Collection of questions for the conference call of Sphere 3D Corp. after the Q4 2014 Earnings Release
Dear Sphere 3D management,
First of all, let us please thank you and your entire team sincerely for the immense progress you have been achieving. Below is a list of questions we have compiled as a group of loyal shareholders and inquisitive minds. While we understand that you might not be able to answer all of these questions in detail due to business, confidentiality or time constraints, please kindly appreciate that every little step towards more transparency helps to make us shareholders more comfortable, limit the potential damage of unfounded accusations and constrain share price volatility.
For ease of reference, the questions below have been categorized into financial, strategic and technical questions:
I. Financial Questions
1) How do we get paid by a server providers such as DELL who incorporates GW? Recurring revenue or a one-time fee?
2) How do we get paid by a solution providers such as Novarad or Pearson that applies Glassware for its customers in its solutions? Recurring revenue or a one-time fee?
3) Regarding MSFT, how do we get paid for use of GW in Azure? Initial fee, by user, or a combination? Who is selling GW to Azure users, ANY or MSFT? What will drive revenues from GW use on Azure?
4) The goal of Sphere 3D as we understand is an annual run rate of $160M by year end. What part of this increased revenue is expected to be attributable to GW? Roughly speaking, what are your GW related sales goals in terms of percentage of total revenue in Q4?
5) How would you see the relative importance of the diverse revenue stream (Overland, GW, V3) develop over time? Which aspect of the business do you foresee to become the most important one for Sphere 3D in the future?
6) Do you already have a goal on when you expect Sphere 3D to become profitable? Or is your intent to primarily focus on growing the revenue side of the business for the time being?
7) Will revenue and income guidance for 2015 and beyond be made in the near future in order to facilitate institutional investments and coverage via sell-side analysts?
II. Strategic Questions - General
1) Why were the education and healthcare vertical chosen as the first sectors to implement GW? Where they the lowest hanging fruit in terms of income or ability/ ease for technical deployment?
2) When do you foresee GW to start being implemented in other sectors? Which ones? Which sectors do you foresee to become the most important ones within 2-3 years?
3) Are you already working on further expanding the network of partnerships (whether in the educational, healthcare or other sectors)?
4) Does ANY sell directly to customers at the moment or focus on sales through partners or re-sellers?
5) If primarily re-sellers are used for sales, what does the Overland/Tandberg sales force/channel add to the GW effort? Or are they primarily focusing on Overland/ Tandberg products? Have you already actively implemented and observed operational and financial synergies?
6) Where do you see the biggest challenges for Sphere 3D currently and going forward?
III. Strategic Questions - Specific
1) Are there GW education deployments other than New Caney and Chesterfield (please put some light on the deployment there if possible especially given the recent attack by the shorts)?
2) Are you already working with or have identified other large customer leads for GW in these or other sectors?
3) Specifically, how is the GW penetration through DELL DRIVE + since its inclusion in March 2014 progressing?
4) How is the inclusion of GW at the 800 locations serviced by Novarad since the announcement of the deal in 2014 progressing?
5) Specifically, can you please give us an update on the POC studies with Ericsson in MSP vertical?
6) ATOS and Promark - Are their sales forces fully trained on selling all products at this time and are they pushing them as a total solution or solely focusing on marketing Overland products?
7) Have any forays –through whichever channel- been made into providing GW on a State or government level?
8) Are there any plans for an independent platform agnostic App Store in near future?
IV. Technical Questions
1) While shareholders understand the requirement for stealth during the development stage, now that we seem to have entered the commercialization stage of Glassware, how can current and future customers, industry analysts or shareholders gain a better idea of the GW technology and its potential and capabilities? Do you intend to provide demos or ‘sandboxes’ to industry analysts in the near future?
2) Some critics label GW as a “niche technology/solution” for Windows legacy apps and the like, while others see GW becoming ”ubiquitous” in the technology sector. Where in this very wide range of interpretation would you locate GW?
3) Please update us on any feedback you have received from clients/ early adopters of GW?
4) How do they - and you- compare GW to technological solutions of Dockers, VMWare and the like? Are benchmarks, demos or comparative statistics capabilities and implementation cost comparisons publicly available?
5) Is the GW technology and its support through internal or external resources ready to be deployed on a larger commercial scale?
6) Is management aware of any competing technology that currently or in the immediate future may threaten the “disruptive" or "ubiquitous" nature of GW?
7) Do the patents currently held and applied for protect the technology and IP sufficiently?
8) How would you foresee the implementation and sale of GW on a chip? When would such be ready to be commercialised? Who would you see as early adopters (in terms of customer target group or sector)?
9) Lastly, where do you see Sphere 3D in 1-2 years as far as its impact on cloud computing and the technology world in general? Are you confident that Sphere 3D’s GW based technological solutions could make Sphere 3D a widely known significant player in this space? If so, to which extent and time-frame?
Needless to say, the above reflect a subjective collection trying my best on an early Sunday morning to incorporate everybody's questions to the extent and in a wording that they could get addressed by management on the call. ANYbody wishing to add questions over and above please feel free to also ask as far as possible on the call as I have been kindly asked by some posters here to send them to management asap so that they have at least little time to review them prior to the call. Better an imperfect collection than a late one. However, while I take responsibility for the idea of submitting these to management ahead of time, I also owe them and us I feel that - given the amount of questions submitted- that we should not be disillusioned that above would probably take two days if we wanted them to answer all of these questions, and that in fact, management may not be best advised to answer all these questions in detail (after all it is a very competitive marketplace out there), but at the very least they get a very good idea of the questions that are on our minds. Many thanks again to everybody for their kind contributions.
