Building on its strengths in the use of neural networking technology for remittance processing systems, San Diego, California-based Mitek Systems Inc expects its revenues in Europe this year to double at least, says marketing manager Tom Whitacre. Mitek is propelling its expansion with the neural networking technology for hand- and machine-print recognition that it purchased approximately a year ago with its acquisition of a division of another San Diego-based company, HNC Inc. When we bought the company, they had only just set up one distributor in Europe, and that was in the UK (Headway Computer Systems, Aldershot), said Whitacre, who spent 18 years of his career marketing computer technology in Europe, the Middle East and Africa. Last June, Mitek began trying to establish a more extensive network in Europe.
More involved
As a result, Whitacre said, it now counts distributors also in Germany (Instant Information Deutschland, Munich), Sweden (Alcom Systems, Stockholm) and Italy (Centromatic, Florence) and is in conversations with a potential distributor in France. Unlike the situation in the US, Mitek’s European distributors are equipped to provide local support to their customers, he said. European distributors tend to get much more involved in the technical aspects of the product, some even do integration. It’s fantastic for us. They come here and learn all of our software structures, he said. Mitek currently does only 30% of its total business abroad, but the situation is rapidly evolving, Whitacre said. We could potentially do between 50% to 60% of our business internationally next year, he said, referring to 1994. The lion’s share of Mitek’s international business comes from Europe, due to a greater difficulty in neural networking for Asian languages, he said. European customers seem to have an even greater need than their US counterparts for the technology, in its application to automated remittance processing, he said. The salaries of key-punch operators in Europe are at a higher level than in the US, particularly with the benefits, so the need for replacing them is greater. I say ‘replace’ advisedly, in that the aim is to improve efficiency and not have to hire still more people, Whitacre said.
By Marsha Johnston
Mitek’s technology is already being used by ScanData, a joint venture of France’s Thomson-CSF SA and Dallas-based BancTec Inc, which is providing remittance processing systems to French banks. Eurocheques are difficult to read [with automated technology] because you have to eliminate the background part to be able to read the amount on the check. It’s something we’ve been able to perfect with our technology, Whitacre said. Computer and operating system-independent, Mitek’s neural networks train on TIFF character and numeric images (they operate under MS-DOS, Windows, Unix, OS/2 and Solaris.) You need a database of between 5,000 and 10,000 examples of each character. The system then just compares the characters it scans to all of those it has been trained on. So, of course the more examples you have in the database, the better off you are, he explained. The company is also applying the technology to forms processing, which is a relatively new side of the business, but which has the biggest potential for growth, Whitacre said. The market segment comprises today approximately 40% of Mitek’s Automated Document Recognition business, but could total 60% next year. One of the strengths of the technology it purchased, says Whitacre, is its segmentation capability, which is the process of distinguishing between two overlapping characters. A contract with the US government for training a neural network to read page-format, machine-written Arabic and convert it into ASCII characters is helping to improve that capability further, he added. With Arabic, it’s difficult to tell where one letter ends and another begins, he said. The acquisition agreement with HNC, which markets neural network technology to other industries, prevents Mitek from applying the technology to areas other than remi
ttance or forms processing for three years. But Whitacre says the restraint poses no problems to the company’s growth because there is so much yet to do on the hand and machine print side of this market. Mitek has hitherto been best known for its Tempesting technology, but that has been something of a victim of the elusive Peace Dividend. The Tempesting process puts a radiation shield around computers and terminals so that would-be eavesdroppers find it much harder to detect radiations from the machines and work out what is being entered into them. Mitek Tempests MS-DOS and Macintosh computers and peripherals, and says that the business has declined considerably since the fall of the Soviet Union.
You just never know
Nonetheless, Whitacre says the company realised 20% more in Tempest business in the first quarter than it had predicted. You just never know what to predict with that market these days, he said – and with growing awareness of the threat of industrial espionage from so-called friendly foreign powers, the business could just start to pick up again and become even bigger than it was in the dying days of the Cold War. Everyone is said to be at it, although France is the country most often identified as a threat, probably simply because the French seem to get caught doing it more often than other countries. In its last fiscal year, ended in September, Mitek lost some $902,000 on sales of $13.1m, but Whitacre said that the loss was largely due to $385,000 in write-offs of Tempest equipment and investments.
