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Startup Now! Building it Right From the Start
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BigBand Presentation For MIT/Cedar EventJuly 15, 2009
Ran Oz, CTO, EVP & Co-Founder
Slide 2
Safe Harbor Language
The statements in this presentation may be forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: changes in demand for video services, the market acceptance of our products; the fluctuations in our gross margins; the concentration of our customer base; competitive developments including pricing pressures; the timing of recognition of a significant portion of our net revenues given the complex systems integration involved; our ability to manage operating expenses effectively; the level of orders that are received and can be shipped in a given quarter; and the general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to BigBand’s Report on Form 10-K for the year ended December 31, 2008.
Stockholders of BigBand Networks are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. BigBand Networks does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this March 11, 2009 presentation, or to reflect the occurrence of unanticipated events.
In addition, we will also be presenting some non-GAAP financial information. A reconciliation of GAAP to non-GAAP items can be found on the investor relations section of our website.
Slide 3
BigBand Founders
» Amir Bassan-Eskenazi – Chairman, President & CEOEducation: B.S. Electrical Engineering – Technion18+ years of experience in media technology companiesPrevious positions -Optibase
Chief Operating OfficerEVP Marketing and Business DevelopmentVarious roles in Engineering, Marketing, BD and Sales
» Ran Oz – CTO & EVPEducation: B.Sc. (1986-89), MSEE (91-92), MBA (95-97)Co-founder Optibase (1988-92) – (Nasdaq: OBAS)Co-founder VCON (1991-92) – IPO in France (NM)Israel Intelligence Forces, Visual Intel. Tech. Unit (92-98)Support in founding Peach Networks (1998)30+ Patents in the area of media networking
Slide 4
BigBand Networks» incorporated in Delaware in December 1998 as Cedar Pre-Seed
» NASDAQ:BBND (Since Mar, 2007)
» Silicon Valley HQ, R&D in North America, EMEA, & APAC450 employees across centers in Tel Aviv, Boston, & Silicon Valley
» Recognized Video Innovator80+ patents granted or in process#1 Switched Digital Video—won the Emmy for Technology
» 9 out of 10 Largest Cable Operators60+ Million Subscribers Worldwide200+ Service Provider Customers
» Strong Balance Sheet with No DebtRevenues: $176M in ’07, $185M in ’08$175 million in cash and investments at 12-31-08
Slide 5
We Power The World’s Largest Video Networks
Slide 6
The Need For More Last Mile Bandwidth
Everything Goes HD» More On-Demand
» From Broadcast to Unicast (Addressability and Personalization)
Slide 7 Slide 7
DVN – Where we sit in the network
Local
(Hub/VSO)20,000 HHP
AccessAcquisition
Broadcast VideoSwitched Video
Regional
(Headend/VHO)100,000 HHP
Slide 8
SDV
RFTV
BVS
BB
ND
-DVN
1Q
AM
vIP
IPTV
Strategy
» Develop superior technology and highly innovative products
» Differentiate on DVN: network-based innovation
» Build carrier-class modular platforms
» Offer future proof solutions to the customer
» Benefit from footprint and expansion business model
» Partner with our customers
Slide 9 Slide 9
Non-subscription Revenue
Robust Video Market Drivers…
HD Eclipsing SD
HDTV adoption
Color TV adoption0%
20%
40%
60%
80%
100%2011
2010
2009
2008
2007
19691970
19711972
1973
Source: Comcast 2007
Operator Competition is Growing
Content Personalization
Slide 10 Slide 10
Switched Digital Video
» The Problem:Adding even more standard definition television
Adding even more high definition television
Building the infrastructure to increase levels of personalization
» The Solution:
SwitchedDigitalVideo
Slide 11
Customer Example: Time Warner
EQAM
SDV SMSDV Client Protocols
Fulfillment Reports
Encryption
Clamping
BMR
SwitchedDigitalVideo
Provides bandwidth for HD
Builds a platform for personalization and IPTV
Slide 12
USA San DiegoMetro
La JollaSuburb
La Jolla HillsNeighborhood
#2 Big Band Dr.La Jolla, CA
From Broadcast to Personalized
* DMA = Designated Market Area (Metro region)
Broadcast Regional (DMA) Local Zoned
(Zip+4) Personalized
Slide 13
Characteristics Of Addressable Advertising
» Choose ads by geographic zone, postal code, or demographic
» Per-STB/device granularity for TV» Ads selected based on actual viewership» Real-time feedback on ad impressions by
demographic and/or zip code» Opt-in for better targeting
Personalization: Leveraging Network to Optimize User Experience and Grow Revenues
Back To The Beginning - 1999
Slide 15
Pre-seed
» We got our first $250K (Dec,98)
» Identified the market - cable
» Initial meetings with potential customersTraveling a lotProduct validation / market validation – relations with customersChanging product slides from meeting to meetingBrainstorm sessions with CedarFounders Bonding – Two is better than oneFirst Stories
» Lots of ideas for interactive video based apps…
Slide 16
Slide 17
Bad News
Nice ideas
BUT
“We are Fresh Out of Bandwidth…”
Opportunity???
The BigBand Concept is born…
Slide 18
TransmissionEquipment
6 MHzChannels
DigitalBroadcast
To node A
To node B
To node C
High Speed Internet
VOD
VoIP
Without BigBand: Fixed Resource Allocation
Slide 19
TransmissionEquipment
6 MHzChannels
DigitalBroadcast
To node A
To node B
To node C
High Speed Internet
VOD
VoIP
NewService Flexible Edge
Infrastructure
Switched NetworkFor Any Media
With BigBand: Next Generation Network
Slide 20
We Are Starting a Start-up (Mid 99)
» Raising money
» Building the initial team
» First team stories
Slide 21
On the Roller Coaster
» From Round to RoundBuilding a companyBuilding a productBuilding customer’s traction
» During good times and bad times
» Innovation, Execution and Scale
Slide 22
Cedar Fund
Evergreen Investments
Redpoint Ventures
Pilot House Ventures
Star Ventures
Time Warner Ventures
Charles River Ventures
Lauder Partners
Eastward Capital Partners
Meritech Capital Partners
Cedar Fund
Evergreen Investments
Redpoint Ventures
Pilot House Ventures
Star Ventures
Time Warner Ventures
Charles River Ventures
Lauder Partners
Eastward Capital Partners
Meritech Capital Partners
Have converted funding toinnovative offerings, profitable operations
$100 Million of VC Backing
Slide 23
$0.4 MM $10 MM$22 MM
$35 MM
$98 MM
$177 MM
First cable HDTV
First Digital Simulcast
First national Telco TV rollout
First Switched Broadcast
Innovation, Execution and Scale
2001 2002 2003 2004 2005 2006
Slide 24
We Must Continue to Beat the Competition…
…through continued Innovation that meet our
customers needs and flawless Execution