Signing contracts moves to the cloud

According to Tom Gonser, chief strategy officer and founder of DocuSign, it was a strategic U-turn by Adobe that led to the acquisition yesterday of his company's largest rival, EchoSign.

"Adobe has in the past been pretty steadfast that the way you sign a document is that you get a digital certificate and you use a process that requires PKI," he told me in a phone interview earlier today. "The strategy of putting everything on a server in the cloud is what DocuSign started doing in 2003. It's the difference between using software to sign documents and using the cloud to sign documents ... Having Adobe come out and say the way you should sign documents in the way DocuSign invented in 2003 is huge for us."

Whether DocuSign invented everything it does was disputed earlier this month in a patent lawsuit brought by another rival, RPost, which today also sued EchoSign and its new parent Adobe (see Techmeme coverage). But according to a video by RPost's chairman Zafar Khan posted to its corporate site, its core intellectual property revolves around mechanisms for verifying receipt of emails and filtering outbound messaging. It will be up to the courts to decide whether those patents extend to cover the more generic concept of third-party authentication of electronic messaging.

What struck me as I reviewed these various claims and counter-claims is that you have in the history of online document signature a perfect microcosm of how processes evolve digitally.

In the first generation, you have a technology-intensive, heavily over-engineered solution that laboriously automates the physical process without changing it in any material way. Today, it's self-evident that applying an on-premise PKI server infrastructure to the problem of authenticating someone's online signature is gross overkill. But back in the 1990s it seemed the only answer technology could offer.

The next generation moves online, but it simply replicates the physical process in a virtual form. The flagship service that RPost offers is called Registered Email, and as the name suggests, it's a digital instantiation of registered mail, providing a legally valid confirmation that an email was delivered.

Finally, a third generation arrives with a completely new process that fully exploits the potential of the online environment, stripping away unnecessary technologies and resource consumption to introduce a simpler, more flexible and cost-effective solution. This is the generation represented by EchoSign and DocuSign, and it is still exploring the new avenues opened up by fresh thinking, such as enabling digital signing of contracts on mobile phones.

So who is best placed to push forward with all that new thinking? If you've read my posting yesterday, Will Adobe wreck EchoSign?, you'll know that my instincts side with a pureplay like DocuSign. As the company's CEO Steve King told me today, "We're myopically focused on what DocuSign does. We just don't believe Adobe will have that focus. Small, highly focussed companies can compete very effectively with the largest technology companies on the planet."