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Zumbox Sets Up Joint Venture in Oz

It’s starting in Australia

Zumbox, the American digital mail start-up, has changed its overseas strategy. Rather than try to involve the local postal operator - as it has once with New Zealand Post - it's going to go it alone.

It's starting in Australia where its wholly owned licensing arm, Zumbox Software Inc, has just climbed in bed with two big publicly traded mail outsourcers to create a joint venture called Digital Post Australia (DPA) that will offer consumers a way to get their paper mail electronically.

Digital Post Australia is supposed to be the first digital postal system in Australia.

Zumbox CEO John Payne, who's on DPA's board, claims that Zumbox is "seeing high demand for digital alternatives to the current postal system, both here in the US and abroad."

Unfortunately because of non-disclosure agreements Payne says he can't say anything about New Zealand Post's experience implementing Zumbox. And NZ Post has been completely opaque about what it's doing since it signed a national exclusive license for the Zumbox widgetry 11 months ago.

The deal was seen as a big endorsement for the US start-up and then went quiet. NZ Post was supposed to test the system and stage a trial, which doesn't seem to have happened yet. There was never a guarantee it would be implemented.

The Australia Post, which hasn't gone electronic, is already ticked off at the prospect of DPA's coming competition. As in other major markets, its letter post and revenues are dwindling under the Internet's onslaught and it needs to keep every piece of mail it gets.

Faced with the start-up's announcement of its imminent arrival, Oz Post told Australia's Daily Telegraph that it was launching its own digital post service "within a few weeks," and expressed concern that consumers will be confused by the name Digital Post Australia, thinking it's part of Australia Post.

The state-owned company also waved around the legal protections afforded the mail it carries and other scare tactics.

Zumbox' partners in Australia are the local arm of the multibillion-dollar Computershare and Salmat, who together handle mail for banking, insurance, utilities, telecommunications, government and share registries and are supposed to reach every home in Australia. Who owns what is unclear.

As a "utility service," Digital Post Australia is also supposed to be available to all "communication service providers" in the country.

Zumbox, by the way, has a deal with Computershare in the US and Salmat already offers its mailers an online service.

Seventy percent of 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 has reportedly already chatted them up. It thinks it may get 15 of them but in the end the scheme depends on consumers buying into the free service.

Obviously Zumbox is kicking in its cloud-based technology for mirroring every street address in the country with an electronic mailbox and storage archive. It says the system has been extended, adapted and customized to meet the specific requirements of the Australian market.

The effort will go live in the second half probably around September. It expects to deliver bills, statements, insurance documents, warrantees, government mail, stock and brokerage disclosures and annual reports, which it promises to store securely forever for free. The system is supposed to notify users when bills are due.

According to some independent research DPA had done by GfK bluemoon 50% of Australians are supposed to be interested in the idea of digital postal mail.

Forrester Research observes that almost 80% of global consumers pay bills, transact e-commerce and do other things online, but only 20% turn off the related paper mail. It says consumers cited the need for paper documents for recordkeeping as the main reason why.

Digital Post Australia says it will deliver those documents in native digital formats such as HTML, Flash, audio and video to a household archive totally under the control of the consumer, who can search it, tag it for tax and business reasons and access it from any device, including Apple's increasingly ubiquitous iPad and iPhone and their rival Android devices complements of a PIN number the user ironically gets through the mail.

Mailers, users and their physical addresses are all supposed to be verified. The Zumbox technology has bank-level security and is said to be hacker-free and phishing-free.

Besides anytime access and online document storage, fewer trees will be cut down to make paper, fewer mail trucks will be on the road and there will less waste consigned to landfills.

Typically under the Zumbox system mailers only start paying when users suppress their paper mail. Whether that scheme will maintain in Australia is unclear.

Per-piece pricing is supposed to save mailers between 50% and 70% of their traditional printing and mailing costs and the scheme holds out the hope of mailers cultivating deeper relationships with their users though Zumbox' direct communications channel.

Of course users may not appreciate their mail being mined. And many may already get their bills e-mailed.

More Stories By 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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