Line of Business
DocSpace takes on global market
Toronto-based software developer sees bright future in Web-based file delivery and storage10/22/1999 12:00:00 AM By: Rodney Porter
Special to CDN
In under two years The DocSpace Company has expanded globally, and even won an industry award for its software. But in spite of its accomplishments, the Web-based file delivery and storage company has yet to make a profit.
In fact, the company's president and CEO, Evan Chrapko, doesn't expect any profits for another couple of years — at least. To him, it's simply the price to pay for rapid expansion.
"We have got to aggressively build over the next two to five years to have a future and we have to be bold about what the future is," said Chrapko when questioned about the lack of profit. "It is not something that is done in a small way or done lightly or done in a timid way.
"The hunt for financing has always been aggressive from day one," added Chrapko, who is also an international chartered accountant. "Any slowing down could jeopardize our success."
DocSpace was spun out of the Canadian ISP Cyberion Networking in Vancouver in December 1997. The consultants who were brought in to solve software problems ended up buying a business.
Although Chrapko will not divulge the cost of the purchase, he told CDN that so far, investments in DocSpace from mostly American venture firms have exceeded $5 million. He said this money has been invested in research and development as well as hardware.
The company's first office was established in Toronto, mainly to stay off the radar screen until Chrapko, one of three co-founders, was ready to announce its presence to the world.
Unlike competitors such as Hushmail and Tumbleweed, DocSpace is a one-stop shop that is based on the Internet — it picks up where Hotmail left off. Chrapko's only fear is that Xerox may emerge as a competitor over the next couple of years — not knowing keeps him awake at night.
DocSpace's four products require access to a Web browser. An important component in its service package is DocSpace Direct, a Web-based courier service that can send, receive and track files of any kind or size with security and tracking that is missing from e-mail. The product won Best of Show in the Workgroup Software category at Spring Internet World in April.
The online storage facility, DocSpace Drive, provides a secure central location for files that can be accessed from anywhere with no need for floppies, Zip disks or laptops. DocSpace Direct is a virtual mailroom that can receive files from internal and external senders. The recently released DocSpace Manager 2.0 allows project teams to share and work on files simultaneously.
Services cost between $9.99 and $24.99 per user, per month, depending on the amount of storage space required per user. Clients include Ogilvy and Mather, TBWA and most recently Black & Decker.
"In the not too distant future, you will invoke DocSpace services through our dealers like The Microsoft Network and go to them for our services," said Chrapko. "Presently, you can come to us directly through our Web site and there are free levels within limits. If you wanted to do something that is co-branded for your business we can do that for you on the sly so it would look to your customers that it is an offering that you yourself have built."
Like any Internet business, security remains a key issue. DocSpace claims its security goes dramatically beyond Web banking-grade security. Files are secured using a public key infrastructure (PKI) that includes encryption, as well as the use of authentication services through collaboration with VeriSign.
"DocSpace will cover the planet and it will be the place people default when they go to do anything with a file whether that is to move, store or collaborate on a file," said Chrapko.
His brother Shane, also a co-founder, heads up the company's California office. There are newer offices in Dallas, New York, the U.K. and France. The global staff count is 55 people and growing.
Aggressive expansion over a short period of time with no profit is typical of many companies trying to take control of a specialty Internet-based business, according to Internet analyst Joe Greene from International Data Corp. Canada in Toronto.
"There are a lot of niche companies starting up and taking advantage of the Internet in a unique way and DocSpace seems to be one of them."
Greene added that while the concept of Web-based file delivery and storage is a new concept, he was not surprised to hear about it. "Internet traffic is doubling every four months and the capacity of the telecommunications industry doubles every year, so this company [DocSpace] may end up in an inevitable position."
Chrapko said he eats, sleeps and breathes DocSpace. He has come a long way from his days on a cattle and hog farm near Edmonton. It is this background from where he gets his financial strategy: continual cultivation of as much income as he can harvest.
