SAN FRANCISC, March 11, 2015 – DocuSign, Inc. (DocuSign®) announced its acquisition of Algorithmic Research, Ltd. (ARX). The acquisition builds on a three year business partnership between DocuSign and ARX, bringing together ARX’s CoSign digital signature technology with DocuSign’s Digital Transaction Management (DTM) platform. No financial details about the deal were disclosed but Israeli newspapers estimate DocuSign is paying $30-50 million.
Way back in 1997, ARX was sold already once to Cylink for $83 million. But Cylink did not survive the dot.com bubble and fell back into the hands of its management and employees in a buyout. Since then the company has focused on digital signature solutions.
“This continues DocuSign’s strategy of buying market share in the e-signature market,” stated Gerald Cäsar, xyzmo owner and CEO. “Already in the last years, DocuSign primarily tried to win market share with very high marketing expenses, assuming that the competition did not have the money to match these expenses. With the backing of large investors, that assumption proved to be right. For many years for 1 USD revenue, DocuSign invested close to 1 USD in sales and marketing.
This new acquisition of ARX fits very well into its strategy to dominate the e-signature market using money. The rationale is that customers want to make a safe decision and buy from the largest company. Many of them will not realize initially that the company uses proprietary standards and that they have to pay for these high marketing and acquisition costs to enable a decent exit for the current DocuSign investors.
This is unlike xyzmo, which does not try to force its standards on its clients. It has based its technology on the most widely approved international open standards, like the ISO PDF standard and true digital signatures, and it does not use proprietary e-signature technology. You do not need to be a xyzmo customer or visit xyzmo’s website to check the validity of your documents. This is fundamentally different from DocuSign. There you are very much dependent on the vendor: your e-signature is valid only as long as you keep paying. But you need to have evidence that can’t expire, and that requires a method of verification that’s independent of the e-signature vendor.”