Case Studies
We believe our market includes applications such as semiconductor manufacturing equipment, medical devices, security systems, retail kiosks, HVAC systems and telephone switches, among others. Below are case studies depicting the use of our products.
Industrial Automation. A semiconductor manufacturing facility uses our device server technology to accurately manage capital equipment used for the production of semiconductor wafers. Our Device Server Technology allows for the remote measurement and control of etch and deposition, lithography and metrology tools and for the precision management of industrial robotics. With the use of our Device Server Technology, this highly technical machinery can be connected, monitored and controlled by any PC over the LAN.
Retail/POS. One of our customers uses our Device Servers to deliver content over the Internet to a network of kiosks located in numerous major retail locations nationwide. Instead of spending the high capital costs associated with networking each kiosk separately, our Device Servers enables our customer to utilize the Ethernet infrastructure already in place within the retailer to deliver content. In addition, our technology provides a secure connection to our customer, completely encrypting our customer's data and separating it from the retailer's within the same network.
Healthcare. A leading provider of handheld point-of-care blood analyzer equipment uses our technology to enable doctors to get fast, accurate results at the patient bedside instead of sending blood samples to an expensive laboratory. Prior to being networked by our Device Server technology, information from the blood analyzers had to be downloaded at local PCs located throughout the hospital in order to transmit the data to the central data station for analysis. With the use of our Device Servers, this data can be transmitted directly from the blood analyzer to the central data station and sent back to the blood analyzer without the need for local PCs.
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Security/Access Control. A leader in integrated security management systems used our Device Server technology to connect their security system card readers and keypads directly to a building's high-speed Ethernet network, enabling their customers to remotely control and monitor security systems in multiple buildings using networked PCs. Previously, the company relied on costly serial lines and dedicated PCs to control their building access systems. In addition, our technology enabled the customer to send data from the readers and keypads upstream to multiple IP addresses for online monitoring by multiple security personnel, automatic database logging and backup system coverage.
Commercial/Information Technology. A company that designs and manufactures cost effective electronic and software products to meet the on-site and remote- location control needs for the heating, ventilation and air conditioning market, uses our Device Servers to control interior environments in multi-unit apartment complexes, schools and hotels from a central location. As a result, our client's customers are able to eliminate expensive wiring and gain the benefits of controlling their HVAC systems over the Internet.
Telecommunications. A large telecommunications equipment manufacturer uses our embedded device server technology in their telephone switches to enable remote management of the equipment. Our Device Servers enable remote monitoring of call logging data, automatic uploading of software upgrades and system maintenance. Previously these actions were performed through on-site visits or by people using slow modem connections.
Sales and Marketing
We maintain regional sales offices in Irvine, California, the Netherlands and Singapore. Additionally, we have local sales offices in Germany, Switzerland, the United Kingdom and the United States. As of March 31, 2000, our direct sales force consisted of 36 sales professionals located worldwide. We supplement our sales effort with marketing activities designed to build our brand name and promote product awareness. These activities include magazine and online advertising, public relations efforts and targeted mailings. We also participate in trade shows and industry gatherings.
Manufacturing
Our manufacturing objective is to produce reliable, high quality products at competitive prices and to achieve on-time delivery to our customers. We outsource the manufacturing of our products, which enables us to concentrate our resources on the design, engineering and marketing of our products where we believe we have greater competitive advantages, and to eliminate the high cost of owning and operating a manufacturing facility.
We currently outsource all of our product manufacturing to two third party manufacturers. Our manufacturing is performed on a purchase order basis and the manufacturers are not contractually obligated to accept our manufacturing requests or deliver our requests within our desired schedules. We supply our own raw materials and testing is performed by the manufacturers using test equipment we supply to them. We buy some of our integrated circuits from sole sources of supplies. We also employ quality control personnel who visit our contract manufacturers' sites at regular intervals and independently test our products. Please see "Risk Factors" for a discussion of the risks associated with manufacturing.
Research and Development
Our research and development efforts are focused on the development of technology and products that will enhance our position in our markets. We intend to significantly expand our research and development team in the near future. As of March 31, 2000, we employed 19 people in our research and development organization. Our research and development expenses were $2.5 million for the year ended June 30, 1997, $1.8 million for the year ended June 30, 1998, and $2.6 million for the year ended June 30, 1999. These expenses were $1.9 million for the nine months ended March 31, 1999 and $2.3 million for the nine months ended March 31, 2000.
We believe that we must continually enhance the performance and flexibility of our current products, and successfully introduce new products to maintain a leadership position. We intend to substantially increase our
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research and development expenditures over the next two years including planned increases in personnel, material costs and depreciation resulting from higher capital expenditures.
Gordian, Inc. develops certain intellectual property used in our MSS line of products. Please see "Risk Factors--Our intellectual property protection might be limited" for a discussion of the risks associated with our relationship with Gordian. |
