athena overview
TRANSCRIPT
OverviewOverview
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ABOUT ATHENAABOUT ATHENA
Athena Technology Inc.
Privately held since March 2007
Headquartered in Newport Beach ,CA
Carrier Ethernet Switching Technology
- Eliminating the Bottleneck
- The Changing Communications Landscape
Athena Technology Inc.
Privately held since March 2007
Headquartered in Newport Beach ,CA
Carrier Ethernet Switching Technology
- Eliminating the Bottleneck
- The Changing Communications Landscape
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
VISIONVISION
Our goal is simply stated. We desire to be the best Metro Ethernet products organization in the world Our goal is simply stated. We desire to be the best Metro Ethernet products organization in the world
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA CAPITAL STRUCTUREATHENA CAPITAL STRUCTURE
25 Million Shares Authorized
5 Million Shares Issued 72% or 3.6 Million of the issued shares are Held by the
founders
28% or 1.4 Million are reserved for future employees Between $1.5 and $2 Million in cash from founders
(excludes “sweat equity”)
25 Million Shares Authorized
5 Million Shares Issued 72% or 3.6 Million of the issued shares are Held by the
founders
28% or 1.4 Million are reserved for future employees Between $1.5 and $2 Million in cash from founders
(excludes “sweat equity”)
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
FOUNDERS & MANAGEMENT TEAMFOUNDERS & MANAGEMENT TEAM Jim Fiedler
CEO of Summa Four, Inc. IPO & sold to Cisco for $400M COO of Timeplex, Inc. sold to Ascom for $420M Chairman and CEO of Coyote Systems
Ananda Perera CTO of Raptor Networks, Viacom, Amdahl and MCI Holder of multiple switching patents
Mark Perkell Senior Vice President and General Counsel for CityNet Telecommunications
John Moore General Manager -Timeplex Inc, Unisys, Fujitsu, Vice President - Raptor Networks
Sri Chaganty Ceeyes Group (Founder), HolonTech (CTO), NEC, GTE Telecom, Unisys 5 Patents in the area of high availability
Jim Fiedler CEO of Summa Four, Inc. IPO & sold to Cisco for $400M COO of Timeplex, Inc. sold to Ascom for $420M Chairman and CEO of Coyote Systems
Ananda Perera CTO of Raptor Networks, Viacom, Amdahl and MCI Holder of multiple switching patents
Mark Perkell Senior Vice President and General Counsel for CityNet Telecommunications
John Moore General Manager -Timeplex Inc, Unisys, Fujitsu, Vice President - Raptor Networks
Sri Chaganty Ceeyes Group (Founder), HolonTech (CTO), NEC, GTE Telecom, Unisys 5 Patents in the area of high availability
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA MANAGEMENTATHENA MANAGEMENT
Over 100 years of successful senior management experience.
Direct successes in the telecommunications switching market.
Successful design and implementation of switching systems.
Ability to attract and retain superior employees.
In depth understanding of the IPO and M&A business.
Proven track record of increasing shareholders equity.
Over 100 years of successful senior management experience.
Direct successes in the telecommunications switching market.
Successful design and implementation of switching systems.
Ability to attract and retain superior employees.
In depth understanding of the IPO and M&A business.
Proven track record of increasing shareholders equity.
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
THE MARKET THE MARKET
Worldwide Carrier Ethernet Market• 2005 Ethernet Revenue $3.5
Billion• Projected growth to $10.5 Billion
in 2010• Application Growth
• Business Services 55%/year• Residential Services
30%/year Residential Drivers – Triple Play
• IPTV/VOIP• High Speed Data• Gaming/YouTube/Social Networks
Enterprise Drivers• Increased Global Reach• Increasingly Distributed IT• Global Outsourcing
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
CHANGING LANDSCAPECHANGING LANDSCAPE Internet Traffic Growth
• Internet Traffic will grow 50 fold by 2015 (AT&T)• 8 hours of video is loaded on to YouTube every minute• 80% of traffic will be video by 2010 (from existing 30%)
• 8 Million Terabytes of traffic by 2011
Key trends moving forward – massive content growth• Early movers such as Apple’s iTunes succeeded in evangelizing their
technologies• Huge investments for R&D by early movers in digitizing content helped
market acceptance of the technologies
The Core Transport Network is being overwhelmed
Internet Traffic Growth• Internet Traffic will grow 50 fold by 2015 (AT&T)
• 8 hours of video is loaded on to YouTube every minute• 80% of traffic will be video by 2010 (from existing 30%)
• 8 Million Terabytes of traffic by 2011
Key trends moving forward – massive content growth• Early movers such as Apple’s iTunes succeeded in evangelizing their
technologies• Huge investments for R&D by early movers in digitizing content helped
market acceptance of the technologies
The Core Transport Network is being overwhelmed
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
SCOPE OF PROBLEMSCOPE OF PROBLEM
Cable Operators and Telephone Companies are struggling to meet and keep up with the bandwidth demand for customer services.
Telco carriers are losing millions of basic customers (over 25M in US alone, $625 million in monthly revenue) to competitors because they cannot offer competitive high speed services.
Ethernet switching equipment market was $3.5B in 2005, projected at $10.5B by 2010.
While “edge” applications, such as Youtube and AT&T’s U-verse, have lead in deployment, they have quickly outstripped the core network’s ability to support them.
Cable Operators and Telephone Companies are struggling to meet and keep up with the bandwidth demand for customer services.
Telco carriers are losing millions of basic customers (over 25M in US alone, $625 million in monthly revenue) to competitors because they cannot offer competitive high speed services.
Ethernet switching equipment market was $3.5B in 2005, projected at $10.5B by 2010.
While “edge” applications, such as Youtube and AT&T’s U-verse, have lead in deployment, they have quickly outstripped the core network’s ability to support them.
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
RECENT NEWS EVENTSRECENT NEWS EVENTS
“Only 60% of American households have speedy Net access. That puts the country in 15th place among developed nations, according to the Organization for Economic Cooperation and Development. It’s a mighty fall from 2001, when the U. S. ranked fourth.”
Roger O. CrockettBusiness Week, August 11, 2008
“It took 100 years to get 1 billion devices on the network. It will take less than 10 years to get the next billion.”
John Donovan: AT&T’s technology chief
quoted in USA Today, August 1, 2008
“Only 60% of American households have speedy Net access. That puts the country in 15th place among developed nations, according to the Organization for Economic Cooperation and Development. It’s a mighty fall from 2001, when the U. S. ranked fourth.”
Roger O. CrockettBusiness Week, August 11, 2008
“It took 100 years to get 1 billion devices on the network. It will take less than 10 years to get the next billion.”
John Donovan: AT&T’s technology chief
quoted in USA Today, August 1, 2008
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
Barriers to EntryBarriers to Entry
Architecture that allows for 1/3 of competitor’s pricing.
Patentable Intellectual Property.
180+ staff years of completed software development.
Tight coupling of the hardware/software interface.
Current competitors must redesign and re-architect.
Architecture that allows for 1/3 of competitor’s pricing.
Patentable Intellectual Property.
180+ staff years of completed software development.
Tight coupling of the hardware/software interface.
Current competitors must redesign and re-architect.
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA CORE SWITCHATHENA CORE SWITCH 25.2 - Tbps switching fabric 144 - 576 ports of 10 Gigabit Ethernet 28 - CPU’s clustered for Control and Management 2 - CPU for Historical Data Collection 1152 - Ports of Gigabit Ethernet 787- Gbps bandwidth per slot 72 - Million Packets per second(Mpps)per 2x10GE ports
(system wide capacity of over 5.1 Bpps) Scalable MAC table (512k-1M) IPv4 and IPv6 unicast and multicast routing 100 Gbps Ethernet ready
25.2 - Tbps switching fabric 144 - 576 ports of 10 Gigabit Ethernet 28 - CPU’s clustered for Control and Management 2 - CPU for Historical Data Collection 1152 - Ports of Gigabit Ethernet 787- Gbps bandwidth per slot 72 - Million Packets per second(Mpps)per 2x10GE ports
(system wide capacity of over 5.1 Bpps) Scalable MAC table (512k-1M) IPv4 and IPv6 unicast and multicast routing 100 Gbps Ethernet ready
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA ACCESS SWITCHATHENA ACCESS SWITCH■ 3U High
■ 2 Load Balanced Power Supplies
■ 1 CPU for Control and Management
■ Anthem Software suite
■ Option Line Cards Line card A 8x10GE Ports (OC192, DWDM, 10GE) Line card B 2x40GE Ports (OC768, STM-256) Line card C48 x 1GE ports Line card E48 x 1GE ports & 4x 10GB Ports (OC192, 10GE, DWDM) Line Card E 64 x 1 GE Ports
■ 3U High
■ 2 Load Balanced Power Supplies
■ 1 CPU for Control and Management
■ Anthem Software suite
■ Option Line Cards Line card A 8x10GE Ports (OC192, DWDM, 10GE) Line card B 2x40GE Ports (OC768, STM-256) Line card C48 x 1GE ports Line card E48 x 1GE ports & 4x 10GB Ports (OC192, 10GE, DWDM) Line Card E 64 x 1 GE Ports
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
Cisco 6513
JuniperMX960
Force10E1200
Athena288
Line Rate Interfaces
20 10G410 1G
48 10G480 1G
56 10G672 1G
288 10G1152 1G
Switch Fabric Capacity
N/A 1.8 TBS 1.68TBS 12TBS
Full Mesh Forwarding
Capacity
400 MPPS
720MPPS 1 BPPS 3 BPPS
Back Plane Capacity
720 GBS 1 TBS 5 TBS 20TBS
Line Card Slots
9 12 14 24
Price/ 10GE $25,000 $23,000 $18,000 $8,000
Competition Competition
Features
Vendor
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
RECENT M&A TRANSACTIONSRECENT M&A TRANSACTIONS
World Wide Packets (March, 2008) – 10 x 10Gb ports, $21,000 per 10GE port, acquired by Cienna for $300 million, revenue of $16 million
Foundry Networks (July, 2008) – 128 x 10Gb Ports, not carrier grade, $17,000 per port acquired by Brocade for $3 billion, revenue of $600 million
Atrica, Inc. (Oct, 2007) – 15 x 10Gb Ports, $13,000 per port, acquired by Nokia Siemens Networks for $300 million, revenue of $17 million
World Wide Packets (March, 2008) – 10 x 10Gb ports, $21,000 per 10GE port, acquired by Cienna for $300 million, revenue of $16 million
Foundry Networks (July, 2008) – 128 x 10Gb Ports, not carrier grade, $17,000 per port acquired by Brocade for $3 billion, revenue of $600 million
Atrica, Inc. (Oct, 2007) – 15 x 10Gb Ports, $13,000 per port, acquired by Nokia Siemens Networks for $300 million, revenue of $17 million
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
Prospects/PartnersProspects/Partners
Carrier Providers Level 3, XO Communications
Carriers• Regional/Independent Telco's• International PTT’s • Verizon• AT&T
Cable Multiple System Operators Telcom/Cable Equipment Manufacturers
• Tellabs• Alcatel/Lucent
Carrier Providers Level 3, XO Communications
Carriers• Regional/Independent Telco's• International PTT’s • Verizon• AT&T
Cable Multiple System Operators Telcom/Cable Equipment Manufacturers
• Tellabs• Alcatel/Lucent
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
MilestonesMilestones
Architectural design signoff Complete
Software Port “Reference Design” Complete
Functional Test complete 12 Mo after funding
Live demonstration 12 Mo after funding
System Test complete 14 Mo after funding
Architectural design signoff Complete
Software Port “Reference Design” Complete
Functional Test complete 12 Mo after funding
Live demonstration 12 Mo after funding
System Test complete 14 Mo after funding
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
BUSINESS MODELBUSINESS MODEL
2011 2012 2013 2014Average Switch Price $ 554k $ 416k $ 277k $ 277k
Revenue $12M $30M $55M $75M
Cost of Goods 16.7% 20.1% 25.1% 22.6%
Gross Profit 83.3% 79.9% 74.9% 77.4%
Expenses 74.5% 40.2% 28.8% 24.3%
Pretax Profit 8.8% 39.7% 46.1% 53.1%
Net Profit 8.8% 31.6% 30.0% 34.5%
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA’S ROLE IN THE NETWORK
ATHENA’S ROLE IN THE NETWORK
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
Carrier Ethernet
Business Ethernet Edge
Ethernet Aggregation
Access Ethernet Switching Core
CORE SWITCHING BACKBONECORE SWITCHING BACKBONE
Ethernet Aggregation
Access
Cable MSOs
Broadband Ethernet Edge
Telco's
Ethernet AggregationSwitch
Ethernet AggregationSwitch
OLT
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
TOPOLOGY FLEXIBILITYTOPOLOGY FLEXIBILITY
Ring & Spoke topology
Ethernet resilient ring Carrier Ethernet
Hub & spoke topology
Bus topologyWiMax BTS Athena
Athena
Athena
Athena
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
LEASED ETHERNET WIMAX SERVICE DELIVERY OPTIONS
LEASED ETHERNET WIMAX SERVICE DELIVERY OPTIONS
SONET/SDHAccess ring
Ethernet over TDM
WiMax BTS
Ethernet resilient ringNative Carrier Ethernet
Ethernet over PDH(T1/E1)
SONET/SDH
Carrier Ethernet
10 Gbe
Athena
Athena
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ETHERNET SOLUTIONS FOR WIMAX,2G/3G BASE STATIONS
ETHERNET SOLUTIONS FOR WIMAX,2G/3G BASE STATIONS
Carrier Ethernet
Ethernet resilient ring
WiMax BTS
WiMax BTS
ATM
2G/3G base Station
T1/E1
WiMax BTS
SONET/SDHAccess ring
2G/3G base Station
Ethernet radio
Microwave
Pseudo-Wire backhaul:WiMax co-located with CDMA/GSM/UMTS
Microwave backhaul:WiMax co-located with CDMA/GSM/UMTS
Microwave Radio Microwave Radio
WiMax BTS
WiMax BTS
WiMax BTS
Campus Ethernet
10 GbE
10 GbE
Ethernet over PDH(T1/E1)
Athena
Athena
Athena
Athena
WiMax BTS
Secure RouterIP/PPP
10/1000/1000
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
CONCLUSIONCONCLUSION
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.25
• Optimized Software
• High Density
• Carrier Grade
Athena SwitchesAthena Switches
Completely none blocking
Robust Management Software
Meets all Carrier requirements for placement in the Core Network
Higher Capacity than any competitor
Operates at the speed of the lines
• Aggressive Cost/Price Model
• High Performance
16% of Competitor’s Cost30% of Competitor’s Price
Proprietary and Confidential - Athena Technology, Inc.Proprietary and Confidential - Athena Technology, Inc.
ATHENA BENEFITSATHENA BENEFITS Compatibility
Industry standard provisioning and operationIndustry standard communication interfacesCoexistence with present equipment
PerformanceCompletely non-blockingLine speed operation across the systemLatency neutrality providing Stratum 1 clock capability
ScalabilityUp to 576 10GE ports in a single chassisUp to 1152 1GE ports Low basic unit cost
CostPricing at 1/2 to 1/3 of competitionNo expensive “forklift” replacement
CompatibilityIndustry standard provisioning and operationIndustry standard communication interfacesCoexistence with present equipment
PerformanceCompletely non-blockingLine speed operation across the systemLatency neutrality providing Stratum 1 clock capability
ScalabilityUp to 576 10GE ports in a single chassisUp to 1152 1GE ports Low basic unit cost
CostPricing at 1/2 to 1/3 of competitionNo expensive “forklift” replacement