From Data Centers to Cloud Services, Inside the Backbone of a New Economy - Clipperton Finance Research Paper

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Clipperton Finance, a leading European corporate finance boutique serving the technology and media industries, has released a Research Paper covering the evolution and current trends of the Data Management market.

The essentially virtual “New Economy”, is in fact inherently tied to the very physical world of traditional Data Center and Telecom networks. In this era of online advancement, these physical networks are placed under unprecedented new demands through the proliferation of online rich media and cloud computing leading to an explosion in storage capacity and networking needs. In turn, the virtual data underworld is undergoing a true revolution.

One consequence is remarkable: as the cost and complexity of managing Data Centers increases exponentially, this function is more and more outsourced by the large companies that previously managed their own infrastructure on-site.

This paper focuses on this Outsourced Data Center market and demonstrates how this particular value chain is maturing and organising itself:

· Upstream: a new category of players have rapidly emerged – the Wholesalers.
· Downstream: Hosting offerings are experiencing significant commoditizing pressure and need to act fast.
· In the middle: the “Colocators” need to find there position in this newly organized ecosystem.

Today this value chain is dominated by large US companies, but significant European exceptions exist: OVH in France, Telecity in the UK, 1&1 in Germany.

The paper also features European players that we deem “ones to watch”.

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From Data Centers to Cloud Services, Inside the Backbone of a New Economy - Clipperton Finance Research Paper

  1. 1. © 2014 Clipperton Finance Limited Clipperton White Paper Outsourced Data Management: From Data Centers to Cloud Services, Inside the Backbone of a New Economy February, 2014 About Clipperton Finance Clipperton is a leading European corporate finance boutique exclusively dedicated to High Tech and Media industries. Clipperton Finance advises high growth companies on mergers and acquisitions, financial transactions, fundraisings, and capital increases. With a team based in London, Paris and Berlin and an international reach, Clipperton is a European leader in the sector. Disclaimer: This document has been produced by Clipperton Finance (“Clipperton”) and is communicated to you solely for you information and should not be construed as a solicitation or offer to buy or sell any securities or financial instruments. Clipperton Finance Limited is authorized and regulated by the Financial Services Authority. Registered No.523695 – More Details P51 LONDON: 15 Stratton Street, London, W1J 8LQ PARIS: 10 Rue Du Mont Thabor, Paris 75001 BERLIN: Neue Schönhauser Str. 2., Berlin 10178 Thomas Neveux, Partner Antoine Ganancia, Senior Associate Kulchetan Sanga, Associate
  2. 2. © 2014 Clipperton Finance Limited Hosters: Adapt to Survive 2 Executive Summary  As investment needs are growing exponentially, a specialized asset class is emerging upstream: Wholesale Vendors. These new players offer real estate and technical infrastructure management services allowing clients’ to improve capital efficiency by focusing investments on their core business.  Wholesalers are deploying large amounts of capital with low risk long-term returns.  Hosters are facing key challenges… i) Traditional data hosting becomes largely commoditized ii) High value cloud services have emerged down the value chain  … And need to move fast: i) Mainly going downstream (incorporating high tech cloud services) ii) And Consolidating for scale New Asset Class: Wholesalers ? A Fast Maturing Outsourced Data Management Value Chain  For most Companies, Data Management needs are growing too fast and become too complex to be handled internally.  Naturally, the fast growing Outsourced Data Management Market is organizing itself around highly specialized operators in a rapidly structuring value chain. UPSTREAM DOWNSTREAM 1 2 3
  3. 3. © 2014 Clipperton Finance Limited Outsourced Data Management: A Maturing Value Chain 3 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in the Data Management Space Focus on Selected European Players About Clipperton Finance Table of Contents I II III IV V VI
  4. 4. © 2014 Clipperton Finance Limited The Data Management Industry has now Entered its Third Expansion Phase 4 Explosion of the “client-server” computing architecture within major corporations 1 2 3 Explosion of Internet usage Explosion of content consumption (video…) 1990’s 2000’s Today 26 33 41 51 62 76 2012 2013 2014 2015 2016 2017 Consumer Internet Traffic (EB/month) 0.4 0.5 0.7 0.8 0.9 1.0 1.1 1.4 1.6 1.7 2.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Internet Users worldwide (billions) Servers are grouped into dedicated “Data Centers” Growing number of servers are housed in the large ‘dotcom era’ Data Center inventory Driven by increased usage, exploding IP traffic leads to a buoyant market Source: Cisco Source: World Bank
  5. 5. © 2014 Clipperton Finance Limited Clear and Sustained Exogenous Trends Driving the Expansion of the Data Management Market 5 Explosion of computing needs … … not offset by innovation 100 145 210 303 439 100 140 142 164 183 2011 2012 2013 2014 2015 Amount of Digital Data Stored Areal Storage Density* This gap drives the need for more servers … … and more Data Centers to house them in! Digital Data Storage & Areal Storage Density (*) Comparative Evolutions (base 100 in 2011) *Number of bytes per square inch / Source: PFS Violin White Paper, IDC, Clipperton Finance analysis 26 33 41 51 62 76 2012 2013 2014 2015 2016 2017 Internet Vidéo Web, email & data File sharing Internet Traffic (EB/month)  Multimedia consumption pushed by access point multiplication  Broader Internet usage in Emerging Countries  Cloud services Video Mobile Cloud 2000 2020 $80B Projected Annual Data Center Construction (billion USD) Source: C. Belady, Microsoft “Projecting annual new datacenter construction market” 2000-2020: 9% CAGR Explosion of Data Center construction $15B
  6. 6. © 2014 Clipperton Finance Limited 50%50% 13% 87% Explosion of Data Centers Needs Foster Growth of Outsourced Solutions 6 In-house DC As cost and complexity of owning and operating a Data Center increases, Companies are less inclined to keep them in- house Outsourcing Data Centers helps Companies refocus investments on core business 100 118 138 153 100 107 112 118 2011 2012 2013 2014 Revenue Index Major Outsourced DC Players Global Data Center Infrastructure Market Outsourced DC Players Rev. Growth CAGR 15% 2012 2020e * Outsourced DC Players Index: DLR, DFT, EQIX, TCY, INXN Source: Lifeline Datacenters, IDC, Canalys, Thomson, Clipperton Finance Analysis Outsourced DC 610k sq.ft. 800k sq.ft. US Data Center Stock Shifting to Outsourced Solutions Outsourced DC Market Growth is Outpacing Overall DC Market *
  7. 7. © 2014 Clipperton Finance Limited7 How is this Fast Growing Outsourced Data Management Market Structuring Itself ?
  8. 8. © 2014 Clipperton Finance Limited A Large Market Inevitably Leading to Fragmentation of the Value Chain around Differentiated Business Models WHOLESALE VENDORS COLOCATION VENDORS MANAGED HOSTING Strong Outsourcing Trend Telcos Corporations What? TELECOM INFRASTRUCTURE OUTSOURCED Data Center SPECIALISTS FINAL CUSTOMERS A portion of server to thousands 10-500 sqm1,000-10,000 sqm Dedicated server and management services offered to customers. Fitted DC space (cabinets, cages and racks to house their clients’ servers, …) Shell DC space (“walls” as well as facility security, secured power, …) Chunk Size ? Who ? 8 CLOUD SERVICES Cloud Services ranging from IaaS enabling to SaaS Bytes
  9. 9. © 2014 Clipperton Finance Limited 4 Segments Displaying Different Equity Stories 9 Wholesalers Colocators Hosters Cloud Services 1 2 3 Low risk/Low Return Profile High risk/High Return Profile Digital Realty, Dupont Fabros, Coresite Equinix, Interxion, Telecity Akamai, InterNAP, Iomart, Rackspace Weighted average components of the ROCE per segment 4 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0% 50% 100% 150% 200% WHOLESALERS COLOCATORS HOSTERS 5% ROCE 10% ROCE 15% ROCE 20% ROCE CLOUD SERVICES VMware, Citrix, Salesforce, Netsuite Source:ThomsonOne,ClippertonFinanceanalysis 2012 Sales / Capital Employed 2012EBITMargin 4 3 2 1
  10. 10. © 2014 Clipperton Finance Limited Wrap Up Early 2000s In-House Hosters Colocation Wholesale 2013+ Data Management Market Evolution KEY TAKE AWAYS 10 The fast growing outsourced Data Management market is maturing, leading to fragmentation of the value chain into identifiable asset classes A new class of players have emerged: the Wholesalers, that need to be specifically analyzed
  11. 11. © 2014 Clipperton Finance Limited Outsourced Data Management: a Maturing Value Chain 11 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in Data Management Space Focus on Selected European Players About Clipperton Finance Table of Content I II III IV V VI
  12. 12. © 2014 Clipperton Finance Limited Wholesalers: Widely Used & Praised by IT Bellwethers 12 “DuPont Fabros has always proven to be a great customer- focused partner with a fantastic mission-critical product” Source: DFT’s testimonials “We consider DuPont Fabros one of our most trusted partners. They have yet to miss a committed delivery date and their operational expertise is second to none.” Source: DFT’s testimonials “Digital Realty is the perfect investor able to provide the stable environment we need to pursue our growth in France” Richard Viel, deputy CEO of Bouygues Telecom “By leasing space in its facility, we are able to move forward immediately with our Data Center plans without the significant capital investment ordinarily associated with large hosting projects” Oliver Herrmann,Deputy COO of Capgemini… sold in 2013 its Parisian Data Center facilities for $80m to… … signed in 2009 a turn-key Data Center lease agreement with… … uses Data Centers facilities of… … uses Data Centers facilities of…
  13. 13. © 2014 Clipperton Finance Limited Wholesale Market is Growing at a Fast Pace 13 Source: JP Morgan, Clipperton Finance analysis 0.4 0.6 0.8 1.2 1.7 2011 2012 2013 2014 2015 Wholesale market in Europe ($b) WORLDWIDE MARKET EUROPEAN MARKET 2.4 3.1 4.1 5.3 6.9 2011 2012 2013 2014 2015 Worldwide wholesale market ($b) Source: JP Morgan, Clipperton Finance analysis
  14. 14. © 2014 Clipperton Finance Limited 2 Major Wholesalers Have Emerged in the US: Digital Realty & DuPont Fabros 14 100+ facilities Worldwide combining 18 million square feet 10+ facilities Located in the US combining 2.5 million square feet Clients include: $1.3b 2012 Revenue Clients include: listed since 2004 Listed since 2007 $12b Enterprise Value $332m 2012 Revenue $2.5b Enterprise Value
  15. 15. © 2014 Clipperton Finance Limited Upstream to Colocators, Wholesalers Have Found their Sweet Spot in the Value Chain 15 Real Estate Technical Infrastructure Proximity Services Telecom Services Hardware Computers Simple Cloud Services Advanced Cloud Services CORE BUSINESS CORE BUSINESS CORE BUSINESS CORE BUSINESS WHOLESALE MANAGED HOSTING 1 COLOCATION2 3 CLOUD SERVICES 4
  16. 16. © 2014 Clipperton Finance Limited Offering Low Risk x Long Term Returns to Investors 16 1-3 years5-7 years8-10 years StrongLimitedVery low WHOLESALE MANAGED HOSTING 1 COLOCATION2 3 PAYBACK PERIOD 15% 20-30% 30-50% 50% UNLEVERAGED IRR 60%+ 50% 30-40% 20-30%EBITDA MARGIN RISK LEVEL Low High Low High Low High CLOUD SERVICES 4 Fair Low High 3-5 years
  17. 17. © 2014 Clipperton Finance Limited Why did Wholesalers Emerge? To Allow Other Players to Focus on Core Business 17 OUTSOURCE INFRASTRUCTURE By outsourcing Data Center facilities companies avoid heavy investment in non-core assets Financial Structure Ratios (2013e) Source: Thomson One, Yahoo Finance, Clipperton Finance Analysis -0,4 -0,2 0 0,2 0,4 0,6 0,8 1 1,2 1,4 0 1 2 3 4 5 6 7 FinancialLeverage (NetLTdebt/Equity) Capital Intensity (Fixed Assets/Sales) COLOCATORS WHOLESALERS HOSTERS INTERNET GIANTS Outsourcing Capital Intensive Investments
  18. 18. © 2014 Clipperton Finance Limited Outsourced Data Management: a Maturing Value Chain 18 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in Data Management Space Focus on Selected European Players About Clipperton Finance Table of Content I II III IV V VI
  19. 19. © 2012 Clipperton Finance Limited. Private and confidential. Hosting Market is Crowded, with Basic Offerings now Largely Commoditized 19 COLOCATION A $13bn Global Cloud Infrastructure Market in 2012 45% share 26% share 5% 4.5% 4% TELCOS COLOCATORS INTERNET GIANTS REGIONAL PLAYERS SOFTWARE HARDWARE Managed Hosting is a $5.6bn market with three leaders occupying a ~15% market share With a very long tail of diversified players Source: Synergy Research Group, Clipperton Analysis Amazon the clear leader in IaaS and ranks second behind Salesforce in PaaS segment HOSTING HOSTING MANAGED HOSTING IAAS & PAAS Client leases an entire server that is not shared. More flexible than shared hosting due to full control over the servers/ choice of OS. Server hardware is owned by the provider IaaS: Virtualized Computing / storage delivered over the internet + CDN/ADN PaaS: Developer services bundling infrastructure and a programming language level environment CLOUD SERVICES IAAS ENABLEMENT SAAS 29% share
  20. 20. © 2012 Clipperton Finance Limited. Private and confidential. Some Value Has Shifted Downstream To New Cloud Services 20 … and Outperform Hosters in Terms of Shareholder Value created Cloud Services are Clearly Gaining Momentum… Increasing innovation further downstream has encouraged the emergence of complex Cloud Services offerings Revenue and Index analysis based on: Hosters: Iomart, Akamai, Internap, Cloud Services: Salesforce, NetSuite, Vmware, Citrix 0 100 200 300 400 500 600 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Stock Price Evolution (index 100, Jan.09)YoY Revenue Growth 0% 5% 10% 15% 20% 25% 30% 35% 2009 2010 2011 2012 Cloud Services Hosting not inc. RAX
  21. 21. © 2013 Clipperton Finance Limited. Private and confidential. How can Hosters React? 21 COMMODITIZATION Fragmented market Flattening Revenue Growth Highly competitive landscape Ubiquitous Service Offerings TWO OPTIONS TO SURVIVE: CONSOLIDATE FOR SCALE Capitalize on market fragmentation to rapidly build customer base/ geographical expansion via acquisition MOVING DOWNSTREAM Break free from commoditization by combining recurring revenue from service subscriptions with elastic infrastructure e.g. • Internally develop new downstream offerings • Via acquisition of cloud software/ service providers 12 3
  22. 22. © 2013 Clipperton Finance Limited. Private and confidential. Consolidation to Rapidly Build Large Scale Client Bases - A “Land Grab” - Examples 22  Date: Apr-13  Deal Value: $526m  Rev Multiple: 3.3x  EBITDA Multiple: 12.4x Rationale: Increases scale and reach of Cogeco Cable's IT hosting business: addition of infrastructure including 19 Data Centers and 21 points-of- presence throughout NA & EU. AQCUIRES TRANSACTION DETAILS Rationale: Combines SoftLayer with IBM SmartCloud into a global platform; acquires 21,000 customers across 140 countries. AQCUIRES TRANSACTION DETAILS  Date: Jul-13  Deal Value: $2.0bn  Rev Multiple: 6.0x  EBITDA Multiple: 14.9x  Date: Dec-12 Apr-13 Sep-13  Deal Value: $2.4m $11m $12.4m  Rev Multiple: - 2.4x 1.5x  EBITDA Multiple: - 11.2x 3.3x AQCUIRES European hosting services TRANSACTION DETAILS Rationale: Numerous acquisitions to expand into new markets with a particular recent focus on Scandinavia. May-13 Three UK based hosting acquisitions in 12 months with the aim to become the leader in UK hosting services Media & Communications company Multinational Technology and Consulting Founded in 2006 – Data Center server and managed hosting provider Founded in 1999 - Internet hosting services AQCUIRES Colocation and hosting providor Nov-13 Nov-13 Nov-12 Aug-11 Sep-11 Aug-12
  23. 23. © 2012 Clipperton Finance Limited. Private and confidential. Going Downstream, What Does it Mean? 23 Historically, Hosting offerings evolved from simple colocation to IaaS & PaaS. CLOUD SERVICES SAASIAAS ENABLING IAAS & PAAS MANAGED HOSTING SHARED HOSTING COLOCATION OS SOFTWARE Client leases an entire server that is not shared Mass market shared infrastructure hosting IaaS: Virtualized Computing/ storage delivered over the internet PaaS: Developer services bundling infrastructure and a programming language level environment OS Technology Specific: • Unified Communications • Cloud Management/ Automation • Cloud Security Monitoring / Diagnostics: • Power • Cooling • Analytics Traditional equipment space and bandwidth for rental Load Balancing / Traffic Optimization: • Web app acceleration Sector Specific: • Compliance software/ services • Financial services solutions Basic Business Applications: • Email • Cloud Storage • Database • CRM Internally developed services such as load balancing and monitoring begin to blur the line but major players will exhibit a shift towards more downstream offerings: IaaS optimizing & enabling services and/or SaaS. So, what’s next? HOSTING
  24. 24. © 2013 Clipperton Finance Limited. Private and confidential. Hosters can Progress “Downstream” via Internal Development and/or Acquisitions Examples 24  Date: Jan-13  Deal Value: $55m  Rev Multiple: 1.8x  EBITDA multiple: 11.5x Rationale: To offer cloud-based voice services and a full suite of enterprise-grade cloud servers and services. AQCUIRES TRANSACTION DETAILS  Founded: 1995  Overview: Cloud Service Provider  Founded: 2001  Overview: Cloud Communications  Date: Nov-12  Deal Value: £55m  Rev Multiple: 1.1x  EBITDA multiple: n.a. Rationale: Unified communications, remote desktop and advanced security services; creates largest EU mid-market hosting provider. AQCUIRES TRANSACTION DETAILS  Founded: 1996  Overview: Managed Services  Founded: 1995  Overview: Unified Communications Founded: 2010 Transaction Date: Mar-13 Overview: Error tracking software  Founded: 1998  Overview: IT HostingAQCUIRES Founded: 2012 Transaction Date: Feb-13 Overview: Cloud database-aaS (MondoDB) Founded: 2010 Transaction Date: Aug-12 Overview: Mailbox web service APIs Has developed extensive software, advisory and support services largely utilising open source technologyDEVELOPED Cloud Monitoring Load Balancing Backup & Replication IaaS Enabling SaaS Rackspace email Rackspace Databases Cloud File Storage Enables users to have servers delivered with a full range of pre-installed SaaS apps (CRM, database management, …)DEVELOPED IaaS Enabling SaaS • Customers can opt for a pre-installed software environment. • vApps: specific professional apps (CRM, database management, e- commerce, …). • vSphere / vCloud dedicated cloud offering w/Vmware partnership. • Private Cloud® offering. Has developed extensive software – particularly useful for personal and small business useDEVELOPED IaaS Enabling SaaS • MyWebsite; website creation platform. • 1&1 email: Instant Mail / MailXchange / Microsoft Exchange 2013. • Mobile app cloud server management. • Mobile app server monitoring. Via Internal Development Via Acquisition
  25. 25. © 2012 Clipperton Finance Limited. Private and confidential. Rackspace Example: Differentiation Seems to be Paying Off 25 Also Outperforming Hosters and Cloud Services in terms of Value Created for Shareholders Revenue Growth Contrasts with other Hosters and Exceeds Cloud Services growth The success of Rackspace (a serial acquirer and developer of innovative cloud services) suggests that the first strategy for winners will be to move downstream 5% 10% 15% 20% 25% 30% 35% 2009 2010 2011 2012 Cloud Services Hosting not inc. RAX Rackspace 0 200 400 600 800 1000 1200 1400 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Stock Price Evolution (index 100, Jan.09)YoY Revenue Growth Revenue and Index analysis based on: Hosters: Iomart, Akamai, Internap, Cloud Services: Salesforce, NetSuite, Vmware, Citrix
  26. 26. © 2013 Clipperton Finance Limited. Private and confidential. Differentiation Should be the Priority, Consolidation Will Not be Sufficient 26 #1 WINNERS 2nd PLACE LARGE SMALL TRADITIONAL HOSTING HIGHLY TECHNICAL/DIFFERENTIATED COMPANYSIZE INNOVATORS: • Smaller innovators to be acquired by hosters for their tech expertise SMALLER/ REGIONAL PLAYERS: • Various players acquired for major players’ consolidation for scale
  27. 27. © 2014 Clipperton Finance Limited … What About Colocators? They seem to go Upstream with the Wholesalers, a Good Idea? 27 Moving Downstream: HostersMoving Upstream: Wholesalers & Colocators Evolution of ROCE components until 2012 among key players EBITMargin Sales/ Capital Employed 0% 5% 10% 15% 20% 25% 30% 35% 40% 0% 50% 100% 150% 200% 2008 2012 2009 2011 2012 2010 2008 2012 2009 2010 2008 2009 2010 2011 2012 Wholesalers Wholesalers Wholesalers Colocators Wholesalers Hosters Wholesalers Cloud Services 5% ROCE 10% ROCE 15% ROCE 20% ROCE Source:ThomsonOne,ClippertonFinanceAnalysis
  28. 28. © 2014 Clipperton Finance Limited Outsourced Data Management: a Maturing Value Chain 28 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in Data Management Space Focus on Key European Players About Clipperton Finance Table of Content I II III IV V VI
  29. 29. © 2014 Clipperton Finance Limited Comparables Analysis Valuation Analysis 29 Company Market Cap as @ Jan-14 Enterprise Value as @ Jan-14 Revenue Revenue EBITDA EV / Revenue EV / EBITDA P/E Growth CAGR Margin USDm USDm 2013-14 2012-14 2013 2014e 2013 2014e 2013 2014e 2013 2014e Wholesalers Dupont Fabros 1,632 3,162 8.8% 10.6% 63.9% 63.9% 8.5x 7.8x 13.2x 12.2x 28.7x 18.4x CoreSite 706 1,348 14.0% 14.0% 44.9% 45.7% 5.7x 5.0x 12.7x 11.0x 71.8x 70.2x Digital Realty 6,785 12,200 8.0% 11.7% 58.0% 58.3% 8.3x 7.6x 14.2x 13.1x 26.7x 42.6x Mean 10.3% 12.1% 55.6% 56.0% 7.5x 6.8x 13.4x 12.1x 42.4x 43.7x Colocators Equinix 8,834 12,135 12.1% 12.8% 46.2% 46.7% 5.6x 5.0x 12.2x 10.8x 108.2x 46.8x Telecity 2,539 3,012 13.1% 14.7% 47.1% 47.8% 5.6x 4.9x 11.8x 10.3x 12.9x 11.1x Interxion 1,689 2,070 11.3% 11.4% 43.0% 44.5% 4.9x 4.4x 11.5x 10.0x n/m 32.9x Mean 12.2% 12.9% 45.5% 46.3% 5.4x 4.8x 11.8x 10.4x 60.6x 30.3x Hosters Akamai 8,695 8,128 14.0% 13.9% 44.0% 43.0% 5.2x 4.6x 11.8x 10.6x 24.4x 22.6x Iomart 506 544 21.6% 24.7% 41.1% 42.3% 6.4x 5.2x 15.5x 12.4x 19.5x 14.6x Internap 408 541 7.5% 4.9% 20.7% 26.6% 1.9x 1.8x 9.3x 6.8x n/m n/m Rackspace 5,344 5,146 16.7% 16.8% 32.9% 32.8% 3.4x 2.9x 10.2x 8.8x 62.7x 52.4x Mean 14.9% 15.1% 34.7% 36.2% 4.2x 3.6x 11.7x 9.6x 35.5x 29.9x Cloud Services Vmware 42,189 36,802 14.5% 13.6% 40.3% 40.3% 7.1x 6.2x 17.6x 15.4x 29.2x 25.5x Citrix 11,316 10,621 11.3% 12.2% 32.8% 31.1% 3.6x 3.3x 11.1x 10.5x 20.5x 18.1x Salesforce 36,011 37,182 28.7% 30.8% 16.6% 17.7% 9.4x 7.3x 56.4x 41.1x n/m 122.7x Netsuite 8,264 8,060 29.4% 31.3% 10.7% 8.6% 19.6x 15.2x 183.2x 175.2x n/m n/m Mean 21.0% 22.0% 25.1% 24.4% 9.9x 8.0x 67.1x 60.5x 24.8x 55.5x Source: Thomson One
  30. 30. © 2014 Clipperton Finance Limited Relevant M&A deals in the DC industry Focus on Selected Deals in the Upstream Segment 30 Date Target Acquirer Deal Value Target Rev. EV/Rev. Rationale Jun-13 - - - • A 23k sq.ft. Facility located in US Southeast's most active datacenter cluster that will provide Centrilogic with direct access to new large enterprises. Jul-12 $1.1b - - • A deal part of DRT strategy to better address the European market. • 750k sq.ft. facility in London for $1.1b, showing a valuation of $1.5k/sq.ft. Jul-12 $320m $40-45m 7-8x • Asia Tone strengthens Equinix position in the Asia-Pacific region • The deal values the 80K sq.ft. of Data Center space at $4k/Sq.ft. Asia Tone Aug-11 $144m $22m 7x • The deal allows Telecity to better capture the strong and growing demand for storage capacity in Ireland • Telecity acquired 64sq.ft. At $2.4k/sq.ft. Oct-13 $440m $85m 5x • Enables NTT Com to more than double its Data Center space in the US. • NTT will also use Raging Wire’s patented technology to deploy sophisticated Data Centers.
  31. 31. © 2014 Clipperton Finance Limited Selected M&A Activity in the Upstream Segment 31 Date Acquiror Nat. Target Nat. Description Rationale sq.ft. acquired Value EV/Rev EV/ EBITDA EV/sq ft Feb-14 Cologix US BZ US Datacenter provider Acquiring the leading interconnection points in underserved markets 32k n.a. - - - 0ct-13 NTT Com JP RagingWire US Datacenter provider US Expansion n.r. $350 (80%) 5.1x - - Sep-13 Rogers Communications CAN Pivot Data Centers CAN Datacenter provider Data Center portfolio build-out n.r. $155m 5x - - Aug-13 Mellanox US Kotura US Technology provider Improve performances n.r. $82m 5.5x - - Jun-13 Zayo US Core NAP US Datacenter provider Geographic expansion 15k n.a. - - - Jun-13 Centrilogic US Dacentec BEL Data Center operator Geographic expansion 23k n.a. - - - Apr-13 NTT Facilities JAP Unitrio THA Datacenter builder Improve offering n.r. n.a. - - - Dec-12 365 Main US 16 Equinix datacenter US 16 facilities in the US Upstream move 280k $75m - - $270 Nov-12 Telecity UK Academica FIN Datacenter operator Geographic expansion 5k $36m - - $7,200 Aug-12 Telecity UK Tenue Oy FIN Datacenter operator Geographic expansion 2k $6m - - $3 000 Jul-12 Oracle US Xsigo US Technology provider Deliver a complete set of virtualization capabilities for cloud environments n.r. n.a. - - - Jul-12 Equinix US Asia tone CH Data Center colocator Strengthen Equinix position in the Asia-Pacific region 80k $320m 7-8x $4,000 Jul-12 Digital realty US Sentrum UK Ficility in London Geographic expansion 760k $1,1b - - $1,450 May-12 Six Degrees Group UK Datahop UK Technology provider Improve Network's capacity and allow to deliver broader range of services to its customers n.r. n.a. - - - Mar-12 AMD US SeaMicro US Technology provider Accelerate AMD’s strategy to deliver disruptive server technology n.r. $334m 6.7x 27.8x - Oct-11 Digital Realty Trust US Sun Center Drive US Facility located in California Increase storage capacity 69k $30m - - $435 Aug-11 Telecity Group UK Data Electronics Group IRE Data Center operator Geographic expansion 60k $144m 6.7x 13.9x $2,400 Apr-11 CenturyLink US SAVVIS US Data Center colocator Geographic expansion (48 Data Centers in NA, EU & Asia) 1.9m $3b 3x 13.1x $1,580 Jul-10 Digital Realty US RockWood Capital/365 Main US Facilities in the US Extend leadership 250k $725m - - $2,900 Oct-09 Equinix US Switch and data facilities company US Provider of Datacenter services Acquisition of 32 Datacenters in 22 markets, allowing Equinix to reach 16 new markets 150-200k $689m 3.5x 11.5x $3,445 May-07 Reuben Brothers SW Global Switch UK Wholesaler Buy out Morley Fund Management's 25% stake 3m $580m 2-3x - $193 Average 5,0x 16,6x $2 387 Median 5,5x 13,5x $1 990
  32. 32. © 2014 Clipperton Finance Limited Focus on Selected Deals in the Downstream Segment 32 Date Target Acquirer Deal Value Target Rev. EV/Rev. Rationale Apr-13 $2bn $333m 6x • This acquisition is part of IBM strategy to offer more Hosting services to its clients. • It also allows IBM to expand geographically in the NA & EU regions. Feb-13 n.a. n.a. - • ObjectRocket is a provider of Cloud Database-aaS Solutions. • The acquisition allows Rackspace to improve its open-source & open-cloud offering. Jun-12 $38.5m $12.5m 3x • Peer 1 becomes the #2 provider of SME managed hosting services in the UK. • NetBenefit provides Peer1 with a platform allowing to sustain their growth in Europe. • Part of Vmware’s plan to deploy one of the biggest SDN (software-defined-network) of the industry. $1.3bJun-12 Dec-10 $212m <$10m(e) - • Combine Heroku’s technology and product with Salesforce reputation to make it a leader in cloud application platform for companies. -n.a. • Through the acquisition of Corente, Oracle plans to strengthen its networking portfolio. • It enables Oracle to move toward a cloud services broker offering. Jan-14 n.a.n.a. -
  33. 33. © 2014 Clipperton Finance Limited Selected M&A Activity in the Downstream Segment 33 Date Acquiror Nat. Target Nat. Target Focus Rationale Value ($m) EV/Rev. EV/ EBITDA Feb-14 IBM US Cloudant US Database-as-a-server Enhance its Big Data and analytics portfolio n.a. - - Jan-14 Oracle US Corente US Software defined Networking Oracle plans to bundle SDN and cloud infrastructure n.a. - - Dec-13 Evolve IP US Paragrid Inc US Cloud Services Geographic expansion n.a. - - Oct-13 VMware US Desktone US Virtual desktop hosting platform Enhance desktop virtualization offering n.a. - - Oct-13 NTT JP Virtela US Cloud based security Expand global network services coverage 525 - - Dec-13 Akamai US Prolexic Technologies US IT Security Services Expand Akamai security services offering 370 - - Sept-13 iomart Group UK Redstation UK Managed Hosting Enlarge Client base 13 1.6x - Jul-13 Cinven UK Host Europe Group UK Hosting and Domain Services Capitalize on further consolidation in the hosting market 668 4.8x 13.8x Jul-13 Intergenia DE Internet24 DE Managed Hosting Geographic expansion (DACH) n.a. - - Apr-13 IBM US Softlayer US Hosting Services Enlarge footprint; Geographical expansion (NA & EU) 2,000 6.0x 14.9x Mar-13 Rackspace US Exceptional US Error tracking Sfotware Improve service offering n.a. - - Feb-13 Rackspace US ObjectRocket US Cloud Database-aaS Improve service offering n.a. - - Jan-13 Intermedia US Telanetix US Cloud communication Offer cloud-based voice services 55 1.8x 11.5x Jan-13 Cogeco Cable CAN Peer 1 Hosting CAN Managed Hosting Enlarge client base 526 3.3x 12.4x Nov-12 Claranet UK Star UK Unified communications Improve service offering 88 1.1x - Aug-12 iomart Group UK Melbourne Server Hosting UK Managed Hosting Geographic expansion (North England) 11 2.4x 11.2x Aug-12 Rackspace US Mailgun US Mailbox webservices APIs Improve service offering n.a. - - Jun-12 Peer 1 Hosting CAN NetBenefit UK Managed Hosting Geographic expansion (UK) 38.5 3.1x 10.1x Jan-12 Host Europe UK Red Coruna ESP Hosting Services Geographic expansion (ESP) n.a. - - Nov-11 iomart Group UK EQSN UK/US Managed Hosting Consolidate position in hosting market; additional recurring revenue 3.8 1.5x 10.0x Oct-11 ISIS Equity Partners UK The Onyx Group UK Managed Hosting, internet connectivity Capitalize on further consolidation in the hosting market 43 1.8x - Jun-11 Acens Technologies ESP Telefonica S.A ESP Colocation and Managed Hosting Enlarge SME client base (ESP) 132 2.7x 6.9x Mar-11 Novacap, Bank Street Capital, Caisse CAN iWeb Group CAN Dedicated and web hosting Capitalize on further consolidation in the hosting market 47 1.6x 7.8x Feb-11 Time Warner Cable US NaviSite US Managed Hosting Enlarge client base 230 1.8x 9.5x Jan-11 Verizon Communications US Terremark Worldwide US Colocation and Managed Hosting Enlarge client base 1,842 5.4x 22.4x Average 2.8x 11.9x Median 2.1x 11.2x
  34. 34. © 2014 Clipperton Finance Limited Selected European Fundraisings – 2010/13 34 Invest. Date Company Name Nat. Description Investors Amount Jul-13 eNovance FR Managed Hosting Odyssee venture, Entrepreneur Venture, BNP, OSEO $6m Jul-13 Opbeat DN Web hosting Balderton Capital $2.7m Apr-13 abiquo UK Managed Hosting Oxford Capital Partners, Balderton Capital, Nauta Capital $5m Apr-13 Flexiant UK Managed Hosting Leopard Rock Capital $6m Mar-13 OVH FR Managed Hosting Debt $181 Mar-13 Racktivity BEL Power Management services PMV-Vinnof, BigBang Ventures, Partech Ventures $3.2m Jan-13 OnApp UK Managed Hosting LDC $20m Nov-12 Flexiant UK Managed Hosting Leopard Rock Capital $5m Sept-12 amplitada BEL Hosting Services Intel Capital, Swisscom Ventures, Hummingbird Ventures, Endeavour Vision $6m Apr-12 NWIX Group, Ltd. UK Colocation & Hosting Services Alliance Fund Managers Ltd $0.8m Feb-12 amplidata BEL Hosting Services Intel Capital, Swisscom Ventures, BigBang Ventures, Endeavour Vision $8m Jan-12 AIMES Grid Services CIC, Ltd. UK Colocation & Hosting Services Alliance Fund Managers Ltd, RBS Capital $2m Oct-11 Virtus Data Centres, Ltd. UK Wholesale & Colocation services Brockton Capital n.a. Sept-11 Adapt PLC UK Managed Hosting Lyceum Capital Partners $47m Jul-11 Intrinsic Technology, Ltd. IRL Colocation & Hosting Services RJD Partners $48m May-11 Next Generation Data, Ltd. UK Power Management services Finance Wales Investments Ltd, Lombard Investments Inc. n.a. Mar-11 TIXEL GmbH GER Colocation & Hosting Services enjoyventure Management GmbH, High-Tech Gruenderfonds Management GmbH $1m Dec-10 Racktivity BEL Power Management services BigBang Ventures, Partech Ventures $8m Nov-10 VirtenSys, Ltd. UK Colocation & Hosting Services Undisclosed $2.1m Nov-10 abiquo UK Managed Hosting Balderton Capital, Nauta Capital, Eurecan $10m Oct-10 Host Europe Corporation, Ltd. UK Managed Hosting Montagu Private Equity LLP $347m Oct-10 Zimory GmbH GER Managed Hosting Creathor Venture Management GmbH, High-Tech Gruenderfonds Management GmbH, IBB $5.5m Sept-10 amplidata BEL Hosting Services Swisscom Ventures, BigBang Ventures, Endeavour Vision $6m
  35. 35. © 2014 Clipperton Finance Limited Outsourced Data Management: a Maturing Value Chain 35 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in Data Management Space Focus on Selected European Players About Clipperton Finance Table of Content I II III IV V VI
  36. 36. © 2014 Clipperton Finance Limited Clipperton List of Selected European ‘Data Management’ Players 36 Stars & emerging companies with a claim on online Data Management markets
  37. 37. © 2014 Clipperton Finance Limited Table of Content: Selected European ‘Data Management’ Players UPSTREAM 37 39 41 43 44 DEV OP TOOLS 45 45 PRICING OPTIMIZATION 46 ENERGY MANAGEMENT 49 48 48 49 RETAIL COLOCATION CARRIER-NEUTRAL WHOLESALE SECURITY CLOUD-ENABLING SERVICES CLOUD MANAGEMENT IAAS 42 41 40 40 38 47 PLATFORMS
  38. 38. © 2014 Clipperton Finance Limited Selected European Players – Focus on Telecity Group 38 Key Figures Presentation  Founded:  Nationality:  Rev. 2013:  Rev. 2012:  Market Cap.:  EV/EBITDA:  PER  Leading colocation provider in Europe with 33 Data Centers spread over key Tier I locations (London, Paris, Amsterdam, …).  With 10+ acquisitions since inception, Telecity has proved a key consolidator on the European colocation scene. 1998 UK £329m £283m £1.4B 10.8x 20x Context & Positioning  Thanks to an aggressive consolidation strategy and a well-handled execution, Telecity has managed to display an impressive 20% revenue growth CAGR from 2008 to 2013 making the Company one of the leading colocation provider in Europe.  Telecity announced the launch of Cloud-IX, a cloud-neutral ecosystem that will be rolled out to customers and provide direct connectivity with cloud providers such as Amazon Web Services, iland, CSC, Fujitsu, Outsourcery, etc. Equinix 8% Telecity 8% Interxion 7% Telehouse 4% Deutsche Telekom 4% Orange; 3% Interoute; 2% BT; 2% Colt; 2% Other local players 60% Source: Synergy Research Group Retail Colocation Market Leaders – EMEA Q3 2013 Telecity has consistently outpaced LSE index (base 100) - 50 100 150 200 250 300 350 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13
  39. 39. © 2014 Clipperton Finance Limited Selected European Players – Focus on Global Switch 39 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Asset Value:  Est. EV  Founded in 1998 by the Reuben brothers (UK’s 2nd net worth individuals).  One of the largest carrier- neutral wholesale Data Centers vendors in Europe with 9 Data Centers spread over Tier I locations (London, Paris, Amsterdam, …).  Tier I clients include IBM, Cap Gemini or Atos. 1998 UK £313m £3.8B £2.2-2.5B Context & Positioning (based on comps.)  With a specific Carrier-Neutral x Wholesale positioning, Global Switch has managed to compete with the larger US-based players such as Digital Realty or Dupont Fabros.  Global Switch is currently focusing on the Asian market where demand is booming with large projects underway (Sydney, Hong-Kong, Singapore) and a newly appointed Managing Director to lead the Asian expansion. + Singapore & Sydney Madrid London Paris Amsterdam Frankfurt GLOBAL SWITCH Data CenterS  9 Datacenters  290,000 sqm  Carrier-neutral
  40. 40. © 2014 Clipperton Finance Limited40 Selected European Players – IaaS [1/3] Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Developer of advanced cloud software and management solutions.  Strong international reach (Europe, US, Asia).  Multi-awarded software solution (incl. Gartner’s Cool Vendor in Cloud Management 2011, 2013 Red Herring top 100 Europe). 2006 UK n.a. n.a. $24.2m Balderton, Nauta, Oxford Capital + Others Context & Positioning  Abiquo positions itself at the point at which enterprises are seeking to migrate from legacy software systems to cloud based services.  To address this, Abiquo’s cloud computing toolkit enables enterprises to build, integrate and manage public and private clouds via a single homogenous dashboard environment. Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  Provider of cloud orchestration software for on-demand, fully automated provisioning of cloud services.  Spun out from hosting company XCalibre Communications.  Cloud Orchestrator is now implemented by 100+ EU service providers. 2009 UK n.a. n.a. $10.5m Leopard Rock Capital Context & Positioning  Flexiant acts as a facilitator in the trend for traditional hosting providers seeking to offer more downstream, value add services. Of particular focus are telcos that want to use their existing infrastructure to become fully fledged infrastructure-as-a-service players. By integrating Flexiant’s software, such service providers broaden their hosting offerings into more advanced cloud services.  The recent fundraising will be used by Flexiant for international expansion, particularly in the US.
  41. 41. © 2014 Clipperton Finance Limited Selected European Players – IaaS [2/3] 41 Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  Initially a Cloud Management SW offering, Onapp has pioneered the federated cloud model enabling their network of Service Providers to offer at scale CDN services, and storage.  900 clients in 87 countries, Signing 20-30 new SP’s per month. 2010 UK n.a. n.a. $20m Lloyds Development Capital Context & Positioning  Onapp has emerged in response to the widespread commoditization of traditional hosting services and dominance of Amazon in the IaaS space. Their solution targets the significant longtail of hosters struggling to compete with Amazon’s sheer scale.  As many of the core building blocks of cloud hosting are now able to be bought off the shelf, Onapp has developed software that enables smaller hosters to operate a network or “federated” cloud model thus enabling the scale and product diversity of bigger players.  Onapp plans to further utilize it’s network of service providers to offer a true marketplace for cloud infrastructure. Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  Cloud management platform for complex, virtualized and physical enterprise applications.  Product portfolio includes the eCloudManager based on Information Workbench semantic platform.  Numerous awards winner, including Computerwoche Best in Cloud Award 2012 (Category IaaS – Private Cloud). 2008 DE n.a. n.a. €6m Founder, SAP-Co-Founder Context & Positioning  Fluid Operations offers a semantic cloud and Data Center management solution to overcome the complexities that enterprises experience in managing complex, virtualized application environments.  Offers automated handling of daily operations of a private or public eCloud.  Serves enterprise customers, such as Daimler, F.IT, SAP, Statoil and T-Systems.
  42. 42. © 2014 Clipperton Finance Limited Selected European Players – IaaS [3/3] 42 Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  Carrier-grade cloud infrastructure management software provider.  Expanding international reach (US, Eurasia).  Numerous awards winner, e.g. Cloud Management Leader Award by Experton Group in 2013 and 2012 as well as Gartner “Cool Vendor” in 2011. 2007 DE n.a. n.a. $26m Creathor, HTGF, IBB, KfW, T-Venture, Deutsche Börse Context & Positioning  Zimory’s infrastructure management software automates and simplifies the creation, launch and management of all types of cloud environments.  The suite delivers also brokerage capabilities which are enabling cloud and service marketplaces, and reducing service delivery times and effort.
  43. 43. © 2014 Clipperton Finance Limited Selected European Players – Energy / Environment Management 43 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Energy & environment management system for Data Centers.  In-house developed hardware, firmware and software.  Integration with third party components.  Mainly active in Europe (25 FTEs). 2009 BEL n.a. n.a. $13m PMV-Vinnof Partech Ventures Big Bang Ventures Context & Positioning  Racktivity offers hardware and software solutions that enable detailed monitoring of Data Center infrastructure in order to minimize system failures and downtime for end customers.  Energy management is absolutely key as energy usually accounts for the bulk of Data Center operating expenses.  The software combined with a family of PDUs and sensors measure, monitor and manage power across distributed Data Centers and gives customers full visibility and control of Data Centers’ energy consumption.
  44. 44. © 2014 Clipperton Finance Limited44 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Funding:  Investors:  Cloud infrastructure security SaaS solutions.  One of the Cloud Security Alliance founders.  Technology partner of Amazon Web Services, HP Cloud, VMware and Eucalyptus.  7 FTEs 2011 FR €1-3m. Undiscl. n.a. Context & Positioning  Result of a joint research work with Eurecom, a French research institute in telecom and network security.  Set of products and services specifically designed to help cloud infrastructure providers and users to safely migrate to the cloud.  Increases the safety of IaaS, identifying vulnerabilities in major IaaS providers and collaborating with them. Selected European Players – Security
  45. 45. © 2014 Clipperton Finance Limited45 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Provider of application provisioning and management services for Ruby on Rails.  Build PaaS from scratch on any public or private cloud vendor or your own infrastructure.  Offices in the UK and the US. 2011 UK n.a. n.a. No funding to date Context & Positioning  Innovative solution combining the convenience of Platform-as-a-Service (PaaS) with the control and flexibility of Infrastructure-as-a-Service (IaaS).  A very fast way to market, while still allowing clients to maintain their control over their infrastructure growth and expenditure for the lifetime of their projects.  Provided as a service and charged per server per month. Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Cloud computing hosting PaaS.  Runs all the major languages (Java, Scala, Ruby, Python, PHP, etc.).  Hosted in French Data Centers in Paris.  10 FTEs (as of Jan. 2014). 2010 FR €1-3m n.a. Undiscl. Kima Ventures Context & Positioning  Provides Cloud computing hosting, for high-performance and easy-to-manage Java/PHP/Ruby based web applications.  Each hosted application is highly secured (https protocol, backups, 24/7 monitoring and support, specific virtual machine, etc.).  Designed to make developers’ life easier and let them focus on their core business (easy testing, deployment and production). Selected European Players – Dev Op Tools
  46. 46. © 2014 Clipperton Finance Limited Selected European Players – Cloud Hosting Software 46 Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  PaaS provider for web applications development and operation.  Integrated add-on marketplace with 3rd party services.  Won ECO Award (category “Hosting”) in 2009.  Mainly active in Europe (22 FTE), currently rolling out US business. 2009 DE n.a. n.a. 2 Rounds IBB Creathor Ventures Context & Positioning  Extends the product portfolio through PaaS-enablement for hosters and telecommunication companies (managed white-label platform).  Initially started with PHP language support in Q4 2010. The company became one of few ‘polyglot’ player by supporting Java, Python, Ruby and NodeJS programming languages and others through the buildpack standard.  Offers a broad service base through it’s 3rd party add-on marketplace.
  47. 47. © 2014 Clipperton Finance Limited47 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Cloud computing broker-dealer.  Billing and pricing service between cloud clients and cloud providers.  Approved supplier on the UK government G-cloud program.  Clients in the EU and the US and usually have £25-50k IaaS spend per month and commit for 6 months minimum with Cloud Options. 2010 UK n.a. n.a. Undiscl. Techstars Context & Positioning  Experts in cloud billing and price risk management, transferring expertise from the physical commodities markets to cloud computing.  Their offering is effectively a cloud service “market maker” – helping users to buy cloud services on terms that suit them, whilst buying from cloud providers on terms to suit the latter.  Through its financial service “Cloud Options”, Strategic Blue involves both the buyer and the seller in the price-setting process, not just the seller. Going forward the business model will begin to mirror a traditional commodity hedging business model of high volume and low transaction fee margins. Selected European Players – Cloud Brokerage
  48. 48. © 2014 Clipperton Finance Limited Selected European Players – Platforms [1/2] 48 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  SaaS Cloud Management solution allowing multiple Cloud providers in a unified infrastructure.  Complete monitoring system.  Awared Best Solution 2013 by EuroCloud, at spannish level.  ~20 FTEs 2012 SP n.a. n.a. €200k Ackstorm Context & Positioning  Offers easy management and control of different Cloud providers (Amazon, Rackspace, Linode, etc.) from a single intuitive interface.  Powerful control tool capable of performing a complete monitoring of the operation, and performing automatic maintenance actions such as increasing resources available, auto-scaling or restarting applications in case of incidents.  Clients include developers, IT managers, systems integrators and IaaS providers. Key Figures Presentation  Founded:  Nationality:  Rev. 2011:  Rev. 2010:  Funding:  Investors:  Complete cloud business provider.  Offers public, private and hybrid clouds plus storage in own Data Centers or hosted worldwide on their network of cloud federation partners.  Operates multiple Data Centers in Berlin, Hamburg and Frankfurt am Main. 2009 DE n.a. n.a. n.a. Spin-Off from Internet Service Provider Internet4You Context & Positioning  IaaS providing self-service solution to user management, provisioning, automation services to offer a public, private or hybrid cloud solution.  Spin-Off from Germany-based Internet Service Provider Internet4You, which also offers managed hosting services and hybrid engineering solutions to build tailored server solutions.
  49. 49. © 2014 Clipperton Finance Limited Selected European Players – Cloud Hosting Software 49 Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Storage and scalable cloud hosting platform software provider.  Self-healing platform designed to automatically recover when Data Center hardware or software fail.  SETsquared member company.  11 FTEs. 2008 UK n.a. n.a. $1m DN Capital Context & Positioning  Helps user systems automatically recover from hardware & software failures without loss of data and deal with spikes in traffic that traditionally lead to crashes.  Offers storage and hosting platform technology that automatically detects and recovers from Data Center outages, delivers better density of customers per server, and offers end users the ability to self-recover lost files and data.  Key technology enabler is the use of containers as a lighter alternative to VMs enabling live migration across servers without the need of arduous/ enormous data replication (as is the case with VMs). Key Figures Presentation  Founded:  Nationality:  Rev. 2012:  Rev. 2011:  Funding:  Investors:  Collaborative work tool in SaaS mode dedicated file sharing and project management.  Strong security policy (resilient storage infrastructure, confidentiality, accessibility, etc.).  Used by 5,000+ SMBs.  Offices in Paris and San Francisco (18 FTEs). 2010 FR n.a. n.a. €680k Business Angels Context & Positioning  All-in-one solution for collaborative processes in business, Wimi streamlines teamwork, allowing businesses to quickly and easily access shared documents, tasks and project calendars.  Seamless integration with today’s most popular productivity apps including Google Apps, Outlook, Skype, Evernote, etc.  Automatic synchronization across all digital devices.
  50. 50. © 2014 Clipperton Finance Limited Abiquo ControlCircle Skye Cloud Adapt Flexiant Skyscape Cloud Services Arkivum Future Facilities Strategic Blue Cloud66 Hybrid Logic The Bunker Opbeat EverCloud Ensafer ECManaged Red Coruna 50 Selected European Players by Country Altitude Datacenter eNovance SecludIT CleverCloud JoliCloud Wimi Ecritel France OVH CloudControl Fluid Operations ScaleUp Technologies Zimory Amplidata AWINGU Racktivity
  51. 51. © 2014 Clipperton Finance Limited51 Clipperton Finance Antoine Ganancia Senior Associate, Paris Thomas Neveux Partner, Paris Disclaimer: This document has been produced by Clipperton Finance (“Clipperton”) and is communicated to you solely for your information and should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments. This research paper is based on information available to the public and other sources deemed reliable, while every effort has been made to guarantee exactitude and reliability, Clipperton Finance cannot be held responsible for omissions or errors. The information and analysis accessible in this presentation speaks to industry trends in general, and should not be construed as providing any particular recommendations or analysis for any specific company that is mentioned in this presentation. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Clipperton’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Clipperton Finance Limited is authorised and regulated by the Financial Services Authority. Registered No. 523695 aganancia@clipperton.nettneveux@clipperton.net Clipperton Finance Contacts: Kulchetan Sanga Associate, London ksanga@clipperton.net
  52. 52. © 2014 Clipperton Finance Limited Outsourced Data Management: a Maturing Value Chain 52 Upstream: Emergence of a New Asset Class Downstream: Increasingly High-Tech Notable Transactions in Data Management Space Focus on Selected European Players About Clipperton Finance Table of Content I II III IV V VI
  53. 53. © 2014 Clipperton Finance Limited Mission Statement Building the best European platform in tech advisory London (2009) Paris (2003) Berlin (2013) Leveraging a proven track record of 100+ transactions & seasoned technology advisory professional's experience to accompany our clients in their growth and through all key steps of their financial life 3 offices in Europe 5 partners
  54. 54. © 2014 Clipperton Finance Limited What do we do? Transaction Advisory for European Growth Companies, International Investors and Blue-Chips 54 Mergers & Acquisitions StrategyFundraising European Tech and Growth Companies Early Stage Financing Growth Financing Exits (M&A, IPO, Buy-out) Private Equity Investors VCs – International reach incl. Corporate VCs Growth Equity – EU and US Funds Leveraged Funds – Buyout, Mid Market Technology Blue Chips Sell-side Advisory, Divesture Buy-side Screening Minority Investment
  55. 55. © 2014 Clipperton Finance Limited Value Proposition Our Solid Track Record Illustrates an Ability to Consistently Exceed Client Expectations 55 Transaction expertise Client Expectations Clipperton Finance‘s Fit Industry knowledge and extensive experience Access to investors Team commitment and senior-level involvement Ability to maximize value • Track record of delivering deals since 2003: 100+ successfully closed transactions as placement agent or M&A advisor • Deal negotiation experience and proven process & methodology • Cutting-edge and extensive domain expertise in TMT and Cleantech • Strong capabilities in framing and fine-tuning strategic positioning and go-to-market • Global network of investors and acquirers • Strong relationships with industrial and financial sponsors, intimate understanding of expectations • Major success stories within client base • Strategic approach to financial transactions to position companies to maximize shareholder return • Partner commitment from conception to closing, deep pool of experienced professionals • Quality, not volume led – significant resource dedicated throughout Independent and trusted advisor • Unbiased advice with focus on long term value creation • Long term relationship with clients and exceptional level of client satisfaction
  56. 56. © 2014 Clipperton Finance Limited Track Record Selected High Profile M&A & Fundraising Transactions Across the Value Chain 56 M&APrivate Placement sold to Sole Sell-Side Advisor July-12 $160,000,000 Apr-11 €5,300,000 Private Placement (A-round) Digital Media Social Gaming Acquires Sole Buy-Side Advisor Jan-11 € Undisclosed Dec-10 €6,000,000 Private Placement (C-round) Telecom Equipment Mobile 3G/4G Network Nov-10 Undisclosed Acquired by Sole Sell-Side Advisor Sep-10 €7,500,000 Private Placement (B-round) Jul-10 €13,700,000 Clean Tech Energy Storage Dec-09 €12,000,000 Private Placement (B-round) E-Commerce Footwear Since May-08 €16,000,000 Private Placement (B/C-rounds) Digital Media Media Center Private Placement (B-round) May-09 €12,500,000 Telecom LTE / Testing Acquired by Sole Sell-Side Advisor Sep-08 $27,700,000 Private Placement (C-round) Sep-07 $10,500,000 Telecom Mobile BSS / OSS Acquired by Sole Sell-Side Advisor Sept-10 Undisclosed Private Placement (B-round) Clean Tech PV Operator Nov-08 €20,000,000 Private Placement (B-round) Feb-12 £6,300,000 eCommerce Private Sales Private Placement (B-round) Oct-11 €7,500,000 Social Commerce Second hand fashion Private Placement (B-round) Feb-12 $12,000,000 New TV sell-side platform Private Placement (B-round) Mar-12 €4,000,000 Social Payment Private Sales Private Placement (A-round) $13,500,000 Mobile App App Discovery Private Placement (A-round) eCommerce Organic Products Jan-13Jan-13 €3,000,000 Aug-07 €8,000,000 Private Placement (A-round) E-Commerce e/m-ticketing Aug-06 €7,000,000 Private Placement (A-round) Digital Media Video Sharing Since Jul-06 €60,000,000+ Private Placement (B-E-rounds) Semiconductors WiMax/LTE Comm. IC Private Placement (B-round) $30,000,000 Connected Objects Jul-13 Private Placement (B-round) $20,000,000 Social Commerce Sep-13 $90,000,000Jul-13 Joint Sell-Side Advisor sold tosold to Sell-Side Advisor Jan-14 Undisclosed Private Placement (A-round) Feb-12 €4,000,000 Adtech Video advertising ADS Public Offering Dec-13 $26,000,000 Semiconductors WiMax/LTE Comm. IC [NYSE:SQNS]
  57. 57. © 2014 Clipperton Finance Limited Experience in Advisory Services Over 50 Years of Experience in Technology Advisory Services 57 • M&A sell-side & buy-side (20+ operations); >€700m raised in Equity (70+ operations) • Extensive network of investors and acquirers in Europe, North America and Asia • Team based in Paris, Berlin and London (pan-European coverage) • 4 Partners combining 50+ years of experience with prominent Technology firms
  58. 58. © 2014 Clipperton Finance Limited58 Clipperton Finance France 10 rue de Mont Thabor 75001 PARIS + 33 1 77 35 18 10 corporate@clipperton.net Clipperton Finance United-Kingdom Green Park House 15 Stratton Street W1J 8LQ LONDON + 44 20 3036 0346 corporate@clipperton.net Clipperton Finance Germany Neue Schönhauser Str. 2. 10178 BERLIN corporate@clipperton.net 58 Disclaimer: This document has been produced by Clipperton Finance (“Clipperton”) and is communicated to you solely for your information and should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments. This research paper is based on information available to the public and other sources deemed reliable, while every effort has been made to guarantee exactitude and reliability, Clipperton Finance cannot be held responsible for omissions or errors. The information and analysis accessible in this presentation speaks to industry trends in general, and should not be construed as providing any particular recommendations or analysis for any specific company that is mentioned in this presentation. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Clipperton’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Clipperton Finance Limited is authorised and regulated by the Financial Services Authority. Registered No. 523695

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