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Enron Mail |
Vince:
I am disappointed to hear that the interest on the part of your internal users has waned. We have made a lot of progress since you and they last reviewed it, completing and finalizing our . short term North American gas model and data base (which endogenizes storage into a Continent-wide zero arbitrage solution) . long term North American gas model and data base (which drills wells and builds pipe and calculates equilibrium given such decisions) . short term North American electric model and data base . long term North American electric model and data base (which tells you precisely where on a nodal basis all forward power plant construction will and should occur. The model builds the right amount of capacity in the right place at the right time) . Western European gas model and data base . World Gas Trade model and data base . World Oil Model and data base We are striving to have the definitive economic modeling system so that companies like Enron can incorporate and proprietize your own "private knowledge" in combination with our general knowledge. Vince, I wanted to raise another issue with you. Now that MarketPoint is developed and operational and (hopefully) the leading technology available for dynamic microeconomic market modeling, I perceive that that it has more value as an acquisition play by a major player such as Enron than it does as "just another commoditized model" supported by a "play for pay" consulting firm such as Altos who is continually hounding internal users for license and consulting fees. My goal from the outset has been to use my traditional consulting base to capitalize the best tool in the industry and when the tool is complete to seek acquisition or investment by someone who can make a lot of money by proprietizing it. After a substantial development period here in the Silicon Valley (a very good place to develop software--that is why we were here), MarketPoint is just now arriving at the point of seeking equity investment or outright acquisition by a major player who can proprietize and benefit internally from MarketPoint as well as potentially enhancing the customer value from e-commerce verticals such as enrononline.com. When you and I had breakfast at the Hyatt about a year ago, you expressed the sentiment that Enron wants to be able to proprietize and husband technology such as MarketPoint (rather than seeing it licensed to everyone) so that you can comfortably augment it with your competitive advantage. We are at the point where we want to talk seriously with you and a selected few others about that. That is why I want to speak with you next Friday. 1. Could we really sell MarketPoint to a single entity such as Enron and take it off the market? Without elaborating, our licenses are structured so that we can do that. 2. Is the MarketPoint genie out of the bottle with licensees; would they know how to replicate it? Not a chance, we have protected the source code and the critical technical documentation and concentrated it three people in the world. (They issue technical tasks on a piecemeal basis.) It is extremely tough to do it. 3. Can MarketPoint run tens, hundreds, or thousands of fundamentally based forward market scenarios and thereby generate a continuously refreshed, extensive forward joint probability density function over price? We have just completed development of our Enterprise/LAN version, which fully parallelizes our calculations and renders the number of processors and the MIPS we can access over the intranet or internet essentially limitless. MarketPoint can now automatically "farm out" its microeconomic calculations across processors on a huge network and make all its calculations in parallel. This means that you can actually run a continuous, fundamentally based, automatic-feed forward probability density function calculation over gas price or over electricity price by region by time and a few seconds or minutes depending on how many processors reside within your network. Without parallelization, this simply cannot happen. Think of the magnitude of competitive advantage this could bring to Enron if you can proprietize it. You are one of a handful of organizations who could really monitize that. 4. How large or detailed a model can you run? With its tremendous degree of parallelization (under our algorithm, every node can be a parallel activity), our LAN Enterprise Version allows models of essentially unlimited size to be solved through parallelization very quickly and efficiently. The models are highly modularized (individual network nodes linked together) and therefore can be expanded and run efficiently. 5. Are the MarketPoint development risks gone? Yes, we have been offering MarketPoint under stand alone commercial license for a few months. The gas, electricity, and oil models all demonstrably work, and we have a number of test and demonstration cases. I have been waiting until this was true before looking for an investor. While there are maintenance costs and tasks to be done forever, there are no more known development costs or risks. 6. Does MarketPoint work for other commodities? Yes. MarketPoint can help you avoid difficulties of the past across a broad range of commodities and guide your businesses in such commodity areas with workable, fundamental models of those industries. MarketPoint is designed to give you early warning flags and guidance in commodity oriented business including but not limited to energy. 7. What would be your role? If Enron proprietized MarketPoint, I have the feeling you would probably inherit technical responsibility and could safely leverage MarketPoint into your group, secure in the knowledge that it is truly proprietary to you and Enron and would not be in the hands of Enron competitors. I should think that if Enron were interested, someone else's budget would acquire it and you would get it. Yours is one of a handful of groups in the world with whom I would want to work because you have the sophistication to make progress. 8. Is it really realistic to sell MarketPoint? It is realistic. Only two people (Mark Nickeson and I) own over 90 percent of the capital stock in MarketPoint, and there are no outstanding options, encumberances, or other impediments. We own it outright, and we have the ability and disposition to move. That is the beauty of capitalizing it as we have with consulting dollars--we paid people with MONEY rather than with stock, and we ended up owning the stock and the flexibility and value such ownership affords. We don't have to deal with employees or venture capitalists; we have autonomy of action. These are the issues I would like to speak with you about next Friday if you are interested. I would anticipate that this is a not decision that you alone will make within Enron, but I wanted to lay this out for you and if you are interested and amenable work together to present it to the right people in your organization. I need to get started in the right way with the right Enron people, and I would appreciate your support if you are so disposed. There is one additional issue as well. Would you, Krishna, and your guys be prepared to enthusiastically endorse MarketPoint if I were to interest an internal Enron group in using or licensing it? (If so, I would be prepared make MarketPoint available to you and your group under their license and train you to use it at no additional cost to you. I am confident if I could get MarketPoint into your hands, it would be win-win for you and for us.) The reason I am asking is that I have the opportunity to brief one of your operating groups who has expressed interest (through another consulting company) in one of the MarketPoint models. Before doing that, I want to be confident that you, Krishna, and your group are enthusiastic supporters and endorsers of MarketPoint if one of your inhouse groups is interested in spending the resources to move forward. Please advise by email or when we get together. All the best. Give me an email shout or voice shout at my cell 650.218.3069 on Monday if you can. Thanks for your consideration. Dale Nesbitt -----Original Message----- From: Kaminski, Vince J [mailto:Vince.J.Kaminski@ENRON.com] Sent: Friday, September 28, 2001 5:17 AM To: dale.nesbitt@marketpointinc.com Cc: Krishnarao, Pinnamaneni Subject: RE: Meeting on Friday to Discuss MarketPoint? Dale, Thanks for your message. We don't see at this point any interest from our internal users in proceeding with licencing of MarketPoint. I shall stay in touch with you and will notify you if there is any change. Vince < -----Original Message----- < From: "Dale M. Nesbitt" <dale.nesbitt@worldnet.att.net<@ENRON < [mailto:IMCEANOTES-+22Dale+20M+2E+20Nesbitt+22+20+3Cdale+2Enesbitt+40w < orldnet+2Eatt+2Enet+3E+40ENRON@ENRON.com] < Sent: Friday, September 28, 2001 2:02 AM < To: Kaminski, Vince J < Cc: Krishnarao, Pinnamaneni < Subject: Meeting on Friday to Discuss MarketPoint? < < Vince: < < Would you and Krishna be available to talk about MarketPoint and Enron < on Friday October 5 after lunch, say 130? Give an email shout to < confirm. Thanks. < < Dale Nesbitt < ********************************************************************** This e-mail is the property of Enron Corp. and/or its relevant affiliate and may contain confidential and privileged material for the sole use of the intended recipient (s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender or reply to Enron Corp. at enron.messaging.administration@enron.com and delete all copies of the message. This e-mail (and any attachments hereto) are not intended to be an offer (or an acceptance) and do not create or evidence a binding and enforceable contract between Enron Corp. (or any of its affiliates) and the intended recipient or any other party, and may not be relied on by anyone as the basis of a contract by estoppel or otherwise. Thank you. **********************************************************************
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