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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: John Mansfield who wrote (9700)	1/28/1998 4:35:00 PM
From: John Mansfield	Read Replies (2) of 31646

Some thoughts on the indirect TAVA distribution channels The last couple of days I have tried to make for myself a broader picture of TAVA, it's product and the marketing and sales strategies. I have posed a number of questions to myself; of which I hope and think some of them will be answered on the coming SH Meeting. John --------- There are two main distribution channels for the PlantY2Kone product and services: - direct. Mainly at large customers. First announced customer is BMY. - indirect. Known channel is Wonderware. The strategies for these channels are different: 1. direct: customer expects more consultancy done directly by TPRO; more difficult (but not at all impossible) to carry out consulting with third parties. 2. indirect: LEVERAGING is key here. Wonderware is company with an (almost?) exclusive indirect approach. It is usual to use a 'layered' approach: Wonderware (WW) -> distributors -> resellers. Typically, there are many resellers for a single distributor. The predominant division between distributors will be geographical. What are some of the critical succes factors for succes (i.e. dominant market share; becoming market leader) for Wonderware: - Leverage other channels/marketing/PR systems. Very significant is the unique partnership that they have with Microsoft (see other post). - Quality system: Set up a comprehensive qualification program for all aspects of the business. This is the only way to control quality; therefore the image of the product; therefore the long-term succes of Wonderware. From their website; they clearly have set up qualification programs (resellers, training, system integration - well I have to check at their site again). But you will get the point. - Preventing resellers to fight over turf (i.e. too many resellers in a region that is too small). I suppose that Wonderware succeeds in this; but it is not clear how. Other remarks: - Significant international presence. Indirect sales channels are the way to go here. Local differences on the factory floor are simply too different from one country to another; also the costs of setting up complete direct sales forces are too big to be succesful. - WW needs a Y2K program/solution as a unique selling proposition to enlarge their market share. They will do this mainly by replacing older non-compliant systems. Conjecture: Y2K solutions is not core business for WW; they also did not have anything ready when they first met the TAVA company. So that is a reason why they partnered with TAVA. Now it is interesting to see how TAVA fits into all this. I hope much will become clear during the stock holders meeting. The following questions can be posed: - Can TAVA 'piggy-back' on the sales/marketing channels of WW? - Can TAVA use their mechanisms of certifying distributors/resellers/ISV's for their own products also? This is very important: they need certified resellers; trainers; consultants; project managers etc. That is the best way to leverage the planty2kone potential. - Can TAVA use the WW channels to distribute TAVA's y2k training? Some indication of this can be seen on the web site of a distributor (see one of my posts on WW/TAVA). I think and hope that the planty2kone session is part of a 'standard' FactorySuite 1 day presentation; the format of which is distributed through the entire distributor/reseller channel, both in the US and internationally. - Will TAVA be included in some way in the joint marketing done by WW+Microsoft? Increasingly, companies will be viewed/judged on their y2k-'face' (i.e. complete and accurate information on y2k-status of products to customers; is the company at the front or not etc). Effectibely, TAVA IS the y2k-face of WW. - Can TAVA use the international channels of WW to enlarge their own sales potential?: again distribution of product, standard training etc.

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