Kofax Direct Sales Take Off

By Mark Brousseau

Kofax is achieving significant “accelerating” growth with its two year-old direct sales initiative, Alan Kerr, the company’s executive vice president of field operations said during a general session this morning at Transform 2009, the Kofax Annual Conference, scheduled for October 21-22 at the Manchester Grand Hyatt in San Diego.

Shortly after Reynolds C. Bish joined Kofax at CEO nearly two years ago, the company began to move away from a purely channel-centric sales model, where it avoided direct engagement of customers. While the channel-centric sales model served Kofax well for many years, some large organizations around the world said they would rather have a direct relationship with Kofax, Bish said. So the company adopted a hybrid go-to-market model that uses both direct and indirect channels.

Now, “the business is exploding,” Kerr told the mix of Kofax business partners and end-users.

In the first half of Kofax’s fiscal year 2009, direct sales represented 14 percent of its software license revenues, Kerr said. In the second half of the company’s fiscal year 2009, direct sales doubled to 28 percent of its software license revenues. Looking ahead, Kerr said direct sales should represent 48 percent of the company’s software license revenues in the first quarter of its 2010 fiscal year.

“Do not misinterpret this,” Kerr said. “There is growth with our partner channel. We are selling to end-users who weren’t part of it.” Some end-users refused to buy through partners, Kerr said.

Bish told attendees that the company is executing on its hybrid go-to-market strategy "without encountering any major channel conflict. I think I can count on one hand the number of times we've had a conflict, and to the best of my knowledge, they have all been resolved amicably."

Kerr emphasized that Kofax continues to invest in its strategic relationships. “We continue to invest in technology vendors,” he said. “We have a comprehensive, global, world-class set of partner programs.”