Kyocera Hits the Accelerate Button with DataBank Acquisition
Synergies that go “Beyond the Document”
KYOCERA announced they have acquired DataBank IMX, a nation-wide provider of distributed capture and business process automation services and enterprise content management (ECM) solutions. Specific terms of the deal were not disclosed, but although KYOCERA Document Solutions Inc. acquired DataBank, operationally DataBank will report to KYOCERA Document Solutions America, Inc. This deal is an important move by Kyocera, which typically has focused on organic growth initiatives, and has the potential to create significant new revenue streams and further strengthen their close relationships with independent office equipment dealers. After meeting with Norihiko Ina, President of KYOCERA Document Solutions Inc., and Chuck Bauer, CEO of DataBank, I had the opportunity of learning first-hand of this latest industry acquisition.
Some Background: Kyocera’s Total Document Solutions (TDS) Strategy
During their April 18, 2017 Business Technology Conference, the President and CEO of KYOCERA Document Solutions America, Yukio Ikeda, explained that Kyocera’s alliance with DataBank, announced on 9/13/16, was critical to the next phase in their Total Document Solutions (TDS) strategy. Mr. Ikeda described this next phase as TDS 2.0, offering Business Process Improvement, Business Process Outsourcing and IT Services as expanded Kyocera offerings. In his presentation, he went on to explain that all business processes, not just document-related ones could benefit from these additional services. He announced that within FY18, their North American dealers would be able to “offer business process improvement services through Kyocera and DataBank’s team of BPI specialists.” This acquisition confirms that Kyocera has executed on this approach by fully incorporating the services provided by DataBank – now a wholly owned entity.
Why DataBank?
DataBank claims to be the single largest North American reseller of Hyland OnBase with over 800 ECM installations across the country. The company offers solutions built on a variety of leading document capture, enterprise content management, and business process automation tools.
Kyocera has been focusing on distributed capture and document management solutions for Hyland OnBase and Microsoft Sharepoint customers in document/workflow intensive industries including healthcare, education, and legal. DataBank enables Kyocera to accelerate and deepen its offerings in these areas, as well as provide additional direct sales and professional services capabilities. A quick thumbnail on DataBank:
Other DataBank technology partners include:
DataBank solutions also connect with a variety of MFPs from other vendors, and Kyocera has indicated that they will not disrupt the support offered to those customers, but will look to shift customers to Kyocera-based devices and solutions wherever possible. Kyocera also believes they can more tightly integrate their devices with DataBank solutions as part of future product development.
Why Now?
Kyocera clearly sees solutions as integral to their business strategy and has been impressed with the DataBank management team and offerings. The company is focused on offering customers a new level of consultative expertise in simplifying complex workflows, managing mission-critical information, and optimizing business performance. Kyocera has also been steadily building out their Total Document Solutions portfolio through internal development and industry partners, with nearly 50 software offerings focusing on distributed capture, data extraction, document management, device management, output management, and security.
Kyocera also has the financial resources to make a mid-sized acquisition, and has not been burdened with integrating previous acquisitions like some competing OEMs. The company has outperformed the industry recently with revenue up 104% over the previous year and has reported 8 consecutive years of growth. With the steady economy, strong balance sheet, and a good partner in a strategic part of the market, Kyocera believes now is the time to make a move.
Industry Impact
This acquisition doesn’t change the structure of the industry, but clearly indicates that Kyocera is committed for the long term. Keypoint Intelligence believe this move is important because it:
InfoTrends’ Opinion
Expansion and contraction has become common place in our industry, with Xerox and Lexmark recently divesting its solutions and service entities, and now with this acquisition by Kyocera – clearly vendors are trying to find ways to better serve the expanding needs of their customers for services that go beyond the document. Acquisition is one way to accomplish this, and this recent course taken by Kyocera and DataBank, which began as a partnership a year ago, may have been a prudent one that could work to their mutual benefit. During this past year, both companies have had a chance to familiarize themselves with their respective product and solution portfolios, as well their corporate cultures. It is also likely that their sales channels have had a chance to work closely together, aligning resources and finding ways to combine forces to better serve their customers. With this acquisition, it is anticipated that Kyocera will be able to continue on the path in offering expanded technologies and services to their customers, and realize phase 2.0 of their Total Document Solutions strategy.
