PART I

ITEM 1.      BUSINESS.

Overview

          We are a leading provider of enterprise e-conferencing solutions that enable geographically dispersed organizations to collaborate in real time. The company's award-winning MeetingPlace system is designed for enterprise-wide deployment to improve the ability of employees, partners, and customers to meet and work. With MeetingPlace, participants can schedule and attend a meeting, view, share and edit documents, and capture and retrieve meeting content. MeetingPlace is designed to be an enterprise–wide resource and to leverage existing technologies such as telephones, cellular phones and personal computers. Moreover, we expect that the dramatic growth in web access and collaborative software applications will drive e-conferencing as an important business application of the Internet.

          MeetingPlace consists of three components: (a) the MeetingPlace conference server; (b) MeetingPlace software; and (c) system integration options. MeetingPlace incorporates many easy–to–use features that allow participants to emulate the voice and data collaboration that occurs in a face–to–face meeting, such as breakout sessions, roll calls and meeting handouts. MeetingPlace provides simultaneous voice and web conferencing and the ability to record and access meeting content while lowering the enterprise’s overall conferencing costs.

          We began commercial shipment of MeetingPlace in December 1994 and, as of December 31, 2000, had over 325 customers. In addition to enterprise–wide general deployment, customers have purchased and used MeetingPlace for a variety of specific business applications, including morning brokerage calls, crisis management, training and education, customer and client services, supply chain management and merger integration. Furthermore, over 60% of our customers have purchased additional products or services after their initial system installations. MeetingPlace has been installed in some of the world’s leading enterprises, including 3Com, Aetna, Cisco, Charles Schwab & Co., Credit Suisse First Boston, Hewlett–Packard, Honeywell, Intuit, Microsoft, Oracle, State Farm Insurance, Union Pacific Railroad and the U.S. Federal Reserve Bank.

Industry Background

          The proliferation of communications technologies is revolutionizing the way people conduct business. Today, businesses of all sizes are empowering their employees with a diverse array of communications tools to facilitate information flow, improve productivity and reduce costs. From voicemail, fax machines and cellular phones to e–mail, laptop computers and handheld devices, businesses have demonstrated their continued willingness to adopt technologies that enable their employees, vendors and customers to communicate more efficiently across disparate geographies and time zones. Rapidly increasing travel costs have additionally fueled the deployment by enterprises of technologies that facilitate communication while reducing travel and current communication expenditures.

          An enterprise’s willingness to adopt a new communications technology depends largely on the technology’s ability to efficiently replace or enhance an existing business practice. Voicemail is a more convenient and cost effective substitute for the traditional pad–and–paper answering service. E–mail provides a similar improvement over traditional inter–office mail. Cellular phones and laptop computers provide added flexibility for mobile workers over the traditional telephone and desktop computer. In addition, enterprises have sought to enhance their competitive advantage by creating a virtual presence with their customers and vendors through such means as e–commerce and extranets. Each of these technologies has increased productivity by extending the workplace beyond the physical office.

          We believe that no single, widely deployable technology, however, has been able to effectively provide the integrated voice and data collaboration that occurs in a face–to–face meeting in a cost effective manner. To have a meeting today, a business typically must have everyone present in a conference room or invest in limited and often expensive technologies or services that allow people to communicate. For example, audio conferencing, although widely used and available, is relatively expensive and does not enable participants to share and modify documents. Video conferencing systems enable participants to see each other but have technical limitations, such as minimum bandwidth requirements, and are not widely available to users. Collaborative software applications, such as Microsoft Outlook and Lotus Notes, focus on workflow improvements rather than sharing documents real–time and allowing users to speak with other participants.

                    To address this need for efficient, real–time voice and data communication, organizations have resorted to using a patchwork of these technologies, including conferencing, fax, e–mail and collaborative software applications. While these technologies have been widely implemented, they do not allow an enterprise to create a comprehensive network for collaboration throughout the organization to promote information flow and effective decision making. We believe that the growing geographic dispersion and mobility of workers further compound this problem.

          As a consequence, we believe there is significant demand for an integrated, cost–effective and easy–to–use product that enables simultaneous real–time voice communication and secure document collaboration irrespective of geographic location. Furthermore, we believe that such a product must leverage the existing voice and data infrastructure within the enterprise to facilitate widespread deployment and realize significant cost savings. Finally, the system must provide incremental capabilities to improve the meeting itself.

The Latitude Solution

          We have developed a solution, MeetingPlace, that allows companies to conduct meetings which extend real–time decision making processes irrespective of the geographic locations of participants. With MeetingPlace, users can schedule and attend a meeting, share and edit documents, and record and access meeting content. Attendees can participate in a meeting using widely available communications devices such as telephones, cellular phones, laptop computers and desktop computers. MeetingPlace is designed to be an enterprise–wide resource and to integrate seamlessly into widely deployed enterprise software environments, including corporate intranets and collaborative software environments such as Microsoft Outlook.

          Key benefits of MeetingPlace include:

          Seamless integration of real–time voice and web conferencing. MeetingPlace allows participants to easily schedule and attend meetings that combine voice conferencing with real–time sharing and editing of data over the Internet. By leveraging an enterprise’s existing voice and data networks, MeetingPlace provides reliable and robust transport of toll–quality voice as well as real–time data sharing and editing.

          Lower overall cost of conferencing. With a MeetingPlace server installed, the cost of a conference is limited to the long–distance charge, if any, for each participant. In contrast, the cost of a conference using a third–party service bureau often ranges between $0.30 and $0.55 per minute per participant within the United States. As such, we believe that a typical customer can realize significant cost savings relative to existing voice conferencing services provided by third–party service bureaus.

          Security and control. MeetingPlace’s customer premise–based system provides an architecture that enables an enterprise to manage web collaboration securely behind its network security system, referred to in the software industry as a corporate firewall, consistent with its other information technology strategies. Additionally, MeetingPlace eliminates several risks associated with third party conferencing service bureaus, such as operators giving access to unwelcome participants.

          Ease of use and broad feature set. MeetingPlace allows users to schedule, attend and review meetings easily from their telephones or familiar desktop environments such as browsers or Microsoft Outlook. In addition, MeetingPlace incorporates a large number of features that allow end users to emulate many aspects of a face–to–face meeting such as breakout sessions, roll calls and meeting hand–outs.

          Scalability and configurability. MeetingPlace is scalable with an enterprise’s conferencing needs. MeetingPlace servers are designed to be networked together to coordinate the deployment of servers on a global basis and to allow for large single meeting sessions of over 1,000 simultaneous participants. Moreover, MeetingPlace can be configured in a variety of ways to satisfy specific business applications, such as training and supply chain management.

          Time–displaced access to meetings. MeetingPlace provides an integrated ability to record and archive meeting conversations and materials, enabling information generated during a meeting to be efficiently passed on to those unable to attend. In addition, audio or data information can be made available to participants in advance of the meeting.