DocuSign's Diversification Is Taking Forever

E-signature services soared in popularity during the pandemic when even industries that had stubbornly avoided the convenient technology had little choice but to adopt it. (NASDAQ: DOCU) emerged as the clear leader. The company now has nearly 1.5 million paying customers, and over a billion people worldwide use its software.

DocuSign faces intense competition in its core e-signature market, from upstarts as well as from established software companies like Adobe and Dropbox. Other than name recognition, it's not clear whether DocuSign has a competitive advantage. While the global e-signature market is still growing rapidly, DocuSign's growth has nearly stalled. Revenue expanded by just 9% year over year in the third quarter, and the company's growth rate will contract to 6% in the fourth quarter.

The company's plan for years has been to diversify away from e-signatures by becoming a contract lifecycle management, or CLM, provider. Instead of providing e-signature services only, DocuSign would offer a platform that can handle all things contracts and agreements. DocuSign's Agreement Cloud can handle contract creation, collaboration, negotiation, workflow automation, contract management, and analytics on top of e-signatures.

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Source Fool.com