On-Demand Software “On-Demand” TM The End of Software Development as you know it! TM

1. On-Demand Software “On-Demand” TM The End of Software Development as you know it! TM Feyzi Fatehi, CEO, Corent Technology Michael Oliver, CTO, Alarius Systems Association for Strategic Planning Annual Conference Long Beach, California - February 27, 2007 Corent Technology, Inc. www.CorentTech.com

2. What is innovation? • Scientists seek understanding • Inventors seeks a solution to a problem • Innovators seek the applicationof a solution to a new an unintended field Thomas Edison is thought of as America’s foremost inventor, with 1,093 patents.

3. What is Disruptive Innovation? • Successful companies introduce incremental (sustaining)innovations that over time surpass the needs of some customers, creating a window of opportunity for a new and (disruptive) innovation. • Eventually, a product that is less expensive, easier to use, sometimes with less feature/functionality and even lower quality, that is “just good enough” will come along to take away low-end customers and create a new market segment.

4. 1980 1970 1960 1950 2000 1990 Examples of Disruptive Innovation McDonald’s HondaMotorcycles Steel Mini-mills Ultrasound Southwest Airlines Wal-Mart Charles Schwab EndoscopicSurgery History PersonalComputers Portable DiabetesGlucose Meters Home Depot Dell WirelessTelephony Angioplasty Hyundai E-Mail Palm Pilot Amazon.com New Market Low End

5. 1950 1980 1970 1960 2007 2000 1990 Corent as a Disruptive Innovator McDonald’s HondaMotorcycles Steel Mini-mills Ultrasound Southwest Airlines Wal-Mart Charles Schwab EndoscopicSurgery History PersonalComputers Portable DiabetesGlucose Meters Home Depot Dell WirelessTelephony Angioplasty Hyundai E-Mail Palm Pilot Amazon.com New Market Low End

6. as a Disruptive Innovator: Removing barriers to adoption ofInformation Systems for Small-Medium sized businesses Targeted product or service performance Business Model (processes and cost structure) Improve performance along dimensions valued by demanding customers Exploit existing processes, and competitive advantage Get more from attractive customers in the mainstream market Sustaining Bring a simple, convenient , “good enough” offering to customers who lack the money or skill to buy/use Make money at lower prices, even smaller volumes Bring products and services to new users Disruptive Source: “The Innovator’s Solution”

7. New market disruptions compete on different terms and bring products/services to new users During Mid 90’s Mainframes and Mini-computers were disrupted by standard Intel-based servers… Mainframe Computers Performance Intel-based “Personal” Computers Time Time Product improvement trajectory Customer demand trajectory Source:Framework borrowed from Clayton Christiansen & Michael Raynor, The Innovator’s Solution, 2003

8. Angioplasty vs. Cardiac Surgery • New Market • Therapy for less-seriously ill patients that was better than nothing (the alternative) • Cardiologists grew patient base and fees • Cardiac surgeons benefited from newly-diagnosed patients • Long-Term Impact • Disruption to Cardiac surgery • Through innovation, more outpatient procedures have occurred – disrupting hospitals • Cardiologist interest increases in alternatives to traditional hospital Angioplasty Procedures Procedures (000s) Cardiac Bypass Procedures Introduction of Stents Note: Outpatient and other non-hospital procedures not included (Angioplasties understated) Source: AHA

9. Corent: A Disruptive Innovator within the Enterprise Software Industry On-Demand Software “On-Demand!”

10. The 3rd Wave of Business Software Evolution Savings Efficiency Adaptability Corent Technology e.g. Salesforce.com, HR.com,… On-Demand Software On-Demand! “The end of Software Development as you know it!” e.g. Oracle, SAP,… “On-Demand” Application Services “the end of Software as you know it!” Independent Software Vendors (ISV) The 80’s Late 90’s Mid 00’s Shift of focus from Technology to Business Web 1.0 Web 2.000000

11. The Problem“Faulty software costs US businesses $78 billion a year!” CIO Magazine Quality 90%Delivered Late 50% Failed to meet Objectives Cost Schedule 30% Cancelled Prior to Completion 50%Delivered Over Budget Scope Source: ABERDEEN & GARTNER Groups

12. The Solution Corent’s: • Simple, • Quick, • Quality, • Cost-effective, • Self-Service, • On-Demand, • Open, Scalable and Adaptable Software Applications….

13. Addressing the Four Software Industry Trends Rapid / Quality/ Custom Application Development Software as a Service (SaaS) Cost-effective Solutions Digital Community Contribution / Development

14. Initial Validating and Paying Customers! • Lexar Media • A custom Global Supplier Management Application • Expected duration: 6 months (design, develop, test, deploy) • Corent duration: 6 days • Boeing • A Government Industry Data Exchange Program Application • Expected duration: 12 months (design, develop, test, deploy) • Corent duration: 12 days

15. Building On-Demand Applications “On-Demand”! Corent’s On-Demand Application Builder enables customers to: • Buildcomplete and custom business software applications • Augment legacy application deficiencies • Integratedata from existing apps into new business apps • All of the above: • In a “Self-Service” way, • Save 70% of the timeand cost conventionally required, • Without the need for software developers!

16. 2. Augment 3. Integrate Corent’s Offering: Build new applications,Augment and Integrate existing applications Existing Industry- specific apps Existing CRM Integrated Data 1. Build New Corent Business Applications Existing ERP

17. Corent presents an innovative solution! • A commercial off-the-shelf software app thatuniquely enables businesses to build on-demand, custom, cost-effective and comprehensive applications “on-demand”! • Differentiators: • Not a tool, but offers a turnkey solution • No programming expertise required to customize • Rapid development of new applications • Rapid integration or augmentation of existing apps • Preserve investment in legacy applications • Instantaneously available for production use • Leading edge technology (SOA, SOAP, AJAX)

18. Competitive AdvantageSpeedy, customized and cost-effective Solutions Systems Integrators Degrees of Customization Speed of Development CASE, RAD & 4GL Tools Offshore Development Cost Savings

19. collapses the conventional application development lifecycle! Analyst (External) Analyst (Systems) Architect Developer Tester Operations DetailedDesign External Requirements Systems Requirements High LevelDesign Develop Test Deploy Corent

20. Corent’s Customizable Solutions Maximize Value Maximum Business Value Internal Value (e.g. Cost Reduction) External Value (e.g. Competitive Advantage)

21. Corent’s “www.TheOnDemandMarketPlace.com”becomes a “Digital Community”for application “templates” to facilitate speedy development of new customer. Marketing & Sales Customer Help Desk Product Doc Mgmt Order Management Product Launch Management Product Promotions Revenue Optimization Finance Customer Account Mgmt Materials Expense Management Regulatory Document Mgmt Claims Liquidation Processing Capital Expenditures Asset & Knowledge Management Operations Procurement Supplier Relations Mgmt Shipping Logistics Station Repair Mgmt RFQ & Contract Mgmt Lab Process Mgmt Product Lifecycle Mgmt Supply Chain Management Human Resources Employee On-Off Boarding Employee Move Process Employee Self Services Hiring & Orientation New Hire Management Customer Management Field Service Management Professional Service Mgmt Repair Planning Mgmt Product Development Collaborative Design Product Lifecycle Management Industry Specific Processes Mobile Phone Service Mgmt Broadband Service Provisioning Environmental Event Mgmt Volunteer Recruitment Order Management & Fulfillment Educational Marketplace Sarbanes Oxley Compliance Mgmt … other Business Applications…

22. Corent: The Lotus1-2-3 of the “On-Demand” Software Industry • The electronic “spreadsheet” introduced in the 80’s was a disruptive innovation and a killer app. It enabled individuals to quickly create their spreadsheets - without any “programming” or waiting for the IT department. • Similarly, Corent’s “On-Demand Application Builder” software platform enables us to quickly build any multi-user business software applications without any programming or without waiting for the IT department to create one for us. The applications will be instantly available and accessible by all intended users across the world!

23. The “Software as a Service” Advantage • Customers can use software on a trial basis • Low risk, low up-front costs, low hidden costs • Vendors host and manage the software off-site • Simplifies maintenance and upgrade cycles • Customers can purchase extra usage/seats for “on demand” scalability • “Out of the box” execution Source: The Carlyle Group – October 2006

24. Key Attributes of SaaS 2.0 • Secure, flexible and efficient business processes. Today’s SaaS has so far focused on cost-effective software delivery. SaaS 2.0 is about transforming the way we do business.  • Value-added “business services”. A blend of business process, application functionality, and managed services. • Business impact via SaaS ‘Network Effect’. Increases business capabilities within the enterprise, and between the enterprise and its suppliers, customers and business partners. • Low-cost ‘white-label’ vertical solution stacks. Produces a slew of custom, vertically-oriented solutions that will be used by SMBs. Corent presents a robust SaaS 2.0 product and business model today!

25. Business Structure Business Units create, market and sell their vertical Corent application product lines OEM/VARs market and sell their own “Corent-inside” products & services in line with their Product & Market expertise

26. Corent’s Innovative Business Model End User Customers App Builder Platform Offered by Corent Custom Solutions Built by a Partner Private label Apps By an OEM partner Custom Solutions Built by Corent Vertical Apps By a VAR partner On-Demand App n Offered by Corent On-Demand Apps by OEM Partner On-Demand App 1 Offered by Corent On-Demand App 2 Offered by Corent Software License Offered by Corent Corent’s On-Demand Application Builder Platform Engine Proven Architecture and Technology Infrastructure Color Code: OEM/VAR Partners Corent Independent Business Units

27. Business Model – Pricing Mass Markets High-End Customers Software as a Service Software License Pre-defined Solutions sold directly by Corent $1K-$10K per month /customer Custom Solutions built and sold by Corent $100K-$1M + 20% annual Pre-defined Solutions sold by Channel Partners Custom Solutions built and sold by Integrator Partners Corent’s ODAB (On-Demand Application Builder)

28. Sources of Revenue Year 1Year 5 • Direct, from customers 90% 30% • Hosted Service • Software License • Indirect, through Partners 10% 70% • Reselling, $ sharing • OEM, $ sharing • Private Label, $ sharing

29. P3 Independent Website

30. P3: An independent Business Unit

31. Four Phases Of Corporate Cycles Expansion Bankrupt

32. Corent’s Serial Innovation, Incubation and Spin-off Model Entity Spin-off Business Incubation Market Innovation Time

33. The “Chasm” model PragmatistsHave my peers bought it? ConservativesIs it a commodity yet? VisionariesWe can drive hugecompetitive advantage SkepticsIs there no wayto avoid it? TheTornado Main Street TechiesI have totry it! TheChasm Early Market Bowling Alley Total Assimilation

34. ‘s market adoption lifecycle “On-Demand On-Demand” for the Mass Market LiveLink Market P3 GIDEP Market Phase 3 Phase 4 TheChasm Phase 2 Phase 1 2000 2007 2008 2005

35. Partnerships Accelerate Crossing the Chasm Phase 3 Phase 4 TheChasm Phase 2 Phase 1 2007 2008 2000 2005

36. Incubation – Spin-off Model [Just in case we have enough time!]

37. Phase A - Incubation: 1. Start to phase out marginal opportunities 2. Build inventories in the system 3. Continue placing capital equipment orders 4. Hire "top" people 5. Implement training programs 6. Add sales staff 7. Introduce new product lines 8. Begin advertising and sales promotions 9. Implement plans for facilities' expansion 10. Update standard costs

38. Phase Early B - Growth: 1. Accelerate training 2. Continue to build inventory 3. Increase prices 4. Find the answers to “what next” 5. Consider outside manufacturing sources if internal resources becoming tight 6. Check the process flow for possible future bottlenecks 7. Open distribution centers 8. Use improved cash flow for corporate governance.

39. Phase Late B Early C - Prosperity: 1. Stay in stock 2. Penetrate new OEM accounts 3. Develop plan for lower activity in traditional, mature markets 4. Begin missionary efforts into new markets 5. Consider taking on subcontract work if the backside of the cycle looks recessionary 6. Freeze all expansion plans in current core business units 7. Spin off undesirable operations 8. Stay realistic – beware linear budgets 9. Consider selling the business in a climate of maximum “goodwill”

40. Phase Late C - Warning: 1. Begin work force reductions 2. Reduce advertising 3. Cut training 4. Weed out inferior products 5. Reduce inventories 6. Avoid long-term purchase commitments – late in the price cycle 7. Set budget reduction goals by dept. 8. Encourage distributors to decrease inventory 9. Concentrate on cash and the balance sheet 10. De-Emphasize commodity products/services in anticipation of diminishing margins

41. Phase Early D - Recession: 1. Continue force reduction 2. Reduce virtually all advertising 3. Continue to avoid long-term purchase commitments 4. Review all lease agreements 5. Increase the requirements for justification of capital equipment 6. Eliminate all overtime 7. Reduce overhead labor 8. Combine departments with like capabilities and reduce management 9. Select targets of opportunity where price will get the business

42. Phase Late D - Recession / Early A - Early Recovery 1. Prepare training programs 2. Negotiate union contracts if possible 3. Develop advertising & marketing programs 4. Enter or Renegotiate into long-term leases 5. Concentrate on cost reduction programs 6. Look for additional vendors 7. Capital expenditures & acquisitions considered in light of market-by-market potential

43. The Architecture

44. AJAX & GWT GUI Components Business Components & Chains Security Rules Engine State Engine Workflow Analytics Builders Shared Services Storage Integration

45. AJAX & GWT GUI Components Business Components & Chains The grey pipes represent the Enterprise Service Bus (ESB) Integration Adapters link external or legacy applications and data to the ESB Security Rules Engine State Engine Workflow Analytics Builders The short pipes represent ESB/JBI adatpers Shared Services are used by any application or process, usually stateless Storage includes RDBMS Sql Databases or Content Repositories AJAX and GWT GUI Components are used in Browser Displays Business Components and processing chains are the basic building blocks for applications Shared Services Storage Integration

46. AJAX & GWT GUI Components Business Components & Chains Security Rules Engine State Engine Workflow Analytics Builders Shared Services Storage Integration

47. A Link to an Animated Demo (if time allows) On Demand Application Builder

48. What can we do with this?

49. On-Demand Software“On-Demand” Thank You! Feyzi Fatehi ffatehi@corenttech.com 949-235-9344 Michael Oliver ollie@alariussystems.com 518-378-6154