WR Bulletin Vol 6 Issue #05 7-Feb-05
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
469
On Slideshare
469
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. The Wainhouse Research Bulletin ONLINE NEWS AND VIEWS ON VISUAL COLLABORATION AND RICH MEDIA COMMUNICATIONS This newsletter is packed. We have some very significant product announcements as well as fourth quarter financial results from the leading players in our industry. And be sure to check out the interview with embattled CEO Jonathan Morgan of FVC as he wends his way through bankruptcy proceedings. As always, please feel free to forward this newsletter to your colleagues. To be added to our FREE automated email distribution list, simply visit www.wainhouse.com/bulletin. Andrew W. Davis, andrewwd@wainhouse.com TANDBERG Launches Expressway Addressing directly one of the key obstacles to widespread IP videoconferencing, TANDBERG has introduced Expressway, a NAT-Firewall solution based on technology the company acquired from Ridgeway some months ago, but now available with some added TANDBERG spit and polish. For any of you who have tried to use IP videoconferencing between enterprises, with partners, customers, or suppliers you are aware that unsolicited incoming connections are typically not allowed by enterprise firewalls, and while firewalls can be opened for video, most network managers would rather be poked in the eye with a sharp stick than run the potential security risk. And if a NAT is installed, you have additional problems since the IP address of the receiver may be non-addressable from outside. And by the way, this is an IP problem and applies equally to SIP or H.323. The Expressway solution consists of client software integrated into the company’s MXP endpoints (available in next software revision), server software on the new TANDBERG border controller, and the TANDBERG gatekeeper (required only to support non-TANDBERG MXP endpoints, but advisable nevertheless). The gatekeeper provides access to a secure tunnel on behalf of all endpoints that are registered to the gatekeeper. One of the interesting side points in this announcement (and there are many, including expanded SIP and SCCP support in endpoints) is that the TANDBERG border controller can be IP registered as an H.323 domain and use the DNS IP domain naming system. The border controller would be for H.323 traffic types and just the way you have a DNS system sitting out in the cloud to handle email, another to handle web servers, another to handle IM, this one would handle H.323 (later SIP will be supported) calls. So an email sent to andrewwd@wainhouse.com would IP IP go to my email server while an H.323 call sent to andrewwd@wainhouse.com would go to my videoconferencing system. This is a neat, elegant, no-load way to implement a universal dialing plan. The Wainhouse Research Bulletin Page-1 Vol. 6 #05, February 7, 2005
  • 2. The TANDBERG Border Controller has an MSRP of $7,700 for a system supporting 5 simultaneous calls. Versions supporting 10 and 20 simultaneous calls are also available; I didn’t get pricing for these configurations. The TANDBERG gateway has an MSRP of $9,000. Here’s What I Think This is a significant announcement for several reasons. 1) The problem being addressed is significant and universal. The NAT-firewall issue has been a major deterrent to the migration from ISDN to IP for video and voice. 2) The solution is essentially transparent to endpoints and infrastructure products, solves the problem for all but the most arcane installations (Expressway supports H.264 and encryption of course). The solutions should work with any firewall device. This client software implementation is also another substantiation of the power of TANDBERG’s MXP architecture. 3) This is a solution from one of the leading players in the videoconferencing market. This is not your typical lame partnership announcement that leaves end users (or resellers) dealing with multiple suppliers, multiple support contracts, and potential finger pointing crises. Visual Nexus Enters NAT-Firewall Frey Visual Nexus, the UK-based venture which markets an integrated voice-video-web desktop meeting solution, has launched a NAT-Firewall solution dubbed Visual Nexus Secure Transport (VNST) that, like TANDBERG, provides seamless, transparent, yet secure ‘traversal’ paths through firewall and routers without compromising network security policies. In fact, the Linux-based VN solution is more similar than different from the TANDBERG solution, due in some part no doubt to a mutual heritage line extending back to Ridgeway. VNST provides real- time communication paths (H.323 and T.120 now, SIP in the future) across multiple firewall and NAT devices on behalf of communication devices (endpoints, gatekeepers, bridges and gateways). Because these paths are consistent with firewall and NAT operational standards, minimal system configuration changes are required. Unlike TANDBERG, the default TCP port is port 80. A five concurrent user license is approximately £3,000. Wainhouse Research Summit Update This year’s WR Summit, scheduled for July 13-14-15, is just beginning to take shape. Now in its fifth year, the Wainhouse Research Summit has become the industry's premiere networking event, with conferencing professionals, integrators, and vendors interacting over past successes and difficulties and future intentions in voice, video, and web/data conferencing products and services. The previous events were sellouts, and space is limited again this year, so plan ahead, and book early (hotel rooms are likely to sell out). This year's theme, Driving Adoption of Rich Media Collaboration will bring together users and vendors in frank presentations and panel discussions about what works and what doesn't, how audio and video and web conferencing are evolving, and the future role of service providers. We are proud to announce that one of our featured speakers in July will be Jan Zanetis, the Director of the Virtual School of Vanderbilt University. Jan was a K-12 educator for 20+ years and since coming to Vanderbilt in 2000, has developed and delivered thousands of hours of interactive videoconferences featuring Vanderbilt faculty, staff and students as presenters. She conducts professional development sessions for educators, both onsite and via video. Most recently, she co-wrote the book, “Videoconferencing for K12 Classrooms: A Program Guide.” Jan will discuss how videoconferencing and other synchronous technologies are being deployed in the higher education and K-12; her experiences running a content provider program; and what vendors should be doing to address the education market and applications needs. The Wainhouse Research Bulletin Page-2 Vol. 6 #05, February 7, 2005
  • 3. The 2005 Summit is being sponsored by GlowPoint, Masergy, TANDBERG, and WebEx. This year’s event will feature a special workshop on July 13 covering desktop collaboration products and services. Full details on speakers, sponsors, and the agenda are available at wainhouse.com/wrsummit. News In Brief MVC AG, one of Germany’s leading videoconferencing integrators, has renamed its wholly- owned conferencing service provider (CSP) subsidiary to “meetyoo conferencing GmbH” with the clever URL www.meetyoo.de. While attempting Yahoo- and Google-like awareness, and suggesting to us that we should rename ourselves Wainhoose Research, the new CSP will be going after strong brand recognition while expanding its services from videoo bridging to a full suite of audioo and web conferencing and collaboration tools. Meetyoo dominates the videoo bridging market in Germany, based on the company’s own record plus the fact they acquired the videoo bridging business of Deutsche Telekom in 2003. Customers can choose between flat rates and “pay per use” models. Contact: tkula@mvc-ag.com. Meetyoo is a gold sponsor of our C4B event in Berlin in April. The U.S. Army's 172nd Stryker Brigade Combat Team (BCT) has chosen Macromedia Breeze Live to power real- time battlefield collaboration. RADVISION announced its ProLab Test Management Suite version 3.5, a highly scalable testing system suitable for all stages of development, QA, deployment, and tuning of voice and video over IP (SIP The Wainhouse Research team planning our series of and H.323) products. New features include 2005 market studies and conferences for North America, an improved GUI, advanced signaling, EMEA, and Asia/Pacific. From left to right, media testing, and monitoring, and a large row 1: Andrew; row 2: Ira, Paul, Stacy, Alan; number of built-in media and scripts. row 3: Brent, Marc, Andy. ViewCentral and Microsoft have extended their agreement under which Microsoft resells ViewCentral solutions for managing in-person as well as live and archived web events. Now entering its third year, the agreement holds that Microsoft will continue to offer ViewCentral solutions under the private-labeled name Registration Pro, which has been integrated for use with the Microsoft Office Live Meeting web conferencing service. UK-based NIAD Communications has acquired VAvox VQ Software from VAvox Ltd. The venture includes the transfer of technology and staff to NIAD. Conferencing industry veterans Mike Horsley join NIAD as CTO, and Gary Watkins as Director of Software. 2005 Rich Media Conferencing Calendar WHEN & WHERE WHAT & WHO 19-20-21 April, Berlin Germany WR Berlin events: CSP Summit and Conferencing4Business conference/demo workshop 10-12 May, Eibsee Germany IMTC Spring 2005 Forum 13-14-15 July, Boston Massachusetts USA Wainhouse Research Summit 2005 6-7 October, Chicago IL USA WR CSP Summit The Wainhouse Research Bulletin Page-3 Vol. 6 #05, February 7, 2005
  • 4. Dollars & Sense Polycom Q4-2004 Polycom turned in record revenues in Q4 and, in the process, broke through the $500 million dollar annual revenue benchmark, the first conferencing equipment company to achieve this significant milestone (PictureTel came Q4 Q3 Q4 Sequential Annual remarkably close before its collapse.). PLCM 03 04 04 Growth Growth The company matched its previous Video $72.6 $74.4 $78.0 4.8% 7.4% high of ~14,200 room video systems and saw a dramatic rise in unit Network Sys $25.3 $37.7 $37.8 0.3% 49.4% shipments of personal systems based Audio $20.3 $28.7 $30.7 7.0% 51.2% no-doubt on the sale of PVX software Total Rev $118.2 $140.8 $146.5 4.0% 23.9% codecs. On a year over year basis, Group Units 13,352 13,471 14,211 5.5% 6.4% Polycom’s total revenues were up 27%, Op Inc. $17.6 $13.1 $9.4 -27.9% -46.4% although the comparison is not quite an North Am. $66.2 $85.9 $80.6 -6.2% 21.7% apples-to-apples match since 2004 EMEA $23.6 $25.3 $32.2 27.2% 36.3% includes Voyant and 2003 does not. Asia/Pacific $26.0 $26.8 $29.3 9.5% 12.7% Voyant also apparently had a disappointing Q4. Latin Am. $2.4 $2.8 $4.4 56.1% 85.9% PLCM Video Unit Shipments (K) Polycom Annual Revenues 16 $600 14 $540.2 12 $500 $462.0 $452.1 $425.2 10 $400 8 6 $300 4 2 $200 0 $100 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 00 00 01 01 02 02 03 03 04 04 $0 Room Systems Personal Systems 2001 2002 2003 2004 PLCM Revenues by Geography PLCM Revenues by Product $160 $160 $140 $140 $120 $120 $100 $100 $80 $80 $60 $60 $40 $40 $20 $20 $0 $0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 01 01 02 02 02 02 03 03 03 03 04 04 04 04 01 01 02 02 02 02 03 03 03 03 04 04 04 04 N.A EMEA Asia/Pacific LatinAm Video NW Systems Voice Services The Wainhouse Research Bulletin Page-4 Vol. 6 #05, February 7, 2005
  • 5. TANDBERG Q4-2004 The Wainhouse Research Bulletin would like TANDBERG reported record revenues of $88.9 you to join us in thanking our 2005 sponsors million in the fourth quarter, based on record unit who help keep distribution of the WRB free: shipments of the company's video systems. The AGT GlowPoint company was very strong in EMEA and Asia, Aethra inSORS making up for somewhat disappointing results in the Americas. We believe that on a revenue basis Avaya Konftel for video endpoints, when you take the service Compunetix MVC component out of Polycom's numbers, that Convedia Polycom TANDBERG and Polycom are essentially tied for DSTMedia ReView Video the number one market share position. What is DyLogic TANDBERG equally impressive is that the company is dangerously close to surpassing RADVISION in Espre Solutions V-SPAN the MCU-GW-GK infrastructure market, and may The Whitlock Group have in fact already surpassed RVSN when you The fine print: Sponsorship of the WR Bulletin in no factor out that company's 3G wireless business. way implies that our sponsors endorse the opinions TANDBERG is putting all its eggs behind the expressed in the WRB. Nor does it imply that the Bulletin endorses their products or services. We MXP architecture, and the strategy appears to be remain an equal opportunity critic. paying off bigtime. Q4 Q3 Q4 Sequential Annual TANDBERG Annual Revenues TAA 03 04 04 Growth Growth $350 $305.00 Americas $42.1 $45.8 $45.7 -0.2% 8.6% $300 EMEA $17.4 $21.1 $31.6 49.8% 81.4% $243.6 $250 $223.28 Asia $7.4 $9.6 $11.7 21.9% 58.1% $200 Total Rev $66.9 $76.5 $89.0 16.3% 33.0% 141.4 Endpoints $53.5 $58.9 $67.6 14.7% 26.2% $150 Services $6.7 $9.2 $10.7 16.2% 59.4% $100 Infrastructure $6.7 $8.4 $10.7 26.8% 59.4% $50 Op Inc. $14.9 $20.0 $22.3 11.5% 49.5% $0 Endpoint Units 5,699 7,040 8,330 18.3% 46.2% 2001 2002 2003 2004 TAA Revenues by Geography TAA Revenues by Product $90 $90 9 $80 $80 8 Endpoint Units (K) $70 $70 7 $60 $60 6 $50 $50 5 $40 $40 4 $30 $30 3 $20 $20 2 $10 $10 1 $0 $0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 01 01 02 02 02 02 03 03 03 03 04 04 04 04 01 01 02 02 02 02 03 03 03 03 04 04 04 04 Americas EMEA Asia Endpoints Services Network prod VC Units The Wainhouse Research Bulletin Page-5 Vol. 6 #05, February 7, 2005
  • 6. RADVISION Q4-2004 RVSN reported record revenues for Q4, based on a sharp annual growth factor in the TBU technology licensing portion of the company. According to the company, “Despite a substantial increase in NBU sales of room conferencing systems through the Cisco channel in Q4, non- Cisco sales in the Americas were lower than expected.” As our chart shows, however, the company’s growth numbers in territories outside North America are not enviable. RADVISION Q4 Q3 Q4 Sequential Annual $70 $6 RVSN Operating Income ($M) 03 04 04 Growth Growth $60 $4 Revenues ($M) Products $12.0 $11.4 $12.0 5.3% 0.1% $50 $2 Technology $3.6 $5.3 $5.6 4.9% 54.8% $40 $0 Total Sales $15.6 $16.7 $17.6 5.1% 12.8% $30 -$2 NA $6.8 $7.9 $9.9 25.1% 46.2% $20 -$4 EMEA $5.4 $5.0 $4.6 -7.0% -14.1% $10 -$6 Asia $3.4 $3.8 $3.0 -19.7% -10.9% $0 -$8 Op Inc. $1.93 $0.88 $2.24 154.3% 16.1% 1999 2000 2001 2002 2003 2004 Products Technology Op Inc. RADVISION - By Geography ($M) RADVISION - By Product $20 $20 $3 $18 $18 $3 $16 $16 $14 $2 $14 Revenues ($M) Op. Inc. ($M) $12 $12 $2 $10 $10 $1 $8 $8 $1 $6 $6 $4 $0 $4 $2 ($1) $2 $0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $0 ($1) 01 01 02 02 02 02 03 03 03 03 04 04 04 04 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 01 01 02 02 02 02 03 03 03 03 04 04 04 04 North Am EMEA Asia Products Technology Op Inc Some Comparisons Q4-04 Sequential Growth Annual Growth Polycom total revenues $146.5M 4.0% 23.9% TANDBERG total revenues $89.0M 16.3% 33.0% RADVISION total revenues $17.6M 5.1% 12.8% Polycom group video units 14,211 5.5% 6.4% TANDBERG total video units 8,330 18.3% 46.2% Polycom group video revenues $78.0 (1) 4.8% 7.4% TANDBERG group video revenues $67.6 14.7% 26.2% Polycom Network Equipment $37.8 0.3% 49.4% (2) TANDBERG Network Equipment $10.7 26.8% 59.4% RADVISION Network Equipment $12.0 5.3% 0.1% (1) This number includes video services of an unknown amount. Polycom reported $15.5 million in total services revenues, some of which may belong to the Network Systems Group. (2) The Voyant acquisition makes this number larger than it might otherwise be and makes comparison with other numbers unfair. The Wainhouse Research Bulletin Page-6 Vol. 6 #05, February 7, 2005
  • 7. Centra Software – Q4/04 Andy Nilssen, andyn@wainhouse.com Centra Software CTRA Q4 Q3 Q4 Sequential Annual $14 $0 $M 03 04 04 Growth Growth $12 Licenses $5.92 $2.83 $3.68 30.0% -37.9% $2 Operating Income $M $10 Software Revenue $M $2.19 $2.67 $2.67 -0.1% 22.0% $4 Svcs $8 Prof Svcs $6 $6 $3.75 $4.20 $4.13 -1.8% 9.9% & Maint $4 Total Rev $11.86 $9.70 $10.47 7.9% -11.7% $8 $2 Op Inc -$1.09 -$1.89 -$1.39 na na $0 $10 Centra reported Q4 2004 revenues of $10.5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 01 02 02 02 02 03 03 03 03 04 04 04 04 million, representing an annual decrease of 11.7% over Q4 2003, but a sequential increase Services License Rev Operating Inc of 7.9% compared to Q3 2004. Operating losses improved sequentially to $1.39 million. Gross margins remained steady at 81.0%. The company claimed to have signed an additional nine Enterprise Advantage Subscription (EAS) customers worth $4.1 million during the quarter (following its first 5 EAS subscriptions in Q3). EAS, which was announced in Q3, is a flat fee, all-you-can-use volume licensing program designed to enable large organizations to deploy Centra’s online collaboration solutions across the enterprise. Centra executives believed the company should be profitable in calendar 2005. ACT Teleconferencing ACTT announced it has signed a term sheet with an investor for approximately $14 million. The financing is intended to facilitate the restructuring of the company's debt and support its global reorganization, announced about two weeks earlier. Terms were not announced pending negotiation and approval of definitive agreements. The company's subordinated debt lenders have agreed to a timetable for completion of definitive agreements by the company and the investor, regulatory compliance, and a shareholder meeting to allow the company's shareholders to vote on the transaction. The company expects to close on the financing on or before June 1, 2005. Random Thoughts: It’s always amazing to me how some companies continue to get financing, (the last round of private placement for this public company was in September 04) even after quarter after quarter of poor results. By our reckoning, the company has had negative operating income in 9 of the past 11 quarters. Now we have an even more interesting point to ponder – the fate of ACT now that the future of AT&T conferencing is up for grabs. ACT provides services for AT&T conferencing outside the USA. Once SBC has absorbed AT&T, however, we think the whole “conferencing thing” could be up for grabs. Will SBC stay in the business or sell it off to a third party? Either way, put ACT in the “uncertain” column. New White Paper While few would debate that IP-based videoconferencing has become the clear path for the industry, the reality is that many organizations simply can't make the shift from ISDN to IP at this time. Making the Best of ISDN-based Videoconferencing highlights various ways that enterprise conferencing managers can strategically re-engineer their ISDN network to improve reliability while decreasing cost. Click here to download. Get the latest WRB headlines from RSS-aware applications and web portals such as My Yahoo via our RSS feed: details The Wainhouse Research Bulletin Page-7 Vol. 6 #05, February 7, 2005
  • 8. VoIP, Lies, and Videoconferencing Adam Broadbent, IP Telephony and Videoconferencing Support Analyst at the professional engineering firm Arup UK, has agreed to share his experiences with the C4B Berlin audience on how careful planning and implementation can help companies derive real benefits from the deployment of conferencing and collaboration solutions. Operating in 32 countries, Arup has provided clients with technical solutions ranging from the design of the new 2nd Avenue Subway in New York City to 30 St Mary Axe in the City of London to the re-launched Ford GT40 Le Mans classic. Arup invested in videoconferencing to coordinate the activities of its dispersed teams, but the usage remained low for a number of reasons. In 2004 the company completed the rollout of Cisco IP Telephony across 11 London offices and is now in the process moving to a QoS- enabled MPLS-based global network. This presentation will cover Arup experiences with videoconferencing, the migration to IP-based services, and how the company has turned videoconferencing and IP telephony into a strategic asset. If you are considering deploying videoconferencing or VoIP solutions in your collaboration strategy, this presentation could be critical to your plans. C4B Berlin is Wainhouse Research’s first conference and workshop event for Western and Eastern Europe and is being held in conjunction with the CSP Summit Berlin. See www.wainhouse.com/berlin for details on agenda, speakers, and the hotel. Our Berlin Events are sponsored by Business Management Eastern Europe, the German American Business Association, Aethra, MVC, and Polycom. One on One with FVC’s CEO Jonathan Morgan. It’s not everyday I get to talk to a CEO while he’s in the middle of a bankruptcy filing and a potential sale of the company. But last week I met up with FVC’s CEO Jonathan Morgan and his marketing sidekick, Duncan Campbell, both of whom were in a surprisingly upbeat mood. Much to my surprise, neither one had a flat spot on his forehead from beating his heads against the wall, and both were able to take some time to try to explain to me some of the bankruptcy proceedings, and the possible outcomes for FVC and Click To Meet. WRB: From the public documents, looks like RVSN is buying you for $5 million. In which case, you guys are history, right? JM: Not exactly. What is clear is that FVC will have a new history, beginning soon. The RVSN offer is not firm, not yet a done deal, and the Letter of Intent (LOI) really sets the stage for the next round of negotiations. If we enter into an asset purchase agreement with RVSN on February 7, this really just sets a floor. The process will continue. The RVSN proposal becomes what is known as the “stalking horse.” Other companies and entities may want to get involved in the reorganization or sales process but the rules going forward will be determined in conjunction with the creditors and the bankruptcy court. We are pursuing all options to maximize the recovery to all the existing stakeholders. A case in point is the recently announced interim approval for $2 million in Debtor in Possession (DIP) financing from Millennium Technology Ventures LP of New York. WRB: What exactly does the DIP financing allow you to do? JM: The money gives us tremendous flexibility. We now have the cash and working capital to run the business. We are immediately hiring back key personnel (furloughed a few weeks ago) and continuing work on code development and customer support. If we emerge from the proceedings as an independent company, these actions will serve us well. The DIP gives The Wainhouse Research Bulletin Page-8 Vol. 6 #05, February 7, 2005
  • 9. everyone working with FVC more confidence in the future of our company – our customers, our employees, and our partners. WRB: So, you might remain independent as FVC? JM: Yes. We will examine all of the options, apply our business judgment, consult with our key constituents, and present the best alternative to the bankruptcy court for approval. If the company feels it can maximize the value of FVC through a sale, we will pursue that option. If we believe that more value is driven by remaining independent, we intend to reorganize under chapter 11 protection and leverage our new financing to move in that direction. WRB: Would someone contemplating an asset acquisition, like RVSN for example, see the DIP financing deal as friend or foe? JM: Good question. It clearly depends on your point of view. One could imagine that feelings at RVSN as a result of this financing are mixed. This funding helps preserve and in fact enhance the value of our customers, our people, our products. On the other hand, assets with enhanced value are worth more, and anyone trying to acquire those assets may be forced to pay more as the process unfolds. WRB: If you come out of this experience whole, what changes would you make in the company moving forward? JM: The company will be smaller, and more focused. Focused on cash flow breakeven, focused on select vertical markets where we’ve gained traction, like government and EDU, focused on select channel partners who want to work with us to expand the market on a “pay for performance” basis. We will also probably focus more on our SDK and the opportunities this gives us to drive business through software OEMs and the associated VARs and system integrators. We do believe our tool kit and capabilities give us a unique competitive advantage. WRB: Many would argue that Jonathan made his moves too little too late. Would you agree? Why shouldn't the board fire JM? JM: Hindsight is always 20-20. But in truth I think FVC ran into the Perfect Storm. In April management informed the Board of FVC of certain irregular sales practices in our Asia Pacific Region. As a consequence, the audit committee, independent of management, initiated a special investigation of the Region and the practices in question. Management and the Board believed the investigation would last a few weeks or months at worst. But it went longer than expected (ending November 26 actually), cost us a lot of money, about $5 million, and put us in limbo with the public because we could not file our financial statements during the investigation. Our inability to comply with our SEC filing requirements also meant that we were de-listed. In turn, we fully expected to be back on file with the SEC in August but when the investigation continued and we did not make the filing date, the company and certain officers became targets of a series of shareholder lawsuits. All of these items combined created the Perfect Storm which stalled our business and led to a liquidity crisis. Having been advised that we would likely be on file in August, management undertook our second restructuring in July-August of 2004, diminished the scope of our operations, brought our headcount down to fewer than 100 people and expected to be able to relight and ramp our business. I suppose this is what you are referring to in your too-little-too-late question. Bottom line, when the special investigation began, management and the Board thought it would be short, and we consequently decided to keep our commitments to our customers and made the WR’s on-line content subscription service that provides individualized in-depth information and analysis Visit www.wrplatinum.com on conferencing and collaboration The Wainhouse Research Bulletin Page-9 Vol. 6 #05, February 7, 2005
  • 10. strategic call to keep our development team focused on release 4.1, which we produced on schedule (November 16). But from April to November the financial playing field beneath us continued to shift and impacted our liquidity. The existence of the shareholder lawsuit only made things more difficult. I just hope the outcome of this isn’t the same as the outcome of the Perfect Storm, although some suggest Duncan has a faint resemblance to George Clooney. WRB: You seem amazingly upbeat. Why? JM: I think we’ve got a great opportunity ahead of us. Our mantra is to extend and enhance the existing communication investments of our customers, and do it with standards-based software. With this is mind, and our 4.1 release, we see very large opportunities to partner with the likes of Microsoft and others who also believe in the fast growing market of software-based real time collaboration. Finally we have a team of employees, a large number of whom stem from the White Pine Software – CuseeMe days, that are absolutely passionate when it comes to Click to Meet and putting integrated voice-video-web on the desktop. They want to fulfill their vision. We have a cadre of very enthusiastic and loyal customers. The company is in a position now where it has shed its legacy hardware and software products and is moving forward with a single code based software platform, focused sales and marketing teams and strategy, and an experienced, committed and proven development team. We have the passion, we have the drive, and hopefully the process upon which we have embarked will give us a new lease on life, much like the phoenix arising from the ashes. WR Forum: First Virtual Dances with RADVISION Hot Topics on the WR Forums Join and participate The Wainhouse.com Web Links Database: Over 1,400 members – it’s free! 113,500 click-thrus served ! IP video address plan Our categorized, searchable Industry Web Links Recording streaming contains 850 Internet web links. Bookmark www.wainhouse.com/links Polycom PVX software feedback Vendors: Start your own Are you getting your share of click-thrus? forum discussion topic!! Upgrade to an Enhanced Link and get your message across. © 2005 Wainhouse Research 112 Sumner Road, Brookline, MA 02445 Tel 617-975-0297 Email to editor@wainhouse.com Free subscriptions available at www.wainhouse.com. The Wainhouse Research Bulletin Page-10 Vol. 6 #05, February 7, 2005