Hybrid Messaging Workshop
Business Modelling for Integrated
Messaging and Postal Services
By Ben Livson
© Copyright: Ben Livson 1999. All
rights reserved.
Session 1 - Introductions
• Executive summary - overview
• The current situation
– Messaging
– Electronic addressing: the concept
– The international experience
– The market
• The economics of messaging
© Copyright: Ben Livson 1999. All
rights reserved.
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?
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
Session 3 continued
• Market Analysis
– Customer segments
– Product service bundles, pricing and revenue,
and costs
– Critical Success Factors
– Risks and Responses
© Copyright: Ben Livson 1999. All
rights reserved.
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.
© Copyright: Ben Livson 1999. All
rights reserved.
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?
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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?
© Copyright: Ben Livson 1999. All
rights reserved.
Hybrid Mail Overview
Executive Summary
© Copyright: Ben Livson 1999. All rights reserved.
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
Global Hybrid Mail GHM
Managed Interfaces
Postal Services
Final Distribution
Royal Mail
USPS, IDP..
Email
Surface Mail
Public
Internet
Intelligent Addressing
and Distributed Nodes
Gateway
Voice Mail
Fax, EDI, Pager & SMS
GHM
Intranet
M
Help
Desk
Robot
Directory
Services
Web-enabled
Customer
Care
Web
Tracker
© Copyright: Ben Livson 1999. All
rights reserved.
Web
Service
Activator
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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!
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
Delivery
by open
Internet
Directory
service look up
address
@post
addres
sing
Univers
al inbox
Pricing
Service
backed
by
establis
hed by
postal
service
Integration
with ECommerce
(eg.
bundled
offering)
RelayOne
Y
N
N
(check)
Y (N)
(check)
Premium
Y
N
ELetter
Y
N
N
N
Penetrati
on
N
N
Sweden Post
Y
Y
Y
Y(N)
?
Y
Y (Torget)
Postal Service
and Telco-ISP
in partnership
Y/N
Y
Y
(achiev
able)
Y/N
Penetrati
on
Y
Ecommerce
+ Certificate
Authority
N
N
Penetrati
on
Y
N
Service
feature
Service
Provider:
IDP ePOST
(White
Pages
+e-mail)
N
N
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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.
© Copyright: Ben Livson 1999. All
rights reserved.
THE POSTAL WORLD IS GOING THROUGH A CHANGE
Why?
Because commerce on Internet is all about
- Messaging
- Payment
- Logistics
Core Postal Business
© Copyright: Ben Livson 1999. All
rights reserved.
TORGET BUSINESS STRATEGY
Meeting place for:
- Communications
- Buying & selling
- Information
© Copyright: Ben Livson 1999. All
rights reserved.
Positioning
Sweden Post
as the leading
electronic
commerce
supplier
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.
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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!
© Copyright: Ben Livson 1999. All
rights reserved.
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.
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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%
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
Entrants - “Free” Web-Mail
Hotmail
Rocket Mail
HotOffice
Juno
Fabrik
Iname
USA.Net
WhoWhere
Four11/Yahoo MailExcite
AltaVista
Junior Mail
3Dmail
AOL
MailMail
MSN
Many others!
Why so many?: Float, enhance portal, advertising,
sell a web-mail solution, induce into valued added
messaging eg. universal messaging.
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
Five Architectural Views
•
•
•
•
•
Voicemail Centric Messaging
E-Mail Centric Messaging
Client Integration Messaging
Server Integration Messaging
Intranet Messaging
• Acknowledgement: http://www.ameagle.com
© Copyright: Ben Livson 1999. All
rights reserved.
E-Mail Centric Messaging
Messages
To/From Other
Systems
E-Mail
Server
PBX
Message
Store
Voicemail
Server
Telephone
Client
© Copyright: Ben Livson 1999. All
rights reserved.
PC 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
© Copyright: Ben Livson 1999. All
rights reserved.
Universal Messaging Entrants ../2
• http://www.unifiedmessaging.com/message.htm
• http://www.telebot.com/ "free" unified
messaging
• http://www.octel.com - part of the Lucent
Technologies
• http://www.amteva.com
© Copyright: Ben Livson 1999. All
rights reserved.
Universal Messaging Entrants ../3
•
•
•
•
•
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
© Copyright: Ben Livson 1999. All
rights reserved.
Universal Messaging Entrants ../4
• 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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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/
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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.
© Copyright: Ben Livson 1999. All
rights reserved.
Table 1: Subscriber activation – and hybrid mail services
Party charged
A-party
(sender)
Subscriber
activation
Directory entry or
additions
B-party
(receiver)
Per
transaction
Activation
(?)
Hybrid Mail:
Type of fee or charge
Colour printing
Stationery or
brochure
Greeting card
CD-ROM; media
conversion
Transparencies
Document
management
Notary services
Outbound
mailroom
Inbound
mailroom
Excess
Postal class
Certified Mail
Periodic
© Copyright: Ben Livson 1999. All
rights reserved.
Table 2: E-mail and telephony-based messaging services
Party charged
A-party
(sender)
B-party
(receiver)
Type of fee or charge
Per
transaction
Activation
Email Services:
Periodic
Preferences:
add, move,
delete
Autoforward
Web mail
IVR mail
POP mailbox
IMAP mailbox
IMAP storage
Alias & lifetime
E-Mail address
Autoreply and
acknowledge
List services
Certified signed
mail
certificate
Gateways:
Fax
EDI
SMS (Short
Message
Service)
Voice Mail
Excess
© Copyright: Ben Livson 1999. All
rights reserved.
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 organisations
required to assemble this service
Business focused: profitable products
Not a messaging or messaging technology orientated
organisation (more focused on physical mail logistics)
Little or no experience in subscription-based services (key
processes are service activation, assurance and billing)
Decision making processes may not support a rapid
decision, supported by requisite capital backing
Current processes and structure do not support good coordination of e-commerce across the organisation
Possesses an address-based database, not one on
customers (transaction history or preferences)
OPPORTUNITIES
THREATS
Appears PS only viable opportunity to get into the
messaging market is via hybrid mail. The other strategic
possibilities (PS becoming an ISP or telco) are major
departures from its business – and in any event these
industries are themselves maturing and current players are
looking for value-added services across industry boundaries.
Increased profitability or utilisation of existing PS services
such as EDIPOST (using joint service provider for print-on
demand and mailing services).
Move now: technologies for large-scale integrated
messaging are mature, thereby technology-risks are
diminishing.
Synergies with other PS E-commerce initiatives via
Bundling: Certificate Authority, hybrid messaging, ecommerce, advertising revenues from web-based mail.
Indeed enablers such as Certificate Authority may not be
valued unless bundled strategically with a core service like
Hybrid Mail. Also, longer–term potential for revenues from
web-based advertising, as e-mail becomes more browser
integrated, and therefore advertising possibilities.
Also PS will have a subscription base (c/f. Current property
address base) with customer profiles, to which PS can
market 1:1 existing products, such as PS shop products to
SOHO market, and future products.
Combined full-service messaging with telcos (and perhaps
ISPs)
Fragmented or cautious implementation: not rolled out
nationally or in a unified form
Too slow to react: current opportunity for a first mover is
likely to be short-lived; another player moves first (eg. a local
telco or an international service such as RelayOne). PS
reduced to gaining revenue only from the physical mail
delivery of hybrid mail (ie. others take major portion of the
value chain)
E-mail will rapidly increase with projected Australian users
likely to exceed 7 million by 2005 (1 million current) –
substitution
PS’s current lack of long-horizon products to supplement
erosion of markets in traditional mail services from
competition; with deregulation of PS’s traditional mail
services, PS has only a 2-year buffer to introduce new
longer-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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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
© Copyright: Ben Livson 1999. All
rights reserved.
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.
© Copyright: Ben Livson 1999. All
rights reserved.
Segment
Substitution
Primary driver
Increased usage
Primary driver
Business to
Home
70%
Efficiency
15%-20%
Ease of
communication
Correspondence
Promotion
High
Low-medium
1:1
marketing;
Targeted
promotion
and ads
Invoicing: LMEs,
SMEs
Household to
Business
10%
Ease of use
Very low
0%
NA
Nil
Primarily return
mail by business
requesting a
response or
signature; most
businesses have
e-mail
Household to
household
10% to 25%+?
Initially low
growing to medium
Ease of use
10% - 25%+?
Low to medium
(eg. connected
users sending
hybrid mail to
unconnected
parents/friends)
NOTE: Influence
of multi-point
communications
(eg. videophone?)
Business to
business
3%?
Very low
Very low to Low
Most
business/governm
ent agencies have
e-mail
© Copyright: Ben Livson 1999. All
rights reserved.
Ease of use
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
© Copyright: Ben Livson 1999. All
rights reserved.
