Dollinger index

Coreworx

SI’s flagship product was Coreworx, a Web-

based application that enabled everyone con-

nected to a capital project, be they engineers,

architects, subcontractors, or others, to gain

immediate, secure access to key documents,

drawings, the project calendar and other

information. The product was designed in

conjunction with Fluor to ensure it met real-

world requirements.

Coreworx incorporated a range of tools,

including document management, workflow,

mark-up and access control. The basic struc-

ture was proprietary to SI, as were a number

of key application modules. In addition,

Coreworx had been or could be integrated

with other critical software used by owner-

operators or EPCs, including enterprise

resource planning (ERP) systems from SAP

and Oracle, computer-aided design (CAD)

systems such as Autodesk, and other docu-

ment management systems from vendors

such as Documentum and OpenText.

Coreworx also included some software appli-

cations acquired on an original equipment

manufacturer (OEM) basis from other soft-

ware developers (such as the ProArc docu-

ment management system from SI’s former

parent, SI ASA).

Competition

SI faced competition on a number of fronts.

Historically, software spending in the capital

project market had been in four silos of tech-

nology: enterprise resource planning (ERP)

or accounting software, project management

(PM) software, engineering and computer-

assisted design (CAD) tools, and document

management (DM). Each represented critical

information and functionality for the capital

project market, and each had some claim to

the market space inhabited by Coreworx.

Although ERP vendors, such as SAP and

Oracle, provided the means to track account-

ing and related information at a corporate

level, these vendors did not typically function

well on a project level. CAD tools from ven-

dors such as Autodesk, Intergraph and

Dassault Systèmes were the key applications

that did the actual drawings and blueprints

needed by engineers, architects and designers

for large capital projects, but these CAD

tools did not focus on facilitating the

exchange of these documents with other

users.

Competition also provided Park with a

way of thinking about the valuation he might

place on SI. Exhibit 4 provides valuation

metrics for both competitors and related

companies.

Daratech Inc., a leading market researcher,

forecasted approximately $3.8 billion in tech-

nology software and services spending by

EPCs and owner-operators in 2004. This

number encompassed all of these silos of

technology as well as the emerging project

collaboration functionality. It was noted that

as some of these silo vendors attempted to

extend their footprint within their cus-

tomers, they might wish to move further into

SI’s project collaboration space.

SI also faced competition from smaller

vendors specifically focused on the project

collaboration space. Most significant among

these were the following:

Citadon: Formed in late 2000

through the merger of two other com-

panies, Citadon was a child of the tech-

nology bubble and had tens of millions

of dollars sunk into it. It remained a

private company; nevertheless, it

shared many of the same features as

Coreworx and targeted the same cus-

Software Innovation Inc. 531

Shareholder

Verdexus
Employees
SI ASA
Total Common
Shares Outstanding
Options
Fully Diluted Shares

Shares

2,027,150

45,500

287,850

2,360,500

354,075

2,714,575

% Ownership

74.7

1.7

10.6

87.0

13.0

100.0

EXHIBIT 1 Capitalization, January 2005