Umbro, Thank you for bringing your perspective to this thread. It is good that Khan has someone worthy to 'spar' with :)
Regarding EST, below are some excerpts from EST's 02.24.00 SEC Prospectus filing.
--alan
Embedded Support Tools Corporation
We design, manufacture, sell and support integrated hardware and software
tools for programming, testing and debugging embedded systems. Our products
enable developers to quickly and reliably program and debug the embedded
systems that manufacturers build into their industrial and consumer products.
As the complexity and speed of embedded systems increase, we believe that
embedded systems developers will require more efficient solutions to program
their products and that we are well positioned to offer these solutions.
A significant portion of our customers are in the communications industry,
including telecommunications, data communications and Internet infrastructure
equipment suppliers. Our largest customers by revenue include Hewlett-Packard,
Lucent Technologies, Motorola, Nortel Networks, Tellabs Wireless and 3Com.
Our Market Opportunity
Embedded systems are the special purpose computers within intelligent
industrial and consumer products such as network switches and routers, cellular
base stations, process control systems, cell phones, printers and anti-lock
braking systems. As with all computers, embedded systems minimally consist of a
microprocessor, memory and software, and the level of complexity of that system
can be enhanced with additional components. Embedded systems differ from
general purpose computers, such as PCs, workstations and mainframes, in that
they are designed to run only the specific set of tasks required for the end
product to operate as intended. Manufacturers use embedded systems to enhance
functionality and performance, reduce cost and size, and improve reliability of
a broad variety of products, ranging from simple systems found in microwave
ovens to complex multiprocessor driven systems controlling the infrastructure
of the Internet. Embedded systems development tools enable the developer to
edit and compile code, transfer the operating system and application software
to the microprocessor, and test and debug the program and the functionality of
the embedded system as a whole.
According to industry and market research firms, at least 55% of the more
than 265 million microprocessors produced by the semiconductor industry in 1998
were used in embedded systems, while the remainder were used in general purpose
computers such as PCs. We participate in the market for the higher-end 32-bit
and greater embedded microprocessors, which is forecast to grow at a rate of
21%, from 106 million units in 1998 to 228 million units in 2002. Motorola is
the largest supplier of embedded microprocessors, with a market share of 35% in
1997, the latest year for which data is available. The market for embedded
software development tools is part of the overall embedded operating systems
and development tools market, which was approximately $550 million in 1998 and
is forecast to grow 14% annually through 2003.
Our Solution
We design, manufacture, sell and support a comprehensive suite of high
performance, open and scalable embedded systems development tools, consisting
of both hardware and software components. Our tools enable development
engineers to program, test and debug embedded systems quickly and reliably at
each stage of the development process. We believe that our leadership position
arises from the following:
Superior Development Tools - Our tools offer the following advantages:
Bundled - We bundle software debuggers and other graphical utilities
with hardware tools to produce a complete solution for early stage
hardware and firmware development;
Open - We enable developers using our tools to incorporate a variety of
real-time operating systems into their products and to use a wide range
of software tools with our hardware products;
Graphical - Our software tools provide a rich graphical user interface,
which gives programmers easy access to multiple in-depth views of
microprocessor data and development status; and
Scalable - Our hardware tools are modular and designed to easily allow
developers to configure and scale their development environments to meet
their specific needs.
Microprocessor Knowledge Base - We were one of the first companies in the
industry to develop and market tools for debugging Motorola microprocessors
using its on-chip debug capabilities. We have been able to adapt our tools
to work with over 50 different microprocessors within the Motorola and IBM
families. Through our relationships with Motorola and IBM, we gain early
access to new microprocessor designs prior to commercial release.
Comprehensive Customer Support - We deploy a team of 41 field salespeople
and support engineers to assist our customers throughout the development
process. This support includes providing early development kits containing
single board computers and board support packages. We also offer our
customers formal one-day and three-day training sessions on microprocessor
architectures.
Our Strategy
Our goal is to maintain and enhance our position as a technological and
market leader in embedded systems development tools. In order to achieve this
goal, we intend to:
Extend Our Technological Leadership - We have established leadership in
development tools by bundling hardware and software solutions, and we must
insure that our products continue to embody the latest technologies and
features.
Continue Our Focus on Communications Applications - A significant number of
our customers build highly complex data communications, telecommunications
and Internet networking equipment. We plan to expand our product offerings
to address the specific needs of developers by leveraging our strengths
within these markets.
Increase Our Software Product Offerings - We intend to use our strengths in
the hardware bring-up development stage to extend and enhance our software
solutions, while remaining operating system independent.
Satisfy Customer Demand for Additional Microprocessor Architectures - Our
tools work with more than 50 different microprocessors from Motorola and
IBM. We intend to meet the needs of our customers by continuing to adapt
our development tools for an even wider range of microprocessor
architectures.
Strengthen and Develop Strategic Alliances - We have developed significant
relationships with Motorola and Wind River Systems, and we intend to
strengthen these relationships as well as seek new alliances.
Customers
Our customers develop a wide range of products that incorporate embedded
systems. A significant portion of our customers are in the communications
industry, including telecommunications, data communications and Internet
infrastructure equipment suppliers. In each of 1997 and 1998, no customer
accounted for more than ten percent or more of our revenues and in 1999 Nortel
Networks accounted for ten percent of our revenues. Each of the following
customers was one of our top ten customers by sales during one or more of the
years ended December 31, 1997, 1998 or 1999:
Advanced Fibre Communications (1998, 1999)
Next Level Systems (1997, 1998,
Ciena (1998) 1999)
General Instruments (1998)
Nortel Networks (1997, 1998,
Lucent Technologies (1997, 1998, 1999)
Motorola (1997, 1998, 1999)
Tellabs Wireless (1998, 1999)
3 Com (1999)
The following is a representative list of emerging growth companies who have
purchased products from us during fiscal 1999:
Diamond Lane Sycamore Networks
Castle Networks Sunrise Telecom
Copper Mountain Networks Tut Systems
Strategic Relationships
We have established and will continue to pursue strategic relationships with
significant industry leaders to increase our market penetration and to maintain
our technological leadership. Our principal relationships are with Motorola, a
leading supplier of microprocessors for embedded systems, and with Wind River
Systems, a leading supplier of real time operating systems and software tools
for embedded applications.
Motorola: Our first products introduced in 1989 were hardware tools which
connected an embedded system developer's workstation to Motorola
microprocessors. Since that time we have enjoyed a close informal relationship
with Motorola that provides us with silicon design documentation and the
related pre-release versions of new microprocessors. This enables us to design
and build tools concurrently with Motorola's microprocessor development cycle
and make these tools available to embedded systems developers at the same time
that Motorola delivers the new microprocessor. These tools, which include
reference designs, help embedded systems designers evaluate the microprocessor
and initiate their development efforts prior to investing in their own hardware
design. Motorola benefits from our relationship because our tools help
customers adopt new microprocessors rapidly into their embedded systems, thus
reducing Motorola's sales cycle.
We presently compete primarily against Applied Microsystems, Agilent Technologies and Lauterbach GmbH. |
