Software and Systems Quarterly Market Update

Software and SystemsQuarterly Market Update

Strictly Private and Confidential

June 2011

1

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

1995 2000 2005 2010Y/Ye

ar C

hang

e, b

y Q

uarte

r

0%

2%

4%

6%

8%

10%

12%

1990

1993

1996

1999

2002

2005

2008

2011

Macroeconomic Conditions – Effect on Technology Markets

Changes in Real GDP and IT Investment(1)

Unemployment(3)

Recessions

IT spending remains highly correlated to economic growth

On average from 1989 through 2010, changes in IT spending outpaced changes in GDP growth – and were generally a leading indicator of economic improvement

U.S. Real GDP is forecasted to grow at an annual rate of 3.0% in 2011 and 3.6% in 2012(2)…but economists remain skeptical

Record cash balances and access to robust capital markets should continue to foster growth in productivity-enhancing corporate IT investments

(1) US Department of Commerce, Forrester Research, and CapitalIQ(2) RBC Economic Research, as of 6/2/11(3) US Bureau of Labor Statistics and National Bureau of Economic Research

The severity and duration of the most recent recession left unemployment higher than either of the two prior downturns

Unemployment hit a high of 10.1% in October 2009 and has since mildly abated, to 9.1% in May 2011

Recent concerns pertaining to a potential double-dip recession are centered on the stubbornly high unemployment rate

Recession Length Unemployment RateBeginning (months) Beginning End

Jul '90 8 5.5% 7.8%

Mar '01 8 4.3% 6.3%

Dec '07 19 4.9% 9.6%

% Change in Real GDP % Change in IT Investment

Une

mpl

oym

ent R

ate

2

$8,150$17,250

$25,300 $23,350 $24,700 $22,400$15,336

$5,920

$14,132$8,637

$17,773$9,162

$40,604$33,397

$15,454

$5,407

$23,861

$17,584

$13,963$18,153

$2,636

$5,150

$7,143

$3,894

$53,040

$73,476

$42,544

$78,053$74,719

$57,522

2006 2007 2008 2009 2010 2011 YTD

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Jan-00 Apr-01 Jul-02 Oct-03 Jan-05 Apr-06 Jul-07 Oct-08 Jan-10 Apr-11

Yiel

d

Favorable interest rates will likely lead to record corporate debt issuance in 2011

Debt Capital Markets Conditions

Source: ML Index System, Bloomberg, S&P Leveraged Commentary & Data, and CapitalIQ(1) Debt issuance through 4/30/11

IG Secondary Spread Performance Annual Technology Debt Issuance by Type($ in millions)

Investment Grade LoansHigh Yield Convertible Notes

(1)

BBB Index (%) BB Index (%) 3-Month LIBOR (%) 10 Year Treasury Rate

0

100

200

300

400

500

600

700

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Spre

ad (b

ps)

IG Technology

IG Corporates

Historically Low Interest RatesDebt Market Commentary

The investment grade market is off to a robust start in 2011 with over $400bn in supply priced across the corporate, financial, and SSAsectors in Q1’2011

Similarly, a strong pace of issuance in the leveraged finance and high yield markets has continued from 2010 to 2011 YTD given strong M&A activity and the refinancing of debt issued before the crisis

Convertible bond issuance is on track to surpass 2010 levels, asissuers opportunistically issue equity at premiums to improved stock market values

In general, historically low interest rates continue to power the debt markets

33

Recent Technology Stock Price Performance

Source: Factset as of 05/31/2011Note: Based on RBC’s total universe of 90 public software & systems companies

Since the March 2009 market trough, technology stocks have outperformed the broader market

Performances since March 2009

Enterprise Applications 172%Infrastructure / Storage 155%SaaS 141%NASDAQ 95%S&P 500 75%Large Cap / Platform 71%IT Security 63%

Mar-09 May-09 Jul-09 Oct-09 Dec-09 Mar-10 May-10 Jul-10 Oct-10 Dec-10 Mar-11 May-1150

100

150

200

250

300

350 Performance Since: March 2009 YTDEnterprise Applications 203% 13%SaaS 182% 11%Infrastructure / Storage 163% 15%NASDAQ 106% 7%S&P 500 83% 7%Large Cap / Platform 69% 2%IT Security 40% 11%

44

Valuation Matrix: Revenue Growth vs. EBITDA Margin

Source: Company filings, press releases, RBC Capital Markets institutional research and other Wall Street sources. Companies based on consensus estimates from FactSet. Updated 06/04/2011.

Higher growth companies continue to receive richer multiples

Revenue Growth CY'10 – CY'11E<5% 5% - 10% 10% - 20% >20% Median

>25%

3 companies

MCRO-GB, SGE-GB, TrendMicro

Median EV/Revenue: 2.5xMedian EV/EBITDA: 8.1x

11 companies

BMC, CA, PRGS, ADBE, SOW-DE, MSFT, SYMC, WBSN, VRNT, SNPS,

CSCO


21 companies

CTXS, NTCT, RHT, TIBX, AU-GB, OTEX, INFA, TDC, INTU, JDAS,

ORCL, CHKP, ZIXI, VRSN, CNQR, LOGM, IL, DSY-FR, ADSK, AVV-GB,

EMC


8 companies

VMW, SWI, SAP, JCOM, LPSN, AAPL, GOOG, OPEN


EV/Revenue: 3.7xEV/EBITDA: 11.1x

15%

- 25

%

1 companies

BCSI


4 companies

CPWR, MANH, IBM, MENT


14 companies

CVLT, QSFT, BLKB, CSU, MCRS, RADS, FIRE, ULTI, CKSW, ARBA,

BBBB, VOCS, PMTC, CDNS


13 companies

PRO, PROJ, CRM, FTNT, KNXA, TLEO, RP, ATHN, CTCT, TRAK, SQI,

NTAP, MKTG



<15%

5 companies

PVSW, QTM, CDCS, DELL, HPQ


5 companies

FALC, AMSWA, SAAS, RTLX-IL, SABA


8 companies

GUID, MSTR, AZPN, QADB, CALD, N, DMAN, CNVO


8 companies

PEGA, QLIK, RNOW, VDSI, CYDE, SFSF, CSOD, SPSC



Median EV/Revenue: 2.2xEV/EBITDA: 8.1x




CY'

11E

EB

ITD

A M

argi

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5

Valuation Metrics, by Business Model and by Company Size

3.7x

3.0x2.7x

3.3x

< $250 $250 - $500 $500 - $999 $1,000+

21.2x

13.6x

11.2x9.8x

< $250 $250 - $500 $500 - $999 $1,000+

11.2x

24.6x

License / Up Front Models SaaS / Subscription Models

By Business Model

By Company Size (LTM Revenue)

EV / ’11E Revenue EV / ’11E EBITDA

($ in millions)

Source: CapitalIQ and Company filings as of 05/31/2011. Please see Appendix for companies included in the calculations

EV / ’11E Revenue EV / ’11E EBITDA

The market continues to favor high-growth SaaS and recurring

revenue subscription models

Larger companies are not necessarily rewarded with higher valuation multiples

2.7x

5.0x


6

19.8x 22.3x

12.8x

20.6x

32.2x

IT Security Infrastructure / Storage Large-Cap / Platform Enterprise Applications SaaS

Valuation Metrics, by Sub-Segment

Source: FactSet and Company filings as of 05/31/2011. Please see Appendix for companies included in the calculations (1) Reflects Price/Free Cash Flow for SaaS companies, where Free Cash Flow is defined as cash flow from operations less capital expenditures

EV / ’11E Revenue

2011E Median: 2.5x

EV / ’11E EBITDA

2011E Median: 13.2x

Price / ’11E Earnings or Price / ’11E FCF(1)

2011E Median: 20.2x

(1)

2.5x 3.0x 2.5x 2.3x

5.0x


19.5x

13.2x

8.7x11.5x

24.6x


7

18.2%15.5%

12.9% 12.0%

< $250 $250 - $500 $500 - $999 $1,000+

12.9%

21.6%


2010 – 2011E Revenue Growth by Company Size

2011E Median: 14.2%

Revenue Growth, by Business Model and by Company Size

13.4%15.2%

8.0%

12.3%

21.6%


2010 – 2011E Revenue Growth by Sub-Segment

2011E Median: 13.4%

(1)

Increasing adoption rates of SaaS-based

solutions, particularly by small- and medium-sized businesses, continue to

drive higher growth estimates for SaaS

companies than other segments

As expected, larger companies with greater scale generally grow at

lower rates

Source: FactSet and Company filings as of 05/31/2011. Please see Appendix for companies included in the calculations

2010 – 2011E Revenue Growth by Business Model

8

20.5x

23.0x23.8x 23.9x 23.4x 23.2x 22.7x

25.7x27.0x 26.9x 26.8x

28.8x 28.5x29.2x

33.0x

27.0x

31.2x

24.8x

20.0x

22.7x21.4x

24.4x23.7x

26.6x26.0x

May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11

Historic SaaS Valuation Multiples

(1) Based on forward twelve months Wall Street consensus estimates. Free cash flow defined as cash flow from operations less capital expendituresSource: Company filings, press releases, and other Wall Street research. Please see Appendix for companies included in the calculationsEnterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents

Median EV / FTM Rev. Multiples (1)

Market Cap / FCF Multiples (1)

SaaS-based models are trading at or near two-year highs

relative to both revenue and free cash flow

Investors continue to place premium value on SaaS

companies due to higher growth, recurring revenue and

strong operating leverage

Recent SaaS IPOs such as Responsys and Cornerstone

OnDemand have performed well

2.4x2.6x

2.7x

3.2x 3.1x2.9x

3.0x 3.1x3.3x

3.4x

4.0x 3.9x

4.3x 4.4x

4.1x

4.7x 4.7x

3.1x2.9x

3.9x

3.5x

2.7x2.8x2.8x2.8x

May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11

9

P&L Metrics, by Revenue Size

4.2%

14.5%

22.2%

< $250 million $250 - $999 million $1 billion +

14.3% 13.7%

11.5%


31.7%28.1%

21.5%


Source: CapitalIQ and company filings as of 05/31/2011. Please see Appendix for companies included in the calculations

LTM Operating Margin LTM Research & Development(% of Revenue)

LTM Sales & Marketing(% of Revenue)

LTM G&A(% of Revenue)

As expected, larger companies enjoy economies of scale,

resulting in operating margins correlated with company size

Economies of scale exist throughout the income statement but are most

apparent in sales & marketing and general & administrative

expenses, and less in research and development spend

14.6%

10.8%

5.2%


10

Technology M&A Trends

Technology M&A – Transactions Since 2006

Source: CapitalIQ1 2011 YTD is annualized as of 05/31/112 Ernst & Young, “Global technology M&A update,” 2011

$100.6B $50.0B$68.9B$76.1B$175.5B$140.4BVolume

MicrosoftIntelXeroxHPKKRAlcatelBuyer

SkypeMcAfeeACSEDSFirst DataLucentTarget

$8.5B$7.7B$8.8B$17.0B$28.7B$18.9BValue

Largest Transactions:

M&A activity accelerated in 2010– Technology shifts (sector convergence, cloud /

virtualization, mobility, social media)– Unprecedented cash balances, need for growth – Volatile IPO market for smaller tech companies– Representative 2010 transactions included:

• Intel entered security software market via purchase of McAfee ($7.7B )

• HP – Significant M&A activity, including storage (3PAR), smart phones (Palm), security (ArcSight)

• Oracle’s aim for CRM, retail and e-commerce unity with the purchase of Art Technology ($1.0B)

• SAP’s acquisition of Sybase ($5.8B)• Carlyle’s acquisition of CommScope ($3.9B)• Consolidation in the marketing analytics sector,

including IBM’s acquisition of Unica ($450M) and Teradata’s acquisition of Aprimo ($525M)

Trend continues in 2011– Tech Top 25 began the year with $530B in cash2

– Firms looking to expand into adjacent segments to supplement product portfolios

– Rising market valuations: stock valuable as currency, more expensive for buybacks – but rising valuation environment also gives smaller tech companies an exit opportunity through IPO

– PE firms have significant capital to deploy– Recent transactions (announced or closed) include:

• Attachmate’s acquisition of Novell ($2.2B)• Microsoft’s acquisition of Skype ($8.5B)• Apax Partners’ acquisitions of ERP players

Activant and Epicor (combined $2.0B)

Key M&A Themes

Number of transactions Median deal size ($M)

595619

473

343

472

404

167

$42$40$25$27$36$35

2006 2007 2008 2009 2010 2011 YTD

(1)

11

Technology M&A Consolidators

Source: Capital IQ, current as of 5/31/11

The desire for forward growth continues to be a key driver of M&A activity

Number of Acquisitions Since 2007 Selected Recent Transactions

14

13

17

16

12

14

11

3

10

7

8

4

3

2

3

11

17

12

6

5

5

2

6

2

3

6

5

3

3

7

9

8

8

6

7

5

7

1

3

5

1

2

3

3

30

15

3

8

11

7

4

9

5

7

3

7

4

6

2

14

1

3

1

2

3

7

4

3

3

2

3

1

2

1

68

49

48

45

37

36

32

25

25

22

21

21

15

11

14

0 20 40 60 80

Google

IBM

Microsoft

Oracle

HP

Cisco

EMC

Intel

Sungard

Dell

SAP

VMWare

Symantec

CA

McAfee

2007 2008 2009 2010 2011

GoogleSparkbuy, TalkBin, PushLife, Beatthatquote.com, Next New Networks, BeatThatQuote.com,

Widevine Technologies, ITA Software, Global IP Solutions, AdMob, reCAPTCHA, On2 IBM

Netezza, Blade Network, Unica, CastIron, Cognos, DataMirror, Exeros, ILOG, Lombardi, Ounce Labs, OpenPages, Platform Solutions, SPSS, Telelogic, Transitive Corp,

MicrosoftSkype, InterGrid, Canesta, AVIcode, 90 Degree Software, Danger, DATAllegro, FAST,

Greenfield Online, Komoku, Powerset, Zoomix Data MasteringOracle

Art Technology, Datanomic, BEA, GoldenGate Software, mValent, Primavera, Relsys International, Skywire, Sun Microsystems, Virtual Iron, Phase Forward, Amberpoint

HPPrintelligence, Vertica, 3Com, 3Par, ArcSight, Colubris, EDS, Exstream Software, IBRIX,

LeftHand, Neoware, Opsware, SPI Dynamics, TOWER, Palm, MelodeoCisco Systems

Newscale, Arch Rock, Jabber, Latigent, PostPath, Pure Digital, Pure Networks, Richard-Zeta Building Intelligence, Securent, Starent Networks, Tandberg, Tidal

EMCEvent Robot, Shavlik Tech, SlideRocket, Isilon Systems, Art Technology Group, Archer, Conchango, Configuresoft, Data Domain, Document Sciences, FastScale Technology,

IntelSySDSoft, Infineon (Wireless Solutions Business), McAfee, Wind River Systems, Freescale

Semiconductor (French Division), Virtutech, RapidMindSungard

Stratix Consulting, Valuelink, PredictiveMetrics, GL TRADE, Fox River Execution Technology, Inmatrix Technology, Genix Systems, Delphi Technologies, Advanced Portfolio Technologies

DellComepellent Technologies, ASAP, EqualLogic, Everdream, MessageOne, Silverback

Technologies, Zing Systems, Perot, KACE Networks, ExanetSAP

Analysis and Forecasting AG, Business Objects, Outlooksoft, SAF Simulation, Sybase, Triversity, TechniDATA

VMWarePropero, B-Hive, Blue Lane, Trango Virtual Processors, Tungsten Graphics, SpringSource,

Zimbra, RTO, IT Management of EMCSymantec

Clearwell Systems,Altiris, Vontu, AppStream, SwapDrive, nSuite, MessageLabs, Mi5, GuardianEdge, PGP, VeriSign

CABase Technologies, Optinuity, ID Focus, Eurekify, Orchestria, Cassatt, NetQoS, Oblicore,

3tera, Nimsoft, 4Base Technology, Arcot SystemsMcAfee

Sentrigo, tenCube, TD Securities, MX Logic, Solidcore Systems, Endeavor Security, Secure Computing, Lockdown Networks, Reconnex

12

$56

$82 $79 $73

$189$209

$153

$94

$7 $13 $10 $7 $5

$38$26 $18

2004 2005 2006 2007 2008 2009 2010 2011

108 6

2 31

7

1619

22

1215

5

11

5 10

4

73

4

1

2

32

4

1

2

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

YTD 2011 Median LTM Revenue & EBITDA at Time of IPO

Technology IPO Market

The technology sector is leading a rebounding IPO market, with 2011 issuance outpacing 2010

Median company size and profitability levels remain high relative to historical levels

IPO activity continued to rebound in 2010 as investors deployed previously-sidelined capital – and the momentum has continued in 2011

SaaS and social median / internet businesses dominate the IPO backlog

$1,834

$5,946$4,703

$3,952

$10,139

$5,074

$7,570

$3,655

$797

14

36

28

33

57

4

45

2112

2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: DealogicExcluding IPOs less than $15.0 million(1) YTD figure, through May 2011

YTD 2011 Technology IPO Volume

Median LTM Revenue ($M) Median LTM EBITDA ($M)

# of DealsDeal Value

($ in millions)

($ in millions)

Momentum in the equity capital markets has continued in 2011, with twenty-one IPOs raising more than $3.6 billion YTD through May

(1)

Key Trends

(1)

Technology IPO Filings & Withdrawals

Filed Deals Withdrawn Deals

(1)

Appendix

14

IT Security Public Comparables

US$Price % of 52 Market Ent. EV / Revenue EV / EBITDA Price / EPS

Company Ticker 2011/05/31 Week High Cap. (1) Debt Cash Value (2) 2010A 2011E 2012E 2010A 2011E 2012E 2010A 2011E 2012E

IT SecuritySymantec SYMC $19.55 95% $14,936 $2,561 $2,452 $15,045 2.5x 2.3x 2.2x 9.0x 6.8x 6.2x 24.8x 12.6x 11.1xCheck Point CHKP $54.92 98% $12,019 $0 $1,083 $10,936 10.0x 8.9x 8.1x 18.4x 14.9x 13.5x 25.8x 19.8x 17.7xTrend Micro Inc. 4704 $30.40 89% $4,060 $1 $1,439 $2,622 2.4x 2.2x 2.1x 7.6x 6.5x 5.9x 28.1x 21.6x 19.6xFortinet Inc FTNT $24.25 98% $2,172 $0 $302 $1,871 5.8x 4.7x 4.0x 30.6x 20.6x 16.6x NM NM NMBlue Coat Systems BCSI $22.95 71% $1,204 $79 $350 $933 1.9x 1.9x 1.8x 9.9x 10.0x 9.9x 17.5x 19.6x 18.7xWebsense WBSN $24.85 89% $1,009 $63 $79 $993 3.0x 2.7x 2.6x 14.5x 10.4x 10.4x NM 16.1x 14.7xSourcefire FIRE $26.71 81% $795 $0 $54 $740 5.7x 4.8x 4.0x 42.0x 32.0x 21.9x 38.6x NM 38.9xVASCO Data Security VDSI $11.94 81% $462 $0 $86 $376 3.5x 2.6x 2.4x 25.3x 22.3x 18.9x 42.3x 37.1x 29.4xZix ZIXI $3.81 78% $274 $0 $25 $250 7.6x 6.4x 5.4x 38.1x 19.5x 15.6x 29.3x 24.7x 19.4xGuidance Software GUID $8.03 92% $203 $0 $25 $178 1.9x 1.8x 1.6x NM NM 46.6x NM NM 31.9xAbsolute Software *ABT $4.54 98% $202 $0 $31 $171 2.6x 2.2x 2.0x NM 21.7x 22.6x NM NM NMCyberDefender Corporation CYDE $1.84 38% $62 $9 $6 $65 1.4x 0.9x NA NM 33.5x NA NM NM NA

Median: 2.8 x 2.5 x 2.4 x 18.4 x 19.5 x 15.6 x 28.1 x 19.8 x 19.4 xMean: 4.0 x 3.5 x 3.3 x 21.7 x 18.0 x 17.1 x 29.5 x 21.6 x 22.4 x

Source: Company filings, press releases, RBC Capital Markets institutional research, and other Wall Street sources. NM = Not Meaningful. NA = Not Available(1) Based on fully diluted shares outstanding using the Treasury Stock Method (TSM)(2) Enterprise Value = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents

(Figures in Millions, except per share data)

MRQ EBITDARevenue Revenue Growth Gross EBITDA Margin EPS 5yr EPS

Company 2010A 2011E 2012E '10-'11 '11-'12 Margin 2010A 2011E 2012E 2010A 2010A 2011E 2012E Growth

IT SecuritySymantec $6,048 $6,523 $6,926 8% 6% 85% $1,680 $2,215 $2,431 28% $0.79 $1.56 $1.76 9%Check Point $1,098 $1,228 $1,349 12% 10% 89% $594 $736 $809 54% $2.13 $2.78 $3.10 11%Trend Micro Inc. $1,088 $1,204 $1,272 11% 6% 82% $346 $401 $447 32% $1.08 $1.41 $1.55 NAFortinet Inc $325 $399 $463 23% 16% 75% $61 $91 $113 19% $0.13 $0.35 $0.42 18%Blue Coat Systems $500 $480 $506 (4%) 6% 78% $95 $93 $95 19% $1.31 $1.17 $1.23 12%Websense $333 $364 $380 9% 4% 83% $69 $95 $95 21% $0.43 $1.54 $1.69 15%Sourcefire $131 $153 $185 17% 21% 79% $18 $23 $34 13% $0.69 $0.46 $0.69 22%VASCO Data Security $108 $144 $158 33% 10% 62% $15 $17 $20 14% $0.28 $0.32 $0.41 NAZix $33 $39 $46 18% 19% 81% $7 $13 $16 20% $0.13 $0.15 $0.20 23%Guidance Software $92 $101 $111 10% 9% 68% $0 $1 $4 0% ($0.20) $0.15 $0.25 NAAbsolute Software $66 $76 $85 15% 11% 72% $2 $8 $8 3% ($0.14) ($0.04) ($0.02) NACyberDefender Corporation $46 $71 NA 55% NA 54% ($37) $2 NA NM ($1.49) ($0.27) NA NA

Median: 13% 10% 78% 19% 15%Mean: 17% 11% 76% 20% 16%

15

IT Management / Infrastructure / Storage Public Comparables





IT Management / Infrastructure / StorageVMWare VMW $97.32 98% $43,688 $450 $3,662 $40,476 14.2x 11.2x 9.4x NM 30.8x 25.6x NM 49.3x 41.6xCitrix Systems CTXS $87.62 99% $17,059 $8 $930 $16,137 8.6x 7.5x 6.6x 35.1x 23.4x 20.6x NM 36.3x 31.8xCA CA $23.40 91% $11,855 $1,555 $2,589 $10,821 2.4x 2.3x 2.2x 6.8x 6.1x 5.8x 16.0x 11.2x 10.3xBMC Software BMC $55.83 100% $10,201 $352 $1,689 $8,864 4.4x 4.0x 3.7x 12.9x 9.3x 8.5x 22.5x 17.5x 15.8xTeradata Corporation TDC $55.79 99% $9,770 $300 $778 $9,292 4.8x 4.1x 3.8x 19.6x 16.2x 13.7x 31.6x 25.2x 22.0xRed Hat RHT $43.60 89% $8,868 $0 $861 $8,007 9.1x 7.7x 6.7x 43.2x 25.7x 22.3x NM 46.5x 39.7xInformatica INFA $58.66 99% $7,479 $0 $553 $6,927 10.7x 9.0x 7.8x 45.2x 32.6x 27.2x NM 43.2x 36.1xAutonomy AU-GB $29.58 97% $7,303 $771 $1,068 $7,006 8.0x 6.9x 6.0x 17.0x 14.3x 11.9x 33.3x 24.4x 19.9xTibco Software TIBX $28.09 91% $5,162 $41 $262 $4,941 6.5x 5.7x 5.1x 28.8x 19.6x 17.3x NM 30.5x 26.1xSoftware AG SOW-DE $55.75 87% $4,757 $378 $204 $4,931 3.3x 2.9x 2.7x 11.9x 9.8x 9.0x 20.5x 15.3x 13.8xOpen Text OTEX $65.25 97% $3,846 $299 $238 $3,907 4.2x 3.6x 3.2x 12.7x 12.0x 10.2x 30.7x 15.0x 13.0xQlik Technologies QLIK $33.29 100% $3,078 $0 $177 $2,901 12.8x 9.5x 7.6x NM NM 42.6x NM NM NMCompuware Corp. CPWR $10.19 83% $2,282 $0 $82 $2,200 2.4x 2.2x 2.0x 12.1x 9.1x 8.0x 20.9x 17.8x 14.7xCommvault Systems CVLT $41.34 98% $2,070 $0 $194 $1,877 6.3x 5.3x 4.7x 47.1x 29.9x 24.9x NM 49.0x 41.6xQuest Software QSFT $22.70 80% $2,032 $33 $357 $1,708 2.2x 2.0x 1.8x 10.4x 8.8x 7.6x 21.5x 16.6x 13.5xSolarWinds SWI $24.65 99% $2,006 $0 $143 $1,863 12.2x 9.9x 8.2x 27.6x 20.0x 16.7x 40.1x 28.2x 23.8xProgress Software PRGS $27.07 86% $1,908 $1 $371 $1,538 2.9x 2.7x 2.5x 10.0x 7.8x 6.6x 33.2x 15.1x 13.5xMicroStrategy Inc. MSTR $146.19 98% $1,649 $0 $203 $1,446 3.2x 2.7x 2.4x 22.8x 26.3x 19.6x 39.3x NM 32.6xPegasystems PEGA $37.35 90% $1,409 $0 $87 $1,322 3.9x 3.0x 2.6x NM 21.4x 17.2x NM 31.9x 25.6xMicro Focus International plc MCRO-GB $6.17 76% $1,221 $73 $33 $1,261 2.9x 2.9x 2.9x 7.8x 8.0x 7.8x 11.6x 11.7x 11.2xNetscout Systems NTCT $23.20 83% $1,018 $68 $201 $886 3.1x 2.8x 2.5x 13.8x 10.4x 8.7x 29.9x 20.1x 17.6xQuantum Corp. QTM $3.07 69% $751 $280 $91 $940 1.4x 1.4x 1.3x 13.6x NA NA NM 14.6x 12.6xFalconstor Software FALC $4.40 85% $205 $0 $42 $163 2.0x 1.8x 1.6x NM NA NA NM NM NMGuidance Software GUID $8.03 92% $203 $0 $25 $178 1.9x 1.8x 1.6x NM NM 46.6x NM NM 31.9xInfoVista SA IFV-FR $7.04 93% $116 $0 $37 $79 1.3x 1.1x 1.0x 16.3x 8.4x 7.3x 29.9x 19.6x 15.3xPervasive Software PVSW $6.45 88% $109 $0 $37 $71 1.5x 1.4x 1.3x 13.7x 10.4x 7.9x 37.2x 26.9x 20.4xVersant VSNT $12.70 89% $41 $0 $25 $16 1.0x NA NA 5.9x NA NA 26.3x NA NAUnify UNFY $2.50 66% $36 $27 $4 $59 1.4x NA NA 9.6x NA NA NM NA NA


16

IT Management / Infrastructure / Storage Public Comparables (cont’d)(Figures in Millions, except per share data)



IT Management / Infrastructure / StorageVMWare $2,857 $3,626 $4,322 27% 19% 82% $689 $1,312 $1,579 24% $0.84 $1.97 $2.34 25%Citrix Systems $1,875 $2,165 $2,454 15% 13% 91% $460 $688 $785 25% $1.46 $2.42 $2.76 16%CA $4,469 $4,703 $4,948 5% 5% NA $1,591 $1,767 $1,879 36% $1.46 $2.10 $2.28 11%BMC Software $1,994 $2,204 $2,391 11% 8% 76% $686 $952 $1,047 34% $2.48 $3.20 $3.53 20%Teradata Corporation $1,936 $2,246 $2,473 16% 10% 54% $475 $575 $677 25% $1.77 $2.22 $2.54 13%Red Hat $877 $1,037 $1,193 18% 15% 83% $186 $312 $359 21% $0.51 $0.94 $1.10 20%Informatica $650 $769 $890 18% 16% 83% $153 $212 $254 24% $0.83 $1.36 $1.62 19%Autonomy $870 $1,010 $1,173 16% 16% 88% $413 $490 $589 47% $0.89 $1.21 $1.49 NATibco Software $764 $873 $974 14% 12% 71% $172 $252 $286 22% $0.46 $0.92 $1.07 12%Software AG $1,481 $1,704 $1,811 15% 6% 58% $414 $502 $547 28% $2.71 $3.64 $4.04 NAOpen Text $938 $1,091 $1,211 16% 11% 73% $309 $325 $381 33% $2.12 $4.36 $5.01 15%Qlik Technologies $227 $305 $381 35% 25% 88% $30 $44 $68 13% $0.21 $0.33 $0.51 38%Compuware Corp. $909 $989 $1,079 9% 9% 68% $182 $243 $275 20% $0.49 $0.57 $0.70 8%Commvault Systems $299 $352 $403 18% 15% 87% $40 $63 $75 13% $0.48 $0.84 $0.99 21%Quest Software $767 $866 $962 13% 11% 88% $164 $193 $226 21% $1.06 $1.37 $1.68 NASolarWinds $152 $189 $227 24% 20% 94% $68 $93 $112 44% $0.61 $0.88 $1.04 20%Progress Software $531 $570 $616 7% 8% 85% $153 $197 $232 29% $0.81 $1.80 $2.01 15%MicroStrategy Inc. $455 $536 $604 18% 13% 73% $63 $55 $74 14% $3.72 $2.83 $4.48 21%Pegasystems $337 $440 $514 31% 17% 61% $16 $62 $77 5% ($0.16) $1.17 $1.46 23%Micro Focus International plc $433 $434 $441 0% 2% 86% $162 $158 $161 37% $0.53 $0.53 $0.55 NANetscout Systems $284 $319 $361 12% 13% 79% $64 $86 $102 23% $0.78 $1.15 $1.32 16%Quantum Corp. $672 $685 $725 2% 6% 42% $69 NA NA 10% $0.01 $0.21 $0.24 18%Falconstor Software $83 $91 $100 9% 10% 73% ($12) NA NA NM ($0.78) ($0.18) $0.02 NAGuidance Software $92 $101 $111 10% 9% 68% $0 $1 $4 0% ($0.20) $0.15 $0.25 NAInfoVista SA $60 $71 $78 18% 10% 79% $5 $9 $11 8% $0.24 $0.36 $0.46 NAPervasive Software $46 $49 $54 7% 9% 86% $5 $7 $9 11% $0.17 $0.24 $0.32 NAVersant $16 NA NA NA NA 87% $3 NA NA 17% $0.48 NA NA NAUnify $42 NA NA NA NA 72% $6 NA NA 15% ($0.02) NA NA NA

Median: 15% 11% 79% 22% 18%Mean: 15% 12% 77% 22% 18%


17

Large-Cap / Platform Public Comparables



Large-Cap / PlatformMicrosoft MSFT $25.01 85% $210,965 $13,165 $48,717 $175,413 2.6x 2.4x 2.3x 6.0x 5.6x 5.2x 10.4x 9.4x 8.5xInternational Business Machines IBM $168.93 97% $209,848 $30,383 $13,279 $226,952 2.3x 2.1x 2.1x 9.6x 8.7x 8.7x 14.7x 12.8x 12.8xOracle ORCL $34.22 94% $178,585 $15,153 $24,355 $169,383 5.2x 4.5x 4.2x 12.3x 9.7x 8.8x 24.8x 14.9x 13.5xCisco CSCO $16.80 65% $92,870 $30,383 $13,279 $109,974 2.6x 2.5x 2.5x 10.5x 8.7x 8.7x 12.3x 10.2x 10.2xHewlett Packard HPQ $37.38 76% $83,406 $30,383 $13,279 $100,510 0.8x 0.8x 0.8x 5.6x 5.2x 5.2x 9.3x 7.3x 7.3xSAP SAP $62.17 91% $73,895 $5,470 $6,349 $73,016 4.4x 3.6x 3.3x 13.5x 10.5x 9.4x 30.9x 16.4x 14.5xEMC EMC $28.47 99% $60,862 $4,256 $5,594 $59,524 3.5x 3.0x 2.7x 15.1x 11.2x 10.2x 32.2x 19.2x 16.5x






Large-Cap / PlatformMicrosoft $66,690 $72,008 $77,188 8% 7% 76% $29,159 $31,191 $33,765 44% $2.40 $2.67 $2.93 10%International Business Machines $99,870 $105,716 $105,716 6% 0% 44% $23,622 $26,007 $26,007 24% $11.52 $13.18 $13.18 11%Oracle $32,780 $37,525 $40,520 14% 8% 77% $13,817 $17,416 $19,286 42% $1.38 $2.30 $2.53 16%Cisco $42,164 $44,199 $44,199 5% 0% 62% $10,467 $12,642 $12,642 25% $1.37 $1.65 $1.65 9%Hewlett Packard $126,465 $130,418 $130,418 3% 0% 25% $17,830 $19,210 $19,210 14% $4.00 $5.11 $5.11 9%SAP $16,475 $20,134 $22,016 22% 9% 65% $5,405 $6,928 $7,741 33% $2.01 $3.80 $4.30 14%EMC $17,015 $19,810 $22,215 16% 12% 59% $3,935 $5,292 $5,862 23% $0.88 $1.49 $1.73 16%

Median: 8% 7% 62% 25% 11%Mean: 11% 5% 58% 29% 12%

18

Enterprise Applications Public Comparables





Enterprise ApplicationsAutodesk ADSK $42.98 93% $10,020 $0 $1,274 $8,746 4.6x 4.0x 4.0x 25.2x 15.5x 15.5x 48.3x 26.0x 26.0xDassault Systèmes DSY-FR $84.98 98% $10,299 $405 $1,414 $9,290 4.5x 3.7x 3.7x 15.9x 12.0x 12.0x 35.3x 21.0x 21.0xSage Group plc SGE-GB $4.78 97% $6,288 $303 $185 $6,405 2.8x 2.6x 2.5x 10.1x 9.6x 9.0x 17.6x 14.3x 13.2xAnsys ANSS $57.37 100% $5,473 $154 $550 $5,077 8.7x 7.7x 7.7x 18.1x 11.8x 11.8x 34.9x 24.2x 24.2xMICROS Systems, Inc. MCRS $51.06 96% $4,319 $6 $749 $3,576 3.7x 3.4x 3.0x 17.3x 14.2x 12.3x 33.0x 26.0x 22.1xParametric Technology PMTC $23.29 92% $2,806 $0 $260 $2,546 2.5x 2.2x 2.2x 19.6x 10.7x 10.7x NM 18.1x 18.1xAveva Group AVV-GB $27.44 98% $1,873 $0 $227 $1,646 6.4x 5.3x 5.3x 19.5x 16.1x 16.1x 35.3x 26.5x 26.5xConstellation Software Inc. CSU-CA $77.15 100% $1,635 $86 $58 $1,663 2.6x 2.3x 2.1x 10.2x 11.2x 10.2x 39.1x 14.4x 13.3xAspen Technology AZPN $16.55 97% $1,616 $56 $151 $1,521 8.6x 7.1x 5.6x NM NM NM NM NM NMMentor Graphics MENT $13.41 81% $1,471 $281 $190 $1,562 1.8x 1.6x 1.6x 14.7x 7.6x 7.6x NM 13.6x 13.6xJDA Software JDAS $33.03 94% $1,419 $273 $226 $1,466 2.4x 2.2x 2.0x 9.9x 8.1x 7.3x NM 15.5x 13.2xBlackbaud BLKB $28.15 93% $1,226 $0 $24 $1,201 3.7x 3.2x 2.9x 21.4x 13.6x 12.3x 41.4x 26.3x 23.7xRadiant Systems Inc. RADS $21.00 99% $911 $14 $89 $836 2.4x 2.2x 1.9x 16.6x 13.6x 11.3x 35.7x 20.6x 17.9xManhattan Associates MANH $35.95 97% $823 $0 $118 $706 2.4x 2.2x 1.9x 13.8x 10.4x 8.6x 28.8x 19.0x 16.9xDeltek PROJ $7.45 86% $486 $197 $70 $613 2.2x 1.7x 1.6x 23.0x 9.8x 7.6x NM 22.9x 14.7xRetalix Ltd. RTLX-IL $14.64 92% $354 $5 $140 $219 1.1x 1.0x 0.9x 12.0x NA NA 33.3x 19.1x 15.0xClickSoftware Technologies CKSW $10.66 97% $352 $0 $51 $300 4.2x 3.6x 3.1x 24.5x 16.6x 14.0x 37.8x 22.4x 17.3xSaba SABA $9.89 93% $312 $1 $32 $281 2.5x 2.3x 2.0x NM NM 38.6x NM NM NMCallidus Software CALD $5.89 82% $207 $3 $29 $181 2.5x 2.3x 2.0x NM 35.7x 18.2x NM NM 33.7xAmerican Software AMSWA $7.68 96% $207 $0 $42 $165 2.1x 1.9x 1.7x 12.7x NA NA 33.7x 24.8x 20.2xQAD QADB $10.36 58% $185 $16 $67 $135 0.6x 0.6x 0.5x 10.6x 6.0x NA NM 15.3x 12.5xCDC Software Corporation CDCS $4.83 52% $138 $16 $45 $109 0.5x 0.5x 0.5x 2.6x 3.8x 3.3x 21.4x 6.7x 5.4x


19

Enterprise Applications Public Comparables (cont’d)(Figures in Millions, except per share data)



Enterprise ApplicationsAutodesk $1,916 $2,171 $2,171 13% 0% 91% $348 $566 $566 18% $0.89 $1.65 $1.65 16%Dassault Systèmes $2,069 $2,498 $2,498 21% 0% 86% $586 $774 $774 28% $2.41 $4.05 $4.05 NASage Group plc $2,253 $2,473 $2,593 10% 5% 93% $636 $669 $715 28% $0.27 $0.33 $0.36 NAAnsys $580 $662 $662 14% 0% 88% $280 $429 $429 48% $1.64 $2.37 $2.37 14%MICROS Systems, Inc. $958 $1,058 $1,183 10% 12% 56% $207 $251 $291 22% $1.55 $1.96 $2.31 18%Parametric Technology $1,018 $1,168 $1,168 15% 0% 70% $130 $237 $237 13% $0.16 $1.29 $1.29 13%Aveva Group $258 $309 $309 20% 0% 80% $85 $102 $102 33% $0.78 $1.04 $1.04 NAConstellation Software Inc. $631 $733 $788 16% 8% 32% $163 $149 $163 26% $1.97 $5.37 $5.78 NAAspen Technology $177 $214 $270 21% 26% 80% ($78) ($32) $15 NM ($0.87) ($0.37) ($0.03) 13%Mentor Graphics $891 $996 $996 12% 0% 86% $106 $207 $207 12% $0.21 $0.99 $0.99 15%JDA Software $617 $681 $747 10% 10% 60% $148 $180 $200 24% $0.42 $2.13 $2.50 NABlackbaud $327 $370 $407 13% 10% 58% $56 $88 $98 17% $0.68 $1.07 $1.19 10%Radiant Systems Inc. $346 $385 $431 11% 12% 48% $50 $61 $74 15% $0.59 $1.02 $1.17 14%Manhattan Associates $297 $325 $362 10% 11% 55% $51 $68 $82 17% $1.25 $1.90 $2.13 NADeltek $280 $356 $395 27% 11% 62% $27 $62 $80 10% ($0.08) $0.33 $0.51 10%Retalix Ltd. $207 $227 $250 9% 10% 42% $18 NA NA 9% $0.44 $0.77 $0.98 NAClickSoftware Technologies $71 $83 $97 18% 16% 61% $12 $18 $21 17% $0.28 $0.48 $0.62 38%Saba $113 $123 $138 9% 12% 64% $5 $3 $7 4% ($0.07) $0.02 $0.07 25%Callidus Software $71 $80 $89 13% 11% 40% ($6) $5 $10 NM ($0.40) $0.07 $0.18 20%American Software $79 $87 $95 10% 9% 51% $13 NA NA 16% $0.23 $0.31 $0.38 NAQAD $217 $242 $263 12% 9% 56% $13 $23 NA 6% $0.19 $0.68 $0.83 NACDC Software Corporation $213 $223 $237 5% 6% 53% $41 $29 $33 19% $0.23 $0.73 $0.90 -14%

Median: 12% 9% 60% 17% 14%Mean: 14% 8% 64% 19% 15%


20

SaaS Public Comparables

Source: Company filings, press releases, RBC Capital Markets institutional research, and other Wall Street sources. NM = Not Meaningful. NA = Not Available(1) Based on fully diluted shares outstanding using the Treasury Stock Method (TSM)(2) Enterprise Value = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents(3) Free Cash Flow = Cash Flow from Operations - Capital Expenditures. Source: FactSet Consensus


US$Price % of 52 Market Ent. EV / Revenue EV / EBITDA Price / EPS P / FCF (3)

Company Ticker 05/31/11 Week High Cap. (1) Debt Cash Value (2) 2010A 2011E 2012E 2010A 2011E 2012E 2010A 2011E 2012E 2010A 2011E

SaaSSalesforce.com CRM $152.26 99% $21,660 $492 $497 $21,655 13.3x 10.2x 8.3x NM NM 39.7x NM NM NM NM NM Ariba ARBA $33.54 94% $3,249 $0 $198 $3,051 8.0x 6.8x 5.9x 37.9x 30.0x 21.9x 43.1x 38.8x 29.9x NM 45.7xSuccessFactors SFSF $35.07 87% $2,950 $0 $367 $2,582 12.5x 9.2x 7.7x NM NM NM NM NM NM NM NM Concur CNQR $49.97 86% $2,740 $234 $567 $2,407 7.8x 6.5x 5.4x 27.8x 24.1x 18.1x NM NM 43.1x 45.3x 44.2xNetSuite N $37.74 99% $2,672 $0 $112 $2,560 13.3x 11.1x 9.4x NM NM NM NM NM NM NM NM OpenTable OPEN $88.33 74% $2,246 $0 $55 $2,190 22.1x 14.9x 11.4x NM 39.9x 27.9x NM NM NM NM NM RealPage RP $29.45 86% $2,262 $63 $124 $2,201 11.7x 8.6x 7.0x NM 37.7x 28.1x NM NM NM NM NM Athenahealth ATHN $44.77 89% $1,624 $8 $103 $1,529 6.2x 4.9x 3.9x 30.0x 25.2x 18.8x NM NM 41.0x NM NM Taleo TLEO $37.33 98% $1,572 $0 $146 $1,426 5.9x 4.6x 4.0x 22.5x 22.2x 18.1x 47.9x 40.0x 33.3x NM 33.6xUltimate ULTI $56.38 93% $1,559 $5 $56 $1,507 6.6x 5.6x 4.7x 45.1x 36.1x 21.8x NM NM NM NM NM Blackboard BBBB $43.09 86% $1,555 $165 $53 $1,668 3.7x 3.1x 2.8x 14.8x 12.9x 11.1x 26.9x 23.5x 20.1x 17.3x 16.0xJ2 Global Communications JCOM $28.99 94% $1,387 $0 $124 $1,264 4.9x 3.8x 3.6x 9.4x 7.7x 7.0x 14.8x 12.2x 11.6x 14.6x 11.9xRightnow Technologies RNOW $33.10 90% $1,215 $175 $250 $1,141 6.1x 5.0x 4.3x 41.0x 38.5x 23.4x NM NM 40.8x NM NM IntraLinks IL $20.65 64% $1,143 $126 $51 $1,218 6.6x 5.6x 4.8x 19.5x 16.6x 13.9x NM 39.8x 30.5x NM 26.7xLogMeIn LOGM $43.52 88% $1,120 $0 $176 $944 9.3x 7.9x 6.5x 34.3x 31.3x 22.6x NM NM 47.3x 34.8x 31.2xCornerstone OnDemand CSOD $19.31 82% $1,005 $3 $91 $917 19.7x 12.8x 8.6x NM NM NM NM NM NM NM NM DealerTrack TRAK $23.17 86% $988 $0 $58 $930 3.8x 2.8x 2.5x 16.3x 13.7x 11.1x 43.7x 28.7x 25.3x NM 37.1xResponsys MKTG $17.19 96% $954 $0 $72 $883 10.4x 7.5x 6.0x 40.5x 41.2x 36.1x NM NM NM NM NM Kenexa KNXA $31.62 95% $806 $37 $20 $828 4.2x 3.1x 2.7x 24.2x 19.1x 14.6x NM 40.2x 30.1x NM 35.9xConstant Contact CTCT $24.05 66% $745 $0 $114 $631 3.6x 2.9x 2.4x 27.5x 18.1x 12.8x NM 38.3x 26.1x NM 34.8xLiveperson LPSN $11.86 88% $678 $0 $67 $611 5.6x 4.6x 3.8x 22.8x 17.5x 14.9x 39.5x 33.6x 28.7x NM 39.9xVocus VOCS $27.24 89% $575 $0 $99 $477 4.9x 4.2x 3.6x 25.6x 25.8x 18.1x 38.4x 35.4x 31.3x 36.9x 33.1xSciQuest SQI $16.48 89% $374 $0 $31 $343 8.1x 6.3x 5.4x 34.3x 33.0x 23.2x 48.5x NM 46.1x 44.0x 28.0xDemandTec DMAN $9.94 71% $346 $0 $67 $278 3.4x 3.0x 2.6x 37.7x 32.0x NM NM NM NM NM NM Zix ZIXI $3.81 78% $253 $0 $22 $231 7.0x 6.0x 5.0x 23.5x 18.1x 14.4x 29.3x 24.7x 19.4x 44.4x 22.4xConvio CNVO $11.42 88% $226 $0 $49 $177 2.5x 2.2x 2.0x 19.2x 15.9x 11.9x 30.1x 28.3x 21.4x 40.3x 30.2xSPS Commerce SPSC $16.70 90% $217 $0 $40 $176 4.0x 3.2x 2.7x 33.2x 35.6x 21.2x NM NM 34.7x NM NM Absolute Software ABT-CA $4.54 98% $214 $0 $30 $184 2.7x 2.4x 2.2x 49.9x 23.4x 24.3x NM NM NM 27.5x 15.5xInContact SAAS $3.97 95% $149 $12 $10 $150 1.8x 1.7x 1.5x 24.5x NM 34.1x NM NM NM NM NM SoundBite SDBT $2.41 73% $40 $0 $34 $6 0.1x 0.1x 0.1x NM NM 20.4x NM NM NM NM NM

Median: 6.2 x 5.0 x 4.1 x 27.5 x 24.6 x 19.6 x 38.9 x 34.5 x 30.3 x 36.9 x 32.2 xMean: 7.3 x 5.7 x 4.7 x 28.8 x 25.6 x 20.4 x 36.2 x 32.0 x 31.1 x 33.9 x 30.4 x

21

SaaS Public Comparables (cont’d)(Figures in Millions, except per share data)

MRQ EBITDARevenue Revenue Growth Gross EBITDA Margin EPS FCF 5yr EPS

Company 2010A 2011E 2012E '10-'11 '11-'12 Margin 2010A 2011E 2012E 2011E 2010A 2011E 2012E 2010A 2011E Growth

SaaSSalesforce.com $1,627 $2,124 $2,621 31% 23% 80% $313 $359 $546 17% $1.20 $1.30 $1.81 $368 $423 30%Ariba $380 $451 $521 19% 15% 63% $81 $102 $139 23% $0.78 $0.86 $1.12 $63 $71 19%SuccessFactors $206 $281 $337 37% 20% 70% $11 $13 $17 4% $0.07 $0.03 $0.11 $37 $51 26%Concur $307 $368 $450 20% 22% 72% $87 $100 $133 27% $0.78 $0.90 $1.16 $61 $62 23%NetSuite $193 $230 $274 19% 19% 70% $18 $21 $32 9% $0.13 $0.14 $0.28 $12 $21 26%OpenTable $99 $147 $192 49% 31% 72% $35 $55 $79 37% $0.87 $1.16 $1.74 $24 $37 39%RealPage $188 $256 $315 36% 23% 57% $35 $58 $78 23% $0.20 $0.35 $0.49 $17 $40 20%Athenahealth $246 $312 $395 27% 27% 61% $51 $61 $81 19% $0.64 $0.81 $1.09 $25 $23 34%Taleo $242 $310 $357 28% 15% 66% $63 $64 $79 21% $0.78 $0.93 $1.12 $23 $47 20%Ultimate $228 $270 $323 19% 20% 55% $33 $42 $69 15% $0.47 $0.73 $1.13 $21 $25 29%Blackboard $447 $532 $602 19% 13% 65% $112 $129 $151 24% $1.60 $1.83 $2.14 $90 $97 19%J2 Global Communications $255 $336 $356 31% 6% 78% $134 $165 $182 49% $1.96 $2.37 $2.50 $95 $116 12%Rightnow Technologies $186 $226 $267 22% 18% 68% $28 $30 $49 13% $0.49 $0.55 $0.81 $8 $13 20%IntraLinks $184 $218 $254 18% 16% 74% $63 $73 $88 34% $0.26 $0.52 $0.68 $11 $43 28%LogMeIn $101 $119 $145 18% 21% 91% $27 $30 $42 25% $0.85 $0.73 $0.92 $32 $36 24%Cornerstone OnDemand $47 $72 $107 54% 49% 71% ($6) ($11) ($2) (15%) ($1.11) ($0.30) ($0.07) ($2) ($4) 43%DealerTrack $244 $327 $368 34% 12% 44% $57 $68 $84 21% $0.53 $0.81 $0.92 ($9) $27 15%Responsys $85 $118 $146 39% 23% 51% $22 $21 $24 18% $0.20 $0.17 $0.20 $11 $8 25%Kenexa $196 $270 $307 38% 14% 61% $34 $43 $57 16% $0.62 $0.79 $1.05 $9 $22 21%Constant Contact $174 $218 $267 25% 23% 71% $23 $35 $49 16% $0.38 $0.63 $0.92 $8 $21 53%Liveperson $110 $133 $160 21% 20% 73% $27 $35 $41 26% $0.30 $0.35 $0.41 $6 $17 23%Vocus $97 $114 $131 18% 15% 80% $19 $18 $26 16% $0.71 $0.77 $0.87 $16 $17 24%SciQuest $42 $54 $63 28% 16% 77% $10 $10 $15 19% $0.34 $0.27 $0.36 $9 $13 NADemandTec $82 $94 $109 15% 16% 66% $7 $9 $4 9% ($0.03) $0.06 $0.16 ($9) $1 17%Zix $33 $39 $46 18% 19% 80% $10 $13 $16 33% $0.13 $0.15 $0.20 $6 $11 23%Convio $70 $79 $91 13% 15% 60% $9 $11 $15 14% $0.38 $0.40 $0.53 $6 $7 16%SPS Commerce $45 $55 $66 24% 20% 74% $5 $5 $8 9% $0.31 $0.26 $0.48 $3 $4 23%Absolute Software $68 $76 $85 12% 11% 73% $4 $8 $8 10% ($0.11) ($0.04) ($0.02) $8 $14 NAInContact $82 $88 $98 7% 12% 41% $6 $2 $4 2% ($0.03) ($0.12) ($0.04) $1 ($2) NASoundBite $39 $38 $38 (4%) (1%) 59% ($0) ($1) $0 (3%) ($0.11) ($0.16) ($0.07) ($2) ($2) NA

Median: 22% 18% 70% 18% 23%Mean: 24% 18% 68% 18% 25%


2222

RBC Capital Markets Technology Group – Notable Recent Transactions

$215,000,000

Senior Credit Facilities

Joint Lead Arranger & Joint Bookrunner

January 2011

A portfolio company of

Co-ManagerJanuary 2011

In support of the acquisition by:

$400,000,000ABL Facility

$2,500,000,000Sr. Credit Facilities &

Sr. Notes$81,000,000

Follow-on Offering

Co-ManagerJanuary 2011

$225,000,000



December 2010


$190,000,000

Senior Secured Credit Facilities


December 2010


$91,943,000

Follow-on Offering

Senior Co-ManagerMarch 2011

$2,200,000,000

has acquired

Financial Advisor & Joint Bookrunner on Senior Credit

FacilitiesApril 2011

Undisclosed

Financial Advisor to NewScaleApril 2011

has been acquired by

$770,000,000


Joint Lead Arranger, Joint Bookrunner &

Syndication Agent April 2011

In support of the Company’s Refinancing

$850,000,000


Joint Lead Arranger, Joint Bookrunner &

Syndication Agent April 2011

In support of the Company’s recapitalization

$86,250,000

Initial PublicOffering

Co-ManagerIn Registration

$2,250,000,000

5.375% Senior Notes

Co-ManagerJuly 2010

$1,000,000,000

3.875% Senior Notes

$660,100,000

Initial Public Offering

Joint Senior BookrunnerJuly 2010

$324,000,000

Lead Arranger & Sole BookrunnerJuly 2010


Sr. Credit Facilities$300,000,000

Senior Secured Notes

Joint BookrunnerJuly 2010


$810,000,000

Acquisition Financing

Joint Bookrunner

July 2010


$400,000,000


Joint Lead Arranger & BookrunnerDecember 2010

In support of the acquisition of MDA Info Products by:

Senior Co-ManagerDecember 2010 (Follow-On)

/ August 2010 (IPO)


Follow-On Offering$266,500,000

$135,300,000

$72,500,000


Financial Advisor to Phyworks

September 2010

$135,000,000

Financial Advisor & Bookrunner on FinancingJuly 2010

has acquired

$152,000,000


Financial Advisor to Phoenix

November 2010

Term Loan / Credit Facility

UnderwriterNovember 2010

$1,370,000,000


$745,000,000

has agreed to acquire

Financial Advisor to Apax Partners and Lead Arranger on Financing

Announced March 2011

$1,675,000,000

Acquisition Financing


Announced April 2011

In support of the acquisition of

$783,000,000


Senior Co-ManagerMay 2011

$300,000,000



$100,000,000




Financial Advisor to Sophos

Announced May 2011

Undisclosed

$172,750,000


Co-Lead ManagerJanuary 2011

$1,220,000,000


Financial Advisor to iGate and Joint Bookrunner

May 2011

$700,000,000

Senior Notes

Co-ManagerJuly 2010

In support of acquisition by:

$300,000,000

Senior Secured Credit Facilities


November 2010

In support of acquisition of:

$300,000,000



$83,750,000

Follow-onOffering

Senior Co-ManagerMay 2011

$189,750,000


Co-ManagerMay 2011

Sole BookrunnerPending

Senior Credit FacilitiesIn support of the acquisition by:

$170,000,000


Co-Arranger & Syndication AgentOctober 2010


$230,000,000

Financial Advisor to Apax / Lead Arranger on Debt Financing

May 2011

$2,000,000,000

has acquired

$50,000,000

Private PlacementSole Placement Agent

February 2011

has received an equity investment from

$25,000,000

Private PlacementSole Placement Agent

May 2011

has received an equity investment from

23

RBC Capital Markets Technology Group – Senior Bankers

Ron EliasekManaging DirectorGroup Head(212) [email protected]

Technology Investment Banking

Product Specialists

Louis DraperManaging Director Software(415) [email protected]

Tim KarmanManaging Director Internet(415) [email protected]

Marc LayneManaging Director Communications Technology(212) [email protected]

P.A. WeinerManaging Director Financial Technology(212) [email protected]

David RamazettiDirector, Software(415) [email protected]

Dean GelsDirector(212) [email protected]

Robert LeeDirector, Semiconductors(415) [email protected]

Sean McCarthyDirector(212) [email protected]

Jevan AndersonManaging DirectorMergers & Acquisitions(415) [email protected]

Peter GantManaging DirectorMergers & Acquisitions(415) [email protected]

Paul NagleManaging DirectorInvestment Grade Debt(212) [email protected]

Michael NoonanManaging DirectorEquity Capital Markets(212) [email protected]

David WirdnamManaging DirectorLeveraged Finance(212) [email protected]

Michael RossoManaging DirectorEquity Private Placements(415) [email protected]

Nicholas DaifotisManaging DirectorHigh Yield Debt(212) [email protected]

Devon RitchDirectorMergers & Acquisitions(212) [email protected]

Software and Systems Quarterly Market Update

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Transcript of Software and Systems Quarterly Market Update