Sample Business Plan Trycos

I N C O R P O R A T S E D CONFIDENTIAL Business Plan September 1, 2000 Software Solutions for the eBusiness www.trycos.com Revolution Presented By_: ; ee l nk 914-788-1555 www,thenettank.com ' This Document is not an offer to sell equity in Trycos Incorporated and any discussions or information exchanged with respect thereto only shall be made in accordance with the applicable securities laws. _]_ntral TRYCOS TABLE OF CONTENTS 3 3 3 4 4 4 5 5 5 5 6 6 7 7 7 8 8 9 EXECUTIVE SUMMARY Trycos at a Glance Current Situation Trycos Solutions The Company Value Proposition Competition Marketing Management & Development Team Selected Financials Investment Offering Follow-on Financing / Exit Strategy BUSINESS STRATEGY AND MARKET CATALYSTS Business Strategy Business Model Product Overview Pricing Strategy Market Catalysts for eCentral TM Solutions MARKET AND COMPETITION Market Conditions eCentral TM Target Market Market Size Market Penetration Competition The eCentral Advantage 10 10 10 11 12 12 12 MARKETING STRATEGY Positioning Route to Market Marketing Cycle Sales Efforts Marketing Alliances Promotion 14 14 14 14 14 15 15 APPENDIX I - OPERATING PLAN APPENDIX II - SENIOR MANAGEMENT & DEVELOPMENT TEAM i - iv i-ill CONFIDENTIAL--For Discussion Purposes Only 2 ...... •i..,_.Tf") APPENDIX III - PROJECTED FINANCIAL STATEMENTS TRYCOS i-vi CONFIDENTIAL--For Discussion Purposes Only 3 ., °..°. EXECUTIVE TRYCOS at a Glance • TRYCOS SUMMARY Concept: Trycos provides software solutions that power eBusiness. The flagship product, eCentral TM , is a platform that fuses to back-end systems and pulls data and business rules to a front end Web interface. Other Trycos products, BuyCentral, SupplyCentral, SellCentral, eMarket Portal andTransactXML are packaged eProcurement, B2B sell-side, B2C storefront, portal and XML applications that lay on top of the eCentralTM platform and enable companies to get up and running with a fully-functional eBusiness solution in eight weeks or less. Near-term Target Market: Mid-market companies running SAP as the back-end system with revenues ranging from $250 million to $3 billion in the vertical industries of manufacturing, consumer products, and energy. As new eCentral TM versions are completed, this market will expand to companies runninglDEdwards, Peoplesoft, and Oracle. Market Size: By 2004, the B2B eCommerce market in the United States will be worth anywhere from $5.7 - $7.3 Trillion according AMR Research, IDC and Garmer Group. Fueling this increase is B2B eCommerce application market, forecast to reach $11.6 billion in 2003forecast and the to more (IDC), to grow EAI/middleware market, ,_5,000 $5,000 $4,030 ,_3,000 $2,003 $1,000 $13 1999 _l ___ Forecast Growth of B2B eCommerce I to the • * • • than $7 billion by 2002 (BB Robertson Stephans). Competitors: eCRM providers, eProcurement, Middleware/EAI providers, and Portal providers. eCentral TM occupies a unique position in each market space because of the variety of modules included in the offering. Revenue: Capturing 1.3% of the combined Middleware and eCommerce application market by 2003, Trycos should have revenues of more .than $200 million per year. BilL, 2004 Current Situation The time is right to capitalize on the surge of B2B Commerce. All major research firms are predicting an exponential increase in B2B eCommerce activity over the next four years. The rush is fueled in part by cost savings brought about by digitizing direct and indirect procurement. The other impetus is the potential for revenue increases among the winners in the new digital marketplaces. This growth will not happen without businesses like Trycos, that are developing methodologies, technologies, tools and solutions that facilitate B2B commerce revolution - earning these eBusiness intermediaries significant revenues in the process. A recent Business Week article projected that eBusiness intermediaries have bright prospects. "Looking to the future, Web software is the Internet's brainpower, fashioning eBusiness ... It's the next wave of corporate computinglinking companies with customers and suppliersfl Trycos eCentral TM is positioned for a quick path to profitability in this hot market, eCentral TM is an eBusiness platform suite of software solutions that enable corporations to leverage existing investments in enterprise systems and use the business rules currently in practice to drive the company's entry into B2B sales or eProcurement. i Page 88, Ante, Spencer, "The Second Coming of Software," Business Week, hlformation Technology ,4nnualReport, June 19, 2000. CONFIDENTIAL--For Discussion Purposes Only 4 TRYCOS Trycos Solutions The eCentral platform includes five primary applications poised to leverage the opportunity to help middle-market companies attack the eBusiness scene. • eCentral - The foundation ofTrycos' eBusiness solution. The engine gathers vital information from the back end and passes it to the eBusiness applications maintaining business rules and offering real-time integration with minimal load on the ERP system. BuyCentral - a B2B online procurement solution that enables companies to improve the efficiency of purchasing and better capitalize on the purchasing power of the company. SupplyCentral -- a B2B sales channel that provides business partners access to highly secure commercial site helping them place orders, check availability and track order status. SellCentral - a B2C store front focused on direct-marketing to the consumer by utilizing the Store Builder to quickly generate a site. eMarket Portal - B2B portal that integrates BuyCentral and SupplyCentral with trading communities and market places. Transact XML -- This product is bundled with SupplyCentral in order to move closer to the digital supply chain. It enables companies to directly connect with their suppliers via XML in order to use just-in-time inventory to build their products. • • • • • The Company Trycos Incorporated is a software development company providing essential infrastructure solutions for the eBusiness market, eCentral TM TM,the Company's principal product offering, is the only eBusiness software on the market today providing out-of-box, end-to-end eCRM and eProcurement solutions that can be deployed quickly and easily -with full functionality and integrated business logic- in less than eight weeks. Formed in February 1999, by two seasoned industry experts, the Company now has 25 employees at its headquarters in Dallas, Texas. The Company is successfully selling its first ERP productivity tool - Object Manager 1.3TM -focused on SAP R/3 installations. The first eCentral TM rMproduct suite is designed for SAP installations. The first client ship for this SAP version was announced and implemented in June and July of 2000, respectively. The Company's eCRM and eProcurement Adaptive Technology Integrators TM for other ERP providers will be rapidly deployed including an eCentral TM "rM J.D. Edwards beta release by September 2000. Value Proposition Trycos provides out-of-box web-based eBusiness solutions with full functionality and integrated business logic for all ERP systems installed in 25% of the time at less than 50°,/0 the cost of comparable solutions. eCentrai TM Deployment Timeline 4 - 8 Weeks Go Livel CONFIDENTIAL--For Discussion Purposes Only 5 'i;;_YJr"_ _l_'_nt : raI Competition "_YCOS Trycos will face fragmented competition from various industries includingeCRM providers, eProcurement, Middleware/EAI providers, and Portal providers. Trycos will overcome these threats for four primary reasons. • Unique combination of products - eCentral is the only complete solution on the market focused on the unique needs of middle-market companies. • Speed to market- eCentral and its tertiary applications can be rapidly deployed in a matter of weeks enabling customers to rapidly capitalize on the eBusiness efficiencies and revenue opportunities. • Tight integration to enterprise systems using adaptive technology unparalleled in the industry. • Lower implementation costs due to the rapid installation process. Marketing In order to succeed, Trycos must move quickly to acquire existing energy, manufacturing and consumer products SAP customers in the middle market. Customer acquisition will require knowledge and understanding of the eCentral value proposition and key differentiators. Because the window of opportunity in this market is limited, Trycos will also need to move quickly and build strategic alliances with integration providers and complementary product developers in order to increase revenue and potential customers sources for Trycos. In order to increase awareness and for eCentral, a successful marketing and public relations program will be established. The main goal of these programs will be to generate sales leads and establish credibility for eCentral within the industry. Trycos has evaluated the average customer acquisition cost within the industry and has applied these figures to sales projections for the product. Management and Development Team The principal founder of Trycos, John Nwafor, has significant industry experience in enterprise system design, implementation and deployment. Mr. Nwafor, who serves as the Company's Chief Technology Officer and interim CE._O, s responsible for all software product design and development work and is the principal architect of i eCentrai TM and Object Manager 1.3TM products. Supporting Mr. Nwafor is a five-member management team, all with substantial experience in the sales and marketing of high-end software solutions and ERP implementation. The Company presently has 14 software developers supporting Mr. Nwafor and his development initiatives. The development teams come from a variety of backgrounds, however, all have substantial prior experience in a variety of programming environments including C++, ABAP ,VB, XML, DOHC and Java. Additional management and development positions will be filled in accordance with the Operating Plan set forth in Appendix I. Selected Finaneiais ($ in Thousands) 1999" Sales Net Income $299 $<131> Q3 2000** $630 $<1,926> 2000 2001 2002 $124,267 $14,912 2003 $237,659 $38,501 2004 $305,653 $49,490 633,6 "--$-27630 *Actual **Includes actual sales in QI & Q2 plus Q3 estimates Investment Offering CONFIDENTIAL--For Discussion Purposes Only 6 _Tj_central •_ ._!_'q_,/ TRYCOS Strategy Trycos seeks $6,000,000 to $8,000,000 in first-round equity capital to implement the Company's near-term business strategy and formal roll-out ofeCentral TM TMe-business software products. Operations to date have been funded by capital contributed by principals of the Company and sales of Object Manager 1.3 TM. Follow-On Financing/Exit In order to fully implement the Company's near-term strategy, additional equity capital will be needed prior to January 31, 2001 in order to fund forecast growth. Trycos anticipates at least one additional round of private financing of $15 - $20 million for that purpose. The Company intends to position itself for an initial public offering as soon as practicable or an acquisition by a strategic industry participant. Based upon recent valuations of comparable publicly traded companies, Trycos believes that it will realize a very significant valuation as a publicly traded company. Alternatively, the eCentral TM TM technology makes it ideally suited for integration with product offerings from the leading industry participants thereby enhancing its attraction as an acquisition candidate in the rapidly consolidating eCommerce market. CONFIDENTIAL--For Discussion Purposes Only 7 'O_'p_J J_Eentral .... -IRYCOS Business Strategy And Market Catalysts Business Strategy To provide truly innovative eBusiness software solutions, based upon superior technology, enabling companies to capitalize on new business opportunities created by technological advances. The Company's business strategy consists of the following principal components: • Position Trycos as a leading developer and licensor of eBusiness software infrastructure solutions o Pursuing transactional revenue on an opportunistic basis o Providing eBusiness maintenance, design and consulting services on an opportunistic basis Rapidly installed (3 <3 deploy eCentraF M solutions for all major ERP systems to maximize domestic and international target customer base Creating marketing/deployment efficiencies Accelerating market penetration • • Expand revenue opportunities by leveraging broad applicability ofeCentraF M technology to immediate market needs: o End-to-end totaleBusiness solution o Point solution (e.g. ERP connectivity for standalone web applications e.g: Blue Martini, Versata, Vignette, etc.) o Component solution: BuyCentraprM; SellCentraF M;SupplyCentraF M o eMarketplace exchange engine (e.g: auctionsite, trading network, electronic marketplace) o Company specific eMarketplace o ASP eBusiness solution deployment Extend core technology eBusiness applications platform by developing, acquiring or venturing complimentary web based • • Develop synergistic strategic and marketing alliances Business Model Trycos is positioning itself as a leader of business software solutions for middle market companies with existing ERP systems. Initially, the company will focus on middle market manufacturing, energy and consumer products companies. The primary revenue source for Trycos will consist of software licenses based on CPU's with secondary revenues for software implementation and maintenance & support of existing customers. In order to quickly gain market share and better support existing and potential customers, Trycos has incorporating the following strategies into its business model: • • • • Marketing alliances providing strong integration and leveraged access to potential customers; Strategic alliances providing additional developmental capability and expansion of the Company's technologies into other product categories; and Integration alliances providing additional distribution and implementation channels for Trycos products. Expansion of the market opportunity by adapting existing solutions to a variety of technology landscapes and platforms. Product Overview CONFIDENTIAL--For Discussion Purposes Only 8 ..... TRYCOS eCentral TM is based on a proprietary technology -Adaptive Technology Integrators TM - that rapidly permits "smart" configuration into the ERP environment. Seamless integration can be automatically achieved at a dramatically lower installed and running cost. Currently, the eCentral solution is built for integration with SAP systems. Versions compatible with other ERP providers will be rapidly deployed including aneCentraV M TM/J.D. Edwards beta release by September 2000. SupplyCentral TM B2B online sales channel for companies with ERP solutions looking to enhance direct channels or create a selfservice channel. SupplyCentral offers a full-line of features necessary to meet the individual needs of complex business customers. BuyCentral TM B2B online procurement channel for companies with ERP solutions for goods and services bought on an "ad hoe" (i.e., non-MRO) basis or that require transactional approval (i.e., both MRO and Non-MRO). BuyCentral TM provides the unique ability for a company's suppliers to provide real-time access to their inventory while ensuring strict confidentiality and adherence to business rules. SellCentraF M Business-to-consumer storefront for companies with ERP systems desiring to market and sell directly to consumers. Provides out-of-box, end-to-end automatic consumer storeffont. Transact X_ML TM This product comes bundled with SupplyCentral in order to move closer to the digital supply chain. It enables companies to connect with their suppliers via XML in order to further increase efficiencies. eMarket Portal TM Business-to-business portal solution that integrates SupplyCentral TM, BuyCentral TM, or SellCentral TM. This product leverages capabilities of Adaptive Technology Integrators TM for the benefit of trading partners who have ERP systems, eMarket Portal TM is a centralized point that promotes the deployment, development, and management of a complete range of services, applications, content, and commerce to the Internet community. Online interactions by customers, suppliers, and employees are tightly integrated with the ERP system, eMarketPortal is applicable to several different eBusiness scenarios: I. Buyer consortium scenario using BuyCentral TM - a business-to-business portal that aggregates purchases for multiple buyers to a supplier 2. Supplier based scenario using SupplyCentral TM - a business-to-business portal that aggregates products from multiple suppliers 3. Supplier based scenario using SellCentral TM - a business-to-consumer portal that aggregates products from multiple suppliers for consumers 4. Dot.com company looking to quickly establish operations using "off-the-shelf' eBusiness solutions, leveraging capabilities of an ERP system in a portal environment. Pricing Strategy The Company's pricing strategy is designed to maximize market penetration and, consistent with its value proposition, provide customers significant installation flexibility for any selectedeCentral TM solution. eCentral $ 100,000 BuyCentral $300,000 plus $35,000 for each additional server SupplyCentral $200,000 plus $25,000 for each additional server SellCentral $200,000 plus $25,000 for each additional server eCentral is the platform containing the ERP integration component of the solution. The price of eCentral is included in BuyCentral, SupplyCentral and SellCentral pricing. It can, however, be purchased separately for ERP integration with other solutions. Maintenance and support for all products is 15% of the retail price. Market Catalysts For eCentral TM Solutions 9 CONFIDENTIAL--For Discussion Purposes Only _ll_entral • Companies are making the move to eBusiness. o Time critical / resource sensitive o Focus on customer and supplier interaction and service o Convergence of buying/selling to complete commerce chain TRYCOS desiring to create proprietary eMarketplaces in lieu of independent • • eBusiness initiatives are urgent - solutions are needed in weeks - not months - to be successful. Dramatic increase in companies exchanges. • • No time to "program" in functionality or "business rules." No existing eBusiness software providing automatic end-to-end web based business-to-business or business-to-consumer solutions with complete functionality and business logic specifically for the needs of the middle market. EBusiness software solution must provide: o Real time scalability o High availability o Full functionality and integrated business logic o Fast response time o Vertical functionality o Horizontal eBusiness support o eBusiness backbone/infrastructure o Application to application communication (i.e., through firewall) Internet creating strong demand for "global" technology o Compatibility with global ERP systems Disappearing distinction between application server and integration server • • • CONFIDENTIAL--For Discussion Purposes Only 10 : Market And Competition Market Conditions A number • • of existing market conditions provide a very favorable TRYCOS industry environment fomCentral TM . Rapidly expanding market and growth opportunities. integrated solutions to lower site development costs and speed Need for low cost out-of-box implementation time. • Strong interest in Trycos and eCentral TM from potential customers and alliance partners eCentraF eCentral TM M Target Market and its applications Integrators TM. were first built to integrate with SAP using Trycos proprietary Application Technology • • • Therefore, the eCentral target market is currently defined as: Existing SAP customers Revenues between $250 million and $3 billion Industry-specific o focus: Energy - This industry represents a high growth sector due to the rapid acceptance of B2B eCommerce and Electronic Trading Exchanges predicted by AMR Research. Also, Trycos has an advantage of geographic proximity to large players based in Texas. Manufacturing - This vertical is a high growth segment for SAP. Also, this sector encompasses the largest percentage of clients for SAP. This industry also represents strong intent to adopt ERP integration in order to digitize procurement and sales. 2 Consumer Products - This segment has a high demand for eCommerce solutions now and in the future. These companies also serve well as high profile customers that can help shed credibility on eCentral TM and Trycos due to their strong brand awareness? o o As new versions of eCentral TM are developed with enhanced features and adapted to support JD Edwards, PeopleSoff, Oracle and others, this primary market will grow to encompass new industries and the client base of each of those products. Trycos is also interested in pursuing larger companies, foreign companies and other industries, and it will do so as opportunities arise and resources are available. 2 AMR Research predicts electronic tmding exchanges, eProcurement and other forms ofeCommerce will become an important mechanism for B2B sale revenue with an estimated 52 percent of total B2B revenue gained through trading exchanges by 2004. Currently, the level is hovering around I percent. This evolution will vary from industry to industry. The leading industries for implementing trading exchanges are predicted to be: • Discrete Manufacturingat 650/0 * • Chemical/Oil Products at 68% • Electronics at 72% • Aerospace/Defense at 69% • Transportation at 62°,4 CONFIDENTIAL--For Discussion Purposes Only 11 TRYCOS Market Size Because of the complex nature of the eCommerce industry, one of the critical success factors for Trycos is clearly identifying the market potential. In order to predict sales revenues over the next four years, it is helpful to narrow the scope to the eCommerce Application market, of which Trycos is a part. Overall, the eCommerce Application market topped $1.8 billion in 1999, growing exponentially from $444 million in 1998. This growth trend is forecast to continue reaching $11.6 billion in 2003. (Albert Pang, E-commerce Software Application Market, IDC, June 2000.) By using straight-line growth to estimate the market size over the next four years, we see eCommeree Application Market 6 )0 4 )0. 2 )0, C )0, 6 )0 )0 For the remainder of 2000 and the first quarter of 200 I, Trycos views the market potential as the percentage of companies implementing eCommerce Applications that have SAP as the ERP system. (36% percent of the total or $2.1 billion.) By looking at the breakdown of SAP revenue by industry, it is clear that the market potential in the Trycos target markets is ample to meet near-term sales estimates. EITotal Market ] (US$ billions)] c )0 1999 2001 2003 Public Sector 315 [ t5 % t *;_'_% Utilitiesnd ooma municalionsI Process industries 1,082 ] _'_ ,!1,_.. %t consumer goods 1770 Fast-moving _ Financial services andservice providers 1831 :_-_;.,', o I _ manufacturingI 1,506 Discrete TotalI 5,110 For the 2 nd quarter of 2000 through 2004, Trycos will broaden its focus to include the entire market for eCommerce Applications. Market Penetration Trycos projects that it will capture .87 percent market share within this segment by the end of 2001, generating $37 million in revenues for software, installation, and maintenance & support. In 2001, Trycos will begin to expand its market focus to include international SAP customers in addition to all of the industries using SAP in the United States. Also included in the target market will be companies usingJDEdwards, Peoplesoft, Oracle, Legacy systems and companies without enterprise systems. By 2004, Trycos will strive to achieve 1.7 percent of the $14.05 billion (IDC Forecast) EAI/Middleware and eCommerce Application Industry, netting $237 million in revenues CONFIDENTIAL--For Discussion Purposes Only 12 •.:.:.;_I_I TRYC@S Competition Four types of competitors compete indirectly with eCentral TM . Importantly, these same companies may also be viewed as potential alliance partners because none offer an end-to-end solution for business-to-business initiatives yet each can create substantial value by utilizing Trycos' ATI TM technology to compliment their respective market solutions. 1. 2. Firepond, Siiknet/Kana, Websphere eCRM providers like Open Markets, IBM ..... {i::."- I [eCe"+_lMart;etC_p°_unP" -"'_ "" "-'r" Market .:.. Broadvision, Vignette, Ariba, __, P ole_nll el "Y :1 I eProeurement providers like CommerceOne, Intellysys, ICGCommerce Middleware/EAI providers Crossworlds, Extricity Portal providers Ventro (Chemdex) like 3. like webMethods, _.. • , v._ 4. Plumtree, Oracle, and eCentrai TM occupies a unique position in each market :..' . _i; space because of the variety of modules included in the .:_.: . ..... :. offering and its focus on the middle market. The '._ _.." flexibility to offer end-to-end or point solutions, based upon superior technology, at each point in the eCommerce value chain provides Trycos with a sustainable competitive advantage over existmg competitors regardless of the competitive solution offered, eCentral TM solutions comprehensively addresses existing market catalysts and are capable of providing significantly greater value. The eCentral Advantage eCRM Many of the market participants are not focused on commerce. That is strongly influenced by the fact that it requires significant programming in order to effectively integrate into ERP systems. The initial cost of integration can be significant (well over $500K). Moreover, the maintenance cost can be equally significant if website changes are necessary or if the ERP or eCRM software is modified or upgraded. Packages that do focus on commerce such as Open Market provide APIs that are simply programming tools/environments and therefore still require extensive sophisticated programming to create the integrating software. Among the principal competitive advantages of eCentral TM is its automatic integration with baekend systems and the integration of business logic without the need for programming interfaces. Competitors who do not focus in this space, such as Versata or Vignette, are expected to express strong interest in technology alliances that integrate ATI TM into theireCRM products in order to broaden their competitive appeal. eProeurement Both Ariba and CommerceOne use adapters that are provided by ERP vendors to integrate their products into the ERP system. As a result, eProcurement installations often must be supported by system integrators like Andersen Consulting and PWC. Again, the significant advantage ofeCentral TM is the ability to quieldy and completely integrate with ERP systems. Hosted eProcurement solutions like ICGCommerce, MRO.com, and others require the same integration with ERP systems. Middleware/EAl CONFIDENTIAL--For Discussion Purposes Only 13 '' TRYCOS These packages are designed to provide backend integration onto different systems. The significant differentiator of Trycos ATI TM technology from existing middleware/EAI solutions is theease, speed and cost of deployment as well as real time scalability. All of these packages require a programming environment in which to program the interfaces, whereas ATI TM adapts to the configuration of the backend system while enabling the automatic integration of business logic and interface including configuration of the website. Portal This group is strong in terms of user interface. They take advantage of customer relationships to continue to refine the user experience; however, none of these packages have the ability to effectively integrate into backend systems. The market for these portals is placing more emphasis on customer and supplier integration, creating anincreasing need for technology offered by eCentral TM to better integrate trading partners in a portal environment. Given the competitive nature of providing software to these portals, the company is evaluating an alliance based strategy by providing ATI TM to portal software players (likePlumtree and Ventro), or by providing ATI TM to portal integrators (like PWC and EDS), leveraging their access to the marketplace. eCentraff M occupies a unique competitive position by virtue of its proprietary ATI TM technology embedded in all eCentrai TM solutions. This unique position is exploited by integrating ATI TM with web solutions targeted towards buyers, sellers, and marketplaces. True Points of Competitive Distinction Out-of-Box i.:.:"(,i/i Automatic ERP " Cost Structure . . Time :il/:i!:i_.:ii!i_ii::. SCalability. Complete '" _:iintegration. • Deployme.n_.i:..il. " • Functionality ...:_._,.!.: . / ": , ..i :.. _._:_:_.:. • • : '._. Business Logic " i:.i: .::.(• .:.,. ::::.i ............................................................................. :,.,_? ............ : .::i.:......... :_._..'.,.- _............................................. • ........... .................... ............................. i_../:..: Ariba Broadvision Clarus CommerceOne Haht OnDisplay No No No No No No Yes No No No No No No Yes High Medium High High Medium Medium Low Medium Long Long Medium Long Long Short Medium High Low Medium Low Low High Company CONFIDENTIAL--For Discussion Purposes Only 14 TRYCOS Marketing Strategy Trycos expects to capture 10 eCentral clients by the end of 2000. In 2001, the eCentral client base will more than triple, with significant growth through the next four years detailed in Appendix 3. To date Trycos has 12 existing Object Manager clients and sold eCentral TM TM/SAP to Pilgrims Pride and is negotiating two other national corporate installations, which it expects will be running by the end of Summer 2000. Positioning Trycos marketing and public relations efforts will strive to position eCentral as the only out-of-the box eBusiness software solution tailored for the middle market. This will be accomplished by communicating key messages around key eCentral differentiators and application features. • • • • Unique solution - eCentral is the only complete solution on the market focused on the unique needs of middle-market companies. Speed to market- eCentral and its tertiary applications can be rapidly deployed in a matter of weeks enabling customers to rapidly capitalize on the eBusiness efficiencies and revenue opportunities. Tight integration to enterprise systems using ERP version-independent technology unparalleled in the industry. Lower implementation costs due to the rapid installation process. Route to Market 1. 2. 3. 4. 5. Launch PR activities and targeted marketing campaign to generate interest in eCentral Access to the marketplace through a direct sales force to target market. Utilize Reference selling once a foothold has been established. Build marketing alliances who will serve as value added resellers. Establish strategic alliances that leverage the Company's technology solutions into large installed customer bases or high profile market ventures e.g. EDS, Andersen Consulting etc. Marketing 1. 2. 3. 4. 5. 6. Cycle Prospect becomes aware of the solution from a direct marketing contact, website, marketing alliance partner, press coverage, selected promotions including trade shows or references from other customers. Direct sales force or alliance partner, who sets up an initial call, qualifies lead and evaluates sale opportunity. Direct sales presentation will be made, including a promotional demonstration based upon targeted customer solution requirements. A closing strategy will be developed. Prospect is provided with a "live" demonstration using client data and specific solution recommendations. Contract is negotiated and finalized. After a lead is qualified, the marketing selling cycle is expected to take an average of two to three months, with larger multi-business unit opportunities taking up to four months. Sales Efforts The Company's initial direct sales efforts will focus on manufacturing, consumer products and energy verticals, in addition to existing users of Object Managerl.3 TM. The Company plans to immediately divest Object Manager 1.3TM, either through a sale or licensing agreements, in order to focus exclusively on bringing the eCentral TM suite of solutions to the marketplace. The Company will create an eCentral TM marketing alliance with the acquirer of Object Manager 1.3TM to maintain ready access to the installed base. Specific opportunities within targeted verticals will be based on companies who (will) have SAP PU3 and have relationships with the Company and its marketing partners. CONFIDENTIAL--For Discussion Purposes Only 15 TRYCQS Marketing Alliances Partners will be targeted whose services and solutions are complementary and who are successfully marketing to the same market segments. Currently, Trycos is in targeting the following alliances: • • • • • • • • • • • • Andersen Consulting Avanade (Andersen Consulting, Microsoft joint venture) Diamond Technology Partners EDS ecOutlook.com IXL Enterprises Microsoft Proxicom SAS USWeb/CKS/Whitman Versata Vignette Hart All of these companies are familiar to Trycos senior management, who have personal contacts at the vice president level or above. Promotion Over the next few months, Trycos will engage in the following promotional efforts. Significant progress in these areas has already been made in the areas of relationship building and development of sales materials. * Public relations activities to increase awareness of eCentral TM and its expanding client base o Press Tour- Five to ten media outlets will be targeted for one-on-one interviews in conjunction with first launch of the product. Distribute marketing materials to potential clients via direct mail. Conduct product demonstrations and sales presentations for key industry association meetings, at trade shows and interested potential customers. Establish relationships with industry analysts o Analyst Tour - meet with key influential industry analysts who specialize in B2B eCommerce at firms such as IDC, Aberdeen, Gartner Group and AMR Research. Develop more detailed marketing and sales materials. Develop initial strategic alliances. • • • • • CONFIDENTIAL--For Discussion Purposes Only 16 '_41_ntra I TRYCOS Appendix Operating I Plan CONFIDENTIAL - For Discussion Purposes Only i _;_F_central •..711_:_,J Operations Corporate Organization TRYCOS Trycos will be initially organized into four groups with specific roles and responsibilities. (see figure below). Organization Corporate Strategy Investment Strategy '_;::;:._;;gi !_ [i_ :}- Alliances Investor relations Company strategy Key account acquisition [ _ _i!!!! Li_.i:_!! I _ _<_:;!q:,_!., [:7:,:!!A _ i_'i_ _ t strategy Positioning Marketing I Marketing Promotions Pricing Sales Pre-sales support (demos) Post-sales installation Post-sales support Product development (extension of platforms) Competitive product analysis Alliance strategy Alliance support Marketing strategy & support Investor relations Controller CONFIDENTIAL--For Discussion Purposes Only ii "i TRYCOS Year 2000 Plan Following are selected major activities that the Company will focus on in 2000. Major emphasis will be placed on executing the Company's near-term growth strategy, securing initial customers, expanding alliances, and expanding core technologies into other technology platforms. Through August 31, 2000 the following activities will be conducted: Gen eral A ctivities: • Build the organization o Hire Director ofBusiness Development o Expand Direct Sales Force Disposition of Object Manager 1.3 TM Complete alliances negotiations in progress o Leverage into 2 - 3 installations in 2000 Commence strategic alliance development program • • • Software • Business Activities: Build the organization o Hire VP/GM Software o Designate eCentraF M product manager o Hire eCentraF M customer support/installation manager o Hire customer support engineers Develop collateral marketing materials for eCentraF M solutions o Brochures o Videos o Interactive Demonstration Pursue targeted accounts identified in energy, manufacturing and consumer customer referrals, and leads and complete 10 installations in 2000 Update collateral marketing and demonstrations for eCentraF M/JDEdwards Develop strategy to penetrate JDEdwards installed base Identify JDEdwards beta sites. products leveraging company contacts, • • • • • Technology: • Build the organization o Hire VP Technology o Hire/Outsource JDEdwards resources to complete development of eCentral • • • Adapt eCentraF M to the JDEdwards platform Hire/Train customer support engineers Support existing installations TM /JDEdwards Operations: • Build the organization o Hire Director of Operations Planning, Financial and Administrative Cultural Enhancement Develop nontraditional Programs contracts and alliance agreements controls and procedures • • • CONFIDENTIAL--For Discussion Purposes Only iii \ _u_ _entral TRYCOS 1 and December 31, 2000 the following activities will be Marketing: • • • Integrate branding strategy across all sales channels Publish industry white papers Identify conference opportunities Between September undertaken: General Activities: • • • Build the organization o Establish advisory board Complete licensing transaction with Object Manager Establish regional and initial international presence Software • Business Activities: TM, Build organization o Assign product specialists for BuyCentral TM , SellCentral o Hire additional customer support engineers o Hire additional experienced sales executives SupplyCentraff M,and the eMarket TM Portal solution • Pursue targeted accounts identified above in manufacturing, consumer products and energyverticles leveraging company contacts, customer referrals, and leads <3 Close on 10 installations in 2000. o Lay the groundwork for 15 - 20 installations in the lst quarter of 2001 Secure JDEdwards beta sites. o Pursue JDEdwards accounts o Close on 1 - 3 installations in 2000 o Lay the groundwork for 5 - 10 installations in the 1 quarter of 2001 st • Technology: • Build organization <3 Hire ERP resources to assist in creating Adaptive Technology selected ERP system Adapt eCentral TM to the other ERP environments o Adapt to Peoplesoft o Adapt to Oracle Train required customer support engineers o Support beta site installations o Support JDEdwards sites o Support other ERP sites Integrators TM for Peoplesoft , Retek, and other • • Operations: • Build organization o Hire CFO o Hire controller CONFIDENTIAL--For Discussion Purposes Only iv " i _Jt"*Eentral •_"_ : TRYCOS Appendix II Senior Management & Development Team CONFIDENTIAL - For Discussion Purposes Only i TRYCOS Management John Nwafor Principal Founder, CEO John is a proven leader in Enterprise Systems Implementation and the fast moving electronic commerce industry. As a former practice leader at Arthur Andersen, John excels in designing solutions for most challenging technology problems facing corporations. He also excels in building elite teams to successfully manage very dynamic technology environments. A former NASA fellow, John worked on some of the most challenging problems in Aerospace Engineering and Applied Mathematics at the Center for Fluid Mechanics, Turbulence and Computation. John has several advanced degrees including a PhD in Engineering from Brown University. Prior to joining Arthur Andersen John worked at Oracle Corporation as a software developer on the Oracle Express data warehousing suite of products and also at SAP America helping companies deal with enterprise system integration issues. John also serves as the Chief Technology Officer responsible for all aspects of the research and development of Trycos including strategic concept design, product development, and quality assurance. He can be reached directly at jnwafor@trycos.com David Thomas, Vice President of Strategic Alliances and Product Marketing David is an experienced member of the technology arena having held positions with three leading professional and eBusiness services firms, including Coopers & Lybrand, Arthur Andersen, andUSWeb/CKS. He is a proven integrator, change agent and thought leader in the area ofeBusiness. David has in-depth experience as an Integrator within large organizations. His success in this role has been a result of his strong project and relationship management skills. In addition, as a change agent, he is also versed in identifying a variety of limitations and implementing sustainable change. David has served as a technology and business advisor to the World Economic Forum, is formally trained in systemic thinking, change management, project management and a variety of technology solutions. Educated at the University of Maryland and Drexel University, his studies focused in Marketing and Information Systems.He can be reached directly at dthomas@trycos.cotrL Russell Cooke Product Manager Object Manager Over 20 years experience in system support and application development, in Europe and US. Russell's expertise is in SAP coding and business logic and has worked as a Platinum level Basis/Development Consultant on several global implementations of SAP. He has in-depth knowledge of product life cycle and development schedules and past positions include Project lead and product architect for R/3 performance/event monitoring software at a leading software development company in Los Angeles, this product is in use in Europe, Asia and the US. Chris Cailahan, Director Sales, Eastern United States Chris brings valuable knowledge of the SAP system processes and landscape to the sales organization. Sales experience includes business development with top tier consulting firms to strategically grow their ERP practice and services. His responsibilities have included global SAP rollouts for Mobil and Arthur Andersen. He is a certified Basis consultant for SAP. Chris holds a BS from Texas A&M and an MBA from Southern Methodist University. Tresia Thompson, Director Human Resources Tresia Thompson has numerous years of expertise in the recruiting and building of organizations. As a manager at Arthur Andersen she was instrumental in the formalization and structuring of the National SAP Consulting group. She also spearheaded the implementation of Human Resource programs for the Global Business Consulting practice and has brought unique competitive advantages to corporate culture dynamics. She holds a degree in Communication Studies from Vanderbilt University. CONFIDENTIAL--For Discussion Purposes Only ii i \ TRYCOS Development: Steve Xu, Lead Developer, eCentraF M Steve has expert knowledge in Object oriented analysis, design and programming. His experience includes lead design engineer in the C3I Instruction System, a classified military project that crossed several technology platforms including Visual Basic, VC++ and PowerBuidler. In addition, Steve has been instrumental in the design and standardization of the Multimedia Information Exchange (MIX) for internet service providers. Steve is a Microsoft Certified system Engineer (MCSE) and is a Sun Certified Java Programmer (SCJP). He holds a PhD fromXidian University, Xi'an China. Scott Murdock, Senior Developer, eCentraF M Expert level Internet filed developer that brings seven years experience in new process re-engineering and product development. Experience in analyses, coding and design structure in inter departmental intranets. Won several awards and scholastic fellowships in strategic positioning. Advanced knowledge in ASP, SQL, VBScript, HTML, and JavaScript. Scott has a BS and MBA from Texas A&M University. Matt Strong, Lead Developer, eCentraF M Matt brings skilled expertise in modern programming languages. He has extensive experience in programming COM and Visual Basic using ActiveX Controls. His knowledge transcends over several version of state of the art programming languages and has developed several web applications in the past. Matt was a strategic developer forCyberTek Corporation and was largely responsible for the successful deployment of many of their products. He holds a degree in Mathematics from the University of Texas. Surbhi Jiani, Senior Developer, eCentral TM Surbhi brings extensive experience in developing, testing and implementing client server systems, including the SAP R/3 application development. She is a Platinum level consultant in advanced ABAP/4 programming techniques and has in-depth knowledge and experience with interactive reporting and script processing for all functional areas of SAP R/3. She has worked for major corporations including Nestle, IBM and Thomson Electronics. She holds a BE from MNREC inAllahabd, India. CONFIDENTIAL--For Discussion Purposes Only iii '_e__centra I ::::_" TRYCOS Appendix III Projected Financial Statements CONFIDENTIAL - For Discussion Purposes Only i supply_ -_-.=: !: _Cel nt rutI _ _, _ __ TRYCOS Trycos Incorporated Sources and Uses " Sources Private Venture Funding $ 5,000 Uses Marketing Development eCentral Release 2.0 ATI Adapters for JDE, Peoplesoft, Oracle 1,650 1,000 500 1,500 Operations / Infrastructure Working Capital Lease Space Build-out Capital Expenditures 1,040 80 110 1,230 Financing Bridge Loan Repayment Transaction Fees 420 200 620 $ 5,000 CONFIDENTIAL--For Discussion Purposes Only ii 7 s,.,ppl_:_ ' ntr [ TRYCOS (21 Units Single 1998 1999 2000 299 109 Q2 2000 115 0 115 100% Q3 Q4 Q1 (22 Q3 2001 Q4 2001 2001 i: i!i " 2002 2003 2004 124,267 237,659 305,653 Income Statement Calendar Years Trycos version 1.15a 2000 2000 4 2000 2001 2001 Revenue COGS Gross Profit Gross Margin Operating Expenses Operations Other expense 4,640 6,365 10,164 12,4933.6 0 0 299 109 100% 100% _J ::f. ; _ _<_ .:_ 0 0 i: i _:i:i:__0 0 0 0 0:' : i 0 0 0 0 i?, _:: 406 2,7501_3,374 4,640 6,365 10,164 12,493: 33',662 124,267 237,659 305,653 . . . 100% 100%: !00% 100% 100% 100% 100%:100% 100% 100% 100% .....__ i_1 ! : : 1,548 3,295:5!686 6,410 6,775 8,080 938530!650 . ; _i°_. 0 0i :!ii, 0 !_i:i_! 0 0 0 0 :;:::: 0 _ 1,548 3 295 51686 6,410 6,775 8,080 9385:..30650 770 -410 2,084 3 108ii3,012 _ 431 0 431 -132 252 0 252 -144 591 0 591 99,413 173,491 223,127 0 0 0 99,413 173,491 223,127 24,853 20% 0 0 0 64,168 27% 0 0 0 64,168 0 64,168 82,526 27% 44 0 0 82,483 0 82,483 EBITDA EBITDA Margin % Depreciation Amortization Mgmt Fee EBIT Net Interest Exp. EBT Taxes Net Income -475 -1,142 -545:z2306-1 •., ._._,, -44% -132% -412% -287% -20% .69°_o-38% 0 0 0 0 0 • :_i_:_ 0 • :i_ :0 i_ 0 0 0 0 0 _i:_'0 0 0 -132 -1 -131 0 -131 0 -144 0 -144 0 -144 0 0 0 ii::ii!: 0 0 -6% 0 0 0 21%o 25% : 9% 0 0 : i 0 0 011 ::;-0 0 O:: :0 -475 -1142 -5451::_21306-1,770:-410 2,084 31080_ 30:!:2:i 24,853 i i; i!;! 0 21 0 i_0 0 0 00 0 -475 -1162 -545 i_i2,326-1,770 -410 2,084 3,108 30i2 24,853 0 0 -475 -1162 0! i !'_ 0 0 0 382!::i! _, 382 -545 _-2i326 -1,770 -410 2,084 2725::ii2630 9,941 14,912 25,667 32,993 38,501 49,490 Calendar Years Trycos version 1.15a CONFIDENTIAL--For Discussion Purposes Only Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 .., 111 5 _F_ce.tral Units Balance Sheet Assets$,000 Current Cash A/R Inventory Other Fixed Assets Gross PP&E Acc. Depreciation Net eP&E Other Non-current asset Intangibles Gross intangibles Acc. Amortization Net intangibles TotalAssets Liabilities and Equity Current _"_ TRYCOS 1998 1999 2000 2000 2000 20001: 200() 2001 i _" "i _: :' i _i .. •.i i "_<" ! " 2001 2001" ; 12()0_i ' if ! 2001 2002 2003 2004 _ i 0 0 0 0 0 0 0 0 0 0 0 0 0 110 42 0 0 152 44 9 36 0 0 0 0 188 12 20 0 48 80 62 9 54 59 0 0 0 193 4 80 0 3 87 62 12 51 59 0 0 0 196 3,883 269 0 3 4,155 75 12 63 0 0 0 0 4,218 3,260 _:31260: 6,886 917!:. ':._917_ 1,547 . o 0_... •. 0 3 • :i!:.3 3 4,180! .4ii!80• 8,436 .............. : ::_::_:. .J: 871..i. :.. L8..71 100 • :(_,!i-2 12i 12 76! _iiS76 $: O 0i i .... _ .'_! 0 : i:): 0 ; : :... " 'i 6,010 2,122 7,251 3,388 9622::9,622 4,164")_4,i64 23,449 58,624 10,356 19,805 106,577 25,471 o o oli 0 _!:!_-_.: ::_:! o o o 3 132,051 287 56 232 0 0 0 0 132,283 3 3 31 3 3 3 8,135 10,642 13,790!'•:.13,790' 33,808 78,432 112 12 101 0 0 0 0 8,235 125 12 113 0 0 0 0 1371 .; 13Z 12: 12 126: : :::126., 01 _ O : . 187 12 176 0 0 0 0 237 12 226 0 0 0 0 88 0 0 0 0 0 0 0 01 0; 4 255!i4 : 0 O 0 0 t, .... 0: 255 • 8,524 10,755 13,915.13,915 33,983 78,657 ' :_ili :!_;! A_'_,¢_= , ..., i i !_ i i i NP Other current 0 0 0 0 36 36 79 0 74 36 111 78 0 /134__1 J 121 ] _ 77 0 0 516 0 0 098:1;098 2,137 0ili:!! ):_ 0_ 0 1,098 !' i,098 2,258 0 2,258 0 2,693 0 2,693 0 3,1281 3,128 8,284 14,458 0:i:::!!_ 0_ ):. 0 0 3,128!:" 3,128, 0 . 18,594 0 18,594 0 i !" i 2,137 , 8,284 14,458 0 Other Non-current liab Minority Interest 0 0 0. • ._:_;..,_ ,. i:::,..0'. 0 o_,.:,,.._:_!I o o .... :_:_..................... . ::... o o o/ :.o 0'. o 0 o o CONFIDENTIAL--For Discussion Purposes Only iv TRYCOS Balance Sheet Calendar Years Continued Debt Senior Subordinated Revolver Debt 4 Debt 5 Shareholders' Equity 0 0 0 0 Total Liabilities & Equity 0 188 193 196 3,818 3,855 3,855 8,124 7,835 10,261 13,619 13,619 33,669 78,329 131,939 203 0 278 0 213 0 213 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 400 0 0 0 0 0 0 1998 Q1 Q2 1999 2000 2000 Q3 2000 Q4!_:!: _i::!.:2000! 2000 i _ . i , ¢.... :... ! "_" ....... i...._.:ii_ ! .... 0I. 0i-... ..; 0 0'. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q1 2001 Q2 2001 Q3 2001 Q4i_ ..... :::_i 20011 20011 ! .! 2002 2003 2004 i i: :i .v:"d }. _ 0 01 .i 0' 0_ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0!!i_ . 0_ Oi".:_i!i 0 I: 0!:. 0 O. _.::"0 " i 01 •..i i:.0 0!, :,0 01 0 O. 0 Common stock Preferred stock Retained earnings 213i. '_ 213, 5,000',. 5i000 .,.. . .! 213 10,000 213 10,000 -4,636 5,577 213 10,000 -2,646 213!_ 213•, 213 10,000 213 10,000 213 10,000 103,138 113,351 10,000:10,000 -131 -274 -749 -1,911 72 4-536 3,302 -2 4561 ,2_;:456 -4,226 ;._ i_:., 3,8551.:"::J1855 5,987 277i :.."277 15,178 53,663 "i_: 7,567 10,491 10,491 25,391 63,877 L:.L.I i ...... ................ CONFIDENTIAL--For Discussion Purposes Only V ,£ 'u_]!__lcentral Trycos version 1.15a Units 1998 1999 Q1 2000 Q2 2000 TRYCOS Q3 Q4 2000 2000 _ 2000 i ;i $,000 -131 9 0 -6 0 79 -49 -143 0 0 48 -59 -1 -155 -475 3 0 129 0 -1 -344 -762 0 0 73 59 -77 -708 -545-!,926-1,770 O.-."_:. ill.,.3 0 01 . :0 0 -66. 184 408 O' i ....0 0 0I_*:...+..,;:.:-79_ . 0 I:_ " -611i...-1,8 1 Z-1,362 • ' Q4 2001;...i... 0011 2 2002 2003 2004 2,725.. 2,630 14,912 38,501 49,490 01._":-;i '/_.:_ ._ 0 0 44 0 " 0 0 0 0 -341 -1,218 -1,035 -3,276 -1,530 0 0 0 0 0 0 _..;;- .. 0 0 0 0 , 2,384.:_1;412 13,877 35,225 48,003 . . .. Q1 2001 Q2 2001 Q3 2001 Cash Flow Statement Operating + + + total Net income depreciation amortization change in working capital change in other non-curr assets change in other non-curr liabilities -410 0 0 -453 0 0 -863 2,084 0 0 -831 0 0 1,253 Investing capex acquired pp&e increase in gross intangibles total Financing + change in minority interest + change indebt + increase incommon stock + total Total change in cash Beginning cash Ending cash increase inpreferredtock s -44 0 0 -44 -18 0 0 -18 0 0 0 0 -13 0 0 -13 ' . :i -13, -43 -13 0!.. i_i:O.' 0 Oi:_:""":i!_!!_!iO 0 -131 __3 -13 _ 0i ...i_:.. ;iOi : ......... 0 0 '..,,0 0 0. .1i0 0 O< 5,000 5,000 -13 0 0 -13 -13 0 0 -13 '! -131 -50' 0=.;. _ 0 !:.. ": O. :. ....0 -13 '50 -50 0 0 -50 -50 0 0 -50 -50 0 0 -50 0 0 203 0 203 110 0 110 0 0 75 0 75 -98 110 12 0 400 -65 0 335 0 -400 0 5,000 4600 0 0 0 0 0 0 0 0 0 1,240 6,010 7250 O..... ...... 0 0 0 O 0 0 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 i 5010 5000 0 i ._ :!i -9 3,879 -6231 3,150 3,626 -876 12 4 3,883 !+ .11.(_. 3,260 6,886 3 3883 32601 326(_ 6886 6010 _. :.:. _. i.......... 0 5000 0 0 0 _ 2,372 6,362 13,827 35,175 47,953 7251i 3,260. 9,622 23,449 58,624 96231 9622 23449 58624 106577 j..... • .::_ :!..............._: CONFIDENTIAL--For Discussion Purposes Only vi