At Pixily, Cloud Computing Quenches the Downpour of Paper

10/8/08Follow @wroush

I am not a David Allen disciple, but the one practice I did adopt after reading his time-management bible Getting Things Done many years ago was to start a filing system for the stacks of papers that used to cause a distracting mess around my home and office. As a result, I’ve got about six boxes full of neatly labeled file folders—most of which I will probably never open again, but which I can’t part with. After all, you never know when you might need that tax return from 1996 or that old report card from your puppy’s obedience school. (Five paws! What a good dog! Can’t throw that away!)

Now there’s a company in Waltham, MA, that will scan and digitize all of your old papers, taking them off your hands once and for all and uploading them to the great computing cloud in the sky, where they can then be accessed from any Web browser. It’s called Pixily, and it charges about $15 for every 50 pages you want to send in for digitization, postage included. Founders Prasad Thammineni, Vikram Kumar, and Anand Rajaram started the company last year and have been talking it up more since its official July launch, starring in a video for the Boston Globe and doing a main dish presentation at the latest Web Innovators Group meeting (where they won the “audience favorite” award). And while their service might not usher you into the Nirvana of pure paperlessness, it will at least stem the tide.

The self-funded startup isn’t the first to offer industrial-scale conversion of paper into bits. Boston’s Iron Mountain, for example, offers document conversion services for records that companies don’t need to put into the company’s secure underground vaults. But that service starts at $700 a month, according to Rajaram—a bit out of most consumers’ price range. “There isn’t anybody that really does [document conversion] for consumers and small businesses,” Rajaram says. “And more importantly, none of the other services are really suited for search. Just because something is archived doesn’t mean it shouldn’t be searchable.”

Pixily Screen ShotSearch capabilities, in fact, are what bring Pixily’s service alive. Its website acts like a portal to your once paper-laden life, showing snippets of each document that you can browse and search, just as you would with Web pages. Like Evernote, an online note-keeping service I reviewed in July, Pixily runs every document that you archive (whether it’s a paper document you mailed in for scanning, or a PDF, Word, Excel, or PowerPoint document that you uploaded yourself) through character-recognition and indexing software.

That means, for example, that if you need to retrieve the name of that restaurant where you blew $250 six months ago, you can type “250″ into Pixily’s search engine, and it will instantly find and highlight the relevant line on your credit-card statement. Try doing that with your paper file system.

“Everyone has a different take on the paper problem,” says Rajaram. “You either spent time organizing your papers, or you spend time searching through them.”

The idea that Rajaram and his colleagues hit on in mid-2007, he says, was to build a service that automates both. That the three were able to turn the idea into a company so quickly—and without having to raise outside money—is partly thanks to the rise of cloud computing technology. Other than the machines that run its scanners, Pixily doesn’t own a single server: it processes incoming documents using Amazon’s Elastic Compute Cloud (EC2), a utility computing service introduced by the e-retail giant in 2006, and stores them on Amazon’s Simple Storage Service (S3).

That means the company can requisition additional computing capacity whenever it’s needed—and avoid buying a lot of hardware that would just sit idle at other times. “Cloud computing is one of the trends that makes an operation like ours possible,” Rajaram says. “Say it’s tax time and we’re getting three or four times our normal volume of envelopes. It’s just a question of bringing in additional servers on EC2 to process that additional load, and winding them down once the demand winds down. So we don’t have to commit a lot of up-front capital for those five or six times a year when things spike.”

Rajaram admits that there are still questions about the reliability of cloud computing. The company learned that the hard way on July 20—one day after the official launch of Pixily’s service—when Amazon’s EC2 and S3 systems were out of commission for five long hours. But Rajaram says Amazon is getting better at communicating with users during outages and restoring service faster. “It’s not about whether it goes down, because almost every system is going to go down at some time,” he says. “The point is how you recover from it.” Pixily is also considering buying an on-site server that would take over the load when Amazon’s cloud infrastructure fails, he says.

But even if the company does have to buy some of its own computing hardware, its biggest expenses will be for old-fashioned things like postage—for the envelopes used to send customers’ papers back and forth—and labor (i.e., the workers in the company’s Waltham scanning center).

“With our cost structure, we make a profit on every envelope” of papers, Rajaram says. As a result, the company has been able to bootstrap itself to this point, and won’t need to raise new funds until it begins a big marketing push next year.

Up to now, Pixily has kept marketing costs low by pursuing targeted promotions such as an offer advertised on the Weather Channel’s website for two months of free document-conversion service for people who live in regions hit by this summer’s hurricanes. It’s also exploring strategic partnerships with retailers such as Staples, FedEx Kinko’s, Office Depot, and Costco. The customers at those chains “pretty much fit our ideal customer—people who have kids, are strapped for time, work in a service industry, understand online applications, and can pay for the convenience we offer,” Rajaram says.

But couldn’t the very online services that Rajaram mentions—such as banking sites where people can pay their bills online—mean that the flow of paper into people’s homes may eventually subside? I asked Rajaram how long consumers will really need a service like Pixily.

“People have a love-hate relationship with paper,” he replied. Boston-area electrical utility NSTAR recently reported that only 12 percent of its customers have opted for paperless bills, he says. “People attach a real value to the act of receiving a statement,” says Rajaram. “It’s a reminder to go pay the bill. So it will be a very long time before we go truly paperless.”

Which means that makers of file folders, label makers, and file boxes can probably breathe easy for now. After all, there are some crucial keepsakes—like your dog’s first report card—where a digital scan in the cloud just isn’t the same.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Milton Elliott

    Question:
    What if anything has/is the government doing about setting authentic-ship on scanned documents? I am an entrepreneur looking to startup a document scanning business, and this would be a strong selling for my market.