Autonomy Presentation 1 503341

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Transcript of Autonomy Presentation 1 503341

Autonomy OverviewDRAFTPreliminary | Subject to Further Review and Evaluation

January 2011

Autonomy OverviewSummaryDual Headquarters Founding San Francisco, CA Cambridge, U.K. Founded in June 1996 by world-leading researchers from University of Cambridge($MM, except per share amounts) Fiscal Year Ended December 31, 2008A Revenue Annual Growth Gross Profit Gross Margin EBITDA EBITDA Margin Free Cash Flow Free Cash Flow Margin Net Income Net Income Margin Diluted EPS Annual Growth $503 47% 458 91% 226 45% 121 24% 148 29% 0.68 81% 2009A $740 47% 652 88% 360 49% 191 26% 233 31% 0.97 43% 2010E $866 17% 764 88% 426 49% 281 32% 289 33% 1.09 12% 2011E $963 11% 856 89% 505 52% 322 33% 343 36% 1.27 17% 2012E $1,079 12% 969 90% 585 54% 487 45% 399 37% 1.48 16%

Financial Performance

IPOEmployees Customers/OEMs Geographic Mix Key Verticals

July 1998 at a split-adjusted price of $1.23 (approx. 0.70)1,800 (10% Administrative, 60% Technical, 30% Sales and Marketing) 20,000+ Customers, 400+ OEMs with over 500 product licenses 70% Americas, 30% Rest of World Education, Energy & Utilities, Financial Services, Government, Healthcare, Investigative, Legal, Manufacturing, Professional Services/Consulting, Retail & Consumer, Technology, Telecom Primarily indirect through 400 Value Added Resellers such as Accenture, IBM Global Services, Cap Gemini, HP and Wipro Software infrastructure solutions that form an understanding of content, allowing for powerful meaning-based data processing Intelligent Data Operating Layer (IDOL) Server collects indexed data, enriching it with conceptual and contextual understanding Core infrastructure of Autonomys solutions Power solutions search and management built around IDOL Markets include Search, BPM, and OEMs Protect solutions regulatory and compliance platform Markets include eDiscovery, Archiving & Records, Content management, Compliance Promote solutions marketing and customer interaction Markets include Web Content Management, eBusiness, Marketing Optimization, Rich Media Management, Contact Center

Source: Projections based on Bank of America Merrill Lynch research as of October 19, 2010. Note: Free Cash Flow defined as Operating Cash Flow less Cap Ex and Investment in Product Development. Gross Profit adjusted for amortization of acq related intangibles. EBITDA adjusted for amortization of acq related intangibles, SBC, foreign exchange, and non-recurring items.

Sales Channel Product Overview

Trading Overview($MM, except per share amounts) Share Price Fully-Diluted Equity Value (1) Plus: Debt (1) Less: Cash (1) Fully-Diluted Enterprise Value (1) CY10E Revenue EBITDA Earnings per Share CY11E Revenue EBITDA Earnings per Share 14.78 / $23.66 $5,811 945 1,028 $5,728 6.6x 13.4 21.7 5.9x 11.3 18.6

Statistic (2) $866 426 1.09 $963 505 1.27

Note: Current market prices as of January 24, 2011, converted from GBP to USD at a constant spot exchange rate of 1.60. (1) Net Debt based on Autonomy Form 6-K for the period ended September 30, 2010. Includes 500 ($800) convertible debt with strike price of 20.63 ($33.03). (2) Projections based on Bank of America Merrill Lynch research as of October 19, 2010.

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Source: Company filings.

Key Financial MetricsHistorical Revenues $MM 800 600 400 $251 200 0 2005 2006 2007 2008 2009 $96 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 Attractive Revenue Mix (in $MM, LTM) EBITDA Margins 94% $343 $740 40% 30% 20% Organic IDOL Revenue Growth YoYAutonomy estimates organic IDOL growth by comparing prior period reported results with current period results (less any contribution from acquisitions and excluding services)

$503

Historical Margins Gross Margins

Services, $41Deferred Revenue, $250 5% 29% 29% IDOL Product, $249

100%80% 60% 40% 20% 0%

91%

89%

91% 45%

88% 49%

70% 60% 50%40% 30% 20% 10% 0%

29% 15%

34%

2005

2006

2007

2008

2009

13% OEM 2% Ongoing, OEM Dev, $115 $11

22% IDOL Cloud, $184

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Source: Company filings. Note: OEM Ongoing refers to sales of OEMs products. OEM Dev refers to a non-refundable, upfront development license fee.

Data Management Market DynamicsThe secular migration towards unstructured data has created a large and meaningful addressable opportunity in managing, regulating and monetizing the use of informationStructured Data Management 15% of total data(1) Size: $18bn Traditional structured data CAGR of 32.3% from 2006 2010 (IDC) Current RDBMS solutions only address ~20% of the total data management market Unstructured data is expected to grow twice as fast as structured data Unstructured Data Management 85% of total data(1) Size: $20bn (email, video, voice, etc) Unstructured data CAGR of 63.7% from 2006 2010 (IDC)

Power: Manage and Search(~40% of 2009 Revenue)

Protect: Legal and Compliance(~40% of 2009 Revenue)

Promote: Marketing(~20% of 2009 Revenue) U.S. behaviorally targeted online advertising spending(2) $MM$5,000 $4,000 $4,400

While enterprises only create 20% of all data, Data needing protection in 2020 is the they need to manage transmission, storage, size of the entire digital universe in 2018 security and compliance for more than 85% of it EB (Exabytes)

User generated content ~900 EB (Exabytes)

Enterprise touch content ~960 EB

18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

Data Needing Protection Data Actually Protected

$3,000 $2,000 $1,000 $0 $525 $775 $1,100 $1,700

$2,700

Overlap ~600 EB

Enterprise generated content ~240 EB

2010: ~1,200 EB

2010

2012

2014

2016

2018

2020

2007

2008

2009

2010

2011

2012

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Source: (1) (2)

Company filings, IDC, Industry research. Bank of America Merrill Lynch estimates. Source: eMarketer. Refers to advertising displayed to a select audience whose interest or intentions are revealed by website or ISP tracking data, audience segmentation and/or predictive analysis; excludes ads targeted using adware.

Key Fundamental DifferentiatorsAutonomys IDOL Structured Probabilistic Engine (SPE) can be leveraged across verticals, functions and connectorsPower: Manage and Search Proliferation of unstructured information in enterprise IT Secular migration towards automation versus adding headcount to reduce operating expenditures

Protect: Legal and Compliance Proliferation and increasing complexity of data regulations Reputational risk and tougher sanctions for breaches

Promote: Marketing Rich media and content explosion Shift from cost per thousand impressions (CPM) to cost per action (CPA) advertising model Need to demonstrate ROI Multichannel Customer Mgmt Social Media Analysis Rich Media Management eCommerce Solutions Web Content Optimization

Drivers

Applications

Enterprise Search Business Process Management Business Intelligence Information Access

Real-time Policy Management Early Case Assessment E-mail and Audio Archiving Advanced eDiscovery Retention and Disposition

Growth

~100 customers standardized on IDOL Establishing pipes in core IT platforms builds defensibility 10-15% growth (of which OEMs growing at 20% plus YoY)

Early signs of second phase adoption Growth constant through recession and upturn 15-20% growth

Contribution geared to a recovery 15-25% growth

Commercial Leadership

IDOL solution universally recognized OEM reaches 95% of customers in market (~5% product penetration suggests significant growth opportunity)

Market leading solution Largest, most visible eDiscovery cases 87% of the Fortune 100 10 of the top 10 global banks 10 of the top 10 law firms Major government agencies

Produces tangible results Delta Air Lines sales: +$30MM LexisNexis e-mail clickthroughs: +103% Amnesty Intl donation clickthroughs:+157% Lenovo orders: +400 per week

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IDOL Software Business ModelGross margins over 90%, operating margins over 50%, 30% of revenue deferredBusiness Delivery Model License (~$850k ASP) Support & Maintenance (~15% p.a.) Typical sale 4 connectors, 4 functions 65% recurring revenue $MM$60

Illustrative Customer Over TimeOnce a decision has been taken to standardize, some customers have made upwards of 40 repeat purchases in Q310 > 65% sales were repeat

Standard Product

IDOL OEMs

400+ OEMs (~5 year deals) Royalty-based ~3% (no deferred revenue, 100% gross margin) 10-14 signed per quarter 35% year-on-year revenue growth Paid monthly and typically 3-year contracts Collected in arrears (no deferred revenue) The worlds largest private legally compliant cloud at over 17 Petabytes of data Mixture of traditional license and hosted revenues Timing of revenues varies per contract Some deferred revenues

$50

Rich Media Management

$2Policy Management

$5$2

$40 $5

$2Website

IDOL Cloud

Call Center

$30 $15Enterprise Search

$51 $20

Hybrid Model

Legal Hold

Appliance

New model focused on quick time to value, high return Archiving (Arcpliance) Email (DSmail) eDiscovery

$10

$20eDiscovery

$0

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Competitive PositioningData Management LeaderAUTONOMY LEADS THE DATA MANAGEMENT INDUSTRY WITH MEANING BASED COMPUTING Network Effects Technology and vendor agnostic nature of IDOL leads to increasing adoption by OEM vendors

Message Archiving Software (Forrester Wave)

Strength of Current Offering

Symantec CA Open Text