improve usability. Competitors include Hyland, I.R.I.S., Automation Anywhere, xSuite, and BIS. The Disruptor category includes some well-funded IDP-focused starts-ups like Hyperscience and Rossum, as well as vendors with a traditional Capture heritage that are aggressively expanding their platforms to incorporate features like IDP, work□ow, and cloud delivery, such as TCG Process and KnowledgeLake. Finally, enterprise software vendors who are rapidly expanding into IDP, such as Microsoft, UiPath, and Appian are all classi□ed as Disruptors. Explorers UST and Planet AI have shown impressive potential and will likely move forward as their products and GTM execution matures. Infosource’s EMEA version of the matrix includes □ve additional Explorers with roots in AI technologies. One fascinating market development has been the lack of consolidation, especially involving established Capture vendors and IDP-focused start-ups. It’s almost as if the established Capture players, many of which have been at least experimenting with AI for some time, □gure they can do IDP better based on their knowledge of the market. I’m not sure this is true based on some of the interesting new technology I’ve had the opportunity to see. One of the key features of many new IDP applications is their ability to learn by example. This means that a business only has to do their normal data entry work and the software application will learn which data to capture based on their keystrokes. While this concept has been around for a long time, IDP vendors are perfecting it, which reduces set up times and has helped expand the market to handle a new breadth of document types. This includes unstructured documents where the application may only be able to learn 80% of the □elds needed to be captured, but with a proper human- in-the-loop interface, still enables the person entering the data to double their output. But, even as IDP technology continues to improve, as interest rates have risen, venture funding as been harder to come by. In some respects, the IDP space has been a victim of its own hype, with many analyst □rms touting huge growth potential and discounting the presence of established Capture market leaders. In addition, while IDP was a great proving ground for AI, generative AI is the new hyped market for the technology, which may lead prospective investors away from IDP. There is certainly going to be pressure on IDP start-ups to grow by taking market share away from established Capture vendors, but if they fail, they may want to start considering trying to sell themselves to them. As they say, if you can’t beat them join them. And for established Capture vendors, there are quite a few diamonds on there that could really help them differentiate from the competition. This potential for market consolidation will be one of the many hot topics being discussed at this year’s annual Capture & IDP Conference, being held Sept. 6-7 in Chicago. The Infosource 2023 Global and EMEA Capture & IDP Vendor Matrix reports are currently available. If you are interested in purchasing one, please contact David Record at . dr@info-source.com Learn more Single user: $597 (electronic) Two users: $897 From 3 to 5 every extra user: +$100 10 users: $1,497 Company-wide subscription: $2,500 (country-speci□c) Enterprise-wide subscription: $4,500 (global) Subscriptions: Vol. 32, No. 2 Managing Editor: Ralph Gammon; rg@info-source.com Editor-in-Chief: Bryant Duhon; bdu@info-source.com and +1 (301) 275-7496 DIR is published approximately 15 times per year by: Infosource SA Avenues des Grande-Communes 8, 1213 Petit-Lancy, Geneva, Switzerland http://www.info-source.com Copyright @ 2023 by Infosource SA. Federal copyright law prohibits unauthorized reproduction by any means including photocopying or facsimile distribution of this copyrighted newsletter. Such copyright infringement is subject to □nes of up to $25,000. Because subscriptions are our main source of income, newsletter publishers take copyright violations seriously. Some publishers have prosecuted and won enormous settlements for infringement. To encourage you to adhere to the law, we make multiple-copy subscriptions available at a substantially reduced price. DIR is the leading executive report on managing documents for e-business. Areas we cover include: Document Capture; OCR/ICR, AI, and Machine Learning; RPA; ECM; Records Management; Document Output; and BPM. DIR brings you the inside story behind the deals and decisions that affect your business. Business Trends on Converting Paper Processes to Electronic Format DOCUMENT IMAGING REPORT
