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Kodak Moments

By Michael Alsup posted 06-16-2013 15:54

  

Talking to my friends at Kodak last week, I heard that the Kodak Document Imaging Group had been acquired by the UK Kodak Pension Plan as part of the Kodak exit from bankruptcy.  Over the weekend, I saw a fascinating article on the history of Kodak that essentially made the point that Kodak failed because it failed to see the future.  This is my anecdotal ECM history of Kodak that argues that Kodak made the decisions it could make and the future happened anyway. 

In my early AIIM Conference attendance, I always looked forward to the Kodak breakfast.  I got invited because I wrote two or three articles a year for Inform or Document Magazine or one of several other niche industry publications.  It was a lavish spread that introduced me to things like salmon and capers for breakfast that I decided to never get tired of.  One year, I sat with George Fisher, their new CEO, and his team.  I was on the ECM software and integration side and never got big capture and film companies, but I loved their breakfasts. 

In about 1994, I took a call from McKinsey who said they heard I was a know-it-all in the ECM business and would I talk to them about Kodak.  I told them to acquire FileNet, which needed a big parent and eventually found a fine one.  Instead, they bought struggling Wang Imaging which struck me as an awful thing to do, because two wrongs wouldn’t make a right. 

In about 1998, I led an AIIM Emerging Technology Advisory Group (EmTAG) team to Kodak for a show and tell day.  We had meetings with key groups, and afterwards had a roundtable to talk about what we had learned.  It was clear to us that Kodak Imaging was headed down a dark path, and we wrote a long letter to Kodak offering them our candid and confidential feedback on the issues we foresaw with their approach.  We were trying to help.  Two days later, I was on a call with many lawyers from Kodak who asked me to swear that nothing we wrote would ever see the light of day.  I so swore. 

More recently, the Kodak Document Imaging team, led by Rod Hughes, has moved back into markets I understand with a fine new set of products that I hope will be successful.  They deserve the chance to be successful for having such an ECM legacy, and it seems like a good outcome for their UK buyers, who obviously have a vested interest in their success. 

Here is the point of this post.  I believe that Kodak failed because you and I have 4 megapixel cameras in our phones.  We are taking more photos and using less photo paper than ever before.  Even if Kodak had perfectly foreseen the future and empowered its teams to move into digital photography, the decline of the 90% margin business of photography paper and chemicals would have obliterated their business model just the same. 

Sometimes the future doesn’t give you time to adapt your business model.  We have lived through this many times in ECM, as the platform technologies on which we depend morphed like shifting sands.  Just as the ECM vendors adapted to Windows, the Internet took off.  Just as everyone adapted to browser-based imaging, multi-tenant cloud-based ECM reared its head.  Internet search and social and cloud-based file sharing have intruded and taken market share.  My recommendation – solve real business problems with real ROI and assume that the rate of change in the future will at least equal the rate of change in the past.  Fasten your seatbelts, turbulence ahead.  



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