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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: TokyoMex who wrote (6062)	11/15/1997 3:08:00 PM
From: Zebra 365	Read Replies (1) \| Respond to of 31646

DocStone excellent synopsis. Regarding the answer to Skip Davidson of First New York Securities question regarding revenue breakdown and the total market. You wrote: <<<-- TAVA goal is engagement with 3,500 plant sites with estimated revenues of 20K per site. That works out to 300K per plant (menaing of crouse a "plant" has multiple sites).>>> My take was that they have 3500 assessment engagements "the current pipeline" developed internally (from prior business relationships) and that the average assessment (CD + database access + unit reports {avg 100/site x $200/report}) was worth $20,000 per "plant equivalant". I think the $300,000 estimate was for total remediation per "plant equivalant" (assessment + Y2K fix + final testing). And the total United States market was 70-100,000 "plant equivalants" (not counting utilities, oil refineries, QA sites, ect.) This makes the total Y2K remediation market for manufacturing in the US a potential 30 billion dollar market! Of course many plants will use their own engineering staff to do the remediation and testing work (ie. GM plants) but they are still candidates for the higher margin tools sales from TPRO. Gross margins on engineering services in the core business (in Y2K that will be remediation and final testing) are 52%. On hardware sales they are about 10%. I would guess that gross margins on the sales of the CD and database access (front end assessment) have to be in the neighborhood of 85%. That means a 2 billion dollar market with 1.7 billion in gross profit and no identified competition for the front end assessment alone. Raytheon will certainly be competitive with it's own current clients but I doubt it will be price competitive with TAVA on the front end for new clients. I think much of the 20,000 CD run will be going out to Wonderware customers free of charge but with limited functionality. Next week discussions with Square-D will probably center around a similar approach. It's the AOL marketing strategy, give the limited software away, so that customers realize they need your service, but charge to make it functional. This leads to this brief summary of about the front end process: First you purchase the CD which has enough information to screen your plant and tell you you might have problems. Then you pay the Fee to access the TPRO Database and you will get a list of all your embedded systems categorized as to potential Y2K problems or not (40% of the 4,000 embedded systems listed in the TPRO database have compliance problems) and you will get a report on each system (at $200 per report). This is the ~$20,000 average assessment. More Detail from the 11/06 Wonderware press release follows: <<<Through the marketing partnership with TAVA Technologies, Wonderware will provide end-user customers of its FactorySuite software and its Comprehensive Support program with a limited "assessment phase" version of TAVA's PlantY2K One product. This limited time offer will be provided to Wonderware's customers at no additional cost. The single CD contains: -- a complete Assessment Module and related electronic forms that make up the first phase of the PlantY2K One assessment and remediation methodology; -- a specially-designed Equipment Inventory Module that can be installed on a customer's Windows 95 or Windows NT-based PCs to easily organize information on existing plant equipment and software installations; -- a web-interactive "hot link" to TAVA's industrial equipment database for use in structuring and developing those plant-wide hardware and software inventories; -- and an overview of all phases of the complete compliance methodology. Using the information on this single CD, Wonderware customers can examine and understand the complete Year 2000 assessment methodologies and can begin to collect data necessary to create an essential equipment and software inventory listing for their plant facilities. Given the potential scope of the issues at the factory automation and process control level, manufacturers need to move quickly through the assessment stage and on to the real business of application remediation, according to Joe Cowan, Wonderware vice president of sales and marketing. "Our FactorySuite software modules have been designed from the start to be Year 2000 compliant and we already provide an easy upgrade path for our customers to solve any date-handling problems with their existing Wonderware applications," Cowan explained. "However, we also recognize that complete Year 2000 compliance on the factory floor must include every piece of equipment or application that is used in an industrial automation environment -- including hardware and software that is interfaced to our products. Working with TAVA we can provide our customers with no-cost assistance in assessing their millennium-related problems so they can move quickly through the critical first step on the path to avoiding Year 2000 disruptions in their operations." With TAVA Technologies' PlantY2K One product, end-users can easily segregate manufacturing equipment and/or related software by physical area of the plant, by process line, or by any means of categorization they may desire. After collecting the necessary information, they may obtain compliance or deficiency reports on their own, directly from the equipment vendors or software suppliers, or they can download formal compliance reports directly from TAVA's extensive on-line compliance database. "After using these CD-based tools to complete the assessment and inventory phase, Wonderware customers can contract with TAVA Technologies to provide formal vendor compliance reports, follow-on stages of the methodology, complementary project management support modules, numerous 'date search' utilities, Help Desk support and complete Year 2000 remediation services, if desired," noted John Jenkins, TAVA president and chief executive officer.>>> My final comment is on what I would call the TAVA Vision. I could tell from the call that these guys have the vision of integrating data from the plant floor into the front office decisions for manufacturers. They may have been frustrated in the past as being relegated only to the "blue collar" side of the company. When they were speaking of this potential for true "system integration" I heard the real excitement. They are truly excited about the Y2K issue being a window of opportunity to pursue this vision and not just an end in itself. I would say that it is this vision and enthusiasm that defines the true entrepreneur. Other Y2K companies have visions that end somewhere in the year 2000, Jenkins has a vision that will outlive all of us. Zebra