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Start-up Wins First Skirmish in Digital Postal Fight Down Under
Australia Post has two good reasons to worry that it waited too long to get into digital mail

The mystery of where Australia Post's recently promised digital mail system is coming from has been solved.

It's going to use Volly, the sight-unseen system that Pitney Bowes announced 15 months ago but has yet to put on the market.

Australia Post said so last week making it the first national post to sign up for Volly. It plans to roll out a Volly-based Digital Mailbox service to consumers by the end of the year.

Australia Post was spooked into finding something fast by Digital Post Australia (DPA), the joint venture based on technology supplied by the American start-up Zumbox that came out of stealth mode last month and planted its digital flag on the continent ahead of Australia Post making its "me too" move.

A digital solution should mean more cannibalization of Oz Post's plummeting physical mail volumes and consequently lower revenues.

At least appearing spooked Australia Post immediately took DPA to court claiming the start-up was trading on the Australia Post name because it has the effrontery to call itself Digital Post Australia. A federal judge denied Australia Post a preliminary injunction last week saying the state-owned agency had a "weak case." Australia Post, which essentially claims to own the word "post," will get another chance to slow its rival down at a trial next month.

Australia Post has two good reasons to worry that it waited too long to get into digital mail for all the handwriting on the wall.

First, the local arm of the multibillion-dollar Computershare and Salmat are Zumbox' partners in the venture, each owning 40% of the start-up. These companies already handle mail for banks, insurance companies, utilities, telcos, government agencies and share registries and are supposed to reach every home in Australia.

They reportedly already control about 85% of the time-sensitive financial digital mail sent, such as invoices and credit card statements.

Seventy percent of all the addressed mail in Oz, which works out to 20 million items a day, is reportedly sent by 30 organisations including government agencies and DPA says it has already chatted them up (which is probably how Oz Post found out what was afoot). DPA thinks it may get 15 of them but in the end the scheme depends on consumers buying into the free service.

Australia Post's second problem is that Zumbox has been a marketed product in the states for the last two years. It says it's ironed out a lot of the knotty technical issues and has been localizing the Australia service for the better part of a year. Volly is an unknown entity of unknown scale - Pitney has only tested it internally - with an architecture that appears to still be in flux.

Back in the US, Zumbox CEO John Payne, who rates Volly "a tick above vaporware," says Australia Post will be Pitney's "lab rat" and that Oz Post "doesn't know yet what it doesn't know" about wrestling a digital mail box service to market. The regulatory considerations alone are apparently daunting let alone a practical consideration like what to do when a user dies.

Payne makes the point that Pitney Bowes despite its franking machine monopoly and cozy relationships with mailers has no experience of the consumer and the mass market and it is ultimately the consumer who gets to decide who wins. Whether Australia Post can supply the critical consumer touch remains to be seen.

Volly president Chuck Codray says Australia Post will have to set up or rent its own cloud infrastructure. The Australian system won't be hosted from the US and, anyway, Volly hasn't explained yet where its own cloud is coming from. Oz Post is getting software, technology and mailer-integration infrastructure from Volly - but nobody knows exactly what that means yet - and Cordray says the post intends to integrate its own authentication system and payment system in Volly.

He indicated customization comes by way of plug-ins.

All this could prove a tall order in the limited time Oz Post has set itself to get the widgetry out. Payne claims the integrated payment system will probably tick off the banks. Zumbox just enables payments through existing customer-selected systems in deference to the banks.

Oddly enough, Codray never mentioned that Volly has just added Adobe's Digital Marketing Suite, including Adobe's CQ content management system, which is supposed to let international posts and banks customize their own Volly-based digital service. The Adobe widgetry is meant to imbue Volly with critical personalization and customization features.

Adobe CQ is supposed to give Volly a plug-and-play presentation layer for the personalization that international posts and banks are said to be looking for in a customizable white-label digital delivery solution and let them create their own branded solution.

The online analytics capabilities of the Adobe Digital Marketing Suite are also supposed to give Volly's mailing and service bureau partners intelligent and actionable insights so they can make more informed business decisions about how to develop and identify their markets. Mailers should be able to deliver tailored content "instantaneously," Pitney has claimed.

Whether all that will be part of the Australian Post is again unclear.

Volly is supposed to mimic Zumbox in providing everybody in Australia with a Digital Mailbox that corresponds to their street address. Oz Post is supposed to come out with its system sometime in the second half. DPA means to stage a few soft launches and go national in the fall.

Both systems free users from visits to multiple sites and multiple passwords and are accessible from any device. They are also supposed to be proof against hacking and phishing.

Australia Post claimed last Thursday in a press release intended to detail its still-somewhat-mysterious Digital Mailbox further that "We have been working hard on this project for a long time." It said that "For senders of mail this is a low-cost and secure platform that integrates a world-class postal service with a secure digital communications suite to provide an offering of physical, digital and hybrid mail."

Presumably that means it doesn't intend to follow the German example and charge the same for both digital and physical mail.

Mailer are supposed to have a range of integration options and, pushing classic paper mail, said its "integrated hybrid product will offer better value for money than any other singular service."

Pitney Bowes chimed in that "the Volly-powered Australia Post Digital Mailbox will give businesses the most powerful tool yet to develop an integrated communications program that uses both physical and digital mail for maximum impact and effect."

Of course, mailers really save money when consumers turn off physical mail.

Oz Post also claimed that Pitney Bowes "knows customer communications better than anyone."

Like all such services, users will be given a storage locker for documents. And the post confirmed that its Digital Mailbox would be available from the iPads, iPhones and Android platforms that are currently all the rage as well as desktops.

Digital Mail Australia has a video up at www.youtube.com/watch?v=4akxVQ2ggCY.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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