1. SMB Market Capture. Microsoft, Oracle, Novell, Cisco, Hewlett-Packard... have all pursued the Small-to-Medium Business sector. Now for the first time there is a technology and business model, SaaS, which can profitably reach this market. And, the winners will not just be the large tech companies but also the small SaaS companies. NetDocuments is perfectly suited for the SMB market. Furthermore, the SMB market is more recession-proof than large enterprise markets.

2. Heads in the Cloud. The race is on to get application in the cloud, NetDocuments' home for our document management software for the past 10 years! ND has the experience and pure SaaS model to continue to be in the cloud.

3. Web 2.0 and Social Networking to Business. ND has big plans to integrate SN functionality into NetDocuments' already strong collaboration and sharing features.

4. SaaS Financial Model. During a slow economy, the SaaS model is the best way to acquire technology. Predictable, smooth, expensed payments for a technology "service" is the way to pay for technology. Let the on-premise legacy software vendors rely on capital budgets in tough times.

Despite what happened to the world in the fourth quarter of 2008, NetDocuments had record revenues with profitability and significant growth in our user base. We look forward to continuing to be your document management SaaS service provider for 2009 and beyond. Thank you for your continued business. We value our relationship with every customer and pledge to continue to offer a world-class SaaS service.

Respectfully,

Kenneth W. Duncan
CEO