NEW YORK (Fortune) -- The typical business today is awash in e-mail, from the critical to the mundane to the absolutely worthless.

By one account, we're receiving 20 percent more e-mails per day than a year ago, and since much of today's e-mails contain large attachments, the overall size of e-mail-related storage in corporate networks has increased more than 40 percent during the same period.

A new product that launched Tuesday at the DEMOfall technology confab in San Diego, promises to help companies beat back this flood. The makers of VaporStream, a web-based messaging system from Void Communications, have come up with a recordless, confidential alternative to e-mail and instant messaging that's spam-free and can be used with any e-mail address.

Here's how it works: Let's say Rajiv wants to shoot a private message over to Julie. He goes to the encrypted VaporStream home page, enters his password and selects Julie on his list of chat partners. (Companies can choose which employees have access to the system.) He types a message, which disappears from his computer and is held temporarily on a VaporStream server.

When Julie checks her VaporStream messages, she clicks on Rajiv's, and when it's delivered to her, it leaves the server for good. She cannot copy, paste, forward, save or print out his message. And when she responds, Rajiv's original message vaporizes entirely. (If only Frank Quattrone had this back in 2000, his famous exhortation to "clean up those files" would have disappeared into the ether.)

The system also separates the sender's and receiver's names and the date from the body of the e-mail, so even if you took a digital picture of the screen the full details of the message would not be captured.

The cost? $40 per user per year, according to CEO Joseph Collins. (Mobile devices like Blackberries can be added for an additional $5 per user.) Collins says he is not trying to replace e-mail, just complement it. "If you need a record, e-mail it; if not, use VaporStream," he says.

So will anyone use it? Nancy Flynn, executive director of the ePolicy Institute and a paid consultant for VaporStream, seems to think so. Flynn notes that businesses lack a full understanding of what constitutes a "business record" that needs to be archived. Using VaporStream, she argues, would force companies to "define for themselves what a business record is, and educate their employees about that."

Lacking such an understanding can prove costly. Last year, Morgan Stanley (Charts) was forced to pay $1.45 billion to Revlon (Charts) chairman Ron Perelman as compensation for his loss in the sale of camping-equipment maker Coleman to Sunbeam.

The bank claimed it did not have e-mail records for the period in which the sale was negotiated, then later said it had the records but it would be costly and time-consuming to locate them. This assertion turned out to be false, and Judge Elizabeth Maass came down hard on Morgan Stanley for the misstatements.

E-mail also played a starring role in a sex discrimination suit against European bank UBS (Charts), which was sanctioned for destroying backup e-mail messages sought in the suit. A federal jury in New York ultimately ordered UBS to pay more than $29 million in damages to a former saleswoman.

A survey of over 400 companies by the ePolicy Institute and the American Management Association found that about one in four companies have had employee e-mails subpoenaed, and a similar number have terminated employees for e-mail misuse.

While it's clear that corporate America's e-mail policies leave much to be desired, it's less clear that VaporStream will find a home alongside Microsoft (Charts) Outlook, Lotus Notes and AOL's ubiquitous instant messages. Securities brokers and dealers, like the aforementioned Morgan Stanley, would run afoul of SEC archiving regulations if they used VaporStream, so they couldn't go near it. Other highly-regulated industries would probably also shy away.

And while VaporStream's Collins insists that VaporStream was designed for informal communications only, some experts seem to think it's ripe for misuse.

"I'm skeptical," says Matthew Brown, senior analyst at Forrester Research (Charts). "The only reason I would not use a normal channel of communication is if I had something to say that wasn't terribly compliant or trustworthy. From that perspective, they have put themselves in a position where a lot of companies that have to be compliant cannot use VaporStream."

Herbert Teitelbaum, a senior litigation partner at law firm Bryan Cave, says he would counsel any client of his in any regulated industry not to use VaporStream. "A regulator is going to infer from the presence of this kind of system that there is something going on here that is improper," he says. "Regulators are going to be mighty suspicious."

Mark Vadon, CEO of online jewelry emporium Blue Nile (Charts), says that the mere presence of VaporStream "opens things up to abuse."

Others question the demand for such a product. "It seems like there is a very limited legitimate need for a tool that leaves no forensic traces," says Rich Mogull, research VP of information security and risk at Gartner. "It's hard to see a big market for this."

But Michael Osterman, head of research and consulting firm Osterman Research and an expert on all things related to messaging, does see a potential market for sending messages that aren't business related - say, a notice that Bob's birthday cake will be served in the conference room at three p.m., or an invitation to lunch.

"These messages eat up bandwidth and storage unnecessarily," he says, "so VaporStream's offering could have a positive impact by eliminating storage of a significant proportion of e-mail."

How much? VaporStream's backers estimate that 70 percent of e-mail sent over corporate networks is not germane to the business, and Osterman says that's a reasonable assumption, although a good chunk of those e-mails are caught by spam filters and never make it to our inboxes. Osterman's own research found that spam, opt-in bulk e-mail and miscellaneous office chatter accounted for an average of 47 percent of e-mail.

VaporStream's founders will soon find out whether there's a market for their intriguing product. If it does catch on, VaporStream will likely not have this market to itself for very long.

"This isn't a technology play, this is a business model play," says one chief technology officer. "And as a business model play, I'm just not sure. The barriers to entry just don't seem that great. It's too much of a no-brainer for the gorillas of e-mail and instant messaging to drop in if it actually sees some uptake."

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