Focal Technical Consultants, LLC - Salem State University



Focal Technical Consultants, LLC

Business Plan 2000 - 2004

Confidential and Proprietary

Table of Contents

Executive Summary

Description

Organization

I. Financial plan and capitalization

II. Marketing

III. Products and Services

IV. Administrative policies

VIII. Appendices

I. Executive Summary

Focal publishes and distributes comprehensive, up-to-date documentation on the Linux operating system for the Linux community. This is a proven concept that began in 1994 and continues through the present. Focal has acquired the rights to continue publishing under the title Dr. Linux beginning in the Fall 2000 and registered Dr. Linux[1] in the State of New Hampshire.

There are two, initial U.S. market segments for Dr. Linux. Each market is commercially viable. The first market segment is the Linux business community. Focal has two products for this market segment. The first product is the continued publication of the Dr. Linux manual and the second product line entails textbooks and training manuals targeted to the business community. Focal will publish the reference documentation and sales and distribution will be through an existing chain of resellers. This is an established market with a developing sales volume based on the growing acceptance of the Linux operating system. Focal will work with various organizations to develop customized training manuals and textbooks.

The second, initial market is the US academic community. This is a new market not currently served by the existing publisher. There are approximately 1500 colleges and universities in the US that offer a course of study involving some form of computer technology (refer to Appendix D for a partial listing). The curricula in these colleges and universities vary and are generally subsumed under titles such as Management Information Systems, Computer Technology, or Information Technology. Graduate business school programs have recently evolved to include similar concentrations. For example, Babson College recently established an MBA Program focusing on MIS and computer technology. This equates to hundreds of thousands of students studying in one of these concentrations annually and these students are the future managers, employees and innovators for the technology revolution. As an active supporter for the open source concept, Focal proposes to distribute free, hard cover copies of the reference documentation to the academic community. Focal will solicit sponsors from the Linux business community to pay for the publishing and distribution of the reference documentation. The purposes of these sponsorships are to promote the viability of Linux as superior, alternative operating system and to market to the students that each of the sponsoring businesses is an active supporter of the Linux operating system and Linux community. This promotional effort is an investment in the future for these businesses.

With the increased number of businesses adopting Linux, its viability increases. (Appendix E provides a partial listing of recent press releases that document the rapid adoption of the Linux operating system.) Combined with the presence of the free distribution of the Dr. Linux reference, the Linux user groups at colleges and universities, and increased use by businesses, the academic community will ultimately offer courses in the Linux operating system. Open source delivery of the Dr. Linux content to students offers another niche in the academic market. As the academic market grows and businesses adopt Linux, the market size for the Dr. Linux reference, sold through resellers, will also increase.

Focal has contracted with a European representative to market Dr. Linux. Focal plans to sell a license to the highest bidder for this market. Focal will deliver a version of the Dr. Linux reference manual to the bidder. The bidder will be responsible for all translations, printing, distribution, and sales and marketing. Subsequent activities will address other global markets and alternate publication and distribution methods. The business plan provides the supporting information.

II. Description

Who we are

Focal publishes (print, electronic and web) and distributes comprehensive, up-to-date documentation on the Linux operating system for the Linux community. The Linux operating system community includes the Information Technology, Computer Technology and Management Information Systems departments of educational institutions, their faculty and students, businesses, and non-profit organizations across the world.

The business will operate out of the New Hampshire. The principals in this business are

Strategic objectives

Focal’s first objective is to support and advocate the open source concept. The open source concept promotes active and continuous updating of the operating system by the Linux user community. Focal supports the open source concept with constant involvement in the open source community.

Focal's second strategic objective is to publish and distribute, to the Linux user community, the reference documentation on a twice per year basis. Focal will electronically provide, via a web page, the interim updates (to be included in subsequent editions) to the reference documentation to the open source community. Focal will also publish training materials (instructor manuals and texts) for the Linux business community.

Focal’s third objective is to become the recognized publisher for Linux reference material and textbooks in the academic community. Through increasing the acceptance and use of Linux in this community, Focal will be able to grow the sales of the Dr. Linux references in the business community and strengthen the communications between the Linux and academic communities.

Focal's fourth objective is to start with the US market and grow the business into global markets.

Focal's fifth objective is to use ten percent of pretax net income for charitable purposes.

In the long term, Focal may use the following business model for other software market segments or to enter other industries and markets.

Business Model

Focal Enterprises uses a differentiation strategy in a select niche market. Providing value to our customers and stakeholders is the key to our differentiation strategy. Our products and services must be unique, of exceptionally high quality (content must be current, accurate, and easy to use), tailored to our customers needs (incorporate features and product attributes that raise customer performance, lower customer costs, and enhance satisfaction) , and delivered with great speed.

Focal is serving a market in the early portion of the industry life cycle. We base this on the rate of acceptance of the Linux operating system over the past two years, the projected entry into the desk top operating system market and the projected growth of the handheld computer market. (Refer to the NY Times insert and Appendix E.) The growth of complimentary services for an industry usually lags the industry by one or two years. Focal believes we are positioned to become the dominant provider of Dr. Linux reference manuals and training materials in support of the Linux community.

Reseller market model

Focal uses a unique business model that requires no capital to enter the reseller and academic markets. Focal makes sales to the reseller market at a specified price per Dr. Linux reference manual. Focal then places the sales order with the publisher for a stated cost per Dr. Linux reference. The publisher directly invoices the reseller at the price stated by Focal. Upon payment by the reseller, the publisher sends Focal the difference between the stated price (to the reseller) and the publisher's costs.

The traditional publishing model parallels the Focal model in that publishers obtain commitments from retailers prior to publishing the book or reference manual. The traditional model, however, has the authors preparing the text's contents prior to obtaining the retailers commitments. Focal's model differs in that our editors maintain and continuously update a PDF version of the Dr. Linux content. Therefore, the Dr. Linux reference is always current at the time of printing and is between six and twelve months more current than our competitor's Linux manuals.

Academic market model

The academic Dr. Linux approach is similar. Focal sells sponsorships to the Linux community and then directly invoices the businesses. Upon receipt of payment, Focal places the order with the publisher.

The content for the academic Dr. Linux derives from the Dr. Linux manual. Focal will develop ancillary services and derive additional products from each of Dr. Linux (web page, training materials and text books) subsequent to sales in the Linux business community and academic community. This ensures a very strong positive cash flow for the major products and services.

Future markets

Focal can easily expand upon this model for other software products. This model is also transferable to other industries. These are future opportunities for Focal.

Opportunities

The industry environment provides the following opportunities for Focal:

• Sales to the reseller market are a proven, viable concept. The reseller market has been selling various editions of the reference documentation to the Linux community since 1994. Focal has a developing, market for the reference documents. We expect this market to grow with the increased acceptance and use of the Linux operating system.

• Open source software is constantly changing and therefore requires continuous revisions to the reference documentation. The opportunity lies in the need to provide periodic, published updates to the user community. The current reseller market purchases one edition and a subsequent reprint each year. The first edition's sales are approximately 15,000 sets and the reprint sales are approximately 50% of the first edition. Sales volume should more than double within three years.

• The use of Linux as an operating system is growing and new Original Equipment Manufacturers (OEMs) are also adopting and supporting Linux. Linux is currently the number 3 operating system (Windows #1 and MAC #2) in terms of total number of operating systems and Linux is growing at a faster rate than all other operating systems.

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|Credit: The New York Times |

This is occurring on a global basis. The global market for reference documentation is growing with each new Linux user. As Linux becomes an accepted standard, training organizations and academic institutions will require current source material for instructional purposes.

• Although Linux is available on the web, the explanatory material in the reference documentation is not currently available. This provides two opportunities. First, users are generally more comfortable with a printed document that they can reference across multiple pages and instructions simultaneously. This applies to the domestic and global markets.

The second opportunity stems from the technological infrastructure of the web in foreign markets. Many of these markets use wireless communication as the backbone for communication. Unlike the US market that charges a fixed, flat fee for a given service territory, these markets charge a fee for each use regardless of proximity or area. These two factors create an opportunity for increased use of reference documentation over searching for information on the web.

• Voluminous reference documents are the current medium for the reference documents. These are costly to publish and distribute. Other mediums such as CD-ROM, are options for future editions.

• The academic community has responded to the market's demand (significant quantities of students seeking to study some form of computer technology) with new and expanded programs. Many businesses have established various ties to individual colleges and universities. In some cases, these businesses provide direct support in the form of free or discounted equipment and software. The proposed distribution of Dr. Linux to a larger audience provides several opportunities for the businesses that choose to sponsor the academic reference documentation. These opportunities include: reaching the target market for their future employees and managers, promoting the open source concept, and demonstrating their participation in and support of the Linux operating system. Focal's opportunities lie in becoming the bridge between the Linux community and the academic community. In doing so, Focal will help to generate the future market for the Dr. Linux Reference and the market for instructional purposes. Ultimately, colleges and universities will offer courses in the Linux operating system. This provides another opportunity for Focal to re-package the Dr. Linux content in a textbook type format. Focal can tailor the delivery medium (e.g. conventional textbook to open source web format) to the audience. The concept of free distribution to the academic community is not new. There are several examples of industries coming together to collective promote the sponsoring companies and the industry as a whole.

Threats

The risks attributable to this venture are:

• Open source software is available to anyone in the market and therefore there is free access to the documentation. Focal's alliances overcome this risk.

• The ability to secure five-year sponsor commitments from the Linux business community is a pre-requisite to publishing and distributing the academic reference documentation.

• Free distribution of the reference documentation to the academic community is new concept for businesses in the Linux community. Most, if not all of these businesses have a demonstrated commitment or involvement with the academic community. This proposal is a further commitment that requires only monetary involvement. However, the businesses may not see the advantages in participating in this venture.

• There are several competing versions of Linux reference documentation. The existing industry practice for producing these versions results in reference documentation that is a minimum of six months, and more likely to be twelve months, behind the current state of the software development. This situation arises from the publisher's requirement to have retailers commit to purchase the book/reference in advance. The time necessary to secure these commitments causes a delay in publication and ensures that the reference is considerably outdated by the time it arrives on the retailer's shelves. Some users may not know this fact.

Strengths

• Focal, through its involvement in the Linux community and the sponsors for the academic reference documents, has established alliances and endorsements that give credibility to the reference documentation and Focal. This provides Focal with credibility and a marketing edge with the resellers. Furthermore, Focal's alliances ensure that the reference documentation is at least 9 months more current that its competitors. The sponsor inserts in the academic Dr. Linux will further promote the sales of Dr. Linux with the reseller market and their clients. These give Focal sustainable competitive advantages over other publishers of Linux reference documentation.

• Focal relies on the contributions of more than fifty authors (contributors directly involved with Linux updates) to ensure that Dr. Linux reflects the most current state of the software. Two existing editors continually maintain an electronic file with ongoing changes. This file and format ensures that Dr. Linux is continually up-to-date and the most current reference possible at the time of publication. Focal is acquiring this infrastructure as part of the acquisition rights.

• This business plan requires minimal capital and working capital. (Refer to the business model narrative above.)

• Focal has strong ties to the reseller market and the publishing industry. The assumptions used in the subsequent finance section rely on existing data.

• The principals in this venture have more than 90 years of business experience. Appendix A outlines their credentials and experience to conduct this business.

Weaknesses

• Securing the sponsorships from the Linux business community before November 2000 is critical to the success of the academic portion of this business plan. Focal is relying on the endorsement of one or two key industry participants to gain entry with the key sponsors. Focal also has to complete the necessary market research and analysis in order to develop the sales presentations to these sponsors. Appendix F provides the sales promotion materials. Gaining these sponsors is time sensitive.

• Focal has limited sales resources.

• Focal is able to implement most of this business plan for the U.S. markets. We currently lack the resources to implement some of the global aspects of this plan. We also may seek a strategic alliance to ensure successful entry into the academic community.

Five-year activity plan

Focal is able to use its strengths to take advantage of the opportunities provided by the industry environment and to overcome or avoid the external threats and minimize our weakness. This is the basis for our five-year activity plan. Focal is in the process of securing purchase commitments for the year 2000 edition reprint of the Dr. Linux reference manual. The current commitments ensure a positive cash flow and cover the rights acquisition fees. Focal will end the first six months with a positive cash flow.

The domestic US reseller market has traditionally purchased a new edition and one reprint each year. The reprint is approximately 50% the volume of the new edition. Focal believes that the market will eventually require two editions per year to reflect the growing

number of modifications to the Linux operating system. This will grow the market rapidly. The academic market is large and untapped. Focal will enter the academic market using a phased approach. Conservative calculations estimate that there are more than 200,000 students directly involved in a technology related course of study at approximately 1500 North American colleges and universities. These assumptions are the basis for the marketing exposures and the cost of the sponsorships discussed in the marketing section (below).

The effectiveness of these sponsorships is embedded in the direct approach to the exact target audience. Each member of the audience will be exposed repeatedly to the sponsors each time they use the reference documents. Distribution to the academic audience will occur once per year. The basic reference and the advanced reference comprise the standard two-volume document reference set. Focal proposes to distribute the basic reference to second semester Freshman that have declared a technology concentration and to distribute the advanced reference set to second semester Seniors in the same concentrations. Conservatively estimating that a student uses a reference book 100 times, the cost per exposure is 3.5 cents. Focal will also create links to each from the Focal web site (Dr. Linux pending changes for the next edition will posted on the web site.). When an individual uses the link to a sponsor, it further increases the effectiveness of the initial sponsorship. Focal will charge each sponsor (approximately 2 cents per link) for marketing information based on the number of times a client uses a Focal link to them. Focal will keep specific client information confidential.

There are approximately 1500 colleges and universities that offer a technology related curriculum. (A separate study, Appendix D, provides a list of the specific course of study by institution.) Focal proposes to provide reference documents to approximately 125 of these institutions through a phased approach over three years. The 125 institutions equates to distributing approximately 100,000 books. Focal will first serve those institutions that have an existing Linux user group or an existing working agreement with a member of the Linux business community. For example, Red Hat recently established working relationships with twelve colleges and universities in the US and Canada. Focal will start with approximately 40 colleges and universities and over a three year period, increase its distribution to the 125 colleges and universities. Assuming approximately 250 students in both the Freshman and Senior classes, the initial distribution is to 40,000 students. In year three this equates to 62,500 students.

2000

Focal's year 2000 activities include:

• completing this business plan,

• securing purchase agreements for the year 2000 edition reprints

• acquiring key Linux community endorsements

• acquiring sponsorship commitments from the Linux business community

• establishing Focal as a New Hampshire Limited Liability company

• identifying the full extent of the academic community and the target 125 colleges and universities

• securing the commitment of 40 colleges and universities for receipt of Dr. Linux in the spring 2001 semester

• completing the revised content for publication by the end of the 4th quarter

• obtaining competitive quotes for publishing the reference documents

• renewing reseller orders for the reference documents, and

• selling the European commercial distribution and publishing rights to Dr. Linux.

2001

• publish and distribute to the resellers

• publish and distribute the revised edition to the resellers

• publish and distribute the Dr. Linux academic reference to forty colleges and universities

• establish the distribution for next two phases of academic distribution

• determine the global market needs for the reseller and academic communities

• publish Dr. Linux training materials (textbooks and instructor manuals)

• identify resellers for the Indian and Japanese markets and obtain commitments to purchase the commercial distribution and publishing rights to Dr. Linux,

• determine the potential and establish the distribution for global academic distribution of the Dr. Linux academic reference

• explore alternate publishing mediums and distribution methods (e.g., web based sales of CD-ROMs to the user community)

2002

• publish and distribute to the resellers

• publish and distribute the revised edition to the resellers

• publish and distribute the next edition to eighty-five colleges and universities

• publish and distribute the first phase of global academic distribution

• establish the distribution for subsequent phases of domestic and global academic distribution

• revise and update the textbook version of Dr. Linux

2003

• publish and distribute to the resellers

• publish and distribute the revised edition to the resellers

• continue with the domestic and global academic distribution of the academic reference manual

2004

• continue sales to the domestic and global reseller markets

• continue distribution to the domestic and global academic community

II. Organization

The corporation's owners and officers will consist of the three principals. Focal will contract for all other services. The qualifications of the principals are outlined in Appendix A.

Financial systems will be supported by commercially available software such as “Quick Books” or an equivalent. Focal has retained a Certified Public accountant for occasional advice, audits and tax preparation.

III. Financial plan and capitalization

The publishing rights, alliances with the Linux community and the skills of the principals are the primary assets of Focal. No initial capital investment is required or expected. The venture is funded through the reseller purchase commitments and the sponsorship commitments. Expenses will be incurred for establishing the business, web presence, and marketing.

Appendix B provides a pro-forma income statement. The Business model narrative (above) describes how Focal achieves positive cash flow and earnings for the reseller and academic markets. This positive cash flow provides the income stream for ancillary services, new products and expansion into future markets. A pro-forma statement of cash flow is forthcoming.

IV. Marketing

Target Markets

As mentioned above, the business community's Linux users and the academic community comprise the two basic domestic markets. The products and services for the Linux business community include:

• twice per year printings of the Dr. Linux Manual,

• subscriptions to the web page, and

• training materials (instructor manuals and texts).

The products and services for the academic market include:

• the Dr. Linux reference manual,

• textbooks, and

• web site links to the sponsors.

Globally, there are the European and Pacific Rim business community's Linux users and academic communities. The product offerings are equivalent to the domestic products in most respects. However, for the European and Pacific Rim business community's Linux users, in lieu of publishing through resellers, Focal plans to sell publishing and distribution licenses in return for a fee. This fee is direct profit. Focal will retain the web-based subscriptions. The global academic market is an unknown at this time but should parallel the domestic market. Focal will secure sponsorships from global businesses to underwrite the costs of distributing the Dr. Linux reference manuals to the global academic community.

Industry Trends and Size

Domestically and globally, Linux is the fastest growing operating system in terms of new orders (Refer to the earlier NY Times insert and to Appendix E.) This bodes well for Focal. However, this also creates the threat for new entrants. The keys to success for this niche in the operating system reference documentation are:

• the continued acceptance and growth of Linux as an operating system,

• ties to the Linux community (business and academic),

• a reference that is continuously current and of high quality,

• the ability for users to access the most current information in-between periodic editions, and

• continued product development (e.g. open source texts) and new distribution methods.

Competition

The Linux software community originally provided supporting documentation but subsequently withdrew this service. The Linux software community now sees publication activities as a diversion from their core business. This is particularly relevant during the high growth period for the Linux market.

These events have led to approximately six variations of Linux operating systems reference manuals. The titles and publishers for the manuals are:

Title Publisher

Linux for Dummies IDG

Later Macmillan

Later O'Reilly

Later

Later

Later

In the traditional publishing model, publishers obtain commitments from retailers prior to publishing the book or reference manual. The traditional model, however, has the authors preparing the text's contents prior to obtaining the retailers commitments. Focal's model differs in that our editors maintain and continuously update a PDF version of the Dr. Linux content. Therefore, the Dr. Linux reference is always current at the time of printing and is between six and twelve months more current than our competitor's Linux manuals.

The strength for these publications lies in that they are pre-sold to retail distributors (e.g. Barnes and Noble) and that they represent only one title among many for large publishers. Furthermore, the Dr. Linux manual is recognized as a technically superior product. This high content quality stems from:

• the contributions of more than fifty contributors involved with the Linux community,

• the fact that Dr. Linux's content is kept current continuously, and

• the dynamic publishing model mentioned in the business model narrative.

Another competitive advantage lies in the fact that we are focused on one product for one community and therefore we have an incentive to perform and serve the Linux community. The continued acceptance and growth of the open source concept will further provide advantages to those companies whose business plan accepts high quality products and services over proprietary products and services as the operating model.

Pricing strategy and comparisons with competitors prices

Focal is currently obtaining competitor market share information and financial information to complete this section of the business plan.

Advertising and Promotion

Trade shows and conferences are the primary places for Focal to sell Dr. Linux to resellers. Focal has existing contacts within the reseller community and will promote Dr. Linux with new resellers. The resellers are responsible for marketing the reference documents to the end user. This is consistent with past practices. Focal has no responsibility in this area.

The success of Focal's academic distribution relies on the sponsorships by the Linux business community and entry into the academic community. The Linux businesses will commit to a five-year plan for sponsoring the academic references. The cost of the sponsorships escalates with the increased distribution of the reference documents to a larger quantity of students. Appendix C provides a sponsorship cost analysis. Focal will include links from our web page to the sponsor's web pages. Focal will charge each sponsor two cents for each time an individual links to a sponsor's web page through the Focal web page. Focal will provide the sponsors with market share information but hold any individual information confidential.

The increased distribution also relies on top colleges and universities accepting and distributing the Dr. Linux academic reference books. Quick market penetration is a key. Colleges and universities with existing Linux user groups, ties to the Linux community (Red Hat has entry into 12 colleges and universities), and/or colleges and universities that offer courses in Linux are the prime targets for the Dr. Linux reference books and ultimately for textbooks. Focal will explore the possibility of using academic booksellers as a marketing service to secure commitments from the academic community. Appendix D provides a list of the target colleges and universities for the Dr. Linux reference. Advertising and promotion in the global academic market is a future activity.

Focal will also take full advantage of the Internet with an attractive web site that describes our company and our products. In the future, we may offer direct sales of the reference documents to the user community.

Sales forecasts

The following table summarizes sales forecasts by market for the next four years. Appendix C provides the supporting analysis for each of the market segments.

|Target market |2000 |2001 |2002 |2003 |

|Domestic reseller |$110,000 |$495,000 |$550,000 |$660,000 |

|Linux software community | |$50,000 |$100,000 |$150,000 |

|(texts and instructor manuals)| | | | |

|European reseller (This is | |$150,000 |$175,000 |$200,000 |

|pure profit.) | | | | |

|Asian reseller | | |$50,000 |$100,000 |

|(This is pure profit.) | | | | |

|Domestic academic distribution| |$420,000 |$1,050,000 |$1,500,000 |

|of the reference manual | | | | |

|Global academic distribution | | |$210,000 |$420,000 |

|of the reference manual | | | | |

|Textbook version of Dr. Linux | | |$20,000 |$40,000 |

|Web page subscriptions | | |$20,000 |$20,000 |

|Projected total sales |$110,000 |$1,115,000 |$2,175,000 |$3,090,000 |

Core competencies

Focal's core competencies begin with our associates' experience, education and relationships within the respective Linux, publishing and academic communities.

Focal's contracted editors have direct contact with those members of the Linux community (more than fifty contributors) that create the revisions to the Linux operating system. This ensures that the periodic editions of Dr. Linux are up-to-date and reflect the latest information about the Linux operating system.

The combination of recognized experts and low prices gives Focal two core competencies that we can use to grow the business.

V. Products and Services

Product and service development

The Dr. Linux Reference Manual, the Dr. Linux academic reference, the web page updates and the Dr. Linux textbooks are the basic products. All development is based on ongoing revisions to the existing content of the Dr. Linux Reference Manual. The following matrix provides an outline of the products and services by market segment served.

Product and service matrix

| |LINUX |Free BSD |

| | |Slackware |

|Segment |reseller |academic |training | |

|Product/service |Dr. Linux manual |Dr. Linux reference |textbooks |Textbooks and training|Future market |

| | | | |manuals | |

|Markets |Business community in:|North American academic|North American |Business community in:| |

| |US |community |academic community |US | |

| |Europe | |(1500 colleges and |Europe | |

| |Japan | |universities in North |Japan | |

| |India | |America) |India | |

| |Other | | | | |

|Potential customers |BSDi (Walnut Creek) |Top 125 colleges and |Open Mind | | |

| |Ingram Micro |universities in North | | | |

| |Penguin |America | | | |

| |Linux Care | | | | |

| |Linux Mall | | | | |

| |Linux Central | | | | |

| |SuSe | | | | |

| |Caldera | | | | |

|Potential sponsors | |Abria | | | |

| | |Appgen | | | |

| | |Atipa | | | |

| | |Caldera | | | |

| | |Compaq | | | |

| | |Dell | | | |

| | |Helix Code | | | |

| | |HP | | | |

| | |IBM | | | |

| | |Intel | | | |

| | |Linux Care | | | |

| | |Linux Central | | | |

| | |Linux Mall | | | |

| | |Linux Wizardry | | | |

| | |Open Mind | | | |

| | |Penguin | | | |

| | |Red Hat* | | | |

| | |Sun Micro-systems | | | |

| | |SuSe | | | |

| | |VA Linux | | | |

| | |Walnut Creek/BSDi | | | |

Equipment and machinery required

Focal will contract for the use of a server for the web page. This service will be for the subscriptions to the business community's Linux users. Focal will explore potential synergies for the open source access of textbooks for the academic community. This concept also requires the use of a server. The open source textbook vendor would provide the server while Focal would provide the content.

Production capacity

Production capacity depends on the quantity of references ordered by the resellers and anticipated distribution to the academic community. Since Focal contracts for the printing of the Dr. Linux reference documents, we will contract with book printers that can meet our order quantities

Quality control

The quality of the content (currency with the state of changes to the operating system software, technical accuracy, readability, and visual appeal) and the quality of the printing are the two primary quality concerns. Focal controls content quality by using two editors. Each editor is deeply involved with the Linux community and each has years of editorial experience. Focal will specify the quality parameters to the printer. Focal's experience in this industry ensures that contracts will be with printers with established and accepted internal quality controls.

Focal will select European, Japanese, Indian and other Asian resellers based on price, quality and other key variables.

Production costs

Appendix C provides the detailed production costs for the reseller and academic reference manuals.

VI. Administrative policies

Focal will address administrative policies and procedures in the third and fourth quarters of the 2000 calendar year. The policies and procedures will stem from the structure of the Limited Liability Company structure and our strategic objectives.

VIII. Appendices

Appendix A - Member resumes

Appendix B- Pro-forma income statement

(Later)

Cash Flow Statement

(Later)

Appendix C - Detailed sales and cost analysis for each market

(Later)

Appendix D - Analysis of the Academic community

This list identifies colleges and universities by the type of program offered. In some instances, the list reflects a review of only the first 200 colleges (alphabetically) offering the program. The initial purpose of this list is to identify the size of the potential market for academic distribution of Dr. Linux. The review criteria included a four-year course of study, sufficient enrollment (greater than 7500 students), reputation, and type of school (e.g. technology or computer science type of focus). The next steps are to identify the student enrollment within these programs, the deans under whose auspices the programs are offered and to identify the schools not reviewed in this first effort (more than 200 schools offering the same program). This initial study indicates there is a considerably larger potential market when taking the smaller four-year colleges and universities and community colleges into account (e.g. There are 1439 colleges and universities offering a program in computer science).

Business computer programming (33 colleges and universities)

Idaho State University (Pocatello, ID)

Business system analysis and design (16 colleges and universities)

Ecole des Hautes Etudes Commerciales (Montreal, PQ)

Business system networking and telecommunications (56 colleges and universities)

California State University, Hayward (Hayward, CA)

Illinois State University (Normal, IL)

University of Minnesota, Twin Cities Campus (Minneapolis, MN)

Computer education (22 colleges and universities)

Baylor University (Waco, TX)

Central Michigan University (Mount Pleasant, MI)

Eastern Michigan University (Ypsilanti, MI)

Florida Institute of Technology (Melbourne, FL)

McGill University (Montreal, PQ)

Universite du Quebec a Trois-Rivieres (Trois-Rivieres, PQ)

University of Illinois at Urbana-Champaign (Urbana, IL)

University of Nebraska at Kearney (Kearney, NE)

University of Nebraska-Lincoln (Lincoln, NE)

University of North Texas (Denton, TX)

Youngstown State University (Youngstown, OH)

Computer engineering (223 colleges and universities; first 200 reviewed)

Arizona State University (Tempe, AZ)

Auburn University (Auburn University, AL)

Boston University (Boston, MA)

Brigham Young University (Provo, UT)

Brown University (Providence, RI)

Bucknell University (Lewisburg, PA)

California Institute of Technology (Pasadena, CA)

California Polytechnic State University, San Luis Obispo (San Luis Obispo, CA)

California State Polytechnic University, Pomona (Pomona, CA)

California State University, Chico (Chico, CA)

California State University, Fresno (Fresno, CA)

California State University, Long Beach (Long Beach, CA)

California State University, Northridge (Northridge, CA)

California State University, Sacramento (Sacramento, CA)

Carnegie Mellon University (Pittsburgh, PA)

Case Western Reserve University (Cleveland, OH)

Clarkson University (Potsdam, NY)

Clemson University (Clemson, SC)

Colorado State University (Fort Collins, CO)

Columbia University, (New York, NY)

Concordia University, Canada (Montreal, PQ)

Dalhousie University (Halifax, NS)

Drexel University (Philadelphia, PA)

Eastern Michigan University (Ypsilanti, MI)

Florida Institute of Technology (Melbourne, FL)

Florida International University (Miami, FL)

The George Washington University (Washington, DC)

Georgia Institute of Technology (Atlanta, GA)

Harvard University (Cambridge, MA)

Iowa State University of Science and Technology (Ames, IA)

Johns Hopkins University (Baltimore, MD)

Kansas State University (Manhattan, KS)

Lehigh University (Bethlehem, PA)

Marquette University (Milwaukee, WI)

Massachusetts Institute of Technology (Cambridge, MA)

McGill University (Montreal, PQ)

McMaster University (Hamilton, ON)

Michigan State University (East Lansing, MI)

Mississippi State University (Mississippi State, MS)

Montana State University-Bozeman (Bozeman, MT)

New Jersey Institute of Technology (Newark, NJ)

New York University (New York, NY)

North Carolina State University (Raleigh, NC)

North Dakota State University (Fargo, ND)

Northeastern University (Boston, MA)

Northern Arizona University (Flagstaff, AZ)

Northwestern University (Evanston, IL)

The Ohio State University (Columbus, OH)

Ohio University (Athens, OH)

Oklahoma State University (Stillwater, OK)

Old Dominion University (Norfolk, VA)

Oregon State University (Corvallis, OR)

Pennsylvania State University University Park Campus (University Park, PA)

Polytechnic University, Brooklyn Campus (Brooklyn, NY)

Polytechnic University, Farmingdale Campus (Farmingdale, NY)

Portland State University (Portland, OR)

Purdue University (West Lafayette, IN)

Purdue University Calumet (Hammond, IN)

Queen's University at Kingston (Kingston, ON)

Rensselaer Polytechnic Institute (Troy, NY)

Rice University (Houston, TX)

Rochester Institute of Technology (Rochester, NY)

Rutgers, College of Engineering (Piscataway, NJ)

San Jose State University (San Jose, CA)

Southern Illinois University Edwardsville (Edwardsville, IL)

Southern Methodist University (Dallas, TX)

Stanford University (Stanford, CA)

Stevens Institute of Technology (Hoboken, NJ)

Syracuse University (Syracuse, NY)

Texas A&M University, College Station (College Station, TX)

Tufts University (Medford, MA)

Tulane University (New Orleans, LA)

Universite de Sherbrooke (Sherbrooke, PQ)

Universite du Quebec a Trois-Rivieres (Trois-Rivieres, PQ)

Universite Laval (Sainte-Foy, PQ)

The University of Akron (Akron, OH)

University of Alberta (Edmonton, AB)

The University of Arizona (Tucson, AZ)

University of Arkansas, Fayetteville (Fayetteville, AR)

University of British Columbia (Vancouver, BC)

University of Calgary (Calgary, AB)

University of California, Davis (Davis, CA)

University of California, Irvine (Irvine, CA)

University of California, Los Angeles (Los Angeles, CA)

University of California, San Diego (La Jolla, CA)

University of California, Santa Cruz (Santa Cruz, CA)

University of Cincinnati (Cincinnati, OH)

University of Colorado at Boulder (Boulder, CO)

University of Connecticut (Storrs, CT)

University of Delaware (Newark, DE)

University of Florida (Gainesville, FL)

University of Idaho (Moscow, ID)

University of Illinois at Chicago (Chicago, IL)

University of Illinois at Urbana-Champaign (Urbana, IL)

The University of Iowa (Iowa City, IA)

University of Kansas (Lawrence, KS)

University of Louisville (Louisville, KY)

University of Maine, Orono (Orono, ME)

University of Manitoba (Winnipeg, MB)

University of Maryland, College Park (College Park, MD)

University of Massachusetts Amherst (Amherst, MA)

University of Miami (Coral Gables, FL)

University of Michigan (Ann Arbor, MI)

University of Minnesota, Duluth (Duluth, MN)

University of Minnesota, Twin Cities Campus (Minneapolis, MN)

University of Missouri-Columbia (Columbia, MO)

University of Nebraska-Lincoln (Lincoln, NE)

University of Nevada, Las Vegas (Las Vegas, NV)

University of New Brunswick, Fredericton (Fredericton, NB)

University of New Hampshire (Durham, NH)

University of New Mexico (Albuquerque, NM)

The University of North Carolina at Chapel Hill (Chapel Hill, NC)

University of Notre Dame (Notre Dame, IN)

University of Oklahoma (Norman, OK)

University of Ottawa (Ottawa, ON)

University of Pennsylvania (Philadelphia, PA)

University of Pittsburgh (Pittsburgh, PA)

University of Puerto Rico, Mayaguez Campus (Mayaguez, PR)

University of Rhode Island (Kingston, RI)

University of South Alabama (Mobile, AL)

University of South Carolina, Columbia (Columbia, SC)

University of Southern California (Los Angeles, CA)

University of South Florida (Tampa, FL)

Computer/Information Sciences (447 colleges and universities; first 200 reviewed)

Arkansas State University (State University, AR)

Bentley College (Waltham, MA)

Boise State University (Boise, ID)

California State Polytechnic University, Pomona (Pomona, CA)

California State University, Chico (Chico, CA)

California State University, Sacramento (Sacramento, CA)

California State University, San Bernardino (San Bernardino, CA)

Carnegie Mellon University (Pittsburgh, PA)

Central Michigan University (Mount Pleasant, MI)

Central Texas College (Killeen, TX)

Clarkson University (Potsdam, NY)

Cleveland State University (Cleveland, OH)

DePaul University (Chicago, IL)

Drexel University (Philadelphia, PA)

Eastern Michigan University (Ypsilanti, MI)

Florida State University (Tallahassee, FL)

Fordham University (New York, NY)

George Mason University (Fairfax, VA)

The George Washington University (Washington, DC)

Hampshire College (Amherst, MA)

Harvard University (Cambridge, MA)

Idaho State University (Pocatello, ID)

Indiana State University (Terre Haute, IN)

Indiana University of Pennsylvania (Indiana, PA)

James Madison University (Harrisonburg, VA)

Kansas State University (Manhattan, KS)

Kentucky State University (Frankfort, KY)

Computer management (121 colleges and universities)

Ecole des Hautes Etudes Commerciales (Montreal, PQ)

Fordham University (New York, NY)

Oklahoma State University (Stillwater, OK)

Universite de Sherbrooke (Sherbrooke, PQ)

Universite du Quebec a Montreal (Montreal, PQ)

Universite Laval (Sainte-Foy, PQ)

University of Cincinnati (Cincinnati, OH)

Western Washington University (Bellingham, WA)

Worcester Polytechnic Institute (Worcester, MA)

Computer programming (554 any; first 200 shown)

City College of San Francisco (San Francisco, CA)

DePaul University (Chicago, IL)

Hampshire College (Amherst, MA)

Computer science (1439 colleges and universities; first 200 reviewed)

Amherst College (Amherst, MA)

Arizona State University (Tempe, AZ)

Auburn University (Auburn University, AL)

Ball State University (Muncie, IN)

Barnard College (New York, NY)

Baylor University (Waco, TX)

Boise State University (Boise, ID)

Boston College (Chestnut Hill, MA)

Boston University (Boston, MA)

Bowdoin College (Brunswick, ME)

Bowling Green State University (Bowling Green, OH)

Brandeis University (Waltham, MA)

Brigham Young University (Provo, UT)

Brown University (Providence, RI)

California Institute of Technology (Pasadena, CA)

California Polytechnic State University, San Luis Obispo (San Luis Obispo, CA)

California State Polytechnic University, Pomona (Pomona, CA)

California State University, Fresno (Fresno, CA)

California State University, Fullerton (Fullerton, CA)

California State University, Hayward (Hayward, CA)

California State University, Long Beach (Long Beach, CA)

California State University, Los Angeles (Los Angeles, CA)

California State University, Northridge (Northridge, CA)

California State University, San Bernardino (San Bernardino, CA)

Carnegie Mellon University (Pittsburgh, PA)

Case Western Reserve University (Cleveland, OH)

Computer system analysis (34 colleges and universities)

Kansas State University (Manhattan, KS)

Kent State University (Kent, OH)

McGill University (Montreal, PQ)

Miami University (Oxford, OH)

Universite du Quebec a Trois-Rivieres (Trois-Rivieres, PQ)

University of Houston (Houston, TX)

University of Miami (Coral Gables, FL)

Data processing (16 colleges and universities)

Eastern Michigan University (Ypsilanti, MI)

Data processing technology (437 colleges and universities; first 200 reviewed)

Arkansas State University (State University, AR)

Idaho State University (Pocatello, ID)

Management Information Systems/Business data processing (461 colleges and universities; first 200 reviewed)

American University (Washington, DC)

Arizona State University (Tempe, AZ)

Arkansas State University (State University, AR)

Auburn University (Auburn University, AL)

Babson College (Babson Park, MA)

Ball State University (Muncie, IN)

Baruch College of the City University of New York (New York, NY)

Baylor University (Waco, TX)

Boston College (Chestnut Hill, MA)

Boston University (Boston, MA)

Bowling Green State University (Bowling Green, OH)

California Polytechnic State University, San Luis Obispo (San Luis Obispo, CA)

California State University, Chico (Chico, CA)

California State University, Fresno (Fresno, CA)

California State University, Fullerton (Fullerton, CA)

California State University, Hayward (Hayward, CA)

California State University, Northridge (Northridge, CA)

California State University, San Bernardino (San Bernardino, CA)

Central Michigan University (Mount Pleasant, MI)

Clarkson University (Potsdam, NY)

Concordia University, Canada (Montreal, PQ)

DePaul University (Chicago, IL)

Drexel University (Philadelphia, PA)

Duquesne University (Pittsburgh, PA)

East Carolina University (Greenville, NC)

Eastern Illinois University (Charleston, IL)

Eastern Michigan University (Ypsilanti, MI)

Ecole des Hautes Etudes Commerciales (Montreal, PQ)

Florida State University (Tallahassee, FL)

Fordham University (New York, NY)

Illinois State University (Normal, IL)

Indiana State University (Terre Haute, IN)

Indiana University Bloomington (Bloomington, IN)

Louisiana State University (Baton Rouge, LA)

Louisiana Tech University (Ruston, LA)

Loyola University Chicago (Chicago, IL)

Mathematics/computer science (39 colleges and universities)

Brown University (Providence, RI)

McGill University (Montreal, PQ)

Rochester Institute of Technology (Rochester, NY)

State University of New York at Binghamton (Binghamton, NY)

University of Illinois at Chicago (Chicago, IL)

University of Illinois at Urbana-Champaign (Urbana, IL)

University of Oregon (Eugene, OR)

University of Waterloo (Waterloo, ON)

Washington University in St. Louis (St. Louis, MO)

Appendix E - Industry Press releases and reported events in the Linux community

Available in a separate file.

Appendix F - Sales presentation material outline (to be completed in September 2000)

1. Media Kit

• Product description

• Audience

• Circulation

• Frequency

• Why Dr. Linux is a superior product to our competition

• Buying habits of the reseller clients

• Rates for sponsors

2. Selling facts

• Distribution

• Benefits (long and short term)

• Linux growth

• Why it is important to be associated with the academic community

3. Power Point presentation

4. Sales presentation strategy

5. Post presentation strategy

Information required to compose the sales presentation material

• Industry research

• Company research (situations, needs, where Dr. Linux fits in their strategy)

• Competitor research (e.g. adoption of Linux, ties to the academic community)

• Marketing and sales approach for each company

• list of contacts

• Background information on marketing personnel

• Information from etailers

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[1] Dr. Linux aka Complete Reference and variations of Dr. Linux

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