© copyright: ben livson 1999. all rights reserved. hybrid messaging workshop business modelling for...

Hybrid Messaging Workshop

Business Modelling for Integrated Messaging and Postal Services

By Ben Livson

Session 1 - Introductions

• Executive summary - overview

• The current situation– Messaging

– Electronic addressing: the concept

– The international experience

– The market

• The economics of messaging

Session 2

• Executive Summary - Overview

• Business Concept and Customer Value Proposition

• Reaction by National Postal Services?

• SWOT Analysis of National Postal Services

• The Business – History and Present

• Technology Outline – how does it work?

Session 3

• How does it work? – (a) Intelligent Addressing

– (b) Distributed Nodes

– (c) Description of Authentication

– (d) Billing and Customer Care

– (e) SMTP Handler Billing Functions

Session 3 continued

• Market Analysis– Customer segments

– Product service bundles, pricing and revenue, and costs

– Critical Success Factors

– Risks and Responses

Electronic Addressing Concepts

• Phase 1 - Mail House Emulation– Postal Address File = customer mailing list– Manipulate and validate against PS.PAF– Content file(s)– Optional form files (for statement printing)– IDP since 1988. IDP Data Stream --> into an

international Hybrid Mail Language standard– Proprietary solutions: ELetter is web-enabled.

Session 4

• Management and Organisation

• Financial Plan - Pricing, Revenue and Cost

• Industry Literature

• Profile on Business Partners & Competitors – When and how to involve Global Business

Partners?

– What does it take to make it?

Session 4 profiles continued

– United Parcel Service - UPS

– Federal Express Corp

– DHL Worldwide Express

– Microsoft - Royal Mail Relay One

– Netscape - Sweden Post - Sun @post

– AT&T Mail

– International Data Post Hybrid Mail ePOST

Session 4 profiles – IDP PC ePOST - current and future

– US E-Stamp and Stamp Marker Internet Postage Metering

– Tumbleweed Posta Service Providers: UPS Online ® Dossier and UPS OnLine ® Courier and Pitney Bowes iSend.

– E.C.S by USPS, Canada Post & La Poste

– ELetter

• Where to from here?

Hybrid Mail OverviewExecutive Summary

What is Hybrid Mail?• Seamless integration of all e-mail with

postal services

• The last frontier to be conquered for unified messaging of e-mail, fax, SMS, EDI, voice with postal services

• Premium value added messaging

• Email and fax without technology!

• Extension: outsourced print on-demand

PublicInternet

Postal ServicesFinal Distribution

WebService

Activator

WebService

ActivatorWebTracker

WebTracker

Web-enabledCustomer

Surface MailSurface Mail

Royal MailUSPS, IDP..

GatewayGatewayVoice MailVoice Mail

HelpHelp DeskRobot

Intelligent Addressingand Distributed Nodes

Managed InterfacesManaged Interfaces

GHM Intranet

Global Hybrid Mail GHM

EmailEmail

Fax, EDI, Pager & SMSFax, EDI, Pager & SMS

HDirectoryServices

DirectoryServices

Intelligent Addressing

• [service-flags]#address@domain• Address types include email, postal, phone voice

mail, fax, EDI, SMS-pager etc. Examples:• Ben.Livson.36.Minnamurra_Road.[NSW.]

2063[.Australia]@domain for postage• [61.2]99580489@domain for voice mail• [61.2]99583915@domain for facsimile

Hybrid Mail Consumer Benefits• Full automation of the postal process from

printing, addressing, folding, inserting into envelop, franking-metering & delivery

• Annual saving of 100+ hours per person• No technology required for consumer to receive

and send email and fax!• Wrongly addressed mail minimised• Speed of delivery maximised• Quality printed paid letter vis junk email

Premium Value Added Services• Express delivery

• Certified, non-repudiable & track-able items

• Colour on demand print eg. colour glossies

• Overhead transparencies, greeting cards …

• Media delivery of floppy disk & CD ROM

• Paperless out-sourced mail room (out & inbound)

• E-mail address and fax number service for people without access to any technology!

• Advertising

• Document audit services ...ecommerce

Service Provider Benefits• Premium value added messaging in contrast to

free junk email• Physicals of real infrastructure vis Internet

intangibles - real barriers of entry!• Postal services market > $200b• Value added potential > $300b• Print on demand market > $500b• Huge opportunity: the last major market to be

deregulated, re: Telco industry success

Hybrid Mail Cost Structure

• Large mailhouse cost base

• Minimise CAPEX: Fuji-Xerox finance guarantees price per printed page, folded, inserted, enveloped ...

• Advertising and Brand Marketing

• Distribution via IDP a possibility

• Network: America --> India & China!

Competition -> Alliances

• Postal services, eg. Sweden Post

• International Data Post

• Relay One: Microsoft & Royal Mail

• E-Stamp, Stamp Marker, Pitney-Bowes in franking & metering

• UPS, FedExpress, DHL … couriers

Competitors’ Strengths

• Established, trusted and very large

• Already carry out whole-sale hybrid mail eg. invoice and statement printing and mailing

• Still protected by regulation

• Control the last leg of mail drop

• Old boys network averse to start-ups

Servicefeature

Service

Provider:

Deliveryby openInternet

Directoryservice -look upaddress

@postaddres

Universal in-box

Pricing Servicebacked

byestablished bypostalservice

Integrationwith E-

Commerce(eg.

bundledoffering)

RelayOne Y N N(check)

Y (N)(check)

Premium Y N

ELetter Y N N N Penetration

Sweden Post Y Y Y Y(N) ? Y Y (Torget)

Postal Serviceand Telco-ISPin partnership

(WhitePages

+e-mail)

Y(achiev

Y/N Penetration

Y Ecommerce+ Certificate

Authority

IDP ePOST N N N N Penetration

The current situation

• Messaging vis Postal Services Statistics– 2-billion emails/day vis 1.5 billion letters/day

– 2001: emails = 8 x letters according to Forrester

• Email addresses: 120m --> 1b in 2002-2003

• Postal addresses: 2.5b (140m in the USA)

• Sources vary: CNET, Intelliquest & IDC

• Gartner: email = 25% customer contacts

Reactions by Postal Services

• Sweden Post annual report 1998 reports 4% pa gains in letter service turning into -4% pa

• Australia Post annual report 1998 analyzes letters 4.4b pa as 20% of all messaging 22b pa including telephony and facsimile.

• USPS 5-year Strategic Plan for 1998-2002 largely ignores messaging.

THE POSTAL WORLD IS GOING THROUGH A CHANGE

Why?Because commerce on Internet is all about

- Messaging

- Payment

- Logistics

Core Postal Business

T O R G E T B U S I N E S S S T R A T E G Y

PositioningSweden Post as the leadingelectronic commercesupplier

STNEMYAP

RGET S MARKET

EMeeting place for:

- Communications

- Buying & selling

- Information

The wheels are spinning faster

• It took 38 years before 50 millions Americans were listening to radio;

• Television reached 50 million in 14 years;

• Internet reached 50 million in 4 years.

• This is a wake up call for Postal Services

• Projects: Defence=5-10 years, MIS=1 year and E-Services=1-3 months.

Electronic Addressing Concepts

• Phase 1 - Mail House Emulation– Mailing list of customer address file verified

against Postal Address File– Content file(s)– Optional forms– IDP Data Stream DS since 1988– IDP DS --> Hybrid Mail Language Standard– Proprietary: ELetter is all web-enabled

Phase 2 of Electronic Addressing

• Desktop integration via Print Driver DLLs

• IDD PC ePOST since 1997

• Royal Mail - Microsoft RelayOne

• First generation consumer solution

• No integration of email with postal service

• Deutche Post annual report 1988 lists 83 million ePOST items vis 30b+ letters

Phase 3 @post

• True email to postal services integration

• SMTP electronic addressing of the form postal-address@postal-services-domain

• For example:

Ben.Livson.36.Minnamurra.Road.Northbridge.NSW.2063.Australia@post.au

• Sweden Post initiative with Sun & Netscape

Evolution of Phase 3

• Early phase 3: @post and .us initiatives:

• Early idea: provide every postal address an email address leads to problems:– A postal address may correspond to several

email addresses (can be resolved)– You cannot give addresses without permission

• Phase 3+: Directory centric subscriber driven with no need for email accounts!

International Experience

• IDP = 18 countries with a potential to reach 75% of global postal service volume.

• Currently IDP volume is 3b pa <1% global postal volume of 500b letters pa.

• Current focus in automating parts of postal services such as metering & franking eg. e-stamp.

Potential Market

• 500b letters pa - 43% in USA

• Postal Services revenue $150b pa

• 90% already contestable as market deregulated

• Total postal market including letter print production and preparation > $500b pa

• Market > $1t pa with print on-demand

Postal Services Globally

• 700K post offices, 6.1m staff & reach=70%

• Developed countries: 400 letters per capita

• Developing countries: 7-33 letters per capita

• China 7 letters per capita & 2400 regional sorting centres --> 255 centres

• Japan and Germany have both 82 centres

• International mail: 2.5% & parcels: 1%

The Economics of Messaging

• Major messaging market segments include:– Free web-mail for portals– Outsourcing– Universal messaging– E-service for Sales Support and Customer Care– Secure certified commercial grade messaging– Each segment has massive competition with a

very large number of entrants

Entrants - “Free” Web-MailHotmail USA.Net WhoWhere

Rocket Mail Four11/Yahoo MailExcite

HotOffice AltaVista Junior Mail

Juno 3Dmail AOL

Fabrik MailMail MSN

Iname Many others!

Why so many?: Float, enhance portal, advertising, sell a web-mail solution, induce into valued added messaging eg. universal messaging.

Defining Universal Messaging

• Single Logical Message Store• Supports Voice, Fax, E-mail, Video, Pages,

Calendar Events, . . .• Fully Accessible From Phone, PC, and Other

Capable Devices• Interoperability Between All Media Types• Call Control

Five Architectural Views• Voicemail Centric Messaging• E-Mail Centric Messaging• Client Integration Messaging• Server Integration Messaging• Intranet Messaging

• Acknowledgement: http://www.ameagle.com

E-Mail Centric MessagingMessages

To/From OtherSystems

VoicemailServer

E-MailServer

MessageStore

PC ClientTelephone

Client

Universal Messaging Entrants

• Universal Email Inbox to/from fax, phone, pager-mobile, EDI, voicemail etc. can be grouped into service and solution providers including:

• http://www.software.com

• http://www.orchestrate.com

• http://www.unified-msg.com

Universal Messaging Entrants ../2

• http://www.unified-messaging.com/message.htm

• http://www.telebot.com/ "free" unified messaging

• http://www.octel.com - part of the Lucent Technologies

• http://www.amteva.com

• http://www.phonesoft.com

• http://www.jfax.com

• http://www.unitel-inc.com

• http://www.irdg.com/ipostoem.htm iPOST

• http://www.plpt.com Pulse point Communications

• http://www.redrock.com.au

• http://www.freeoffice.com/tbd/ ESA from StarTouch International http://www.unifiedmessaging.com/

• http://www.comversens.com/

• http://www.mailmail.com/ Web Office, messaging, fax platform for ISPs

• http://www.commtouch.com

E-Service: Customer Care

• http://www.aditi.com

• http://www.ask.com

• http://www.brightware.com

• http://www.delanotech.com

• http://www.primus.com

• http://www.motive.com

• http://www.servicesoft.com

E-Service: Sales Support

• http://www.adante.com/

• http://www.aptex.com/

• http://www.egain.com/

• http://www.mustang.com/

• http://www.kanana.com/

• Many others

Messaging Market Trends

• Market has to rationalize - too many entrants in all categories.

• Many competitive advantages unsustainable– secure messaging S/MIME and S/SMTP– universal inbox– virus protection– anti-spamming– Delivery and read receipts

Group 5 Messaging

• Proof of Message Delivery

• Archiving

• Legally Admissible Messaging

• Multiple Transports: Fallback to email&fax

• Message Integrity and Security

• Universal Inbox

• http://www.group5forum.org

Literature

• http://www.bal.com.au/hybrid.htm• Internet Mail Consortium

http://www.imc.org

• Electronic Messaging Association http://www.ema.org

• Ferris Research www.ferris.com

• Radicati Group http://www.radicati.com/

Business Concept• Universal Inbox for Messaging supporting:

Postal letter service E-mail Voicemail Fax, pager, EDI and SMS

Redirection, A-Send and B-Receive Preferences and Directory Services

Outsourced Mailroom & Print On-Demand Virtual Email and Fax addresses

Value Proposition

• Scope is any computer file or anything that can be scanned into a computer file

• Full automation and outsourcing of all postal operations

• Automation and outsourcing of mailroom

• Outsourcing of print-on-demand

• Speed, quality and professionalism

Value Proposition ../2

• SOHO savings: 60 hrs pa x $26/hr = $1,560

• Assumptions: 720 letters pa * 5 min/letter

• Accuracy: postal addressing validated

• Improved cash flow with invoice cycle reduced by a calendar day

• Value added services such as tracking of delivery, insurance, notary and multi-media.

Table 1: Subscriber activation – and hybrid mail servicesParty charged Type of fee or charge

A-party(sender)

B-party(receiver)

Pertransaction

Activation Periodic Excess

Subscriberactivation

Directory entry oradditions

Hybrid Mail:

Postal class

Colour printing

Stationery orbrochure

Greeting card

CD-ROM; mediaconversion

Transparencies

Documentmanagement

Notary services

Certified Mail

Outboundmailroom

Inboundmailroom

Table 2: E-mail and telephony-based messaging servicesParty charged Type of fee or charge

A-party(sender)

B-party(receiver)

Pertransaction

Activation Periodic Excess

Email Services:

Preferences:add, move,delete

Autoforward

Web mail

IVR mail

POP mailbox

IMAP mailbox

IMAP storage

Alias & lifetimeE-Mail address

Autoreply andacknowledge

List services

Certified signedmail

certificate

Gateways:

SMS (ShortMessageService)

Voice Mail

SWOT Analysis of National Postal Services STRENGTHS WEAKNESSES Nationally trusted authority: supports confidence that the

messages will be delivered reliably Postal Service brand synonymous with mail delivery:

supports message delivery in the digital world Retail network: service activation (for those not choosing

web activation and for 100pnt check to obtain certificate);credit card details

Financial strength: ability to partner with large organisationsrequired to assemble this service

Business focused: profitable products

Not a messaging or messaging technology orientatedorganisation (more focused on physical mail logistics)

Little or no experience in subscription-based services (keyprocesses are service activation, assurance and billing)

Decision making processes may not support a rapiddecision, supported by requisite capital backing

Current processes and structure do not support good co-ordination of e-commerce across the organisation

Possesses an address-based database, not one oncustomers (transaction history or preferences)

OPPORTUNITIES THREATS Appears PS only viable opportunity to get into the

messaging market is via hybrid mail. The other strategicpossibilities (PS becoming an ISP or telco) are majordepartures from its business – and in any event theseindustries are themselves maturing and current players arelooking for value-added services across industry boundaries.

Increased profitability or utilisation of existing PS servicessuch as EDIPOST (using joint service provider for print-ondemand and mailing services).

Move now: technologies for large-scale integratedmessaging are mature, thereby technology-risks arediminishing.

Synergies with other PS E-commerce initiatives viaBundling: Certificate Authority, hybrid messaging, e-commerce, advertising revenues from web-based mail.Indeed enablers such as Certificate Authority may not bevalued unless bundled strategically with a core service likeHybrid Mail. Also, longer–term potential for revenues fromweb-based advertising, as e-mail becomes more browserintegrated, and therefore advertising possibilities.

Also PS will have a subscription base (c/f. Current propertyaddress base) with customer profiles, to which PS canmarket 1:1 existing products, such as PS shop products toSOHO market, and future products.

Combined full-service messaging with telcos (and perhapsISPs)

Fragmented or cautious implementation: not rolled outnationally or in a unified form

Too slow to react: current opportunity for a first mover islikely to be short-lived; another player moves first (eg. a localtelco or an international service such as RelayOne). PSreduced to gaining revenue only from the physical maildelivery of hybrid mail (ie. others take major portion of thevalue chain)

E-mail will rapidly increase with projected Australian userslikely to exceed 7 million by 2005 (1 million current) –substitution

PS’s current lack of long-horizon products to supplementerosion of markets in traditional mail services fromcompetition; with deregulation of PS’s traditional mailservices, PS has only a 2-year buffer to introduce newlonger-horizon products

Web feeds Rise of other communication options: multi-point

communications (eg. video conferencing) Web TV (or network computer may make messaging service

easier to use) Band-width expansion is delayed Consumer’s uptake of hybrid mail is slower than expected

History and Present

• Earliest postal delivery: Egypt 255 BC

• Universal Postal Union Berne Treaty 1878

• 189 countries, 6.2m employees, 700,000 post offices and 500b letters.

• International Data Post: 18 major countries:– Finland Post and IBM Finland 1988– Australia EDIPOST 1992 --> modern open IDP

History and Present ../2

• Post 2005 Study by the Universal Postal Union: http://ibis.ib.upu.org/AN/Poste2005.html

• IDP PC ePOST 1997

• RelayOne 1998

• ELetter 1999

• @post 1999

Market Analysis• SOHOs and SMEs are the most attractive

segments.• LME. Large-to-Medium sized Enterprise

Already have existing mail rooms and infrastructures built but willing to outsource postal services, mail rooms & printing.

• Residential.Take years to educate - very high price sensitivity.

Segment Substitution Primary driver Increased usage Primary driver

Business toHome Correspondence

Promotion

Invoicing: LMEs,SMEs

Efficiency 15%-20%

Low-medium

1:1marketing;Targeted

promotionand ads

Ease ofcommunication

Household toBusiness

Very low

Primarily returnmail by businessrequesting aresponse orsignature; mostbusinesses havee-mail

Ease of use 0%

Household tohousehold

10% to 25%+?

Initially lowgrowing to medium

Ease of use 10% - 25%+?

Low to medium

(eg. connectedusers sendinghybrid mail tounconnectedparents/friends)

NOTE: Influenceof multi-pointcommunications(eg. videophone?)

Ease of use

Business tobusiness

Very low

Mostbusiness/government agencies havee-mail

Very low to Low

Postal Service Internet Initiatives

• Service Fulfilment - trucks & scheduling

• Tracking of logistics - parcel service

• On-line Post Shop

• E-Payments eg. Australia B-Pay

• E-Market eg. Sweden Post Torget

• National Certificate Authority - Retail

• E.C.S eg. USPS, Canada Post and La Poste

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