MultiLink Solutions 4.0 Market Analysis Contents 4.1 Market Assumptions 4.2 Market Needs 4.3 Market Barriers 4.4 Competitive Analysis 4.5 Market Interviews 4.6 Test Results 4.1 Market Assumptions MultiLink Solutions' (MLS) marketing strategy relies critically on the validity of the following market assumptions. Assumption 1: The computer network industry needs more reliable, efficient and secure network protocols than currently available. To succeed in persuading potential customers to invest resources in MultiLink Solutions' flagship product, GroupWare, which implements the Reliable Multicast Protocol, MLS can show that GroupWare meets this new need. Assumption 2: MLS has only one competitor (ISIS) currently selling a product similar to the Remote Multicast Protocol (RMP). If indeed ISIS is our only competitor, MLS can establish an immediate market lead in technical superiority (another assumption, discussed below). Assumption 3: GroupWare is and would be perceived better than this competitor's product. If GroupWare is a better product than that offered by ISIS, MLS can market GroupWare as the best solution to various market needs. Assumption 4: Large corporations would be willing to invest resources testing and developing applications with GroupWare. Since we anticipate customers to resist changing software to use a new network protocol, we must be convinced that GroupWare provides sufficient benefits to merit this change. Assumption 5: Independent software developers would be interested in GroupWare. Our long term objectives focus on the mass PC market, which independent software vendors (ISVs, such as Microsoft, Novell, Oracle, etc.) supply. Thus, if MLS is to succeed as a company, ISVs will need to endorse and use GroupWare in their software. 4.2 Market Needs The computer industry market is huge. Dataquest Incorporated estimates that the average shipments of network operating systems from 1995 through 1998 will average 1.2 million for peer-to-peer users and 3 million for client/server users in North America alone. Since network protocols lie at the heart of other types of network software, not just network operating systems, the market for such protocols is estimated to be approximately 100 million network nodes worldwide. Thus, any company that can fulfill the needs of such a market has the potential for capturing a large market share. From a detailed survey of numerous network trade journals such as Communications of the ACM and NetworkWorld reveal the validity of our first market assumption. Developments in the computer industry such as high-speed networks used in interactive communication and the increased globalization of information access place even stricter demands for group communication and improved network performance. Numerous network protocols used throughout the computer industry reliably and efficiently allow one computer to communicate with another. However, an extremely few number of protocols extend this efficiency and reliability to multiple computers communicating simultaneously. All of these needs create a market niche that MultiLink Solutions can target. These needs address the concerns of end-users of network software. However, our market research also reveals a need among network software developers as well. To achieve the levels of reliability and security offered by RMP and GroupWare, software developers must devise complex manipulations of existing network protocols and still do not derive the efficiency afforded by RMP. Thus, group communication currently is extremely costly to develop without direct support for such communication in one consolidated package such as GroupWare. 4.3 Market Barriers The most critical barrier to MLS' successful entry into this market niche is the resistance of network developers in using a new network protocol. Thousands if not millions of man-hours have been invested in developing software based on other protocols. Thus, MLS must convince customers that investment in RMP and GroupWare would be profitable. 4.4 Competitive Analysis Extensive research at the University of California by MultiLink Solutions CEO Brian Whetten confirms that RMP's performance exceeds that of existing protocols as the following figure summarizes. 4.4.1 ISIS Distributed Toolkit ISIS Corporation, recently acquired by Stratus Computer, is the only known producer of a group communication product similar to GroupWare. ISIS entered the market after years of academic research that led to their flagship product, the ISIS Toolkit. When the company formed, the Toolkit gained widespread popularity among brokerage houses that required reliable and secure group software. They soon used the Toolkit to develop reliable database applications. The successes ISIS experienced in these two market segments made ISIS an attractive venture for Stratus Computer, which recently purchased ISIS for over 20 million dollars. The ISIS story provides clear evidence of the need for group communication software that allows software developers to easily create distributed applications too complex to develop with existing network tools. Comparisons performed at UC Berkeley of ISIS and GroupWare demonstrate that GroupWare provides far better performance than does the ISIS Toolkit. Table 1 summarizes these comparisons. 4.4.2 Other Protocol Implementations All current protocol implementations use a point-to-point paradigm that does not allow for the same benefits as RMP's group communication approach. 4.5 Market Interviews To guide its marketing strategy, MultiLink Solutions is concentrating its market research on obtaining an accurate understanding of the potential market for GroupWare. 4.5.1 Prospective Independent Software Vendors (ISVs) Potential ISVs are divided into two categories: those that produce network applications themselves and those that produce tools for developing such applications. The ISVs listed below were identified at the Software Development '95 conference, held in San Francisco on February 14 - 16, 1995. 4.5.1.1 ISVs Producing Network Application Development Tools Company Name Comments INTERSOLVSpecializes "solely in client/server software development." [From product literature.] Has licensed over 325,000, with a major focus on all aspects of "the enterprise" [An industry term that we should define somewhere.] Has a product called MultiLink/VB. Tremendous potential as an ally and conduit to large corporations. ATRIADeveloped ClearCase, a distributed application development tool that helps manage the software development process involving teams of programmers. NobleNet, Inc.Developed EZ-RPC, a "software development tool that helps programmers build client-server applications by generating the network communication code that the client and server parts use to communicate with each other." Essentially, it "does RPC for you." Atria used this tool in developing ClearCase. Borland, Int'lWill soon introduce Delphi 95, a high-performance client/server application development environment. Distinct, Corp.Develops software development products for TCP/IP support in a Windows environment. Gupta Corp.A serious leader in all aspects of client/server development, mostly based on SQL. FairComHas been around for many years in the client/server development market. SunSoftDevelops mission-critical development tools for UNIX and other platforms. 4.5.1.2 ISVs Producing Network Applications NETMANAGEHas built strong momentum in the PC internet access market. Also develops Software Development Kits (SDKs) for network applications. 4.5.2 Prospective Corporations To identify corporations that could use RMP, our marketing strategy relies on references from ISV contacts. Some corporations have been identified through product literature that reveals in-house network development (such as AT&T's "Software Solutions" directory, for example). Company Name Comments AT & TInformation obtained through their Software Solutions catalog indicates listed products were "developed to meet the internal needs of AT&T." Product categories include integrated distributed data systems, database development tools and other network applications. 4.6 Test Results 4.6.1 Large Corporations MLS has contacted AT & T Solutions Group and discussed GroupWare and the Reliable MultiCast protocol. Though additional interviews are planned, Paul J. Fillinich, head of this internal development group, preliminarily expressed an interest in learning about RMP and its potential benefits to his corporation. 4.6.2 Independent Software Vendors MLS interviewed Kevin Naylor, a marketing analyst with NobleNet, Inc., which provides software that implements the RPC protocol. Mr. Naylor also seemed enthused by our initial presentation of RMP and also referred us to the CEO and founder of NobelNet, with whom Mr. Naylor agreed to arrange a phone interview. Thus, our market research continues to evolve.