<<< On the positive side, it is important to note the cost
of the CD does not include the cost of remediation which
Tava would seem to have an excellent chance of participating
in as the pilot projects become full scale roll outs. >>>
I think remediation is being overemphasized by some of you. (Chris, I'm just using your post as a point of departure.) The big money will be in inventory and assessment, especially on the CD side, where gross margins are 80% or greater.
Take KO. The first stage is the pilot--inventory and assessment (using the CD and data base) for 10 plants. The next stage would be I and A for some humongous % of KO's plants. That will be the big rollout.
Remediation? I don't know ... TAVA can't possibly handle that many remediation projects. Nor do we want them to. That's lower-margin in the trenches stuff. Among the many stupid things Mike Winn said on this thread, there was one that was at least partly true: How do you remediate a y2k noncompliant embedded chip? You replace it. Get out your wrenches ...
We want TAVA to work with companies, and let them handle as much of the scut-work as possible. Recall the following wording from the BMY press release:
"The initial stage of services is a pilot plant project at the Bristol-
Meyers Squibb multi-building facility in New Brunswick, NJ. The pilot plant
project has begun and is scheduled for completion by February of 1998.
The intent of Bristol-Meyers Squibb is to roll-out the worldwide program,
covering all sites, shortly thereafter. The worldwide roll-out is already in
the planning stage. The engagement program includes TAVA's Plant Y2K One(TM)
CD-ROM based tools, database access and Millennium services.
"We are pleased to have this opportunity to work with Bristol-Meyers
Squibb. We believe that their approach to Year 2000 compliance, which contains
a strong element of self-execution supported by the Plant Y2K One(TM) tools,
is a great way to move quickly through the critical assessment stage," said
John Jenkins, CEO of Topro, Inc."
Here's a post I made on "Roger's 1998 Short Picks" that also underscores this point:
______________________________
To: CalculatedRisk (5574 )
From: Wade Ramey
Friday, Mar 27 1998 12:08AM EST
Reply # of 5697
<<< The whole premise of TAVA is a joke (i.e.
one company can solve all Y2K embedded system problems) >>>
There you go again. No one is saying that. TAVA longs have been saying--rightly--that no company other thanTAVA has tackled the embedded y2k problem in such a significant way. And they've got a big head start, making competition pretty much a nonissue.
The gross margins on TAVA's CD ROM methodology are extraordinarily high--around 80-85%. That methodology can be replicated ad infinitum. There is great promise here, though we have yet to see concrete financial results (which is why I sold half my position at 14 yesterday). TAVA can help ANY company with tools and access to their extensive database (via the internet). The number of clients TAVA can help (using its own engineers) with a complete front-end assessment and inventory is of course much smaller; the number TAVA can help with full-blown remediation is of course very small.
TAVA currently has pilot projects with 60 different companies. Some of the names are mighty impressive: Coca Cola, Bristol-Meyers, Unilever, GM, ... with more to come.
_______________________
Wade |
