Ten years ago, the market for electronic forms was anchored by a number of software vendors that dedicated significant resources to the transformation of the lowly form from a paper-based 'necessary evil' to an online business process catalyst. Driven by the likes of Caere, Cardiff, JetForm, Shana, and even Microsoft itself, it was a vibrant if small market that in many ways broke new ground for customers seeking to drive costs out of their businesses.

On Monday, one of the last of these leading independent lights winked out as search engine/classification vendor Verity announced its intention to acquire Cardiff in a transaction worth $50 million, plus Cardiff's cash and options. In fact, Kinetic Information views this acquisition as a positive event in the history of both companies. But it also marks the end of an era and provides further validation of our long held belief that the form marks the beginning of a process, not the end. As such, forms in general have been undervalued for years as operational assets, and it is interesting to see vendors of various sorts increasingly ratchet them into their core offerings.

The dynamic at work here has to do with taking e-forms' ability to capture structured information and marrying it with other technologies that can then take that information and inject it into specific business processes. With few exceptions, this is why most of the companies listed above no longer exist: firms with core competencies in different areas recognized how well e-forms functionality dovetailed with their own, and between the relatively small size of most of the e-forms companies and the liberal use of the exchange of stock as compensation, the price very often was right (see table). It is undoubtedly also why Cardiff was so attractive to Verity, for Cardiff itself long ago recognized the process context in which it operates and on its own added meaningful 'business enablement' capabilities to its product line. (For more on this related subject, see Twin Sons of Different Mothers: BPM/Workflow Both Target Business Enablement, December 2003.)

Prospects for Verity/Cardiff
Combining Verity and Cardiff makes a lot of sense on a lot of different levels, but it is not without its challenges. With revenues of about $120 million per year, Verity is approximately four times Cardiff's size, and the two companies do different but complementary things: broadly speaking, Cardiff's strength lies in capturing forms- and other document-based data and intelligently routing it to where it needs to go to accomplish a business objective, while Verity's lies in making data usable by indexing and classifying it, and providing the means to search for what is needed.

Verity President Anthony Bettencourt was right when he observed that “there is a natural cohesion between extracting information from forms and metadata from documents,” and since some 350 organizations already are customers of both companies, there is a built-in sales opportunity just waiting to be mined in both directions. Similarly, Cardiff has built a successful network of resellers that with proper education could prove to be effective for Verity as well. It remains to be seen how Cardiff's integration partnerships with content-management vendors such as Open Text will fare under the new management. It is also fair to wonder whether – at some point – Verity will opt to sell off parts of its new acquisition as it seeks to streamline its product offerings, or use its increased market muscle to acquire other companies. And it will be interesting to see how this deal will help Verity keep and expand its share of the search market, which is receiving an increasing amount attention from major software players – notably Microsoft in its belated push to compete with the likes of Google.

The challenge now for Verity/Cardiff is explaining exactly how the two product families fit together. To see this clearly requires a reasonably sophisticated understanding of business process management, a topic that itself is shrouded in a cloud of hype and confusion even as it is emerging as a field with some cachet. Customers and prospects of both Verity and Cardiff undoubtedly will resonate to the message once they've had a chance to digest it, but they will need to be brought along slowly by sales reps, account managers, and business partners, who themselves may not yet be comfortable with the broader business context.

Getting the F(orm) Out of There
Verity and Cardiff are not alone in this by any means: parachute into almost any area of the enterprise software market and you'll find precisely the same issues at work. Customers everywhere are seeking to align the components of their IT infrastructures for a higher process purpose – even Oracle, for goodness sake, is openly embracing interoperability themes, for even it knows that its database engines, however tightly wrapped with applications they may be, need to communicate and cooperate with other systems so that work may be best done.

But because the combined capabilities of the post-acquisition company will bring it up against an expanded set of competitors, executives on both sides of the house will have to work quickly to develop and promulgate a new core value message that succinctly and powerfully articulates not only the problem the company solves, but the way that it solves it. We believe they will be successful at this in the end, and we'd be surprised if this message had the word “forms” anywhere in a prominent place. Thus, we hereby mark the close of an important phase of the e-forms market and welcome a new age in which 'process' takes center stage. Contact Us for More

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