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BUSINESS PLAN
Q4/2001
A Billion Dollar Opportunity:
Using a new & powerful
Wireless Messaging Protocol
to capture the
Wireless Application Service Provider
market
LEAP: An Alternative to WAP
Neda Communications, Inc.
3610 164th Place SE
Bellevue, Washington 98008
Phone: (425) 644-8026
Fax: (425) 644-2886
Website: http://www.neda.com
Version 4.4
October 24, 2001
This document does not constitute an offer to sell, or a solicitation of an offer to purchase.
Neda is not a conventional company, and this is not a conventional business plan.
One of the most counterintuitive aspects of our business model is its very high degree of openness. The foundations of our business model consist of a set of wireless messaging protocols called LEAP, and a comprehensive suite of software implementations of those protocols. The protocols and their software implementations were developed by Neda over a period of several years, and therefore represent a major investment of company resources. The protocols and software are key assets, around which everything else in our business model turns.
Yet despite this, we are giving these assets away. We are giving away the protocols by making them patent-free and freely available, and we are giving away the software implementations by making them available as open-source.
The general openness of our model also extends to our written Business Plan. There is no great need for secrecy with regard to the plan; on the contrary, it is very much in our interest for there to be widespread awareness and discussion of our business model. For this reason we are subjecting the Business Plan to wide distribution and readership.
This does not mean that the Business Plan is a public document. It remains a confidential document, for which Neda remains the sole source of distribution, and which may not be copied or redistributed by anyone else. But this is not because there is any real need for secrecy; rather, it is for two other practical reasons. First, there are strict legal restrictions on the distribution of a business plan, and an investment opportunity like Neda cannot reasonably be directed towards the public at large, but should only be directed towards qualified investors. Second, although the readership will be broad, we wish to select that readership ourselves, and limit it to investors and partners of our choosing. Therefore, as recipient of this Business Plan, you are required to respect fully the confidentiality statement on the cover page. However, if you feel that the plan would be of interest to another party, please let us know; if appropriate, we will then gladly provide them with a copy.
Our philosophy and methodology for presenting our Business Plan to investors differs from the customary practice. We view the writing and distribution of the Business Plan as one element in the creation of a general framework for general industry participation. Other elements of this framework consist of the publication of the LEAP protocols as Internet RFCs, the creation of public forums for enhancement and maintenance of the protocols, the distribution of open-source software implementations of the protocols, and the publication of The LEAP Manifesto.
We have created an enormous profit-making opportunity. Together, the above elements provide a complete framework for participation by others – including but not limited to the investment community.
Based on this philosophy we are subjecting our plan to broad distribution, and we consider it the responsibility of the recipient investors to determine whether they wish to participate or not. Therefore in most cases we will not be following up on our distribution of the plan to you. If you would like to participate at this early stage, we invite you to contact us.
Regardless of whatever else you may think of this plan, we hope you will find it interesting reading.
In less than a decade the use of e-mail and wireless devices has grown spectacularly. These two technologies are now about to give rise to a third: the combination of e-mail and wireless technology, or Mobile Messaging.
Neda Communications, Inc. intends to play a leadership role in the creation of an entirely new industry based on this technology: the open Mobile Messaging industry. We have designed a set of protocols for Mobile Messaging called the Lightweight & Efficient Application Protocols, or LEAP. These protocols will become the industry standard as a result of two powerful forces: (i) the protocols are open and patent-free, and (ii) they will be distributed as Open-Source Software.
Several Mobile Messaging products and services have already been developed, but in all cases these are based on protocols which are closed, or at best pseudo-open. A good example is the BlackBerry messaging system from Research in Motion (RIM), which is based on entirely closed and proprietary protocols. Meanwhile, a crude attempt to launch the messaging industry on the basis of a set of protocols has been made in the form of an entirely inadequate set of specifications called the Wireless Application Protocol, or WAP. The tremendous amount of hyberbole, controversy, and dissatisfaction surrounding WAP is a clear indication of the industry’s need and readiness for the right set of protocols. As the basis for creation of the Mobile Messaging industry, LEAP is superior to non-open solutions such as BlackBerry and WAP in every respect.
The success of the LEAP protocols will catalyze enormous industry growth. Neda’s name recognition and first mover advantage will place it in prime position to capitalize on this growth.
This business plan is about an industry-building opportunity. Initially Neda will generate revenue from multiple segments of this expanding industry. In the long term, however, the major, strategic revenue-generating opportunity is the Subscriber Services business. Neda will position itself to target this segment of the industry as the industry matures.
Since 1994 Neda has been actively developing all the assets required to create this new industry and profit from its growth. All these assets are now complete, and we are ready to execute our plans immediately. This business plan includes no vaporware.
Rudimentary forms of mobile messaging technology exist already; several products and services are available which provide end-users with basic messaging capability. However, major development of the Mobile Messaging industry is currently being blocked by the lack of an adequate industry-standard messaging protocol. The adoption by the industry of a standard protocol will cause this logjam to be broken, resulting in enormous industry growth.
The business opportunities represented by this are gigantic, as has been made abundantly clear by numerous market forecasts providing growth projections for wireless devices, services and networks. For an industry overview, including some sample data, see the article The Mobile Messaging Industry [5].
By virtue of our leadership role in their development and distribution, the success of the LEAP protocols will create incomparable mindshare and name recognition for Neda Communications. At the outset, this mindshare will far exceed that enjoyed by any competing LEAP software solution provider. Initially, we will capitalize fully on this mindshare by generating software and services revenues from every relevant industry segment, including the message center software and systems market, the device software market, and the LEAP technology market. We will leave no significant profit-making opportunity unexploited.
Though they provide a major revenue source, software products do not represent the really big opportunity in the Mobile Messaging industry. The ultimate, truly spectacular opportunity in this arena consists of the Wireless Application Service Provider (WASP) market, and it is this market that represents Neda’s business target in the long term.
The success of the LEAP protocols provides the key entry point for this, by placing Neda at the absolute dead center of the wireless application arena. In the short term, the resulting mindshare puts Neda first in line to profit from the wireless software market. And in the long term, this gives Neda a unique entry ticket into the Subscriber Services market. The company that leads the way by defining the industry standard is in a uniquely advantageous position to participate in, profit from, and potentially dominate, the WASP market. It is our intention to position Neda to profit fully from this market as the LEAP-based wireless industry comes to maturity.
This leadership/participation/domination role is both a major opportunity and a major challenge. This challenge need not be met by Neda acting alone – this could equally well be accomplished by an appropriate industry partnership in which Neda plays a central role.
WAP is claimed by its proponents to be the solution to the industry’s need for a unifying protocol, and is being aggressively marketed as such. In April 2000, however, we published our article entitled The WAP Trap: An Exposé of the Wireless Application Protocol [22], in which we state the truth of the matter. In that article we demonstrate that the WAP protocols are entirely unfit for their claimed purpose – they are the result of a closed design process, are tightly controlled by the WAP Forum, are crippled with patents, and are riddled with technical design errors. We concluded that WAP is a fraudulent marketing construct rather than a genuine engineering one.
Eighteen months after initial publication of The WAP Trap, our analysis and predictions have been convincingly validated, and WAP has been widely discredited within the wireless industry [15], [43]. At this point WAP is intensely disliked by developers, and is becoming increasingly so by the entire communications industry. Neda’s solution is superior to WAP in every respect, and it will succeed where WAP will fail.
All of this provides Neda with a ready-made public relations opportunity. We intend to go publicly toe-to-toe with WAP, positioning our solution as an open, patent-free and viable alternative to WAP. As part of this positioning strategy we recently published a follow-on article to The WAP Trap entitled WAP Scraps [6]. In that article we point out how recent wireless protocol developments have now rendered WAP completely irrelevant, and we discuss whether anything useful can be salvaged from WAP.
The key component of Neda’s plans is a set of mobile messaging protocols called LEAP. LEAP is a set of high-performance, efficient protocols which are ideal for mobile and wireless applications.
LEAP originated in 1994 as part of the research and development initiatives of McCaw Cellular’s wireless data group (now AT&T Wireless Services). The development work that would eventually lead to LEAP was initially undertaken in the context of the CDPD (Cellular Digital Packet Data) network; its scope was later expanded to include the Narrowband PCS network also.
By 1996 McCaw Cellular was fully committed to paging, had recently purchased two nationwide narrowband wireless PCS licenses, and wished to develop an efficient wireless messaging system. Neda Communications, Inc., working under contract to McCaw Cellular, played a key role in the development of the required system.
In 1997 however, soon after the purchase of McCaw Cellular by AT&T Wireless, the latter company abandoned the wireless messaging project. Prior to this event, Neda had secured from AT&T the necessary rights to continue independent development of the protocols. Therefore, recognizing the eventual future need for these protocols, Neda then undertook to continue development of them independently of AT&T. They were eventually completed by Neda, published as RFCs [44] [1], and now form the basis of the LEAP protocols.
Prior to abandoning wireless messaging, AT&T Wireless Services invested several million dollars in related development work. In creating LEAP, therefore, Neda was able to build upon a large abandoned investment by AT&T Wireless.
Over the past five years, Neda has independently developed complete software implementations of the LEAP protocols for major device PDAs and message centers, so as to create a complete end-to-end messaging solution. All this software is now distributed by Neda as free, open-source software under the terms of the Gnu General Public License (GPL).
The LEAP protocols have been designed from the outset as a genuine enabling technology for the benefit of the industry and the consumer. They are a sound engineering construction based on true openness and patent-freedom.
Mobile applications demand both power and bandwidth efficiency, and existing Internet protocols do not provide this efficiency. LEAP is a mainstream native Internet protocol that is up to five times more efficient than the ubiquitous SMTP messaging protocols. LEAP is a general-purpose solution to the problem of efficient message transfer, and is not restricted to any particular device or network. In particular, LEAP is compatible with all wireless-IP networks. Examples of wireless networks which provide native support for LEAP are: CDPD, GSM, packet CDMA, and PCS.
The LEAP protocols are layered. The lower layer, called Efficient Short Remote Operations (ESRO), provides reliable connectionless transport services which can be used for a variety of applications. Built on top of ESRO is EMSD (Efficient Mail Submission & Delivery). EMSD is a messaging protocol that is highly optimized for the submission and delivery of short internet mail messages. Efficient Hyper Text Delivery (EHTD) is a hypertext transfer protocol which is optimized for transfer efficiency of short markup pages. EHTD is the member of the LEAP protocols which facilitates web browsing; it also benefits from the reliable efficient services of ESRO. A multiplicity of efficient markup languages can be used in conjunction with EHTD. Development of the EHTD protocol is in progress.
Our business model includes the answers to two fundamental questions:
The answers to these two questions are very different, and this represents the basic dichotomy of our business model.
The answer to the first question is that we will promote the adoption of our protocols by the completely open and free nature of the protocols themselves, and by the Open-Source Software (OSS) model. In the OSS model, adoption of a software system is encouraged by providing it in the form of patent-free, open-source software, at no cost to the user. Since the software is free, it has an enormous advantage over traditional for-profit commercial software. The OSS model has been proven to be an effective and powerful mechanism for promoting software usage.
The question that the OSS model leaves unanswered is: how does the originator of the OSS system profit from its success? It would seem that giving away free software is an unbeatable way of ensuring its market acceptance, but an extremely poor way of making money.
Neda’s business plan represents the marriage of two things: (1) the use of the Open-Source Software model to catalyze the growth of an industry, and (2) an explicit business plan for profiting from this growth. Not only are these two things not traditionally thought of as going together, they are traditionally considered to be fundamentally incompatible. In this plan, however, we are setting forth a blueprint for combining these two things successfully.
The first half of our business model consists of a strategy to ensure that the LEAP protocols become the Mobile Messaging industry standard.
This half of our business model contains no profit motivation whatsoever. Instead, we are motivated by only a single consideration: to promote the widespread usage of LEAP throughout every segment of the Mobile Messaging industry. In a nutshell, we do this by making LEAP a good solution, making it a complete solution, then giving it away for free.
The first element of this strategy is that LEAP is an open and free protocol. The LEAP protocols are patent-free, so that any company, organization, or individual may implement and use the protocols without incurring licensing fees or any other financial obligation.
In addition to being patent-free, the LEAP protocols are truly open. They have been published as Internet RFCs, thus ensuring that they remain freely and permanently available. Furthermore, they are supported by public maintenance organizations, so that anyone may participate in their further enhancement and development.
All of this serves to ensure that there are no financial, administrative, or other hindrances to the free usage, implementation, and evolution of the protocols. Note that this is in very sharp contrast to WAP, which is hobbled by patent restrictions, not RFC published, and closely controlled by the WAP Forum.
The next element of our strategy is that Neda has created software implementations of the LEAP protocols for a variety of devices and message-center platforms, and is making these available in the form of open-source software. Neda has created a complete and comprehensive set of LEAP-based Mobile Messaging software products, including message center software, protocol engines software, and device software for a variety of handheld devices.
These software products address the needs of all the major segments of the Mobile Messaging industry, and are ready for immediate deployment to ISPs and wireless data carriers, intranet messaging system operators, device manufacturers and systems integrators, and personal desktop messaging users. These products are available as open-source software, free of charge, to anyone who wishes to use them.
The availability of open-source implementations of the LEAP protocols is still not sufficient to ensure their adoption. In addition, Neda must also solve the chicken-and-egg problem of encouraging implementation of the LEAP protocols in both message center systems and end-user devices, each of which requires implementation of LEAP in the other.
Therefore a further element of our strategy is that Neda will provide subscriber services to support the initial implementation of our protocols and software, and to assist in bootstrapping them into widespread usage.
Neda provides subscriber services which accommodate various methods of accessing and using mobile messaging services. All of these subscriber services are provided by Neda free of charge.
The technological and software elements described above are supported by a comprehensive set of written assets. First and foremost among these is The LEAP Manifesto [21], a collection of over 20 individual articles which collectively describe every aspect of the LEAP protocols.
Our models for promoting and profiting from the LEAP protocols are different in many ways from conventional engineering and business models, and for this reason we have chosen to refer to our description of these models as a “manifesto.” This term is interpreted by many to carry a negative connotation – it may be considered to imply an extreme or fanatical viewpoint. However, no such connotation should be inferred here. While the Manifesto may indeed be considered radical by many, it is entirely well-founded and logical.
The LEAP Manifesto and our other written assets provide the final, vital component of our strategy for making LEAP widespread. These assets include articles and other documentation tools for communicating our message to every relevant segment of the wireless industry, including the engineering community, the business community, our customers, strategic partners, the media, the academic community, and the investment community.
All of this is a complete recipe for the success of the LEAP protocols. In summary, the LEAP protocols will become the Mobile Messaging industry standard because:
For these reasons, we expect the LEAP protocols to take off like wildfire within the Mobile Messaging industry. A set of protocols which satisfy a desperate industry need, have no competition, are completely free, and are skillfully promoted, cannot help but succeed – it is in the nature of such a creation to propagate extremely rapidly.
The LEAP protocols will have a unifying and catalyzing effect on the Mobile Messaging industry. They will provide an open and fertile environment in which businesses can market competing products and services. The best products and services will succeed, to the ultimate benefit of the consumer. And the Mobile Messaging industry will grow.
All the technological, software and documentation assets required to implement the first half of our business model are complete, in place, and ready to go. These assets consist of:
http://www.esro.org
http://www.emsd.org
http://www.LeapForum.org
http://www.ByName.net; http://www.my.ByName.net
http://www.ByNumber.net; http://www.my.ByNumber.net
Collectively, these assets represent a complete recipe for the success of the LEAP protocols. All the pieces of the puzzle are complete and in place, and there are no missing pieces. Prospective investors are encouraged to visit the above websites and verify for themselves that everything we have described is real and available now. This business plan includes no vaporware.
As a result of its aggressive promotion by the WAP Forum, WAP has now achieved widespread name recognition throughout the wireless industry. This has had two major effects. First, WAP has become strongly disliked among the technical community who understand its shortcomings; and second, the resulting controversy has drawn attention to the need for a viable alternative to WAP. We will take full advantage of this current industry climate to market LEAP as the viable alternative to WAP.
This Business Plan is about the creation of the open Mobile Messaging industry. Since the scope of the plan is so large, we tend to speak about this industry in very general, abstract terms.
However, a crucial step in the execution of our plan is the deployment of an actual, tangible LEAP-based Mobile Messaging solution. We have created such a solution; we call it the WhiteBerry solution. WhiteBerry is a truly open messaging solution that can be implemented immediately based entirely on existing open-source software implementations of the LEAP protocols, and other existing technologies. WhiteBerry thus represents an immediate, concrete embodiment of the open Mobile Messaging paradigm.
The WhiteBerry solution provides equivalent functionality to existing closed messaging solutions such as the BlackBerry system, and will therefore displace these closed solutions entirely. We refer to the implementation of the open WhiteBerry model as Operation WhiteBerry.
Operation WhiteBerry forms the strategic spearhead of our campaign to promote the LEAP protocols. Complete details of Operation WhiteBerry are provided in an article entitled, appropriately enough, Operation WhiteBerry [4].
Neda will acquire priceless name recognition from the success of the LEAP protocols, and from its central role in the creation of the Mobile Messaging industry. Because of this unrivaled name recognition and our first-mover advantage, Neda will be uniquely positioned to profit from the growth of the industry.
The Mobile Messaging industry can be viewed as four distinct and independent markets, each of which will generate a revenue stream for Neda. These four market segments, and the corresponding revenue streams, are:
The proportions of revenues deriving from each of these sources will shift radically as the industry matures. Initially, the majority of Neda’s revenues will be provided by sales of software, systems and technology licenses; i.e. from items 1 - 3 above. Though we will provide support for Subscriber Services (item 4) from the beginning, we do not expect this to be a significant revenue source at the outset.
However, as the industry matures, support for Subscriber Services will emerge as the dominant revenue stream, and will eventually eclipse all others. The Subscriber Services segment of the industry represents the ultimate, major, profit-making opportunity for Neda.
An initial basis for all the technological and software assets required to implement the second half of our business model are also complete, in place, and ready to go. These assets consist of:
http://www.ByName.net; http://www.my.ByName.net
http://www.ByNumber.net; http://www.my.ByNumber.net
Neda Communications, Inc. is a well-established company with a proven track record of technical proficiency and profitability. Neda was founded in 1991, and between 1991 and 1997 operated as a successful data communications consulting company, with an average income from 1993 to 1997 of over $1 million annually. To date Neda has received no external financing.
Neda has been actively involved in the wireless data industry since 1992. From 1992 through 1994 Neda acted as the lead designer and primary architect of the Cellular Digital Packet Data (CDPD) System Specifications. From 1994 through early 1997, Neda designed and implemented much of AT&T Wireless Services mobile messaging prototype software and systems, for use over Narrowband PCS and CDPD wireless networks.
In 1997, Neda substantially curtailed its consulting activities, and since then has been actively developing the assets required to implement this business plan.
In 1999 Neda was re-incorporated as a new legal entity, appropriately structured to undergo external financing.
Despite the fact that we have made very little investment in sales and marketing activities, we have already sold a number of LEAP-related licenses. Our most recent licensees are: Xypoint Corporation, INETCO Systems, AT&T Wireless Services Messaging Division, and Sema Group UK.
Neda has a core team of technical and management personnel with extensive experience in the wireless data communications field, and a track record of technical accomplishment and business success. Among the team there are relationships going back almost twenty years, reflecting a long history of productive cooperation. Every member of the team fully understands and is committed to the execution of this business plan.
The team is led by Mohsen Banan, who has been running Neda since 1991. Mohsen was the primary architect of the network structure of the CDPD specification; he is also the primary author of the LEAP RFCs and of the LEAP software implementations.
Other team members have a similarly high level of technical and business expertise. Complete biographical data for each team member is provided in Appendix A of this business plan.
All the assets required for the first half of our plan are complete and ready to go. No external financing is required for this part of our plan, and we expect to succeed in our goal of promoting the LEAP protocols as the industry standard with or without financing.
We also have the assets and ability to make partial execution of the second half of our plan. We have the personnel, technical expertise, and business experience necessary to capitalize immediately on the success of the LEAP protocols, and we have complete confidence in our ability to generate a highly profitable revenue stream on this basis. The propagation of LEAP and the resulting name recognition of Neda will present us with abundant opportunity – our success and revenues will be limited only by the limits of our ability to grow rapidly and take advantage of it.
Indeed, the opportunity is so large that it is far beyond our ability to take full advantage of it. In order to do this, we need external financing. With an appropriate level of external investment, the scale of our success can be multiplied many times over, resulting in a huge win for both Neda and her investors.
Neda is in the process of creating an enormous industry, with a correspondingly large profit-making opportunity. The ability of Neda to capitalize on this opportunity will be increased tremendously by means of a suitable level of investment. We are seeking funding to increase dramatically the scale of our success.
Initially, the majority of Neda’s revenues will be generated by sales of software, systems and technology licenses. However, these revenue sources represent only a small fraction of the Mobile Messaging industry. It is the Subscriber Services segment of the industry that represents the truly gigantic, long-term, strategic opportunity. Neda is seeking funding in order to target this huge market.
The key to maximizing profits consists of aggressive pursuit of the Subscriber Services business. And the ultimate in profit maximization consists of the successful domination of this market. To achieve this goal, the necessary Subscriber Services must be appropriately structured. Among other things, they must have the following key characteristics:
A set of Subscriber Services structured along these lines allows its owner to develop a continuously increasing revenue stream based on virtual community building, data mining, eyeball capture, advertising revenues, and content provider charges.
The LEAP protocols provide Neda with a unique opportunity to do exactly that. We will take advantage of Neda’s central role and spotlight position within the wireless industry as the basis for a comprehensive, sustained and credible campaign to claim the Subscriber Services market.
The implementation of Neda’s business plans consists of two very different phases of operation:
It can be seen that these two phases of operation are very different in nature. Phase I is extremely well characterized – the required assets, execution steps and schedule are all defined precisely. We know that Phase I can be fully accomplished on the basis of our existing assets and resources, requires very little financing, and can be self-financed as necessary. We are already executing this phase, will continue to do so, and expect to bring this phase to successful completion regardless of any external financing.
The expected state of affairs at the conclusion of Phase I is also very well characterized. At this point the LEAP protocols are in widespread use, the WhiteBerry model is widely implemented, Neda is generating a major revenue stream on the basis of software licenses, and the LEAP-based open Mobile Messaging industry is experiencing strong and rapid growth. But most important of all: Neda is sitting at the epicenter of this growing industry, and is sitting there alone.
It is this latter characteristic that is the key to Neda’s enormous business opportunities in Phase II – and a principal reason for writing this Business Plan. Since Neda is occupying this unique position, there are many ways in which it can profit from the rapid and early growth of the industry. At the smallest end of the opportunity spectrum, Neda can do no more than active development of the software licensing business. At the largest end, it can target the ultimate in profit maximization: domination of the WASP market. And anything in between.
A consequence of this abundance of opportunity is that Phase II cannot and should not be defined with precision at this point. Phase I can be characterized in concrete and deterministic terms: execution of a plan to make LEAP widespread. No such deterministic characterization can be made for Phase II. Rather, we think of it in general abstract terms: contingent exploitation of available opportunity.
If we assume that Neda will target the ultimate opportunity – domination of the Subscriber Services market – then Phase II would begin as Phase I reaches completion, with approximately 3 months of overlap with Phase I. Neda would require $15 million in financing to implement this top-end strategy.
But Phase II is by nature very flexible in terms of scale and timing. It can consist of exploitation of any opportunity from the smallest up to the largest. Within broad limits, its implementation can be advanced or delayed. What this means is that the Phase II opportunity can accommodate a wide range of financing amounts and timing. The most profitable approach to this opportunity is to hit it as hard and fast as possible, and that means $15 million, immediately. But the Phase II operations can be readily adapted to any amount and timing of financing. Therefore we are not allowing a specific definition of Phase II to dictate a specific amount of financing; rather the other way around. In other words, we will adapt the Phase II operations to amount of financing available, and the prevailing industry conditions at the time.
Therefore our formal financing solicitation statement as follows: Neda is seeking up to $15 million in financing, at any point over the next 12 months.
This is an unconventional financing model, but it is the right one for this plan. To accommodate this model, we have put in place a well-defined, clearly structured and flexible framework for investment participation. This framework allows investors to participate to the extent and timing of their choosing.
Note that snapshots taken of Neda now, and at the conclusion of Phase I, will look very different. A snapshot today shows Neda with all the assets required to implement Phase I, and in the process of doing so. A snapshot taken at the end of Phase I will show the LEAP protocols in wide and increasing usage, Neda generating healthy and increasing software license revenues, and experiencing widespread and increasing name recognition. Clearly, investment at that time can no longer be characterized as “Early Stage,” and the opportunity to invest on those terms will no longer be available.
Investors who think of themselves as early stage participants should get involved now.
Financing proceeds will be used to:
The complete business plan including detailed financial projections is available on request to serious investors and development partners.
All the development work necessary to execute our plans has been completed, and all the assets required for immediate and rapid implementation are fully in place. Also, our timing could hardly be better: the current technological climate is perfectly ripe for the introduction of the LEAP protocols; and a clumsy fake solution exists as a foil for our genuine one. For these reasons we expect that execution of our plans will proceed extremely quickly, and investors will experience a large return on their investment within a very short timeframe.
Exit will be by means of any of the conventional mechanisms.
Neda’s business model consists of two radically different components. In very simple terms, the first component consists of a strategy for promoting a set of communications protocols as the Mobile Messaging industry standard, while the second component consists of a business plan for profiting from this.
These two components are sufficiently different in nature that they are described in two separate documents. The first component is described in a document called The LEAP Manifesto [21], while the second component is described in this document, the Neda Business Plan.
The LEAP Manifesto provides a complete description of what the LEAP protocols are, how and why they will succeed, and how they will catalyze the growth of the Mobile Messaging industry. The Neda Business Plan describes how we will profit from this growth. Together, these two documents provide a complete description of Neda’s business model.
The LEAP Manifesto can be thought of as the public side of our business model, while this document can be thought of as the private side of our model. An understanding of The LEAP Manifesto is essential in order to understand this business plan. It is required reading for anyone who is considering investing in Neda.
The LEAP Manifesto is organized as a series of largely independent articles. Each of these articles stands on its own, and can
be read and understood independently of the others. Together, these articles provide a complete picture of the
Mobile Messaging industry and the role of the LEAP protocols. The LEAP Manifesto consists of the following
articles:
Part I: The LEAP Protocols
Part II: LEAPing Over Closed Solutions
A description of how equivalent functionality to the closed BlackBerry mobile messaging solution can be implemented based on a completely open model, using existing open-source software implementations of LEAP, and existing off-the-shelf hardware components.
Part III: Making LEAP Widespread
Part IV: The Mobile Messaging Industry
Various other documents are available which provide further information about the LEAP protocols, Neda Communications, Inc., and our products and services.
If you just want to get a brief overview of what we are about, then of course the place to begin is with the Executive Summary in Section 1. In a few minutes reading this will give you a concise summary of all the major aspects of our business plans.
Following that, you may find it of interest to read the following three articles from The LEAP Manifesto:
These three documents describe the foundations of our business plans. The WAP Trap provides a critique of an existing set of communications specifications called WAP, and explains why they cannot succeed as an industry standard. LEAP: One Alternative to WAP provides a relatively brief introduction to the LEAP protocols, and compares them to WAP. Operation WhiteBerry describes how LEAP will form the basis for the open Mobile Messaging industry. These documents are fairly short, and all three can be read in an hour or so.
Depending on your reading style and your familiarity with the data communications industry, you may wish to continue to browse through other articles in The LEAP Manifesto, or you may prefer to jump straight into the Business Plan at this point. Various articles of The LEAP Manifesto provide essential support and justification for the Business Plan, so you may find it helpful to refer to those articles as you progress through the Business Plan. References to the appropriate manifesto articles are provided throughout the Business Plan.
When you have finished reading the Business Plan, you may find it worthwhile to page through Neda’s Media Kit, and to visit the various websites referred to in the plan.
Following that, if you want to do further research and/or due diligence on Neda, then the references section of this Business Plan will direct you to a large amount of additional information. The references include pointers to the LEAP protocol specifications themselves, Neda product manuals and data sheets, and Neda subscriber services manuals. These various resources will demonstrate to you the ambitiousness and complexity of this venture, and our preparedness to undertake it.
This Business Plan is available in several alternative formats. In addition to printed form, it is also available electronically in plain text, PostScript, PDF, and HTML formats. In the HTML format, all references and URLs are “hot” and clickable, so this format is ideal for referential mode reading. Please feel free to request the format that best suits your needs.
We can also give a PowerPoint slide presentation of the major aspects of the Business Plan. It takes about an hour for a Neda representative to make the presentation. Please let us know if you would like us to make a presentation to your investment group.
The key component of our business plan is a set of mobile messaging protocols called the Lightweight & Efficient Application Protocols, or LEAP. LEAP is a set of high-performance, efficient protocols which are ideal for mobile and wireless applications. A detailed description of the LEAP protocols is provided in The LEAP Manifesto [21].
Engineering is the art of making intelligent trade-offs between conflicting requirements. A perennial engineering trade-off is that which must be made between the need for simplicity, and the need for performance. In the case of wireless data communications, performance means such things as data transfer speed, power efficiency, and bandwidth efficiency.
The 1980s and 1990s were the decades of simple protocols - protocols such as the aptly named Simple Mail Transfer Protocol (SMTP), and Simple Network Management Protocol (SNMP). Much of the success of these and other Internet protocols can be attributed to their simplicity. Simple protocols become widespread more easily than “high-performance” protocols, because it is easier to adopt and implement simple protocols than the more complex “high-performance” protocols.
However, things have changed. Network communications has now expanded into the wireless and mobile data communications arena, and wireless applications demand efficiency. The move to wide-area wireless has significantly shifted the location of the ideal engineering balance between simplicity and performance - moving it away from simplicity, and towards performance.
Wireless networks are constrained by bandwidth limitations, and the hand-held devices they serve are constrained by limitations such as display size, battery capacity, and memory capacity. These constraints place an extremely high premium on the efficiency of data transfer.
Existing Internet protocols do not provide the required efficiency. We therefore need a new generation of high-performance, efficient protocols, to cater to the demands of wireless applications. The point is sometimes made that the need for efficiency in the wireless arena is a temporary one – that advances in wireless engineering technology in the form of third generation (3G) systems will eliminate existing bandwidth limitations, obviating the need for efficient protocols. As long as the capacity of wireless networks remains finite, however, the need for efficiency will persist. Efficient usage is an inherent requirement for any finite resource, therefore the requirement for efficient bandwidth usage and battery longevity will remain.
The LEAP protocols are intended to be an enabling catalyst for the growth of the wireless-IP based Mobile Messaging industry, and have been designed with this goal in mind from the outset. They have been designed as a genuine enabling technology which will bring enormous benefits to the industry and the consumer. They are a sound engineering construction based on true openness and patent-freedom.
The LEAP protocols are a general-purpose solution to the problem of efficient message transfer, and their use is not limited to any particular device type or network. In particular, LEAP is compatible with all wireless-IP networks. Examples of wireless networks which provide native support for LEAP are CDPD, GSM, packet CDMA, and PCS.
The basic organization of the LEAP protocols is shown in Figure 1.
As shown in Figure 1, the LEAP protocols are layered. The lower layer is called Efficient Short Remote Operations, or ESRO. The ESRO layer provides reliable connectionless transport services which can be used for a variety of applications. For example, in addition to mobile messaging services, ESRO can also be used as a transport service for credit card verification applications and efficient micro browsers.
One of the efficient application layers built on top of ESRO is called Efficient Mail Submission & Delivery, or EMSD. EMSD is the component of LEAP that addresses the Mobile Messaging application.
EMSD is a specialized native Internet messaging protocol. It defines a similar set of services to the existing SMTP protocols. It defines a complete set of rules for message submission (end-user device to server) and message delivery (server to end-user device). EMSD meets or exceeds the level of functionality, reliability and security provided by the existing SMTP protocols.
Though its use is not limited to wireless networks, EMSD has been designed specifically to address the requirements of wireless networks, such as CDPD, Wireless-IP, and Mobile-IP. In particular, EMSD has been designed with a very strong and clear emphasis on efficiency.
EMSD is highly optimized for the submission and delivery of short (typically 4 kilobytes or less) Internet e-mail messages, and is therefore extremely well suited to the wireless environment. EMSD improves on existing messaging protocols by optimizing the exchange between the server and the end-user device, both in terms of the number of bytes transferred and the number of transmissions. Because of the required timeliness of the messages, mailbox access protocols like POP and IMAP are not used. EMSD is the only truly open messaging protocol that is specifically designed for the wireless network environment.
EMSD is a natural extension of the existing Internet e-mail environment, and accommodates the two-way paging model of usage, in which time-critical messages are ”pushed” to the recipient.
Any network or network operator which faces significant bandwidth and capacity limitations can benefit from the use of EMSD. Any user of a network who must bear high costs for measured network usage can benefit from the use of EMSD.
The initial use of EMSD is expected to be primarily to provide Mobile Messaging services over IP-based wireless networks. However, EMSD can also function as an adjunct to Mail Access Protocols for ”Mail Notification Services.”
The Efficient Hyper Text Delivery, or EHTD, layer is a hypertext transfer protocol which is optimized for the efficient transfer of short markup pages. EHTD is the component of the LEAP protocols which facilitates web browsing. Along with EMSD, EHTD also benefits from the reliable efficient services of ESRO. A multiplicity of efficient markup languages can be used in conjunction with EHTD. Development of the EHTD protocol is currently in progress.
Various other efficient application protocols are either under development or anticipated for future development. One of these is the Efficient Dictionary protocol, or E-DICT, which will enable efficient access to dictionaries and other lookup data structures. A starting point for the E-DICT protocol is currently being created. In developing E-DICT, we intend to build on the existing work already done in the context of the DICT protocol.
We anticipate that additional protocols will be needed for a variety of future applications, not all of which can be foreseen at this time. These applications will include such things as efficient implementations of ESRO-based instant messaging, chat, white pages, and others.
All LEAP protocols are designed with efficiency in mind. In this section we describe the efficiency characteristics of EMSD, the LEAP e-mail protocol. Other LEAP protocols deliver similar efficiency benefits.
Most existing Internet e-mail protocols are designed with simplicity, rather than efficiency, as a primary design requirement. EMSD, by contrast, has been designed with efficiency as its primary requirement. For this reason, EMSD is a great deal more efficient than existing Internet e-mail protocols.
A set of detailed studies of the efficiency characteristics of EMSD is provided in the article entitled Efficiency of EMSD [16] within The LEAP Manifesto. In this section we will provide only a brief summary of some of the major results from that article. A comparison of the efficiency of the EMSD protocol to other messaging protocols is provided in Figure 2, which compares the delivery traffic overhead for EMSD to three other e-mail protocols: SMTP, IMAP and POP.
As the figure shows, EMSD is much more efficient than SMTP, POP and IMAP. For submission and delivery of short e-mail messages, EMSD is up to five times more efficient than the ubiquitous SMTP e-mail messaging protocols. Even with pipelining and other possible optimizations of SMTP, EMSD remains up to three times more efficient than SMTP.
By minimizing the network traffic required to send and receive messages, EMSD meets the needs of the mobile communicator. The extreme efficiency of the EMSD protocol translates into bandwidth efficiency, which in turn translates into:
A detailed description of how LEAP will form the basis of the open Mobile Messaging industry is provided in the Manifesto article Operation WhiteBerry. In this section we provide a brief overview of the role of LEAP.
An illustration of how LEAP works is provided in Figure 3. As the figure shows, LEAP provides complete openness of interoperability among Mobile Messaging devices, wireless networks, and message centers (indicated by the abbreviation MC in the figure).
LEAP will thus have the effect of unifying the entire Mobile Messaging industry under a set of open Internet Protocol (”IP”) standards and protocols so that, in the manner of the World Wide Web, all of the Mobile Messaging networks will effectively operate as one.
In order to achieve this convergence, it is not sufficient for the Mobile Messaging industry merely to adopt a set of common protocols. Many would claim that WAP is in fact just such a set of common protocols. However, a further essential attribute of the required protocols is that they must be a truly integral, “end-to-end” part of the Internet, as opposed to “gateways” which accommodate unnecessary gatekeepers and middlemen.
LEAP is based on the concept of the Internet end-to-end model, in which direct communication between the client and the server assumes that the role of the network service provider is merely that of a pipe – i.e. a passive communication conduit. The Internet end-to-end model assumes that both ends are under the control and choice of the user, and that the servers are widespread, from a variety of providers, and under no specific administration or control. The Internet end-to-end model is in sharp contrast to the traditional phone company and telecommunications approach, which inserts gateways between the two ends, and creates control and exploitation opportunities for the telecommunications operators.
Bearing in mind that the natural convergence of all wireless networks to IP at Layer 3 is well under way and rapidly progressing, the key remaining requirements are: efficiency, lightweightness, miniaturization, and conformance to the Internet end-to-end model. LEAP fulfils all of these requirements. By serving as the necessary missing link, LEAP will become the ultimate basis for convergence.
The mobile e-mail component of LEAP is EMSD. In the spirit of the Internet end-to-end model, EMSD will facilitate the convergence of the two-way paging industry and Internet e-mail in a natural and transparent manner.
The entire LEAP family of protocols brings efficiency and functionality benefits to the users of miniaturized mobile devices. In this section we describe the user’s experience of an EMSD-enabled device.
Because of their frequent mobility, mobile users may not always have the benefit of a wired connection. They may have a permanent computing system elsewhere, at which they can review large messages at their leisure (for example, messages containing Word documents, Excel spreadsheets, images, etc.). While on the move, however, they need to be kept apprised of important information that requires their immediate attention. Such information cannot wait for them to find the time to set up a laptop and dial in to check for messages. They must be able to accept messages immediately, at any time, and on a device that they can carry anywhere.
LEAP provides mobile users with precisely this capability. Figure 4 illustrates how the Mobile Messaging needs of a typical user (we’ll call him Joe) are provided by the LEAP technology. This figure shows all the required technological components, and how they interoperate, in order to satisfy Joe’s messaging needs. The figure includes three major components:
Joe’s mobile device could be a cell phone, a two-way pager, or a handheld device (such as a PalmPC) with a wireless (for example CDPD) modem. While the device can be turned off, the modem will remain on at all times to accept incoming messages.
Anyone with access to the Internet can now send a message to Joe. If Joe receives a generic (i.e. non-LEAP) e-mail message over the Internet, then the message will be fielded by Joe’s Subscriber Service provider from the Internet e-mail system, using standard Internet protocols. The Service Provider will then forward the message to Joe’s mobile device via the LEAP protocols.
Since the modem is always on, the message can be accepted at any time, and Joe can be notified immediately (in any of the ways commonly used for pager notification) that a message has arrived. He will then activate his LEAP device and read the message.
To send a message, Joe enters the message then submits it to the LEAP Service Provider via the LEAP protocols. The Service Provider then acts like a standard Internet Service Provider and sends the message to its destination.
Meanwhile, e-mails for Joe may be received in either his home or office mailbox systems. Joe may configure either of these systems to forward certain e-mails to his mobile device on a selective basis. If so, the qualifying e-mails will be forwarded to him directly over the Internet, using the LEAP protocols. The Subscriber Services system need not be involved in the transmission of these forwarded e-mails, since they are being sent from one LEAP-enabled system to another.
Joe’s end-user device may have a limited display area and a limited keyboard. This is very much the case for today’s cell phones, for example. If so, both the end-user and his/her correspondents may wish to make use of canned messages to facilitate their communication. These canned messages may be defined by the system or end-user device, or they may defined by the message originator as embedded multiple-choice responses.
Note that the end-user experience described above represents a superset of the capabilities of the existing RIM BlackBerry [tm] system. In other words, the full functionality of the closed BlackBerry system can be reproduced and exceeded by the open LEAP protocols. The market success of BlackBerry has clearly demonstrated the large user demand for this kind of service. By providing the same functionality of BlackBerry in a completely open fashion, the market rewards will be much larger. For further discussion, see the article Operation WhiteBerry in The LEAP Manifesto.
The LEAP protocols are intended to be open in the fullest sense of the word; they are intended to be freely and permanently available, subject to public review and revision, and without usage restrictions of any kind. Therefore the processes and procedures used throughout the development and maintenance of the LEAP protocols have been such as to endow them with these characteristics, and to ensure their integrity as public protocols.
A detailed description of the LEAP development process is provided in the article entitled The LEAP Protocol Development Model within The LEAP Manifesto. In the following sections we provide a brief summary of the major development principles.
The development and maintenance of the LEAP protocols conforms fully to the policies and procedures of the Free Protocols Foundation. In particular, Neda has declared to the Free Protocols Foundation that the LEAP protocols are patent-free to the best of its knowledge, and that it intends to keep them patent-free permanently. For more information see http://www.FreeProtocols.org.
Both protocols have been published as Internet RFCs; ESRO in September 1997 as RFC-2188 [44], and EMSD in March 1999 as RFC-2524 [1]. RFC publication is the mainstream Internet publishing procedure, ensuring that the protocols are freely, easily and permanently accessible to anyone who wishes to use them.
To provide an open forum for the continued development and maintenance of the LEAP protocols, Neda has established a public organization for each protocol.
The ESRO and EMSD protocols are maintained, respectively, by ESRO.org at http://www.esro.org/, and by EMSD.org at http://www.emsd.org/.
Each of these organizations allows public review of the respective protocol, and provides mechanisms for enhancement of the protocol as a result of collective experience.
Any interested person may participate in the further development of the protocols. Participation in the development process is entirely open and non-exclusive; there are no membership fees.
A set of specifications called the Wireless Application Protocol, or WAP, exists already, and purports to do the same things that LEAP does. However, the WAP specifications are entirely unfit for their claimed purpose, and are doomed to technological and political failure. A detailed criticism of WAP and justification of these statements is provided in an article called The WAP Trap [22] within The LEAP Manifesto.
LEAP is an alternative to WAP, that does in fact what WAP does only in fiction. For a point-by-point comparison of LEAP to WAP, see the article entitled LEAP: One Alternative to WAP [20] within The LEAP Manifesto.
Those characteristics of WAP that make it wholly unfit to be the industry standard are summarized in Table 1, along with the corresponding characteristics of the LEAP protocols.
