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Why Twitter and eBay Rely on 100-year-old Pitney Bowes

Courtesy of Pitney Bowes

Pitney Bowes, a powerhouse in the era when sending paper mail was the primary way businesses communicated with customers, is fully in the present today, quietly turning itself into a company that enhances digital relationships and helps define the future of e-commerce.

This company for many decades famously made postage meters, and sold and managed systems that made corporate mailrooms’ models of efficiency, especially for utilities or credit card companies that sent out millions of bills and other missives. But around a decade ago, still flush with cash from its great business that had been stuffing our mailboxes for decades, its leaders realized they had to change.

Back then it wasn’t entirely clear what would change, or how, but Pitney Bowes began buying startups and businesses that were establishing toeholds in the emerging digital economy. Today, the company is emerging as a lynchpin of the digital ecosystem, operating a back-end software and services infrastructure that enables Twitter to assign a location to a tweet, eBay’s customers to buy and sell goods from anywhere in the world, and all manner of other services. “This is not your father’s mail company,” says Mark Smith, CEO of Ventana Research, an Oregon-based market analysis and advisory company who has studied Pitney Bowes.

The company’s evolution sped up almost five years ago when Marc Lautenbach left IBM to join Pitney Bowes as CEO. He took what was already a promising set of assets and focused money and attention on the digital tools corporate customers were starting to need. He sold off old businesses, emphasized e-commerce, and worked to reinvigorate the company’s traditional hard-copy mail business. “We knew we had assets within our portfolio that solved problems for businesses and how they deal with their clients, but we had to bring that into the 21st century,” says Michael Monahan, who was previously CFO and is now executive vice president and chief operating officer.

“We already had, for example, software for location intelligence,” Monahan continues. “So we asked ourselves ‘How can we apply that today with crowdsourced and real-time data?'” Pitney Bowes had in 2007 bought a company called MapInfo, whose data helped numerous industries, including property and casualty insurers who needed location information about properties they covered. Mining companies also used it to aid in exploration and managing assets. A big reason Pitney Bowes back then wanted to own MapInfo was to accurately get mail to physical addresses. “But we realized that what an address is to physical mail, location is to a digital message,” Monahan says. “For the property and casualty insurers we work with, your house doesn’t move, of course. But that same precision of location they use to do underwriting can be applied in a real-time situation like a tweet, so long as you have accurate data.”

So today Pitney Bowes enables Twitter users to tell followers where they are—Twitter applies Pitney Bowes’s location intelligence technology to enable location sharing in tweets, if a user has opted in to the feature.

A more recent acquisition of the Lautenbach era, of a company called Borderfree in 2015, has expanded Pitney Bowes’s ability to connect buyers and sellers around the world. Pitney Bowes has long offered services for companies shipping globally. For example, in partnership with eBay, Pitney Bowes helps power eBay’s Global Shipping program that connects eBay sellers in the UK and U.S. to buyers in over 100 countries. The addition of Borderfree allows the company to provide end-to-end services for ecommerce retailers that sell to customers in over 220 countries and territories. When buyers around the world want to buy from sellers in the U.S., UK, or Australia, they can instantly get a reliable shipping quote and delivery date estimate, something the American seller in most cases wouldn’t be able to provide themselves. The seller gets paid in dollars or pounds and just ships the goods domestically, as usual.

The reason that’s possible is that Pitney Bowes combines a sophisticated, constantly-evolving database of information about shipping prices, addresses, taxes, tariffs, and local law with operation of big physical mail and reshipment facilities. All the seller does is ship to one of those hubs, and Pitney Bowes seamlessly re-routes and stamps the package for its trip to the eventual foreign destination. Says Ventana’s Smith: “The buyer understands when to expect delivery, but also might sometimes learn that this product can’t in fact be shipped to Saudi Arabia or wherever, or that the tariffs add so much to the cost that you don’t want to buy it. These are the kinds of digital signals that are critical for consumers to have a good experience.” Pitney Bowes offers the service to more than 260 global retailers, including Harrod’s in the UK and Neiman Marcus, enabling them to sell in many countries around the world.

“Oracle, Salesforce and SAP also do software and services for shopping carts,” continues Smith, “but Pitney Bowes is enabling personalized experiences all the way from shopping to delivery.”

Says Pitney Bowes’s Monahan: “It’s a great example of leveraging the 100 years of knowhow at Pitney Bowes into a contemporary application. Our traditional mail business is all about taking a complex set of rules and regulations around mailing and allowing our clients to manage those rules efficiently. We knew the letter business was contracting, but we saw an opportunity to apply that knowhow to global e-commerce.”

But it has by no means neglected its longtime expertise in physical mailroom systems, which it is now updating with its newfound digital savvy. Pitney Bowes still sells gigantic high-speed mailroom manufacturing equipment to clients like large insurance, telecom, or investment companies, so they can mail millions of bills or statements at a time. Speed and accuracy in this process is all-important. You certainly don’t want your 401k statement to go into someone else’s envelope.

So Pitney Bowes deployed an array of sensors throughout its facilities, and worked with General Electric to apply that company’s Predix Internet of Things system so it could digitally manage these vast systems. It was the first commercial application on the GE Predix platform. The Internet of Things—instrumenting all the systems so they could talk to one another and send data to central management software—turns out to be an ideal way to manage the productivity of a giant mail facility.

Says Ventana’s Smith: “Everybody’s talking about digital experience and digital transformation. It’s a growing challenge in every industry. But these guys have a unique set of technologies and services that have relevance to what customers need. Pitney Bowes hasn’t figured everything out yet, but they’re clearly on the right course.”

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