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Helping Computer Users Anytime, Anywhere
CyberMedia pioneered "self-healing technology" that works like a personal, 24-hour technical support expert -- inside the PC. Automatic technical support makes personal computers easier to use by preventing computer crashes, by locating and installing free software updates over the Internet, and by protecting user privacy from "cookies" and other Internet-borne invaders. In the three-year period since it began shipping products, the company has sold more than 5 million units. The flagship product, First Aid (R), which prevents crashes and automatically repairs hardware and software conflicts, has sold more than 3 million copies and was selected for the past two years as PC Magazine’s Editor’s Choice for Troubleshooting Utilities (1997-98) "CyberMedia has clearly established
itself as the brand leader in automatic technical support for PCs.
It is trailblazing an entirely new PC software category and responding
to the growing challenge of simplifying the complexity of PCs."
The Market Opportunity Personal computers are still so complex, so hard to use, and so prone to breakdowns that analysts estimate nearly a third of all computer users cannot use their PCs without extensive and costly help. According to the market research firm Dataquest, PC users place 200 million calls annually for help to their vendors -- at a cost to those vendors of $20 per call, or $4 billion to the industry as a whole. "Only in the PC industry is it
considered customary to sell As Dataquest analyst Steven Clancy puts it: "The PC industry simply can't keep putting head count on the phone. It's just sucking the life out of the industry's profitability." The ratio of support staff to total industry employees has doubled in the last six years alone, and vendor support costs are currently increasing by an astonishing 20 percent per year. "There is a large growing opportunity
to solve today's crisis in PC service and support. We anticipate
that companies such as CyberMedia will experience significant growth
in the period ahead." By some estimates, vendors today must spend upwards of 10 percent of their total revenues just to provide service and support to their customers. Microsoft, for example, recently spent more than $600 million in one year providing customer support. As for IBM, its technical support call volumes exploded by 84 percent in a single quarter. The situation is similar at other vendors, with call volumes up 30 percent at Compaq, and up 100 percent at AST. What's more, there appear to be significant intangible costs -- from lost business to reduced customer loyalty -- associated with the PC support crisis. Industry estimates show, for example, that only one in seven customer support calls even gets past a busy signal to reach a technical support operator during peak business hours. Additional Market Forces Personal computer usage has now reached far beyond the technically-sophisticated segment of the population, with approximately half of new PC sales going to first-time, novice users. At the same time, computers have become increasingly complex, loaded down with advanced multimedia and communications capabilities that require diverse hardware and software components to cooperate flawlessly. And with literally thousands of firms offering their own differing versions of these components -- not to mention constantly revising and updating them as product cycles shorten -- the world of computing has become a veritable Tower of Babel. According to the New York Times, 93 percent of the 225 million PCs in use worldwide lack any onboard service or repair technology, suggesting a huge market for CyberMedia. Dataquest estimates that 58 percent of PCs sold in the U.S. are going to first-time users with a greater need for service and support. Recent Dataquest research shows that the sub-$1000 PC will have a major impact on the marketplace. For vendors, it means a squeeze between lower margins to fund support and greater demand for support from novice and first-time PC users. The combination can only hasten the industry’s headlong rush toward a crisis in customer confidence and declining profits. It is clearly time to consider new solutions. "If intelligent self-help technology
for PCs can reduce service and support cost by even 25 percent,
then we're talking about a savings just to PC vendors alone of at
least $1 billion a year. That represents a huge opportunity for
companies such as CyberMedia." CyberMedia’s Solution for Automatic Technical Support – ActiveHelp™ ActiveHelp™ is an innovative methodology for detecting and resolving thousands of PC malfunctions automatically, with the least possible disruption to the PC user. CyberMedia’s ActiveHelp products rely on a knowledge base located directly on the user’s PC. They also include the capability to retrieve newer and more complex fixes over the Internet from CyberMedia’s regularly updated ActiveHelp server. CyberMedia’s Retail Products First Aid® 98 automatically fixes thousands of potential computer problems that PC users routinely experience. First Aid's advanced database of solutions recognizes problems like software conflicts, buggy components, and configuration issues, and offers users easy, one-click solutions. First Aid has sold more than 3 million copies and was selected as PC Magazine’s Editor’s Choice for Troubleshooting Utilities two years in a row—1997 and 1998. More about First Aid UnInstaller™ is the top-selling product for safely removing unwanted programs and files to reclaim hard disk space with a minimum of worry about accidentally removing important files. UnInstaller is especially helpful for removing Internet junk files that clutter up PCs. CyberMedia acquired UnInstaller from Luckman Interactive in April 1997. Since its re-launch as a member of the ActiveHelp product family, it has ranked consistently among the top ten best-selling business software packages sold at retail, according to PC Data. More about UnInstaller Oil Change™ is the subscription-based software best-seller that locates, downloads and installs the latest updates and bug fixes for thousands of today's most popular programs and peripheral device drivers. Outdated software drivers represent one of the most common causes of user dissatisfaction with the performance of new hardware and software products. Conventional methods for obtaining updates can be frustrating and time-consuming, especially for new users. Oil Change automates the process of searching the Internet, downloading and installing updates without taking away user control and decision-making. Introduced in late-1996, Oil Change now serves more than 350,000 paid subscribers. More about Oil Change Guard Dog™ Deluxe, the company's newest retail product, gives Internet users full privacy and security protection. Guard Dog's comprehensive protection safeguards personal files, eradicates viruses, blocks hostile programs, and even prevents snooping by curious Web sites. Developed as an outgrowth of CyberMedia’s acquisition of the company Walk Softly in 1997, Guard Dog has emerged as a factor in today’s computer privacy controversy. Public concern about "cookies" and other forms of invasion via the Internet has prompted rapidly growing sales during the product’s early months on the market. Guard Dog and Oil Change were both selected as finalists for the Software Publishers Association’s prestigious Codie Award for best new consumer software product. More about Guard Dog Entering the Enterprise Market CyberMedia’s products currently address one-fourth to one-third of the total universe of PC users--those individuals who have home computers or who run a small business with one PC. The majority of PCs, however, are located in larger businesses, typically networked with other machines to share electronic mail and files. In 1997, CyberMedia hired a team of experienced corporate marketers to leverage the company’s ActiveHelp technology and products for entrance into the enterprise marketplace. Industry experts estimate that small businesses, Fortune 500 companies and government agencies spend between $5,000 and $13,000 per user, each year, to support networked personal computers. The Total Cost of Ownership (TCO) issue has become a wake-up call for the entire PC industry. There are billions of dollars to be saved and countless productive hours to be regained. Gartner Group estimates that up to 15 percent of the total in-house cost of operating corporate PCs could be saved through the deployment of self-help technology. By effectively using the Internet as a platform for customer service, vendor support costs may be slashed by an additional 25 percent. In December 1997, the Enterprise Group launched CyberMedia Support Server Repair Engine™. The new product extends to corporate users and network administrators automatic technical support based on ActiveHelp technology and CyberMedia's unique knowledge base of problems and fixes. Repair Engine diagnoses and repairs many PC problems and software conflicts even before end users call for help. This significantly reduces end-user downtime and boosts productivity. Equally significant, Repair Engine puts network administrators in control of problem resolution, from a central console, liberating support personnel from repetitive calls and freeing administrators to focus on more strategic tasks. More than a dozen organizations are currently evaluating CyberMedia’s enterprise products, including the National Institutes of Health (NIH), US Steel, and the Veterans Administration. CyberMedia’s Competitive Advantages CyberMedia’s success has attracted numerous competitors and copycat products, all of which have served to increase awareness of the product category and ultimately to grow CyberMedia’s sales.
"No network administrator
has enough time to manage each and every problem they come across.
CyberMedia has developed a brand new way to automate technical support
for mid-to-large sized businesses." Growth Strategies
Management Team
For Further Information
Disclaimer: This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are being provided pursuant to that legislation. Investors are cautioned that all forward-looking statements concerning the Company and its markets involve risks and uncertainties including, without limitation, risks related to the Company’s ability to continue to develop new products to meet the needs of its customers, the reliance of the Company on certain large customers, the impact of ongoing regulatory developments affecting the telecommunications industry, as well as other factors. Investors are directed to the Risk Factors section and other information contained in the Company’s filings with the Securities and Exchange Commission, including the Company’s 10-K filed in 1997, as well as more recent filings, for a more complete description of the risks and uncertainties relating to the Company’s business. The Financial Relations Board, Inc. serves as financial relations counsel to this company, is acting on the company’s behalf in issuing this bulletin and receiving compensation therefor. The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities. Note: CyberMedia and First Aid are registered trademarks and Oil Change, Guard Dog, UnInstaller and the CyberMedia logo are trademarks of CyberMedia, Inc. All other trade names are trademarks of their respective owners.
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