Demand for OCR software has been strong due to the growing trend toward document digitization and the reduction of paper-based information storage
Los Angeles, CA (PRWEB) September 14, 2014
The buyer power score for OCR systems is 3.5 out of 5. This score represents low price volatility and changes in the delivery model for OCR software. “Rising demand for OCR systems is being fueled by a transition from paper-based to digital document storage in many industries. Healthy demand for OCR software has led to high profit margins throughout the market. Fortunately, low volatility and competition from freeware providers have offset rising demand to keep prices in check,” according to IBISWorld business research analyst Jeffrey Cohen. Buyers, consequently, have a financially healthy and competitive purchasing environment from which to source OCR software.
Recent developments in the method by which software is delivered are also 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. As physical software delivery via CD-ROM is phased out, suppliers are cutting input costs and moving toward a direct-sales model that eliminates price markups from wholesalers and retailers,” Cohen says. As a result, buyers can negotiate directly with OCR software producers to achieve lower per-user or per-document pricing. Although prices are anticipated to rise during the three years to 2017, the changing landscape of software delivery will provide buyers with negotiation leverage that can help offset any 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. Among the largest players in the US market are Nuance Communications, Belgium-based IRIS, Newsoft Technology and ABBYY. While open-source software providers have attempted to reduce the market share of major players, their product remains less effective than the expensive and complex offerings of their competitors. Market share concentration has, therefore, remained high, a factor that has and will continue to limit buyers' negotiation power. 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 read text to the visually impaired. Software publishers and computer hardware and software retailers are the main suppliers of OCR systems. This report will not focus on cameras, scanners or multifunctional printers, although OCR systems do utilize them 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
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
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.