E-Postal News 102 - March 25-29, 2002

E-Postal News 102
March 25-29, 2002

EPN 102-01 PostX Pushes the Digital Envelope

Remember PostX? Well, in case you don’t, let’s recap. The
start-up’s technology facilitates secure, personalized electronic
communications via the ubiquitous e-mail.

The Cupertino, California outfit’s secure communications
infrastructure is designed for sending out e-bills, e-statements,
e-confirms and e-paystubs to any desktop or wireless device.
In its early years the start-up didn’t exactly set a scorching
pace but lately, with fresh funding and a new seasoned management
team, the six-year-old operation seems to have developed
a renewed zeal to push the digital envelope, so to speak.

PostX uses the envelope metaphor in its secure communications
offering. When recipients click on a PostX-secured e-mail,
the representation of an envelope pops up on the screen to
prompt them to enter a password. The digital envelope, which
supports the US Postal Service’s Electronic Postmark, includes
a time stamp, sender identity and the ability to represent other
objects on the user’s computer screen.

Late last year, the company got a patent on its method of processing an e-mail message including that envelope icon.

While the PostX secure communications technology serves a
useful purpose, an obvious drawback has been the requirement
that recipients download an 80k applet or a Win32 application
from the PostX web site or that of one of its partners to be able to view messages.

Well, the company now claims to have licked that problem.
Not completely maybe, but pretty much.

On Tuesday, PostX announced that it had enhanced its widgetry
to reduce end-user frustration and make it easier for organizations to maximize adoption of the stuff.

A key enhancement is that the technology will now let users
securely send sensitive information by e-mail without recipients
having to download any software.

However, the zero-download capability works only with HTML
and text messages. When binary files like Word or Excel documents,
PDF, Flash or other executables or multimedia file types
are sent, the one-time applet download is still required.

According to PostX CTO Cayce Ullman, the company was able
to do away with downloading by implementing the encryption
algorithm in JavaScript. It’s supposed to work with the IE4 and
Netscape 4 and above browsers. Previously, the encryption algorithm
was part of the applet or the Win32 download.

Ullman says PostX is encouraging its server-side customers to
send messages in the HTML or text formats. Apparently, most
messages sent through PostX’ server-side products are in HTML.
In a second major enhancement, PostX now supports recipients
on all operating systems including Windows, Linux, Mac
and Unix as well as all e-mail clients including Outlook, AOL and
Hotmail. Previously, only Windows users could get PostX e-mail.
“Our customers face a tough challenge in achieving maximum
adoption for their electronic communications. Research verifies
that consumers want e-mail, but recipients simply won’t read a
message if it is difficult to access,” PostX CEO Mike Seashols said.
“The new PostX Envelope means our customers can send a
self-contained, completely secure e-mail to anyone, without knowing
the recipient’s proprietary desktop environment beforehand,
with complete confidence that their recipients can effortlessly open
and use the information.”

Ullman claimed that PostX technology has experienced
“extremely solid” adoption rates with customers in the past but
left the details out.

PostX customers include Merrill Lynch, Ford, EuroBrokers
and the Schwab Retirement Plan.

Its competitors include other secure document delivery technology
vendors such as Tumbleweed and PrivateExpress.


EPN 102-02 Netdelivery Loses Two Top Execs, Cuts Staff 12%

Netdelivery has lost two of its senior managers.
The start-up’s senior VP of business development Bill
Robertson and its VP of customer operations Richard Graylin
have both left as “part of an overall adjustment” that cut the company’s
headcount down by about 12%.

“Like everybody, we’ve made some reductions,” Netdelivery
COO Dan Twing explained.

Product development was especially hit. The Boulder, Colorado
company thinks that since its technology is mature, it doesn’t
need that many people in R&D right now. Twing wants a “ little
more focus” on customer implementations.

Netdelivery products let businesses automate critical business
communications securely. Its suite addresses e-billing, electronic
messaging, electronic forms and electronic document delivery.
Canada Post’s epost venture and Posten AB, the Swedish postal service provider, use the widgetry.

Twing described Robertson’s departure as a mutual decision.
Twing said Robertson’s exit was prompted by the shift in the
company’s international sales strategy. It wants to work more
with local systems integrators rather than deploying direct sales
resources overseas. Robertson reportedly focused on developing
international business.

Before joining Netdelivery in July 2000, Robertson was a key
executive at Canada Post and helped implement its epost initiative.
Netdelivery did not explain Graylin’s departure. He managed
professional services, pilot operation centers and its call centre.


EPN 102-03 USPS Finances Desperate, GAO Says

The US Postal Service’s financial outlook is becoming increasingly
dire, according to the General Accounting Office, the
investigating arm of the US Congress.

The GAO says the post office’s basic business model of rising
mail volume covering rising costs that’s supported by rate
increases is flatly not sustainable. The agency paints a bleak picture
of the USPS’ finances characterized by continuing deficits,
severe cash flow pressure, rising debt and liabilities that exceed
its assets.

Its losses continue to balloon. In fiscal 2001, the USPS lost
$1.68 billion. It had projected a $1.35 billion loss this year, but
that was before 9/11 and the anthrax scare hit, both depressed
revenues and jumped up costs.

“USPS’ worsening financial situation and outlook intensify the
need for a comprehensive transformation that will address its
financial, operational and human capital challenges,” the GAO said.

The post is working on a morphing plan that’s supposed to be
finalized by the end of the month.

As mail volumes slacken, the e-commerce activities the post
has launched have added little to its revenues. In fiscal 2001,
they yielded only a pitiful $2 million in revenues, a 98% shortfall,
against a projection of $104 million.

Arguing the need for a complete makeover, the GAO says that
“E-mail use has exploded, more and more documents are being
sent electronically, and a growing share of payments has also
shifted from mail to electronic alternatives.”


EPN 102-04 Consignia's Interim Chairman May Stick Around

Consignia’s interim chairman Allan Leighton will become a
permanent fixture soon, according to the Financial Times.
Leighton, the former CEO of Wal-Mart Europe, was appointed
interim chairman of the British post in January after former
chairman Neville Baine retired December 31.

Leighton is said to have impressed UK ministers with his tough
talk and calls for “radical solutions” to Consignia’s problems.
Consignia is supposed to be losing $2.1 million a day.


EPN 102-05 Hungarian Post Debuts E-Marketplace

The Hungarian Post has launched an Internet marketplace.
Initially, it is only letting its subsidiaries participate in the
thing, according to Europemedia.net.

In April, the post plans to open the e-marketplace to other
companies as well.

The marketplace is supposed to be able to handle tenders and
auctions as well.

The amount of investment going into the site was not disclosed.
Apparently, the game plan is to attract multinational companies
in Hungary first, then expand to businesses in other East
European countries.

The post already has a portal to host acquisitions of local
state-owned companies.

Other postal outfits such as Post Danmark have also launched
e-marketplace initiatives.


EPN 102-06 Deutsche Post To Put $2.2b into IT

Deutsche Post will be investing $2.2 billion in its IT infrastructure
this year in a bid to become the leading e-logistics services
provider.

The Deutsche Post ITSolutions subsidiary, originally created
to deliver IT solutions internally, is now supposed to crack the
external market as well.

Separately, the post has teamed with Art Technology Group
Inc (ATG) to launch a personalized online post office at
www.deutschepost.de/efiliale.

The new web site, based on the ATG Enterprise Commerce
Suite and ATG relationship management framework, is supposed
to let the post manage relationships centrally with consumers
and small and mid-sized businesses across business units.
Customers get to access various post-offered services at a single
web site.

On the site customers can purchase stamps and letters, order
delivery of parcels, search for post offices and zip codes, download
forms, access the Postbank’s online services, print postage
and change local energy providers.


EPN 102-07 Hongkong Post in Cross-Certification Deal with Guangdong

The Hongkong Post has signed a cross-certification agreement with
Guangdong Electronic Certification Authority of Mainland China.
The two organizations are also exploring joint procurement
and development of open PKI-based applications to facilitate
secure Internet transactions.

Hongkong Post’s digital certificates, known as e-Certs, let users
authenticate the identity of digital certificate holders on the Internet.


EPN 102-08 E-Mail Marketing Threatens Direct Marketing

In what must surely count as another blow against the beleaguered
postal organizations, businesses have started using email
marketing promotions instead of old-fashioned direct mail
campaigns.

The reason is simple economics. Advertising dollars go further
with e-mail than with direct mail.

E-mail marketing is a more cost-effective way to acquire and
retain customers, says GartnerG2.

E-mail costs are estimated to range from $5-$7 per thousand
while direct mail costs between $500 and $700 per thousand, a
whopping 100 times increase.

GartnerG2 projects e-mail advertising revenues will reach
$1.26 billion in 2002, up from $948 million in 2001. It predicts email
advertising revenues will reach $1.5 billion by 2005.

“Direct mail has reached its peak and will account for less than
50% of mail received by US households by 2005, down from 65% in
2001,” says GartnerG2 research director Denise Garcia. “As e-mail
use, familiarity and trust increases, consumers will become comfortable
with accepting advertisements through their computers.”

Gartner analysts claim e-mail marketing campaigns are more
efficient and their success rate easier to measure.

Garcia estimates that “the entire cycle time of the e-mail campaign
from creation to delivery and response is one-tenth the
time of traditional direct mail.”

Response rates to both direct mail and e-mail are, however,
supposedly the same, hovering at 1% on average.
To boost e-mail responses, Gartner recommends using permission-
based and opt-in marketing strategies and advanced
personalization. With permission-based e-mail, the average
click-through rate is supposed to range around 6%-8%.
The Gartner study is titled “E-Mail Savings Threaten a $196.8
Billion Direct Mail Market.”


EPN 102-09 Secure Document Delivery Poised To Grow, Study Says

The total secure document delivery (SDD) market will grow to
$474 million by 2006, according to the Radicati Group.

Its study entitled “Secure Document Delivery Market Trends,
2002-2006” found that the segment, initially viewed merely as a
branch of messaging, has developed its own identity.
SDD products and services accept documents from senders and
securely deliver them electronically, providing senders with return
receipts and tracking records. SDD offerings typically come with
strong encryption, return receipts and password-protection capabilities.

Advanced products may include digital signatures, message
compression, activation/expiration period and message recall.
Target markets include vertical segments such as healthcare,
legal, finance, insurance and mortgage lending. The healthcare segment
is said to represent the largest vertical market utilizing SDD in
North America. Some offerings are targeted at individuals as well.
The SDD market has attracted a variety of entrants including
postal outfits, start-ups, ASPs and ISVs. La Poste and Canada
Post have launched secure online document delivery initiatives.

Key factors contributing to the growth of SDD are ease of use,
immediate delivery and its significant cost savings, says report
author Masha Khamartseva. In addition, legislation ensuring
legal protection for digitally signed documents is also supposedly
spurring it.

The study divides the market into three segments – enterprise
software vendors, software suppliers to service providers and
service providers.

SDD enterprise software vendors provide solutions that organizations
install and manage internally, usually behind firewalls.
These products let companies filter and encrypt outgoing messages
at the administrator and desktop levels. Players here include
PostX, CertifiedMail, MicroVault, TFS Technology and SwiftView.
The enterprise software category is projected to grow from
$47 million in 2002 to $191 million in 2006.

The SDD software suppliers to service providers offer their
applications for deployment by service providers. Vendors in this
category include Tumbleweed and Critical Path. The study estimates
this category will grow from $7 million this year to $76
million in 2006.

The SDD service providers provide their offerings to both
businesses and individuals on a hosted basis. Depending on the
provider, the services are offered on a monthly or yearly subscription
basis or charged on a per-document basis. Included in
the service provider category are vendors such as UPS, ZixIt,
PrivateExpress, IntraLinks, Consignia and Airborne Express.

The service provider category is projected to grow from $23
million in 2002 to $207 million in 2006.

Radicati also finds that SDD products are becoming increasingly
popular not only for B2B but B2C communications.
The researcher says that the major challenge for the SDD vendors
and service providers will be public education. It expects
large postal service providers to shoulder this responsibility
since they already have access to millions of customers.
Ironically, one of the largest postal outfits in the world, the US
Postal Service has recently abandoned the market claiming
adoption rates were lower than anticipated for its PosteCS service.
It also took a swipe at analysts and said the commercial
response to PosteCS didn’t match their projections.

The SDD market is currently said to get most of its revenues
from North America – about 60% – followed by Europe with 35%.

Meanwhile, Deutsche Post announced that software house Datev
would integrate the post’s Stampit PC postage product with its offerings
for the accounting and legal markets. Datev is considered to be
Europe’s leading provider of data processing, software and services
to tax consultants, accountants, lawyers and their clients.
Deutsche Post already has deals with ISVs such as Sage KHK
and Gandke & Schubert to integrate Stampit into their software.


EPN 102-10 Japan Post To Launch Internet Banking

Japan’s Postal Services Agency is reportedly gearing up to
launch Internet banking services starting on March 25.
Dubbed Yucho Internet Home Service, the new offering will let
postal savings account holders remit money, check account balances,
pay for online purchases and have mailmen deliver cash
to any address they specify.

The Internet Debit Settlement Service, part of the new services,
will let account holders pay for online purchases. The service
has been in pilot for two years.


EPN 102-11 Finland Post Changes Logo

To keep pace with the way its business operations have
changed and with a product line that now includes both physical
and electronic offerings, Finland Post has changed its logo.
The old, stylized post horn is sadly gone and in its place are
two blue dots that connect to each other. The dots are multidimensional
since one of them can change position and size.
In the logo, the post’s continuity with tradition is supposedly
reflected in the name Posti and the yellow background.


EPN 102-12 USPS Plans Online Real Estate Auction

The US Postal Service is planning to conduct its first online
real estate auction.

The online auction, which is slated to run April 5-11 on the
Bid4Assets.com web site, is to sell one-and-a-half acres of
vacant land that the post owns in Michigan.

The USPS has sold assets on eBay and through Bid4Assets before.
continued from page 6


EPN 102-13 E-Post Conference in April

E-postworld, a two-day conference on e-commerce applications
for postal organizations, will be held in London on April 25-26, 2002. e-postworld is being organized by UK-based conference organizer IQPC.

The conference will feature case studies on how to incorporate
strategic e-business policies to increase market share.
Topics expected to figure in the discussions include e-billing, efulfillment,
hybrid mail, e-government services and e-messaging.

IQPC is also organizing two pre-conference workshops on April
24 focused on customer relationship management and encryption,
authentication and digital certificates for electronic services.
See www.e-post-world.com.