EXABYTE BACKGGROUND INFORMATION Exabyte was formed in 1985, it is now the sole supplier of a technology which holds 7% of the tape back-up market. It has managed this through releasing its first 8mm product in 1987, which coincided with an explosive growth in the midrange computer systems market - Workstations, Fileservers, and Minicomputers. QIC, although cheap, did not have the required capacities, and DAT had not yet entered the market, therefore Exabyte could take a quick, strong foothold in the market. Exabyte's strategy has been to prevent any potential competitors from entering the 8mm market. A strong patent position and an exclusive agreement with Sony ha have been effective deterrents. However this may also be a threat as more vendors to chose from also means more R&D dollars being invested. Their product strategy has been to decrese the form factor whilst increasing the capacity, this is revealed in their new half height product, which they are hoping to follow with a 3.5" drive. They claimed to have a working prototype ofa 3.%" 8mm tape drive in Nov'90. Also they have plans to expand beyond 8MM tape drives within the next 4 years into other areas in storage, either through aquisition or joint venture. TARGET SYSTEMS Strategy - To prioritize the high end of the market, and be the dominant supplier whilst maintaining profit margin. Target Market - OEM and System Integrators of advanced micro, mini and super-mini computer systems - Users who need high storage capacity and high throughput PRODUCTS TO DATE PRODUCT DATE RELEASED CAPACITY TRANSFER RATE FORM FACTOR OEM PRICE 8200 Q4'87 2.5GB 246KB/s 5.25" 1,860 8500 Q3'90 5GB 500KB/s 5.25" 2,196 8500c Q1'92 15GB 1.5MB/s 5.25" 2,675 8205 Q3'92 7.5GB 788KB/s 5.25"HH 1,920 120 Q4'90 580/290GB 246/500KB/s 116 Cart. 10 Q2'90 25/50GB 256/500KB/s 10 Cart. 2,995 10i Q4'91 25/250GB 246/1.5MB/s 10 Cart. 12-25,000 (EU) Note. The DC licenced is IBMs' IDRC. SUMMARY FOR EACH PRODUCT : 8200 - This was their first product launched, and managed to sell 17,200 units in its first volume year ('88). This continued to grow, selling 263,800 units to date. This success was aided perhaps the absence of DAT in the market. 8500 - This product was launched to provide greater capacity and faster transfer rates. The delay in shipping this product was due to OEM acceptance of the EXB-8200. 8500c -IDRC data compression was implemented on the EXB-8500 drive to gain even greater capacity, although they quote a 5:1 DC ratio which is believed to be unrealistic. Sales of $55.6M are expected for'92,& $128.1M in '93. 8205 - This is their first half height tape drive, based on the EXB- 8200. It also encorporates DC, this being IDRC as used in the EXB-8500c. A reduction in form factor was managed by replacing the six single-sided PWBs of the EXB-8200 with four double-sided PWBs. Expected sales are $10.7M in'92, and $69.2M in'93. 120 - Fully configured, this product allows up to 12.5 days of nonstop, hands-off data aquisition. It utilizes up to four EXB- 8200 or EXB-8500 and up to 116 cartridge tapes. 10 - This allows up to 28hrs. of nonstop, unattended data backup. It incorporates either an EXB-8200 or EXB-8500, and a robotic handler which performs automatic, SEQUENTIAL loading and unloading of up to 10 Cartridges. 10i - This is an EXB-10 with the added capability to RANDOMLY address the cartridge to be loaded. It can be used with either the EXB- 8200 or the EXB-8500c. MANUFACTURING LOCATIONS BUY : Mechanical Decks from Sony. Exabyte are currently under agreement with sony to be their electronics supplier - This is a shift in manufacturing content from Kubota to Sony, and will not negatively affect Exabytes' margin. MANUFACTURE : Kubota Corporation, in Osaka, Japan Manufacture - 60% of EXB-8200 100% of EXB-8500 Final assembley and manufacture of formatting and control electronics is taken by Exabyte CHANNELS Over time Exabyte have changed their emphasis in the various channels - 1988 1989 1990 1991 OEM 8% 27% 41% 46% DISTRIBUTORS 32% 24% 20% 18% VARS & SYSTEM INTEGRATORS 60% 49% 39% 36% OEM Aydin Vector Division, Apollo, Apinix, Aretcon, Control Data, Cranel, Cray, CSS Labs, Banyan, Bull/Honeywell, Data General, Data Point, DEC, Eastman, fujitsu, Genius, Gould, IBM, ICL, Intel, Intergraph, Jobe Computer, Kodak, Mai Basic Four Mannesmann, Matsushita, Mentor Graphics, MIPs, Motorola, NCR, NEC, Netframe, NEXT, Norsk Data, Northern Telecom, Olivetti, Philips, Picker, Prime, Quantel, Sequoia, Siemens Nixdorf, Sequent, Silicon Graphics, Solbourne, Sony, Sun, Texas Instruments, Toshiba, Tricord, Wang Labs, Xerox, 3Com Corporation. VAR Aviv, Bering*, Borsu, Brastex Electronica, CMS Enhancements, Contempory Cybernetics, Dilog, Distributed Logic Corporation, Eakin, Emerald, Emulex, Feith, GFK*,Geac Computer, Herstal*, IEM*, IPL Systems, Macrolink, Maynard Electronics, Megatape Corp., Micro Technology, Mountain, Northern Telecom, Perfect Byte, Personal Computers, Sedasis*, Spectrum Systems, Summus, Storage Data Systems, System Industries, Tense Lectronix, Transitiional Technologies, US Design and Workstation Solutions. DISTRIBUTOR NORTH AMERICAN : Anthem Electronics, Inc.; Dallas Digital Corporation; Digidyne, Inc.; Gentry Associates, Inc.; National Peripherals, Inc.; Northeast Peripherals, Inc. EUROPEAN : Borsu International B.V.; M&S Electronic GMBH; Phase IV Systems Ltd.; Saven, A.B.; Storage Data System. INTERNATIONAL : Anthem Electronics, Exabyte's Principle U.S. distributor accounted for 12% of the companies sales in 1988. Inapro and Phase IV ISV - Brainwave Systems * Indicates companies who offer a HP-IB interfacec option (Price $8-10,000) Note. 83% of 1990 sales were to U.S. Companies. KEY PERSONNEL President, CEO& Chairman - Juan A.Rodrguez. President & Chief Operating Officer. - Peter D.Behrendt. VP Sales and Marketing. - James D.Greenup. VP Operations. - Frank M.Lahue. VP Oerations & Secretary. - William L.Marriner. Director of Technology. - Kelly J.Beavers. SUMMARY The future of 8mm, and hence Exabyte is predicted not to grow as fast as DAT, however the following reasons help contribute to its future: * Workstation vendors will continue to prefer the higher capacities and faster transfer rates associated with 8mm as apposed to 4mm tape drives. * Generally resellers can make more margin with 8mm than 4mm. * Scale economies associated with 4mm are overstated due to dissimilarities in mechanism design. However: * As ther are about 20 companies competing in DAT market prices should fall, which may outweigh the smaller capacities available. * Theere is only one source for 8mm tape which makes OEMs nervous and have adopted 8mm as a defensive move because of aftermarket pressure. Though the future is fierce with competition, Exabyte is here to stay, as it had too much of a head start, although its market may well stop grwoing, and will almost certainly be taken over by DAT.