2011 World Tech M&A Report

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2011 World Tech M&A Report

  1. 1. 2011World Tech M&A Report www.corumgroup.com
  2. 2. IntroductionDeal volume, transaction size and valuations for software, Traditional technologies in Enterprise, Horizontal, VerticalIT and related technologies have rebounded. 2011 has and Infrastructure markets will see continued consolidation.started with momentum. Mobile, Tablets, and Apps, unknown a few years ago, will be a large source of transactions. Of course there are firmsThe recovery trend will continue as global financial markets that just need to re-invent, or they will fall by the wayside.remain strong, IPO’s are up, with cash reserves at recordlevels. Major strategic acquirers are being pressed to solidify The Corum Group Annual World Tech M&A Reporttheir positions in Cloud, Gaming and Social Networking follows. It is prepared by Corum’s research staff, and coversagainst Private Equity, which has returned to the market, the basic drivers of tech M&A including financial markets,accounting for many of the largest deals last year. In leading buyers, cash reserves, and overall M&A metricsaddition, there are other bidders emerging, including newly in the Corum Index. Notable transactions are detailed, asminted public companies from the East, as well as many are trends for 26 market segments in six major categorieswell-funded private firms such as Facebook. - Horizontal, Vertical, Consumer, Infrastructure, Internet and IT Service as detailed below. Major Category Market Segment Business Intelligence (BI) Human Resource/Capital (HR and HCM) Communications (Horizontal) Supply Chain Management (SCM) Horizontal Application Software Content Management (CM) Enterprise Resource Planning (ERP) Customer Relationship Management (CRM) Other Horizontal A/E/C (Architecture, Engineering, Construction) Government Vertical Application Software Energy and Environment Healthcare Financial Services Other Vertical Consumer Application Software Digital Content Video Games Communications (Infrastructure) Storage Development Tools Systems Management Infrastructure Software Legacy / Software Oriented Architecture (SOA) Virtualization Network Management Security Internet Infrastructure Pure Play IT Services and BPO (No subsectors)Page 1
  3. 3. Markets Up for 2011Markets Percentage Change in Markets in 2010The technology industry is trading The technology trading 35% 2010at 30% above its value since 2007, at 30% above 2007, NASDAQ S&P TECH 500 DOW JONES NASDAQ S&P TECH 500 DOW JONESoutperforming the overall Dow and outperforming and 30%Nasdaq as reflected in the market Nasdaq as market 25%chart. Tech took off in Q2 2010, chart. Tech 2010,riding out a market downturn in riding out in 20%August, then accelerating through the August, then theend of 2010 into 2011. end of 2010 15% 10%Tech Stock MoversTech 5%The Tech Stock Movers tableThe Tech tablehighlights the percentage of pricehighlights price 0% JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10changes in select companies with overchanges in over -5%$1 billion market capitalization.$1 billion -10%Netflix, the largest mover in stock Netflix, the stockvalue, has become the preferred value, has preferredstreaming content vendor across streaming acrossa wide array of platforms. Netflix a wide array Netflix Amazon Amazon 36.31% % Price Change NetSuite Inc. Inc. NetSuite 55.88% 2010 Stock Moversnow spans beyond PC and mobile to now spans to Apple Inc. Inc. Apple 56.39% 2010 Stock Movementinclude gaming consoles like Xbox include gaming Xbox VanceInfo Technologies Inc. Inc. VanceInfo Technologies 81.31%360 and PS3. 360 and PS3. salesforce.com, inc. Inc. salesforce.com, 85.17% VMware, Inc. Inc. VMware, 119.37%Considering its sector, IT Services,Considering Services, LogMeIn LogMeIn 122.30%VanceInfo’s move is a surprise.VanceInfo’s surprise. Baidu.com, Inc. Inc. Baidu.com, 142.52%VanceInfo is representative of a newVanceInfo new F5 F5 Networks, Inc. Networks, Inc. 153.60%breed of Chinese competitor.breed of OpenTable Inc Inc. OpenTable 177.49% Netflix Netflix 226.40%Nokia declined more than 20 percent. Nokia declined percent. Nokia Nokia -20.30%The company stood out as a flop The company flop Hewlett-Packard Company Hewlett-Packard Company -17.03% Company Year Ago Cash Current Cash %Changeamong 2010 smartphone competitors, among 2010 competitors, Cisco Cisco -15.50% MSFT $29,910 $43,250 44.6%battered down by continued pressure battered down pressure Adobe Systems Incorporated Adobe Systems Incorporated -14.93% CSCO $35,000 $38,920 11.2%from Apple and Android. from Apple Microsoft Corporation Microsoft Corporation -8.20% GOOG $19,340 $33,380 72.6% DellDell Inc. Inc. -4.67% AAPL $24220 $25,620 5.8% Google Inc. Inc. Google -2.52%Keep an eye on Microsoft–rumor has Keep an eye has ORCL $12,620 $23,640 87.3% Yahoo! Inc. Inc. Yahoo!it they may put their OS into the new it they may new -0.18% IBM $12,530 $11,100 -11.4%Nokia phone release. Nokia phone HPQ $13,590 $10,930 -19.6% EMC $7,260 $6,650 -8.4% SAP $2,703 $3,740 38.4% YHOO $3,880 $2,820 -27.3%Cash UpCash CA $1,275 $2,540 99.2% SYMC $2,220 $2,260 1.8%Companies with cash either need to engage in stockCompanies need to engage in stockbuybacks, issue dividends or make acquisitions. Thus, 2011buybacks, acquisitions. Thus, 2011 Cash Reserves (in millions)should be a banner year for M&A with record coffersshould be M&A with record coffersamong the high tech leaders who are also the major buyers.among the are also the major buyers. them to pick up the pace of acquisitions inin 2011. Cisco is a them to pick up the pace of acquisitions 2011. Cisco is a similar scenario. similar scenario.Microsoft, as seen in the Cash Reserves chart, is sitting Microsoft, Reserves chart, is sittingon the largest war chest (over $43 billion) -- part of which on the largest billion) part of which Google isiscash rich and should continue its sizzling pace asas Google cash rich and should continue its sizzling pacewas raised in convertible debt in 2010 when interest rates was raised 2010 when interest rates the M&A leader. HP’s cash stores were depleted inin 2010 due the M&A leader. HP’s cash stores were depleted 2010 duewere low. As Microsoft sat at the bottom of the acquisition were low. bottom of the acquisition to multiple big deals, including the acquisitions ofof 3PAR, to multiple big deals, including the acquisitions 3PAR,leader board for 2010, with a flat stock price, we expect leader board stock price, we expect ArcSight and Palm, but HP should not be counted out. ArcSight and Palm, but HP should not be counted out. Page 2 2 Page
  4. 4. Total Deal Volume vs. Total Deal Value $457b $457b $432b $432b Software M&A - 2002-2011 $373b 4500 4500 $373b The M&A market returned in 2010 - as seen in 4029 4029 $301b $301b $225b $225b 4000 4000 $226b $226b 3640 3640 $150b $200b $200b this chart, the last 8 years were mapped for both $150b 3212 3500 3500 deal volume (vertical bars) and annual deal value 3500 3500 3040 3040 3015 3015 3008 3212 3008 (line chart). 3000 3000 $83b $83b $62b $62b 2081 2081 2500 2500 1921 1921 With stock prices rising, cash reserves at record levels, 2000 2000 1508 1508 and heated global competition, volume and value will 1500 1500 continue to trend up in 2011. 1000 1000 500 500 Expect Strategic deals to lead the way, with Mega 0 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 Deals setting the pace due to the resurgence of 2002 2011 Private Equity after a hiatus in 2008/09. Deal Volume Deal Volume Dollar Volume Dollar Volume Top Acquirers: 2010 26 15 11 9 8 8 6 6 5 5 5 2 3 3 While this list isn’t definitive (CA and EMC are missing), IBM had their highest volume year on record with 15 deals, what’s notable is that there are new entrants to the M&A though Google led the pack with a record 26 acquisitions leader board, private firms Facebook, Zynga, and Twitter. for 2010. Most remarkable for Google–transactions were often small and fairly far-ranging technology. They are Facebook is comfortable staying private and they are continuing this trend into 2011 with three acquisitions in making acquisitions: 11 in 2010, most of which were the first month. completed in the latter half of 2010. With the cash they are generating, Facebook started 2011 by immediately making On the opposite end of the spectrum, Microsoft has sat acquisitions. Additionally, watch out for Groupon; with a on the sidelines with only 2 acquisitions in Q4, the lowest war chest of $950 million, they may move to consolidate the number from them in a single year. “mass discount” market in 2011. Page 3
  5. 5. The Annual Corum Index of Tech M&A Metrics shows The transactions that led the market last year were Intelthat we are up in volume, number of deals, and Mega Deals acquiring McAfee for $7.6B, the acquisition of Sybase bythis past year. Mega Deals are important as they lead the SAP for around $6B, and EMC buying Isilon Systems formarket; we refer to them as a “ripple” indicator. When the around $2.3B.strategic and private equity giants do $1B+ acquisitions, itsends a clear message to the small and mid-market players One of the most important aspects of 2010 was the re-that it’s safe to be doing deals and spending money. emergence of Private Equity (PE) which had been very active prior to the recession. Carlyle Group 2009 2009 2010 2010 Change Change spent $6.5B in telecom infrastructure with acquisitions of CommScope and Syniverse.# of Transactions 3008 3212 6.8% Other major transactions were SkillSoft,# of Mega Deals 32 41 28.1% Vertafore, and Novell. We expect PE toLargest Deal $6,400 $7,680 20.0% be an even bigger factor in 2011 as there is nearly $500 billion in uncommitted funds,% Sub-$100m 24% 19% -20.8% not counting sovereign equity.Private Equity Deals 97 119 22%Private Equity Value $13,318 $25,793 93%# VC backed Exits 398 474 19.1% Corum IndexAll Cash (announced) 44% 58% M&A Metrics% Targets were Public 18% 13%% Public Buyers 47% 51% Aggregate Growth (six markets) Q4:08 Q1:09 Q2:09 Q4:09 Q1:10 Q2:10 Q3:10 Q3:11 EV/EBITDA 6.63x 5.99x 8.07x 10.13x 10.55x 9.87x 10.48x 11.48x Q4:08 Q1:09 Q2:09 Q4:09 Q1:10 Q2:10 Q3:10 Q3:11 EV/S 1.28x 1.08x 1.37x 1.77x 1.77x 1.76x 2.23x 3.23x EV/EBITDA 6.63x 5.99x 8.07x 10.13x 10.55x 9.87x 10.48x 11.48x EV/S 1.28x 1.08x 1.37x 1.77x 1.77x 1.76x 2.23x 3.23xCorum divides the tech industry into six broad markets: the charts will show show a bump-up the higher multiples of the charts will a bump-up due to due to the higherHorizontal, Vertical, Consumer, Infrastructure, Internet, in the East. the East. multiples inand IT Services, which are further broken down into 26sub-sectors. The major groupings are represented by the After the trough of the recession in late ‘08/early ‘09, we6 logos on the left of the chart. Multiples in this report are came back dramatically with EV/S multiples of 2.7x andin median values, not averages. EV/EBITDA multiples currently trading at a healthy 12.5x. From the bottom in Q1 ’09, both multiples more thanNote that the most recent numbers include the newly public doubled, and we expect that they will continue back up incompanies in Asia as they are aggressive global competitors 2011 as they are still short of the peaks registered in 2007.and buyers. With the recent addition ofof these firms, some buyers. With the recent addition these firms, some of Page 4
  6. 6. g-10 Sep-10 Oct-10 Nov-10 Dec-10 Horizontal Appl 69 x 27 x 2.94 x 10.74 x 3.07 x 11.89 x 2.99 x 12.41 x 3.37 x 17.17 x Horizontal Applicatio Horizontal Application Software Horizontal Application Software Market Horizontal Application Software Horizontal Application Softwa Horizontal Application Software Horizontal Application Softwa Business Intelligence Huma Business Intelligence Human Resources Horizontal Application Software Ma EV/S EV/S 4.21 x 4.21 x EV/S EV/S EV/EBITDA 20.39 x EV/EBITDA EV/EBITDA 20.39 x EV/EB Horizontal Application Informatica Corp.Software Ma Horizontal Application Market Corp   Software Horizontal Intelligence ApplicationResources Inc. MarketSCM   Horizontal   Software Business Application Software Market   Kenexa Human  MicroStrategy Corp. InformaticaSoftware Market Horizontal   Taleo Corp. Business Intelligence Human Resources SCM EV/S   MicroStrategy Inc. x Application EV/S Business Intelligence 4.21 x Human Resources 3.89 EV/S   SCMSoftware Market Software EV/S 4.21 x Business Intelligence EV/S 3.89 x Human Resources EV/S 2.68 x SCM Communications ERP EV/EBITDA Intelligence Business Business Intelligence EV/S 20.394.21 x EV/EBITDA Resources x Human EV/S 30.393.89 x x SCM SCM EV/EBIT EV/S EV/EBITDA 20.39 x EV/S EV/EBITDA 4.21 x x 30.39 EV/SHuman Resources EV/EBITDA EV/S x 13.42 3.90 3.89 x EV/S EV/S EV/S EV/S 4.214.21 x x EV/S Resources Communications EV/S EV/EBITDA 3.89 x 3.89 x 17.17 x 30.39 x EV/S EV/EBITDA EV/S ERP  EV/EBITDA HumanCorp. 20.39 x Resources  EV/EBITDA Commerce30.39 x EV/EBITDA   EV/E EV/EBITDA Business IntelligenceHuman Resources EV/EBITDA EV/EBITDA Informatica Resources Human 20.39 x 20.39 x EV/EBITDA Kenexa Corp. 30.39 Inc. x EV/EBIT Human SCM SPn Software Market Business Intelligence SCM   Informatica Corp. Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 x Business IntelligenceBusiness IntelligenceEV/S Corp.   Kenexa 4.21 x EV/EBITDA SCMSPS    EV/EBITDA xn Software Market 20.39 x 30.39 xLawson EV/E SCM 4.21 EV/S 3.89 x EV/S Amdocs Ltd.EV/S 3.89 x 3.90 EV/S   2.68 xEV/S Soft g-10 Sep-10 Oct-10 Dec-09 Jan-10 Feb-10 Mar-10 Nov-10 Dec-10 EV/S MicroStrategy Inc. EV/S EV/S   InformaticaInformatica EV/EBITDA xx  EV/EBITDA Corp.Corp.2.68 x    4.21Informatica Corp.  TaleoEV/EBITDA x EV/S Corp. EV/EBITDA Taleo x Corp. 30.39 x   EV/SManhattan Associates   SPS Comme   Kenexa EV/EBITDA   Ma x   Inc. 2.68 x SP Kenexa Communications 17.17 xOraclexEV/EB EV/EBITDA 11.67 x 10.76 x 11.16 x Inc. 12.07 x 11.39EV/EBITDA 10.49 x 9.27 x   10.74 x 11.89 x 12.41 x 17.17 x  x MicroStrategy EV/S x Corp. x x EV/S 4.21 x 20.39 Corp. 20.393.89 3.89 x    Kenexa Corp.   Nuance 30.39 EV/S EV/EBITDA   Corp 13.42 2.25 12.71 x 11.95 x EV/EBITDA Informatica Corp. Inc.30.39 x EV/EBITDA 60 x 1.95 x 1.90 1.98 x x EV/EBITDA   MicroStrategy Inc. 20.39 x 20.39   MicroStrategy EV/EBITDA 2.23 x  2.49 x 2.69 x Informatica 2.99 x Kenexa   Taleo Corp. Corp.   Kenexa   Taleo Corp. 13.42 x EV/EBITDA x 30.39 EV/EBITDA 13.42   Manhattan A     69 x 9.90 x EV/S x 10.15 x x 11.41 x   MicroStrategy Inc.x Corp. 3.37 x Corp.Taleo Corp.   SPS Commerce SPS Comme 2.419.502.48 x 2.42 x 2.11 x 2.24 x 2.12 x   Informatica Corp.   2.94 x 3.07       Kenexa Corp.   Inc.   Ma SCM   Informatica Corp.   MicroStrategyCorp.   Taleo Corp. Content Mgmt. Corp.   Informatica Corp. Communications Inc.   MicroStrategy   Kenexa Inc.   MicroStrategy Inc. ERP Taleo   Kenexa Corp.   TaleoCommerceSPS Commerce Manhattan   SPS Corp. Ltd. Amdocs   Manhattan Associates Inc. As   Inc.   Inc. CRM Communications   MicroStrategy ERP MicroStrategy   Taleo Corp.   Taleo Corp. CRM Inc. Inc. Communications ERP Manhattan Associates Inc. Associates Inc.     Manhattan CRM 3.90 x 3.90 x ERPERP Nuance Communications CRM   EV/S 2.82 x3.89 x EV/S 2.68 x EV/S Communications EV/S EV/SEV/S  2.55 x2.55 x EV/S EV/S CRM SCM EV/S SCM 3.90 x Communications EV/S Communications Communications ERP2.55 x EV/EBITDA EV/S ERP CRM 9.28 x 3.62 x CRM0.39 x EV/EBITDA 13.42 x Communications EV/EBITDA EV/EBITDA ERP 17.17 x EV/EBITDA 17.173.90 x x ERP x EV/EBITDA 11.86 x EV/EBITDA CRM 3.90 EV/S CRM OpenxText Corp. 2.5511.862.55 x x EV/EBIT SCM Communications Communications ERP CRM3.89 3.89 x x EV/S EV/EBITDA EV/S 2.68 x 2.68 x17.17 x EV/S EV/S EV/S EV/EBITDA EV/S 3.90 x 3.90 x x 11.86 EV/S EV/S 2.55 EV/S EV/EBITDA   EV/S x2.55 x EV/S 38.25 3.62 x EV/S EV/S 3.89 x EV/S 2.68 x EV/S EV/S EV/S x 3.90 3.90 x Ltd. EV/S Amdocs EV/S3.90 x x 17.17 x 2.55 2.55 x Software 11.86 x x EV/SLawson EV/S EV/S Inc.3.62 3.62 x EV/S 2.55 xRightNow Te 30.39 x EV/EBITDA 13.42 x   17.17 EV/EBITDA x   11.86 EV/EBITDA Mgmt. EV/EBITDA Content x   38.25 EV/EBITDA x  EV/EBITDA EV/EBITDA x Communications  EV/EBITDA Corp.EV/EBITDA Inc.11.86 xInc.   EV/E EV/EBITDA EV/EBITDA x 17.170.39 x x 30.39 EV/EBITDA Commerce Inc.EV/EBITDA   SPS Amdocs13.42 x 13.42 x EV/EBITDA EV/EBITDA EV/EBITDAAmdocs Ltd.17.17 17.17 x 11.86 x EV/EBITDA x Software 11.86 x   xSalesforce.c Lawson Rig EV/EBIT     SPS Commerce Inc. Ltd.   Lawson Amdocs Ltd.EV/EBITDA EV/EBITDA   Software Inc. x SoftwareOracle Software Inc. 17.17 x   Amdocs Ltd.   Nuance 17.17   Lawson   RightNow Technologies 38.25 x EV/E 11.86 EV/EBITDA   Lawson EV/EBITDA   EV/S Inc. 38.25 x 11.86 x 2.82 RightNow Tec     RightNow Technologies Inc.   Manhattan Associates Inc.  Inc.   SPS CommerceAssociates Amdocs Ltd.   Amdocs CommunicationsCommunicationsSoftwareRightNow Technologies Inc.9.28 x OtherRig   Manhattan Inc.   SPS Commerce Inc. Amdocs Communications Nuance   Nuance   Nuance Communications   Nuance Ltd. Content Mgmt. Software Inc. Corp.EV/EBITDACorp.  Salesforce.com Salesforce.co   AmdocsLawson   OracleLtd.   Ltd. Corp. OracleLawson   RightNow Horizontal   Sa     Oracle Corp. Software Inc.    Lawson   Lawson Software Inc. Technologies Inc.   Oracle   Inc.   Salesforce.com       Manhattan Associates Inc.   AmdocsOracle Corp.   Oracle Corp.   Salesforce.com Salesforce.com   Nuance Communications   Nuance Communications   Ltd.   Nuance Communications   Oracle Corp.   Lawson Software Inc.         Manhattan Associates Inc.   Nuance Communications2.82 x   Oracle Corp. EV/S   Sa CRM CRM   Nuance Communicationsx Horizontal OtherHorizontal Other Content Mgmt. EV/S Content Mgmt. Content Mgmt. EV/EBITDA 9.28   Oracle Corp. Other Horizontal Other Text Corp. Open Horizontal Horizontal Other EV/EBITDA   Horizont CRM Content Mgmt. 3.62 x Content Mgmt. Content Mgmt. EV/S EV/S 3.81 x 2.55 x EV/S EV/S 2.82 x EV/S 2.82 x EV/S EV/S 3.81 x EV/S EV/EBITDA x Hori 3.81 Horizont2.55 2.55 x x x EV/S EV/S 3.62 x 3.62 x EV/S EV/S Content 2.82 x EV/S 2.82 x Mgmt. Open x2.82   9.28 Text Corp. 9.28 x EV/EBITDA Mgmt. EV/EBITDA x EV/S EV/EBITDA 3.81 x 24.07 x Navi   Trimble g-10 x Sep-10 11.86 11.86 CRM Oct-10 EV/EBITDA EV/S EV/EBITDA Nov-10 38.25 xDec-10 38.25 x 2.82 x Content EV/EBITDA 9.28 x EV/EBITDA EV/EBITDA 24.07 x EV/EBIT24.07 x Hori1.86 x EV/EBITDA Content Mgmt. 9.28 x 24.07 xConcur Tech   EV/S 69 x re Inc.2.55 x 0.72 EV/EBITDA Technologies Inc. 3.62 x 9.28 x EV/S 0.70 x x   RightNow EV/EBITDA0.87 x 38.25 2.53 x x EV/EBITDA EV/S   9.28 x   Open Text Corp. Open Text Corp.x x EV/S 2.822.82 EV/EBITDA EV/S   Trimble Navigation Ltd. Navig   Trimble re Inc. 10.29 x   RightNow Technologies Inc. x  Open Text Corp.Open Text Corp.   EV/S EV/S   Trimble Navigation Ltd. Techn   Trimble Navigation Ltd. Technologies EV/EBIT 80 x   Salesforce.com x 10.04 x 5.54 7.58 2.82 x   Concur   Concur EV/E Inc. c.1.86 x   Salesforce.com Text Corp. xInc.   RightNow Technologies EV/EBITDA   Open 38.25  EV/EBITDA EV/EBITDA Text Corp. Open EV/EBITDA 9.289.28 x x 9.28 x   Trim   Concur Technologies Inc. EV/E   Concur Technologies Inc.   Trimble Navigation Ltd. c.   Salesforce.com HorizontalTechnologies Avid Other   RightNow Technologies Inc. Horizontal Other   Open Text Corp.   Open Text Corp.   Concur Technologies Inc.   Co     Trim EV/S 3.81 x   Open Text Corp.       Salesforce.com EV/S EV/EBITDA 3.81 x 24.07 x   Co Corum Group Presentatio Corum Group Presentation ■ 26 Group Presentatio Corum g-10 Sep-10 Horizontal OtherNov-10 Oct-10 EV/EBITDA 24.07 xDec-10 The Horizontal Application Software Market is one of the Concur, the enterprise travel expense management solution,   20 x 2.50 EV/S 2.67 x Navigation Ltd. 2.87 x x x   Trimble 11 x top performers. 2.71 x are a large number of There x   TrimblexNavigation Inc. 12.18 3.81 10.67Horizontal Other 12.46 xLtd. 13.57 x SaaS companies is currently the second highest valued pure SaaS company.   Concur Technologies in Concur   this group with subscription, recurring revenue streams, EV/EBITDA Technologies Inc. 24.07 x Concur has been among the deal laggards theCorum Group Presentation last few ■ 2 EV/S 3.81 x predictable revenue streams, or web-delivered solutions. years, but started 2011 with the acquisition of Tripit–a EV/EBITDA 24.07 x   Trimble Navigation Ltd. 26 Corum Group Presentation ■ brilliant strategic move. At Concuris SalesForce.com–they have set the bar and the top   Trimble Technologies Inc. Corum Group Presentation ■ 26   Navigation Ltd. escalated the whole SaaS trend while completely changing This section cannot be reviewed without mentioning SAP. theConcur Technologies Inc. that end, they acquired   landscape of the CRM space. To SAP maintains strong multiples and a favorable market Jigsaw in 2010 as part of their Cloud 2 strategy. On their position relative to their big stateside competitors. SAP had heels is RightNow who started the year by acquiring Q-Go Corum Group Presentation ■ 26 the second largest tech deal of last year, spending $6.1B in the Netherlands. on Sybase, adding a complementary unit to their enterprise Corum Group Presentation ■ 26 offering to manage and analyze a broad array of enterprise Recently, the biggest SaaS growth story has been in the data, but, more importantly, to provide a mobile outlet for broad HR world, especially by SuccessFactors and Taleo. data access and updates in real time. SuccessFactors acquired Inform for its Business Execution Suite, and Taleo bought Learn.com to move into the SaaS Moving down the ERP food chain, there are 10 or 12 learning space. Both firms will be making more acquisitions mid-tier public players. It’s crowded with a lot of vertical this year, further challenging the traditional license model differentiation in their product portfolios: Lawson, Epicor, companies. CDC, NetSuite, and QAD among them. We expect to see continued consolidation in this space in 2011, especially as the top-tier players like Microsoft and Oracle have such huge cash reserves. Page 5

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