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Technology Stocks : Wonderware (WNDR)

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To: Ron Harvey who wrote (905)1/30/1998 11:42:00 AM
From: Ron Harvey  Read Replies (1) of 954
 
Today's News:
Wonderware Corp. extends its industry leadership in the Windows-based industrial automation software market with the introduction of the FactorySuite 2000 package of integrated application development tools. The new, tightly integrated bundle of six modular components is a quantum leap forward in automation functionality and implementation cost-effectiveness for users in virtually any industry around the world.

FactorySuite 2000 is the result of nearly three years of investment and development work at Wonderware. The product is unique in industry because there is no competitive package that offers these unparalleled performance benefits:

-- It leverages the latest in Windows technologies and graphical

user interface (GUI) standards;

-- It is based on a fully open architecture, providing

connectivity to all popular interface standards, including

dynamic data exchange (DDE), OLE for process control (OPC), ActiveX object technology, structured query language (SQL) and open database connectivity (ODBC) technologies;

-- It is fully extensible, permitting drag-and-drop ease of use

for integrating with both internal and third-party ActiveX

components as well as offering a wide range of extensibility

toolkits;

-- It is highly scalable, permitting installations of just a

single PC-based node to very large networks, with true

client/server architecture utilizing thin clients;

-- It is fully integrated, offering "out-of-the-box" productivity

for complex applications that involve multiple FactorySuite

modules;

-- It is based on robust, high performance networking, including

data quality support and a new Wonderware SuiteLink data

communications technology;

-- It is information-rich, with its integral real-time relational

database that allows users to deal with relevant data, not

just tons of raw data;

-- It is function-rich, with the synergy provided by tightly

integrated modules that interact seamlessly;

-- And it is the most cost-effective automation software bundle

in the industry, priced at $9,950 in the United States

(slightly higher elsewhere) for the complete development

toolkit, with low cost runtime copies of individual modules

available at low cost for plant-floor implementation of

configured applications.

ROI on Infrastructure Investment

"The new FactorySuite 2000 package is a direct result of major infrastructure investments that Wonderware has made over the past two and a half years," said Slavin, chairman. "During that time many of our competitors have mistakenly portrayed Wonderware as being in financial trouble. They couldn't have been further from the truth. We are now realizing the return on our corporate investment because the technical infrastructure that we've
built since mid-1995 has now allowed us to become the powerhouse in the Windows-based automation software industry.

"Wonderware now has the most prolific software delivery capability in the industry, having brought to market two major software releases within a year -- as planned, with outstanding quality and within budget," Slavin continued. "Our message to users

-- from large, Fortune 500-size corporations to small, family-owned manufacturing businesses -- is that they can now have the ability to resolve any production problem or optimize any process with a scalable, cost-effective solution that can improve their productivity.

"This has been the goal for all of our development investments -- to assimilate and integrate cultures and products," Slavin said. "Unlike our competitors, we've always recognized that integrated product requires integrated culture. FactorySuite 2000 is not an illusion created with pieces and parts from various vendors that are loosely bound by a common install program. Our approach guarantees our customers a tightly integrated suite
that's easy to use and that shares a common vision and code." Enterprise-Wide Benefits, Too

Manufacturing departments aren't the only areas within companies that can benefit from the FactorySuite 2000 product. "More than 80 percent of the Fortune 500 companies are manufacturers, which means they make their money by manufacturing products or processing materials," said Cowan.

"This means that management information system (MIS) or information technology (IT) managers are as concerned with high performance, cost-effective industrial automation as they are with corporate applications for business, finance, management or enterprise resource planning (MRP/ERP), scheduling, warehousing or inventory functions.

"Corporate computing applications like these have historically been batch-oriented in nature, which means that the data with which they work is usually anywhere from two to eight weeks old -- it's not what is happening on the plant floor at any given moment," Cowan explained. "Wonderware's new integrated FactorySuite package provides a unique capability to link the entire plant floor directly with the front office, allowing standard computing
applications to make use of real-time data, as events occur in the factory.

"The supply chain implications of using data on a real-time instead of batch basis are enormous," Cowan continued. "Manufacturers can better monitor their activities and assure high productivity and profitability if they are linked directly to the plant floor. For example, companies can now decrement their corporate inventory records as they consume raw materials, components or sub-assemblies in real-time production. They also can adjust
real-time delivery schedules in response to plant floor problems, so their customers are better informed of progress.

"FactorySuite 2000 applications can be linked easily to popular MRP, ERP, scheduling, business and financial systems -- such as those from SAP, Baan, Oracle, etc. -- to truly allow the enterprise-wide use of real-time data, such that management can literally know at any given moment whether the company is operating efficiently and profitably," Cowan said. Changing Marketplace

The Wonderware FactorySuite is already changing the industrial automation landscape. Shipments of the original suite package began in mid-April of 1997 and grew quickly to about 15 percent of Wonderware's total software sales. Response was so good because the customer community realized quickly that having integrated automation functionality allowed them to deploy standard tools throughout all their plants.

Wonderware responded to this new corporate standardization interest with a new "enterprise-wide" licensing program that lets customers equip all of their plants with single, integrated production solution using unlimited copies of runtime software from the FactorySuite.

"Our goal is to get FactorySuite development kits into as many user hands as possible and encourage them to experiment with other components," Cowan added. "The suite is priced so low that companies can justify purchasing it to use just one or two components

-- but we know that production engineers are very smart and creative people. We feel confident that once users have all this capability in-house, they'll experiment with other applications that use other suite components, and very likely will implement them.

"We know this approach is already working because we have a number of Fortune 500 companies that have followed this very pattern. And we feel the outstanding initial success of our enterprise-wide license program is a good indicator that corporations see the tremendous value of using the suite, including creating real-time links to their MRP/ERP and other corporate computing applications."

By creating an entirely new "suite" market segment, much like Microsoft's market strategy with its Microsoft Office suite for office computing applications, Wonderware is changing the face of the automation industry. Industry analysts no longer will be able to "pigeonhole" software solutions by vertical functionality -- such as process visualization, PC-based control, work-in-process (WIP) tracking, batch management, real-time relational
data management and remote Internet or intranet application viewing and data collection. But they should be able to more easily track the new development kit sales as well as sales of specific runtime modules.

The FactorySuite has already changed the market impact of Wonderware's business. The company currently is operating at an annualized revenue rate approaching $100 million. Adding distribution channel margins to that net rate brings the total retail value of FactorySuite software to about $150 million. Factoring in a minimum 5X multiplier for associated system integrator revenues to assist end user customers with system development and
implementation tasks, this makes the total market impact of Wonderware software nearly $1 billion annually -- far more extensive than any other software company serving the industrial automation industry.

--30--KM/np* CB/np

CONTACT:

Wonderware Corp., Irvine

Don Allen, Director of Corporate Relations

714/453-6652

don.allen@wonderware.com
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