CONSYGEN , INC. PRESENTATION FROM THE WESTERGAARD Y2K CONFERENCE
04/28/97
NBC Professional Transcripts
Copyright 1997 by Federal Document Clearing House, Inc.
JEFF RICHARDS, EXECUTIVE VICE PRESIDENT, CONSYGEN , INC.: ...(JOINED
IN PROGRESS) There are current investors and future investors because we have just gone through very recently that exciting business of going public and I don't really want to do it over again. Hence, I am here and the president is back dealing with other things relating to the public issues. (LAUGHTER)
But it has been an exciting time, ConSyGen (CSGI) has been public since September of last year and we have been perfecting a tool set which is called ConSyGen 2000 for Year 2000. It is called ConSyGen
Conversion for broader-based conversion activities and I would like to explain more about those two tool sets as a I go along. By way of background, some of the things that you will hear, you may have heard a little in the Ellidar (ph) presentation, in that when we first started addressing their question of where we wanted our market to be during the 1990s back in the early part of the decade, the thing that we saw that was most appropriate for a software development group, such as our selves and marketers of software and software services, was that we should look at the expanding migration environment that was coming along. There was the advent of UNIX. UNIX was stabilizing itself. The move towards open systems and then eventually later to client services and the various other permutations of that were occurring and there was a steady movement emphasizing the need to move away from large, mainframe, legacy applications running on larger, old boxes to get to smaller, cheaper client servers of UNIX boxes and to move from non- relational databases to relational databases.
At that time, we started the process of doing something that had never been done before to our knowledge and that was to develop a tool set that would automate that process. Now, for those of you who are concentrating purely on Year 2000, let me tell you that there is a huge issue that is out behind Year 2000. The Year 2000 is essentially just a flash in the pan. It has come along. It is a fortuitous time for people such as ourselves. But it does not represent what we see as a sea wave of change that has been going on for over 10 years in the computing industry.
And that sea wave is to move away from very large, monolithic, single, legacy environments to smaller, much more flexible, perhaps more specifically directed to an application here or there or the move to the desktop and to individual computing capacity. In other words, taking the power away from -- you ever been in the old computing environments? When I first started, you know, as a programmer you had to take a stack of cards over and you put it in a little window.
And there was a person in a white coat that came and took it away. And then magically sometime later -- hours later or perhaps even the next day if they really felt like not serving you -- back came some code. And then, you went and looked at it and worked out what you had done wrong. Then you change some cards and you put them back again. This remoteness from the computing capacity was so much part of the patent of the early days of the '50s, the '60s, then '70s and even through
into the '80s. It has changed.
It has changed dramatically. It has changed not only for the developers because they can now be online to their system wherever it is, they can make their changes online. They can develop systems and applications very, very rapidly. But also, it has put the power in the hands of the individuals. The person who uses this system now has the right to go in and make changes to their own applications. Now, you
have your own little (OFF-MIKE) that have their own applications running a little UNIX box. They don't have to rely on the central mainframe.
Now, that is a huge change. It is a transformation in mentality. It is still going on. We thank Microsoft and a few of the other people who have helped to support that process by bringing to bear software that will do that and we thank also the HPs and the Suns and all the other people who have brought along UNIX boxes and so on. We started to address that question, how do you get those big old systems to their better computing environments and free up the data and applications?
And all of us who were involved in that question had gone through the process of manual conversions. All of us had learned their lessons the hard way. All of us had got white hair or no hair out of doing it I might add. And at that time, we said there is a better way. We can automate some of this process. So, we started the exercise to automate the whole entire activity. That is to be able to convert the control
language, the operating system of the mainframe itself, to something else.
We started to convert the language. We started to convert the data structures and the transaction processing monitor -- the screens and so on. What we finished up with was a tool set that does that. And in my comments to you today, I want to stress the fact that when we go out past the Year 2000, ConSyGen will be there. I have heard this phrase used already, you want to be with and we want to be with a
company that doesn't die after the Year 2000 opportunity goes away.
We want to be with a technology that will take us out into the 21st century and will be able to be expanded and used as new types of solutions come along, to be expanded to take up NT if that is the new wave of the future or whatever it might be. And that is really where we have found ourselves. We are essentially conversion systems generators. Hence, the name. If you are ever faced with the problem of
finding a unique name to put Nasdaq, you will find that all the softs have been taken and all the micros have been taken and all those other nice suggestive names have been taken.
So, we went around and we said, what would most describe us and lend us contracted to something and we have a mouthful called ConSyGen , but to us it means Conversion System Generators because that is what we do. We convert systems. That is our focus and that is what we will continue to do. The rest of the work that goes into a project to convert a system -- the manual tasks, the planning, the testing and so on. You have heard other groups talking about this. We leave that responsibility to other people, to our third-party alliance providers and partners.
Our background is that we are in the business of creating conversion tools. The emphasis that we make is on total system migration. When we do a conversion, even if its the Year 2000, we make sure that we read the entire system. The effectiveness of Year 2000 conversion will be directly limited by what you don't convert. If you convert 90 percent of the code, you just don't have a 90 percent result. You could have a zero result. It is not possible to take one program and to extrapolate from that, the fact that this client has degree of problem.
You can't just take one program and say, oh gee, I found half a dozen date references, therefore here is an indication of the size of the problem. You have to read 100 percent of the code in order to convert 100 percent of the code. Now, you are sitting and you have got that because you are all bright people. But usually when I say something like that, I put is as conversion 101. You can't convert what you don't have. We go through the process of making sure that everything that is in a client's environment that they wish to convert must be able to be read and understood by our tool set.
Our tool set reads through it all. It reads through every program. It makes sure that if a call is made to another program or to a copy member or whatever it might be it follows that logic path and it reads it and it reads everything that is in that because you see it is looking not only for date fields, it is looking for everything that it has to do because there is code in there that will be impacted. You change a date field, you have to change the underlying program -- procedure logic as well or the storage logic. So, therefore, we are addressing all the elements that are in an environment.
We are addressing the screens. We are addressing the data stores because a decision will be made by the client to either expand that date field or to insert a window. By the way, we do both. By the way, we do both for the same price because when you are doing an automated conversion, a true automated conversion, it's just as easy to do one or the other. So the client makes that decision at the level of the change, as they're preparing for the change.
We do full system conversion. We convert all system components. OK (ph). So somebody comes to me and says, "By the way, I've got an IBM mainframe, a 3090 ES 9000, it's running COBOL, it's running V-Same (ph) files, it's running an IBMS database, its running COCS, and I want to convert the Year 2000 at the same time I want to put it across to a Hewlett-Packard 9000 running Oracle . Can you do it?"
And the answer is, "Yes." We might do it as two projects. We might do it as two half projects, but the decision then rests with really how the client wants it delivered back. But we're in the business -- let me stress this again and make sure you understand -- from the name, we're in the business of converting systems. It is fortuitous that we're now dealing with the Year 2000.
And the last thing that we -- that I want to touch on here is that the process that we undertake is fully automated. Questions will come up as to the size of our company. I will not defend our size, but I will tell you that we do not add staff in great numbers in order to handle multiple projects. It is our expectation that we can convert 5 or 10
million lines in a project, assuming that's a normal size, with 2 part-time people on our side and perhaps 2 or 3 people on the client's side because they have to do things like write test plans and do some testing. A truly automated tool set does not require very substantial numbers of people, and our growth path, as we look down the future, is not based up substantial additions to our staffing. We certainly do need to add new staff, and I'll talk about that as we go on, but at this stage, we're certainly not planning to have very, very large new
staffing.
Why ConSyGen 2000? Why did we go into the 2000? Well, it's one of these things where it just falls in your lap. It really does. It's also it was already there. We had already started the process of converting clients. We already knew how to expand fields. We already knew how to insert new logic, new procedural logic, new code in
systems. We already knew how to deal with the control languages. We already knew all those things. We already knew how to find 100 percent of the client's code.
To us, the Year 2000 is merely an extension of our underlying technology. It was a change of focus, not of our technology or of our philosophy. The philosophy continues to this day that we will do full automation of the process that we go through. No one in our shop write a line of code. If we were to convert 5, 10 million lines, Year 2000 or full conversion, no one write a line of code. In fact, we cannot.
The mechanism that we use around our tool set is such that no individual can go in and change anything in a client's code. It is all done through the tool set. If we make a mistake, we go back and we change the tool set because we failed to understand how to interpret something directly, and we then run that code again, and we make it right. One of the fun things of doing this is you usually don't have one mistake. You have a thousand of them. Seriously.
(LAUGHTER)
RICHARDS: OK. You know you've got something wrong in the translator if, for some reason, you know, you put it out there and everything is wrong. You may fix that one thing and that will all be right. Now, that sounds too simplistic, but believe me, this is how it works. And it is actually practical, and we are doing it on a regular basis. OK?
The change to Year 2000, then as I said, was really just to say let's look at something special. Now, we came at a -- at a -- what was both a good and a bad time for us. We had been a private company. We had been internally funded. The primary owner of our company at the present time was our president at the time, and he had funded the company for a period of some 15 years from his own money. We had not been a major profit maker because we'd been in heavy research and
development, building the tool set I've just been describing.
By the time we got to early last year, we suddenly faced this issue of Year 2000 and said should we continue pursuing the market of converting systems because the first thing somebody is going to say is OK you can convert me but does that say -- solve my problem as far as the Year 2000. And our answer was, well no, not at this stage because you need to determine what we've got to change. So we said we'd
better add the functionality to the tool set. We did not start at ground zero. We started with an established base, and then we added the functionality to do an automated conversion of the Year 2000. But we realized, of course, that we had to do other things along the way here. We really had to get ourselves public to be able to fund ourselves into the future because we were going to go, essentially, another year without doing much in the way of contracts. And that was the decision we made at the end of last year, and I'll talk a little further about how we've been progressing through our predictions at that time.
One of the other reasons we went into the 2000 market was because we had an established demand. Sometimes, we shake our heads at the Gartner Group (ph) estimates, and we hear the other estimates, and we bandy them around. You know, 300 billion rolls off the tongue so easily. I think it was one of your -- one of your representatives who said, you know, "A billion here, a billion there, pretty soon, you're talking serious money." Sam Washburn (ph), was that the guy's name? I
think it was. Help me here. I'm an Australian. I'm not an American.
(LAUGHTER)
UNKNOWN: Rayburn.
MR. RICHARDS: Rayburn. Thank you. Thank you.
The issue of getting the publicity out there is a critical thing. When we started trying to impose -- to present to people, to propose to them that we had an automated solution to move their environments totally to a disparate operating environment, the credibility level was zero. It was very, very hard to get attention. It was very hard to get credibility. One of the reasons was because people had come out with purported solutions like that before, and invariably, they had failed. Also anybody who had come out with an automated solution had really had tucked away behind the scenes the fact that there was a lot of manual work going on under the covers. Therefore, to say we have a totally automatic solution was very, very hard to believe, and also we just -- we couldn't get the credibility going. OK?
Here we have a situation where everybody is talking about the Year 2000. It doesn't matter where you are. I've sat on planes and talked to people who've never seen a computer in their life. They still are talking about the Year 2000. It was...
(AUDIO BREAK)
RICHARDS: ... the overall project could indeed be considered to be completed within probably 3 months, and that's certainly the way we're quoting now, 3 to 4 months.
Why we're special -- the range of services. I mentioned before, the Year 2000 identification and correction, automated platform re- hosting. Let's talk about range of environments. Many of the tool that are now becoming available are concentrating specifically on the IBM market. I absolutely know why. IBM is so big. But out there, there are people who are lost and alone. There are people who use Honeywell Bull (ph), as you heard from Stratega (ph) before, who really don't have a lot of people paying attention to them in terms of supplying good services. There are people with Unisys . There are people with Hewlett-Packard proprietary. There are people with Digital . What we have done, because the tool set is totally flexible and generic, we can extend the capacity of the tool to handle a total new environment, a total new processing environment, within about 6 weeks. Over the last 6 weeks, we have added the Unisys OS-1100, OS-2200 environments, and we've added HP's MPE systems, which is their proprietary environment. And we are currently in delivery mode on both of those projects.
By the end of May, we will have finished Digital because, by then, I hope that we will have a Digital project, and that will substantiate what we're doing. We currently handle all those proprietary environments. We handle -- when I say we handle them, we are able to deal with their control language, the primary programming languages
that are on them. COBOL PL-1. We do not deal with Assembler (ph) and some of the others. I understand that, you know, that might be a complication, but we understand also that we're working through clients -- excuse me -- through alliance partners who bring those sort of manual conversion services to the table. We're dealing with the bulk, and the bulk is the procedural language. And that's usually COBOL or PL-1. We deal with all UNIX. We deal with basically all COBOLs. So therefore, if somebody comes to me and says I have this environment, can you deal with it, my answer is yes or I will in 6 weeks.
About -- let me see. About a month after we went public, we had a detailed conference call -- and some of you may have been on that call -- to basically find out who we were and why we believed we had something special. What I want to do is just give a quick report, an update on what we have done since that time. I want to talk about what we went to in the last quarter of last year, why we're approaching things the way we are.
The last quarter of last year we dedicated to alliance creation. We do not see ourselves as a 100 percent supplier. We see ourselves as the conversion supplier. We see ourselves as being aligned with people who bring to the table either their dedicated clients or their particular skills or their geographic location or their hardware.
So therefore, we have alligned ourselves with Ages(ph) which has just gone public on NASDAQ. We are concentrating with them in the Canadian government market. They are based in Ottawa, concentrating on the Canadian government market and commerical market in Eastern Canada. We have another partner we are about to sign with in Western Canada. We're currently doing a project for them in Los Angeles and they have other projects on the way. Millenium Enterprises concentrates on the Hewlett-Packard propreitary market. We have signed with them. They're out of Columbus, Ohio, a private company. But, our goal is to go out into the whole of the Hewlett-Packard 3000 market. How many boxes are our there? 30,000 in store with applications running on them. That's a nice market to control. We'd like to get into that.
The SCB computer technology is very heavily involved in the IBM world. They're out of Memphis, Tennessee. They have outsourcing clients. They've got 600 stuff and they are concentrating on companies such as Federal Express, International Paper, National Electrical Supple and so on. These are people who need their services, we supply the conversion piece to their services. Stratego(ph), you've already heard of, and their concentration is on Ball(ph). They have an IBM skill as well and they want to go wider than that. We will allow them to go wider. They're certainly concentrating on Bull. This tool was originally conceived as a Bull converter. We learned our trade on Bull. We've done conversion from Bull. If someone was to walk in today and say I have X million liines to convert from a Bull environment, cna you do it. My answer would be, I'll start tomorrow. It's easy to do.
Unisys, we marketing agreement with them. We are currently pending furthur discussion with them about how we proceed in a joint marketing activity.
That was last quarter of last year. This first quarter of this year, we set ourselves to close and commence the first contract. You have our allaince partners, all of them are active in bringing to us projects. All of them have said, basically they need some help in convincing their clients of the effectiveness of what we do and so you have AGESS(ph). We are currently doing a pilot project for the Canadian government. It's an interesting one, because it brings to us the IDMS market. Those of you who know IBM, IDMS is one of the more common databases of non-relational database. It's like a network database. We have not done that, so we are extending the tool to accomadate that. Millenium Enterprises, we are currently in the process of delivering a conversion project for the Hewlett-Packard proprietary. SCB, we have an IBM pilot project in progress. That is also IDMS conversion, but it has Telon(ph) and a few other interesting things in it. Stratego, we've completed two impact assessment, automatic impact assessments for Bull. We have, Dick indicated, we have a Bull conversion project pending for the State of Tennessee. We will be paired on that. Unisys, we have a marketing campaign in development. Insign Integrated Systems(ph), out of Winnipeg, Canada, we are currently in delivery mode with their, their impact assessments is already complete and we have just delivered the first round of their conversion project.
That's an indication of what we've been doing in the first quarter. The logic of this is that we have to get referencable sites. We have to prove our technology in a variety of environments. We know it works in Bull. We know it works in IBM. But, then there's the rest of this world out there that we want to also address. That's the UNisys, Hewlett-Packard, etc, and that's why we've been engaged in that exercise.
In this current quarter, our goals are to continue that process, to complete the first contracts and then to commence major roll out. That will be based on referencable sites. Based in completed projects where we can demonstrate not just that we find the problem, but that we fix it automatically. I come back to this point again, this is where our difference is. We are not basing this on any form of manual analysis or propping up of the tool. The tool does it all. If the tool does it all, then it's almost an unlimited capacity to grow and expand our ability to code 3. Extended conversion set, of course, we're now looking at a far wider market than just Bull or IBM and trying to experience projects start (OFF-MIKE) partners. The time to train project staff on our tool set is probably about month tops. So, we can train new staff very quickly, get them on board very rapidly. During the first quarter, we have gone through a training exercise with each of our partners ot make sure that their project management staff understand throroughly their responsibilties vis-avis our tool. They already are people who are confident in project management. They already understand how to do planning. They already understand how to manage a project. They already understand how pull code off so that they can send it to us. They already understand how to control testing. So, we don't have to teach that all we need to do is help them understand how the tool works, and what their responsibility is. That process is pretty well complete and this stage I would say that each of our partners has staff that they can use in that way.
So, ConSyGen 's approach now and in the future will be a continued reliance on our partners for marketing. We do not have a major marketing staff. We don't intend to recruit one. We would prefer to rely on our partners to carry the responsibility of marketing to their captive audiences or their specifc skill set. Last week, I was involved in a series of meetings with one of our partners and one of their prospects and I'll tell you now, we would have never gotten in the door, if had not been for our partners. Not only were we invited in, we were welcomed in. Because our partner stood up and said, "We have seen this work, We've been to Phoenix, we've seen test been run. We've seen the demonstration. We've seen code being converted automatically. We're convinced". The client sat up an listened and said, "well, we've got give you a project".
Part II
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