2Q13 Software Industry Financial Report

Q22013
The Software Industry
Financial Report

SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTS
About Software Equity Group
Leaders in Software M&A 4
Extensive Global Reach 5
Software Industry Macroeconomics
Global GDP 8Global GDP 8
U.S. GDP and Unemployment 9
Global IT Spending 10
E-Commerce and Digital Advertising Spend 11
SEG Indices vs. Benchmark Indices 12
Public Software Financial and Valuation PerformancePublic Software Financial and Valuation Performance
The SEG Software Index 14
The SEG Software Index: Financial Performance 15-17
The SEG Software Index: Market Multiples 18-19
The SEG Software Index by Product Category 20
The SEG Software Index by Product Category: Financial Performance 21The SEG Software Index by Product Category: Financial Performance 21
The SEG Software Index by Product Category: Market Multiples 22
Public SaaS Company Financial and Valuation Performance
The SEG SaaS Index 24
The SEG SaaS Index Detail 25
The SEG SaaS Index: Financial Performance 26-28The SEG SaaS Index: Financial Performance 26 28
The SEG SaaS Index: Market Multiples 29-30
The SEG SaaS Index by Product Category 31
The SEG SaaS Index by Product Category: Financial Performance 32
The SEG SaaS Index by Product Category: Market Multiples 33
Public Internet Company Financial and Valuation PerformancePublic Internet Company Financial and Valuation Performance
The SEG Internet Index 35
The SEG Internet Index: Financial Performance 36-38
The SEG Internet Index: Market Multiples 39-40
The SEG Internet Index by Product Category 41
The SEG Internet Index by Product Category: Financial Performance 42
1 Q2 2013 Software Industry Financial Report
Copyright © 2013 by Software Equity Group, LLC
All Rights Reserved
The SEG Internet Index by Product Category: Financial Performance 42
The SEG Internet Index by Product Category: Market Multiples 43

SOFTWARE INDUSTRY FINANCIAL REPORT CONTENTS
Software Industry M&A Market Update
Software/SaaS M&A Deal Volume and Spending 45
Software M&A Exit Multiples 46
Software M&A by Ownership Structure and Size 47
Software M&A by Vertical and Horizontal Markets 48Software M&A by Vertical and Horizontal Markets 48
Software M&A by Product Category 49-50
SaaS M&A Deal Volume and Exit Multiples 51
SaaS M&A by Product Category 52
SaaS M&A: 2Q13 Transactions 53-55
Internet M&A: Deal Volume and Exit Multiples 56-57Internet M&A: Deal Volume and Exit Multiples 56 57
Appendix
The SEG Software Index Companies 59-63
The SEG SaaS Index Companies 64
The SEG Internet Index Companies 65-67
The SEG Software Index Metrics by Product Category 68-69The SEG Software Index Metrics by Product Category 68 69
The SEG SaaS Index Metrics by Product Category 70
The SEG Internet Index Metrics by Product Category 71
2Q13 Public Sellers 72
2Q13 Software Mega Deals (>$500M) 73
2Q13 Most Active Buyers 742Q13 Most Active Buyers 74
All Rights Reserved

ABOUT SOFTWARE EQUITY GROUP
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• Industry leading boutique investment bank founded in
LEADERS IN SOFTWARE M&A
Industry leading boutique investment bank, founded in
1992, representing public and private software and
internet companies seeking:
• Strategic exit
• Growth capital
We Do Deals.
Growth capital
• Buyout
• Inorganic growth via acquisition
• Buy and sell-side mentoring
• Fairness opinions and valuationsFairness opinions and valuations
• Sell-side client revenue range: $5 - 75 million
• Buy-side clients include private equity firms and
NASDAQ, NYSE and foreign exchange listed companies
• Clients span virtually every software technology, product
category, delivery model and vertical market
• Global presence providing advice and guidance to more
th 2 000 i t d bli i th h t USthan 2,000 private and public companies throughout US,
Canada, Europe, Asia-Pacific, Africa and Israel
• Strong cross-functional team leveraging transaction,
operating, legal and engineering experience
• Unparalleled software industry reputation and track
record.
• Highly referenceable base of past clients
4

EXTENSIVE GLOBAL REACH
Current Sell-side Representation
• SEG currently represents software companies
in the United States, Canada, France,
Recent Sell-side Representation
Germany, Australia & Saudi Arabia
• In addition to the countries listed above, SEG
has recently represented software companies
in the United Kingdom, France, Netherlands,
Israel, and South Africa
SEG Research Distribution
• SEG’s Quarterly and Annual Software Industry
Equity Reports and Monthly Flash Reports areq y p y p
distributed to an opt-in list of 50,000 public
software company CEOs, software
entrepreneurs, private equity managing
directors, VCs, high tech corporate lawyers,
public accountants, etc. in 76 countries.
5
p ,

Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. Founded in 1992, our firm has guided and
ABOUT SOFTWARE EQUITY GROUP
q y p y g gy , g
advised companies on five continents, including privately-held software and technology companies in the United States, Canada, Europe, Asia Pacific, Africa
and Israel. We have represented public companies listed on the NASDAQ, NYSE, American, Toronto, London and Euronext exchanges. Software Equity
Group also advises several of the world's leading private equity firms. We are ranked among the top ten investment banks worldwide for application software
mergers and acquisitions.
Our value proposition is unique and compelling We are skilled and accomplished investment bankers with extraordinary software internet and technologyOur value proposition is unique and compelling. We are skilled and accomplished investment bankers with extraordinary software, internet and technology
domain expertise. Our industry knowledge and experience span virtually every software product category, technology, market and delivery model, including
Software-as-a-Service (Saas), software on-demand and perpetual license. We have profound understanding of software company finances, operations and
valuation. We monitor and analyze every publicly disclosed software M&A transaction, as well as the market, economy and technology trends that impact these
deals. We're formidable negotiators and savvy dealmakers who facilitate strategic combinations that enhance shareholder value.
P h t i t t th l ti hi ' b ilt d th i d t t ti j S ft E it G i k d t d b bli lPerhaps most important are the relationships we've built and the industry reputation we enjoy. Software Equity Group is known and respected by publicly
traded and privately owned software and technology companies worldwide, and we speak with them often. Our Quarterly and Annual Software Industry Equity
Reports are read and relied upon by more than thousands of industry executives, entrepreneurs and equity investors in sixty-one countries, and we have been
quoted widely in such leading publications as The Wall Street Journal, Barrons, Information Week, The Daily Deal, The Street.com, U.S. News & World Report,
Reuters, Mergers & Acquisitions, USA Today, Arizona Republic, Detroit Free Press, Entrepreneur Magazine, Softletter, Software Success, Software CEO
Online and Software Business Magazine.g
To keep your finger on the pulse of the software equity markets, subscribe to our Annual and Quarterly Research Reports.
Software Equity Group is an investment bank and M&A advisory serving the software and technology sectors. For a confidential consultation without obligation,
.kbeible@softwareequity.com,2800-509)858Beible, Director, Business Development (Krisplease contact
CONTACT INFORMATION:
Software Equity Group, L.L.C.
12220 El Camino Real, Suite 320
San Diego, CA 92130
www softwareequity comwww.softwareequity.com
p: (858) 509-2800
The information contained in this Report is obtained from sources we believe to be reliable, but no representation or guarantee is made about the accuracy or completeness of such information, or the opinions expressed herein. Nothing in
this Report is intended to be a recommendation of a specific security or company or intended to constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any security. Software Equity Group LLC may have an interest in
one or more of the securities or companies discussed herein.
Financial data provided by Capital IQ.
6
This Report may not be reproduced in whole or in part without the expressed prior written authorization of Software Equity Group, L.L.C.
Software Equity Group registers each Report with the U.S. Copyright Office and vigorously enforces its intellectual property rights.

SOFTWARE INDUSTRY MACROECONOMICS
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GLOBAL GDP
• According to the Economist Global GDP growth slowed in 2Q13 growing only 2 1% down from 3 1% in 2Q12• According to the Economist, Global GDP growth slowed in 2Q13, growing only 2.1%, down from 3.1% in 2Q12.
• The global economy continued to be impacted by the European Union’s recession, and slowing GDP growth in China, which is
rebalancing its economy to be more urban based and consumer driven.
• Other large, emerging markets are struggling with social unrest, largely driven by high unemployment and lackluster growth.
F th PIMCO f t Gl b l GDP t th 2 0% 2 5% li htl f i f t d t i t i• For the year, PIMCO forecasts Global GDP to growth 2.0% - 2.5%, up slightly from previous forecasts due to improvements in
the U.S. and Japan offsetting continued challenges in Europe and potentially slower growth in key emerging markets.
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Sources: Worldbank, The Economist
and PIMCO

U.S. GDP AND UNEMPLOYMENT
5.0%
4 1%
6%
8%
10%
GDP Unemployment Rate
1.2%
3.2%
3.6%
2.1%
0 7%
1.5%
0 7%
2.2%
3.7%
1.7%
2.6%
3.1%
0.4%
2.5%
1.3%
4.1%
2.0%
1.3%
3.1%
0.4%
2.5%
1.8%
0%
2%
4%
-0.7%
-2.7%
-5.4%
6 4%
-0.7%
-6%
-4%
-2%
• Current economic forecast calls for moderate U S GDP growth in 2Q13 that should modestly improve in the second half of the
-6.4%
-8%
2Q07 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13
• Current economic forecast calls for moderate U.S. GDP growth in 2Q13 that should modestly improve in the second half of the
year.
• May’s Federal Reserve survey of 42 economists predicted GDP growth in 2Q13 would be 1.8%, ticking up to 2.5% growth in the
second half of the year. For the year, expectations are the U.S. will grow 2.0%.
• PIMCO’s latest forecasts were consistent with the Federal Reserve’s panel of outside experts. In its 2Q13 market perspectives,PIMCO s latest forecasts were consistent with the Federal Reserve s panel of outside experts. In its 2Q13 market perspectives,
PIMCO forecast U.S. GDP growth of 1.5% - 2.0% for the year, driven by continuing strength in the housing market.
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GLOBAL IT SPENDING
9.0%
6.0%
8.0%
6.0%
4.1%5.0%
10.0%
2.0% 2.0%
0.0%
2007 2008 2009 2010 2011 2012 2013 2014 (F) in IT Spending
-10 0%
‐10.0%
‐5.0%
YoY Change
• In July analysts revised their earlier Global IT spending forecasts predicting only a 2% increase rather than their previous growth
10.0%
‐15.0%
• In July, analysts revised their earlier Global IT spending forecasts predicting only a 2% increase, rather than their previous growth
estimate of 3.9%.
• Estimates for 2014 are more promising, with an array of economists forecasting a 4.1% increase in Global IT spending.
• According to Forrester, software is receiving the largest share of Global IT dollars with $542M in 2013. Software spending is
expected to grow 3.3% in 2013, and 6.2% in 2014.expected to grow 3.3% in 2013, and 6.2% in 2014.
• SaaS software spending is expected to increase 25% in 2013.
• Especially hot Software spending priorities include: collaboration (13% YoY growth), business intelligence (11%), ePurchasing
(10%), HR management (9%), and healthcare systems (8%).
All Rights Reserved
Sources: IT spending numbers shown in charts are
a blended average of Goldman Sachs, IDC,
Forrester, Gartner forecasts

E-COMMERCE AND DIGITAL ADVERTISING SPEND
illions)
llions)
Digital Advertising RevenueE-Commerce Spending
20%
50 000
60,000
25%
30%
10 000
12,000
oY%Change
rceSpending($M
oY%Change
ngRevenue($Mil
5%
10%
15%
20 000
30,000
40,000
50,000
5%
10%
15%
20%
6,000
8,000
10,000
Yo
E-Commer
Yo
InternetAdvertisi
‐5%
0%
0
10,000
20,000
‐10%
‐5%
0%
5%
0
2,000
4,000
• U.S. retail e-commerce sales totaled $50.2B in 1Q13 (the latest
data available), marking the second consecutive $50B+ quarter.
Th $50 2B i d t d f 10 6% f ll di ti
• U.S. digital advertising revenues totaled $9.6B in 1Q13 (the
latest quarter data was available). The figure is a 15.6%
increase over the $8 3 billion digital advertising tally• The $50.2B in spend accounted for 10.6% of all discretionary
dollars spent, the highest on record.
• 1Q13’s 13% YoY growth in online sales, while impressive, was
down YoY from 1Q12’s 17% growth rate.
E commerce categories with greater than 20% YoY growth
increase over the $8.3 billion digital advertising tally
reported in the first quarter 2012.
• 1Q13’s strong first quarter follows on the heels of a strong
2012, when digital advertising soared 15% to $36.6B.
• E-commerce categories with greater than 20% YoY growth
included: Digital Content & Subscriptions, Apparel &
Accessories, Sport & Fitness, Consumer Electronics, and
Consumer Packaged Goods.
• Apparel & Accessories was the highest growing mobile
All Rights Reserved
Sources: comScore, IAB, IBD
commerce category, generating nearly $1 billion in sales in Q1.

SEG INDICES VS. BENCHMARK INDICES
25.0%
30.0%
DOW S&P NASDAQ SEG SaaS SEG SW Index SEG Internet Index
15.0%
20.0%
5.0%
10.0%
• An improving macro economic climate and continued support from the Federal Reserve helped drive the U.S. stock markets higher
in 2Q13.
0.0%
Jan Feb Mar Apr May Jun
in 2Q13.
• After finishing Q1 with the best overall performance (11.3%) among the three major indices we track, the Dow gained 2.3% in Q2, for
a first half return in 2013 of 13.6%. Meanwhile, the NASDAQ, which posted the weakest Q1 return (8.2%), led the way in Q2 with a
5.0% return. The S&P continued its middle of the pack performance, adding to Q1’s return of 10.0% with an additional 2.8% in Q2.
• Both the SEG SaaS and the SEG Internet Index derived significant benefit from investor receptivity to higher risk assets, postingg p y g , p g
17.2% and 17.0% returns, respectively, by close of Q2. By contrast, the SEG Software index closed 2Q13 with a comparatively
paltry return of 1.9%.
• For the first half of the year, the SEG SaaS and SEG Internet indexes have posted stellar returns of 22.5% and 24.8%, respectively.
All Rights Reserved

PUBLIC SOFTWARE COMPANY FINANCIAL ANDPUBLIC SOFTWARE COMPANY FINANCIAL AND
VALUATION PERFORMANCE:
THE SEG SOFTWARE INDEX
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THE SEG SOFTWARE INDEX
SEG - Software: Median Metrics
• The SEG Software Index tracks public
software companies that primarily offer on-
premise software under a perpetual
Measure 2Q12 3Q12 4Q12 1Q13 2Q13
EV/Revenue 2.7x 2.7x 2.6x 2.8x 2.7x
EV/EBITDA 11.0x 11.2x 11.8x 13.2x 12.0x
EV/Earnings 22.3x 21.4x 22.0x 24.0x 24.4x
Gross Profit Margin 65.5% 66.0% 66.0% 66.4% 66.8%
EBITDA M i 19 3% 19 4% 19 7% 19 5% 18 8%
license with annual M&S
• The SEG Software Index is currently
comprised of 137 public software
i *
EBITDA Margin 19.3% 19.4% 19.7% 19.5% 18.8%
Net Income Margin 10.7% 10.2% 10.4% 9.4% 9.1%
TTM Revenue Growth 15.8% 14.7% 13.9% 12.5% 11.0%
TTM Total Revenue ($M) $432.5 $445.4 $454.3 $466.7 $477.0
TTM EBITDA Growth 17.8% 15.1% 8.8% 6.3% 4.9%
TTM Total EBITDA ($M) $73.5 $76.7 $78.9 $78.0 $85.3
companies*
Cash & Eq ($M) $185.6 $162.5 $165.7 $172.3 $182.1
Current Ratio 1.9 2.0 1.9 1.9 1.9
Debt / Equity Ratio 19.3% 21.3% 22.5% 25.1% 25.3%
All Rights Reserved
* See appendix for a complete list of companies in The SEG Software Index

THE SEG SOFTWARE INDEX: FINANCIAL PERFORMANCE
71% of public on-premise software companies
had TTM revenue growth rates of 20% or below
Of the 15% of companies with TTM revenue
TTM Revenue Growth Rate DistributionRevenue Performance
18%$490
TTM Total Revenue ($M) TTM Revenue Growth
31%
35%
Of the 15% of companies with TTM revenue
growth rates of 30% or more, a disproportionate
number are focused on mobility and cloud
computing
10%
12%
14%
16%
$450
$460
$470
$480
$
nue Growth
l Revenue
16%
31%
24%
14%
20%
25%
30%
ompanies
0%
2%
4%
6%
8%
$410
$420
$430
$440
$450
TTM Reven
TTM Tota
14%
5%
10%
0%
5%
10%
15%
% of Co
• On-premise software companies lost market share to SaaS
and Internet providers and struggled with continuing tight
0%$410
2Q12 3Q12 4Q12 1Q13 2Q13
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM Revenue Growth
p gg g g
constraints on IT capital spending and macro economic
headwinds, as their 2Q13 median TTM revenue growth rate
declined to 11.0%, the lowest since 4Q10.
• Despite slowing growth, the median TTM revenue of the
SEG Software Index reached $477 0M the highest in itsSEG Software Index reached $477.0M, the highest in its
history and the highest among our three tracking indices.
• We expect TTM revenue growth for most on-premise public
software companies to remain modest, which portends
increased and highly strategic M&A and R&D spending to
All Rights Reserved
spur top line growth.

26% 27%30%
TTM EBITDA Margin DistributionEBITDA Margin Performance
Almost one in three on-premise software
companies posted EBITDA margins of
20% - 30%
20%22%
EBITDA Margin TTM EBITDA Growth
18%
26%
15%
20%
25%
ompanies
10%
12%
14%
16%
18%
20%
12%
14%
16%
18%
20%
22%
DA Growth
Margin
10%
11%
7%
0%
5%
10%
% of Co
0%
2%
4%
6%
8%
10%
0%
2%
4%
6%
8%
10%
TTM EBITD
EBITDA
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM EBITDA Margin
• EBITDA margins of public on-premise software companies
have held relatively constant over the past year and remain
0%0%
2Q12 3Q12 4Q12 1Q13 2Q13
y p y
at historic levels, closing 2Q13 at 18.8%.
• Median TTM EBITDA growth plunged from 17.8% YoY in
2Q12 to a 4.9% YoY increase in 2Q13, suggesting many
public software companies are spending more to grow
revenue after paring expenses to the bonerevenue after paring expenses to the bone.
• A year ago in 2Q12, median TTM EBITDA growth outpaced
TTM revenue growth by 7.5%. In a dramatic reversal, TTM
EBITDA growth in 2Q13 lagged TTM revenue growth by
6.1% (4.9% vs. 11.0%).
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Margin PerformanceOperating Ratios
30%
S&M (% of Revenue) R&D (% of Revenue) G&A (% of Revenue)
80%
Gross Profit Margin EBITDA Margin Net Income Margin
15%
20%
25%
Revenue
40%
50%
60%
70%
Margin
0%
5%
10%
% of R
0%
10%
20%
30%
% M
• Median spending on sales & marketing (S&M), research &
development (R&D) and general & administrative (G&A), as
• In 2Q13, median gross profit, EBITDA and net income
margins were 66.8%, 18.8% and 9.1%, respectively.
0%
2Q12 3Q12 4Q12 1Q13 2Q13
0%
2Q12 3Q12 4Q12 1Q13 2Q13
p ( ) g ( ),
a percentage of total revenue was 24.0%, 15.0% and 10.6%,
respectively, in 2Q13 – consistent with historical norms for
public, on-premise software companies.
• Over the past year, S&M and G&A expenses as a percent of
revenue have remained flat while R&D grew slightly from
g , , p y
• Several on-premise providers achieved gross profit margins
of 89% and greater, including Qlik Technologies (89%),
Splunk (89%), Autodesk (90%), Glu Mobile (90%), Unit 4
(92%) and SolarWinds (93%).
revenue have remained flat, while R&D grew slightly from
14.5% in 2Q12 to 15.0% in Q2.
• Median S&M spending among on-premise public software
companies lagged far behind their SaaS counterparts, which
are investing heavily in customer acquisition (38.9% for
• We anticipate EBITDA margins and net income margins will
likely decline over the next several quarters, as on-premise
software companies increase their investments in R&D to
improve products/delivery models, and sales & marketing to
accelerate TTM revenue growth.
All Rights Reserved
SaaS and 24.0% for on-premise).

THE SEG SOFTWARE INDEX: MARKET MULTIPLES
EV/Revenue Multiples by Size (TTM Revenue)EV/Revenue and EV/EBITDA Multiples
3.5x
Revenue Greater Than $1 billion Revenue Between $500 million and $1 billion
Revenue Between $100 million and $500 million Revenue Less Than $100 million
13.2x14.0x
EV/Revenue EV/EBITDA
2.0x
2.5x
3.0x
3 5
V/Revenue
11.0x 11.2x
11.8x 12.0x
8.0x
10.0x
12.0x
0
0 0x
0.5x
1.0x
1.5x
Median EV
2.7x 2.7x 2.6x 2.8x 2.7x
0 0x
2.0x
4.0x
6.0x
• Despite slowing growth and EBITDA erosion, the median
EV/Revenue multiple of public on-premise software
• Investors in 2Q13 continued to place higher value on larger
public software companies with revenues >$100 million.
0.0x
2Q12 3Q12 4Q12 1Q13 2Q13
0.0x
2Q12 3Q12 4Q12 1Q13 2Q13
p p p
companies remained unchanged YoY in 2Q13, closing the
quarter at 2.7x.
• By contrast, the median EV/EBITDA multiple in 2Q13 was
12.0x, well below the high-teen EBITDA multiples that
prevailed in 2007 and years prior
p p $
• Throughout 2012, and in 2Q13, the EV/Revenue multiples of
on-premise software companies with revenues <$100 million
remained markedly lower than their larger counterparts.
• SEG Software Index companies with TTM revenue between
prevailed in 2007 and years prior.
$100M and $1B successfully balanced TTM revenue growth
(median 17.3%) and spending (median EBITDA of 17.7%),
and were rewarded with the highest median EV/Revenue
multiples.
All Rights Reserved

THE SEG SOFTWARE INDEX: MARKET MULTIPLES
5.4x
6.0x
EV/Revenue Multiples vs. TTM EBITDA MarginsEV/Revenue Multiples vs. TTM Revenue Growth Rates
6.0x
2.4x
2.6x
2.9x 3.0x
3.0x
4.0x
5.0x
EV/Revenue
2 1
2.9x
3.9x
3.4x
4.8x
3.0x
4.0x
5.0x
EV/Revenue
1.7x
0.0x
1.0x
2.0x
Median
1.4x
2.1x
0.0x
1.0x
2.0x
Median
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM EBITDA Margin
• Noting the decline in the median revenue growth of on-
premise software providers investors awarded markedly
• Premium market multiples were awarded to the select few on-
premise software providers generating EBITDA margins north
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM Revenue Growth
premise software providers, investors awarded markedly
higher market multipes to public on-premise software
companies with revenue growth exceeding 20%.
• Indeed, public on-premise software companies with revenue
growth rates of 20% or higher were rewarded with median
premise software providers generating EBITDA margins north
of 40%.
• Surprisingly, the EV/Revenue multiple range for most on-
premise software companies was relatively narrow, suggesting
investors were seemingly indifferent to profitability, a stark
EV/Revenue multiples of 3.4x or higher in 2Q13,
considerably greater than the SEG Software Index median of
2.7x.
reversal from prior quarters.
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THE SEG SOFTWARE INDEX: BY PRODUCT CATEGORY
2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13
Billing & Service Management 1.3x 1.3x 1.5x 1.9x 1.9x 7.9x 8.3x 8.4x 8.4x 8.3x 13.6% 9.5% 10.4% 10.4% 8.9% 18.9% 18.8% 19.9% 21.1% 18.7%
Business Intelligence 3.2x 2.9x 3.2x 3.4x 3.0x 26.7x 25.9x 17.6x 15.8x 16.5x 18.3% 14.5% 13.2% 11.8% 8.3% 15.1% 15.4% 14.7% 14.0% 13.7%
Development Platforms 1.9x 2.1x 2.5x 2.5x 2.6x 8.4x 8.2x 9.6x 9.1x 10.0x 5.3% 3.5% 1.6% 3.0% 0.3% 22.3% 21.8% 23.6% 21.8% 20.6%
EBITDA Margin
SEG Software Index
Category
EV/Revenue EV/EBITDA TTM Revenue Growth
Engineering & PLM 2.3x 2.6x 2.5x 2.7x 2.7x 11.5x 12.1x 11.8x 13.4x 12.4x 13.5% 13.2% 14.0% 13.1% 11.7% 19.9% 20.7% 20.6% 20.7% 20.5%
Enterprise Resource Planning 2.4x 2.7x 2.7x 2.9x 3.0x 8.3x 9.1x 9.0x 9.7x 11.3x 10.1% 9.0% 2.9% 2.0% 0.2% 29.0% 29.3% 29.6% 29.6% 29.6%
Financial & Accounting 2.7x 2.9x 2.9x 3.1x 3.3x 9.5x 9.8x 9.8x 10.5x 11.3x 7.3% 17.2% 13.8% 8.6% 10.7% 27.2% 29.0% 28.8% 27.5% 26.6%
Gaming 1.0x 1.0x 1.0x 1.1x 1.3x 7.6x 9.1x 8.0x 7.1x 9.7x 2.6% 2.2% 0.1% 7.4% 15.1% 16.3% 15.5% 16.3% 15.4% 15.0%
Healthcare 2.7x 2.2x 2.1x 2.1x 2.1x 13.0x 12.8x 11.3x 14.8x 17.6x 37.1% 24.2% 19.6% 10.7% 11.0% 22.3% 19.6% 18.4% 13.4% 14.1%
IT Conglomerates 2.9x 2.8x 2.5x 2.5x 2.9x 7.3x 8.2x 7.8x 8.8x 8.3x 5.3% 1.5% 1.4% 0.5% 0.2% 36.9% 36.1% 34.6% 33.8% 33.8%
Mobile Solutions/Content 3 6x 3 6x 2 5x 2 7x 2 8x 16 1x 13 8x 11 9x 20 6x 13 2x 43 5% 34 4% 33 1% 35 2% 19 4% 8 1% 7 8% 6 4% 4 5% 7 9%Mobile Solutions/Content 3.6x 3.6x 2.5x 2.7x 2.8x 16.1x 13.8x 11.9x 20.6x 13.2x 43.5% 34.4% 33.1% 35.2% 19.4% 8.1% 7.8% 6.4% 4.5% 7.9%
Networking & Network Performance
Management
2.4x 2.5x 2.5x 2.7x 2.6x 15.0x 14.0x 14.0x 15.1x 15.6x 22.9% 19.5% 15.5% 14.2% 9.1% 17.9% 16.7% 15.8% 14.9% 15.0%
Security 2.9x 3.2x 2.7x 3.3x 3.6x 10.2x 10.5x 11.2x 11.5x 10.7x 19.4% 20.1% 23.1% 23.4% 21.3% 13.1% 14.5% 13.9% 8.1% 4.5%
Storage, Data Management &
Integration
2.5x 2.5x 2.3x 2.4x 2.4x 9.4x 9.2x 8.4x 9.2x 8.8x 7.6% 6.3% 6.5% 4.8% 4.1% 23.7% 23.9% 23.8% 22.2% 21.9%
Supply Chain Management &
Logistics
3.2x 3.2x 3.5x 3.8x 4.1x 11.3x 11.1x 13.6x 14.7x 15.6x 19.1% 16.1% 13.1% 12.8% 10.7% 19.6% 19.6% 19.6% 19.4% 19.2%
g
Systems Management 5.9x 5.5x 4.5x 4.8x 4.3x 22.9x 22.3x 18.9x 20.5x 19.0x 18.1% 18.1% 16.5% 17.2% 15.8% 26.8% 25.8% 25.5% 25.8% 24.7%
Vertical - Finance 3.3x 3.2x 3.0x 3.4x 3.8x 10.3x 10.6x 9.4x 10.7x 11.0x 6.8% 6.3% 7.1% 6.7% 7.6% 26.4% 26.3% 26.4% 26.5% 27.3%
Vertical - Other 3.0x 2.9x 2.9x 3.0x 3.2x 16.4x 21.0x 20.3x 22.0x 22.1x 26.5% 28.0% 19.8% 21.3% 21.0% 15.8% 14.7% 14.4% 14.1% 14.4%
Median 2.7x 2.7x 2.6x 2.8x 2.7x 11.0x 11.2x 11.8x 13.2x 12.0x 15.8% 14.7% 13.9% 12.5% 11.0% 19.3% 19.4% 19.7% 19.5% 18.8%
• The SEG Software Index is segmented into 17 product categories
• See the appendix for the complete list of companies within each product category
All Rights Reserved

THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY:
FINANCIAL PERFORMANCE
2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth
10%
15%
20%
25%
2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth
( 0%)
0%
50%
100%
0%
5%
10%
ervice…
gence
pment…
&PLM
rprise…
cial&…
aming
hcare
erates
Mobile…
king&…
ecurity
,Data…
Chain…
stems…
nance
Other
(150%)
(100%)
(50%)
ervice…
gence
pment…
PLM
rprise…
cial&…
aming
hcare
erates
Mobile…
king&…
curity
Data…
Chain…
stems…
nance
Other
Billing&Se
BusinessIntellig
Develop
Engineering&
Ente
Financ
Ga
Healt
ITConglome
M
Network
Se
Storage,
Supply
Sys
Vertical-Fin
Vertical-
Billing&Se
BusinessIntellig
Develop
Engineering&
Enter
Financ
Ga
Health
ITConglome
M
Network
Sec
Storage,
SupplyC
Sys
Vertical-Fin
Vertical-O
25%
30%
35%
40%
2Q13 YoY Change EBITDA Margin2Q13 TTM EBITDA Margin
(20%)
0%
20%
0%
5%
10%
15%
20%
25%
e…
e
nt…
M
e…
&…
g
e
s
e…
&…
y
a…
n…
s…
e
er
(100%)
(80%)
(60%)
(40%)
ice…
ce
ent…
LM
ise…
l&…
ng
are
tes
bile…
g&…
rity
ata…
ain…
ms…
ce
her
Billing&Servic
sinessIntelligence
Developmen
ngineering&PLM
Enterpris
Financial&
Gaming
Healthcare
ITConglomerates
Mobil
Networking&
Securit
Storage,Dat
SupplyChai
System
Vertical-Finance
Vertical-Othe
Billing&Servi
usinessIntelligen
Developme
Engineering&PL
Enterpri
Financia
Gami
Healthca
ITConglomerat
Mob
Networking
Secur
Storage,Da
SupplyCha
System
Vertical-Finan
Vertical-Oth
All Rights Reserved
Bus
En
I
Bu
E

THE SEG SOFTWARE INDEX BY PRODUCT CATEGORY:
MARKET MULTIPLES
2Q13 YoY Change in Median EV/Revenue Multiples2Q13 Median EV/Revenue Multiples
4.0x
4.5x
40%
50%
60%
1.5x
2.0x
2.5x
3.0x
3.5x
(10%)
0%
10%
20%
30%
40%
0.0x
0.5x
1.0x
ement
gence
tforms
&PLM
anning
unting
aming
thcare
erates
ontent
etwork…
ecurity
ment&…
ment&…
ement
nance
Other
(40%)
(30%)
(20%)
( %)
ement
igence
tforms
&PLM
anning
ounting
aming
thcare
erates
Content
etwork…
ecurity
ment&…
ment&…
ement
nance
-Other
g&ServiceManage
BusinessIntelli
DevelopmentPlat
Engineering&
priseResourcePla
Financial&Acco
Ga
Heal
ITConglom
MobileSolutions/C
Networking&Ne
Se
ge,DataManagem
plyChainManagem
SystemsManage
Vertical-Fi
Vertical-
g&ServiceManag
BusinessIntelli
DevelopmentPla
Engineering&
priseResourcePla
Financial&Acco
G
Heal
ITConglom
MobileSolutions/C
Networking&Ne
Se
ge,DataManagem
plyChainManagem
SystemsManag
Vertical-Fi
Vertical-
• In 2Q13, eleven product categories achieved median EV/Revenue multiples above the SEG Software Index median (2.7x), including
Systems Management (4.3x), Supply Chain Mgmt (4.1x), Vertical – Finance (3.8x), Security (3.6x), Financial & Accounting (3.3x), Vertical –
Other (3.2x), Business Intelligence (3.0x), Enterprise Resource Planning (3.0x), IT Conglomerates (2.9x), and Mobile (2.8x).
Billing
Enterp
M
Storag
Supp
Billing
Enter
M
Stora
Supp
• For some categories, TTM revenue growth translated to an impressive EV/Rev market valuation (Security, Vertical – Other), while other
categories demonstrated a curious disconnect between market valuation and top line growth (Supply Chain, IT Conglomerates).
• The Systems Management product category, benefitting from the rapid shift to cloud computing and growing demand for cloud
infrastructure, achieved the highest median EV/Revenue multiple (4.3x) in 2Q13, driven by strong TTM revenue growth (15.8%) and
EBITDA i (24 7%) b th b th di f th i d
All Rights Reserved
EBITDA margins (24.7%) – both above the median for the index.

PUBLIC SaaS COMPANY FINANCIAL ANDPUBLIC SaaS COMPANY FINANCIAL AND
THE SEG SaaS INDEX
All Rights Reserved

THE SEG SaaS INDEX
SEG - SaaS: Median Metrics
• The SEG SaaS Index tracks public
companies that primarily offer hosted, on-
demand software under a subscription
Measure 2Q12 3Q12 4Q12 1Q13 2Q13
EV/EBITDA 29.9x 37.9x 41.7x 35.4x 31.5x
and/or transaction based pricing model
• The SEG SaaS Index is currently
comprised of 40 public pure-play SaaS
i *
EBITDA Margin 8.9% 8.0% 8.0% 6.0% 3.1%
Net Income Margin -1.0% -0.7% 0.5% -1.4% -2.6%
TTM EBITDA Growth 28.2% 23.2% 10.4% 5.7% -1.5%
TTM Total EBITDA ($M) $7 2 $6 8 $6 7 $7 5 $6 3
companies*
Cash & Eq ($M) $62.6 $68.5 $68.6 $75.9 $77.6
Current Ratio 1.8 1.6 1.7 1.8 1.6
All Rights Reserved
* See appendix for a complete list of companies in The SEG SaaS Index

THE SEG SaaS INDEX DETAILS
SEG SaaS Index
Company
Athenahealth, Inc Vertically Focused 7.2x 8.2x 6.1x 7.2x 7.2x 50.0x 62.9x 48.9x 59.9x 74.6x 34.4% 34.2% 32.4% 30.3% 28.7% 14.5% 13.1% 12.5% 12.1% 9.6%
Bazaarvoice, Inc CRM & Marketing 9.4x 7.2x 4.3x 2.7x 2.7x - - - - - 64.6% 62.6% 59.3% 57.9% 51.0% -19.4% -17.8% -17.9% -18.2% -28.1%
Callidus Software Inc. Workforce Management 2.4x 2.0x 2.0x 2.1x 2.5x - - - - - 15.4% 15.0% 14.9% 13.3% 14.5% -13.8% -17.0% -18.1% -17.1% -15.4%
ChannelAdvisors Workforce Management - - - - 5.8x - - - - - 18.8% 18.8% - 23.0% - -2.6% -2.6% -1.5% -1.8% -3.7%
Concur Other SaaS 8.0x 8.7x 7.8x 7.9x 8.7x 57.1x 66.8x 67.5x 81.7x 113.9x 24.0% 25.7% 25.8% 25.1% 22.3% 14.0% 13.1% 11.5% 9.7% 7.7%
SEG SaaS Index
Category
EV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin
Constant Contact CRM & Marketing 2.3x 2.0x 1.3x 1.4x 1.3x 21.4x 19.6x 14.2x 17.9x 18.5x 21.4% 20.0% 19.1% 17.6% 16.1% 10.9% 10.4% 9.3% 7.8% 7.3%
Cornerstone OnDemand Workforce Management 11.7x 12.9x 13.1x 13.4x 14.6x - - - - - 63.2% 72.2% 68.1% 61.5% 61.9% -25.5% -21.5% -24.1% -23.4% -21.5%
DealerTrack Vertically Focused 3.1x 2.9x 2.9x 3.3x 3.3x 20.0x 19.4x 20.1x 23.9x 24.0x 39.2% 28.7% 16.8% 10.1% 10.5% 15.5% 15.2% 14.3% 13.8% 13.8%
Demandware, Inc. Other SaaS 12.5x 9.8x 10.0x 8.9x 9.5x 553.5x - - - - 48.7% 45.0% 42.3% 40.5% 37.5% 2.3% -3.5% -5.9% -4.8% -10.7%
E2open, Inc ERP & Supply Chain - 4.6x 4.5x 5.9x 4.5x - 92.6x 76.6x 754.0x - - - 22.2% 25.6% 17.4% 1.6% 5.0% 5.9% 0.8% -3.4%
Ebix Inc. Vertically Focused 4.1x 5.2x 3.7x 3.4x 3.7x 9.3x 12.2x 8.9x 7.9x 8.8x 22.8% 18.2% 18.4% 18.0% 20.5% 43.5% 42.9% 41.2% 42.4% 41.8%
Ellie Mae Vertically Focused 4.6x 7.8x 6.0x 5.0x 5.0x 29.8x 37.9x 24.6x 19.5x 19.9x 46.4% 67.0% 83.5% 83.5% 69.9% 15.4% 20.6% 24.4% 25.5% 24.8%
ExactTarget, Inc. CRM & Marketing 2.8x 2.5x 2.9x 2.9x 2.9x 9.3x 8.0x 9.2x 9.5x 9.8x -5.1% 1.2% 9.4% 14.4% 7.8% 29.6% 30.8% 31.3% 30.7% 29.1%
Fleetmatics ERP & Supply Chain - - 7.5x 6.9x 5.6x - - 45.1x 37.0x 27.8x - - - 38.1% 39.6% 18.1% 16.8% 16.6% 18.6% 20.3%
Halogen Software, Inc. Workforce Management - - - - 8.0x - - - - - 36.4% 36.4% 36.4% 22.5% - -6.7% -6.7% -6.7% -8.8% -9.6%
inContact, Inc. Other SaaS 2.4x 2.5x 2.4x 2.7x 3.2x - - - 458.2x 236.3x 12.5% 16.1% 20.3% 24.6% 25.5% -5.8% -4.9% -2.1% 0.6% 1.4%
IntraLinks Holdings Other SaaS 1.3x 1.4x 1.6x 1.6x 1.5x 12.1x 26.1x 86.0x 51.1x 66.2x 7.3% 2.9% 0.1% 1.8% 4.6% 10.3% 5.4% 1.9% 3.2% 2.3%
J2 Global Other SaaS 2.9x 3.3x 3.4x 4.1x 4.5x 6.0x 6.7x 6.7x 8.3x 9.8x 27.9% 18.6% 12.1% 12.5% 16.0% 49.5% 49.7% 50.5% 49.6% 46.1%
Jive Software, Inc Other SaaS 13.0x 8.7x 6.9x 7.6x 7.0x - - - - - 64.2% 56.8% 49.3% 47.1% 41.2% -43.6% -39.3% -34.9% -32.2% -35.4%
LivePerson CRM & Marketing 5.8x 6.0x 4.3x 4.3x 2.6x 30.0x 37.2x 30.3x 35.4x 29.8x 21.3% 21.4% 19.7% 18.3% 17.0% 19.3% 16.2% 14.1% 12.1% 8.7%
Marin Software CRM & Marketing - - - 8.2x 4.5x - - - - - 90.1% 90.1% - 64.9% - -42.4% -42.4% -37.2% -38.0% -39.9%Marin Software CRM & Marketing 8.2x 4.5x 90.1% 90.1% 64.9% 42.4% 42.4% 37.2% 38.0% 39.9%
Marketo CRM & Marketing - - - - 11.5x - - - - - 130.8% 130.8% 130.8% 80.3% - -67.9% -67.9% -67.9% -56.2% -53.2%
Medidata Solutions Vertically Focused 3.0x 4.0x 4.4x 5.3x 7.3x 14.9x 23.0x 26.6x 31.8x 45.6x 14.5% 10.0% 12.1% 18.4% 19.2% 20.4% 17.6% 16.5% 16.6% 16.0%
Netsuite ERP & Supply Chain 12.5x 14.2x 14.6x 15.4x 18.7x - - - - - 24.6% 26.3% 28.4% 30.7% 31.3% -6.8% -5.6% -5.2% -5.2% -6.3%
OpenTable, Inc. Other SaaS 5.9x 5.9x 6.1x 7.1x 7.9x 19.8x 20.7x 20.3x 25.0x 27.2x 30.3% 22.0% 17.1% 15.9% 15.6% 29.8% 28.5% 29.8% 28.5% 29.2%
Qualys, Inc. Other SaaS - 4.8x 4.8x 3.1x 3.4x - 57.6x 50.5x 27.7x 30.2x - - - 20.0% 19.3% 9.8% 8.3% 9.5% 11.3% 11.1%
RealPage Vertically Focused 4.9x 6.1x 5.1x 5.0x 4.4x 37.9x 46.9x 36.0x 30.6x 27.3x 34.4% 32.0% 27.7% 24.9% 22.5% 12.9% 13.1% 14.1% 16.4% 16.0%
Responsys CRM & Marketing 3.4x 2.7x 1.4x 1.7x 2.1x 20.3x 20.3x 11.4x 14.0x 19.0x 36.3% 27.2% 21.1% 20.7% 21.3% 16.6% 13.1% 12.1% 11.8% 11.2%
Salesforce com CRM & Marketing 8 2x 7 4x 7 4x 8 2x 7 4x 189 2x 168 0x 235 9x 298 6x 331 3x 37 7% 36 5% 36 1% 34 6% 32 1% 4 3% 4 4% 3 1% 2 8% 2 2%Salesforce.com CRM & Marketing 8.2x 7.4x 7.4x 8.2x 7.4x 189.2x 168.0x 235.9x 298.6x 331.3x 37.7% 36.5% 36.1% 34.6% 32.1% 4.3% 4.4% 3.1% 2.8% 2.2%
SciQuest ERP & Supply Chain 5.0x 5.4x 4.7x 5.5x 6.6x 41.4x 47.1x 50.7x 96.2x 167.3x 23.3% 22.0% 21.4% 24.4% 31.5% 12.1% 11.6% 9.4% 5.7% 3.9%
Service-now.com Other SaaS 19.5x 20.3x 17.7x 14.9x 17.0x - - - - - - - - 90.3% 87.8% -1.2% -6.1% -9.2% -8.9% -9.4%
SPS Commerce ERP & Supply Chain 4.9x 5.6x 6.6x 6.4x 7.7x 68.5x 67.2x 78.0x 73.9x 86.7x 31.6% 31.5% 30.4% 33.0% 36.3% 7.1% 8.4% 8.5% 8.7% 8.9%
Tableau Software Other SaaS - - - - 21.4x - - - - 20132.4x 82.5% 82.5% 82.5% 104.8% - 9.6% 9.6% 9.6% 6.3% 0.1%
Tangoe Other SaaS 6.3x 5.5x 3.2x 3.3x 2.8x 77.9x 70.3x 41.7x 38.9x 32.9x 56.0% 50.8% 48.1% 47.2% 41.5% 8.1% 7.8% 7.6% 8.5% 8.7%
Textura Corp. Vertically Focused - - - - 18.7x - - - - - 74.7% 74.7% 106.2% - - -102.3% -102.3% -68.0% -62.6% -55.1%
The Ultimate Software Group, Inc. Workforce Management 7.0x 8.3x 8.0x 7.9x 8.5x 71.1x 80.0x 69.4x 63.7x 61.9x 19.6% 21.0% 21.8% 23.4% 24.4% 9.9% 10.4% 11.6% 12.5% 13.8%
U it 4 ERP & S l Ch i 1 5 1 5 1 6 1 8 1 9 10 0 10 6 11 8 12 7 13 3 6 0% 4 3% 3 8% 5 4% 5 4% 14 9% 13 9% 13 8% 14 3% 14 3%Unit 4 ERP & Supply Chain 1.5x 1.5x 1.6x 1.8x 1.9x 10.0x 10.6x 11.8x 12.7x 13.3x 6.0% 4.3% 3.8% 5.4% 5.4% 14.9% 13.9% 13.8% 14.3% 14.3%
Vocus CRM & Marketing 3.0x 3.3x 2.6x 2.1x 1.3x 311.8x 433.8x 242.6x - 92.0x 21.0% 29.9% 39.7% 48.7% 48.4% 1.0% 0.8% 1.1% -0.2% 1.4%
Workday, Inc. ERP & Supply Chain - - 33.2x 29.9x 32.0x - - - - - - - - 103.6% 88.3% -42.4% -38.1% -35.7% -32.5% -31.9%
Zix Corporation Other SaaS 3.9x 3.5x 3.6x 4.2x 4.7x 12.5x 11.3x 12.7x 15.3x 21.1x 12.4% 11.1% 12.0% 13.7% 14.4% 31.2% 30.7% 28.1% 27.6% 22.2%
Median: 4.9x 5.4x 4.6x 5.0x 5.3x 29.9x 37.9x 41.7x 35.4x 31.5x 30.9% 28.0% 26.8% 25.1% 25.5% 8.9% 8.0% 8.0% 6.0% 3.1%
All Rights Reserved

THE SEG SaaS INDEX: FINANCIAL PERFORMANCE
26%
30%
24% achieved TTM
35.0%$180
26%
24%
21%
15%
15%
20%
25%
ompanies
24% achieved TTM
revenue growth of
40% or more
Only 6% of
companies
generated TTM
revenue growth of
10% l
20.0%
25.0%
30.0%
$100
$120
$140
$160
$
nue Growth
al Revenue
0%
6%
9%
0%
5%
10%
% of Co
10% or less
0 0%
5.0%
10.0%
15.0%
$0
$20
$40
$60
$80
TTM Reven
TTM Tota
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
<= 50%
> 50%
TTM Revenue Growth
• After declining for four consecutive quarters, the median TTM
revenue growth rate for the SEG SaaS Index edged up to 25.5%
0.0%$0
2Q12 3Q12 4Q12 1Q13 2Q13
in 2Q13.
• Public SaaS companies continued to grow and mature, and gain
market share; Q2’s median TTM revenue exceeded $164M, up
sharply from 2Q12’s $120M.
• Accelerating demand for SaaS solutions has bolstered the TTM
revenue growth rates of public SaaS providers, but many are
reaching a size that makes it difficult to recapture 2007’s median
42.5% growth rate in a slowly recovering economy.
• We expect median TTM revenue growth for public SaaS
All Rights Reserved
We expect median TTM revenue growth for public SaaS
companies to remain at current levels for the remainder of 2013.

85% with EBITDA margins of 20% or lower
30%10%
35%
40%
15%
20%
25%
6%
8%
DA Growth
Margin
35%
33%
18%20%
25%
30%
35%
ompanies
5%
0%
5%
10%
0%
2%
4%
TTM EBITD
EBITDA
10%
5%
0%
5%
10%
15%
% of Co
• After peaking in 2010, the median EBITDA margin of public
SaaS companies has declined every quarter.
‐5%0%
2Q12 3Q12 4Q12 1Q13 2Q13
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
TTM EBITDA Margin
SaaS companies has declined every quarter.
• The trend continued in 2Q13, as EBITDA margins fell to 3.1%
from 8.9% in 2Q12.
• The continuing erosion of EBITDA margins among SaaS
providers has not been accompanied by a concomitantp p y
increase in TTM revenue growth rates, suggesting public
SaaS providers are working harder and spending more just to
stay even.
All Rights Reserved

Median Margin PerformanceMedian Operating Ratios
45%
80%
25%
30%
35%
40%
45%
evenue
40%
50%
60%
70%
80%
argin
0%
5%
10%
15%
20%
% of Re
0%
10%
20%
30%
40%
% Ma
• Increased spending on sales and marketing by public SaaS
companies accounted for much of the decline in median
• Median gross profit margins for public SaaS companies in
2Q13 were 70.6%, and have remained steady over the past
0%
2Q12 3Q12 4Q12 1Q13 2Q13
0%
2Q12 3Q12 4Q12 1Q13 2Q13
EBITDA margin.
• In 2Q13, 38.9% of total revenue was spent on sales &
marketing, up from 35.8% in 2Q12.
• R&D spending as a percent of revenue increased to 17.8% in
, y p
five quarters.
• Stable gross profit margins demonstrate the ability of public
SaaS companies to grow without disproportionally scaling
infrastructure and increasing application delivery costs.
2Q13, compared to 15.0% of revenue invested in R&D by
on-premise software companies.
• It is unclear whether the increased spending on product
development and sales by public SaaS companies will
accelerate revenue growth in the absence of improved GDP
• With growth as their primary objective, public SaaS
companies are running close to break even, with net income
in 2Q13 of -2.6%.
All Rights Reserved
accelerate revenue growth in the absence of improved GDP
growth and increased IT capital spending.

THE SEG SaaS INDEX: MARKET MULTIPLES
EV/Revenue Multiple DistributionEV/Revenue and EV/EBITDA Multiples
41.7x45.0x
21%
25%
29.9x
37.9x
35.4x
31.5x
20 0x
25.0x
30.0x
35.0x
40.0x
11%
16%
11% 11%
16%
21%
15%
20%
Companies
4.9x 5.4x 4.6x 5.0x 5.3x
0.0x
5.0x
10.0x
15.0x
20.0x
0%
5%
3%
8%
0%
5%
10%
% of C
• Median EV/Revenue multiples remained strong for public
SaaS providers, closing 2Q13 at 5.3x.
• The wide disparity in public SaaS company EV/Revenue
multiples is striking, and demonstrates growing awareness
2Q12 3Q12 4Q12 1Q13 2Q13 <= 1.0x > 1.0x
<= 2.0x
> 2.0x
<= 3.0x
> 3.0x
<= 4.0x
> 4.0x
<= 5.0x
> 5.0x
<= 6.0x
> 6.0x
<= 7.0x
> 7.0x
<= 8.0x
> 8.0x
<= 9.0x
> 9.0x
EV/Revenue
p , g Q
• Public SaaS providers in 2Q13 continued to trade at a
significant premium relative to their on-premise peers (5.3x
vs. 2.7x).
• Public SaaS EV/Revenue multiples have exceeded 5x in
p g, g g
and sophistication among SaaS investors.
• Typically, we would expect to see a cluster of companies
with multiples around the median (5.3x); instead, public
SaaS companies are clustered at the low and high ends of
the range suggesting SaaS is increasingly comprised of
three of the past five quarters, the best streak since 2007.
the range, suggesting SaaS is increasingly comprised of
underperformers and overachievers.
• 22% of the companies in the SEG SaaS Index are trading for
9x TTM revenue or greater, while 27% are trading for 3x or
lower.
All Rights Reserved

THE SEG SaaS INDEX: MARKET MULTIPLES
14.0x
8 8x
10.0x
7.4x
11.5x
8.0x
10.0x
12.0x
EV/Revenue
8.8x
4.5x
5.3x
4 1x5.0x
6.0x
7.0x
8.0x
9.0x
EV/Revenue
0.0x
1.7x
3.4x
4.4x
2.8x
0 0x
2.0x
4.0x
6.0x
Median E
3.4x
4.1x
0 0x
1.0x
2.0x
3.0x
4.0x
Median E
• There is a clear and direct correlation between the median
TTM th t d di EV/R lti l
• There is an inverse correlation between EBITDA margins
and median EV/Re en e m ltiples
0.0x
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
<= 50%
> 50%
TTM Revenue Growth
0.0x
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
TTM EBITDA Margin
TTM revenue growth rate and median EV/Revenue multiple
of public SaaS companies.
• Public SaaS companies growing TTM revenue in excess of
50% achieved a median EV/Revenue multiple of 11.5x.
• The premium EV/Rev market multiples awarded rapidly
and median EV/Revenue multiples.
• In the current market, SaaS profitability is penalized, as
investors perceive profitability to be at the expense of
growth, which they deem all important.
• As proof public SaaS companies with no profitability• The premium EV/Rev market multiples awarded rapidly
growing public SaaS companies, which is driving their
increased spending on sales & marketing.
• As proof, public SaaS companies with no profitability
boasted a remarkable 8.8x median EV/Revenue multiple in
2Q13.
All Rights Reserved

THE SEG SaaS INDEX BY PRODUCT CATEGORY
CRM & Marketing 5.8x 5.0x 4.3x 3.5x 2.7x 4.1x 4.5x 2.8x 2.3x 3.0x 37.0% 33.2% 37.9% 40.9% 32.1% 1.0% 0.8% 2.8% 1.4% 1.4%
ERP & Supply Chain 4.9x 5.4x 6.6x 6.4x 6.6x 5.0x 5.3x 5.7x 5.7x 6.7x 24.0% 24.1% 22.2% 30.7% 31.5% 7.1% 8.4% 8.5% 5.7% 3.9%
Vertically Focused 4.3x 5.7x 4.7x 5.0x 5.0x 4.1x 4.6x 3.9x 4.2x 4.0x 34.4% 32.0% 27.7% 21.6% 21.5% 15.4% 15.2% 14.3% 16.4% 16.0%
SEG SaaS Index
Category
EV/Revenue Forward EV/Revenue TTM Revenue Growth EBITDA Margin
Currently comprised of 40 public companies, The SEG SaaS Index has sufficient critical mass to
analyze trends across four distinct SaaS product categories Select companies within each SaaS
Workforce Management 7.0x 8.3x 10.5x 10.7x 8.5x 6.5x 7.3x 7.6x 8.0x 7.4x 28.0% 28.7% 29.1% 23.4% 43.1% -13.8% -17.0% -18.1% -17.1% -15.4%
Median: 4.9x 5.4x 4.6x 5.0x 5.3x 4.5x 4.7x 4.2x 4.5x 5.3x 30.9% 28.0% 26.8% 25.1% 25.5% 8.9% 8.0% 8.0% 6.0% 3.1%
CRM & M k ti ERP & S l Ch i V ti ll F d W kf M t
analyze trends across four distinct SaaS product categories. Select companies within each SaaS
category are included below. See the appendix to this report for the complete list.
CRM & M k ti ERP & S l Ch i V ti ll F d W kf M tCRM & Marketing ERP & Supply Chain Vertically Focused Workforce ManagementCRM & Marketing ERP & Supply Chain Vertically Focused Workforce Management
All Rights Reserved

THE SEG SaaS INDEX BY PRODUCT CATEGORY:
2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth 2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth
20%
40%
60%
30%
35%
40%
45%
50%
(60%)
(40%)
(20%)
0%
g
in
ly
d
e
nt
0%
5%
10%
15%
20%
25%
30%
CRM&
Marketin
ERP&
SupplyChai
Verticall
Focuse
Workforce
Managemen
0%
CRM&
Marketing
ERP&
SupplyChain
Vertically
Focused
Workforce
Management
10%
15%
20%
20%
30%
40%
50%
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
(50%)
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
g
n
d
t
(20%)
CRM&
Marketing
ERP&
SupplyChain
Vertically
Focused
Workforce
Management
CRM&Marketing
P&SupplyChain
erticallyFocused
Workforce
Management
All Rights Reserved
C
ERP
Ve

THE SEG SaaS INDEX BY PRODUCT CATEGORY:
MARKET MULTIPLES
9 0 40%
4 0
5.0x
6.0x
7.0x
8.0x
9.0x
(10%)
0%
10%
20%
30%
40%
0.0x
1.0x
2.0x
3.0x
4.0x
g
n
y
d
nt
(60%)
(50%)
(40%)
(30%)
(20%)
g
n
y
d
nt
• Public SaaS companies comprising the Workforce Management category achieved a 8.5x median EV/Revenue multiple, 66% higher
CRM&
Marketing
ERP&
SupplyChain
Vertically
Focused
Workforce
Managemen
CRM&
Marketing
ERP&
SupplyChain
Vertically
Focused
Workforce
Managemen
g g g y g
than the next closest product category, ERP & Supply Chain.
• The stellar market valuations of these SaaS Workforce Management providers can be attributed to their breakneck TTM revenue
growth (23.4%), despite little or no profitability.
• Workforce management SaaS providers continued to benefit from a continuing migration from legacy, on-premise solutions to hosted
SaaS solutions.
• SaaS ERP & Supply chain, where market adoption has lagged due to concerns over security and integration, achieved the second
highest median EV/Revenue multiple (6.6x).
• Although ERP & Supply Chain TTM revenue growth was only slightly above the SaaS median, companies within this product
t i d i k t lti l b f th i k t t ti l f h t d ERP & S l Ch i l ti
All Rights Reserved
category received premium market multiples because of the massive market potential of hosted ERP & Supply Chain solutions.

PUBLIC INTERNET COMPANY FINANCIAL ANDPUBLIC INTERNET COMPANY FINANCIAL AND
THE SEG INTERNET INDEX
All Rights Reserved

Public Internet Company Market Valuations by Product CategoryTHE SEG INTERNET INDEX
SEG - Internet: Median Metrics
• The SEG Internet Index tracks public
companies that primarily offer B2C
solutions over the Internet using a wide
Measure 2Q12 3Q12 4Q12 1Q13 2Q13
EV/EBITDA 12.3x 13.5x 13.3x 13.5x 14.8x
EBITDA M i 13 3% 13 2% 13 3% 13 0% 13 3%
array of pricing models
• The SEG Internet Index is currently
comprised of 89 public Internet
i *
EBITDA Margin 13.3% 13.2% 13.3% 13.0% 13.3%
Net Income Margin 4.8% 4.3% 6.2% 3.9% 2.4%
TTM EBITDA Growth 20.3% 20.3% 11.5% 15.6% 9.4%
companies*
($ ) $ $ $ $ $
Cash & Eq ($M) $136.6 $122.6 $130.8 $148.2 $164.5
Current Ratio 2.6 2.6 2.5 2.2 2.4
All Rights Reserved
* See appendix for a complete list of companies in The SEG Internet Index

Initial Public OfferingsTHE SEG INTERNET INDEX: FINANCIAL PERFORMANCE
30.0%$440
23%25%
15 0%
20.0%
25.0%
30.0%
$410
$420
$430
$440
nue Growth
l Revenue
13%
18%
17%
10%
19%
15%
20%
ompanies
0 0%
5.0%
10.0%
15.0%
$370
$380
$390
$400
TTM Reven
TTM Tota
10%
0%
5%
10%
% of Co
• In 2Q13, the median YoY TTM revenue growth rate of public
companies comprising the SEG Internet Index declined from 26.6%
0.0%$370
2Q12 3Q12 4Q12 1Q13 2Q13
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM Revenue Growth
to 18.7%.
• While lower, Q2’s median Internet growth rate remains healthy,
especially considering the median TTM revenue of the SEG Internet
Index is $430.6M, compared to only $164.2M for the SEG SaaS
IndexIndex.
• The SEG Internet Index had an impressive number of star
performers, 19% of companies in the index reported TTM revenue
growth greater than 40% in 1Q13.
• Conversely, 23% of companies in the SEG Internet Index posted
All Rights Reserved
Conversely, 23% of companies in the SEG Internet Index posted
negative TTM revenue growth, depressing the median as a whole.

THE SEG INTERNET INDEX: FINANCIAL PERFORMANCE
25%14%
30%
15%
20%
25%
8%
10%
12%
14%
DA Growth
Margin
20%
24% 24%
14%15%
20%
25%
ompanies
0%
5%
10%
0%
2%
4%
6%
TTM EBITD
EBITDA
9% 9%
0%
5%
10%
% of Co
• Over the past five quarters, public Internet companies
managed to maintain respectable EBITDA margins despite
0%0%
2Q12 3Q12 4Q12 1Q13 2Q13
0%
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM EBITDA Margin
g p g p
their declining revenue growth rates.
• The median ~13% Internet Index EBITDA margin for 2Q13
was consistent with 2006 and 2007 performance, but was
markedly lower than the 18.1% median EBITDA achieved in
1Q111Q11.
• The EBITDA margin decline was partly due to a greater
number of Internet IPOs with stellar revenue growth, but
little, if any, profitability.
• 44% of all public Internet companies posted EBITDA
All Rights Reserved
• 44% of all public Internet companies posted EBITDA
margins of 10% or lower.

THE SEG INTERNET INDEX: FINANCIAL PERFORMANCE
Median Margin PerformanceMedian Operating Ratios
25%
70%
15%
20%
25%
evenue
40%
50%
60%
70%
argin
0%
5%
10%
% of Re
0%
10%
20%
30%
% Ma
• In 2Q13, companies comprising the SEG Internet Index spent 22.1% of total revenue on sales and marketing (S&M), 11.5% on
research development (R&D), and 11.3% on general and administrative.
0%
2Q12 3Q12 4Q12 1Q13 2Q13
0%
2Q12 3Q12 4Q12 1Q13 2Q13
p ( ), g
• The median R&D spend as a percent of total revenue was the lowest among our three tracking indices.
• Despite TTM revenue growth declines, public Internet companies kept their cost structures in line, resulting in a median TTM
EBITDA margin of 13.3% in 2Q13.
All Rights Reserved

THE SEG INTERNET INDEX: MARKET MULTIPLES
EV/Revenue Multiple DistributionMedian EV/Revenue and EV/EBITDA Multiples
14.8x16.0x
30%
12.3x
13.5x 13.3x 13.5x
8 0x
10.0x
12.0x
14.0x 23%
25%
15%
20%
25%
ompanies
2.2x 1.9x 2.1x 2.0x 2.2x
0 0x
2.0x
4.0x
6.0x
8.0x
9%
8%
9%
3%
5%
7%
2%
9%
0%
5%
10%
% of Co
• In 2Q13, the median EV/Revenue multiple of the SEG Internet Index was 2.2x, flat YoY.
• The EV/Revenue market multiples of public internet providers vary dramatically with the largest concentration at 2 0x or below (48%
0.0x
2Q12 3Q12 4Q12 1Q13 2Q13
0%
<= 1.0x > 1.0x
<= 2.0x
> 2.0x
<= 3.0x
> 3.0x
<= 4.0x
> 4.0x
<= 5.0x
> 5.0x
<= 6.0x
> 6.0x
<= 7.0x
> 7.0x
<= 8.0x
> 8.0x
<= 9.0x
>= 9.0x
EV/Revenue
• The EV/Revenue market multiples of public internet providers vary dramatically, with the largest concentration at 2.0x or below (48%
of our Internet Index).
• However, a significant minority – mostly the headline grabbers – are valued highly. 23% of public Internet companies closed 2Q13
with EV/Revenue multiples of 6.0x or higher.
• Among the Internet companies boosting the highest EV/Revenue market multiples were a large number of relatively recent IPO’s that• Among the Internet companies boosting the highest EV/Revenue market multiples were a large number of relatively recent IPO s that
are capturing a significant share of online advertising dollars; several also benefited from originating in high growth economies like
China and Brazil. Examples include LinkedIn (16.8x), Zillow (13.0x), Qihoo (12.2x), Mercadolibre (11.8x), Yelp (11.6x), Facebook
(10.0x), Trulia (10.1x) and Youku (7.9x).
All Rights Reserved

THE SEG INTERNET INDEX: MARKET MULTIPLES
7.5x8.0x 8.0x
4.0x
5.0x
6.0x
7.0x
EV/Revenue
3.8x
4.8x
6.8x
4.0x
5.0x
6.0x
7.0x
EV/Revenue
0.9x
1.3x
2.5x
2.9x
2.5x
0 0x
1.0x
2.0x
3.0x
Median E
1.9x
1.4x
1.9x
0 0x
1.0x
2.0x
3.0x
Median E
• Public Internet company valuations are being driven by TTM
revenue growth with dramatic differences between new
• With few exceptions, and in stark contrast to SaaS
0.0x
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM Revenue Growth
0.0x
<= 0% > 0%
<= 10%
> 10%
<= 20%
> 20%
<= 30%
> 30%
<= 40%
> 40%
TTM EBITDA Margin
revenue growth, with dramatic differences between new,
rapidly growing social and ad-tech providers and their slower
growing incumbent counterparts (e.g., Facebook vs. Yahoo).
• Public Internet companies with TTM revenue growth of 40%
or higher were rewarded with median EV/Revenue multiples
companies, many of the most profitable public Internet
companies also reported stellar TTM revenue growth. Among
them were ChangYou, Baidu, Yandex, Mail.ru, TripAdvisor
and Tencent Holdings.
• Unlike The SEG SaaS Index where TTM EBITDA margins
markedly greater than their slower growing peers.
• Investors were noticeably less excited about public Internet
companies with TTM revenue growth less than 40%.
Unlike The SEG SaaS Index where TTM EBITDA margins
bore little relationship to median EV/Revenue multiples,
investors in public Internet companies kept a keen eye on
margins, and rewarded strong performers with significantly
higher market multiples.
All Rights Reserved

THE SEG INTERNET INDEX BY PRODUCT CATEGORY
SEG Internet Index
Ad Tech & Lead Generation 2.5x 1.8x 2.1x 2.0x 2.0x 11.0x 13.3x 12.0x 14.9x 14.9x 37.5% 35.3% 32.9% 25.2% 26.8% 14.0% 14.4% 14.1% 13.0% 13.5%
Commerce 0.7x 0.8x 1.2x 0.9x 0.9x 18.8x 15.1x 15.2x 10.5x 15.1x 16.7% 23.3% 20.6% 17.5% 17.7% 8.3% 8.3% 8.4% 7.6% 7.5%
Content & Media 1.6x 1.3x 1.4x 1.6x 2.3x 10.1x 10.8x 10.9x 15.4x 13.8x 15.5% 12.3% 10.5% 12.6% 12.1% 14.0% 14.1% 14.1% 14.8% 15.5%
Gaming 3 4x 2 1x 2 4x 2 7x 2 7x 4 0x 3 4x 4 3x 5 8x 5 9x 33 1% 32 0% 24 8% 21 9% 21 9% 45 0% 43 5% 38 6% 36 3% 38 6%
Category
EV/Revenue EV/EBITDA TTM Revenue Growth EBITDA Margin
Gaming 3.4x 2.1x 2.4x 2.7x 2.7x 4.0x 3.4x 4.3x 5.8x 5.9x 33.1% 32.0% 24.8% 21.9% 21.9% 45.0% 43.5% 38.6% 36.3% 38.6%
Infrastructure 1.8x 1.1x 1.0x 1.7x 1.6x 12.4x 14.0x 11.7x 11.9x 13.6x 13.7% 12.2% 10.9% 9.2% 8.8% 10.7% 8.3% 7.5% 8.0% 7.2%
Services 2.2x 2.9x 2.7x 3.2x 2.9x 16.9x 16.4x 17.7x 15.3x 26.8x 55.1% 49.5% 42.0% 42.2% 44.9% 6.5% 7.3% 8.5% 8.5% 6.6%
Social 13.0x 9.6x 8.6x 8.9x 7.1x 30.4x 29.3x 36.4x 29.1x 32.6x 64.0% 64.6% 50.9% 49.3% 47.2% 12.9% 12.6% 13.3% 16.5% 20.0%
Travel 2.8x 2.3x 2.0x 2.0x 2.2x 19.7x 16.5x 15.3x 16.2x 18.2x 29.1% 24.0% 18.6% 19.8% 19.5% 24.5% 25.7% 21.7% 18.1% 19.1%
Median 2.2x 1.9x 2.1x 2.0x 2.2x 12.3x 13.5x 13.3x 13.5x 14.8x 26.6% 24.9% 22.0% 19.8% 18.7% 13.3% 13.2% 13.3% 13.0% 13.3%
The SEG Internet Index is segmented into eight product categories. Select companies within each
Internet product category are included below. See the appendix for the complete list of companies
within each product category.
Ad Tech & Lead Gen Commerce Content & Media GamingAd Tech & Lead Gen Commerce Content & Media Gaming
Infrastructure Services Social Travel
All Rights Reserved

THE SEG INTERNET INDEX BY PRODUCT CATEGORY:
2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth 2Q13 YoY Change in Revenue Growth2Q13 TTM Revenue Growth
(15%)
(10%)
(5%)
0%
5%
10%
30%
35%
40%
45%
50%
(40%)
(35%)
(30%)
(25%)
(20%)
(15%)
n
ce
ia
ng
re
es
al
el
0%
5%
10%
15%
20%
25%
30%
AdTech&
LeadGeneratio
Commerc
Content&Medi
Gamin
Infrastructur
Service
Socia
Trave
AdTech&
LeadGeneration
Commerce
Content&Media
Gaming
Infrastructure
Services
Social
Travel
30%
40%
50%
60%
L
C
30%
35%
40%
45%
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
5%
10%
15%
20%
25%
30%
(40%)
AdTech&
eadGeneration
Commerce
ontent&Media
Gaming
Infrastructure
Services
Social
Travel
0%
AdTech&
adGeneration
Commerce
ntent&Media
Gaming
Infrastructure
Services
Social
Travel
All Rights Reserved
Le
Co
A
Lea
Con

THE SEG INTERNET INDEX BY PRODUCT CATEGORY:
MARKET MULTIPLES
0%
20%
40%
60%
4.0x
5.0x
6.0x
7.0x
8.0x
(60%)
(40%)
(20%)
on
ce
dia
ng
ure
es
cial
vel
0.0x
1.0x
2.0x
3.0x
tion
erce
edia
ming
ture
ces
cial
avel
AdTech&
LeadGeneratio
Commerc
Content&Med
Gamin
Infrastructu
Service
Soc
Trav
AdTech&
LeadGenerat
Comme
Content&Me
Gam
Infrastruct
Servic
So
Tra
• Public Internet Companies comprising the social product category closed Q2 with the highest median EV/Revenue multiple among
the eight Internet categories we track. The 7.1x median market valuation was 84% higher than the next closest product category,
Services (2.9x).
• Social solutions Facebook, LinkedIn, Yelp, etc., continued to expand their online footprints and investors rewarded them accordingly.
Social Market Multiples also reflected significant YoY EBITDA margin improvement, as category members demonstrated a greater
ability to monetize their large user bases with advertising, subscriptions, more mobile offerings and other value added services.
• The Commerce product category lagged all other product categories, with a 0.9x EV/Revenue multiple, a tepid TTM revenue growth
of 17.7%, and a lackluster 7.5% EBITDA margin. Amazon, one of the most notable commerce companies, is aggressively trying to
diversify its content offerings and expand its hardware offerings as a way of differentiating from competitors and driving more spend
All Rights Reserved
diversify its content offerings and expand its hardware offerings as a way of differentiating from competitors and driving more spend
through its platform.

SOFTWARE INDUSTRY M&A MARKET UPDATE
All Rights Reserved

SOFTWARE/SaaS M&A DEAL VOLUME AND SPENDING
Median On-Premise Software EV/Revenue Exit MultiplesU.S. Software Mergers & Acquisitions Activity
383
407
421 426 430
454 456
432
454
435
406
388
396
$17 9 $21.3
$23.4 $23.1
$20
$25
400
450
500
$
$33
$37
$40
$42 $41 $41 $42
$36
$39
$36
$34
$35.0
$40.0
$45.0
Millions)
$17.3
$17.9
$12.7
$13.1
$
$12.6
$15.8
$12.3
$15.8
$
$17.6
$10
$15
200
250
300
350
Value (BIllions)
Number of Deals
$28
$31
$15.0
$20.0
$25.0
$30.0
$35.0
rage Deal Value (M
$8.8
$0
$5
0
50
100
150
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
$0.0
$5.0
$10.0
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
TTM Aver
• Software M&A deal volume in Q2 once again hovered at of 400 transactions, which is historically consistent with an active M&A market.
• Total Software M&A spending rose sharply to $17.6 billion in 2Q13, up from 1Q13’s $6.8 billion, due in large part to the return of
software mega deals (EV > $500M).
Deals Value*2Q13 Projected
2
3
4
1
2
3
4
1
2
3
4
1
2
• There were eight on-premise/SaaS/Internet mega deals in 2Q13 alone, a marked increase from 1Q13’s single mega deal. Notable
mega deals in the second quarter included: Adobe’s acquisition of Neolane ($600M EV, 10.3x EV/Revenue multiple); Vista Equity
Partner’s acquisition of Websense ($971M, 2.7x); IBM’s acquisition of SoftLayer Technologies ($2B, 5.0x); Salesforce.com’s acquisition
of Exact Target ($2.2B, 7.1x); Insight Venture Partners’ acquisition of BMC Software ($6.9B, 3.1x).
• The software M&A average deal size retreated to the mid $30M range after surging then peaking in 2011The software M&A average deal size retreated to the mid $30M range, after surging, then peaking, in 2011.
• Software buyers have remained true to their word. Of the software buyers who responded to our Annual Buyer Survey over the last two
years, 72% on average said they would focus on deals ranging in size from $10M - $99M.
All Rights Reserved

SOFTWARE M&A EXIT MULTIPLES
Median Exit Multiples Median EV/Revenue Exit Multiple Distribution
12.1x 11.8x
12.7x
11 6x12 0
14.0x
25 0%
29.3%
30.0%
35.0%
TM
11.2x
11.6x
6 0x
8.0x
10.0x
12.0x 25.0%
20.7%
12.0%
13.0%
10.0%
15.0%
20.0%
25.0%
ofDealsin2Q13TT
1.7x
2.3x
1.8x 1.6x 1.8x
0 0x
2.0x
4.0x
6.0x
0.0%
5.0%
<= 1.0x > 1.0x &
<= 2.0x
> 2.0x &
<= 3.0x
> 3.0x &
<= 4.0x
> 4.0x
%
• After two consecutive quarters of declining TTM revenue exit
multiples, on-premise software transactions regained some
• On a TTM basis, 75.0% of all on-premise software targets
were acquired for 3.0x TTM revenue or less in 2Q13.
0.0x
2Q12 3Q12 4Q12 1Q13 2Q13 TTM Revenue Exit Multiple Bins
multiples, on premise software transactions regained some
lost ground, closing Q2 at 1.8x TTM revenue.
• Over the last several years, the median exit multiple of on-
premise software providers has been ~30% lower than the
median exit multiple for public on-premise software
i M f th t i iti f bli
e e acqu ed o 3 0 e e ue o ess Q 3
• The remaining 25.0% of targets, those with 3.0x or higher
exit multiples, came from software categories growing much
faster than the overall on-premise software market, such as
cloud, network infrastructure and security.
companies. Many of the more recent acquisitions of public
on-premise software companies were primarily financial,
rather than strategic, yielding lower EV/Revenue exit
valuations.
• Among the more noteworthy on-premise acquisitions in
2Q13: McAfee’s acquisition of Stonesoft ($378.7M, 7.0x
rev.) and IBM’s acquisition of SoftLayer Technologies ($2B,
5.0x).
All Rights Reserved

SOFTWARE M&A: BY OWNERSHIP STRUCTURE AND SIZE
by Sizeby Ownership Structure
Public Sellers
1.8x Median Multiple
Buyer Less Than
$200 million
Buyer Greater Than
$200 million
Private Sellers
64%36%
60%
40%
Private Buyers
59%41%
Seller Greater
Than $20
million: 1.5x
Seller Greater
Than $20
million: 0.8x
Seller Greater
Than $20
million: 1.9x
Seller Greater
Than $20
million: 2.7x
Public Buyers
Seller Less
Than $20
million: 2.4x
Seller Less
Than $20
million: 2.0x
Seller Less
Than $20
million: 1.5x
Seller Less
Than $20
Not enough data
• In Q2, as in quarters past, large (greater than $200 million in • Public buyers with revenue greater than $200 million paid a
revenue), public buyers paid the highest multiples.
• Public buyers in 2Q13 paid a median 2.3x TTM revenue for
their targets in 2Q13, compared to a median of 1.7x paid by
private buyers.
median 2.7x TTM revenue for their targets, compared to
only 1.5x paid by smaller public buyers.
• On a TTM basis, deals with the highest multiples featured a
large public or private buyer (greater than $200 million in
revenue) acquiring a small target (less than $20 million). Inrevenue) acquiring a small target (less than $20 million). In
Q1, this combination produced a median 3.3x EV/Revenue
exit multiple. Unfortunately, in 2Q13 there was not enough
data to provide a meaningful multiple.
All Rights Reserved

Horizontal & Vertical M&A Median EV/Revenue Exit
SOFTWARE M&A: BY VERTICAL AND HORIZONTAL
MARKETS
Horizontal & Vertical M&A Median EV/Revenue Exit
Multiples
Horizontal & Vertical M&A Volume
100%
% 37% 42% 36%
65% 63% 58% 67% 64%
20%
40%
60%
80%
1.9x 2.0x
1.4x 1.3x
1.9x
1.6x
3.0x
2.2x
1.8x 1.6x
35% 37% 42% 33% 36%
0%
20%
2Q12 3Q12 4Q12 1Q13 2Q13
Horizontal Vertical
2Q12 3Q12 4Q12 1Q13 2Q13
Vertical Horizontal
• As they have for most of the past five quarters, horizontal software providers garnered the lion’s share of M&A transactions in
2Q13.
However TTM revenue exit multiples dropped precipitously from 3 0x in 3Q12 to1 6x in 2Q13• However, TTM revenue exit multiples dropped precipitously, from 3.0x in 3Q12 to1.6x in 2Q13.
• Q2’s most noteworthy horizontal deals included the take private of BMC Software by a group of private equity firms for $6.9
billion (3.1x revenue), and Tyco International’s acquisition of security software provider ExactTechnologies ($150 million, 2.7x
revenue).
• After two consecutive lackluster quarters the median TTM revenue exit multiple for vertical software providers improved• After two consecutive lackluster quarters, the median TTM revenue exit multiple for vertical software providers improved
significantly in 2Q13, closing the quarter at 1.9x.
• Select Q2 vertical deals included P2 Energy Solution’s acquisition of process manufacturing software provider, ISS Group
Limited ($36.8M, 1.8x revenue); and OMERS Private Equity’s acquisition of public sector software provider, Civica plc ($607.8
million, 1.9x revenue).
All Rights Reserved

SOFTWARE M&A BY PRODUCT CATEGORY
• The Mobile product category accounted for
20.1% of all software M&A transactions in
the second quarter, making it the most
active M&A product category.
CRM, Marketing & Sales
2.1%
Data Mgmt & Integration
0.7%
Dev. Tools & IT Asset Mgmt
4.6%
eCommerce
0 4%
Billing & Service Provisioning
0 7%
BI, Risk & Compliance
2.5%
Content & Document Mgmt
1.8%
p g y
• Other active M&A categories in the first
quarter included Healthcare (7.0%),
Financial Services (7.0%), and Security
(5.6%).
0.4%
EDA
0.7%
Engineering, PLM & CAD
3.9%
Middleware
0.4%
ERP
1.4%
EntertainmentReal Estate
Retail
1 4%
Utility
0.7%
Other Verticals
8.8%
Accounting & Finance
1.1%
0.7%
• As a percent of total deals, the Security
product category increased its share 93%
YoY, the largest among all categories.
• According to Gartner, the global security
software market grew 7 9% in 2012 The
2.5%
HR & Workforce Mgmt
2.5%
Messaging, Conferencing &
Communications
2.5%
l d h
Legal
Manufacturing
1.4%
Oil & Gas
1.1%
Public Sector
2.1%
0.4%
1.4%
s
software market grew 7.9% in 2012. The
sector has shown continued strength in
2013, driven by new security demands
spawned by bring your own device (BYOD)
and cloud hosting trends. Buyers have
taken note adding best of breed technology
Multimedia, Graphics &
Communications
2.1%
Network Performance Mgmt
1.8%
Security
Fi i l S i
Healthcare
7.0%
Insurance
0.4%
Legal
1.1%
Vertical
taken note, adding best of breed technology
providers to plug holes in their product
portfolio.
5.6%
Systems Mgmt
3.5%
Supply Chain Mgmt &
Logistics
Construction
2.1%
Education
2.5%
Financial Services
7.0%
Logistics
3.2%
Mobile
20.1%
Automotive
0.4%
All Rights Reserved

SOFTWARE M&A BY PRODUCT CATEGORY
Median EV/Revenue Exit Multiples by Software Product Category
3.3x
3.1x 3.0x
2.7x
2 4x2.4x
1.8x 1.8x 1.6x 1.5x 1.5x
1.1x
Systems
Management
BI,Risk&
Compliance
neering,PLM
&CAD
Security
Healthcare
OtherVerticals
(A&D,Telco,
Retail,etc.)
upplyChain&
Logistics
DataMgmt&
Integration
anufacturing&
AssetMgmt
Mobile
ncialServices
Software
• Among the 32 on-premise software product categories we track, eleven had both sufficient deal activity and deal data to
ascertain a TTM revenue multiple in 2Q13
Engi
O
(
Su
Ma
A
Finan
S
ascertain a TTM revenue multiple in 2Q13.
• Among the eleven product categories offering Systems Management solutions garnered the highest median TTM revenue
multiple (3.3x) in Q2. Buyers in this product category are paying up for best-of-breed cloud and mobile computing companies
with demonstrated market success. Examples include: The KEYW Holding Company’s acquisition of Sensage ($85.5M EV 7.0x
TTM revenue); EQT Partners’ acquisition of UC4 Software ($271.6M, 3.6x); and BMC’s takeover by a group of private equity
fi ($6 9B 3 1 )firms ($6.9B, 3.1x).
• Led by a strong demand for business intelligence tools in the era of Big Data, BI, Risk & Compliance also posted a strong 3.1x
median EV/Revenue exit multiple in 2Q13. Select BI deals in Q213 include: Kofax’s acquisition of altosoft ($13.5M, 4.0x TTM
revenue and Datawatch’s acquisition of Panopticon Software ($31.4M, 6.3x).
All Rights Reserved

SaaS M&A: DEAL VOLUME AND EXIT MULTIPLES
Median SaaS EV/Revenue Exit MultiplesSaaS M&A Volume
104
30%120
al
SaaS M&A Deals SaaS as % of Software
39 39
45 48
68 65
59
94 94
86
104
15%
20%
25%
60
80
100
eals as a % of Tota
re M&A Deals
aS M&A Deals
4.0x
3.9x
4.1x
4.0x 4.0x
30
39
26
39
0%
5%
10%
0
20
40
SaaS M&A De
Softwar
# of Saa
2Q12 3Q12 4Q12 1Q13 2Q13
• There were 104 SaaS M&A transactions in 2Q13 At the half-year mark there have been 190 SaaS M&A transactions on pace• There were 104 SaaS M&A transactions in 2Q13. At the half-year mark, there have been 190 SaaS M&A transactions, on pace
to exceed SEG’s 2013 projection of 344, and 2012’s record breaking total of 311.
• After a steady rise from 2009 – 2012, the median TTM EV/Revenue exit multiple of SaaS transactions has held relatively steady
over the past five quarters, closing 2Q13 at 4.0x.
• The median SaaS exit multiple was 120% greater than the median on-premise exit multiple in 1Q13 (4.0x vs.1.8x), the secondThe median SaaS exit multiple was 120% greater than the median on premise exit multiple in 1Q13 (4.0x vs.1.8x), the second
highest valuation disparity on record.
All Rights Reserved

SaaS M&A BY PRODUCT CATEGORY
• CRM, Marketing & Sales was the most
active SaaS product category,
accounting for 12.0% of all M&A
transactions in the second quarter
Content & Document Mgmt
6%
CRM, Marketing & SalesBilling & Service Provisioning
BI, Risk & Compliance
9%
transactions in the second quarter.
• Buyers are seeking targets that will help
them capitalize on the rapid growth in
spending on marketing technology.
According to Gartner, by 2017 the CMO
CRM, Marketing & Sales
12%
Telecommunications
%
Other Verticals
8%
Billing & Service Provisioning
1%
will purchase more IT than the CIO.
• After two years of claiming almost 20%
of all SaaS transactions, the HR &
Workforce Mgmt product category had
its second consecutive lackluster
Data Mgmt & Integration
2%
eCommerce
4%
Engineering, PLM & CAD
1%
Insurance
4%
Real Estate
4%
1%
als
its second consecutive lackluster
quarter, closing 2Q13 with only 6% of
SaaS transactions. After a period of
rapid consolidation by the large HR
software providers, the M&A window for
many smaller HR providers is rapidly
HR & Workforce Mgmt
6%
Messaging, Conferencing &
Communications
4%
Financial Services
6%
Healthcare
2%
Vertic
many smaller HR providers is rapidly
closing.
• The Systems Management (10%) and
BI, Risk and Compliance (9%) product
categories also exhibited strength in
Multimedia, Graphics &
Communications
2%
Network Performance Mgmt
1%
Security
Automotive
2%
Construction
2%
Education
8%
2Q13. Both categories are benefiting
from adoption of SaaS deployed
solutions, which should continue for the
foreseeable future.
3%
Systems Mgmt
10%
Supply Chain Mgmt & Logistics
6%
2%
All Rights Reserved

2Q13 SaaS M&A TRANSACTIONS
E t i
Date Buyer Seller
Enterprise
Value TTM Revenue EV/Rev
06/28/13 Deutsche Post AG (XTRA:DPW) optivo GmbH - - -
06/28/13 Renaissance Learning Inc. Subtext Media, Inc. - - -
06/27/13 Adobe Systems Inc. (NasdaqGS:ADBE) Neolane SA $600,000,000 $58,000,000 10.3x
06/26/13 EMN8, Inc. Snapfinger - - -
06/25/13 Vi i T h l i I A i I06/25/13 Virima Technologies, Inc. Aruvio, Inc. - - -
06/24/13 DIGIEON Technologies Pvt. Ltd. SmartVault Corporation - - -
06/24/13 Incentivated Limited Ad.IQ Limited - - -
06/24/13 Cenduit, LLC Patient Reminders Limited - - -
06/24/13 LINE-X Franchise Development Corporation American Aftermarket Group LLC - - -
06/23/13 Thoma Bravo, LLC Keynote Systems, Inc. (NasdaqGS:KEYN) $340,770,000 $124,000,000 2.8x
06/21/13 Intuit Inc (NasdaqGS:INTU) Elastic Intelligence Inc06/21/13 Intuit Inc. (NasdaqGS:INTU) Elastic Intelligence, Inc. - - -
06/20/13 NET(net), Inc. xPeerient, Inc. - - -
06/20/13 - Gainsight, Inc. - - -
06/20/13 Fixmo Inc. Fixmo Carrier Services - - -
06/17/13 Lulu Software DOC2PDF Limited - - -
06/17/13 Professional Diversity Network LLC (NasdaqCM:IPDN) Resunate - - -
06/13/13 Accumuli plc (AIM:ACM) Signify Solutions Limited $4 080 000 $4 500 000 0 9x06/13/13 Accumuli plc (AIM:ACM) Signify Solutions Limited $4,080,000 $4,500,000 0.9x
06/12/13 AdRoll, Inc. Bitdeli Inc. - - -
06/12/13 Paychex, Inc. (NasdaqGS:PAYX) HR Services, Inc. - - -
06/12/13 ReviMedia, Inc. N2O Marketing, LLC - - -
06/12/13 Yahoo! Inc. (NasdaqGS:YHOO) Rondee, Inc. - - -
06/12/13 AVG Technologies N.V. (NYSE:AVG) LPI Level Platforms Inc. - - -
06/12/13 - Teliae SARL - - -06/ / 3 e ae S
06/11/13 DocDoc Pte. Ltd. NewCo Internet Pte Ltd - - -
06/11/13 Copart UK Limited Autoresiduos S.L.U. - - -
06/11/13 Immoware24 GmbH AWImmoware GmbH - - -
06/10/13 AFS Logistics, LLC Trendset Inc. $1,140,000 - -
06/10/13 @WalmartLabs Inkiru, Inc. - - -
06/10/13 Progress Software Corp. (NasdaqGS:PRGS) Rollbase, Inc. - - -g p ( q )
06/10/13 Contractors Register, Inc. JobSite123.com, LLC - - -
06/07/13 Salesforce.com, Inc (NYSE:CRM) EdgeSpring, Inc. $79,560,000 - -
06/06/13 RxVantage, Inc. RepAccess - - -
06/06/13 Canal Digitaal B.V. Stream Group B.V. - - -
06/05/13 SilverSky, Inc. Latis Networks, Mngd Security Div. - - -
06/04/13 International Business Machines Corporation (NYSE:IBM) SoftLayer Technologies, Inc. $2,000,000,000 $400,000,000 5.0x
All Rights Reserved

2Q13 SaaS M&A TRANSACTIONS (CON’T)
E t i
Date Buyer Seller
Enterprise
06/04/13 Starhome BV MACH S.à.r.l., Certain Assets - - -
06/03/13 Salesforce.com, Inc (NYSE:CRM) ExactTarget, Inc. (NYSE:ET) $2,249,560,000 $317,000,000 7.1x
05/31/13 Zoopla Property Group Limited Vizzihome Limited - - -
05/31/13 Trimble Navigation Limited (NasdaqGS:TRMB) Trade Service Company, LLC - - -
05/31/13 HGGC LLC M W bG I05/31/13 HGGC, LLC MyWebGrocer, Inc. - - -
05/30/13 Diasoft AO Seeneco - - -
05/30/13 BloomReach, Inc. ShopLogic, Inc. - - -
05/29/13 eCommera Limited OrderDynamics Corp. - - -
05/28/13 R Capital Management; TIME Equity Partners Oodrive Group - - -
05/28/13 Greenbriar Equity Group LLC Transplace, Inc. - - -
05/24/13 Answers Corporation WebCollage Inc $37 000 00005/24/13 Answers Corporation WebCollage, Inc. $37,000,000 - -
05/24/13 - Klick2Contact EU LTD - - -
05/22/13 Recargo, Inc. Xatori, Inc. - - -
05/22/13 GT Analytix, Inc. TRAQ-IT Software, LLC - - -
05/20/13 TOT Group, Inc. Aptito, Inc. $1,090,000 - -
05/20/13 C-Leveled, LLC FINTEL LLC - - -
05/17/13 SolarWinds Worldwide LLC N-able Technologies International Inc $120 000 000 - -05/17/13 SolarWinds Worldwide, LLC N able Technologies International, Inc. $120,000,000
05/17/13 - Syncron International AB - - -
05/16/13 Upland Software, Inc. Marex Group, Inc. - - -
05/15/13 DocuSign, Inc. Cartavi, Inc. - - -
05/14/13 OMT Inc. (TSXV:OMT) AnalytixInsight Inc. $2,070,000 - -
05/14/13 8K Miles Software Services Ltd (BSE:512161) FuGen Solutions, Inc. $7,500,000 - -
05/14/13 @WalmartLabs OneOps Inc. - - -@ p
05/13/13 Twitter, Inc. Lucky Sort Inc. - - -
05/13/13 RichRelevance, Inc. Avail Intelligence AB - - -
05/10/13 Intelligent Living Inc. Mind360 $1,000,000 - -
05/10/13 CellarStone Inc. webKPI LLC - - -
05/10/13 Guidewire Software, Inc. (NYSE:GWRE) Millbrook, Inc. - - -
05/09/13 Box, Inc. crocodoc - - -
05/09/13 Twitter, Inc. Ubalo, Inc. - - -
05/08/13 Rippe & Kingston Systems, Inc. ProspectStream LLC - - -
05/07/13 ReadSoft AB (OM:RSOF B) Expert Systems Development Svenska AB $9,190,000 $2,000,000 4.6x
05/07/13 Trulia, Inc. (NYSE:TRLA) Market Leader, Inc. (NasdaqGS:LEDR) $314,290,000 $48,000,000 6.6x
05/07/13 Swisscom AG (SWX:SCMN) Tweasy SA - - -
05/06/13 Dell Inc. (NasdaqGS:DELL) enstratius, Inc. - - -
All Rights Reserved

2Q13 SaaS M&A TRANSACTIONS (CON’T)
E t i
Date Buyer Seller
Enterprise
05/06/13 LoanLogics, Inc. NYLX, Inc. - - -
05/03/13 NetSuite Inc. (NYSE:N) OrderMotion, Inc. - - -
05/02/13 The Descartes Systems Group Inc (TSX:DSG) KSD Software Norway AS $30,760,000 $9,600,000 3.2x
05/02/13 5Touch Solutions, Inc. NK Labs Inc. - - -
05/01/13 Everest Group LLC JangoMail Inc05/01/13 Everest Group LLC JangoMail, Inc. - - -
04/30/13 Extraprise Group Inc. SmartSource Corporation - - -
04/29/13 Courier New Media, Inc. FastPencil, Inc. $18,000,000 - -
04/29/13 Konetic Limited RecruitActive Ltd. - - -
04/25/13 Software AG (XTRA:SOW) Relational Networks, Inc. $25,000,000 - -
04/24/13 Dassault Systemes SA (ENXTPA:DSY) Archividéo SARL - - -
04/24/13 Alegeus Technologies WealthCare Marketplace - - -04/24/13 Alegeus Technologies WealthCare Marketplace - - -
04/18/13 Jive Software, Inc. (NasdaqGS:JIVE) CLARA ehf $6,500,000 - -
04/18/13 Quindell Portfolio Plc (AIM:QPP) iter8 Inc.* $25,580,000 $5,000,000 5.0x
04/18/13 Access UK Limited TeamSeer Limited - - -
04/16/13 Echo360, Inc. ThinkBinder Inc. - - -
04/16/13 Ener-Core, Inc. (OTCBB:ENCR) Inventtech Inc. - - -
04/15/13 InnRoad, Inc. LTV Hotel Systems LLC - - -04/15/13 InnRoad, Inc. LTV Hotel Systems LLC
04/12/13 Egmont Hjemmet Mortensen AS MyKid AS - - -
04/12/13 ViaSat Inc. (NasdaqGS:VSAT) LonoCloud Inc. - - -
04/10/13 Coupa Software Incorporated Xpenser, Inc. - - -
04/10/13 Solera Holdings Inc. (NYSE:SLH) Eziworks Pty Ltd - - -
04/09/13 Proofpoint, Inc. (NasdaqGM:PFPT) Mail Distiller Ltd - - -
04/08/13 Follett Corporation BetterKnow, Inc. - - -p ,
04/07/13 Fujitsu Limited (TSE:6702) RunMyProcess SAS $20,220,000 $1,000,000 20.0x
04/07/13 Ebix Singapore Pte Ltd. Qatarlyst Limited - - -
04/04/13 IntraLinks Holdings, Inc. (NYSE:IL) MergerID Limited - - -
04/04/13 IntraLinks Holdings, Inc. (NYSE:IL) PE-Nexus, LLC - - -
04/04/13 Sport Ngin eYouthSportsUSA - - -
04/03/13 ReachForce, Inc. SetLogik, Inc. - - -
04/03/13 Experian Finance Plc Decisioning Solutions, Inc. - - -
04/02/13 ConnectSolutions Inc. NextUC, Inc. - - -
04/01/13 Rosetta Stone Ltd. LiveMocha, Inc. $8,500,000 $3,600,000 2.4x
04/01/13 inContact, Inc. (NasdaqCM:SAAS) Sierra360 LLC - - -
04/01/13 SAP AG (DB:SAP) KMS Software Company, LLC - - -
All Rights Reserved

INTERNET M&A: DEAL VOLUME AND EXIT MULTIPLES
Median Internet EV/Revenue Exit MultiplesInternet M&A Volume
273 263
222
185
204
berofDeals
2.1x
1.9x 1.9x 1.9x 1.9x
2Q12 3Q12 4Q12 1Q13 2Q13
Numb
2Q12 3Q12 4Q12 1Q13 2Q13
• Internet M&A remained highly volatile, in large part due to shifting marketing strategies, evolving business models, and constant
changes in the competitive landscape.
• In early 2012, a large number of Internet targets exited amidst the hype of the pending Facebook IPO (5/2012), creating a spike
in M&A volume. After the Facebook IPO debacle, Internet investors and buyers alike became more cautious and circumspect,
and M&A volume declined markedly, plunging to 185 transactions in 1Q13, down from 273 transactions in 2Q12.
I 2Q13 th 204 I t t M&A t ti k d i t th i t b t till ll b l 2012 d l• In 2Q13, there were 204 Internet M&A transactions, a marked improvement over the prior quarter, but still well below 2012 deal
levels.
• Internet median TTM EV/Revenue exit multiples have held steady, finishing 2Q13 at 1.9x. This is an M&A world of haves and
have nots, with wide disparities in exit multiples.
All Rights Reserved

INTERNET M&A: BY PRODUCT CATEGORY
M&A Volume by QuarterTTM M&A Volume by Product Category
Category 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 201311.3%
Ad-Tech & Lead Gen 70 85 57 58 60
Commerce 57 40 41 34 39
Content & Media 62 52 55 42 34
Gaming 25 13 12 7 11
Infrastructure 30 41 27 24 41
28.8%
5 9%
14.2%
Ad‐Tech & Lead Gen
Commerce
Content & Media
Gaming
Social Tech 29 32 30 20 19
Total 273 263 222 185 204
18.4%
21.4%
5.9%
g
Infrastructure
Social Tech
• Driven by a dearth of ad-tech players in the Internet landscape a much needed consolidation continued to shape the Internet• Driven by a dearth of ad-tech players in the Internet landscape, a much needed consolidation continued to shape the Internet
ad-tech landscape in 2Q13, making it the most active Internet M&A product category over the past twelve months.
• After years of consolidation, Internet ad-tech leaders have now emerged, and the pace of ad tech M&A deals has tapered off
over the last three quarters, suggesting that buyers and advertisers have placed their bets. Mobile ad-tech is the next frontier.
• Despite the marked decline in Internet M&A transactions YoY, the Infrastructure category showed strength in 2Q13, accountingDespite the marked decline in Internet M&A transactions YoY, the Infrastructure category showed strength in 2Q13, accounting
for 20.1% of all Internet M&A deals and much higher than its TTM average of 14.2%.
• After a respectable 2Q12 showing with 25 M&A transactions, the Internet Gaming M&A has been largely dormant over the past
four quarters, averaging ten transactions per quarter. The product category has been decimated by the emergence of mobile
gaming.
All Rights Reserved

C Ti k P d t C t
THE SEG SOFTWARE INDEX COMPANIES
Company Ticker Product Category
Amdocs Limited DOX Billing & Service Management
AsiaInfo Holdings, Inc. ASIA Billing & Service Management
CSG Systems International, Inc. CSGS Billing & Service Management
Evolving Systems, Inc. EVOL Billing & Service Management
C O & SMIND C.T.I. Ltd. MNDO Billing & Service Management
NeuStar, Inc NSR Billing & Service Management
Redknee Solutions TSX:RKN Billing & Service Management
Synchronoss Technologies, Inc. SNCR Billing & Service Management
Actuate Corporation BIRT Business Intelligence
MicroStrategy Incorporated MSTR Business Intelligence
Pegasystems Inc PEGA Business IntelligencePegasystems Inc. PEGA Business Intelligence
Progress Software Corporation PRGS Business Intelligence
PROS Holdings PRO Business Intelligence
Qlik Technologies QLIK Business Intelligence
Teradata NYSE:TDC Business Intelligence
Verisk VRSK Business Intelligence
Actuate Corporation BIRT Development PlatformsActuate Corporation BIRT Development Platforms
Adobe Systems Incorporated ADBE Development Platforms
BSQUARE Corporation BSQR Development Platforms
Compuware Corporation CPWR Development Platforms
Magic Software Enterprises Ltd. MGIC Development Platforms
Microsoft Corporation MSFT Development Platforms
Oracle Corporation ORCL Development Platforms
Progress Software Corporation PRGS Development Platforms
Red Hat, Inc. RHT Development Platforms
Software AG XTRA:SOW Development Platforms
ANSYS, Inc. ANSS Engineering & PLM
Autodesk, Inc. ADSK Engineering & PLM
Cadence Design Systems, Inc CDNS Engineering & PLM
Cimatron Ltd. CIMT Engineering & PLM
Dassault Systèmes DSY Engineering & PLM
GSE Systems Inc. GVP Engineering & PLM
Mentor Graphics Corp MENT Engineering & PLM
Parametric Technology Corporation PMTC Engineering & PLM
PDF Solutions Inc PDFS Engineering & PLM
Stratasys Inc SSYS Engineering & PLM
All Rights Reserved
Stratasys, Inc. SSYS Engineering & PLM
Synopsys Inc SNPS Engineering & PLM

C Ti k P d t C t
THE SEG SOFTWARE INDEX COMPANIES (CON’T)
American Software, Inc. AMSW.A Enterprise Resource Planning
Oracle Corporation ORCL Enterprise Resource Planning
QAD Inc. QADA Enterprise Resource Planning
Sage Group plc LSE:SGE Enterprise Resource Planning
SAP SAP Enterprise Resource Planning
Unit 4 ENXTAM:UNIT4 Enterprise Resource Planning
ACI Worldwide, Inc. ACIW Financial & Accounting
Bottomline Technologies EPAY Financial & Accounting
DST Systems, Inc. DST Financial & Accounting
Evertec EVTC Financial & Accounting
Fair Isaac Corporation FICO Financial & AccountingFair Isaac Corporation FICO Financial & Accounting
Fiserv FISV Financial & Accounting
Intuit Inc INTU Financial & Accounting
Model N, Inc MODN Financial & Accounting
NetSol Technologies Inc. KASE:NETSOL Financial & Accounting
Sage Group plc LSE:SGE Financial & Accounting
Qiwi plc QIWI Financial & AccountingQiwi plc QIWI Financial & Accounting
Activision Blizzard ATVI Gaming
Electronic Arts Inc. EA Gaming
GameLoft SA ENXTPA:GFT Gaming
Konami Corporation TSE: 9766 Gaming
Take-Two Interactive TTWO Gaming
Ubisoft Entertainment ENXTPA:UBI Gamingg
Accretive Health AH Healthcare
Allscripts Healthcare Solutions Inc. MDRX Healthcare
Cerner Corporation CERN Healthcare
Computer Programs and Sys, Inc. CPSI Healthcare
Greenway Medical Technologies, Inc GWAY Healthcare
MedAssets MDAS Healthcare
Merge Healthcare MRGE Healthcare
Omnicell, Inc. OMCL Healthcare
Quality Systems, Inc. QSII Healthcare
Hewlett Packard HPQ IT Conglomerates
IBM IBM IT Conglomerates
Microsoft Corporation MSFT IT Conglomerates
O l C ti ORCL IT C l t
All Rights Reserved
Oracle Corporation ORCL IT Conglomerates
SAP AG SAP IT Conglomerates

C Ti k P d t C t
Bango PLC BGO Mobile Solutions/Content
Glu Mobile, Inc. GLUU Mobile Solutions/Content
Gree TSE:3632 Mobile Solutions/Content
Millennial Media Inc MM Mobile Solutions/Content
Myriad Group AG MYRN Mobile Solutions/Content
NQ Mobile Inc. NQ Mobile Solutions/Content
Opera OB:OPERA Mobile Solutions/Content
Qihoo 360 Technology Co. Ltd QIHU Mobile Solutions/Content
Pandora Media P Mobile Solutions/Content
Synchronoss Technologies, Inc. SNCR Mobile Solutions/Content
Tangoe Inc TNGO Mobile Solutions/ContentTangoe, Inc. TNGO Mobile Solutions/Content
TeleCommunication Systems TSYS Mobile Solutions/Content
TeleNav TNAV Mobile Solutions/Content
Velti Plc VELT Mobile Solutions/Content
Zynga, Inc ZNGA Mobile Solutions/Content
Allot Communications Ltd. ALLT Networking & Network Performance Management
Aruba Networks Inc ARUN Networking & Network Performance ManagementAruba Networks, Inc. ARUN Networking & Network Performance Management
Brocade Communications Systems, Inc. BRCD Networking & Network Performance Management
Cisco Systems, Inc. CSCO Networking & Network Performance Management
Compuware Corporation CPWR Networking & Network Performance Management
Cyan, Inc. CYNI Networking & Network Performance Management
F5 Networks, Inc. FFIV Networking & Network Performance Management
Gigamon, LLC GIMO Networking & Network Performance Managementg , g g
Juniper Networks, Inc. JNPR Networking & Network Performance Management
Keynote Systems, Inc. KEYN Networking & Network Performance Management
Radware Ltd. RDWR Networking & Network Performance Management
Riverbed Technology, Inc. RVBD Networking & Network Performance Management
AVG Technologies N.V. AVG Security
Check Point Software Tech Ltd. CHKP Security
Commtouch Software Ltd. CTCH Security
Fortinet Inc. FTNT Security
Guidance Software, Inc. GUID Security
Imperva IMPV Security
Palo Alto Networks, Inc PANW Security
Proofpoint, Inc. PFPT Security
S fi I FIRE S it
All Rights Reserved
Sourcefire, Inc. FIRE Security
Symantec Corporation SYMC Security

C Ti k P d t C t
Trend Micro TSE:4704 Secuity
VASCO Data Security International VDSI Security
Brocade Communications Systems, Inc. BRCD Storage, Data Management & Integration
CA, Inc. CA Storage, Data Management & Integration
Ci S t I CSCO St D t M t & I t tiCisco Systems, Inc. CSCO Storage, Data Management & Integration
CommVault Systems, Inc. CVLT Storage, Data Management & Integration
EMC EMC Storage, Data Management & Integration
FalconStor Software, Inc. FALC Storage, Data Management & Integration
IBM IBM Storage, Data Management & Integration
Informatica Corporation INFA Storage, Data Management & Integration
Microsoft Corporation MSFT Storage Data Management & IntegrationMicrosoft Corporation MSFT Storage, Data Management & Integration
NetApp, Inc. NTAP Storage, Data Management & Integration
Oracle Corporation ORCL Storage, Data Management & Integration
Splunk, Inc. SPLK Storage, Data Management & Integration
TIBCO Software Inc. TIBX Storage, Data Management & Integration
American Software, Inc. AMSW.A Supply Chain Management & Logistics
Aspen Technology, Inc. AZPN Supply Chain Management & LogisticsAspen Technology, Inc. AZPN Supply Chain Management & Logistics
Manhattan Associates, Inc. MANH Supply Chain Management & Logistics
The Descartes Systems Group Inc. TSX:DSG Supply Chain Management & Logistics
Unit 4 ENXTAM:UNIT4 Supply Chain Management & Logistics
BMC Software Inc. BMC Systems Management
CA Technologies CA Systems Management
Citrix Systems, Inc. CTXS Systems Management
Netscout Systems, Inc. NTCT Systems Management
Red Hat, Inc. RHT Systems Management
SolarWinds, Inc. SWI Systems Management
VMWare, Inc. VMW Systems Management
Advent Software, Inc. ADVS Vertical - Finance
Broadridge Financial BR Vertical - Finance
Fid LSE FDSA V ti l FiFidessa LSE:FDSA Vertical - Finance
Jack Henry & Associates, Inc. JKHY Vertical - Finance
MSCI, Inc. MSCI Vertical - Finance
SS&C Corporation SSNC Vertical - Finance
Blackbaud, Inc. BLKB Vertical - Other
Constellation TSX:CSU Vertical - Other
EPIQ Systems Inc EPIQ Vertical Other
All Rights Reserved
EPIQ Systems, Inc. EPIQ Vertical - Other
Guidewire Software, Inc. GWRE Vertical - Other

C Ti k P d t C t
Micros Systems MCRS Vertical - Other
PROS Holdings PRO Vertical - Other
Sapiens International SPNS Vertical - Other
Silver Spring Networks, Inc. SSNI Vertical - Otherp g ,
The Active Network, Inc. ACTV Vertical - Other
Tyler Technologies, Inc. TYL Vertical - Other
All Rights Reserved

C Ti k P d t C t
THE SEG SaaS INDEX COMPANIES
Bazaarvoice, Inc BV CRM & Marketing
Constant Contact CTCT CRM & Marketing
ExactTarget, Inc. ET CRM & Marketing
LivePerson LPSN CRM & Marketing
Marketo MKTO CRM & MarketingMarketo MKTO CRM & Marketing
Marin Software MRIN CRM & Marketing
Responsys MKTG CRM & Marketing
Salesforce.com CRM CRM & Marketing
Vocus VOCS CRM & Marketing
E2open, Inc EOPN ERP & Supply Chain
Fleetmatics FLTX ERP & Supply ChainFleetmatics FLTX ERP & Supply Chain
Netsuite N ERP & Supply Chain
SciQuest SQI ERP & Supply Chain
SPS Commerce SPSC ERP & Supply Chain
Workday, Inc. WDAY ERP & Supply Chain
Athenahealth, Inc ATHN Vertically Focused
DealerTrack TRAK Vertically Focusedy
Ebix Inc. EBIX Vertically Focused
Ellie Mae ELLI Vertically Focused
Medidata Solutions MDSO Vertically Focused
RealPage RP Vertically Focused
Textura Corp. TXTR Vertically Focused
Callidus Software Inc. CALD Workforce Management
Cornerstone OnDemand CSOD Workforce Management
Halogen Software, Inc. TSX:HGN Workforce Management
The Ultimate Software Group, Inc. ULTI Workforce Management
Workday, Inc. WDAY Workforce Management
ChannelAdvisors ECOM Other SaaS
Concur CNQR Other SaaS
Demand are Inc DWRE Other SaaSDemandware, Inc. DWRE Other SaaS
inContact, Inc. SAAS Other SaaS
IntraLinks Holdings IL Other SaaS
J2 Global JCOM Other SaaS
Jive Software, Inc JIVE Other SaaS
OpenTable, Inc. OPEN Other SaaS
Qualys Inc QLYS Other SaaS
All Rights Reserved
Qualys, Inc. QLYS Other SaaS
Service-now.com NOW Other SaaS

2Q13 Software Industry Financial Report

2Q13 Software Industry Financial Report

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