One of the key benefits of the SaaS model is that it allows better, more frequent, stable, and comprehensive updates to the software being served up to all customers at the same time. This has certainly been the case with NetDocuments. As you hopefully are aware, the NetDocuments Service consists of the following four fully integrated services: 1) Document Management, 2) Email Management, 3) Extranets, and 4) Digital Records Management. The Service continues to be aggressively updated at a pace of 9 releases a year. Our largest enhancement ever, the implementation of FAST as our primary search engine, is scheduled to be released later this summer when we run FAST in "parallel" with our existing search engine. The FAST search engine will support relevency ranking, phrase and proximity searching, snippets, and later this year lemmatization, lingustics, entity extraction, and topic based searching. FAST will be the base search engine for all four NetDocuments services.

Year after year, the number of documents being managed by the NetDocuments Service has doubled, while we have simultaneously improved performance by 20% annually during peak-time, and 5% during night time. Late last year we implemented dual-datacenters (Dayton, Ohio and Provo, Utah), both configured for high availability. Our aggressive enhancement schedule has included all services. In the Document Management service we implemented about 150 enhancements during the past 12 months. The next two releases (May 31st and July) will provide better handling for zero-base profiling. We will also release our new document review screens.Extranet Services had about 45 enhancements released during the past 12 months, including the ability to share documents from workspaces (in addition to Cabinets and NetBinders) and multi-threaded discussions. We will continue to focus on better display of calendar events and easier methods to share documents.Email Management has received the most attention, with deployment in several law firms. The EMS agent has been made significantly more robust with better handling of emails. EMS captures emails into NetDocuments, deflates Exchange and PST files (stubbing and purging), creates folders in Outlook to match workspaces, and honors existing client/matter folder structures in Outlook so attorneys don't have to change to a new folder organization. We also tested a third party product which helps capture outgoing emails, and continued to introduce methods for easier deployment of EMS.For the Digital Records Management service, we released records archiving early this year and will be releasing the policy-based purging in beta in R4 (May 31st). Instead of forcing administrators to associate a global retention policy to every record, NetDocuments introduced the innovative approach of a "vectorized based policy", which greatly simplifies retention definitions. We will continue enhancements in DRMS with record connonization and paper document definition.

All four services are key to our future strategy. All four share a common repository, user interface, search engine, logging, security, ethical walls, inheritance, authentication, mirroring, matter centricity, APIs, administration, document IDs, profiling, and taxonomy.

Finally, we also integrated NetDocuments with LexisNexis Total Search and Salesforce.com in the past 12 months. One of the hallmarks and major benefits of a SaaS company is it ability to continually refine the software being served. No one does this better than NetDocuments. Prospective customers who take their eyes off NetDocuments for a year or two are amazed at our functionality when they refresh. If you are not a NetDocuments' user and haven't "refreshed" lately; I encourage you to do so........you will be surprised at what you see and learn. You will like what you see so much that you will want us to "turn on" the service and let you evaluate it. You can contact us at sales@netdocuments.com or sign up for the evaluation at our site at www.netdocuments.com.