Mr. Mattioli: It has been a tremendously exciting year for us. During 2002, YottaYotta installed five of our NetStorager' Systems in beta sites. Some have been installed as long as six months. As we come to the close of the year, we expect to have our first customer shipment. YottaYotta has created a solution for our customers that utilizes both storage and networking technology to build the unified storage networks that we at YottaYotta believe will be the future of storage.
TWST: What is it that's getting people to move ahead with your
approach even in this tough time where storage interest has
dropped off?
Mr. Mattioli: The numbers over the course of the year seem to
indicate that storage growth has been relatively flat or slightly
down from last year. However, what's interesting is that the
capacity purchased has continued to increase significantly. It is
the revenue dollars generated that has remained flat, maybe even
slightly down. Yet the need for storage today is as high as it
has ever been. All we need to do is look around us at the
increased use of e-mail, growth of databases and increased
reliance on technology. That growth translates into an
addressable market of about $8 billion to $9 billion. That
market contains many would be customers for our product line. Our
beta sites reflect a very exciting cross-section of the market.
Each of these customers purchases a minimum of $10 million a year
of storage that gets installed even in these very difficult
times. All of these sites are customers of some of the finest
traditional storage companies in the world ' companies like EMC,
IBM and Hitachi to name the three largest. The reason they have
chosen to test and implement YottaYotta's solution is that we
address problems that the traditional storage vendors cannot
solve. Consider that the last thing any large processing or IT
shop wants is a new vendor. It's a tremendous cost to bring in a
new vendor and it's even more challenging when that new vendor is
a startup. Even so, our beta customers have chosen to bring in a
new solution, YottaYotta's NetStorager System, because we provide
them a strong value proposition and we provide a solution to
business problems that impact them in a very significant way. We
are confident our beta customers will ultimately purchase our
systems so that we start generating revenue beginning in the
first quarter of next year. YottaYotta's NetStorager Systems are
not simply storage receptacles such as traditional storage
vendors provide but a platform that incorporates features that
have not been part of the traditional storage environment. Two
examples of these features are security at the storage system
level and direct storage array to storage array communication
over any geographical distance. These features are reality today.
In fact, YottaYotta published a press release on December 10
announcing a new world record for disk-to-disk bulk data
transfers using standard TCP (Transmission Control Protocol)
between locations. To highlight the significance of this
achievement, I can use an automobile as an analogy. If the land
speed record was 660 mph using a traditional automobile, then
YottaYotta's established a new world record of 11,500 mph '
that's roughly 15 times faster than the previous record. This is
the order of magnitude of YottaYotta's achievement. In addition,
YottaYotta's utilization of bandwidth is the highest recorded '
running in excess of 93%. The point is YottaYotta incorporates
more than just traditional capacity storage. We don't believe
that the value proposition of a company, especially in this
market, can be limited to just saying we do something a little
bit faster or a little bit cheaper. We believe you have to solve
a significant business problem. Our TCP disk-to-disk bulk data
transfer specifically addresses several problems, of which backup
is just one. The NetStorager System takes disaster recovery to a
new level by providing real-time business continuation. Our
systems can be deployed in geographically dispersed locations and
yet are managed as a single system. This attribute allows
customers to realize a significant cost savings in terms of
operational expenses. Operational expenses typically run four to
seven times more than the capital outlay that an organization
spends on traditional storage. By using YottaYotta, there is a
significant improvement to ROI. When you are producing products
with more efficient technology today, every dollar of revenue
includes about US$0.10 to US$0.12 to the bottom line of that
efficiency. However, when you provide a dollar of cost avoidance,
saving a dollar on operational expense, that full dollar drops to
the bottom line. So, YottaYotta's value proposition is one that
incorporates a vision of our customer being able to take
advantage of technology beyond traditional capacity and utilize
it as a platform for growth that will enhance their business for
years to come.
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