Letter from LizardTech CEO, Carlos Domingo

Dear Customers and Partners,

Last quarter, I shared with you how successfully we closed our fiscal year for the geospatial side of our business. Now, as we conclude the first quarter of our fiscal year 2005, the second fiscal year under new management as part of Celartem Technology, I would like to focus on the progress we are making on the document imaging side of the business with our Document Express products. As you know, the Document Express line of products is based on the DjVu document format and technology that we acquired from AT&T Research Labs. The DjVu document format yields extremely small files that are easy to distribute across the Internet and corporate networks. When discussing the market outlook with some customers and partners, I sometimes hear comments like, "Well, broadband is taking over. We do not need document compression. Or, "storage is becoming very cheap, there is little savings to be realized there." However, today there are many factors driving the need to compress documents to higher levels than in past years. I'd like to discuss some of these drivers and highlight a recent customer win for each of them. First, the main driver is the move towards color scanning. Kodak has a very good discussion about the benefits of color scanning so I will defer to them on this, click here.

When moving from 300dpi black and white images to 300dpi color images, the increase in file size is much bigger than any recent increase on bandwidth or decrease in storage cost. Another key driver is the push for governments to digitize their workflows and file archives and make them readily available to the public. The government must ensure access to the widest audience and today that means access by common Web browsers on low bandwidth without lengthy download times and in compliance with Section 508 of the Rehabilitation Act for the visually impaired. These key drivers have been the source of two recent customer wins, the Washington State Digital Archives and the United States Geological Survey Publications Warehouse (see our case study here. Finally, serving the widest audience possible over any bandwidth or terminal is not just a requirement of government agencies but also of large multinational corporations with customers, partners and suppliers around the world. One of the pioneers in the use of DjVu format for publishing product manuals online is Samsung. Recently, LG Electronics began publishing its product manuals online using DjVu (go here and pick any product to see the DjVu files). Despite the fact that both are Korean companies, a country with the largest penetration of broadband in the world, they acknowledge that dial-up is still the preferred method of Internet access worldwide.

Regards,

Carlos Domingo