BLUE CHIP CLIENTS FLOCK TO TOPRO'S YEAR 2000 SOLUTION
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Topro, Inc. name change to TAVA Technologies approved Jan 29 '97
Venture Returns E-Mail Network - Thurs Jan 29 '97
Topro (TPRO) just released a list of companies that have newly engaged Topro to examine factory sites for Year 2000 embedded chip problems. Embedded chips are increasingly regarded as the single most daunting aspect of the "Millennium Bug", and may prove the costliest to remediate. Topro is currently engaged by thirty (30) companies to examine over 100 plant sites for this problem.
[CK Sidebar: SHM Power Point presentation - Y2K work: 30 companies at 250 sites]
New clients announced today are ...
- General Motors
- Kraft Foods
- Pillsbury
- TRW
- Occidental Petroleum
- UNOCAL
- Cargill
- Medeva Pharmaceuticals
- The US Mint
Previously, Topro announced a contract with Bristol-Myers Squibb. That contract begins with a pilot plant assessment, and allows for roll out to BMY's125 factories worldwide. Fully implemented, Topro estimates the BMY contract alone would keep 60 Topro engineers working full time for two years. Topro bills at rates up to $160/hr for engineering consultancy work.
Topro typically begins a "Year 2000 engagement" by assessing a single pilot plant, then rolls out to the client's other plants as the scope of the job emerges. Two earlier engagements, with Unilever and Ivax Pharmaceuticals, have now completed the assessment stage. These are now at the conversion planning and remediation stages. As an example of how Topro's "engagements" roll out, the Ivax Pharmaceutical engagement began as a $750,000 contract. Topro has submitted a follow-on proposal to Ivax to complete the work for $7.5 million. Topro estimates that each $1 of initial engagement work will generate $9 of follow-on work.
Because Topro's massive plant floor database is accessible through a CD-ROM tool, Topro is able to move factories quickly through the assessment stage. As the largest independent systems integrator in the US, Topro is also able to move projects quickly into the remediation stage. An estimated 70,000 major factories in the US need Year 2000 assessment, with the majority in need of at least some remediation.
TOPRO ADDRESSES THE MOUNTING ELECTRIC UTILITY Y2K PROBLEM
The Year 2000 problem in electric utilities is similar to that in the nation's factories, but requires a different expertise. Power generation and transmission is highly automated, controlled by millions of embedded chips. The prospect of failures in the generation and transmission of electric power caused by the millennium bug, occurring as they would in mid-winter, has vaulted Topro to increasing prominence in the utility industry.
Today, Topro announced that it is teaming with utility engineering specialist RW Beck of Seattle. The joint venture will modify Topro's highly successful CD ROM for factories and apply it to utilities. Yesterday, the joint venture, a designated solution provider, presented to 35 utilities at a Year 2000 conference sponsored by EPRI, the Electric Power Research Institute.
Today, the joint venture announced two initial engagements.
- CMS, CONSUMER'S ENERGY, MICHIGAN
One is with CMS (Consumer's Energy, Michigan) for $100,000. CMS is a $5 billion utility giant with operations in 17 countries.
- PACIFICORP
The other is with Pacificorp and is for $250,000. The joint venture is currently bidding on an additional Pacificorp engagement valued at $2 million, and has proposals with several other clients that are expected to close within the next 30 days.
Topro expects the "$1 generates $9 more" ratio experienced in factory engagements will apply to utilities.
RW Beck brings 1000 clients to the joint venture, and 500 engineers, significantly leveraging the reach of Topro's Year 2000 database.
The utility industry's awareness of the urgency and complexity of the Y2K problems posed by embedded systems is accelerating, and represents a significant additional market for Topro's database Y2K tools.
Topro estimates pretax profit margins on its CD-ROM to 80% or more, with the average charge for using it to be $20,000 per site.
Further details are in a press release put out today by Topro and carried on the major newswires.
Wishing you peace and prosperity,
Karl Drobnic, Publisher
Venture Returns
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PR Release: exchange2000.com
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