Feedback: Experts weigh in on Newline Software

(Reuters) - What would happen if your laptop was lost, stolen or accidentally dropped in a pool? Would

you be able to easily retrieve all the megabytes of precious content housed in its memory banks? These are

the questions that drove Seattle software developer Kory Gill to leave an almost 20-year career at Microsoft

and start his own online data-storage company, Newline Software. The following panel of experts critique

Newline Software's business model and opportunity for growth:

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EXPERT COMMENTS:

STEVE DUPLESSIE, FOUNDER & SENIOR ANALYST, ENTERPRISE STRATEGY GROUP

Steve Duplessie is the founder of and Senior Analyst at the Enterprise Strategy Group

<here>. Recognized worldwide as the leading independent authority on

enterprise storage, Steve has also consistently been ranked as one of the most influential IT analysts. Prior

to founding ESG, Steve was the founder and CEO of Invincible Technologies Corp., a manufacturer of fault-

tolerant NAS systems. Steve graduated from Babson College with a BA/BS.

"Unless they (Newline) have an application advantage or some sort of what-they-do-to-stuff technological

advantage, it's going to be very difficult to compete in a commodity offering. Unless you build the disk drives,

you're going to pay for them and another guy is always going to pay for them cheaper than you.

"This is a game that plays at scale. To get to whatever degree that they could, the only way it becomes

sustainable is if they either have or are going to develop higher-value services. I cannot envision a model

that is ultimately sustainable that is predicated exclusively on whatever the lowest commodity common

denominator is, like capacity.

"Everybody's play that offers this service is to create operating efficiencies to have the lowest cost for

delivering that particular service."

JOSLYN FAUST, PRINCIPAL RESEARCH ANALYST, GARTNER

Joslyn Faust is a principal research analyst at Gartner <www.gartner.com>, covering business and

marketing strategies for small and midsize businesses (SMBs), as well as IT vendors focusing on this

market. Ms. Faust's research covers the buying patterns and behaviors associated with IT investment

among SMBs. This includes looking at how, what, why and from whom SMBs are spending their IT dollars.

Joslyn has an MBA from Cornell University.

"If you are spending money and effort trying to market to everybody then by default a lot of the people in

your pipeline are going to be people who will never buy from you, because they have no need. So once they

have figured out who is that specific set of customers that I should be spending my time on, then they can

figure out what the best way to reach them is.

"People want things that are customized to their needs whatever they are. They should have an idea in

their head of what their differentiator is and who is going to value that difference.

JOSHUA BAER, FOUNDER & CEO, OTHERINBOX

Joshua Baer is the Founder and CEO of OtherInbox <www.otherinbox.com>. Joshua is a widely

recognized email marketing pioneer with a unique combination of technical, business and legal experience.

A serial entrepreneur and angel investor, Joshua serves on the Board of Directors of Greenling and

Lashback and is an advisor to Datran Media and Sympact. Joshua blogs at Austinpreneur.com and

Deliverability.com. Joshua founded SKYLIST in 1996 in his college dormitory as a one of the first email

marketing companies. In 2004, Joshua created UnsubCentral to help email marketing companies comply

with regulatory requirements. Joshua holds a BS in Computer Science and Information Decision Systems

from Carnegie Mellon University.

"Pretty much every kind of software application service that is happening on the desktop there needs to

be a cloud version of it. That's kind of a blue sky, green field for people to go implement those solutions in

the cloud and be the first to market with the cloud solution.

"The whole value of the partnership is that they have the door already open and you're just walking through

it. One way or another they're going to have a customer-acquisition cost and it's probably going to be on the

order of $10-50 per person. So if they want 100 customers a day that means they're going to be spending

$1,000-5,000 a day to make that happen.

"Whatever you think it's going to be, is probably not exactly what it's going to be. The initial idea gives you

a great start, but it's rarely a moment of pure genius where you write down the secret formula and that's it."