NEWS ANNOUNCEMENT

FOR IMMEDIATE RELEASE

Contacts:
Paula Brici Bordigon
Lages & Associates
(714) 453-8080

Robert Smith
Elms Systems Corporation
(714) 461-3207


COMPUTER PERIPHERAL VETERANS LOG ANOTHER ROUND OF INDUSTRY 'FIRSTS'

Elms Systems Corp. Founders Fashion CD Technology Into Affordable Mass Storage Solution for Networks


         IRVINE, Calif., January 15, 1997 -- When Howard Lewis caught his first glimpse of CD-ROM technology in the mid-1980s, its growth rate was not meeting projections and he didn't give it a second thought. He was too busy running Archive Corporation, the leading independent supplier of computer tape drive solutions which he co-founded with William R. Miller.

         In 1993, however, Lewis and Miller had a little more time on their hands after the sale of Archive to Conner Peripherals. They were joined by another former Archive executive, Robert Smith, in the search for a new business venture related to computer storage products.

         They took another look at CD-ROM and were impressed by:
         "We saw an opportunity developing in the computer industry," Lewis recalls. "CD-ROM technology was being driven by strong market forces, thereby setting the stage for CDs to play a significant role as a storage solution. What was missing was software and the right class of hardware to make the information on CDs readily available to the user."

         Further research and discussions on this opportunity led the three men to form Elms Systems CorporationTM in January 1995 and invent a new class of storage product for network and personal computer users. The first innovation is a new software paradigm that manages the use and creation of CDs by providing the ordinary user with an integrated database and intuitive GUI which features icon representation of CDs, magazines, etc. This new software paradigm is delivered in Panorama, which provides the user with an "Explorer-like" interface as well as database and search tools. Panorama's database and GUI support both on and off-line CD collections. The old paradigm presents a collection of CDs as a hard drive with subdirectories, which is difficult for users to understand and is not readily searchable.

         The second innovation, launched by Elms, is its DVLTM (Digital Versatile LibraryTM). The DVL creates a new class of product, by providing the CD market with the first multiple CD storage solution with features that users have come to expect from well designed storage solutions. Prices start at $5,495, half the price of the old paradigm. The DVL holds 100 discs in five easy to handle magazines. The magazines are barcoded to make the media pool easy to track and use. The DVL can be configured with from one to four drives. Other DVL firsts are: a) user serviceable CD drives; b) the Faster-Now upgrade feature which allows the user to add or replace drives as faster drives, drives with new features or DVD drives become available; c) a front access design for easy use in an office environment; and d) a built-in battery backup that protects state information if the power goes out.

         "There are certain similarities with our experience at Archive, where we were very successful in developing a solution that provided the customer with the software and hardware needed for server backup," Lewis said. "This success led us to building a software organization that went on to be one of the top software companies in the data management industry."

         Other similarities were also discovered, he continued. "The desktop publishing and multimedia revolution was, and still is, a PC phenomena and it seemed to us that any effective CD storage solution would have to be developed with a PC mentality," Lewis said. "At the time the one competing idea was to scale down the big optical storage jukeboxes from 14-inch platters or magneto optical to desktop size, but the price was beyond the mindset of PC shops."

         Product reliability was a consuming passion of the hardware designers, Lewis noted. "We were taking thousands of dollars in cost out of the electro-mechanical design, but we couldn't allow the quality to be compromised," he said.

         Since its inception, the company had two concurrent development programs in process: one to develop a line of CD library management software expressly for CDs, called Panorama; and another to design a priced-right, easy-to-use robotic CD loader, the DVL.

         The team that met the challenges of a new product class was assembled from some of the most capable companies in the industry. Software development is headed by David R. Challis, who formerly held a similar position at Autodesk, Inc. The head of systems engineering, Robert E. Bohn, came from AST Research where he was engineering director for desktop and server products. The executive responsible for worldwide sales, Douglas J. Smith, was director of channel sales and marketing at Exabyte Corp.

         Lewis, who serves as president, was president and CEO at Archive while Miller, who is now responsible for operations at Elms, was Archive's general manager of the Minicartridge Products Division. Robert Smith left Archive shortly after its sale to become general manager of Yaskawa Electric America's Computer Peripherals Division. At Elms, he was initially in charge of software development but recently assumed duties as vice president marketing.

         With funding by the founders and two prominent high-tech venture capital funds, The Mayfield Fund of Menlo Park, CA and Enterprise Partners of Los Angeles, CA, the company has met its design goals, staffed a manufacturing organization and is now turning to the marketing and sales mission.

         "It's always a challenge to roll out a new class of product because there isn't a solid reference point for instant recognition," Robert Smith said. "At the same time industry firsts are exciting. Ours is being the first digital library solution for affordable CD sharing and publishing."

         Elms is positioning itself as the first affordable CD storage solution for libraries of CDs and as a strong entrant into the CD-R and mastering market. The company's products are a highly cost-effective alternative to CD towers, which have limited application to growing libraries because they require a drive for each CD. The company's full featured software, built on a relational database, is the first to offer the user a full set of features without requiring an expensive implementation plan. The CD mastering functions are a fraction of the cost of existing equipment or service bureaus, but Elms does not consider itself competing with those businesses. "We're a solution for the low-volume producer who duplicates for internal distribution, small runs or beta test quantities," Robert Smith said.

         The company's products are being offered by Bell Microproducts of San Jose, CA and Globelle of San Diego, CA. The DVL will be supported by these leading ISVs: Luminex - Unix, Riverside, CA; SmartCD - Novell and NT, Andover, MA; Celerity - Novell, NT and Unix networks, Knoxville, TN; Asimware - Amiga, Windows 95, Ontario, Canada; and Optisys - Novell, NT and Unix networks, Glendale, AZ.

         The company will be announcing a new version of Panorama called Panorama+TM for automated CD mastering. Both Panorama and Panorama+ will run on Windows 95 and Windows NT Workstation. Company plans include networking support and developers' tools later this year.