John Jenkins, TAVA CEO 
November '97 Conference Call

Question: "What do you see in revenue for the future on
your CD?"

John Jenkins: "Well, the opportunity (let me roll it
out that way for the moment), first of all when we sell
tools, its a combination of the CD, which is sort of the
key to the compliance data base - so there's our pricing
model. ÿBut, basically ... $4000 for the CD. That
includes the methodology and several support tools. 

Then to switch on and have access to the vendor
compliance database, your talking about $5000 per site.
The CD price is per seat. 

  A company may purchase the CD, but that does not give
  them the right to use the CD throughout the
  organization. Each location the CD is used, the company
  must pay additional seat charges. Seat charges are
  very common throughout the software industry.

So in a straight forward model, you've got somebody who
buys 1 CD. He pays $4000 for that, he's going to pay
$5000 for the vendor compliance data base access, and
he's going to pay $200 per vendor compliance report.

Most organizations that we're looking at on the small end
of the quote average range would have at least 100
unique devices in their facility. So its 100 x $200 =
$20,000. He buys some training along the way. You can
get to a model that says between $30,000 and $35,000
on an average basis per individual facility. 

The total facility count out there is, on a
conservative basis, between 70,000 and
100,000 facilities that have to address this
problem. So its a very large number at the high end.
We won't reach all those facilities and not everybody's
going to pay retail price. 

When you sit at the table with somebody that's got 600
sites to address, there's a fair amount of negotiating
pressure from his side of the table. But I think we've
used a conservative number of about $20,000 per site
for a straight up tool purchase by a client. I still think
that number works and I have no reason to push it one
way or the other at this point.

The mix of tools and services is hard for us to pin down
today. We've got a wide range. Some organizations have
absolutely no engineering staff and they want to buy
services wrapped around tools. Others have solid
engineering staffs and are really looking at tools and
projects.

 70,000 - 100,000 Facilities need to
       Address Y2K on Plant Floor

                    $4,000 CD ÿPer Seat 
                    $5,000 Database Access
                    per Site 
                    $200 per Vendor
                    Compliance Report 
                    $2,000 Search Engine for
                    Software

  Does NOT include any engineering time from the TAVA
                   engineers.
  Engineering rates have gone up 66% since last year to
    approx $160/hr. Rates are projected to escalate.

   This pricing structure is a good estimate of the revenue
                associated with CD.
          Pricing is always Subject to Change