Special Delivery for Click2send.com

FRAMINGHAM (04/03/2000) - Slow overseas connections and a nosy neighbor led Duane Wadsworth straight to Click2send.com Inc., a startup that's pushing to become the registered mail delivery service of the Internet.

Circuit diagrams are the lingua franca of the semiconductor industry. They're also really, really big and swapped among engineers like your aunt's Christmas fruitcake. That was Wadsworth's problem. His company, Wadsworth-Pacific Manufacturing Associates Inc. in Palo Alto, California, brokers manufacturing supplies between North American semiconductor manufacturers and their Japanese suppliers.

Wadsworth's buyers and sellers must see - and alter -product specifications rapidly, and generally send these diagrams as e-mail attachments.

"You can't always guarantee a reliable connection overseas, and some mail programs used in Asia have trouble receiving big attachments," says Wadsworth, the company president. One corrupted attachment, and Wadsworth-Pacific could lose a sale.

There wasn't enough time to express-deliver disks containing large files, he adds. "Federal Express services in Japan are expensive and, with crossing the international dateline, can take three or four days."

Wadsworth says he griped about the situation to a neighbor who happened to work for Click2send.com. The neighbor "nagged" him to try the service.

"He just didn't let up," Wadsworth chuckles. "And now I thank him for it."

One-to-Many Delivery

The idea behind Sunnyvale, California-based Click2send.com's service is simple:

Let customers store large data files, such as graphics, large and multimedia presentations once, then download those files for every recipient - and get a receipt to prove the files were successfully delivered.

Senders upload the files to the Click2send.com site only once, no matter how many times they're delivered, which can eliminate a lot of redundant network traffic. Files can be downloaded to authorized recipients as needed, and the sender receives a proof-of-delivery notice. Click2send can convert Windows Media audio and video files to streaming format, enabling the service to provide broadcast presentations.

The firm's delivery mechanisms - which provide reliable, browser-neutral and idiot-proof upload and download capabilities, notification messaging for both sides of the transaction, good security and the ability to automatically delete a file after the delivery period is complete - take a lot of work on the back end. Click2send is still working on incorporating public-key infrastructure security into the system.

Storing lots of large files means massive storage management headaches; Click2send is a poster child for Hopkinton, Massachusetts-based storage-area network (SAN) giant EMC Corp. The startup has built a 22-terabyte SAN so far.

"We can scale that in multiples, and we're glad we did [it that way]," says Click2send co-founder David Knight. "We've grown much more rapidly than anyone predicted."

"Click2send has had a lot of positive evolution in the last six months, and their service really does what they promise," says Joyce Graff, an analyst at Gartner Group Inc. in Stamford, Connecticut. "I think they've set up a good infrastructure, and they're making all the right kinds ofrelationships."

Free vs. Pay

The company's co-founders, Knight and Charlene Steele Vaughn, have impressive pedigrees, says Graff. Knight helped deliver the very successful Retix and Isocor initial public offerings. Vaughn, who helped found Time Warner Interactive, has been operating in the online entertainment field for several years.

Still, the murkiest part of the Click2send.com picture is the bottom line.

Vaughn and Knight have built a tremendous buzz around the service by offering it for free. Registered users get a "lockable safe-deposit box" storage area with a 120MB capacity and a maximum of 50MB for any single file.

Now that the free service has "gone viral" with millions of users, says Vaughn, "it's given us an in to very large corporations that need additional services, probably use high-speed, private [wide-area IP networks] and are willing to pay for it."

The company sells a subscription service for $35 to $50 per seat per month. In return, users get additional storage space, better activity tracking and the ability to collaborate across the Internet.

Analysts at Gartner and Stamford, Connecticut-based Meta Group Inc. predict the market for such services will eventually take about one-third of today's global document-delivery business.

For now, Wadsworth is content to use the free service. "It works, and it's free," he shrugs.

Click2send.com Inc.

Location: 1250 Borregas Ave., Sunnyvale, California 94089Telephone: (408) 752-8400Web: www.click2send.comThe technology: Secure online file deliveryWhy it's worth watching: Click2send.com acts as a secure repository and delivery service for data, especially very large files such as multimedia, high-end graphics and presentations.

Company officers: Charlene Steele Vaughn and David Knight, co-foundersMilestones: August 1998: Company founded; April 1999: Free consumer service launched; March 2000: B-to-B serviceEmployees: 40Burn money: Vertex Management, East-West Capital Associates Inc., Angel Investors LP and EMCCustomers: Ogilvy & Mather Worldwide, Wadsworth-Pacific and Mojo Records Corp.

Partners: EMC, Microsoft Corp., VeriSign Inc., US West Inc., Comcast Corp. and Cisco Systems Inc.

Red flags for IT: Potential trouble distinguishingitself from competitors.

Click2send's free service could hurt its business-to-business image. And the success of free-to-pay conversions has been iffy. The company's B-to-B offering works best off the public networks, on high-speed private networks that can guarantee performance. While these "private Internets" are increasingly popular, they're not universal - yet.

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