Falvey Partners Focus & Sector Overviews
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Falvey Partners Focus & Sector Overviews

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As we continue to be thematic in our approach at Falvey Partners, we've put together thought pieces on a few of the software sectors in our core focus areas, including Digital ...

As we continue to be thematic in our approach at Falvey Partners, we've put together thought pieces on a few of the software sectors in our core focus areas, including Digital Marketing/Personalization, Human Capital Management, Cloud Middleware and Business Intelligence, among others. In the following market overviews, we outline relevant trends we identified, the most active consolidators and market maps of specific companies. More in depth reports and additional sector overviews can be found on our firm website at http://www.falveypartners.com/sector-overviews.

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    Falvey Partners Focus & Sector Overviews Falvey Partners Focus & Sector Overviews Presentation Transcript

    • PRIVATE AND CONFIDENTIALTECHNOLOGY FOCUS. BROAD REACH. OPTIMAL RESULTS. Firm Focus & Industry Overviews Peter Falvey Managing Director peter.falvey@falveypartners.com P. 1.617.598.0437 Jeffrey Monk Analyst jeffrey.monk@falveypartners.com P. 1.617.598.0445 Jeffrey Cook Vice President jeffrey.cook@falveypartners.com P. 1.617.598.0439
    • 2 Table of Contents I. Our Focus & Approach II. Relevant Industry Overviews
    • 3 I. Our Focus & Approach
    • 4 Falvey Partners Snapshot FOCUS SELECT, RELEVANT TRANSACTION EXPERIENCE December 2011 Has acquired July 2012 Has been acquired by September 2011 Series D Convertible Preferred Stock led by September 2012 Has been acquired by A portfolio company of July 2011 Has been acquired by a portfolio company of April 2011 Has been acquired by July 2011 Has been acquired by February 2011 Growth equity investment from November 2010 Has received an investment from A portfolio company of October 2010 PGI Notify and Send platforms acquired by August 2010 Series C Convertible Preferred Stock Led by SERVICES  Sell-side or buy-side M&A  Growth capital raising  Board and corporate advisory SECTOR  Software / SaaS  Tech-enabled business services  IT services  Internet / digital media COMPANY TYPE  $50M - $250M in enterprise value  Growing, with established scale  Profitable or near-term path to profitability We are an entrepreneurial investment banking firm focused exclusively on capital raising and M&A for leading software companies  Founded in 2012 by Peter Falvey and key members of the Morgan Keegan / Revolution Partners team  Falvey Partners professionals have closed dozens of software transactions representing billions of dollars in transaction value August 2004 Has been recapitalized by Sell-Side Advisor Enterprise Mobility Software Provider Project Swift Placement Agent Web Infrastructure Software Provider Project Anthem Sell-Side Advisor Project Port Content Management Software Provider Placement Agent Project Leaf Cloud Accounting Software Provider December 2012 Strategic Minority Investment from July 2011 Strategic minority investment from
    • 5 We are Experts in Our Focus Sectors We are thematic in our sector coverage, “placing our bet” on only a few sectors where we are seen as thought leaders and maintain deep, extensive relationships SOURCE OF OUR INDUSTRY EXPERTISE Approach    Relevant Transactions: We have completed numerous, highly relevant deals in our sectors and take-on impactful transactions that reinforce our reputation and leadership with industry constituents Intellectual Property: We create detailed, informed thought pieces on each sector that we use as the basis of our interaction with companies, buyers, investors and analysts Extensive Relationships: We invest significant time identifying leading companies, forming relationships early on and acting as a resource throughout the companies’ lifecycle  Meaningful Conversations with Buyers: We frequently have meetings with strategics to do deep dives on our focus sectors, alerting them to trends and companies to watch, allowing us to be up-to-speed on acquirers’ thoughts and action plans in each sector
    • 6  Software covering all aspects of managing customer experience, customer intelligence and internal marketing processes  Applications for developing, deploying and managing all aspects of cloud software  Software for K-12 learning and corporate training including learning management systems, learning content creation and distribution  Applications covering the internal and external social layer for enterprise collaboration, project management and social networks Our Focus Sectors FALVEY PARTNERS’ FOCUS DIGITAL MARKETING CLOUD INFRASTRUCTURE BI / ANALYTICS HUMAN CAPITAL MGMT. E-DISCOVERY MOBILE E-LEARNING ENTERPRISE SOCIAL  Software and services covering all aspects of the electronic discovery reference model including information management, data collection / preservation and review and analysis  Consulting services to help enterprises integrate their disparate legacy systems with cloud applications  Applications for managing, extracting and analyzing business data  Software covering all aspects of enterprise mobility enablement including MDM, MAM, mobile security and mobile application development
    • 7 Our Past Deal Experience SELECT TRANSACTION EXPERIENCE BY FALVEY PARTNERS PROFESSIONALS April 2011 Has been acquired by July 2011 Has been acquired by July 2011 Has been acquired by a portfolio company of February 2011 Growth equity investment from November 2010 Has received an investment from A portfolio company of October 2010 PGI Notify and Send platforms acquired by July 2011 Has been acquired by March 2011 Has divested its diagnostic solutions unit August 2010 Two divisions have been acquired by a portfolio company of April 2010 Has been acquired by October 2009 Has been acquired by February 2010 Strategic minority investment by July 2009 Has been acquired by a portfolio company of June 2009 Has been acquired by August 2010 Series C Convertible Preferred Stock Led by February 2009 Series D convertible preferred stock July 2006 Has been acquired by June 2006 Has been acquired by August 2006 Has been acquired by August 2006 Has been acquired by October 2007 Has been acquired by December 2007 Has been acquired by December 2007 Has been acquired by May 2008 Series D convertible preferred stock December 2011 Has acquired July 2012 Has been acquired by September 2011 Series D Convertible Preferred Stock Led by September 2012 Has been acquired by A portfolio company of
    • 8 Our Approach to Creating Intellectual Property in Sectors We have invested significant time and resources to establish thought leadership and mindshare with companies, buyers and investors in our chosen sectors Thought Leadership • Extensive research • Creation of thought pieces and market maps • Reference existing knowledge and experience from prior deals • Distribute thought pieces to relevant companies • Form relationships early, investing significant time as a resource and trusted advisor • Place our “bet” on a select few • Distribute thought pieces to the relevant consolidators • Deep dives on the sector with corporate development teams • Facilitate introductions to companies as appropriate • Be seen as experts and be the de facto choice when the time is right • Refine analysis and extend leadership from conversations and completed deals Meet with Leading Companies Conversations with Buyers & Investors Relevant Transactions
    • 9 Regular Interaction with Leading Strategic Buyers We are constantly interacting with leading strategic buyers through deals we have in market and in-depth discussions on sectors SELECT CONVERSATIONS WITH STRATEGICS IN RECENT QUARTERS
    • 10 Examples of Thought Leadership  Several leading prospects – continued dialogue / meetings with management  Introductions made for prospects to relevant companies  Several leading prospects – continued dialogue / meetings with management  Industry analysis sent to Gartner  Introduction made to companies Thought Leadership Establish Relationships with Leading Companies Conversations with Buyers Personalization Backend-as-a-Service Relevant Transactions
    • 11 II. Relevant Industry Overviews
    • 12 II. Focus Areas and Relevant Industry Overviews Digital Marketing / Personalization
    • 13 Our Thoughts on the Market  CMO influence is increasing: CMOs are wielding increasing purchasing power and influence over marketing software solutions  Marketing is increasing in complexity: The number of technologies in the marketing stack has increased as CMOs are employing a growing number of best-of-breed solutions − Growing number of digital touch points need to be managed – areas like mobile, social, integrated analytics, and personalization make the creation of a marketing solution much more challenging  Emergence of platforms: Platform vendors pursuing full solution suites through organic development and inorganic acquisitions  M&A Activity Remains Strong: There has been a recent flurry of acquisitions, with the consolidators paying healthy multiples to continue assembling their portfolios − Recent high profile acquisitions include Oracle acquiring Responsys, Adobe acquiring Neolane, SAP acquiring Hybris and Salesforce acquiring ExactTarget We believe that M&A and investment activity seen in 2013 will accelerate as the confluence of several trends will shape the digital marketing landscape
    • 14 Problems with Today’s Approach Today, most personalization is done through extensive integration between engagement applications and sources of marketing data CRM Content Management E-Commerce Automation E-mail Marketing Display Ads Analytics Web / Mobile Social Current Multiple Integration Points No System of Record Current Approach• Extensive integration is not a sustainable way forward as the complexity of the marketing stack grows: - More Data: The amount of data being tracked (clicks, time spent on site, etc.) and the amount generated is anticipated to increase 20x in the next 5 years - More Systems: Today, an enterprise runs, on average, 30 marketing systems. This number has doubled in the last 10 years - More Silos: Valuable data is often siloed in each application and unifying, cleansing and enriching the data is necessary to take action - More Cost: With stagnant budgets, more systems and more data, extensive integration for each incremental system is not sustainable
    • 15 Many Point Solutions and Few Suite Providers SizeLargerSmaller Point Solution Providers Suites Customer Experience / Touch Customer Intelligence Resource Mgmt / Workflow External Internal
    • 16 Personalization Market Landscape Testing DataActionDataManagement Personalization Data Management & Enrichment Tag Management eCommerce Optimization Customer Engagement Data Management and Action Marketing Infrastructure Testing Personalization eCommerce Optimization Tag ManagementData Management & Enrichment We view the following categories as the major components in an enterprise’s marketing data stack
    • 17 Acquisition Portfolios of the Major Acquirers Examining acquisition activity of the major acquirers highlights the trend towards acquiring infrastructure and engagement assets Infrastructure Applications Customer Engagement Data Management & Action CRM Automation WCM eCommerce E-mail Social Web Testing Personalization eCommerce Optimization Data Management Tag Management in 2013 for $600M in 2010 for $240M in 2013 for $600M in 2011 for $400M in 2010 for $240M in 2009 for $1.8B in 2011 for $58M in 2010 for $480M in 2010 for $1.4B in 2010 for ~$600M in 2011 for $1.5B in 2012 for $870M in 2011 in 2010 for $1B in 2013 for $1.5B in 2012 for $300M in 2011 in 2014 for $400M via ExactTarget in 2013 for $2.2B in 2012 for $689M via ExactTarget in 2013 for $1.3B Acquirer
    • 18 Recent M&A Activity The consolidators are paying attractive prices for the emergent leaders in digital marketing to fill in product offering holes Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, Pitchbook Target Acquirer Date EV Revenue / EV Dec 2013 $1,500M 7.7x Aug 2013 $21M N/A Aug 2013 $1,500M 13.6x Jul 2013 $600M 10.5x Jul 2013 $316 2.x Jun 2013 N/A N/A Jun 2013 2,250M 7.1x Jan 2013 N/A N/A Dec 2012 N/A N/A Dec 2012 $870M 9.7x Oct 2012 $95.5M 8.7x Oct 2012 $21M N/A Jul 2012 $350M ~7.8x – 10x
    • 19 Target Date Amount / Total Raised Investors November 2013 $27M / $49M Yahoo Japan, Baird Capital, Epic Ventures, Tomorrow Ventures, Others November 2013 $2.2M / $84M Undisclosed October 2013 $30M / $97M Peepul Capital, Norwest Venture Partners, Nexus Venture Partners September 2013 $50M / $140M New Enterprise Associates August 2013 $38M / $89.3M Sequoia Capital, Northgate Capital, Hummer Winblad, DAG Ventures August 2013 $33M / $80M Goldman Sachs July 2013 $40M / $75M Revolution Growth May 2013 $3M / $73M Atlas Venture, Flybridge Capital Partners, Infocomm Investments May 2013 $30M / $46M Northgate Capital, Singtel Innov8, Cross Creek, Trinity Partners April 2013 $35M / $39M Benchmark Capital, Bain Ventures, Battery Ventures, Google Ventures April 2013 $25M / $87M (Debt Financing) Escalate Capital Partners, Silicon Valley Bank March 2013 $20M / $107M Temasek, SAP Ventures, Benchmark Capital February 2013 $15M / $34M Bain Capital, TL Capital February 2013 $2.2M / $48M Openview Venture Partners, Rose Tech Ventures February 2013 $18M / $34M OpenView Venture Partners, Austin Ventures, InterWest Partners January 2013 $60M / $79M Goldman Sachs, Arthur Ventures November 2012 $25M / $69M Norwest Venture Partners, Nexus Venture Partners November 2012 $20M / $38M New Enterprise Ventures, Sequoia Capital November 2012 $30M / $69M Investor Growth Capital, Tenaya Capital, Northbridge Ventures November 2012 $35M / $101M Altimeter Capital, Cross Creek Capital Recent Investment Activity High profile capital providers are showing interest in the broader marketing software sector through significant investment Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, Pitchbook
    • 20 II. Focus Areas and Relevant Industry Overviews Cloud Infrastructure / Middleware
    • 21 Our Thoughts on the Market  Adoption growing: Enterprises have widely embraced the economic benefits of SaaS and IaaS solutions and are quickly moving to middleware solutions as the technology matures and provides an increasingly compelling value proposition  The market is separating: We are beginning to see leaders emerge and break away in an increasingly crowded market place  Platforms are assembling: The universe is extremely fragmented from both a programming language and solution perspective. Larger PaaS players (e.g. EngineYard) and major enterprise vendors are beginning to build platforms through development and acquisition − IaaS vendors moving up the stack, SaaS vendors moving down the stack to PaaS  Investment and consolidation will continue: Recent acquisitions of Mashery and Layer7 provide a precedent for consolidation which we think will accelerate over the next 18 months - Investment activity will focus on enabling leading platforms to consolidate and betting on disruptive point solutions - Acquisition activity will come from diverse industry sectors as larger vendors continue to build out their cloud strategies We expect the level of transaction activity in the broad cloud middleware sector to accelerate in the coming year as vendors race to complete their technology stack
    • 22 Market Map for Application & Integration Platforms Application / SuiteAPI Data ScaleSmallLargeScaleSmallLarge APPLICATION PAAS INTEGRATION PAAS PURE PLATFORM PLATFORM + DEV TOOLS - Used for deployment and scaling of existing or new custom applications developed in-house - Mainly in use in business environments where application development takes places in-house and developers are looking to abstract the back-end - Developers will typically need to adhere to an architecture specified by the PaaS vendor - Front and back-end of application developed and deployed in studio provided by vendor - App development adheres to design templates provided by vendor in visual studio PaaS Scale based on company funding and revenue, where available Acquired
    • 23 Market Map for Point Solutions & Specialists APP DEVELOPMENT & TESTING - Tools for rapid application design, development and testing prior to deployment through a platform SECURITY & IDENTITY TOOLS - Point solutions to manage private or public PaaS security and user identity DATABASE & ANALYTICS - Outsourced database platforms and BigData analytics platforms BUSINESS PROCESS MANAGEMENT - Supports software development and SOA by providing defined, reusable business processes MBAAS - Mobile back-end-as-a-service - Focused exclusively on the stacks used for mobile applications Security IdentityDevelopment Testing Data Analytics Developer Enterprise Scale based on company funding and revenue, where available Acquired
    • 24 Application PaaS Integration PaaS Leading Cloud Infrastructure / Middleware Consolidators Point Solution PaaS Diversified Technology Consolidators Upgrading product offerings as software development shifts away from legacy products to the new paradigm While there will be interest in cloud middleware from diverse industry sectors, we believe three main industry sectors will drive the consolidation EXAMPLES OF PAAS CONSOLIDATORS
    • 25 Recent Acquisition Activity Target Acquirer Date Solution December 2013 Application PaaS December 2013 MBaaS November 2013 Integration PaaS November 2013 IaaS and PaaS October 2013 PaaS September 2013 Application PaaS August 2013 Application PaaS July 2013 Integration PaaS July 2013 Integration PaaS June 2013 Application PaaS June 2013 Application PaaS June 2013 Application PaaS April 2013 MBaaS April 2013 Visual PaaS April 2013 Integration PaaS April 2013 Integration PaaS
    • 26 Recent Investment Activity Target Date Solution Amt. / Total Raised Investors Jan 2014 Application PaaS $25M / $38M Battery Ventures, Prime Ventures Dec 2013 Application PaaS $16M / $32M Safeguard Scientifics, Ignition, NEA Dec 2013 Integration PaaS $3.75 / $41 Ignition Venture Partners, Andreessen Horowitz Sep 2013 Application PaaS Undisclosed Maxfield Capital Sep 2013 Security $27M /$53.7M Sequoia Capital, Andreessen Horowitz, Greylock Sep 2013 Security $6.5M / $43.6M Ignition Partners, Others Jul 2013 Integration PaaS $35M / $120.8M BlackRock, Accenture, Others Jul 2013 MBaaS $12.1M / $82.9M EDB Investments, Mayfield Fund, Others Jul 2013 Application PaaS $2M / $16.9M Undisclosed Jun 2013 Data & Analytics $3.5M / $15.6M Hummer Winblad Ventures, Jun 2013 Application PaaS $3.4M / $3.4M Sierra Ventures, Andreessen Horowitz, Others May 2013 Data & Analytics $12M / $15M Devonshire Investors, Rackspace, Toba, Others May 2013 IaaS $10M / $14.3M Trinity Ventures, Juniper Networks, Seagate May 2013 Application PaaS $9M / $9.7M Intel Capital, ACT VC, Kernel, VMWare Apr 2013 Application PaaS $105M / $105M General Electric Apr 2013 Application PaaS $7.5M / $18M Atlas Venture, Citrix, Maayan Ventures
    • 27 II. Focus Areas and Relevant Industry Overviews Human Capital Management
    • 28 Human Capital Management Market Remains Active  High-growth sector: Talent management continues to be a priority for executives and is being driven by changes in how enterprises interact with human capital  HR is increasing in complexity: The emergence of social media, collaboration and mobility as enterprises continue to align with the ‘Web 2.0’ world creates more opportunity, but also more challenges, for HR professionals  Highly fragmented market: There is no clear leader in the market, with many point solutions fighting for share, encouraging players to grow through acquisition  Consolidation is starting: Much of the acquisition and investment activity has been directed towards enabling and creating talent suites, as SaaS platforms are emerging as early leaders, a trend we believe will continue in 2013 The human capital management sector has been one of the most active investment and M&A markets in recent years and we expect the trend to continue
    • 29 SaaS Suite Vendors Dominate the Market Source: Gartner, Forrester Research FORRESTER WAVEGARTNER MAGIC QUADRANT Although the market is saturated with many high profile point solutions, vendors offering suites with depth, flexibility and ease-of-use are viewed as market leaders  Leaders are consolidating to succeed in this extremely competitive market  Focused on SaaS suites with an offering for both performance and learning
    • 30 Many Point Solutions and Few Suite Providers ScaleLargerSmaller POINT SOLUTION PROVIDERS MARKET CONSOLIDATORS Talent Acquisition HR Core Admin Candidate-facing Internal Talent Management Employee-facing
    • 31 HCM Point Solutions Market Map TALENT ACQUISITION SOURCING RECRUITING + ONBOARDING TALENT MANAGEMENT PERFORMANCE + SUCCESSION TRAINING / LEARNING MANAGEMENT HR CORE ADMINISTRATION ScaleScaleScale RECOGNITION / REWARDSPAYROLL / BENEFITS / TAX / COMPLIANCETIME + ATTENDANCE
    • 32 Recent Strategic M&A Activity Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, PitchBook Target Acquirer Date Solution February 2014 Talent search engine February 2014 Online job search portal October 2013 Talent acquisition and management software August 2013 Online training for IT professionals May 2013 Behavioral assessment solutions December 2012 Time and attendance software for SMBs September 2012 Online job search portal September 2012 SaaS social recruiting and networking September 2012 E-learning and talent management content provider August 2012 SaaS solutions for recruiting and developing employees June 2012 Video interviewing platform April 2012 Performance and succession management software March 2012 Workforce management software March 2012 SaaS solutions for organizational change and growth February 2012 On-demand talent management software February 2012 Workforce management February 2012 Workforce training software = Falvey Partners acted as advisor: case study and process overview in rear of book
    • 33 Recent Investment Activity Target Date Amount / Total Raised Investors Feb 2014 $750M (Recap) Blackstone, GIC Feb 2014 $20M / $26M General Catalyst, KPCB Feb 2014 $11M / $25M Accel-KKR, Norwest Venture Partners Jan 2014 $4.5M / $9M Undisclosed Oct 2013 $16M / $63.8M Starvest, Morgenthaler, Scale, C&B Capital, Intersouth, others Oct 2013 $25M / $53.5M Sequoia Capital, ICG, Granite Ventures, Peterson Ventures Sep 2013 $20M / $27.7M Highland Capital Partners Aug 2013 $10M / $15.5M Rembrandt Venture Partners, The Mayfield Fund Aug 2013 $16M / $203.5M Foundation Capital, Azure Capital Partners, Intel Capital, Others Aug 2013 $2M / $3M IrishAngels Jul 2013 $2.1M / $2.1M Venrock, Maverick Capital, Andreessen, General Catalyst Jul 2013 $1M / $1M Andreessen, Kapor Capital, Founder Collective, Greylock Jul 2013 $7M / $11.7M Edison Ventures, Carmel Ventures Jul 2013 $5.3M / $8.2M Atlas Venture, Google Ventures, NextView Ventures Jul 2013 $1.5M / $2.3M MMC Ventures Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, PitchBook
    • 34 II. Focus Areas and Relevant Industry Overviews Business Intelligence / Analytics
    • 35 Overview  Market evolving: Enterprises are moving away from legacy solutions and towards a growing crop of disruptive vendors (e.g. Tableau, GoodData) addressing a new set of BI needs such as mobile, BigData, cloud and social  BI remains a top priority for IT: Having neglected BI spending over the past few years, enterprises are refocusing on growth initiatives and upgrading to more robust BI solutions - New cloud-based solutions touting ease-of-use will also extend the appeal of BI solutions to the mid-market, who will play a major role in overall market growth • Next-gen solutions are being funded: Disruptive vendors that are gaining traction are receiving significant funding from VCs to take advantage of the market window  Legacy players need to catch up: Larger legacy players (SAP, Oracle, IBM, etc.) will look to acquire more nimble independent vendors in an effort to keep pace with the rapid evolution of the BI analytics market The BI analytics market is quickly moving to the “2.0” phase of its lifecycle which we believe will usher in a wave of investment and consolidation activity
    • 36 Market Map Scale based on company funding and revenue, where available ScaleLargerSmaller FunctionalityBI 1.0 BI 2.0 <$25M $25M - $100M $100M - $500M $500M+
    • 37 M&A Interest Comes from Several Angles DATA & INFRASTRUCTURE APPLICATION VENDORS • Vendors controlling the data and infrastructure layer • Focused on platform acquisitions to move up the technology stack towards the application layer • Enterprise application vendors • Will look to acquire front-end solutions to broaden product offering; pursue select vertical acquisitions DIVERSIFIED TECHNOLOGY / FULL-STACK BI PURE-PLAY BI VENDORS • Diversified technology vendors offering solutions across the BI stack, from hardware to applications • Will look to do technology tuck-ins as well as acquire platforms • Independent BI vendors of scale looking to build BI product offering across the technology stack • More focused on tuck-in technology / functionality acquisitions
    • 38 Recent Acquisition Activity Target Acquirer Date Solution January 2014 Maker of scientific BI software October 2013 Active subscriber intelligence platform October 2013 Technology and personalized BI September 2013 Predictive analytics and modeling August 2013 Real-time operational intelligence June 2013 Visual analytics and BI June 2013 Custom analytics June 2013 Streaming analytics software May 2013 Advanced visualization for data March 2013 Web and Social Media Analytics Technology March 2013 BI and analytics software February 2013 Process automation for BI software October 2012 Big data search and analytics September 2012 Personalized SaaS BI August 2012 Big data analytics June 2012 Metadata management May 2012 Real-time network data analytics
    • 39 Recent Investment Activity Target Date Amt. / Total Raised Investors Feb 2014 $125M / $248M TPG Growth, Salesforce, Greylock, IVP, Mercato, others Nov 2013 $4M / $4M Alven Capital Partners Oct 2013 $7M / $27M Undisclosed Sept 2013 $27.5M / $49M LLR Partners, Updata Partners Aug 2013 $38M / $91.3M Sequoia, Northgate, Hummer Winblad, DAG Ventures Jul 2013 $4.1M / $5.2M Columbus Nova Technology Ventures, Razor’s Edge, CIT Jun 2013 $22M / $74M TOTSV Ventures, Adreessen Horowitz, General Catalyst Jun 2013 $8M / $13.5M Draper Fisher Jurvetson, Atlas Venture May 2013 $46M / $97M Bessemer, Norwest Ventures Partners, ONSET Ventures May 2013 $12M / $18M Toba Capital, SAP Ventures May 2013 $6.5M / $7.7M Trinity Ventures, SoftTech VC May 2013 $254M (IPO) New Enterprise Associates was the seller Apr 2013 $39M / $86.5M Investor Growth Capital, QuestMark Partners, Intel Capital Apr 2013 $10M / $23.5M Battery Ventures, Opus Capital, Genesis Partners Mar 2013 $2.5M / $10.6M Undisclosed Feb 2013 $1M / $1M (Debt) Intel Capital, JMI Equity, Others
    • 40 II. Focus Areas and Relevant Industry Overviews Enterprise Mobility
    • 41 Enterprise Mobility Will Continue to be an Active Sector in 2014  Strong growth outlook: Enterprise mobility continues to be a major area of focus for enterprises and the underlying macro drivers are undeniable  Enterprises are demanding unified solution sets: The requirements of enterprise mobility continue to evolve in lockstep with the industry: what started with a need for basic MDM / end- point security has quickly spread to MAM, data security and deeper mobile security  Large players will need to acquire to build solution sets: The exploding demand from enterprises for a unified mobility solution will translate to consolidation and investment activity in the industry - We believe that the consolidation seen in the second half of 2012 and 2013 will continue to play-out as the larger players in the space and tech consolidators round out their portfolios - Many of the tech consolidators have fallen behind more acquisitive competitors and will need to acquire to keep pace We expect the level of investment and transaction activity in enterprise mobility to continue into the coming year
    • 42 Market Divided Between Large Players and Point Solutions Device FocusApplication / Data Focus = Acquired / Operating Subsidiary ScaleSmallerLarger Market Solution Scale based on available revenue figures and amount of funding raised
    • 43 Solution Landscape Among Large Strategics Current EMM product portfolios are being assembled through partnerships and acquisition. Consolidation activity will remain as companies bring capabilities in-house Potential Buyer Deployment Products Customer Strength Major Partners Cloud On-Premise MDM MAM Security App Dev. Analytics Content Enterprise SMB Large, Diversified Enterprise Software Vendors CA Technologies X X   Dell    X Microsoft EMC X X  X HP   P A R T N ER  X F5 Networks IBM X   X Microsoft     Oracle X   X SAP X  P A R T N ER  X Appcelerator, Phonegap (Adobe), Sencha Salesforce  X   Infrastructure / Network Management Aruba Networks   P A R T N ER   SOTI, MobileIron, JAMF Software BMC Software   P A R T N ER P A R T N ER P A R T N ER P A R T N ER  X AirWatch Cisco   P A R T N ER P A R T N ER P A R T N ER  X AirWatch, Good Technology, MobileIron, Zenprise Citrix     F5 Networks   P A R T N ER   AirWatch, MobileIron, Silverback MDM, Zenprise Juniper Networks X    LANDesk X  P A R T N ER   Kaspersky Labs Palo Alto Networks   P A R T N ER P A R T N ER P A R T N ER   MobileIron, Zenprise Research in Motion X    VMware X  P A R T N ER P A R T N ER  X Cisco, Dell, F5 Networks, Symantec, McAfee Security / Support Software Absolute Software X  P A R T N ER P A R T N ER P A R T N ER P A R T N ER   Intel, McAfee, Microsoft, Qualcomm, Verizon BeyondTrust X  P A R T N ER   IBM, Microsoft, Oracle, HP, McAfee, VMware Kaseya     LogMeIn X X X  McAfee     Symantec X    Stronger Offering Acceptable Offering No Offering
    • 44 Enterprise Mobility Precedent Transaction Strategics have been aggressively rounding out product offerings through acquisition, acquiring targets at premium valuations Target Acquirer Date Valuation* EV/Revenue* January 2014 $1,540 N/A November 2013 $300M - $325M 6.0x – 6.5x November 2013 Undisclosed N/A February 2013 $1,000M 14.3x December 2012 $355M 15.4x October 2012 $25M 31.3x June 2012 $82M 4.1x April 2012 $28M 28.0x March 2012 $60M 12.0x February 2012 $70M 23.3x July 2010 $5.4B 4.5x April 2010 $200M 6.7x Median: 13.2x Mean: 14.6x * Data based on Falvey Partners’ and market estimates when not publicly disclosed Source: SEC Filings, Company Press Releases, Wall Street Research, 451 Research, CapitalIQ
    • 45 II. Focus Areas and Relevant Industry Overviews Other Focus Areas
    • 46 Additional Focus Areas Outside of the sectors covered above, we focus on a few additional high profile sectors and are continually expanding our reach E-DISCOVERY E-LEARNING  With legal / compliance areas becoming more important areas for IT spending and the amount of electronically stored information growing exponentially, the e- discovery market has attractive growth drivers  While not a hot market in recent years, the space will consolidate, a function of client needs and a fragmented, localized market − Large enterprise software vendors looking to acquire small e-discovery point solutions to build solutions that span the entire EDRM lifecycle − The handful of strong, independent e- discovery companies will have the opportunity to consolidate subscale local competitors  The emergence of e-learning solutions has rapidly taken market share from traditional instructor-led training at both the K-12 and corporate training levels  The popularity of MOOCs has led to a sizable amount of new companies emerging and investment activity in the space (i.e. Coursera, Udacity, Udemy)  At the corporate level there has been a convergence of e-learning with talent management solutions to provide a platform for full human capital management − Oracle acquired Taleo which acquired Vurv, Learn.com, Cytiva Software and Jobpartners − SAP acquired SuccessFactors which had acquired Plateau Systems
    • 47 Additional Focus Areas (cont.) MOBILE-BACKEND-AS-A-SERVICE ENTERPRISE SOCIAL SOFTWARE  Relatively new technology, though new companies have been popping up in the space on a weekly basis  A simpler, more cost effective way for developers and enterprises to develop mobile apps, MBaaS vendors are taking market share from traditional MADP vendors  Much like PaaS of years ago, MBaaS vendors must prove the technology is enterprise-grade and scalable before gaining mind share from potential acquirers  Facebook’s recent acquisition of Parse ($80M) and Paypal’s acquisition of StackMob may provide a light tailwind for activity  The maturation of social media has created a diverse landscape segmented with numerous use cases of social media, both internally (communication and collaboration) and externally (marketing, customer care)  The vastness of segments in social enterprise software has led to a dynamic where only the large players with platforms will be able to keep up with everything to be competitive and must build solution sets by acquiring point solutions  IBM, Jive and Communispace have emerged as the early leaders of enterprise social software market share