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iPass corporate presentaion


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Overview of iPass and its enterprise mobility offering

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iPass corporate presentaion

  1. 1. March 2011 March 2011 IPASS INC. Company Overviewsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  2. 2. Forward-Looking StatementsF d L ki St t tThe information contained in this presentation regarding iPass belief that its new open Mobile Platform provides a compelling and value-focused set of integrated mobility offerings to the enterprise and to channel and carrier partners; iPass belief that its new Open Mobile Platformand f d functionality are central t evolving it b i ti lit t l to l i its business model f d l from a network services-centric model t a value-added platform b i t k i ti d l to l dd d l tf business th t sells that llenterprise mobility services via a cloud-based infrastructure; iPass belief that its driving forward in having a meaningful impact on changing theeconomics of mobility for the enterprise; iPass’ belief that technology innovation will create stockholder value over the long-term; iPass’ beliefthat there’s a compelling new opportunity around the company’s Wi-Fi assets with potential carriers; and iPass’ projections of any financialresults are forward-looking statements.Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including:the risk that current poor economic conditions and reduction in business travel will have a greater negative impact on iPass than it predicts; therisk that iPass new mobility platform does not achieve customer acceptance or does so slower than iPass predicts; the risk that iPass willexperience unexpected technical or other delays in the implementation of added functionality to its new platform; the risk that iPass may not beable to generate revenue from new services if market acceptance of those new services is not as iPass expects; the risk that the rate of declinein use of narrowband/dial technology as a means of enterprise connectivity may be faster than iPass predicts; the risk that iPass will not be ableto generate broadband revenues in the manner expected; rapidly emerging changes in the nature of markets served by iPass, which may not becompatible with iPass services; increased competition, which may cause pricing pressure on the fees iPass charges; the risk that iPass couldunexpectedly lose current integrated broadband access points if one or more current broadband access point providers perceive iPass servicesto be competing with the providers services in a manner that renders the relationship with iPass detrimental to the provider; and the risk thatiPass may not be able to establish additional relationships with broadband access point providers, including providers of 2.5G/3G/4G MobileData,Data at the level iPass expects and if it is unable to negotiate such relationships on terms acceptable to both iPass and the providers on thetimeframe iPass currently expects for any number of reasons, including perceived competition with the providers.Detailed information about these and other factors that could potentially affect iPass business, financial condition and results of operations isincluded in iPass quarterly and other filings with the SEC and is available on the company’s Web site at and at the SECs Website at iPass undertakes no responsibility to update any information in this presentation if any forward-looking statement laterturns out to be inaccurate.smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 2
  3. 3. Non-GAAPNon GAAP Financial Measures Meas resThis presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP).iPass management evaluates and makes operating decisions using various performance measures. In addition to iPass’ GAAP results, thecompany also considers non-GAAP metrics, including Adjusted EBITDA, defined as net income (loss) before interest, income taxes, depreciation p y , g j , ( ) , , pand amortization, restructuring charges, impairment charges, certain state sales and federal tax items, stock compensation expense and revenueadjustments related to the correction of historical billing errors.Management uses these non-GAAP financial measures as components of its comparison of results with its business plan and individual operatingbudgets and to assist in the allocation of resources. Management excludes from its non-GAAP financial measures certain items in order to facilitateitsit review of th comparability and performance of th companys core operations b i f the bilit d f f the ti because it b li believes th t such it that h items are not related t the t l t d to thcompanys ongoing core operating performance. Management adjusts for the excluded items because management believes that, in general, theseitems possess one or more of the following characteristics: their magnitude and timing is largely outside of the companys control; they are unrelatedto the ongoing operation of the business in the ordinary course; they are unusual or infrequent and the company does not expect them to occur inthe ordinary course of business; they are non-operational; or they represent non-cash expenses involving stock option grants. iPass believes thatthe presentation of these non-GAAP financial measures is useful to investors.Management uses certain non-GAAP financial measures as a component for the measurement of incentive compensation. Detailed information,definitions and reconciliations of non-GAAP to GAAP financial measures are included in the company’s quarterly and annual filings with the SECand is available on the company’s Web site at and at the SECs Web site at connections IPASS PROPRIETARY AND  CONFIDENTIAL 3
  4. 4. Company Overview Presentation iPass Overview ………………………………………….…. 5 The E t Th Enterprise Mobility Open Mobile Business ……….... i M bilit O M bil B i 10 The Carrier Off-load & Enablement Business ………..…. 23 Financial Results Highlights ………………….................. 27 Key Take-Aways ………………………………………….... 32smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 4
  5. 5. iPass Overviewsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  6. 6. Investment ProfileiPass is a leading enterprise mobility provider focused on delivering cloud‐based services to  g p , g g large and multi‐national enterprises and telecom carriers, enabling them to manage the  economics, complexity, compliance and security needs of the global mobile workforce. ATTRACTIVE MARKET & OPPORTUNITIES Real Time Real-Time Enterprise Mobility Needs Around Compliance Cost Control & End-User Experience Compliance, Cost-Control End User Meaningful Carrier Needs Around Mass Market Wi-Fi Off-load and International Roaming IPASS’ UNIQUE & COMPELLING ADVANTAGES Unique Open Mobile SaaS Platform Unmatched Global Wi-Fi Network and Authentication/Transaction Fabric Strong and Long-standing Relationships with Tier-1 Enterprise Customers Transforming Company from Network-Centric Arbitrage Model to Value-Add Cloud-Based Platform FOCUSED NEW TEAM & BOARD New Leadership, Financial Discipline and Focus on Driving Meaningful Stockholder Value smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 6
  7. 7. iPass’ Two Broad Business Opportunities iPass is leveraging it’s unique assets to pursue two compelling business  opportunities: the enterprise mobility space with its Open Mobile Platform, and  new opportunities with global carriers for mass market Wi‐Fi offload,  international roaming and related needs. Two Business Opportunities 1. MORE DEVELOPED VALUE PROPOSITION: Open Mobile Enterprise Mobility Platform 2. NEWLY-EMERGING OPPORTUNITY: Carrier Off-load International R C i Off l d & I i l Roaming i Leveraging the Same Set of Assets Importantly, these businesses both leverage iPass’ unique set of assets and competencies in network connectivity management, cloud-based service provisioning, transaction authentication and p g Wi-Fi network expertise.smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 7
  8. 8. Leveraging iPass’ Unique Assets There’s strong alignment how iPass’ assets line-up to support success in the two business opportunities around enterprise mobility and carrier mass-market Wi-Fi off-load. Enterprise Mobility Business Wi‐Fi Enablement Business iPass’ Core  Assets Network Access Contracts Network Access Contracts Connection Managers Connection Managers Wi‐Fi Authentication Fabric Profile Configuration Management Location/Access Method Updates User Experience Data Collector Network Access Config and Enforcement Network Access Config and Enforcement User Policy Config and Enforcement User Policy Config and Enforcement Transaction Processing Usage Reporting & Analytics Transaction Clearing Transaction Clearing Operational Support 8smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 8
  9. 9. The Enterprise Mobility Open Mobile Businesssmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  10. 10. The State of Enterprise Mobility The mobile ecosystem for enterprises is chaotic, expensive and out-of-control Enterprises are caught between carriers E i h b i and consumers The control point has shifted from the VPN to the Internetsmarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 10
  11. 11. The Mobility Trends That Are Playing Out Playing-OutFor The Enterprise … Mobile bill >2x and more variable ! No N such thi as an h thing “enterprise device” ! • 64% of mobile don’t know how much • Corporate liable, personal use mobility costs bili • Individual liable, Mixed use • Mobility costs $1448 annually per worker • 36% see smartphones driving mobility • 66% of enterprises see mobility spend spend increase; 30% see 3G costs going up; 38% by more than 5% driving increase Fragmentation worsens ! More mobile attacks ! • Countries, carriers, devices, connections • Very profitable activity • 25% of enterprises manage more than 5 • Billions of new threats opening carriers; and 15% manage more than 10 • Data privacy, asset, operational and • 2+ devices/user; 3+ connections/device compliance risks Sources: iPass Mobile Workforce Survey, February 2010 and March 2011; iPass Enterprise Mobile Cost Survey, June 2010smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 11
  12. 12. … And The Mobile Worker Trends That AreImpacting Enterprise IT 1. Security and Cost/Productivity Imbalance 2. The Hyper-Connected M bil W k 2 Th H C t d Mobile Worker 3. The Post PC Era: The Laptop is the New Desktop, p p p, The Smartphone/Tablet is the new Laptop 4. 4 The Technical Chasm is Multi-Generational & Global Multi Generational 5. Multi-Mobile (the “Mobile Stack”) Rules the Day*Data from the 2010 iPass IT Costs of Enterprise Mobility Survey Results and 2010 Mobile Workforce Report smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 12
  13. 13. The iPass Solution: Enterprise Value Proposition The iPass Open Mobile Platform delivers cloud‐based services to enable  enterprises to manage the economics, complexity, compliance  and security needs of their global mobile workforce. Radically improve mobility economics Revolutionize th mobile user experience R l ti i the bil i Enforce control at the point of connect Extend across all networks and devicessmarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 13
  14. 14. Th iPThe iPass S l i Solution: C i V l P ii Carrier Value Proposition Differentiation, Higher-Value Conversation across market segments and from competition Optimize Revenue and Increase ARPU up-sell and cross-sell new services Customer Retention offering a “seamless” user experience Change the Economics of Service Management controlling mobility services complexitysmarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 14
  15. 15. The iPass Enterprise Mobility OfferingsiPass offers a compelling suite of enterprise mobility services through two broad offerings: (1) Mobility Management Platform Services and Services, (2) Mobile Network Services. Open Mobile Platform Network Services connection manager • provides an excellent user experience with always-on, auto-connect, intuitive user interface global mobile broadband network (Wi-Fi, OpenAccess, In-Flight, etc.) • provides the enterprise with access to the reporting & analytics world’s largest commercial Wi-Fi network. • enables th IT manager with unmatched visibility across bl the ith t h d i ibilit the enterprise’s mobility devices, networks and users policy management • ensures efficient and effective security and compliance f all connections at th edge li for ll ti t the dsmarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 15
  16. 16. Enterprise Offering Details: The simplest and smartest connection manager that d li th t delivers remote and mobile access. t d bil Ubiquitous Master Connection Management Across Multiple Devices and Networks Automatic, Zero-Click Connectivity Smart Network Selection™ No-Fee OpenAccess iPass Open Mobile Client Web-based Management Portal (end user experience) Customizable Experience to Enterprise Configuration and Style Data Collection Engine smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 16
  17. 17. Enterprise Offering Details: The reporting and analytics functionality that provides the enterprise with the intelligence they need to optimize the quality, security and cost of their mobile network activity. Mobile User Management • Real-time view into mobility usage across the enterprise • Track access by connection method y • Track user success and failures for mobile usage • Track deployment of iPass software and updates Mobile Broadband Management • View usage of iPass & 3rd-party Mobile Broadband devices • Categorize users into high and low usage • C Catch and reduce international roaming smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 17
  18. 18. Enterprise Offering Details: Policy manager functionality that p y g y provides enforcement of enterprise security, spend & other policies across global fleet of laptop, netbook and mobile devices Web-based creation Policy distribution Any state change Enhanced 3G Co t o s a ced Controls smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 18
  19. 19. Enterprise Offering Details: 272,000 Mobile Network Venues in 101 Countries Wired – 2,000 Wi-Fi – 270,000 96 of the Top 100 Airports 72 Countries 91 Countries and 657 Airports WW North America Europe Asia-Pacific Over 41,000 Hotels and 30,000 70,000 165,000 Convention Centers WW Over 110,000 Retail Locations WW , More than 6,000 iPass validated Free Wi-Fi locations Latin, Central and Middle East, Africa and South America Rest of World Premium Inflight Wi-Fi service – 4,000 3,000 Available on 3,800 daily U.S. flights US, CN, UK JP Mobile US CN broadband smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 19
  20. 20. iPass’ Unique Mobility Infrastructure & Network Assets The iPass Cloud: 5 data centers around the world Large distributed authentication network and clearing house consisting of 350+ carriers and over 3500 enterprises. Support for broad range of mobile devices from Windows to Mac laptops to iPhone, Blackberry, Symbian, Android and Windows Mobile Broad ecosystem support from Cisco, Juniper, Dell, Lenovo, Qualcomm, Checkpoint, Nokia, RIM and others 400 network partners i l di AT&T Deutsche Telekom, BT, t k t including AT&T, D t h T l k BT Orange, NT, Sprint, Telstra World’s largest Wi-Fi footprint with over 270,000 hotspots and hotel g p , p Ethernet locations in 101 countries. smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 20
  21. 21. Strong Reputation With Tier-1 Customers More Than 3,500 Customers 240 of the Forbes 500smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 21
  22. 22. The Carrier Off-load & Enablement Businesssmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  23. 23. Exciting New Opportunity With iPass Wi-Fi Assets Imminent Bandwidth Constraints Driving The Second Wave Of Wi‐Fi g f Explosion in bandwidth consumption Driven by video based apps on more capable smartphones and tablets Annual hotspot connects anticipated to grow to over 11 billion by 2014 By 2012, handhelds are anticipated to y , p account for half of hotspot connects LTE exacerbates the problem Existing experience shows that higher bandwidth leads to higher usage Carriers are readjusting their service strategy AT&T, Verizon, T-Mobile, O2 and others are abandoning unlimited data plans Wi-Fi offload gaining momentum as a resultsmarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 23
  24. 24. iPass’ New Wi-Fi Offload/Roaming Value Proposition 1. DOMESTIC OFFLOAD – Provide carriers with a client/connection  technology and authentication solution that enables mobile users  (Smartphones) to access a range of Wi‐Fi networks in home market 2. INTERNATIONAL ROAMING – Provide carriers with a client/connection  technology and authentication solution that enables mobile subscribers to  access Wi‐Fi networks while travelling internationally CDMA Carriers CDMA Carriers GSM Carriers  Carriers smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 24
  25. 25. Why iPass’ Wi-Fi Position is UniqueEfficient Cloud-Based OfferingEffi i t Cl d B d Off i Wi-Fi Wi Fi Connection Ability to manage preferred networks Management Expertise and configure user profiles Integral to end-to-end user experience Core and edge hierarchical g Enable Wi-Fi user experience to Wi Fi architecture resemble Mobile (e.g., auto-connect) SaaS-based interfacesProven Authentication Fabric Largest Commercial Wi-Fi The ‘Visa’ model for transaction Network processing In-place Wi-Fi asset and relationships Delegated authentication and tie to Model is extensible and evolves over carrier credential/policies time – Mobile carriers can strike own Leverages existing, industry-standard existing commercial relationships and still interfaces into mobile network leverage platform for implementationsmarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 25
  26. 26. Financial Results Highlightssmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  27. 27. Q4 2010 Financial Highlights Change (in millions, except per share amounts) Q4 2010 Q3 2010 Favorable / (Unfavorable) Revenue $38.6 $38.1 $0.5 1% Operating Expenses $37.9 $39.4 $1.5 4% Adj. EBITDA( ) Adj EBITDA(1) $0.1 $0 1 ($0.3) ($0 3) $0.4 $0 4 n/m  n/m Cash & Investments(2) $30.7 $34.1 ($3.4) (10%) _________________________ (1) Non‐GAAP metrics exclude restructuring, amortization of intangibles, stock‐based compensation and certain state and federal tax items; see notes t Q4 2010 earnings press release, 10 K and other SEC fili t to i l 10‐K d th filings f reconciliation of GAAP t non‐GAAP numbers and f d fi iti for ili ti f to GAAP b d for definitions. (2) In December 2010, iPass paid $4 million in a special cash dividend; additionally, in 2009, iPass distributed $30 million in cash dividends and from November 2009 through August 2010, iPass repurchased approximately 5m shares of the Company’s common stock for $6 million. smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 27
  28. 28. Revenue Overview % Change vs.  (in millions) Q4 2010 % of Total Q3 2010 Enterprise Mobility Services (EMS): Network Revenues $26.0 67% 2% Platform Revenues 4.2 11% (3%) Fees & Other Services 1.3 13 4% (10%) Total EMS Revenue $31.5 82% 1% Managed Network Services (MNS) 7.1 18% 4% Total Revenue $38.6 100% 1% Revenue By Geography: 59% US, 41% ROWsmarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 28
  29. 29. Monetized Users and Value Creation Long term Long-term Value Creation Achieved By Driving Increased Usage Q4 2010 Q3 2010 Q4 2009 Total Average Monthly 624,000 621,000 689,000 Monetized Users Platform Users 560,000 552,000 612,000 Implied ARPU (monthly) $2.48 $2.58 $1.98 Network Users 190,000 192,000 222,000 Implied ARPU (monthly) $45.72 $44.46 $42.45smarter connections IPASS  PROPRIETARY   AND  CONFIDENTIAL 29
  30. 30. Initiatives and Priorities To Drive Growth Sign Customers onto Open Mobile Platform • Migrate existing customers and partners to Open Mobile platform. • Bring-on new enterprise customers to Open Mobile. Drive Platform Usage D i Pl tf U • Increase penetration of usage into enterprise customers. • Increase frequency-of-use from month to month. Continue to Drive Carrier Distribution and Service Offerings • Build-out Open Mobile-based carrier platform. • Pursue opportunities around Wi-Fi off-load & authentication needs. Drive Platform Features & Functionality • Deliver value-added Platform roadmap and new services.smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 30
  31. 31. Key Take-Awayssmarter connections IPASS PROPRIETARY AND CONFIDENTIAL
  32. 32. Focused on Continuing to Build StockholderValue Strong, new senior management & board of directors. Transforming company from network-centric arbitrage model to SaaS-based, value-add mobility platform. Driving innovation and creating technology value. Driving high margin revenue growth with Open Mobile Platform. high-margin Platform Leveraging unique and largest global Wi-Fi network and authentication platform around new Carrier Wi-Fi opportunities. opportunities Managing with financial discipline. • Reduced operating cost structure: Q4’10 OpEx down 26% YoY • Returned $34m in cash to stockholders and repurchased $6m in stock • Stabilized foundation: $30m in Cash and zero Debt at 12/31/10smarter connections IPASS PROPRIETARY AND  CONFIDENTIAL 32
  33. 33. Thank You.smarter connections IPASS PROPRIETARY AND CONFIDENTIAL