Business Spotlight: Cloud Collaborators

There are software companies, and there are document-management firms. PaperWise Inc. is built on a merging of the sectors.

Owned by Dan and Shelley Langhofer since 2000 through an acquisition from Dan’s ex-employer Bell & Howell Co., PaperWise is a digital document imaging company that licenses its own software and stores and manages data via a cloud network.

“PaperWise manages unstructured data, in a nut shell,” says Eric Wubbena, director of partner development.

Examples of unstructured data include email, Word documents, photographs, Excel spreadsheets and receipts – “any paper that is currently flown across your desk that does not neatly fit into your accounting system,” says Langhofer, now president and CEO.

Transportation ties
Langhofer began working with the PaperWise software as a programmer for Prime Inc. in the early 1990s. By 1996, Utah-based Bell & Howell recruited him as general manager, establishing PaperWise as a wholly owned division.

Seizing on an opportunity to acquire the company in May 2000 instead of seeing the firm sold to a competitor, Langhofer moved PaperWise to Springfield with a focus on updating its code and expanding its client base.

While the transportation and insurance industries remain key business sectors, PaperWise’s clients run the gamut.

“We could have a small, three- to five-person insurance agency that we manage. Some other companies that you have probably heard of are Snap-On Tools, Mesirow Financial and Monsanto,” Langhofer says, adding the seven-campus Dallas County Community College District, which serves over 72,000 students in Texas, is among its largest customers.

PaperWise serves some 450 clients in the United States, United Kingdom and Canada, Langhofer says, and the 45-employee firm also has a presence in India through a licensing partner.

Revenue the last two years remained above $5 million, but a two-year switch to a recurring-revenue model from an enterprise-sales model has the firm poised for projected growth of 25 percent this year.

With a greater focus and demand for cloud technology in recent years, the company still is innovating. Known for its One content management platform, the firm now is developing a workflow-collaboration product, called Oprum 365, to launch this fall.

Reselling and security
Through licensing agreements, PaperWise offers private-label imaging software to firms that in turn embed it in their own products to meet business-document needs of their clients. Original equipment manufacturing sales represent about 10 percent of PaperWise’s annual revenue, while general software licensing garners roughly 55 percent of revenue and managed services, and custom development projects fill the remaining 35 percent.

Median client agreements generate $1,500-$2,000 per month.

“In some cases, the management system is simply an integration partnership with us. So, we integrate with their management system to bring the capabilities of our software to the users,” Wubbena says. “In other instances, that partnership becomes an OEM relationship and they embed it into their product.”

Notable Springfield OEM clients are CaseMax and DAT Keypoint. CaseMax provides case management for defaulted loans, and DAT Keypoint offers transportation management software designed for brokered freight.

“We have a couple of different flavors from a partnership standpoint,” Wubbena says.

DAT Keypoint General Manager Steve Blair says about half of his 250 clients utilize transportation management software that has incorporated imaging software from PaperWise.

“Every time you move a piece of freight there are about seven pieces of paper generated,” Blair says. “There are rate confirmations, invoices and delivery receipts – it’s a situation ripe for an imaging solution.”

The company, a division of Beaverton, Ore.-based DAT Solutions LLC, has worked with PaperWise for eight years and now serves as a resell partner.

“Rather than develop our own imaging solution, we partner with PaperWise and integrate our software with theirs and resell their product,” Blair says, declining to disclose revenue or licensing fees. “From our customer’s perspective, the imaging solution is an option they can buy from us.”

In August, PaperWise moved its stored data out of Bluebird Network’s center at Springfield Underground to hosting by St. Louis-based TierPoint LLC.

“It’s about scalability. They have 40-plus data centers around the country,” says Hunter Abbey, PaperWise’s chief operating officer.

Serving clients around the globe, Langhofer says the move was necessary to create flexibility and ensure security.

“You can never bring your system down,” he says.