A Unique Approach to the Distribution of Networking,

Security, and Business Continuity Solutions

Company History/Background

RAD Data Com.WAN/LANAccess Solutions Established: 1981

SILICOMHome Networking

Established: 1987

RADVISIONIP Voice andVideo ConferencingEstablished: 1992

RITCablingManagementEstablished: 1989

RADWAREInternet AccessManagementEstablished: 1997

CERAGONWireless WAN

Established: 1996

BYNETGroup Distributor

in Israel

The RAD Group

• Coordinated Strategy

• Shared Marketing Channels

• Joint Development & Technology Sharing

• Some companies are Public

RADirectNetwork Services

Established: 2000

SANRADStorage AreaNetworksEstablished: 2000

RADWINWireless Local Loop Established: 1997

WISAIRUWB – Ultra WidebandCommunicationsEstablished: 2001

AXERRAIP Over Sonet/SDH

Established: 1999

MODULESIP for the Home

Established: 2000

RADCOMWAN, LAN and ATMAnalyzersEstablished: 1991

RADirect Company History

• Established in 2000

• Headquartered in Mahwah, New Jersey

• Member of internationally renowned, $450+ million RAD Group of companies that develop, manufacture and market solutions for diverse segments of the networking and telecommunications industry

• Original charter: To increase sales & exposure of the RAD Group companies in the United States as a value-added online distributor of networking and internetworking products manufactured by these companies

RADirect Today

Three Primary Areas of Focus

• Networking / Infrastructure – Products from RAD Data Communications, FibroLAN

• Security / VPN / IPS (Intrusion Prevention Systems)

– Products from Radware, Check Point

• Business Continuity Solutions

– Products from Radware, SANRAD

Range of Solutions• RADirect specializes in selling data communications and

telecommunications access equipment, security & business continuity solutions including:

– Fiber Access Solutions – Extending enterprise voice, data or LAN over fiber infrastructure

– xDSL Last Mile Access Solutions – High capacity transport of data, LAN or voice over 2-wire/4-wire copper

– Migration of Legacy Services to IP – Solutions for transporting legacy voice, video and more over IP Infrastructure

– Voice & Data Convergence Applications

– Load Balancing Solutions – For multiple ISP links, servers, firewalls and more

– Firewalls, VPN Gateways & IPS (Intrusion Prevention Systems)

– IP Storage Networks (IP SAN/iSCSI) Solutions

Technology Equipment Distribution Landscape

RADirect

RADirect Customer Breakdown

53%

34%

13%

End Users:Government

MilitaryEnterprise

UtilitySmall VARs:< 10 employees

< $2 Mil Revenue

Service Providers:Rural TelcosSmall ISPs

Tier 3 & 4 Markets

The RADirect Sales Cycle

The RADirect Sales Cycle: Marketing

• An e-commerce business model at inception

• Highly detailed, well-organized online catalogs that can be searched by product type or application (including application drawings)

• Majority of leads today are generated through Internet Search Marketing:

– Paid listings

– Unpaid (organic) listings

• Current marketing mix also includes a proactive targeting of lucrative and underserved rural markets

Internet Search Marketing Example

Paid

Organic

Rural Markets: Opportunity

• While customers in rural areas experience the same datacom and telecom challenges faced by their urban counterparts, they are often underserved due to:

– Lack of local expertise / knowledge

– Lack of local resources

• Funds and infrastructure readily available

• “Utelco” concept is proving successful

Targeting Rural Markets

• RADirect proactively targets rural VARs and service providers, and helps to “fill in the knowledge gap”.

– Trade shows and events

– Publications

– Direct mail / cold calling

– Targeted website content

– Marketing collateral

The RADirect Sales Cycle: Systems Engineering

• RADirect’s systems engineers are among the most knowledgeable, proficient, and accessible in the industry:

– Boast an average of 20 years of experience per systems engineer in RADirect’s narrowly focused area of operations

– Offer free consultation to ensure customers always get the best solution

– Are available for “live chat” online during business hours

– Provide 2-hour or less response time on phone and web inquiries

The RADirect Sales Cycle: Account Management

• Dedicated account manager for every customer

• Quotes provided in 24 hours or less

• 85% of products ship in 24 hours

• Online account management

– Order status

– Tracking

• 30% of buyers are repeat customers!

Success Metrics - Revenue

Projected

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2001 2002 2003 2004

AnnualRevenue

0123456789

10

2001 2002 2003

Employees

Success Metrics - Employees

Going Forward

Going Forward…

• Projected 2004 Total Revenues: $5.25 million

• How to accomplish?

– Expand product portfolio in 3 target areas (networking, security, business continuity)

– Increase Internet-based marketing activities

– Penetrate key vertical markets

Recent Success Stories

RADirect Success Story: (Rural Utility) Pend Orielle County Public Utility District

• Washington State-based “Utelco” (utility that also provides communications services)

• Challenge: To provide T1 services to customers over a fiber Ethernet infrastructure

• Solution: Purchased RAD Data Communications’ IPmux TDMoIP gateways from RADirect

RADirect Success Story: (Rural Utility) Empire District Electric Company

• Joplin, Missouri-based rural “utelco” (utility that also provides communications services)

• Challenge: To provide managed T1 services over fiber

• Solution: Purchased RAD Data Communications’ LRS managed modem racks and Optimux fiber multiplexers from RADirect

RADirect Success Story: (Education)Illinois State University

• State University (enrollment: 20,000+) located in the heart of Central Illinois

• Challenge: Needed increased capacity for T1 voice extension across the campus. Required some unique features that are mostly found on higher-priced alternatives

• Solution: Purchased RAD Data Communications’ Optimux-T3 units from RADirect to transport T1s and E1s across their campus

RADirect Success Story: (Wireless/ISP) Heritage Internet Services

• Salt Lake City, Utah-based wireless ISP that recently launched one of the first citywide wireless networks in the United States

• Challenge: T1 Access - needed a reliable, easily managed, compact router for installation between wireless towers and their Internet backbone

• Solution: Purchased RAD Data Communications’ Web Ranger II T1 Routers from RADirect

www.rad-direct.com