TRACKING THE GROWTH AND SUCCESS OF EQUITRAC
May 23, 2008 - In 2004 Equitrac unveiled an aggressive
plan to reinvent itself via fresh technologies, while at the same time
maintaining its firm grip as a leader in print management and intelligent cost
recovery. At its briefing for media and analysts held recently in South Beach, FL, Equitrac executives outlined how the Plantation, FL-based private equity
company (it also has a research and support center in Waterloo, Ontario) has grown and what it’s doing to ensure success. “We’ve made an unbelievable
transformation and I’m proud of all of the hard work we’ve done in embracing
and executing the vision,” said Mike Rich, chief executive officer of Equitrac.
“This is the culmination of four years of heavy lifting to build a new
organization and products.”
As part of the company’s evolution, the executives
also spoke at length about Equitrac’s card reader security system and
environmental positioning, as well as the TouchPoint Console (TPC), which is
the company’s innovative new solution in the document capture arena that
furthers its legacy of cost recovery devices. Much of the information that was
presented revolved around what Equitrac terms its “AAA”—authentication,
authorization and accounting—strategy. However, it goes without saying that the
company is driven by its core software offerings: Equitrac Office, Equitrac
Express and Equitrac Professional. Updates on all three were provided as the
latest version of each will be released during the summer.
Channel Development And Sales Figures
Equitrac’s direct sales force consists of 20 people
who are responsible for calling on the legal and professional markets. Other
than that, the company relies on the distribution networks of the manufacturers
it has partnered with. According to Rich, 65 percent of Equitrac’s revenue is
derived from business in the United States, which is where just over half of
the company’s 15,000 customers are located.
Mike Delaney, vice president of channel sales for
Equitrac, offered up more figures: 13 percent year-over-year (YOY) revenue
growth in Europe, the Middle East and Africa; 47 percent YOY revenue growth in
Latin America and the Asian Pacific region; and 94 percent YOY revenue growth
in North America, which he attributed to increased sales of Office, Express and
the Xerox Secure Access Unified ID System (XSA; see Partners section). “Growth
was sequential in 2007—we’re gaining momentum,” he said. “Our fourth quarter
numbers represented an all-time high for us in terms of results from our
partners, and a portion of our strong finish was due to securing a contract
with a large, national graphic arts firm. Although 40 percent of our revenue is
from the legal industry, we’re seeing an incredible uptick in multiple vertical
markets such as financial, healthcare and insurance, as well as engineering.”
Rich added, “Over the past year we had 360 customers
implement Professional 5, and our legal print tracking revenue increased by 30
percent. We have almost 500 schools using our software, including the University of North Carolina and Indiana University. Furthermore, we’ve now achieved a virtual
even split of revenue from product sales and recurring maintenance charges. We
have tremendous operating leverage for a mid-size company and more infrastructure
to grow without adding tons of incremental resources. On a marginal basis 60
cents on the dollar goes to our EBITA [earnings before the deduction of
interest, tax and amortization expenses], which we’re striving to increase by
50 percent.”
Equitrac’s solutions, regardless of any marketing
efforts, tend to be geared toward enterprises, but Rich used the example of
sales of Equitrac products through Global Imaging Systems, which focuses on
small and medium-size businesses (SMBs), to illustrate how things might be
changing. “The impact of the Global team on us has been extremely apparent,” he
said. “Dealers in that organization are entrepreneurial and exploit any
opportunities. They communicate the value proposition of solutions and
effectively sell them. We’re still in the early stages, but Global’s
representatives are always improving their understanding of our products.
“With SMBs, we’ve found that many of our customers
will start off with an interest in color cost control and add a secure login
solution thereafter,” Rich continued. “Then they’ll wind up wanting more
personalized scanning applications. But as more businesses grasp the concept of
what we provide, more contracts will be won.”
Delaney believes that if Equitrac continues to evolve
strategically and maintain existing partnerships, while also identifying and
then reaching out to manufacturers it hasn’t worked with before, its channel
business will expand by 30 percent in 2008. “Another initiative for us is to
have sales and service reps go through technical training on our products and
be certified, which helps them comprehend the full scope of our solutions,” he
said. Marketing campaigns help raise brand awareness, but ultimately it’s an
ongoing process of establish, monitor, measure and repeat that will bring
results.”
In closing Delaney said, “The penetration rate for
solutions like ours is less than 10 percent—there’s a massive opportunity for
us. Latin America is basically untapped and frankly we have no competition
there; we’d only have to invest a modest amount of money in order to grow
quickly.”
Partners
As a third-party developer Equitrac is bound to
forming relationships with manufacturers, who in turn sell its solutions
through their direct sales forces and dealers. Because of this though, the
company must tread carefully and be wary of not stepping on any toes. “We’ve
built a business model on broad interoperability in heterogeneous environments,
and this has allowed us to address a wide range of opportunities,” Rich said. “We’ve
always focused on the needs of users and provided solutions that work with any
technology. These two points are what has allowed us to develop deep
relationships with multiple partners, while affording us the chance to react to
market needs.”
Equitrac became a founding member of the Xerox EIP
(Extensible Interface Platform) Consortium in 2004, aiding in the birth of that
company’s open architecture technology. Three years later Equitrac was named a
Platinum Partner and created Xerox Secure Access. “What we did was take a
subset of Office’s capabilities and built a private-label product that combines
the first two A’s—authentication and authorization—of AAA,” Rich said. “The
purpose was to give Xerox a nice, neat entry into the market.” In a nutshell,
XSA is card-based and provides a simple method of authentication, thus giving
workers access to only those functions—copy, print, scan and fax, color and
monochrome, etc.—that they’re allowed to use. Additionally, Follow-You Printing
frees people to output documents at their choice of device so long as it
resides on the network, regardless if it’s in New York City, Los Angeles,
London, wherever. “We’ve sold 5,000-plus units of Xerox Secure Access since
last August. Businesses are starting to demand this product.”
Said David Bates, vice president of product marketing
for Xerox Office Group, “MFPs intimidate: they’re big and expensive and
sometimes hard to use. We’re working on software that will make workers’ lives
less complicated. Equitrac has had its solutions working in conjunction with
our devices long before EIP was introduced—they’re really the backbone of our
security.”
Equitrac is also an HP Platinum Partner; both Office
and Express are distributed by that company’s direct sales force and channels,
and card-based security for the commercial and professional markets is offered
too, just not to the same level of XSA.
The company also partners with Canon, which has a
leading share in the legal industry in regards to overall devices managed, at
48 percent, according to an August 2007 International Legal Technology
Association survey.
Of course, Equitrac has relationships with other
manufacturers such as Konica Minolta, Sharp, Kyocera and Ricoh, with whom it’s
a Strategic Alliance Partner. The company also works with eCopy and EFI.
Environ“mental” Messaging
Sustainability has become the topic du jour for
manufacturers. And while power consumption and producing devices with fewer
toxic substances are still the primary concerns, “green” printing and a renewed
focus on consumables are rapidly rising on the list of ways to protect the
earth. “Good business practice aligns with good environmental practice,” said
Chris Wyszkowski, vice president of professional sales and marketing for
Equitrac. “We’re absolutely committed to this and we’ll soon hand out awards to
the organizations that utilize our solutions to have the biggest environmental
impact.”
Policy management, which the company describes as
“Rules and Routing,” is a major component of both its solutions and green
message, including that administrators can set quotas to prevent excessive
printing and allow only specified users to output in color. Forced duplexing,
and no color printing from Web sites or simply no printing whatsoever from
Internet Explorer, are all user-programmable features.
According to Wyszkowski, 10 to 15 percent of paper
waste stems from unclaimed documents sitting on the device at the end of the
day, making it the largest chunk of the pie, while a smaller slice is because
of documents being output on devices that are low on toner and will therefore
need to be printed again. With that in mind, Follow-You Printing and
intelligent routing round out the eco-friendly features that Equitrac offers:
the former enables jobs to be sent to a queue where they can be released via
card-reader authentication instead of simply output; and the latter
automatically reroutes jobs that are sent to a device with low toner to one
with a better supply.
Set Your Solution To Scan
“Scanning to an e-mail address is perhaps the most
frequently used function in today’s office,” Rich said. “And while an embedded
scan solution works just fine, it’s clear that a standalone device such as our
TouchPoint Console also makes sense for many businesses. We launched this
product in August of last year and we’ve already sold about 1,700 units.”
Billed as “cost recovery at your fingertips,” the TPC
is a document capture and scan tracking solution that allows users to scan to
their own or others’ e-mail addresses or file on a network folder; Equitrac
hopes to add a scan to document management feature in the near future. Users
can preview scans on the touch-screen LCD, and card-based identification
retrieves personalized settings such as the functions they’re allowed to access,
history and favorites. Also included is a USB-based QWERTY keyboard, which is
easier to use than a keypad on the display of an MFP. Users can use the TPC to
copy, scan, fax, apply finishing features and route the document in one step.
Designed for the professional market, the device also keeps a count of scans so
that customers can be charged for them.
“The TouchPoint Console was created to address the
increasing use of the MFP as a document workflow appliance instead of just a
copier, while making operations like scanning and job allocation easier and
more personalized,” Rich said. “For professional firms where accounting
and cost recovery are key business processes, the TouchPoint Console was a
natural that’s been met with enthusiastic acceptance by our customers.”
And The Breadwinners…
Equitrac’s three software suites are each targeted
toward a specific type of business: Office, for typical office environments
such as financial, healthcare and insurance organizations; Express, for the
education sector; and Professional, for the legal industry and other
professional markets. “The AAA engine allows us to build specific capabilities
for all different verticals,” Wyszkowski said. “For instance, the ability to
accept quotas and payments from students is a key module in Express, while
supporting the complicated workflows and capturing all clicks, including scans
and faxes, is important for law firms.”
“We have a customer-driven approach to enhancing our
products and we’re always reading e-mails,” Rich said. “Our products cover
various levels of need to the businesses that use them. Office focuses on
security and total cost of ownership (TCO), Express concentrates on
pay-for-print and TCO, while Professional is a cost recovery and document
capture solution.”
Erik Vander Ahe, vice president of product development
for Equitrac, noted that more than $20 million has been spent to date on
developing and improving the company’s new products, and that Equitrac’s
R&D budget per year is approximately 10.5 percent of its gross revenue.
Office And Express
The latest versions of these suites, labeled 4.1, are
due to be released this June. Vander Ahe noted that the theme of both is that
they’ll “Fit into the Organization,” with a subhead of “Don’t Force the
Customer into Our Paradigm.” The new editions of Office and Express feature
better deployment flexibility, manageability and cost optimization than their
predecessors.
An important component of the better deployment
flexibility is improved active-active Windows cluster support. While the
active-passive clustering model enables an application to failover from one to
another, an active-active cluster means that the application is running
simultaneously on all nodes. “The primary objective is load balancing,” he
said. “With this new version, we’ve increased our cluster support so that the
DCE (Distributed Computing Environment) server component that controls all
devices—terminals, consoles and MFPs—can handle components that are
active-active in Windows clusters.”
Other aspects of better deployment flexibility include
enhancements such as automatic server discovery for Follow-You Printing and, in
the advanced print client venue, peer-to-peer printing. “With Office and
Express 4.1 we’re taking our complete server-based printing capability and
making it available on the desktop. This means that the complete power of
Follow-You Printing, as well as Rules and Routing, will be available to those
organizations that employ serverless printing.”
The suites will also offer better manageability
support via Active Directory synchronization filters; multiple accounting
server-based enterprise licensing; SSL encryption for server-server
connections; and enhanced reporting, including system snapshots, device status
views, authentication audits and usage summaries.
Optimizing and reducing costs are hallmarks of
Equitrac products. With Office and Express 4.1, administrators can enforce
policies that enable users to print only in monochrome or in duplex mode, for
example, and with true least-cost routing businesses can set devices that only
certain users can take advantage of.
The company will refresh both suites in late 2008,
with version 4.1.1. Based on feedback from the soon-to-be-released editions,
Equitrac will enhance certain print client features while adding Konica Minolta
and HP Edgeline devices as embedded clients.
Professional
The latest edition of Equitrac Professional, 5.2.3, is
slated for July delivery. Its theme of “Client Options” will feature a print
client refresh and embedded scan client updates.
WAN optimization and enhanced local caching are two of
the improvements that have been made for Professional. With the former,
businesses get a better accounting system of record with roaming profiles and
validation, push to print client and distributed control systems, and specified
user classes only. The latter takes into consideration the 4-99 validation
rule, which caches only recently used authorized cache on a daily basis, then
bypasses the WAN and implements an accounting system for 99 percent of prints
made. “We’ve analyzed literally millions of print tracking transactions and
from this we’ve learned about their usage patterns,” Vander Ahe explained.
“We’re using the results to improve our caching algorithms such that 99 percent
of print transactions will obtain their validation information from the local
cache, which will enhance performance, especially across high latency WANs. The
net effect is a print tracking solution without any delays to users, with quick
and responsive controls.”
Equitrac will also employ a new EFI SendMe/IKON
DocSend embedded client scan offering while refreshing its existing eCopy
embedded client software; both solutions will use standard Professional 5
workflows, by which users can log in, search and view histories and favorites
for allocation.
Another development will be adding the ability to track
color usage from Canon MFPs. And in early 2009, Equitrac will refresh
Professional with version 5.2.4., which will add an accurate cost recovery feature
for reprints done with a Fiery controller, as well as adding HP Edgeline
devices as a client.
