| The market for distributed component software products and related services is highly competitive, and the company expects this competition to increase. The company's products currently compete with those of other independent providers of COBRA-based solutions, including, without limitation: Digital Equipment Corporation's ObjectBroker, IBM's SOM and DSOM, Sun Microsystem's NEO and Joe, Hewlett-Packard Company's ORBplus, Visigenics' VisiBroker products and Expersoft's PowerBroker products. While the company is presently a leading provider of distributed component solutions based on COBRA, there can be no assurance that the company will maintain its share of the market for such solutions. The company's products also compete with those of independent providers of other interoperability technologies, including, without limitation: Microsoft's ActiveX, COM and DCOM technologies, proprietary distributed component technologies; BEA Systems Inc.'s Tuxedo, a transaction processing monitor; IBM's MGSeries and Digital Equipment Corporation's DECmessageQ, messaging software products; Sun Microsystems's non-COBRA based application connectivity solutions and Java interoperability technologies, such as Microsoft's DCOM, because such technologies may leverage existing infrastructure, expertise and commercial relationships, because such products may be adopted or promoted by industry leaders, because such products may be bundled with other product and system offerings, or because such products may be offered at lower prices. In the future, potential customers also may select non-COBRA based interoperability technologies in the event such solutions gain broader market acceptance, are based on alternative open standards, become available on multiple platforms, or incorporate complementary features and functionality. In addition, the company expects to compete in the future with messaging and transaction technologies from Microsoft, including but not limited to Microsoft's announced Viper and Falcon products. Some of the company's current and future competitors may offer interoperability technologies as part of their broader product and service offerings. The company believes that the principal competitive factors affecting its market include product features and functionality, ease of use, quality, performance, price, customer service and support, effectiveness of sales and marketing efforts and company reputation and financial viability. The company anticipates continued growth and competition in the application-to-application infrastructure industry and, consequently, the entrance of new competitors into the distributed component software market in the future. Moreover, the company believes that some of its existing and potential competitors including Sun Microsystems, are developing application connectivity solutions entirely in an interoperability technologies based entirely, on Java. The company expects that any such development will further increase competition. |