Industry impressed with firm's paperwork reduction act

NASHUA -- The bad economy has been good to eCopy Inc.

The Nashua-based company grew 1,555 percent from fiscal 1999 through 2003 by turning standard office copiers into scanning devices that transfer paper documents onto computers with a push of a button -- a simple step that saves companies time and cuts down on overnight mailing and faxing costs.

''A downturn has a benefit for companies like ours when other companies are looking to save money," said Edward Schmid, eCopy's founder, president, and chief executive officer.

After years of waiting for market demands and technology to catch up with its product, eCopy experienced its growth spurt during the recent recession. In fact, it made the Inc. 500 list of fastest-growing privately held US companies and the Deloitte & Touche Fast 500 list of fastest-growing private or public companies for the past three years.

And the good times show no sign of ending. The company is poised for even more growth, according to company officials, its strategic partner, and an independent analyst.

''They're in a very good position right now," said David Sweetnam, a senior analyst with the Manalapan, N.J.,-based BERTL Inc., which evaluates and reports on copiers, printers, digital imaging devices, and related software. ''They have a very good opportunity to grow."

Schmid, who worked at Digital Equipment Corp. and a startup digital imaging company, started eCopy in 1992. He wanted to help people process paper-based information through their computers using technology that was as easy to use as a telephone or fax machine, ''technology that was so easy to use that people didn't even think about it."

However, Schmid said, ''we soon found out that we were way ahead of our time."

The company, called Simplify Development Corp. until 2000, was a software company that had to sell hardware because its clients didn't have the scanners or enterprise-based e-mail systems needed to support the technology.

One of eCopy's first customers was the marketing department at now-defunct NYNEX Corp. Schmid saw the possibility of greater sales. But when he met with NYNEX's information technology people, he soon learned that marketing was the only department with the infrastructure to support eCopy's product.

It's the kind of scenario that sank plenty of tech startups during the recession.

But eCopy had two big breaks in the mid-1990s. The first was the Internet and the widespread adoption of e-mail. Then office copiers moved from analog to digital. Suddenly companies had a scanner -- even if they didn't know it.

''Now we could start selling our software by itself if they had a copier," Schmid said. ''That was our 'Eureka!' moment."

eCopy developed relationships with copier companies. It's an innovative approach: eCopy doesn't sell its product to end users. Rather, it sells to two copier companies, Canon U.S.A. Inc. and the Netherlands-based Oce NV. Those companies then offer eCopy's technology as an upgrade to their copiers.

Canon invested $15.8 million into eCopy in 2002.

''Canon viewed the technology as very important," said Sam Yoshida, director and general manager of the corporate systems division in Canon's imaging systems group. ''eCopy allowed us to position ourselves better with the IT accounts."

Canon's own records show the growing demand for eCopy's technology. Canon was No. 1 in the US black-and-white copier market, with a 31 percent market share in 2000, Canon officials said, citing information from Gartner Dataquest. At that time, eCopy's ShareScan software was connected to approximately 2 percent of the eligible models.

But by 2003, Canon was installing eCopy on 7 to 9 percent of eligible models, Canon officials said.

Sweetnam, the analyst with BERTL, said demand for eCopy's technology and similar products will continue to grow. And while copier manufacturers, including Canon, have developed their own scanning and connectivity solutions, eCopy is a leader in the field.

''It's [at] the next level of scanning that eCopy has an advantage," he said, adding that the company's integration with document management systems is ''one of their core strengths."

Sweetnam's only caveat was that he would like to see eCopy develop relationships with additional copier companies.

eCopy's technology is straightforward, which observers said is one of the reasons for its success. Walk up to a copier and instead of copying a document onto another piece of paper, press eCopy's button and send an image of the document to the computer.

eCopy has developed products that allow workers to send scanned documents to e-mail accounts as well as other destinations, such as a company's document management system, which expands a company's ability to distribute, edit, and store the files.

''The big thing wasn't the technology to do the scanning. It was how easy we made it to scan the document and send it to someone, and how fast it was," Schmid said. A copier can scan anywhere from 20 to 105 pages a minute -- significantly quicker than usual desktop scanners.

''When we put it in and started to use it, I said, 'Well, that's nice. You create an image.' But to my amazement, the lawyers here took to it like a duck to water," said Chris McCarthy, IT director at the law firm of Nutter, McClennen & Fish LLP in Boston.

She cited ease and speed as eCopy's biggest selling points. Lawyers use eCopy to e-mail documents -- technical patent applications, for example -- to colleagues for review. Paralegals use to it to scan images for litigation support. Secretaries use it to scan standard forms, such as those used in real estate transactions, onto the network, where they can use computers rather than typewriters to fill in the blanks.

McCarthy said the firm is now looking at using eCopy in administrative departments, such as accounting, to scan paper documents into electronic storage systems.

McCarthy said there's more than just convenience with eCopy: She said the firm has cut its faxing and overnight mail expenses by approximately 40 percent in the past three years, thanks to eCopy and related technologies. Schmid said that's something his salespeople promote: that companies can save money by using eCopy instead of overnight mail and faxes.

eCopy has a dozen offices in the United States and Europe. It has a sales subsidiary in Tokyo and in July opened an office in Australia.

That's why, he said, eCopy has continued to grow even during the recovery, because companies are still looking at cost-cutting measures and better document management. In fact, eCopy grew at 43 percent in fiscal 2004, with revenue slightly more than $30 million. Its staff also expanded, from 99 people a year ago to 131 today. It is planning to hire another 10 to 20 employees.

Walter Dick, managing director of Boston-based Ascent Venture Partners, which with Landmark Partners invested $6 million in the company in 2000, is impressed: ''eCopy is a standout in the portfolio."