1. Could you elaborate on the Progress Software range of products and what is your core area of focus?
Progress Software Corporation (PSC) supplies software to simplify and accelerate the development, deployment, management and integration of business applications. Today's users demand software applications that are responsive, comprehensive, reliable and cost-effective. 
PSC products address their needs by:

• Boosting application developer productivity, reducing time to application deployment, and accelerating the realization of business benefits;

• Enabling highly distributed deployment of applications; and

• Simplifying the integration of applications across and amongst enterprises.

Our goals are to maximize the benefits of information automation while minimizing technology cost of ownership. PSC delivers products and services through its subsidiaries and business units. The Progress Company provides the OpenEdge platform. OpenEdge offers superior capabilities for developing applications to be deployed and managed over a wide range of computing platforms and across the Internet, including the market leading embedded database. Our Sonic Software subsidiary is the market leader in standards-based integration. Sonic products provide reliable, flexible and cost-effective distributed infrastructure to integrate applications and orchestrate business processes across the extended enterprise, all built on industry standards. Our PeerDirect subsidiary enables organizations to effectively distribute business applications across enterprises, including remote offices and individual users, using patented replication technologies. PeerDirect combines the advantages of distributed application deployment with the control and cost-effectiveness of centralized management.

2. Progress Software Corporation, an over $250 million software industry leader with customers in over 100 countries has more than one independent operating company within its umbrella and has gained recognition by customers and experts around the world. Within this multi - company format what is your core area of focus and who are your target customers?

Our companies deliver products and services directly to user organizations, through OEMs, and through our Application Partners. Focus is a primary reason that Progress has succeeded while so many others have failed. The company has not moved up the architecture stack to compete with its customers. A tremendous amount of software has been sold on fears. First, Y2K, then dot com and more recently security. We believe security will remain an important space, but Progress noted that applications enable firms to differentiate themselves through better understanding, service and order execution for their customers.
Progress's database, when linked with its application vendor partners, enables mid-market firms to achieve this differentiation. Progress approaches the market in a manner similar to the way its Customers think about their software. For the mid-market, Progress has found that Firms want functionality that precisely matches their business needs and no More (unlike large enterprises that at least until recently had the financial Luxury to overspend on applications that were either expensive to deploy or had More features than needed. For example, Progress has deployed its database at a leading trucking company. The IT manager at this firm noted that he was responsible for everything at the firm - from email, to accounts payable to routing. There is no scenario in which this firm wants to purchase an over-engineered application stack that requires database administrators to oversee it. Another example: Progress replaced a failed SAP deployment at a leading lumber firm. This is not because SAP is a poorly designed application. Instead, it is because Progress's ISV partners had assembled an application stack, with Progress's database at the base, explicitly designed for the lumber business. By contrast, SAP's applications are great at managing the assembly of items. The application stack with the Progress database helped the firm operate in the opposite direction: raw materials that were disassembled into component parts.

At the low-end, Microsoft has historically sold shrink-wrapped mass-market software. These applications are inexpensive, but come with no support. It is possible that Microsoft will decide to manage its business software effort on a vertical basis. However, this would require a complete change in the firm's historical approach to the market. Every effort to sell solutions tailored to specific industries requires some form of sales support - either through a direct sales staff or reseller channel. Microsoft has created neither a direct sales force nor a vertical channel effort. This is not surprising because Microsoft has no products to sell through such a channel. Thus, Microsoft has a "chicken and the egg" dilemma. It can't build a distribution channel without products, but if it builds products first, the applications will sell slowly as the channel is built. Thus, if Microsoft eventually decides to enter the low- to mid-market, we believe the most economically rational decision would be to acquire a firm with a strong reseller/ISV partnership network already in place. It seems to us that Progress would make a logical means to that end. Alternatively,Microsoft could decide that it is unwilling to change the way it markets solutions. In this scenario, the firm would eat away at the business currently dominated by firms such as Intuit (INTU). 

At the high end, enterprise software purchases are often a career decision for the individuals that lobby for the purchase. This is the market addressed by firms such as Oracle and SAP - multi-million dollar deployments that require months to select and as long as years to deploy. The challenge for these firms is to reduce the complexity of their solutions. Thus, even Oracle Standard Edition is an over-engineered solution for this segment.

3. Progress Software has launched its new subsidiary. What exactly is PeerDirect's Product Suite for Distributed Enterprise Applications? What is the area of application and who are your target customers? 

PeerDirect enables the distributed enterprise. For example, the software keeps each database up-to-date with patented database synchronization. The system supports Heterogeneous Replication so that various data schemas from vendors such as Oracle, Microsoft, Sybase, Progress and IBM are synchronized. Replication has been a solution that has been around for awhile. One of the reasons a firm wants to distribute databases out to field offices is that bandwidth to access data is nowhere as broad as visionaries assert. Historically, database replication has been difficult for database administrators. One stumbling block has been data chasing. For example, a customer might have placed an order for 100 units. A salesperson visits the customer to confirm the order and explains the advantages of the product. Upon reflection, the customer then decides to order 200 units. When the salesperson logs in that night, the order size is changed. However, if the data transmission is interrupted, the order log gets out of sync with the main database. If the mismatch is large enough, the DBA's beeper goes off and he or she has to fix the problem. By contrast, PeerDirect leverages scaleable n-tier architecture to resolve conflicts by parsing the data changes - without a data log - to make updating significantly less painful. Part of the application's "secret sauce" is that it distributes only the relevant portion of the database to the authorized user.

4. Mr. Justin Kestelyn, editor-in-chief, Intelligent Enterprise, was quoted as saying, " IT and business leaders will increasingly rely on Sonic and other 'companies to watch' to make their organizations smarter, faster and more profitable." Could you elaborate?

Today, there are really only three relevant messaging solutions available to the market today - IBM, Tibco and Sonic. Sonic is flexible, very easy to deploy, two to four times faster and the solution is priced at about half of competing offerings. As such, the firm does extremely well in competitive deals in which functionality and features are the basis of the purchase decision. Sonic loses when the buyer is willing to accept vendor lock-in and be an exclusively IBM or Tibco shop. However, for firms that want flexibility, adding Sonic JMS for a total cost that rarely exceeds $50,000 is a good decision. For example, recently Sonic pitched a Midwestern Fortune 50 firm. The organization was not quite sure many applications it ran - the CIO thought the firm had somewhere between 2,100 and 2,400 applications deployed. The architecture that enabled these applications to communicate with each other was essentially an ad hoc tangled mess designed. Tibco and IBM demonstrated a pilot that showed that upgrades would require about 10 minutes per node (PC, server, etc.). By contrast, Sonic's flexibility and agnostic structure enabled the firm's Enterprise Service Bus to deploy in seconds. Sonic won the deal. One of the problems with traditional integration is that each deployment Was unique. Sonic's modern architecture (basically requiring Java and XSLT skills) enables reuse and much faster deployments.

5. Sonic Software has experienced nearly 100% revenue growth in 2002 and since the introduction of the SonicXQT, Sonic has emerged as a pioneer in standards-based business integration, a market that is a top priority for CIOs today. What is the Enterprise Service Bus (ESB)? How exactly do you forsee it becoming a "major market force during 2003."

An enterprise service bus (ESB) is a standards-based service-oriented backbone, capable of spanning a global organization and connecting hundreds of application endpoints. Gartner, Inc. has predicted that this new form of enterprise service bus infrastructure will be running in the majority of enterprises by 2005. On the surface, ESBs share many of the fundamental capabilities of traditional integration brokers, such as messaging, transformation, intelligent routing and process management, but their architecture is fundamentally and remarkably different. The design center of an enterprise service bus is that of an
integration network, not a hub-and-spoke server-centric model. The ESB assumes the responsibility for secure, reliable communication within the network and includes the core integration capabilities required to allow applications to interoperate.
Sonic Software was the first to define a new approach to application integration to support the proliferation of service-oriented interactions between enterprise applications: the enterprise service bus (ESB) which has since been acknowledged by Gartner as a high growth, opportunistic market place. Some have referred to the ESB as "EAI Light" i.e. rapidly deployable, relatively inexpensive, non-proprietary Application Integration. On March 25, 2002, Sonic Software announced SonicXQ, the first ESB available to the market. Since then, the ESB has been recognized as a new category of integration middleware emerging to
support the proliferation of service-oriented interactions between enterprise applications. As of April 25, SonicXQ version 5 has been renamed SonicESB Sonic Software now provides the first integration suite built on an enterprise service bus. Sonic delivers a cost-effective, standards-based and flexible infrastructure that reliably connects applications and orchestrates business processes across the extended enterprise. 
The SonicXQT ESB provides a far more flexible, manageable and scalable solution to EAI than traditional integration broker technology. In its 2003 Predictions series, industry analyst firm Gartner, Inc. forecasts that ESBs will become a "major market force during 2003." Because of a variety of factors, including the current economy, coupled with the fact that easy, standards-based integration has been a long-sought "cure" for the stove-pipe legacy architecture that already exists. Now, more than ever, businesses & governments do not want to throw away existing applications, existing platforms, and existing data. IT has been looking for an easy way to tie their existing legacy applications and technologies together, first with CORBA, then with MOM, then with Integration brokers, then Application Servers with integration functionality thrown in. The ESB shows great promise to allow applications to "integrate with ease and extend at will." (Sonic Software's slogan).

6. Sonic Software has strengthened leadership in standards-based integration through acquisition of technology from eXcelon Corporation and have beat out products from IBM and BEA. How much do you think strategic alliances have helped in enhancing your core area of technology and stay ahead of your competitors?

With the acquisition and integration of XML technology from eXcelon Corporation, Sonic is able to deliver a comprehensive suite comprising the most advanced standards-based integration technology on the market. Sonic's integration suite expanded to include Sonic XML Server, an advanced XML database management system, Sonic Orchestration Server, the most robust partner integration server based on ebXML, and Stylus StudioT, a complete XML development environment. Sonic Software is also the market leader in enterprise-class messaging based on open standards. Major corporations, including Bank of America, Phillips International and Sprint depend on SonicMQ's enterprise-class backbone to ensure that messages are never lost, even in the most challenging situations. 

7. A variety of organizations and publications have identified Sonic Software as a "Company to Watch" in 2003. How are you going to sustain the momentum garnered, especially during the period of global economic meltdown, and leverage it to enhance the services offered to you clients?

The Sonic value proposition was explained in #5. Sonic will cntinue to dominate the ESB space, since it was first to offer a shipping product, but as the XML technology from the eXcelon acquisition becomes fully integrated into the Sonic product set, Sonic's suite of products will become the most advanced and complete for offering
standards based integration. Additionally, the Progress Company's OpenEdge Platform will be able to offer this functionality to its base of ISVs, making Progress-based applications even more desirable as end users can rely on easy integration in addition to the traditionally low maintenance and total cost of ownership. Sonic Software will enjoy revenues, then, from non-Progress customers as well as an OEM stream from Progress-based packaged applications.


8. Since inception Progress has come a long way, what are your plans for the future in terms of enhancing your core area of technology and reaching out to wider markets?

Our ongoing goal lies to achieve disciplined growth while advancing our strategy to be the emerging leader of technology solutions in all of the three spaces we are playing in. We're number one in the embedded database. Sonic is the number one Enterprise Service Bus, and PeerDirect is on its way to being number one in enabling distributed applications. Our strategy is three-pronged. One is to grow by acquisitions, which eXcelon helped us do, and ObjectStore will be adding revenue and opportunities as an exiting leader in object oriented databases. The second is by leveraging the existing customer base, which is benefiting from the current economy downturn because of its value proposition -- focus on core competency coupled with low TCO and fast ROI. The third is incubating new technologies in high growth sectors, such as Sonic and PeerDirect. Our core business and our community of application partners will benefit from all of these, as well as our Empowerment Initiative, which is a focused effort by the Progress Company to help our application partners move their applications quickly into a Service Oriented Architecture (SOA) so that Progress-based applications are prepared to leverage the emerging technologies and trends, such as Web Services. This, combined with our commitment to being a good channel partner (not competing with our ISVs, but supporting them) is making a big difference. Already, we are seeing a renewed interest in Progress by ISVs and end users alike. As the disillusionment with the dot com' and start ups fades, businesses are interested in a company that is run "the old fashioned way" -- by making money with proven products that actually work, showing steady growth, and building long term partnerships and a loyal customer base.

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