confidential © 2001, zedgate zedgate, llc september 8, 2001 materials specially prepared for...
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CONFIDENTIAL © 2001, Zedgate
Zedgate, llc
September 8, 2001
Materials Specially Prepared for
VIGNETTE CORPORATION
HIGHLY CONFIDENTIALHIGHLY CONFIDENTIAL
CONFIDENTIAL 2
WHAT’S THE PROPOSITION?
Cleanly Acquire Significant Assets of Enterprise Web Apps software Pioneer 2Bridge
1. In an accretive deal – creatively structured to practically eliminate downside risk to earnings
2. With high margin revenue that could be rapidly scaled by Vignette’s strong distribution organization
UPSIDE – IF YOU CAN MOVE FAST
1. Immediate Impact High Margin Revenue
2. Solidify Vignette’s apps market position & platform
3. Innovative Deal Structure Eliminates EPS Risk
DOWNSIDE – IF YOU CAN’T OR DON’T
1. Miss the window of opportunity to pick up for pennies on the dollar assets that could be to Vignette what WebLogic was to BEA
2. Let a competitor enhance its position in market because these assets will be sold
3. Increase Risk - either inertia (default to in-house development) or trepidation (acquiring a going concern) yield financially inferior alternatives that will take longer & cost more
CONFIDENTIAL 3
2Bridge provides packaged enterprise portal and
content centric web
applications that enable self-service creation of
thousands of collaborative-
commerce workspaces that align
people and manage
processes that are central to the mission of the business
CSFB Profile on 2BridgeStatus: Private (Withdrew Registration)
HQ: San Francisco, CA
URL: www.2bridge.com
Founded: January 1997
Customers: 30+ ( Frontline Capital Group, JP Morgan, The McGraw-Hill Companies, BP Amoco, SAP AG, Schroders & Company, Visa)
Partners: Applicast, Enterworks, Hewlett Packard, IBM, Netscape, New Atlanta, Oracle, iPlanet Placeware, Screaming Media, Sun Microsystems, Verity and others
TECHNOLOGYTECHNOLOGY More than interface & content, it’s patent-
pending technology features distributed app services based on a Unique ‘always-on’ architecture that provides web-tone access to e-service add-ins & XML components such as database forms, e-mails, templates, and even configurable mini-apps.- for rapid configuration and deployment
Cross-platform, open standards: Java/XML, J2EE; WAP and broadband ready, zero-client, multi-media, real-time, always-on, massively scalable
2BRIDGE PORTAL SERVER (v4.2): 2BRIDGE PORTAL SERVER (v4.2): Unified front-end interface and application
services for e-business Build and manage highly functional intranets
and extranets, complex web sites and collaborative workspaces linking people, content & apps
Massively scalable, award-winning Java/XML Portal Server platform is setting the standard for portals as deep application ‘front-ware’ for new Web-based business applications and services with customers such as JP Morgan, McGraw-Hill, ABN-Amro, & SAP.
CLUB.2BRIDGE – e-Business Solutions Network:CLUB.2BRIDGE – e-Business Solutions Network: Self-service, downloadable delivery of
software and add-in application components & web services for ‘Immediate Impact’ e-business application solutions
Amount Post
Raised Valuation
Round Date ($MM) ($MM)
1st 01/97 3.4 16.1
2nd 05/98 10.1 38.0
3th 07/99 20.0 85.0
4th 03/00 7.2 257.2
Revenues:
Financing:
CONFIDENTIAL 4
The Big Risk for Vignette
Vignette has ridden the revenue tiger, and the expectations for earnings seemly tightly wound - a miss could be disastrous
Leverage your balance sheet and strong cash position in a structure that practically eliminate EPS risk
Use recent market momentum & management bench strength to add high margin revenues and steal a march on the competition
CONFIDENTIAL 5
CONFIDENTIAL 6
Vignette Market Multiples
Based on CY 2002 Estimates, Vignette Market Value reflects the following multiples:
Price/Sales Ratio: 3.2
Price/Earnings Ratio: 94.9
CONFIDENTIAL 7
Process
1.1. WHAT’S THE SPECIAL OFFER/DEAL OPPT’YWHAT’S THE SPECIAL OFFER/DEAL OPPT’Y2.2. CLAIMS: HOW WILL WE HELP YOUCLAIMS: HOW WILL WE HELP YOU3.3. PROOF STATEMENTS & DEMOSPROOF STATEMENTS & DEMOS
1. UNDERSTAND & QUALIFY1. UNDERSTAND & QUALIFY
1.1. VALIDATEVALIDATE2.2. ESTIMATE, ANALYZE & MONETIZEESTIMATE, ANALYZE & MONETIZE3.3. NEGOTIATE & CLOSENEGOTIATE & CLOSE
2. DUE DILIGENCE2. DUE DILIGENCE
1.1. INTEGRATE TECH, PRODUCT & OPSINTEGRATE TECH, PRODUCT & OPS2.2. INTRODUCE, SELL & DISTRIBUTEINTRODUCE, SELL & DISTRIBUTE3.3. PROFIT FROM ITPROFIT FROM IT
3. DELIVER3. DELIVER
CONFIDENTIAL © 2001, Zedgate
Zedgate, llc
THE NEW THE NEW 22BRIDGEBRIDGE
LEAN, MEAN PROFIT MACHINE LEAN, MEAN PROFIT MACHINE
TO EXTEND YOUR PORTAL PLATFORMTO EXTEND YOUR PORTAL PLATFORM
CONFIDENTIAL 9
FSP (ASP +++)
Only a Full Service Provider controls and provides all the essential elements needed to deliver rapid, yet sustainable e.business success
FSP=full accountability
e.business Platform for Rapid Delivery Creative & Technical Talent Ready-2-Wear Designer Solutions e.Service Orientation Pure Business Model
CONFIDENTIAL 10
Key Benefits of 2Share/2Bridge Portal Platform Fast to Market
Solution can set-up in as little as 2 days
Easy to Use Browser based: designed for non-tech users
Open to Change Extensible platform: new sites, content, services added seamlessly
Connects to All XML Pluglets: ‘dial tone’ to corporate & external data & apps
Hassle-Free Set-up & management of all design, software, hardware, network
Risk-FreeTrial to ensure fit before spending money
“Do it for me” = Spend More & Wait
“Do it myself” = Spend Less, Start Now
$30K in 6 days?
CONFIDENTIAL 11
The New & Better 2Bridge –
POSITIONING “We are category innovators with the best tech platform for
enterprise web apps”
“ We can extend your platform & market position”
P&L CONTRIBUTION - $(7) Million +$4.4 Million
PEOPLE 70 people in all depts. including field sales & consulting
Best 10 - the product & engineering team
BUYING WHAT? Company Stock All Assets & LIABILITIES
Costs to eliminate unwanted personnel
Only AssetsNO LIABILITIES
Core TeamOnly hire ex-employees as needed
PRICE/VALUE Fair Deal (~ $150M)+ Great Steal (~$15M)
SPEED/EASE OF DEAL 1 to 3 months 1 to 3 weeks
2B OLD2B OLD 2B NEW2B NEW
Clean Deal, Better Price, Faster Profit Contribution
CONFIDENTIAL 12
2B Old vs. 2B New: Operating Income Comparison
($2,883,619) ($1,967,549)
($1,464,910)
($869,115)
$1,216,688
$3,118,329
1
($125,750)
$135,750
1 2 3 4
($2,883,619) ($1,967,549)
($1,464,910)
($869,115)
$1,216,688
$3,118,329
1
($125,750)
$135,750
1 2 3 4
4 QUARTERS – ROLLING FORWARD4 QUARTERS – ROLLING FORWARD
BREAKEVENBREAKEVEN
PROFIT
LOSSLOSS
2B NEW 2B NEW ASSETS + TEAM ASSETS + TEAM
AGILE & LEANAGILE & LEAN
2B– OLD 2B– OLD BURDENED WITH BURDENED WITH LEGACY COSTS LEGACY COSTS
FROM IPOFROM IPO
CONFIDENTIAL © 2001, Zedgate
Zedgate, llc
ASSETS & TEAMASSETS & TEAM
CONFIDENTIAL 14
Key Entities
SHCSpecial Purpose
LLC
SHCSpecial Purpose
LLCZED GATE LLCZED GATE LLC
MZ + Core TeamNew IP dev’d post terminationCustomer RelationshipsEmployees & Experts
•All 2Bridge assets – with no liabilities or liens including:•Pre June 25 Intellectual Property•Customer Contracts•Trademarks & Web Addresses
Also owned by Comdisco
Sand HillTransamericaFoothill (Wells Fargo)Agility Capital
Mansoor Zakaria Michael ShatsmanVadim SemenovHenry ChanJim LoganNancy AminoTom TootFrank CummingsJulie Farris
Infrastructure tuned for enterprise software production, management, delivery & support systems
Servers & PC & Software
Office operating tools - equipment, software, furniture
CONFIDENTIAL 15
Intellectual Property
Core Team of 5 highly skilled product engineers, additional 10-15 engineers in SF, and 25 in Princeton, 5 in UK – available and super enthusiastic about the product
Michael ShatsmanArchitecture, Design and Engineering Management
Michael ShatsmanArchitecture, Design and Engineering Management
Vadim SemenovCore Product Design and
Development
Vadim SemenovCore Product Design and
Development
Henry ChenComponent Design and
Development
Henry ChenComponent Design and
Development
Jim LoganApplications Design and
Development
Jim LoganApplications Design and
Development
QA & Performance team
QA & Performance team
DocumentationDocumentation
CONFIDENTIAL 16
Public- ALLPublic- ALL Group(s)Group(s) PersonalPersonal
2B2BHub
Containers
Portal
THE DEEPEST TECHNOLOGY IN PORTAL APPS
Adaptive ViewsPersonalized, Configurable,
& Permissioned by Users
Portal Creation & Mgmt Application Modules-Create, Edit, Publish, Manage Workflow,
Audiences, Distribution, Rules, Reporting etc.
Dynamic ContainersSeamless Integration of content, apps,
and services
Components Instant PortalLogin Personalized GreetingGroup MessageTable of ContentsDirectorySite-MapRecently Updated Sites
Auto-Publish AgentExpress PublishingP2P Doc & File ShareMS Office FileAudio/VideoIn-Line Text EntryProperty (Meta-data)Web PageURL Pass through
LinksDiscussionsEmailSearchSurveyWorkflow StatusActivity ReportsUsage Reports
Portal Application Components Unlimited number of service components that can be pre-built - by IT or Third parties for immediate use by business
COMPONENTS (PARTIAL LIST)
CONFIDENTIAL 17
Targets & Process
1.1. PITCH: SPECIAL OFFER/DEAL OPPT’YPITCH: SPECIAL OFFER/DEAL OPPT’Y2.2. CLAIMS: HOW WILL WE HELP YOUCLAIMS: HOW WILL WE HELP YOU3.3. PROOF STATEMENTS & DEMOSPROOF STATEMENTS & DEMOS
2. MARKETING & SELLING2. MARKETING & SELLING
1.1. VALIDATEVALIDATE2.2. ANALYZE & MONETIZEANALYZE & MONETIZE3.3. NEGOTIATE & CLOSENEGOTIATE & CLOSE
3. DUE DILIGENCE3. DUE DILIGENCE
1.1. INTEGRATE TECH, PRODUCT & OPSINTEGRATE TECH, PRODUCT & OPS2.2. INTRODUCE, SELL & DISTRIBUTEINTRODUCE, SELL & DISTRIBUTE3.3. PROFIT FROM ITPROFIT FROM IT
4. DELIVER4. DELIVER
ENTERWORKSENTERWORKS
EPICENTRICEPICENTRIC
HPHP
IBMIBM
I2I2
INFORMATICAINFORMATICA
INTERWOVENINTERWOVEN
INTUITINTUIT
ORACLEORACLE
SYBASESYBASE
TIBCOTIBCO
VERITYVERITY
VERTICAL NETVERTICAL NET
VITRIAVITRIA
VIGNETTEVIGNETTE
WEB EXWEB EX
WEB METHODSWEB METHODS
YAHOOYAHOO
ATGATG
AUTONOMYAUTONOMY
BEABEA
BOWSTREETBOWSTREET
BROADVISIONBROADVISION
CITRIXCITRIX
COMMERCE ONECOMMERCE ONE
CORILLIANCORILLIAN
DIVINE
PEOPLESOFTPEOPLESOFT
PEREGRINEPEREGRINE
PLUMTREEPLUMTREE
REUTERS REUTERS
SAPSAP
SCHWABSCHWAB
SCIENTSCIENT
SIEBELSIEBEL
SUNSUN
1. IDENTIFY, QUALIFY & FOCUS1. IDENTIFY, QUALIFY & FOCUS
CONFIDENTIAL 18
List of Secured Assets
2Share Many-to-many Info-Sharing
2BPS 2Bridge Portal Platform Server – web application development platform
CVS Source Code Control Unix Server installation that contains version control for all source code branches starting
2Share version 3.0. It covers 2Share, 2BPS, 2BCS (Golden Gate), 2BPP (Sputnik), and Documentation
Club2Bridge Download Distribution & Service Channel
Advanced Technology R&D 2BPP
1) Next-generation multi-panel presentation and application interface 2BCS
1) Data-driven, highly scalable content delivery system
CONFIDENTIAL 19
Innovations and Patentable IP
Portal Application ComponentsPortal Application Components Configurable, mini-application for allowing business users to produce complex web pagesConfigurable, mini-application for allowing business users to produce complex web pages Database, email, recursive hierarchical director, Table of Contents, Navigation, Screen Database, email, recursive hierarchical director, Table of Contents, Navigation, Screen scraper, EJB, JMS, Web Page Capture, MS Office Markup, and morescraper, EJB, JMS, Web Page Capture, MS Office Markup, and more
PAC Development KitDevelopment Kit
Provides extensibility of 2Share mini-appsProvides extensibility of 2Share mini-apps
InnovationsInnovations
2Bridge mode-aware Container2Bridge mode-aware Container
The Browser based Publishing toolThe Browser based Publishing tool
Multiple browsing views from the same content baseMultiple browsing views from the same content base
Distributed, permissioned, cascading publishingDistributed, permissioned, cascading publishing
Separation between content, structure and presentationSeparation between content, structure and presentation
Patentable IP (prep’d, not filed)Patentable IP (prep’d, not filed)
Multi-panel windowing systemMulti-panel windowing system
Referential links in an object storeReferential links in an object store
CONFIDENTIAL 20How IP Could be Valuable?2Bridge and/or potential M&A partner
Business Value A trained sales team and partnerships with integrators could jumpstart the process The download model provides highly leveraged revenue potential for 2Bridge
Talent Value Development team understands the web application environment and could integrate product into
application environment, such as SFA, CRM, portals platforms, content management platforms and others
CONFIDENTIAL 21
EXPERIENCED ENGINEERING TEAM
Size: Core Team of 5 highly skilled product engineers, additional 20 engineers in SF, and 25 in Princeton – available and enthusiastic about the product 75+ man-years in product development and innovation Core team have been together for over 4 years (24 man-years) with the product
during the formative years of the Internet Valued Skills
Java, Database – Oracle, Sybase, Informix, SQL Server etc. Information Architecture & Web User Interface Multimedia Graphics QA, Performance and Tuning XML DHTML Web and Application servers - WebLogic, WebSphere, iPlanet J2EE peer-to-peer Web services
CONFIDENTIAL 22
Presentation Outline
Executive Summary Enterprise Portals
A Massive Opportunity Getting Very Crowded
Our Strategic Analysis of [their company name] SWOT Cost & Risks of Gaps Opportunities & Benefits
Leveraging & extending your platform from Enterprise Portal into SUPER-PORTAL Benefits – hard & soft Features – product & tech Ideas
Deal Dynamics How? when etc. Valuation Data: provide info on cost to create, similar transactions, profit
contribution to buyer
CONFIDENTIAL © 2001, Zedgate
Zedgate, llc
2WIN THE PORTAL WAR YOU NEED 2WIN THE PORTAL WAR YOU NEED
Confidential & ProprietaryConfidential & Proprietary
CONFIDENTIAL 24
Studies have shown that for every six new large-scale software systems that are put into operation, two others are canceled. The average software development project overshoots its schedule by half; larger projects generally do worse. And some three quarters of all large systems are "operating failures" that either do not function as intended or are not used at all.
TRENDS IN COMPUTING by W. Wayt Gibbs, staff writer. Copyright Scientific American;
Software engineering remains a term of aspiration. The vast majority of computer code is still handcrafted from raw programming languages by artisans using techniques they neither measure nor are able to repeat consistently.
"It's like musket making was before Eli Whitney," says Brad J. Cox, Brad J. Cox,a professor at George Mason University. "Before the industrial revolution, there was a non-specialized approach to manufacturing goods that involved very little interchangeability and a maximum of craftsmanship. If we are ever going to lick this software crisis, we're going to have to stop this hand-to-mouth, every-programmer-builds-everything-from-the-ground-up, preindustrial approach."
CONFIDENTIAL 25
CONFIDENTIAL 26
2Bridge: inventing the technology and products needed to support interchangeable, reusable software components
. In June IBM's Consulting Group released the results of a survey of 24 leading companies that had developed large distributed systems. The numbers were unsettling: 55 percent of the projects cost more than expected, 68 percent overran their schedules and 88 percent had to be substantially redesigned.
The survey did not report one critical statistic: how reliably the completed programs ran. Often systems crash because they fail to expect the unexpected. Networks amplify this problem. "Distributed systems can consist of a great set of interconnected single points of failure, many of which you have not identified beforehand," Randell explains. "The complexity and fragility of these systems pose a major challenge."
The challenge of complexity is not only large but also growing. The bang that computers deliver per buck is doubling every 18 months or so. One result is "an order of magnitude growth in system size every decade-for some industries, every half decade," Curtis says. To keep up with such demand, programmers will have to change the way that they work. "You can't build skyscrapers using carpenters," Curtis quips.
CONFIDENTIAL 27
Thus 2Bridge assets are in order:
1. MZ and MZ's brain/spin/deep understanding of the space (again like what he did at Schwab..defining Equalizer online trading which became standard bearer functionality)...MZ agrees that he will become the acquirer's portal product/vision guy'
2. 2Bridge technologies that can be modified around the acquirer's platform and existing services
3. 2Bridge 'core dev team' 4. MZ ability to hire many other 'experts' to further build out the desired
combined new vision; i.e. 2Bridge + acquirer assets = SuperPortal Plus
CONFIDENTIAL 28
'Portal Functionality'...the engaging application/Trojan-horse and way-into the buying hearts of enterprise purchasers..i.e. this is the way to sell all enterprise software..using/giving away company-specific portal functions and then upselling features and other enterprise software services behind it
What Is Important State-of-the Art Portal Functionality ?? Use of Gartner Group research finders here is important as will be all of the many presentations MZ has put together with his team that shows his depth
of understanding of the space.. .It is important to list all what Gartner thinks is important in nextgen portals to insure
MZ has credibility in the argument
CONFIDENTIAL 29
What Is Super-Portal?
SuperPortal includes the following features and functions:1. BEA-like auto-install app (have your customized portal up and running in 48
hours)2. Self-publishing capability; i.e. the ability for any given authorized employee to
modify portal to reflect his/her priorities and sensibilities that his/her constituents should be experiencing consistent with the permission/authority this employee deserves
3. Pre-built 'pluglets/gadgets/modules' that can be inserted in portal to provide super-robust functionality (need full list of those that are fully functioning, under development and 'planned')
4. Container that allows SuperPortal user to grab 3rd party 'pluglets/gadgets/modules' and drop them into portal (examples such as stock quotes, weather, customized feed, audio/video, etc.) without any real html or coding knowledge
5. Container that allows SuperPortal user to integrate inside the firewall/proprietary enterprise data that belongs on user's extranet
CONFIDENTIAL 30
5+ Benefits Of The SuperPortal
1. Sell more services faster...one could even give away SuperPortal 1.0 to get client and upsell other features for profit...again following the BEA model
2. Immediate revenue to acquirer....3. Immediately enable enterprise salesperson to have relationship with given
client....4. The application that gets management exited about investing more in IT........ then..AFTER acquirer has shared their priorities and thoughts... More Detailed Description of 2Bridge Architecture and Approach
MZ has these presentations...the idea is simply to cover a cover slide that enables him to transition easily from presentation to presentation.
MZ-you must have all these presentations sitting in one folder and not fumble around your hard disk looking for them as its totally disconcerting! That should cover it...Julie, good luck in better packaging this Mark
CONFIDENTIAL 31
Toolbar #1: Personal Portal Toolbar
Link to screen showing Link to screen showing Neomeo and/or Outlook Neomeo and/or Outlook PlugletsPluglets
Files - Upload files to Files - Upload files to share with share with customers, customers, colleagues, partners,colleagues, partners,
Present – conduct on-line Present – conduct on-line presentations & collaborate using presentations & collaborate using the screen sharing capabilities.the screen sharing capabilities.
Discussions: Post thoughts Discussions: Post thoughts and suggestions when they and suggestions when they occur to youoccur to you
Publish: Instantly publish to your Publish: Instantly publish to your enterprise portal, which will enterprise portal, which will automatically alert all your team automatically alert all your team members and/or readers. members and/or readers.
Search E-Mail File Publish Calendar Discuss Present Reports Links More Search E-Mail File Publish Calendar Discuss Present Reports Links More