MERGER BACKGROUNDER
I received this from Verity, puts the merger in perspective....
Verity/Cognisoft
Merger Backgrounder
January 10, 1997
This document contains forward looking statements relating to the combination of Verity and Cognisoft and their SEARCH*97 and IntelliServ products underdevelopment, including the expected features and performance and estimated dates of commercial availability. The success of the Cognisoft merger is subject to several risks, including, the successful development and release dates for the SEARCH*97 and IntelliServ products are subject to potential delay and other risks inherent in software development. Also, there is no assurance that the products will achieve market acceptance, due to the rapidly changing market for the Company*s products, competition and other factors. These and other risks relating to Verity*s business and product development efforts are set as forth in the Company*s Form 10-K and filed with the Securities and Exchange Commission.
Overview concept of search from a simple, rudimentary tool to a robust enterprise-wide platform.
With SEARCH'97, a corporation can join disparate information from multiple sources into a single integrated information source, or "corporate memory". on a crusade to evangelize the SEARCH'97 platform to the content and application development community. More than 100 leading industry software developers are currently developing for SEARCH'97, Verity will be able to leverage its broadly deployed platform by providing an easy-to-use, easy-to-administer application optimized for the SEARCH*97 and Windows NT Server platform. The merging of Cognisoft's flagship IntelliServ product with Verity's SEARCH'97 platform is designed to bring a powerful combination of technology to the marketplace, providing enterprises and information
providers with an end-to-end solution to information management and
dissemination.
Microsoft managers .
Since it*s inception, Cognisoft has aimed to be the premier provider of leading edge information applications, delivery technologies and administrative tools for both corporate Intranets and Internet information providers. The firm has grown to 17 employees with a combined expertise in application design, development and delivery to market. easy-to-use, easy-to-administer Windows NT Server application that monitors information on multiple data sources, and orchestrates delivery of this information to users based on their preferences through a customized start page, email, or pager. IntelliServ is an application architected to add value to the Internet platform, not compete with it. IntelliServ will work with all major web browsers and is currently fully integrated with Microsoft Internet Information Server (IIS). The IntelliServ 1.0 version for Windows NT is currently scheduled for release by the end of Verity's fiscal year in May 1997. A version for the Netscape Enterprise Server is scheduled for availability in late 1997.One goal of the Cognisoft merger is to jump-start this effort. expertise gained at Microsoft by Cognisoft*s founders, coupled with Verity's talented staff of engineers and designers, makes for a seasoned team to define and shape information management applications.
Transaction Details
Verity paid $10 million in cash in exchange for all of the outstanding
>securities of Cognisoft. The merger will be accounted for by the purchase method of accounting by Verity. Verity expects to charge approximately $10 million against earnings during its third fiscal quarter ending February 28, 1997, related to the write-off of research and development in-process at Cognisoft and other costs related to the transaction. Cognisoft will now operate under the Verity, Inc name and trademark as Verity's Information Applications Buisness Unit. The new business unit and all Cognisoft employees will continue to be based at Cognisoft*s current headquarters in Bellevue, Washington. David Weld and Ken Schneider, formerly CEO and President of Cognisoft, will be appointed President and Executive Vice President of the new applications business unit, respectively. David Weld will report directly to Philippe Courtot, CEO and Chairman of Verity,
Inc.
Market Opportunity
Intranets has created new problems to solve and new opportunities to explore. One of the biggest problems is the proliferation of unstructured data. The widespread adoption of Internet technologies has made more data accessible, but information is still hard to find. Since data is published in multiple formats and resides on multiple sources, finding information is a technically cumbersome and time consuming task. For example, a financial analyst needs to navigate internal file servers for new research postings, launch an application to monitor the newswire, check email for personal messages, and browse the web sites for new information.
Verity's strategy with the SEARCH*97 platform is to make searching for
information a quick and seamless experience for the user -- independent of platform and location. On the back-end, SEARCH*97 identifies, categorizes, and filters information from multiple sources to create a single, integrated information source.
As the "network centric" computing model becomes the standard paradigm, categorizing and managing unstructured data residing on networks will be of utmost importance. Verity will be dedicated to making SEARCH*97 the premier search platform by applying top-notch engineering and embracing standards along the way.
The most exciting new market opportunity to arise from the Internet
explosion relates to the new platform being left in its wake. Web browsers, search technology, web servers, and TCP/IP comprise the creation of a new platform which has been adopted by thousands of corporations. Already, corporations are beginning to demand and deploy applications that add value to this new platform. While 1996 was the "Year of the Intranet platform", this coming year will be the "Year of Intranet applications". At present, the most desired applications are those which maximize the value of the information residing on a network. Information applications have become a primary topic with industry press * technologies which "push" information rather than requiring users to "pull" information. Developing easy-to-use, easy-to-administer information applications that can ship in high volumes is the next logical step for Verity and presents a tremendous
revenue growth opportunity.
Cognisoft*s IntelliServ will help jump-start Verity in the server-based information market.
Product & Positioning Strategy
Verity*s strategy moving forward is to enhance the SEARCH*97 platform and to deliver SEARCH*97 applications.
continue to be the foundation of the SEARCH*97 platform.
With SEARCH*97 Information Server, a single, integrated information source can be created from multiple applications and databases residing on disparate data sources. This integrated source serves as a "corporate memory" which can be leveraged with SEARCH*97 Information Server*s robust search features.
Information Server a universal search platform for information everywhere * independent of location and platform * and achieve critical mass. SEARCH*97 is bundled by leading application vendors, such as SAP, Lotus Notes, PC DOCS and Documentum, as well as leading database vendors, such as Informix, Sybase, ODI and Objectivity. At present, hundreds of companies worldwide are using Verity's powerful search technology.
Verity also recognizes that evangelizing the SEARCH*97 platform and
supporting the development community is critical to the success of
establishing any software platform. Verity will continue to develop the tools and support demanded by content and application developers using the SEARCH*97 platform. Thus far, Verity has shipped the SEARCH*97 Developer's Kit which enables users to embed search technology in an application and the SEARCH*97 Agent Server Toolkit which allows developers to integrate advanced search agent technology into their products and applications. This allows developers to build a new level of information applications which can automatically "push" customized information to users based on their needs and preferences.
In addition, Verity announced SEARCH*97 CD-Web Publisher which is a hybrid CD-Web publishing platform tool that enables seamless integration between CD-ROMs and web servers.
leverage the SEARCH*97 platform and build applications, Verity also plans applications optimized for the SEARCH*97 platform. Verity*s application strategy will be limited to applications which address a ubiquitous need in the marketplace, and, thus, represent high volume opportunities. The goal of aggressively moving into the application space is not to compete with third party SEARCH*97 development efforts, but to solidify the SEARCH*97 installed base and protect the investment of Verity*s development partners in the SEARCH*97 platform.
The information application strategy will be two-fold: pull-based and
push-based. Pull-based refers to user initiated searches, or instances where a user has an immediate need to find information.
Verity*s objective is to make finding information a location independent and platform independent experience for the user. SEARCH*97 Personal is a pull-based application designed to enable users to search all the contents of their hard drive. Users can also tap into all sources of information which have been indexed using the SEARCH*97 platform. SEARCH*97 Personal is currently available for Microsoft Exchange, and is scheduled for availability for the web in Q1 of calendar 1997.
Push-based refers to the automated delivery and notification of information customized to each user based on their individual preferences. Verity's objective is to make information delivery from multiple disparate data sources a seamless and integrated experience for the user.
The Cognisoft merger kicks-off Verity's entry into the new category of
information push-based applications through IntelliServ for SEARCH*97.
Unlike SEARCH*97 Personal, IntelliServ is a server-based application which "runs in the background" and has no client software component to install. Using a web browser, a user can set topical preferences as to the type of information they wish to be notified about. IntelliServ stores these preferences and utilizes the SEARCH*97 platform to monitor multiple sources of information and notify users of changes or additions.
It is 100% server-side and utilizes any major web browser, so there is no costly client code to maintain on each user's desktop. Unlike many of the newly announced broadcasting tools, IntelliServ will allow corporations to "push" information to users from multiple data sources, not just a proprietary back-end. This will allow corporations to immediately leverage their current information assets without republishing their information in a new format.
SEARCH'97 platform, brings a powerful application offering to SEARCH*97 customers, and an end-to-end solution for information management to the marketplace.
Technology Integration
IntelliServ will be integrated tighty with the SEARCH*97 platform. The following is an outline of the main capabilities of IntelliServ and a discussion of how each feature will be optimized for SEARCH*97.
Enabling Corporations to Unlock the Potential of Current Information Assets IntelliServ will not require information to be republished or reformatted in order to be "pushed" to users. IntelliServ will be designed to identify, categorize, and continuously monitor internal information in it*s native format residing on a broad set of data sources, including files servers, web servers, ODBC databases, Notes and Exchange. As depicted in the diagram on the right, IntelliServ will take advantage of the robust universal indexing tools offered by SEARCH*97 Information Server. SEARCH*97 Information Server supports incremental indexing and composite collections of HTML, PDF, ASCII
and WYSIWG formats, as well as metatags, client side maps and frame
references within HTML documents.
Taking Advantage of the Internet and Third Party Information
IntelliServ will be configurable to monitor Internet web sites as easily as monitoring internal Intranet web servers. Additionally, Verity is working with information providers of news, research, and other services to create IntelliServ data source modules so that third party information can be monitored by IntelliServ and integrated with internal information for the user.
Timely Notification of Topics of Interest
IntelliServ will empower users to get the information they need with ease and speed. Users prepare a personal profile that contains both the topical information they are interested in and how they want to be notified about new or edited information relating to their specified topics. IntelliServ will utilize the Profiling Engine of the SEARCH*97 Agent Server (embodied in the SEARCH*97 Agent Server Toolkit) to create user profiles and execute timely notifications of information. Users may choose to be notified by email, pager, or custom start page.
Easy to Install and Use
IntelliServ will be an easy-to-use, out-of-the-box application. Once a
corporation has an operating Intranet, in less than an hour and aministrator should be able to complete the installation of IntelliServ and SEARCH*97 components, set up a directory of users, monitor data sources, and have users up-and-running receiving the information they want.
Powerful and Flexible Administration
IntelliServ is scheduled to ship with a full suite of powerful
administrative tools, so administration is fast and easy. Also,
IntelliServ*s modular design provides for scalability of the application to insure top performance.
Summary
In the latest issue of Information Week (1/6/97), the editors predict which products will be hot this coming year and conclude that 1997 will be the "Battle of the Desktop Information Access Paradigm". In addition, they speculate that agents and filters which help users manage information and content will be the "real killer application."
Since agent and filtering technologies are at the core of Verity's business, Verity is well positioned to take advantage of this new market opportunity with its current products. Verity, Inc. has successfully established the SEARCH*97 platform as the leading search platform for corporations, government agencies, online service providers, Internet publishers and developers worldwide.
The acquisition of Cognisoft Corporation represents the next logical step in solidifying Verity*s leadership position and seizing the market opportunity represented by the explosion of the Internet platform.
Cognisoft Corporation will be merged with Verity and will operate as
Verity*s Information Applications Business Unit. This unit*s goal will be to develop information applications for corporations and content providers which 1) are optimized for the SEARCH*97 platform, 2) will ship in high volume, and 3) are easy-to-use, install and administer.
IntelliServ is slated to enter beta in February as SEARCH*97 IntelliServ, with final product scheduled for availability in the first half of 1997.
With the addition of SEARCH*97 IntelliServ, Verity*s SEARCH97 offering will provide the enterprise and information provider markets with a robust end-to-end solution for universal searching and indexing, custom application development tools and out-of-the-box application technology for automated delivery of information based on personal preferences. |
