Inside Nuance’s Imaging Division with Michael Rich

Mike Rich

Last month, Nuance Communications announced Michael Rich as senior vice president and general manager of the company’s Document Imaging Division, succeeding Robert Weideman, who is now leading Nuance’s Enterprise Division. Most recently, Rich served as senior vice president of worldwide sales for Document Imaging and Dragon. Prior to that, he was president and chief executive officer at Equitrac. Recently we had an opportunity to talk to Rich about his new position, the strategic direction of Nuance’s Document Imaging Division, the challenges he sees in the industry, and the Equitrac acquisition.

Going back a year, how did the sale of Equitrac to Nuance come about?

Rich: Anytime you go through a sale of a company it’s a challenge because you have many stakeholders you have to keep in mind in the process—that is, if you’re you are doing it in the right manner. You have your shareholders that entrusted you with a fiduciary duty to run the company and provide them with a return on investment. Then you’ve got your customers and partners who have entrusted the company with their business and business practices. We have a lot of those customers spread across 50 countries so you want to make sure that in any merger and acquisition process we could provide an ongoing high level of continuity first. Second, it’s in the merger entity’s interest to provide those services. For example, if we’d been acquired by a specific MFP manufacturer we may not be able to provide the same level of support for their competitor’s offerings. That’s a matter you have to balance—who is the right partner for Equitrac? Finally, you have your employees and what’s best for them and can they continue to grow with the new organization.

As I went down that checklist and looked at the fit across any one of those dimensions, and I looked at Nuance it became obvious to me that by far this was the best partner for Equitrac on many levels. Once you’re committed to that and you believe in that opportunity you have to put every bit of energy. It’s got to start with the CEO of the company that was acquired, and rally the troops and help make the integration a success. So many acquisitions end up not meeting expectations. Basically, it’s in the first 12 months when all the good things happen and potentially bad things happen.

We managed this process well and what I’m most proud of is during a board meeting I was at last week, Paul Ricci [chairman and CEO of Nuance] said that Equitrac was one of the most successful acquisitions ever made in the history of Nuance.

The fact that Nuance is an acquisitive company with 40+ transactions and to be part of a statement that was made at a board meeting couldn’t have made me more proud of the accomplishments of a broad array of people.

How’d you like working with the Dragon division?

Rich: I enjoyed that and continue to be responsible for the worldwide sales for Dragon. I was familiar with Dragon long before I was involved with Equitrac. I ran a major division at AT&T and one of my business units was called InfoWorks, which was the first hosted IVR service of any scale in the industry. I evaluated and did in fact use Dragon for a number of speech-oriented applications back before it was acquired by Nuance. I was extremely well versed in the technology and quite frankly was amazed at how far the technology had come since my last deep exposure to the product.

Of course in our imaging business, we have a suite of PDF and office productivity products and the way we go to market with both the Dragon and PDF products have a tremendous overlap. We have overlap in terms of e-tail, retail, e-commerce, and where we sell products and bulk licenses to major corporations. So it was a natural when I was given the worldwide sales responsibility for the Imaging Division that we would also take on the Dragon product line as well because of the similarities in many of the e-commerce channels.

Is your new position a radical change from what you’ve been doing?

Rich: I wouldn’t say radical, it’s more of an evolutionary process. It’s fortunate that as I take the leadership position of the Document Imaging Division it comes at a time when the division itself is strategically well positioned in the market and poised for substantial growth moving forward.

That’s the first thing you look at when you take on a new assignment: what is the strategic positioning and what is the market positioning? The next thing you have to look at is the team itself. If you look at the Imaging Division, we have a fantastic team. We’re coming to a time where there’s an inflection point happening within our industry. There are plenty of additional opportunities and the good news here is the job is far from done. I personally believe I’m going to be able to put my handprint on the business and continue to make a strong contribution to the continued success of the business.

What is your main focus for the coming year?

Rich: Right now this question is a little bit like Lou Gerstner’s when he took over IBM. I’ll never forget I read a Harvard Business Review [interview] where he was asked “What do you plan on doing?” and he said, basically, “This isn’t time for new strategies it’s about executing on a great strategy that’s already in place.”

What we’re going to do is take all the great technologies and assets that are housed and contained in Nuance more broadly, and in the Document Imaging Division specifically, and bring these to the market by either bundling the technology directly or marketing bundles, or integrating these technologies in a way that bring the greatest amount of productivity and value to our customers. This includes technologies around the document life cycle, from PDF to scanning technologies, to all of the connector technologies that allow us to move paper into document repositories, to print management. While we do this, recognizing we’re part of a broader ecosystem and we need to connect to other products, even those that are competitive to those in our current portfolio.

This is an exciting time. In my opinion, our competitive position, our portfolio of products and our technology are such that I don’t believe there are any other companies that possess the breadth and depth of technology we have for the market we serve.

What do you see as the biggest challenge for Nuance’s Imaging Division in the marketplace?

Rich: The biggest challenge I have in leading the division and the division in general is simply prioritizing the vast number of in-bound opportunities that are presented on a daily basis. Our entire industry is going through a lot of change. The market is changing, our distribution channels are changing, and a lot of this change is a function of how people are looking to access information. That includes network access, cloud, mobile devices, and, essentially, you have to make it convenient. You have to allow people to consume information in a way that works for them and still maintain compliance and governance in the process.

We feel we’re uniquely positioned in this area. We’ve done a good job of providing solutions for the secure document print industries. We have cloud technologies, and that’s something we’re going to invest in and grow. Nuance has a strong mobile franchise. We’re in virtually every VAR and mobile device. All of these are coming together in a way that will allow us to offer a value proposition that leverages all our assets.

The transformation taking place in our industry today is on an order of magnitude that’s broader and deeper than we saw 10 years ago. That’s when we were going through the analog-to-digital transformation and the walkup device versus one that was fully integrated into an IT infrastructure. That’s what has enabled many of the technologies that Equitrac and eCopy as well as some of the things on the PDF side of the business like PaperPort to leverage.

How do you expect to deal with that challenge?

Rich: It’s really about delivering an end-to-end value proposition to a customer. By having a footprint that covers a broader range of the portfolio of technologies, we’re making it easier for our customers and partners to enjoy the benefits of our products, deploy them more easily and provide a much richer user interface. This also provides much better administration behind the scenes, and a much more convenient solution for our partners to sell.

This is a complex business and there’s a lot of complexity in the applications. That means one of our most important goals is to reduce complexity. We can do that by controlling more of the technology that’s part of these solutions.

The second thing we have to do is make it easier for users to enjoy the benefits as well. It’s not just making it easier to sell, but also making it easier to use. The goal should be zero training where you can walk up to any device and access any of our applications and be off and running in record time. That’s going to be a significant focus of our development agenda in the next six to twelve months.

Are you happy with your existing presence in the independent dealer channel?

Rich: There was a long period of time when Equitrac, as a standalone independent company, did not generate the level of revenue and sales results from our dealer network as has been the case for the past several years. Part of that has to do with the fact that during one of our business reviews with our lenders they were concerned about our customer concentration. They saw us with major MFP manufacturers and were concerned about the risks of them bringing their own solutions to the market.

About four to five years ago, we began to focus on the dealer network from a standing start for all intents and purposes. Today, we have relationship with between 300 to 500 dealers in multiple countries.

And it helps when you consider the scale of our business. Equitrac’s products are sold in 55 countries and we have somewhere in the neighborhood of 30,000 enterprises that use the products. Add Nuance’s footprint to that and the 20 million desktop users, and as a combined organization we have a massive footprint. Moving forward we’re going to build on that dealer channel that’s been so successful for us.

The dealers are more capable of handling complex solutions. They’re looking for ways in which they can differentiate their products and one of the greatest things we offer the dealers, when it comes to our entire portfolio, is that we are heterogeneous. We are multi-vendor, so a dealer can use and learn one print management solution and be confident they can deploy that in a multi-line environment as opposed to having to support vendor-specific solutions. I gave you print as an example, but that also includes our scanning products, our PDF-oriented products, and our document integration products. We are multi-platform. That’s a huge benefit because it sharply reduces their investment in training, technical support, and they know with confidence they can sell the product and get the support that their customers expect.

What else can we expect to see out of Nuance’s Imaging Division this year?

Rich: We’re going to continue focus on strong growth. That growth is going to come from organic means as well as looking at opportunistic acquisitions where they make sense. That’s an important part of our fundamental strategy. Organic growth can be the most profitable growth so that’s where we’re going to focus our attention first and foremost.

We’re going to continue to bring and add capabilities to our product portfolio, so you’re going to see increased investment across in all of the portfolio technology solutions we bring to market. Finally, we must keep a sharp focus on delineating ourselves and our solutions from the competitive offerings in the market with crisp messaging and positioning.