Postage Meters Going Electronic AT&T, Microsoft take stakes in e-postage startup By Terry Costlow, EE Times Palo Alto, Calif. -- Seeking to capitalize on the U.S. Postal Service's pending shift to digital postage metering and embrace of electronic commerce, AT&T and Microsoft Corp. last week bought separate 10 percent stakes in E-Stamp Corp. That startup is readying a production version of a Windows-based postage system that has been under development for three years. The investments underscore the American postal system's move into the electronic era. Mechanical meters are being taken out of service, largely because of increased theft of postage printed by such machines. Serving in their stead will be systems that create information-based indicia--the government's term for electronically generated digital postage. The digital stamps store information on the system that generated them, discouraging theft and postal fraud. The interest from AT&T and Microsoft points up the market potential for digital postage products. Estimates are that the systems will log sales in the millions of units over the next few years. But Ray Boggs, an analyst at IDC/Link (New York), said he doesn't think "AT&T and Microsoft are in this just for the return on investment." Rather, Boggs said, "what interests them is that it involves the nature of Internet commerce. They're getting into Internet transactions in addition to using traditional mail. Essentially, they're using e-mail to facilitate traditional mail." The postal service is working with several companies, ranging from startups such as E-Stamp to well-entrenched companies such as Pitney-Bowes, to make possible the transition from mechanical to digital postage metering. "We want to get rid of hard indicia; that means we would get rid of the meters out today, which use rotating mechanical heads," confirmed Wayne Wilkerson, manager of metering technology migration at the postal service. "We want to go to digital printing, using ink jet, thermal or anything else that works." E-Stamp is addressing that side of the market and is also pushing forward with techniques that will let businesses download postage over the Internet rather than cart meters to their local post offices. The company's technique is PC-based. Assuming that its technology will be among the chosen, E-Stamp is prepared to help others get into the new market. "We have told the [postal service] that we will license other companies," said Sunir Kapoor, president and chief executive of E-Stamp. Meanwhile, the old-style meters aren't expected to disappear altogether. "I think the market will support both the PC/Internet solution and standalone units that look like traditional postage meters," Wilkerson said. (Next article) (c) 1997 CMP Media, Inc [This article comes from EE Times in a joint cooperative effort with the Motley Fool. For more articles like it, please look at Fool's Gold every weekend or simply go to the Fool's Gold Mine and page through our back issues, which all have clever and cool EE Times articles in them.]

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