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Jeffrey Walkenhorst, CFA
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Summary: Portfolio Manager at Copeland Capital, formerly a Senior Research Analyst at international think tank, Wall Street Research Analyst, and Private Investor. Experience consulting to investment funds, financial services firms, global organizations, and high net worth individuals/families.... More
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Copeland Capital Management LLC
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  • Can't Help But Mention Mediasite, Again -- Franchise Overlooked 0 comments
    Oct 9, 2009 9:52 PM | about stocks: SOFO, CSCO, PLCM
    Following up on our M&A post and, specifically, the Cisco (NASDAQ:CSCO)/Tandberg deal, we couldn't help but mention that Sonic Foundry's (NASDAQ:SOFOMediasite rich media solution easily integrates with video conferencing gear from both Tandberg and Polycom(NASDAQ:PLCM). Although Mediasite's core application is "one-to-many" presentations (e.g. lecture capture, town hall meetings, conferences) and not point-to-point video communications, we are aware of some customers using Mediasite to capture video conferencing conversations. For more information on this topic, please see this presentationfrom Sonic's Unleash 2009 Conference: "Integrating Mediasite with Videoconferencing: A Scenario-based Presentation from Basic to Wild" by Helder Conde, Technical Director, Atitude Digital Media. The niche player's ability to readily inter-operate with widespread video hardware/systems is a clear positive.

    For those interested, Helder Conde was also the lead presenter at last week's Mediasite User Group meeting - link here. One item he highlighted was a large Mediasite Webcast his firm handled for Sanofi-Aventis (NYSE:SNY). Originally, Sanofi-Aventis was going to have an on-site meeting, but opted for a Webcast because of the H1N1 virus. Thus, Mediasite was used for 15 presentations and 27 hours of content that was Webcasted live "with intense audience participation" to around 800 participants. We expect to see more events like this.

    The User Group meeting also included a presentation by Sonic Foundry where the company previewed the Mediasite v5.2 release, which includes several additional upgrades to further improve the solution (e.g. "remote recorder control center" in online "management portal"). Notably, the company expects the release upgrade next week. Sonic Foundry continues to keep the virtuous feedback/upgrade cycle alive with the company's expanding, installed customer base.

    The User Group meeting, as well as Sonic's "5.1 in 15 Webinar Series" and a recent Webinar titled "Future Proof Capture: Best Practices for Planning Your Server and Storage Strategy" provide excellent insight into the Mediasite solution and deployment considerations for large-scale installations. Network integration/design become evermore critical as organizations have 20, 30, 40+ recorder units capturing hundreds or thousands of hours each month.
    In other news, TU Delft's Leon Huijbers was featured in a brief interview by DIVERSE2009 Weblectures - link here. We believe TU Delft is one of Sonic's largest European customers. After describing the popularity and success of TU Delft's program, one of his key points is that "no institution that should ignore these kinds of developments". We concur.

    Finally, Sonic's largest customer to-date, The King Abdullah University of Science and Technology, opened for classes in September - BBC article here (no mention of Mediasite, but press for school).

    Although shares of Sonic Foundry are speculative and somewhat akin to venture capital, at approximately 1.3 times trailing revenue, we continue to believe that the private market value for the company is materially higher than current trading levels given the growing Mediasite franchise, annual top-line growth of 20%+ (expected for F09 - end September), and GAAP break-even operations.

    Disclosure: long SOFO.
    Stocks: SOFO, CSCO, PLCM
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