| The market in which the Company competes is intensely competitive,
highly fragmented and characterized by rapidly changing technology and a lack of standards. The Company's current and prospective competitors offer a variety of data mining and multidimensional data mart software solutions and generally fall within five categories: (i) vendors of multidimensional database and analysis software such as Oracle (Express) Arbor (Essbase) and Pilot Software (Pilot Lightship Server); (ii) vendors of OLAP/relational database software such as Informix (Metacube), Information Advantage (Decision Suite) and Holistic Systems (Holos); (iii) vendors of desktop based data mining software, such as Business Objects (BusinessMiner), Cognos (Scenario), Agnoss (Knowledge Seeker) and DataMind (DataCruncher); (iv) vendors of server based multiprocessor data mining software such as Thinking Machines (Darwin), Neovista (Neovista) and Hyperparallel (Hyperparallel) and (v) vendors of vertical software applications for budgeting and financial consolidation, such as Hyperion Software Corporation (Hyperion and FYPlan) and consulting vendors such as Coopers & Lybrand, Arthur
Andersen and Deloitte & Touche, who focus on customer applications in the telecommunications, banking, insurance and retail industries. The Company has experienced and expects to continue to experience
increased competition from current and potential competitors, many of whom have significantly greater financial, technical, marketing and other resources than the Company. Such competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements or devote greater resources to the development, promotion and sales of their products than the Company. Also, certain current and potential competitors may have greater namerecognition or more extensive customer bases that could be leveraged, thereby gaining market share to the Company's detriment. The Company expects additional competition as other established and emerging companies enter into the OLAP software market and new products and technologies are introduced. Increased competition could result in price reductions, fewer customer orders, reduced gross margins and loss of market share, any of which would materially adversely
affect the Company's business, operating results and financial condition. Current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties,
thereby increasing the ability of their products to address the needs of the
Company's prospective customers. The Company's current or future indirect channel partners may establish cooperative relationships with current or potential competitors of the Company, thereby limiting the Company's ability to sell its products through particular distribution channels. Accordingly, it is possible that new competitors or alliances among current and new competitors may emerge and rapidly gain significant market share. Such competition could materially adversely affect the Company's ability to obtain new contracts and maintenance and support renewals for existing contracts on terms favorable to the Company. Further, competitive pressures may require the Company to reduce the price of Voyager and QueryObject System, which would materially adversely affect the Company's business, operating results and financial condition. There can be no assurance that the Company will be able to compete successfully
against current and future competitors, and the failure to do so would have a
material adverse effect upon its business, operating results and financial
condition. The Company competes on the basis of certain factors, including product quality, first-to-market product capabilities, product performance, ease of use and customer support. The Company believes it presently competes favorably with respect to each of these factors. However, the Company's market is still evolving and there can be no assurance that the Company will be able to compete successfully against current and future competitors and the failure to do so successfully will have a material adverse affect upon the its business, operating results and financial condition. |