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  1. Technology
November 21, 1993


By CBR Staff Writer

Some people really used to believe in the paperless office. They used to think that this would be facilitated by the document management system. By now, we know that document management systems won’t make your office paperless – in fact, most people have come to realise that the paperless office is about as likely a concept as the paperless bathroom (subject of a Frost & Sullivan Inc report a decade ago, believe it or not). Even so, the document management system still has a place in the industry. Mark Ruport, president and chief executive of document management software specialist Interleaf Inc, has developed a model setting forth benefits that users can realistically hope for from document management. His model divides information up into different generations.


The first generation involves transaction data: the sort of information traditionally found in most databases. Every firm worth its salt has this sort of raw information, even if it’s only a customer list or sales leads. As the computer industry evolved, the data went with it and second generation information was born. This is the personal productivity generation, which has evolved along with desktop computing tools from the likes of Microsoft Corp, Borland International Inc and Lotus Development Corp. These tools manage office information and they seem to embody the decentralisation process that the industry underwent in the 1980s. Now, in line with the business model of the 1990s, comes Information of the Third Kind, as Ruport likes to call it. This involves bringing together office information of different types (from spreadsheets, word processors, computer-aided design packages and the like), and incorporating all the text and data into one document with component parts. The result is a compound document with a higher-level layer that enables users to access the data behind the various sections of the data. Users faced with a graph in a document could select the graph and ask to see the spreadsheet table containing the information, or they could use a hypertext link to access another word processor file which explains a key term in a document. This requires the users, (who would be on a network), to have the relevant applications on their own systems if they want to edit data actively, although they can run a viewer program, (akin to Adobe Systems Inc’s Acrobat), which enables them to see the data without actually editing it. Oddly enough, Interleaf already has a program – WorldView – which does exactly that. Ruport reckons that this sort of compound document will catch on in about five years’ time.

By Danny Bradbury

Before that happens, though, users must establish enough processing power on their desktops to be able to handle compound documents and they must also develop a feasible network infrastructure. Even then, he estimates, only 10% of all documents will be formed in this way, with the other 90% staying in their traditional form. He predicts that this 10% of transformed documents will be the most important to customers. The other major development is the coming of Object Linking & Embedding 2.0, which Ruport – along with Bill Gates – thinks will revolutionise applications design over the coming years. Ruport fully supports Gates’s prediction of fragmented applications made up of objects traded by developers, and says that hopefully the versions of Interleaf version 6, Interleaf’s document creation software, would be out under Windows and Windows NT in the first quarter, as predicted in October. This will position Interleaf to take advantage of Gates’s plans. We’ve been behind in the user interface field for a few years, says Ruport, adding that availability on Microsoft’s systems will bring Interleaf back into step. The other string to his bow is Avalanche Development Co, which Interleaf bought in July for $5.5m (CI No 2,022). This company is a specialist in the SGML Standardised Generalised Mark-up Language and has been developing the technology that Microsoft uses in Word 6.0 to output SGML. The firm has also been working on t

he SGML compatibility for Adobe’s Acrobat document viewing system. Ruport, who is letting Avalanche operate as an autonomous subsidiary, firmly believes the Mark-up Language to be the document management standard. The important question is, has Interleaf got enough clout to push home these concepts in the document handling industry? Even Ruport cannot deny that the last quarter was tough on the firm. After it took over Avalanche, Interleaf predicted a $1m loss for itself for the first quarter due to revenue shortfall. It actually took a $3.1m loss for that quarter even though revenue was up. The second quarter saw losses hiked to $6.1m following a restructuring charge of $3m, following 30 redundancies, (roughly 15% of the company’s workforce), and the closure of offices in the Netherlands, Sweden and Montreal (CI No 2,293). Support was also centralised into Germany. Ruport partly blames a recent change in business strategy for the firm’s temporary troubles; Interleaf has refocused on consultancy, which represents 18% of worldwide revenues. Consultancy will be an integral part of the firm’s business from now on because more customers are starting to ask for integrated systems as opposed to one-point products. Even so, Ruport complains that the firm isn’t seeing a return on this business as quickly as it had hoped. It’s starting, he says.


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Something else that’s starting is the alteration of the firm’s customer profile. It began as a purely technical document management firm, although that has changed. Three years ago, aerospace and defence totalled 70% of Interleaf’s customer base, with electronics ranking second at under 20%. Manufacturing came in third. Now, the piece of the pie taken by defence and aerospace has shrunk to 30%, while the electronics industry has taken a 25% chunk of the business. The bottom end of the spectrum has fragmented; manufacturing, telecommunications and pharmaceutical industries each have 10% of the market. This could be an indication that more companies are starting to look into the possibilities of document management. Ruport waves away the current loss-making situation, saying it’s just a glitch. Pointing to cash reserves of $25m and no debt, he says he can let the trouble pass simply by continuing operations as normal, although the recent restructuring would seem to counter this. He says Interleaf will break even in the next quarter and return to profitability in the spring, adding that in a public company, people always point to blips and start panicking. Holding onto the goal of next spring like a ‘B’ movie star hanging onto a cliff, Ruport seems calmer than one would expect. One thing’s for sure – as the next two quarters roll around, there’ll be a lot of wide-eyed kids in the picture house.

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