Eastman Software Bets on Channel Sales
By Nick Wakeman
Eastman Software is going after the federal market with a new line of document and workflow management products and a new attitude about how to reach government buyers.
Hitching its wagon even closer to Microsoft, Billerica, Mass.-based Eastman Software is launching a set of document and work management products that rely on the infrastructure created by Microsoft's Exchange, an enterprise level e-mail and messaging system. The subsidiary of Rochester, N.Y.-based Eastman Kodak Co. has had close ties to Microsoft since 1995.
The new products allow users to do workflow management, document management, imaging and storage management using the Exchange infrastructure. Their release on March 17 marked the one-year anniversary of Eastman Kodak's purchase of Wang Laboratories' software division.
To get its new offerings to market, Eastman will rely on resellers and systems integrators like KPMG Consulting of New York rather than the direct sales model, said Jane Forman, Eastman's vice president of federal systems.
The unit now wants to push all its products through the channel rather than direct sales. Eastman's shift to a greater reliance on partners is part of the change the division has undergone since leaving Wang, Forman said.
"Now we are truly a software company and we have been allowed to just focus on software."
The federal unit generates about 25 percent of Eastman Software's total revenues, said Forman, who declined to specify the overall figure or the federal portion.
As part of Wang, the unit made about $50 million in 1996, double what it earned in 1995, said Gerry Murray, research manager for market research firm IDC of Framingham, Mass. Forman said the unit passed the 1996 mark in the first nine months of 1997.
"Under Wang we were part of a large integrator," she said. "Now we are truly a software company and we have been allowed to focus just on software."
The commercial and government market for work management software is expected to rise from about $860 million in 1998 to $1.1 billion in 2000, according to the Yankee Group, a Boston market research firm.
Eastman Software has a small services organization that focuses on supporting its partners, Forman said. One of its biggest partners is KPMG with whom Eastman signed a strategic alliance in February to bring work management solutions to commercial and government customers, she said.
Eastman's products are a key selling point for KPMG when the consulting firm approaches a customer, said Robin Lineberger, a principal for KPMG Consulting's public services group.
Improving the flow of work through an organization is what makes the business case for new information systems, he said. "This goes well beyond just putting in a document management application," Lineberger said.
A close relationship with KPMG is important to Eastman because KPMG is considered one of the top management consultant firms in the United States, said John Cronin, director of Eastman's federal solutions providers.
|Eastman Software Partners|
- Advanced Technology Systems
- Infinite Solutions
- Information Management Consultants
- ManTech International
- Radian Systems
- Science Applications International Corp.
| Source: Eastman Software|
Eastman also has partnerships with other integrators such as DynCorp of Reston, Va.; ManTech International Corp. of Fairfax, Va.; and Science Applications International Corp. of San Diego.
Since splitting off from Wang, Eastman Software's role with integrators is more clearly defined, said Paul Simmons, director of marketing programs for DynSolutions, a division of DynCorp. DynSolutions specializes in correspondence and issues management solutions.
"What they are doing now is focusing on their strengths: the software and working with their partners," he said.
Eastman wants to sign on more integrators, but the quality of the partner is more important than the sheer number of partners, Cronin said.
"We are looking for partners that can expand our geographic and agency coverage and improve our customer satisfaction," he said. Providing imaging and workflow management also must be a stated objective for the partner, Cronin said.
With the new products to run on Microsoft Exchange, Eastman officials are hoping to keep revenue growth high and build on previous successes in the government market, Forman said.
In January, the company won a $5.1 million contract with the Social Security Administration to provide 11,000 seats of imaging, workflow and computer output to laser disk products. The deal is the largest contract of its type in the government or commercial markets, Forman said.
The agency is using Eastman products to reduce paper records and automate processes at Program Service Centers around the country, company officials said.
Eastman is looking for the government to take on more projects like the Social Security job, Forman said. "I think the products have matured enough and the government has gotten to the point where it understands the value of these products a lot more," she said.
The government is no longer buying technology for the sake of technology, Forman said. "The government understands that it can solve real business problems."