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ANTs Software - Unlocking Database Savings

Executive Summary

Database costs are the single most expensive software item in IT budgets, with a typical Global 1000 company spending $50-100 million per year on database licenses and support for up to ten different database products. Vendors lock in customers by using proprietary features making it expensive to switch or consolidate to fewer database products. Customers find themselves in an untenable situation with escalating costs and no alternative….until now.

ANTs software inc. has developed the ANTs Compatibility Server (ACS) patent-pending software technology that allows customers to move applications from one DBMS to another. From the customer perspective, savings of up to 90% are possible, generating millions in shareholder value. From the vendor perspective, database vendors will, for the first time, be able to win business from their competitors’ installed base of customers and generate new revenue streams not currently possible. Customers and analysts agree that the $22 billion RDBMS market is ready for a product that can lower cost and complexity and ANTs software inc. is poised to capitalize on this opportunity with the ANTs Compatibility Server and technologies based on ACS.

The Problem for Customers - Applications are Locked to Databases
Large enterprises use software applications to run their businesses. For example, banks use applications to track deposits, manage investments, run ATMs and calculate their payroll. It is not uncommon for large companies to use between 5,000 and 10,000 applications. Every application must connect to database software that stores the information needed by that application. Database products each use their own “language” to communicate with applications with the result being that once an application has been written to work with one database it cannot work with others. The only way to move an application from one database to another is through the very expensive and time-consuming process of rewriting the application. For this reason, most customers never move, even if they are dissatisfied with the pricing or the features from their current vendors. The database vendors know this, which is why database costs are so high.

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The Problem for Database Vendors - Applications are Locked to Databases
A typical Global 1000 company uses up to ten different database products and holds thousands of database licenses, for which they pay annual support fees to the database vendors. This installed base of annual support fees was approximately $12 billion in 2007 and represents a huge opportunity for database vendors to win new business if they have a way of moving applications to their database product. Knowing this, the database vendors have all developed “migration” tools – software to assist customers in moving applications to their database product. In reality, these products can handle about half the job. The other half requires that the customer or an expensive consultant, rewrite the application. None of the database vendors has a product that can allow customers to easily and inexpensively switch to their database. So the only way they can capture new market share is to compete for new business – the huge installed base of customers using competitive products is not accessible.

The Solution for Customers & Vendors - The ANTs Compatibility Server (ACS)
The ANTs Compatibility Server is software that allows customers to move applications from one database product to another more easily and at far less expense. The ANTs Compatibility Server (ACS) translates the languages used by database products so that applications written for one database product will work with another.

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Benefits to customers:

Cost Savings

  • Ability to move applications = negotiating leverage with the database vendors
  • Ability to move applications to low-cost database products
  • Consolidate from many databases and eliminate license and support cost

Simplify

  • No need to maintain staff to support ten different database products
  • In-house developers can become expert in only one or two database products

Ultimately, customers could save up to 90% of their ongoing database support costs by moving to dramatically less-expensive database products.

Benefits to database vendors:

  • A product they can use to take business and market share from competitors
  • Opens up a new “replacement market” to win new customers or grow business with existing customers.
  • Winning new database business allows the vendor to cross-sell other products as “part of the package”.

ANTs Compatibility Server – First Version and Beyond
The first version of ACS allows customers to move applications from Sybase’s database product to Oracle’s. During 2008, ANTs completed pilots for an early group of customers and in December announced its first commercial deployment with the Wyndham Hotel Group moving a 3,000-user call center application. Additional prospects are in the pipeline evaluating ACS.

ANTs can develop a portfolio of ACS products that allows customers to move from any database to any database. Future versions of ACS are limited only by market demand and development funds. Patent protection has been filed.

Market and Competitive Landscape
IBM, Oracle and Microsoft are the leading database vendors controlling 85% of the $22 billion database market which is growing at 10-15% per year. Approximately $12 billion of that amount is charged to customers for annual support contracts with the remaining $6 billion spent on new database licenses.

Sybase, the fourth largest vendor, with three percent market share, generates approximately $800 million per year from its database products. Sun Microsystems is a new entrant, having purchased MySQL AB in January 2008 for $1 billion. MySQL, a ten-year-old company, is growing rapidly at 50-100% per year as customers move towards its dramatically lower fees (up to 90% less than the larger database vendors) and are starting to use its database product for more critical applications. Still, MySQL has only a small fraction of the market and can only pursue new business through head-to-head competition with the large, established vendors. Industry analysts at Gartner Inc., one of the leading IT industry research firms believe that MySQL now has enough product maturity and features to be able to work with up to 75% of the already-in-use applications in large enterprises. Customers have told us they would jump at a product that will allow them to move applications from costly databases to the affordable MySQL product, saving as much as 90%. For a Global 1000 company the savings would be millions of dollars per year.

To date, ANTs does not know of another product that has the same capabilities as the ANTs Compatibility Server. We have no direct competition in the market at this time.

Go-to-Market Results
ANTs has established a pipeline of potential customers through a targeted direct sales approach. ANTs has customers in the government, financial services and software sectors evaluating ACS. In addition, ANTs is in discussions with every large database vendor and is working collaboratively on sales efforts with at least three of them.

Conclusion
Large organizations are plagued with high database cost and vendor lock-in and are looking for a way to reduce costs. The ANTs Compatibility Server is uniquely positioned to reduce costs significantly by giving customers choice. We know of no other product that offers customers the ability to move applications easily and at significantly lower cost.


Corporate Background
ANTs software inc. is a public Delaware corporation headquartered in San Francisco, California, with engineering offices in Alpharetta, Georgia; Mt. Laurel, New Jersey and Hyderbad, India and sales offices in Mt. Laurel. ANTs’ shares trade on the OTC Bulletin Board (symbol: ANTS).

ANTs has been public since the mid-1980’s when it was originally founded to produce supercomputers as CHoPP Computer Corp. CHoPP wound down operations in the late 1980’s. In 1999, the company was renamed ANTs software inc. and began developing a high-performance database product based on the supercomputer technologies developed earlier. That product was sold in May 2008.

ANTs began developing the ANTs Compatibility Server in early 2007 and launched the first commercial version in April 2008. In May 2008, ANTs acquired Inventa Technologies, Inc. of Mt. Laurel, New Jersey. Inventa is a private, wholly-owned subsidiary that manages and optimizes applications and databases for large enterprises. Inventa is the services division of ANTs, providing installation and support of the ANTs Compatibility Server.


This summary of the business of ANTs software inc. is neither an offer to sell, nor a solicitation of offers to purchase, securities. This summary contains forward-looking statements within the meaning of the federal securities laws, including statements concerning product development activities and sales and activities. Such forward-looking statements are not guarantees of future performance, are sometimes identified by words of condition such as “should,” “may,” or “intends,” and are subject to a number of risks and uncertainties, known and unknown, that could cause actual results to differ materially from those intended or anticipated. Such risks include, without limitation: challenges arising from competition, difficulties experienced in product development, roadblocks experienced in sales and marketing activities, longer than expected sales processes, failures in commercializing ANTs technology, difficulties in recruiting knowledgeable and experienced personnel, possible problems in porting applications using ACS, potential problems in protecting the Company’s intellectual property, and problems securing the necessary financing to continue operations. Further information concerning these and other risks is included in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent Quarterly and Annual Report on Forms 10-Q and 10-K respectively. The Company undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances occurring after the date of this summary.