Lexmark 2011 Annual Report Download - page 39

The rapidly growing BPM software market is closely adjacent to Perceptive Software’s existing ECM
market. By bringing these closely aligned technologies together, Lexmark will further strengthen its
industry-leading fleet management solutions and services with a broader range of workflow solutions
that, in the Company’s view, are more functional and easier to implement and use than existing tools
available in the market today.
ECM and BPM software and services include solutions for capturing all types of unstructured
information such as hardcopy, photographs, emails, and faxes and the intelligent tagging of this
information in order to streamline and automate process flows while managing change to both content
and processes in support of governance and compliance policies. These solutions help businesses
understand existing processes, design and manage new processes, and enable the assembly of
content into meaningful communications with their customers and partners. These solutions also help
companies leverage the value of their content, processes, and people by seamlessly integrating the
user experience with existing systems, with the result being higher productivity, lower costs, and
increased customer satisfaction. Management believes the deployment of ECM and BPM systems and
associated workflow solutions to effectively capture, manage and access unstructured information is a
significant long term opportunity.
Management sees growth opportunities in large/global enterprises with a distributed workforce, in
organizations that are seeking to optimize their content-related infrastructure and reduce costs, and in
functional areas where workers rely on mobile devices for productivity.
The demand for ECM solutions is strong in developed and emerging markets alike, representing a
considerable growth opportunity for Perceptive Software. Lexmark’s products are already installed in
geographies around the world, and management believes this global customer base serves as an
impetus for additional installations for Perceptive Software outside of North America. Customers
continue to purchase ECM solutions that result in greater efficiency and productivity in their various
lines of business and back office operations.
Business systems such as enterprise resource planning (ERP), EMR, and customer relationship
management (CRM) systems represent a mature market and remain vital applications but do not
satisfy an organization’s enterprise content management needs. The Company expects organizations
to continue to look to ECM and BPM solutions to complete their enterprise information infrastructure,
increasing the value of their core business system investments and leading to gains in efficiency.
Challenges and Risks
In recent years, Lexmark and its principal competitors, many of which have significantly greater
financial, marketing and/or technological resources than the Company, have regularly lowered prices
on printers and are expected to continue to do so.
Other challenges and risks faced by Lexmark include:
• The Company must compete with its larger competitors for retail shelf space allocated to its
products.
• New product announcements by the Company’s principal competitors can have, and in the
past, have had, a material adverse effect on the Company’s financial results.
• With the convergence of traditional printer and copier markets, major laser competitors now
include traditional copier companies.
• The Company sees other competitors and the potential for new entrants into the laser and
inkjet markets possibly having an impact on the Company’s growth and market share.
• The Company expects competition will continue to intensify as the ECM and BPM markets
consolidate. The Company sees other competitors and the potential for new entrants into the
ECM and BPM markets possibly having an impact on the Company’s strategy to expand in
these markets.
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