Cylex Systems offers document management for all
A specialist startup is discovering that the ASP model delivers convincing economies of scale that could help document imaging emerge from a niche into the mainstream.
With so much attention focussed on application service providers who work with mainstream packages, it is easy to overlook those in vertical or specialist markets. One of the earliest in the field is Cylex Systems, which in 1994 set out to bring the ASP model to document image management. "We believe document management can be the great killer application of the ASP world," founder and president Zijad Aganovic told ASP News Review in an interview last month.
Traditional document management requires a massive upfront investment in high-capacity storage for all the image files created by scanned documents. "The service approach was just a natural answer to it," said Aganovic.
The economics seem persuasive. Florida-based Cylex claims its users save 50% to 80% compared to the cost of an in-house system over a three to five year period. One partner has calculated that it is even cost-effective to abandon an existing in-house system in favour of using Cylex.Cylex charges for its service on a transaction basis, billing a few cents each time a document is accessed. Proprietary software provides client support for scanning and indexing, and uses Citrix technology to link to the Cylex Express online document store.
The company's first big customer win came last November, when it landed a contract to provide document management services to Florida's department of motor vehicles. Storing from 20m to 30m pages annually, this is a classic document image management account. At the other end of the scale is a 50-employee aviation business that uses Cylex to store parts documentation. It subsequently added accounting paperwork and then legal document storage to the system.
This type of application creep is typical, said Aganovic. "Since we are transaction based, it doesn't matter how many documents you store. You can use it pretty much in any corner of the corporate organisation," he explained. The more documents a customer stores, the more opportunities Cylex has to earn income from users retreiving them.
Cylex concentrates on what it regards as its core competence of operating the document store and serving the contents to users. Partners provide its data centres and image acquisition services. It is even debating the option of taking billing and customer care systems as a service rather than developing them as a core technology. It is building a reseller channel and has already signed Deloitte Touche, which has a $50m-a-year business in document management systems integration, and set up a European division in partnership with Norwegian IT service provider Fellesdata.
The technology currently only handles paper documents, but will begin to add support for electronic document formats in its next release. There are applications to suit various industry sectors, including financial services, government agencies, medecine and law. But ultimately, Cylex believes its service can have broad horizontal appeal. "Our direction is to become a central point of document information management," said Aganovic.
COMPANY FILE
NAME: Cylex Systems
HQ: Boca Raton FL, USA
FOUNDED: May 1994
OWNERSHIP: Private
MAIN BUSINESS ACTIVITY: Specialist ASP
PRODUCTS: Own Cylex Express document image management application
MANAGEMENT: Chairman William Lowe (ex-IBM), founders CEO Zijad "Zee" Aganovic and CTO Stephen Rosenbaum
TARGET MARKETS: Medium and large enterprises, ultimately via partner channel
STAFFING: 20+ worldwide
FINANCING: $2m first round funding Nov 1998, second round under way
This article is an excerpt from the ASP News Review newsletter, April 1999 issue. For details of the current issue and how to subscribe, ... click here>> |