Angstrom Microsystems - Frequently Asked Questions

What is Angstrom Microsystems?
Angstrom Microsystems is a Linux systems company, providing Linux powered eCommerce solutions such as specialized Web servers, transaction servers and security servers - all designed to speed the implementation of Internet eCommerce strategies. Unlike other systems vendors such as VA Linux, Cobalt and Dell, we design, deliver and fully support the complete solution comprising the server, operating system and application. Without Angstrom, an eBusiness would have to build an eCommerce site from scratch, hire expertise, perform research on a fast evolving Internet market and assemble their parts to form a custom solution. We help eBusinesses get up and running quickly so that they can focus on their core businesses, and not on IT issues.

What products and services does Angstrom Microsystems provide?
Angstrom provides:

Angstrom reduces its clients' time-to-market (and time-to-profit!) by offering a menu of Linux-based pre-configured and easy-to-operate application servers such as Web, cache, merchant, email, security, and database servers. Angstrom delivers these solutions by providing end-to-end service designed to quick-start eBusinesses.

What is Angstrom's value proposition to its clients?
By "productizing" services into turnkey solutions for fast delivery, Angstrom helps customers:

Is Angstrom a hardware-only company?
No. Angstrom is a value added systems solution provider for eCommerce installations. In addition to hardware, Angstrom provides eCommerce specific solutions that include software and operation system.

How is Angstrom different from an integrator?
Integrators provide value-added services and support to hardware/software solutions. Angstrom products replace the services that are routinely performed by integrators -- Angstrom "productizes" these services. This reduces the complexity in delivering an eCommerce solution, saving time, and money.

Is there any service that may accompany an Angstrom solution?
Yes. Angstrom's products reduce integration services by reducing the complexity in developing an eCommerce solution. However, these solutions may still require company-specific architecture and integration services. Angstrom can work with consulting companies and integrators to deliver these services.

Do you work with any integration companies?
We are in the process of building a channel network that includes integrators, VARs and consulting companies.

Who are some of your partners?
We are currently partnered with NaviSite and MSB Datasystems, with several other partnerships being explored and negotiated.

Who is your Competition?
VA Linux, Dell, Cobalt and Compaq, but unlike any of these companies, Angstrom provides a three tier-configured applications and application support in addition to the standard server and operating system support.

Based on the three tiers of an eCommerce solution, there are three categories of providers in the eCommerce market place - server providers, operating system providers, and software applications. This market is fractured since none provide a complete eCommerce solution.

Operating system providers include Red Hat, TurboLinux, Suse, Slackware and Debian. Since there is no money to be made selling Linux (it is free to all), these providers are now providing services to complement their offerings.

Application providers include:

Server providers include VA Linux, Dell, Cobalt, Penguin Computing, Compaq and Sun. These providers offer servers that are pre-configured with operating systems. They do not offer eCommerce application integration or support for any of their systems.

The high-end eBusiness solutions market is comprised of companies such as IBM, and Andersen Consulting. Although each has its own focus, none provide Linux-based end-to-end eBusiness solutions. Linux currently runs on almost one-third of all Internet Web servers and Linux operating system sales grew over 180% last year (IDC). Since Web servers and other Internet technologies are key components of eBusiness solutions, Angstrom believes that there is an untapped market for Linux-based eBusiness solutions.

How does Angstrom differ from competitors like Dell or VA Linux?
Linux server vendors only offer two components of a three-tiered solution; they offer the hardware and operating system, but leave the difficult task of selecting, implementing and supporting applications to the customer. Angstrom offers the complete three-tiered solution comprising server, Linux, and the application. Angstrom also fully supports and services the solution, giving customers a single point of contact for all of their eCommerce solution needs.

Unlike hardware-centric companies such as VA Linux and Dell, Angstrom reduces its clients' time-to-market by offering a menu of Linux-based pre-configured and easy-to-operate network appliances such as Web, cache, application, email, security and database servers.

Angstrom saves its clients' time, reduces the need for technical expertise and provides end-to-end application support. Angstrom maintains a large menu of off-the-shelf eCommerce solutions that can be mixed and matched to form a custom solution.

Unlike Cobalt, Angstrom sells high-end eBusiness specific solutions, while Cobalt concentrates on low-end network appliances such as File servers and print servers. Unlike VA Linux, Angstrom sells its hardware bundled with Linux-based eBusiness application. VA Linux only sells hardware with the Linux operating system.

What is Angstrom's value-add to clients?
Angstrom is a one-stop-shop for Linux-based eCommerce solutions. Angstrom integrates eCommerce software on its servers, pre-configuring them, securing them and supporting them in a post-sale environment. This approach incorporates all three components of an eCommerce solution - hardware server, operating system and the software application.

In addition, Angstrom provides a breadth of eCommerce products for end-to-end eCommerce solutions. From Web cluster solutions to high availability transaction servers, Angstrom provides a complete line of eCommerce products.

Why would an eBusiness choose Angstrom as their solution provider?
Angstrom is the first and currently only provider of complete Linux-based eCommerce solutions. Angstrom is a one one-stop-shop, providing an end-to-end array of complete systems to choose from. Angstrom is partnering with key players such as NaviSite to help provide the support necessary for eCommerce solutions.

Who are some of Angstrom's clients?

What is the price of an Angstrom Microsystems solution?
Pricing of any eCommerce solution depends on the components needed for a particular customer. To better assess the pricing of the Angstrom solution, we need to know more about the customer requirements.

Why is market speed so important?
Speed to market is the most critical competitive advantage for an eBusiness. The Internet has increased competition because of easy worldwide access to the Web and by reducing the reliance on high-cost "bricks-and-mortar" facilities such as show rooms and bank branches.

Having few barriers to entry, eBusinesses strive to be first movers and capture market share in the virgin Internet marketplace. For example, Internet players like Yahoo and Amazon have large market shares and continue to grow because they were first in servicing their respective market segments. Each understood their advantage and moved very quickly to solidify their positions through rapid expansion and early brand name recognition.

How big is the eBusiness Market?
eBusiness, of which eCommerce is one component, is growing at an exponential rate: According to Forrester Research, business-to-business online transactions were expected to be a $109 billion market in 1999, up from $43 billion in 1998. The service component of eBusiness is growing similarly. The following chart, provided by Forrester research, shows the growth of the eCommerce services market, which is only a sub-set of the eBusiness market. According to Forrester, this market is growing from 11 billion dollars in 1999 to 20 billion dollars in 2000 and 33 billion dollars in 2001. Hardware and software for eBusiness can be expected to follow similar growth curves as the eCommerce services market.

Why would a company choose a Linux-based e-commerce solution?
There are many reasons:

Is Linux legacy-friendly? How can a company already using a Windows NT or Solaris solution change to Linux?
As with any operating system, Linux would need to have the same or comparable application written for it in order to switch seamlessly from a NT or Solaris solution. The issue is whether such a software application exists as opposed to any Linux limitations in converting legacy systems. In terms of co-existing with NT and Sun solutions, Linux is fully compatible.

How well will Linux work with existing hardware?
Linux works well on recycled PCs, providing value in solving immediate I/T problems. This is an important aspect of the Linux market because it is generating a self-education and validation process for this operating environment, speeding the acceptance time for Linux.

"IDC believes that Linux grew during CY98 as users deployed low-cost Web server software on aging PC servers or on low-end Intel-based servers. Linux has become a grassroots phenomenon, as even large corporations deploy it in an effort to reduce IT costs associated with installing distributed Web servers and servers intended to support software development. During 1999, IDC expects the Linux SOE phenomenon to grow, based on a bandwagon effect by which all major computer system vendors have announced support for Linux on their hardware platforms."

Where is Linux making its biggest impact?
Linux platform sales are focused on the Web server market. This makes Linux inherently capable for eCommerce solutions. IDC reports that shipments of Linux operating systems as servers, particularly for Web serving, grew during CY98. They expect this growth in Linux servers to continue during 1999 as users seek out low-cost, memory-efficient alternatives to standard UNIX and NT Server SOE (Software Operating Environment) software packages.

Linux excels as an Internet application platform, including Web, DNS, email and database servers. By April 1999, Linux was the 2nd most popular platform for all corporate Web servers, justifying the claim that it excels as an Internet application platform. Since eCommerce and eBusiness are built on Web, email, database and other Internet applications, Linux is the ideal platform to deliver cost-effective eBusiness solutions.

Do you support only Intel platforms?
Angstrom currently offers a complete range Intel-based servers. However, since Linux is fully supported on other processors such as Alpha and Power PC, we would consider offering these products if a significant demand exists.

Angstrom Microsystems, Inc.

200 Lincoln Street   Boston, MA 02111
Phone: 617-695-0137    Fax: 617-695-0984

Copyright 1999-2000 Angstrom Microsystems, Inc. All rights reserved.

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