embrace network

April, 2003

Embrace Networks Confidential – All Rights ReservedEmbrace Networks Confidential – All Rights Reserved 2

Agenda

The stampede to connect “devices” to the Internet

Solving the real issue - Complexity Reduction

Embrace’s Device Brokerage Platform

Summary


Factory employees getting instructions for the day andexchanging data with backend systems

Sales personnel getting access toupdated pricing information

Send time & attendancedata to payroll

Remote and real timemonitoring of energy meters

Reading RFID Tagsand routing tag information to

back-end supply chain applications

Current uses of Embrace’s Technology

Update database of employees forpremises access security device

What do these devices have in common?

Reorder of consumables fordoctors offices

Automatic scoring and storageof student test data


They are all part of a stampede…

…to connect every conceivable device to the Internet

InternetInternetIntranetIntranet

ExtranetExtranet

Strong economic driver!Strong economic driver!

10:1 Reduction in Operations Costs


Connected Devices in Billions (Forrester)

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007 2008 2009 2010

Computers 99% CAGR 18.2%X-Internet Devices CAGR 71.2%X-Internet Devices CAGR 71.2%

14.2

BIL

LIO

N D

EV

ICE

S

The Internet will experience a Tectonic shift…

Sources: ForresterSources: Forrester

95% of devices will not be computers95% of devices will not be computers Scale 100x Very diverse and narrow purpose Limited physical control and user interface


Connectivity is not enough …

CONNECTIVITYSOLUTIONS

MANAGEMENT

INTEGRATIONINTEGRATION

WINDRIVERMONTAVISTAMELLANOXMICROSOFT

ARGUSPOSTSMITH

TROY

LANTRONIXDIGI

MOXAATOPAXISNETSILICON

AMD

TI

WELCOME TOCHIPLAND

DOMOSYS

VIRATA

MOTOROLA

INTEL

ARCSOFT

LANTRONIX

WIRELESSIBUTTON

LINDUX

PRECIDIAPATTON

GLOBETEKINTELLICOM

“ADAPTERSSPOKEN HERE”

PALM

IBM

QNXCOMPONENTSOFTWAREOS, STACKS

“Hard-coded” customized software to connect the device to the application

Updating the device requires updating the application

Rapid development Device and application evolution

must be decoupled A general case flexible integration

solution for many devices & applications (MxN) that is cost effective

No remote management Truck roll – field personnel with

laptop

Non-stop operation of large number of devices

Automatic device connectivity & authentication

Management application separate from operation applications

Dynamic interactions between devices and applications

Remote monitoring and upgrading Full data and network security

TraditionalTraditionalApproachApproach

CurrentCurrentRequirementsRequirements

(not solved today)(not solved today)


What’s the solution?

The extended Internet requires a new software layer in its infrastructure that dynamically “brokers” all interactions between software applications and Internet-enabled devices.

ManagementApplications

Devices(000,000,000s)

Applications(000s)

We call this new layer the “Device Brokerage “Device Brokerage Layer”Layer”

InternetIntranet

Extranet

BrokerageFunction


DeviceBrokerage

The Device Brokerage Functions

ManagementManagementApplicationsApplications

DevicesDevicesBusinessBusiness

ApplicationsApplications

ERP

CRM

SCM

Custom

Web Services/User Identity

AppBroker

AppBroker

APPLICATION BROKERAdaptation to standards& custom applications

DeviceBrokerDeviceBroker

DEVICE BROKERDevice and network

abstraction

ContextBrokerContextBroker

DeviceDevice

UserUser

Context Broker“Decouples” devices from applications; Captures and manages the “context” interaction rules, event aggregation,

filtering, etc.


Embrace 3.0Integration takes less than 1 month

Devices

Applications DeviceDeviceBrokerageBrokeragePlatformPlatform


ERP

CRM

SCM

Custom

Web ServicesUser Identity

AppBroker

AppBroker

DeviceBroker

DeviceBroker

MicroClientMicroClient Device IP AdapterDevice IP Adapter(or Gateway)(or Gateway)

• 3 options for device 3 options for device connectivityconnectivity

Device/UserManagement Applications

Brokerage PlatformBrokerage PlatformPlug-insPlug-ins

User

Device• Simple XML/Java Simple XML/Java platform for plug-in platform for plug-in developmentdevelopment

• No need to change No need to change existing applicationsexisting applications

• Less than one monthLess than one month


• Integrates into Integrates into existing application existing application management management infrastructureinfrastructure

$ No need for experienced installation personnel

$ No need for experienced field maintenance personnel

Embrace 3.010:1 Reduction in Management costs

Device/UserManagement Applications

Devices

Applications DeviceDeviceBrokerageBrokeragePlatformPlatform


ERP

CRM

SCM

Custom

AppBroker

AppBroker

DeviceBroker

DeviceBroker

Optimized RemoteMonitoring and

Maintenance

Automatic Connection and Provisioning

Web ServicesUser Identity

Dynamic relationships between devices and applications

User

Device


Embrace Device Brokerage Platform

A powerful, complete and shrink-wrapped software platformA powerful, complete and shrink-wrapped software platform

For the creation of device application “brokerages” IP-based distribution Mediated end-to-end security Supports current and new devices Programmable in real-time Efficient data transfers from telemetry to digital content Highly scalable Enterprise-class availability

Simple development environment for quick deployment

Complete brokerage management application


Why this has not been done before ?

New problem Two different worlds coming together

New thinking Only top down view at the problem of “connectivity/integration/management” A new simple model that is universal in scope A powerful services model

Hard and complex problems Nature of the extended Internet

Scale Diversity No physical control

Innovative system architecture Abstractions Context management Addressing

Intellectual Property: 14 patents filed and 1 granted Intellectual Property: 14 patents filed and 1 granted


Why Are Customers Buying?

Immediate Pain Auto-provisioning Remote device management Integration to existing applications Works with existing devices (hardware adapters and server plug-ins)

Platform Benefits Simple XML/Java environment No need to touch/change current devices and applications Network abstraction (mixed usage of LAN, WIFI, Cellular/PCS, etc) Future proof (simply add new device versions and create new services)

Significant complexity reduction for device based solutions:30 days with 10:1 reduction in operations cost


Embrace

Device Vendor Landscape

Wind River

IBM

BEAOracle

SUN

Ubicom Intel

FusionOne

Openwave

Palm

Espial

Prosyst

Xanboo

MFormation

(Embedded)Processor

(Embedded)OS, Stacks, etc.

Application

MicrosoftDevice Broker

Qualcomm

App/Management Broker

APPLICATIONDEVICE

MontaVista &Other Linux

ComplementaryProducts orPotentialPartners

ComplementaryProducts orPotentialPartners

SiebelMetrix

SAP

PeopleSoft

One-off, ad hoc software development is the alternativeOne-off, ad hoc software development is the alternative

QuestraAxeda

Echelon

emWare Lantronix

NetSilicon

DRMDRM

ComplementaryProducts

TodayIn 2-3 years?

Motorola


Summary

A new Internet will emerge as devices will outnumber computers starting next year

A new software infrastructure component is required to address the hard issues of the extended internet

Embraces’ unique Device Brokerage Platform provides a system-level solution while other vendors focus on connectivity or applications

First set of customers validate the Device Brokerage platform solution and its potential

Raising $8 million to achieve profitability

The Device Brokerage Platformfor the Extended Internet


Embrace 3.0Broker function and data flow

Embrace Device Brokerage Platform

Management Broker

Services

Direct

Device BrokerServices

Connect

Authenticate

Security

Ab

stra

ct

Upon connection, the Platform authenticates device registration and checks Adapter and camera for firmware upgrades.

The Platform supports optional AES 256-bit encryption, and MD5 authentication.

The Platform formats device specifics and events into a high-level abstraction.

The Platform applies the relationships rules, and policies associated with the abstracted device.

EnterpriseBack-OfficeApplications

EthernetWiFi

Modem

EmbraceDevice

Adapter

DeviceEmbraceMicroClientFirmware

A simple press of a button initiates the connection between the Adapter and the Device Brokerage Platform.

Embrace provides an XML programming interface for integrating with target applications.

Application BrokerServices

AdaptTransfer

The device data is adapted to the requirements of the selected application.

The Platform transfers the adapted data to the related application using TCP/IP, with optional SSL support.

Serial, PIOConnection

XMLSSL

TCP/IP


Hardware Platform

RTOS/Network Stack

HAL

Security

Discovery

Multiplexing

Tra

nsp

are

nt

Seria

l

PIO

Min

i-bro

wse

r

Firm

ware

Manage-

ment

Config

Info

rmatio

n

Oth

er

Client API Modular

Core TCP, Connection Control,

Layered Protocol Option

HTTP, Encryption, Firmware Upgrade, Hardware specific

Small Footprint 40K-100K

Network Support TCP, UDP, ICMP, DHCP and

Static IP Easy Porting

8+ Hardware Platforms, 8+ OS Security

MD5, AES (variable key length up to 256bits)

Complex discovery strategies Data Channel

Message Passing Direct Binary Transfer

Embrace Micro Client


DeviceBrokerage

The Device Brokerage: A Java Technology

ManagementManagementApplicationsApplications

DevicesDevicesBusinessBusiness

ApplicationsApplications

ERP

CRM

SCM

Custom

Web Services/User Identity

AppBroker

AppBroker

DeviceBrokerDeviceBroker


DeviceDevice

UserUser

JMX

JSP In use

J2EE

J2ME

In development

JCA

On the roadmap

JNDI

JavaSpaces

Jini

Investigation


Computing evolution

Mainframe

PC

Web

Service

Technology Vision: The Right Next Step for Devices

No enterprise integration problem for devices

The deployed brokerage technology applies “services” in general

Database

Desktop ApplicationMicroprocessor

HTTP, HTMLBrowser

XMLDistributed Systems

Device evolution

Dumb devices

Smart specialized devices

Internet appliances

Proprietary anddiverse

PC/Laptops as gateways

Device Brokerage Platform

Device as a service


Processor

OS

Networking Software

Application

IBM DEC ….Sun

THE WEB

Intel, etc.

Microsoft Unix

BEA IBM SUN …

CRM ERP SCM …

Horizontal Server Industry

The Market Horizontalization Trend

THE DEVICESTAMPEDE

Device variety will remain but network-level Horizontalization occurs

CRM ERP SCM …

EmbeddedProcessor

Embedded OS

Networking Software

Application

Wide variety of devices for specific applications

DeviceBrokeragePlatform


Market Segment Opportunities

Auto-ID Utilities Industrial Equipment Petrochemical Telecom Automotive Consumer Goods


Massive investments well underway

$3.4B estimated spending for 2002 – mainly proprietary and vertical solutions ($2B for software & services)

62% of surveyed device companies are actively developingor deploying Internet connectivity solutions

Most devices will migrate to Internet connectivity by the end of next year What software will facilitate that connectivity? how will that connectivity be

leveraged?

Sources: HarborSources: Harbor

WELCOME TOCHIPLAND

TIUBICOMARCINTERNATIONAL

NATIONAL

ANALOGDEVICES

HITACHI

CONNECTONEARM

ZILOG

ECHELON

ATMEL “ADAPTERSSPOKEN HERE”

ComtroleDEVICETECHNOLOGY

LANTRONIX

KEIL

GREENHILLS

SOFTWARE

COMPONENTSOFTWAREOS, STACKS

CMX

KADAK

eDEVICETECHNOLOGY

OSESYSTEMS

MENTORGRAPHICS

AXIS

NETSILICON

AMDDOMOSYS VIRATA

MOTOROLA

INTEL

ARCSOFT

ARGUSPOSTSMITH

TROY

LANTRONIXDIGI

MOXAATOP

iBUTTON

PRECIDIAPATTON

GLOBETEKINTELLICOM

WINDRIVERMONTAVISTAMICROSOFT

PALM

IBM

LINUX

embrace network

Technology

conceivable device

devices applications

software applications

existing applications

internetenabled devices

devices sources

applications remote

new devices programmable