WORLDOX® - World Software Corporation®
By Tom Burke

September, 2002
Version 1.1

VII. Competition

In Section 1 of this White Paper, we said:   While we will focus primarily on WORLDOX and World Software's point of view in this White Paper, reality and relevancy demands we compare and contrast ourselves with our primary competitors. The reader will find many differences between us and our competitors and will learn that WORLDOX does essentially what they do, costs much less, is less complicated, and, does it as well or better than they do it. We added in Section 4 the following:   Competitors such as DOCS Open and iManage have chosen (in our opinion) to overburden their technology solution with attention-getting but technologically unnecessary components such as SQL and three-tier software and hardware. In Section 3 we commented on replacing our competitors as follows:   In the years 1994-2002 World Software has converted 200+ law firms from SoftSolutions, 100+ firms from PC DOCS, 4 from iManage and 2 from GroupWise DMS, and one from Lotus, Domino.Doc. Law firms are increasingly turning to WORLDOX knowing that WORLDOX is mature, the company's financial future is sound and fast-growing, and its long-term focus and commitment is to the legal market. In Section 3 wherein we commented on all the Players, we zeroed in on just who is our top competitor.   TODAY PEOPLE IN THE LEGAL MARKETPLACE BELIEVE, WHEN MAKING A NEW OR REPLACEMENT DMS DECISION, THAT THERE ARE ONLY 2 CHOICES - WORLDOX or iMANAGE. THE TRENDS WE ARE SEEING SUPPORT THIS BELIEF. Why we think WORLDOX is better. 1. WORLDOX has been reviewed and awarded many of the top DMS awards in Legal publications such as Law Office Computing - twice a Shootout winner; and Technolawyer winner for Favorite Document Management Solution 5 times in a row. WORLDOX is also Association of Legal Administrators' chosen product over iManage and DOCS Open. WORLDOX is an industrial strength, feature-rich, full-functioning legal DMS that is so robust that it can take up to six hours to demonstrate all of its capabilities to a prospective large law firm. 2. WORLDOX has replaced iManage at a number of firms. They include- Woods, Rogers & Hazelgrove in Roanoke, Virginia and Jones Walker in New Orleans who switched from "iManage" to WORLDOX. Woods Rogers' Clay Gibney stated afterward: "I'm really glad I bought WORLDOX!" 3. World Software is the only company whose primary goal is to make its product - WORLDOX - the #1 Document Management System in Law Firms. Currently, WORLDOX is used at 1800 law firms and is #2 to PC DOCS, which has 2000+ (mostly legacy) installations; iManage has 900 legal installations. iManage calls itself an "Information Manager" thereby seeming to abandon primary focus on the Document Management category. As we see it, iManage is not legal-centric, and instead is primarily focused on e-commerce, business-to-business software, collaboration and content management, all or most of which currently is the domain of large corporations not law firms. As of December 31, 2001, iManage's stated goal of diversifying out of the legal market is not happening or is happening slowly. According to their SEC filing (10-K), 79.3% of their Year 2001 business came from legal. In Year 2000 legal accounted for 76.6% and in Year 1999 it was 93.3%. Strategy iManage Stated Objective - to become the leading provider of e-business content and collaboration management software (Source: SEC form 10-K, dated 3/22/00) WORLDOX Stated Objective - to become the #1 Legal Document Management System 4. iManage requires NT 4.0 or Windows 2000, and SQL 7 or above and a third tier as platform software. NT 4.0 or Windows 2000 is required for their SQL Server; Third Tier server; and text search Server - in all, 3 server boxes. In our opinion, all this extra "stuff" has the potential for more errors, requires extensive and continuous maintenance and upgrading, and requires 3 additional hardware servers. WORLDOX doesn't require any extra servers. Today, iManage customers with NT 4.0 and SQL 6.5 will have to be upgraded to Windows 2000 and SQL 2000 in order to get full support because the earlier platform products are no longer supported. This type of forced upgrade is unnecessary with a non-SQL system such as WORLDOX. See Appendix B for White Paper entitled "SQL-Free" DMS http://www.worldox.com/SQL%20Free.pdf Other pertinent SQL-Free Case Studies are as follows: Carroll, Burdick & McDonough LLP Case Study http://www.worldox.com/atwork/cs_carroll.html Just Say "NO" To SQL Case Study http://www.worldox.com/atwork/cs_nosql.html 5. Commentary on our competitors’ new software development directions: (Sept. 18, 2002) We believe software development initiatives, produced by our competitors from the base of legal document management systems, have not been successful in producing broadly-accepted, new product directions. These competitors have chosen to extend or grow their products and companies by offering Collaboration and Content Management. By that choice, they have also chosen to compete with companies up to four times their size in the (corporate) market in which these other companies have been successful and have occupied that market for years. Our competitors are not succeeding. Collaboration, as a strategic application, is a winner and an example of a significant new application of the new paradigm, the internet. However, it is for major vendors like Microsoft to chart Collaboration’s major direction, produce a product and obtain market buy-in. It is not a short-term or tactical product or market, or one that can be successfully pursued by minor vendors, because it requires all collaborating parties to have the same vendor’s collaboration software on their computers. Many of the parties to this collaboration are corporate or non-legal entities who do not have the minor vendor’s software and don’t plan to in the near future. Also, Collaboration features a function called “theads” which, in effect, is a replacement for email when doing Collaboration. Users seem to be rejecting this new option as they don’t want to learn and use a new, additional function when the old one (email) works well enough. The other issues that Collaboration presents are security of the documents on a remote site. Some collaboration applications require that problem of off-site document storage is - which document is current? – the one on the third-party site? or the one on your computer or someone else’s? Niku, a vendor who had developed such a collaboration application, had experienced slow sales and withdrew from the legal market partly due to this document priority problem. Content Management is an application whose market is diffused and for which the needs being addressed with today’s solutions are not productivity driven but mostly research or informational. It is not meeting with much success in the legal market for ex-DMS vendors. Knowledge Management, once touted and sold as a broad-based application, has failed to become so. It remains for now a personal application or applet marketplace. In more difficult economic times such as now, esoteric markets or products such as Content & Knowledge Management that do not offer a compelling and immediate value proposition do not fare well. 6. In the past, our competitors, their resellers and consultants, have mistakenly portrayed WORLDOX as not ready (or worthy) of being installed in a large law firm. That position is no longer valid. WORLDOX is installed in more than 80 law firms or organizations with between 100 to 900 WORLDOX licenses each installed in all parts of the USA. Reasons why WORLDOX is large law firm ready. The largest WORLDOX installed law firm sites have: over 3 million documents under WORLDOX management the largest law firm with WORLDOX installed has 900 users the largest single office with WORLDOX installed has over 500 users the firm with the largest number of branches has 10 offices via a WAN running WORLDOX the largest WORLDOX law firms have 354 lawyers and 347 attorneys, respectively. These two firms are within the Top 100 law firms in the U.S. based on numbers of attorneys. It's AFFORDABLE or More Cost Effective than its competitors. 7. The objections to WORLDOX are "red-herrings." it is not scalable - false - ISYS, WORLDOX's search engine, supports 32 million documents; the largest law firm has 9 million documents. WORLDOX's primary database is Directory-based which means the only limit to WORLDOX is the number of Directories a system can have. Also, as mentioned above, WORLDOX has 2 law firms in the Top 100 law firms in the U.S. based on number of lawyers. WORLDOX is Proprietary - true - so is iManage proprietary except in its SQL database. For that matter, Microsoft's Windows is also proprietary 8. iManage's is not making a profit and World Software has and is making a profit.   iManage has never made a profit in any 90-day period during its first six years of existence. Why would you INVEST in a company (by buying their product) that has for 6 years of operation failed to make any profit and has lost $39 million? The numbers are as follows: Year Net Loss Profit Cumulative LOSS to Date 12/31/01 (6 + Years of Operation)______ 1995 $ 64,000 - $ 64,000 1996 692,000 - 756,000 1997 3,596,000 - 4,352,000 1998 2,840,000 - 7,192,000 1999 2,775,000 - 9,967,000 2000 9,114,000 - 19,081,000 2001 19,750,000 * - 38,831,000 * Source: iManage 10K (SEC form) December 2001   Also, for the first quarter of 2002, iManage again posted a loss of $307,000. This also means their cumulative loss to March 31, 2002 is $39,138,000. Their cumulative loss of $39+ million exceeds their Net Worth of $37 + million as of March 31, 2002, according to the SEC form 10Q. According to their SEC form 10Q for the quarterly period ending March 31, 2002, they "derived 70%…of our licensed revenues for the first quarter ended March 31, 2002…from the sale of licenses to law firms and professional service firms." Their total license revenue for the first quarter of 2002 was $7,113,000. Thus, their total license revenue was split $4,979,000 or $5 million legal and professional services, and $2.1 million other industries. See paragraph 3 in this Section 7 for more information on iManage's revenue from the legal vertical market.

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