Product Line or Service

Lighthammer develops and markets, Illuminator™, the world’s 1st Plant Information Portal™, a universal web-based interface for the manufacturing automation market. Illuminator is a shrink wrapped web server application capable of extracting information from virtually any plant floor data source, aggregating the plant data at the web server, transforming this data into usable information and distributing it to anyone with a browser or internet appliance. In the first 6 months since release, Illuminator™ has enjoyed great success with more than 30 marquee customers and over 70 installations. In keeping with the development plan, a greatly enhanced version of Illuminator™ was released in April 2000.

Technology/Proprietary Rights

Illuminator, a web server application developed internally by Lighthammer, includes a number of proprietary software routines for extracting data from disparate plant automation systems and rendering this data in an optimized format for browsers, enterprise applications, and internet enabled phones, PDAs and information appliances. We are currently exploring patent protection.

Market Opportunities

Enterprise Information Portal has been coined as the key emerging space for growth in the Information Technology sector. Enterprise Information Portals are applications that aggregate data from Financial, Human Resource, Supply Chain and other Corporate Data Warehouses and distribute it to their organizations via web technology. The Plant Information Portal™ (PIP) space roughly parallels the Enterprise Information Portal (EIP) space. The fundamental difference between these spaces derives from the “real time” characteristic of plant data sources, the domain knowledge required to extract data from these sources, and the unique “plant centric context” in which the data must be displayed.
Merrill Lynch forecasts that the Global EIP space has an estimated growth rate of 36% CAGR and will grow to over US$14B by the year 2002. This explosive opportunity is the culmination of companies’ appreciation for the paybacks associated with wide distribution of data via web technology. 

The Plant Information Portal space is a new frontier. While it aligns with initiatives in the $14B Enterprise Information Portal space, it is clearly different due to the real time nature of the information and the domain specific knowledge required to provide context. 
Sales experience with Illuminator indicates that manufacturing companies will install one to three systems per facility – based on size and best deployment practices. With this knowledge the market opportunity for Illuminator can be estimated using two approaches: total plant opportunities and total OEM opportunities.

Total Plants

There are more than 100,000 automated manufacturing plants in the US and more than 800,000 worldwide. Illuminator’s design allows it to provide benefits to users in every one of these facilities. 

Total OEM (Original Equipment Manufacturer) Opportunities

Another method to estimate the total market size is based on the number of sites in which leading suppliers of plant floor systems have their products installed. Lighthammer can target these systems with vendor specific editions of Illuminator, which would be sold through their sales channels or through a direct licensing agreement with the OEM. This analysis results in more than 800,000 possible installations. A list of the target vendors and estimated plant opportunities is included in the business plan. 
Assuming a long-term penetration of Plant Information Portal systems of 25%, the total market would be >$2B USD.

Marketing/Sales and Distribution

Lighthammer’s objective is to dominate the Plant Information Portal space by leveraging our first mover advantage. With the release of Illuminator 8.0 in April 2000 we are in prime position to capture the significant market share through accelerated investments in sales, marketing and technical infrastructure. Our “go to market” strategy is four pronged:

1. Quickly develop an indirect distribution channel to provide sales and support in the Americas, Europe, S. Africa, and Australia. This channel will be responsible for selling the entire Illuminator product family. Status: We currently have 9 Distributor agreements covering 75% of N. America. We expect to sign an additional 12 agreements over the next 3 months which will complete coverage in N. America and provide coverage in UK, Netherlands, France, S.Africa, Australia, Brazil, and Germany.
2. Hire a direct sales force to target the Fortune 250 manufacturers and to provide assistance to the Lighthammer Distribution channel. Status: We recently hired Frank Platt, VP of Sales & Marketing to lead this effort. He has already hired 1 of 7 anticipated direct salespeople.
3. Directly sell Illuminator to OEMs (Manufacturers of Plant Floor Systems) in each of the market segments. These OEMs would include a limited version of Illuminator as part of their product offering, giving us excellent access to their customer base and effectively seeding the market for future Illuminator sales. Status: We are in negotiations with 4 OEMs with a high degree of confidence that we will sign at least 2 of these companies before July 2000 
4. Develop the Illuminator Brand through extensive advertising, editorial play, and industry analyst coverage. Status: We initiated our an aggressive advertising campaign in three trade magazines in March which features full page ads based on a “got web?” theme. This campaign is providing Lighthammer exposure to 160,000 buyers worldwide. Additionally, we have received good editorial coverage through AMR (an industry consultant group) and expect additional editorial play through Manufacturing Systems (a Cahners magazine). Based on meetings with Lighthammer, Manufacturing Systems has decided to create a new software product category - Plant Information Portals.

This integrated sales and marketing strategy is designed to quickly establish Illuminator as the Brand for Plant Information Portal’s.

Competition

Competition for Illuminator sales will come from three areas: home grown solutions, Plant Floor Vendor supplied “partial’ solutions, and Enterprise Portals being extended in the Plant Information Portal™ space. 

Home Grown Solutions – custom solutions will always at small portion of any market. However, as products become available for a market space most users will abandon custom development due to the high development and life cycle costs.

Plant Floor Vendor solutions – Vendors of plant floor systems will seek to supply web based products that provide some of the functionality of Illuminator, primarily targeted at their own products. These solutions will not provide customers the benefits that a common interface to all plant floor information provides. Additionally, these OEMs are prime candidates for reselling Illuminator as part of their product offering, generating license revenue and seeding the market for future “plus 1” sales opportunities.

Enterprise Portals – Enterprise Information Portals (particularly Indx) will try to extend their reach into the plant space. The real time and disparate nature of plant floor data sources combined with the domain expertise required to put this information into context, will eliminate this as a serious threat to Illuminator™. A more natural long-term position will be partnerships with selected Enterprise Information Portals where Illuminator becomes the common source of all plant information, probably delivered via XML.