Rising demand for OCR software from the healthcare and legal markets is accelerating price growth
Los Angeles, CA (PRWEB) February 04, 2014
The buyer power score for optical character recognition (OCR) systems is 3.6 out of 5, representing the low price volatility and shifting delivery model for OCR software. Rising demand for OCR systems is being fueled by a transition to digital document storage from paper-based files in many industries. Healthy downstream demand for OCR software has led to high profit margins throughout the industry. Nevertheless, pricing for OCR software has remained stable in the three years to 2013, growing at an annualized rate of 1.4%. “Despite rising demand, low volatility and competition from freeware have kept prices in check,” says IBISWorld analyst Jeffrey Cohen, “giving buyers a financially healthy and competitive purchasing environment from which to source OCR software.”
Additionally, the shifting model of software delivery is providing buyers with more leverage in price negotiations. “The move to internet-based software delivery is creating efficiencies for OCR software producers that can result in lower prices for buyers,” Cohen says. “As physical software delivery via CD-ROM is phased out, suppliers have cut input costs while also creating a direct-sales model that eliminates price markups from wholesalers and retailers.” As a result, buyers can negotiate directly with OCR software producers, leveraging the efficiencies of a direct-sales model to achieve lower per-user or per-document pricing. Though prices are anticipated to rise in the three years to 2016, the changing landscape of software delivery will provide buyers with negotiation leverage that can help offset expected price increases.
Despite stable prices and a healthy purchasing environment, negotiation leverage for buyers has been limited by the specialized nature of OCR software. Software development is a highly technical process that substantially limits the number of potential providers. This limitation has led to a highly concentrated market that contains only a handful of developers and few substitute options for OCR software. While open-source software has attempted to erode the market share of major players, its efficacy is limited compared with more expensive and complex products. Current major vendors include Nuance Communications, NewSoft Technology Corp. and ABBYY. For more information, visit IBISWorld’s Optical Character Recognition Systems procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of optical character recognition (OCR) systems. OCR systems electronically translate scanned images of handwritten, typewritten or printed text into machine-encoded text. OCR systems are used to convert books and documents into electronic files, computerize record-keeping systems in offices, publish text onto websites and assist the visually impaired. Software publishers and computer hardware and software retailers are the main suppliers of OCR systems. Though optical devices such as cameras, scanners or multifunctional printers are required to capture images, OCR software is the primary driver of OCR systems and will thus be the focus of this report.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.