Agenda - Economic Development Authority - 08/13/2015

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equipment that ISPs and other telecommunications carriers demand is quite expensive and provides industry players with higher margins. Overall, during the five years to 2018, revenue is forecast to rise at an annualized rate of 2.9% to $11.2 billion, including 3.6% growth in 2014. Global competition, technological innovation, and the commoditization of production components will continue to drive down the price of low-end communications equipment over the next five years, and industry participants will have to contend with lower-priced imports, particularly at the low end of the market. The number of broadband connections in the United States is expected to grow 5% per year to 336 million in 2018. Carriers are migrating to next -generation, internet protocol -based networks that can simultaneously deliver voice, video and data services. These networks will eventually allow services to be provided at low and often flat prices over any medium. The shift toward these networks will continue to drive telecommunications carriers to purchase more powerful routing and switching equipment to handle exponential growth in network traffic. As a result, the industry is expected to experience stronger demand for industrial routing and switching equipment over the next five years. Information is this section was taken from the IBIS World Industry Report; telecommunication networking equipment in the United States, NAICS 33421. DNI's sales demonstrate and support the industry; they have grown at an average annual rate of 41% for the past four years and are projecting the same growth over the next three years. 3. Total projected sales for the JCF project both inside and outside of Minnesota Below is an outline of recent and projected sales for DNI: • 2014: $16 million • 2015: $21 million • 2016: $27 million • 2017: $34 million Approximate current sales to MN customers is 20%. 4. Estimated sales to Minnesota customers that replace purchases from outside Minnesota. Upon DNI's expansion, they anticipate an additional 5% of MN sales to replace purchases currently outside of MN. 5. Markets (local, statewide, national, international) along with their respective percentage to total sales and the customers served DNI retains a customer base of more than 750 clients, including brokers and resellers (94% of sales in 2013), end users (5%) and recylcers (1%). Customers are located in the United States (80%) and internationally (20%). 6. Being located in MN since the company's inception, the company gives back locally through actively participating in Feed My Starving Children, a non-profit organization which empowers volunteers to pack meals for the malnourished in nearly 70 countries. The company participates annually in Tough Mudder, 10-12 mile endurance event that includes military-