Esignature company DocuSign completed its first blockchain project with its customer Visa in 2015. In the years since, very few customers have embraced the distributed ledger technology to manage their company’s agreements.
That’s partly because the economics don’t stack up yet, says DocuSign CEO Dan Springer.
Speaking with Which-50 during a visit to Sydney last week, Springer explained why DocuSign gives its customers the option to use the Ethereum blockchain to store their agreements.
“To be really blunt about it, most of the time, when a customer comes to us and says we want to use a blockchain for either all of our agreements, or one particular agreement, it’s not because they have fantastic economic ROI from using the blockchain. It is because they want to say we did a blockchain project,” he said.
“I think it’s great that people are trying to do innovative things with innovative technologies. I think blockchain has a lot of potential for distributed storing of information but it’s not really ready for prime time in that the economics aren’t cost effective.”
To illustrate his point, Springer explained current DocuSign technology is able to generate an agreement, have it routed to people to sign and be stored for less than 10 cents. Just storing the agreement on the blockchain costs $1.
Springer believes blockchain is promising and says DocuSign will continue to experiment with the technology and make it available to its customers, but until the cost drops it’s not a viable mass market option.
The advantage of getting involved with blockchain during these early days is to gain knowledge of the different systems DocuSign customers are using and to be ready to work with the technology if the cost drops dramatically in the future.
“We are happy to use the distributed storage technology as soon as distributed storage becomes secure enough and economically advantageous,” Springer said.
Taking care of document storage is part of DocuSign’s transformation from a product company, which sells eSignature tools, to a platform company which manages the end-to-end process of generating, signing, managing and storing agreements.
The DocuSign Agreement Cloud, launched in March this year, is a suite of products and integrations which digitally transform how organisations prepare, sign, act on, and manage agreements.
The shift has meant the company needs to change the way it thinks about sales and from a product point of view, design and build everything in an integrated way.
The company is also pursing an acquisition strategy, in September 2018 it purchased SpringCM to bolster its document generation and contract lifecycle management portfolio.
“Each new functionality we see that our customers are asking for, we’re going to have to either build it or partner to get it or buy the company — whatever it is — and then we have got to manage that integration,” Springer said.
While its first choice would be to build, Springer says its highly probable they will buy companies that have a headstart on them in terms of functional capability and skill set, which DocuSign would need to recruit.
“Because we trade at a pretty high multiple, and we have a lot of cash, we have good resources available either, stock or cash, to buy companies.”
The key considerations are how well the technology will integrate with the existing platform, as well as the cultural alignment with the target company.
“We want to continue to grow fast. And it’s easy to grow fast with acquisition in the short run. But if you don’t integrate the business as well, it makes it harder to grow fast in the long run,” he said.