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despatchNet Particulars

Background: Historically, business activity has been thought of along traditional industry categorizations (such as the courier industry versus the taxi industry). An alternative viewpoint based on the notion of "functional realms of excellence" focuses on particular skill bases that drive the success or failure of particular categories of business.

The founders of despatchNet believe that one such functional realm of excellence is "dispatch" i.e. the art and science of time critical execution of urgent deliveries be it of packages, persons, or even of information. The follow-on hypothesis is that there are global best practice systems and operations models for the performance of all dispatch based activity. Specifically, the suggestion is that a single "mega-dispatch-center" per metropolitan area, running a scaleable but distributed (for fault tolerance and performance) system is the optimal solution across ALL dispatch activities for a given geography. Such a facility might be busy with courier deliveries by day, black car deliveries during the evening, and emergency and repair service through the middle of the night. The same technology and management resources would be utilized by the dispatch center on a 24/7 basis. Regional scale would be appropriate from an operational perspective, but numerous administrative, financial and systems functions would be better supported at a national or even global level.

The formation of Dispatch Management Services (a newly public $250M business) establishes the operational foundation for the above business model within the courier industry. To date, DMS Corp is hampered by constraints in existing software necessary to fully support a globally integrated, dominant (and branded) business model for a network of dispatch centers supporting all dispatch industries. Numerous other single dispatch industry consolidators and players also are moving independently (and thus more slowly) than would otherwise be the case if a global systems standard and network were available to support faster dissemination and fuller execution of best practices.

despatchNet targets the gap between the operational vision of dominant dispatch and administration centers, and the current challenges caused by a lack of common technologies and infrastructure for the support of all dispatch industries. Whereas DMS Corp (and other standalone, consolidator or restructuring firms) focus on the execution of an operating model for their respective industries, despatchNet focuses exclusively on the systems standard needed to accelerate those operating strategies. The new prominence of web technologies presents an opportunity to crystalize a standard far more quickly and comprehensively than has been the case with past success stories in adjacent industry sectors (such as proprietary airline reservation systems such as Sabre).

Yet unlike traditional technology vendors, despatchNet is NOT in the business of selling proprietary software. Instead despatchNet is a standards creation and certification process that removes the historical barriers caused by the use of non-web based proprietary dispatch systems that to date have inhibited the formation of a single integrated network of all providers of dispatch services. Thus despatchNet is neither client nor vendor as far as traditional paradigms exist for describing industry players. An alternative paradigm based upon follow-on sales of business services is being put forth. Under the new despatchNet paradigm, opportunities are maximized when customer usage is maximized and this can best be accomplished through the usage of readily available, open, networked and free standards rather than through continued reliance on proprietary, closed, standalone, dated software systems.

Mission of despatchNet: Create and maintain certification of a global web based standard for all dispatch systems. Balance the needs of distributed processing necessary for the reliability and speed of dispatch systems, with the economies of scale available from regional and global operational processing centers. Ensure that by making access to the system and source code freely available, all vendors and users gravitate toward participation in a single network of dispatch providers rather than into standalone, proprietary, and incompatible software solutions.

Target Markets/Industries: All industries involved with the delivery of things, people, or information (i.e. couriers, car services, emergency and repair services, fulfillment, and answer services). All geographical areas of the world are to be included, starting with the densest metropolitan markets. The total market size for all dispatch industries runs into the hundreds of billions of dollars as it includes the movement of all goods and services in the economy and extends to the growing proportion of transactions associated with e-commerce.

Business Model: Give away the software to ensure the fastest and largest user group for all dispatch based activity in the world. Ensure that existing vendors are able to generate revenue and profit margins from provision of training, support, and value added services (i.e. server administration, wired and wireless network access and administration, etc.) of the "free" despatchNet software. In addition to technology services, despatchNet will participate in the provisioning of financial services that are more cost effectively provided through the network (such as processing and factoring of receivables and worker settlements, as well as clearing financial accounts between all users of the network).

Technical Model: Based on recent proven experience for establishment of open standards (the Linux and Apache models for operating systems and web endorsed by Sun and IBM). Also please cite the example of other relevant models. Also cite the examples of how even Yahoo and Excite don=B9t rely on their own search engines anymore, but instead simply insert other engines under their nameplate. Over to Jak Dorsey. Participating members are to receive a seal of "despatchNet Compliant" certification to show that they are within the standard.

Business Strategy: An initial web based core system will be developed for simultaneous use by each of the target market/industries described above. One or more existing vendors for each of the target markets will provide training and support for the installations under their own existing brand. The existing vendors will also nominate architectural, feature and function enhancements to be included in the future core specification of the despatchNet standard. Either despatchNet OR the vendors own technical staff will modify and extend the software as necessary to meet existing and new market requirements. A certification process will determine which proposed additions to the standard are to be accepted as part of the "core" despatchNet specification or as authorized "plug-ins" that give the system a feel of infinite customizability.

The despatchNet product/standard will become the generic engine under the hood of the already existing technology vendor brands that have historically developed and sold their own proprietary standalone solutions. The strategy implies that existing technology vendors will hold and grow their customers based on the service they provide, rather than through touting a product based on proprietary sourcecode (whose features and functions could be copied in any case). Differentiation will still be possible through the implementation of various (approved) plug-ins and component interfaces, but the underlying despatchNet specified data and transmission structures will be the same across all participating vendors.

A further impetus for a strong start in 1999 relates to the Y2000 deadline which will prompt many users of dispatch systems to upgrade their software in any case. The despatchNet option will be simpler and more economical as all participants will be converting onto a single network solution that is independent of hardware and operating systems platforms. The Dispatch solution is the perfect environment for running parallel systems a critical factor in achieving successful conversions for a mission critical real time application such as dispatch.

Future Exit Strategy: Vendors supporting the despatchNet standard will be invited to participate in a business combination (such as an IPO) that will allow the formation of a single global systems training, support, and services organization supporting all dispatch based industries worldwide. The remaining customers of the participating vendors that are still on non-web based legacy systems will be converted over to the web based despatchNet standard (post IPO) significantly reducing the cost of support and ongoing R&D while opening up new opportunities to sell a consistent set of dispatch industry oriented technology services on a global basis.

Operational and Financial Synergies: The creation of a global systems standard will accelerate the pace of consolidation both within and across dispatch industries. The despatchNet strategy envisions the formation of dominant operational entities both in the form of mega-operational centers at the metropolitan level, as well as mega-brands in these formerly fragmented service industries. despatchNet is well positioned to aid the leaders in the consolidation and restructuring trend by removing the barriers caused by systems incompatibilities between geographical regions, brands, and dispatch industries. An expectation is that one or more dispatch industry players may also take a keen interest and financial stake in despatchNet, in addition to existing technology vendors, strategic partners (such as wired and wireless network providers or hardware suppliers), and pure financial investors.

Starting Point: Leverage the $850 million of revenue already flowing through the DMS Corp / Fleetway courier network and user base in AustralAsia, North America, and Europe. Add 6-12 additional vendors or large user bases with a target goal of having vendors supporting a globally balanced $10 billion in dispatch industry revenue from the customer bases that they support. Expect to generate at least 1% of revenue from the user base for technology services provided at a 30% net margin, for a target pre tax income of $30M. Expected growth horizon is based on the eventual dominant support of several hundred billion dollars of dispatch based revenue all flowing through the "free" despatchNet standard.

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