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 NEWSThe Esign effect By Jennifer Jones and Brian Fonseca August 7, 2000 BEFORE THE virtual ink of the Electronic Signatures in Global and National Commerce Act (Esign) could dry, a slew of companies began bombarding corporate customers with new ways to use the much-hyped technology. And the fervor sparked by the law may leave many enterprises, start-ups, and digital exchanges wondering how, whether, and when to begin pulling digital signature use into corporate operations.
The passage of the bill brings enterprises face-to-face with the complex process of developing the business rules and policies that must be established before implementing digital signature technologies. "What we're finding is, because this market is relatively young, there's not a whole cornucopia of knowledge on how to do it," says Andrew Morbitzer, vice president of marketing at Baltimore Technologies, in Needham, Mass. "Every customer engagement is different." Esign makes its mark The United Parcel Service has always been ahead of the game in looking to apply digital signature technology. Take, for example, the Online Dossier service that UPS launched in the early 1990s. The service promised tamper-proof electronic documents with digital signatures. That effort never took off, partially because it involved the use of proprietary software but primarily because industry adoption rates lagged too far behind. UPS had to scrap the project. But the current zeal for digital signature use unleashed by the Esign law has UPS making another run with its Online Courier service, the company's heated second attempt at using digital signatures. The service was first developed and used internally at UPS and has since become a paid UPS service for law firms, moving digitally signed legal documents electronically in and out of these firms, which are UPS customers. The service is a way for UPS to deliver on its mammoth quest to move information using technology and the Internet instead of brown-uniformed package handlers. "With the new law that has been signed, we really think migration will happen more quickly," says David Ladner, director of the Document Exchange Group at UPS, headquartered in Atlanta. "That is really what we are counting on." Options usher in confusion Although Esign puts to rest many questions concerning the legality of digital signatures, which with certain caveats are now as binding as their paper-based counterparts, the law remains silent about what technical solutions companies should use to implement the technology. "Congress went out of its way to make the new law technology neutral," says Jay Stanley, Internet Policy and Regulations analyst at Cambridge, Mass.-based Forrester Research. "The cost of making it so broad -- of not being tied to any technology -- causes confusion in the beginning." As a result, enterprises face an onslaught of technological solutions to choose from, as well as the challenge of tackling the interoperability and technical issues that will ensue (see related article, below). The law seems to have multiplied the options that businesses now have, as vendors such as PenOp and Digital Applications join several security stalwarts, including Baltimore Technologies and Entrust, in the race to provide digital signature applications. For example, before getting its digital signature plans in order, UPS, similar to most enterprises, was charged by a herd of digital signature vendors. "We've had many small companies coming to us with the latest hula hoop," Ladner says. The pack of digital signature players gathered steam during the Esign bill's long road to becoming a law, but has only lately burst onto the corporate enterprise scene. "Many of these vendors were around before the law was passed, but they now see this as a big opportunity," says James Grady, an associate analyst at Giga Information Group, in Cambridge, Mass. The digital signature landscape  The new digital security vendors are divided into roughly two camps: One group wants to work with enterprise companies to overhaul the business process and policy changes that must accompany digital signature use; the other group is pushing simpler software packages that stamp a digital signature onto existing documents, much like a notary public does in the world of paper documents. Some applications do have elements of both and do not fit neatly into one camp or the other. In taking the infrastructure route via a partnership with DataCert.com, UPS got some help in brokering the use of digital signatures between trading partners. "We manage the connections between partners," says Jeff Hodge, director of vertical markets at Houston-based DataCert. "If a large corporate customer decides they want to start moving data with someone in Indonesia, we would verify all formats and business rules and set up a pilot to do that." Companies such as Montreal-based Silanis are pushing the signature stamplike approach. The company does not want to burden large enterprises with the need to revamp the way they do business. Instead, Silanis and others promise a technology that dovetails nicely into a company's legacy paper trail. "We have developed products that let people work the same way they did in the paper world and not have to re-engineer business processes or understand anything new," says Tommy Petrogiannis, president of Silanis. "We gave our engineering group a simple mandate: Make it better than paper." Silanis' ApproveIt software, for instance, attaches an electronic signature to a document generated in Microsoft Word, Excel, Outlook, or other formats, including Adobe Acrobat. To get some traction behind its brand, Silanis in late June began offering for free its onSign digital signature software designed for consumers and home office customers. With onSign, the company is making a grab at a "leadership role in the mass-market community," Petrogiannis says. Understanding the market Brand recognition will be important to any player trying to get their own flavor of digital products to take hold because that recognition necessarily comes before brand credibility, most industry observers agree. "Especially with digital identity, trust is going to be key," UPS' Ladner says. "I think what we'll see is this multitude of smaller companies on the scene, but as the space begins to mature there will be some consolidation and recognizable names." Generally, it may be mostly smaller businesses and consumers that will be satisfied with stamping a digital signature on to the documents they already use, although some larger corporations may incorporate such software on a limited basis, Giga's Grady says. Most enterprises, however, are looking to add the technology as they build out e-commerce infrastructures. "It just depends on what your needs are," Grady says. "For some companies, a stamped digital signature is going to be fine. But bigger corporations like Etrade and others have been re-engineering since before the law was passed." Once past the hurdle of selecting a partner, companies will have the hard work before them of getting a corporate house in order so that they can begin using the technology. "The technology has that reputation now of being tough to deploy, which I think is unfair. There's work to do because it's an infrastructure," says Brian O'Higgins, executive vice president of Plano, Texas-based Entrust, a pioneer in customer digital signature infrastructure implementation and education. "As time goes on, it will become easier, but it's not click and install. We're not there yet." Enterprises farther along in dealing with a familiar pool of partners will be able to incorporate digital signatures a lot easier than those still putting e-commerce infrastructures in place, most industry observers agree. "The major part of the work involved is developing the policies and the processes," Chevron's Eaton says. "It is going out to customers and partners and saying this is the way we are going to do things to be able to do business electronically." Business-to-business exchanges may therefore prove to be an especially tricky area because such online environments are built for companies to do business with unfamiliar partners. Nevertheless, exchanges cry out for the use of digital signatures. "The ultimate use of the technology is friction-free, stranger-to-stranger interaction," says Scott Lowry, CEO of Digital Signature Trust, an established infrastructure provider, in Salt Lake City. But realizing that vision for digital signatures may take time. "It's hard enough to do business this way with companies you know," Eaton says.  Send comments to Senior Editor Jennifer Jones (jennifer_jones@infoworld.com) and Reporter Brian Fonseca (brian_fonseca@infoworld.com).
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