1. CLOUD INSIGHTS
M&A and Capital Markets Perspective
on the Cloud Computing Industries:
- Software-as-a-Service
- Platform-as-a-Service
- Infrastructure-as-a-Service
October 2011 Update and Q3 Review
Mark McNay Andrew Arno Patrick Vihtelic Paul Huber
Partner & Managing Director Director Associate Senior Analyst
mmcnay@williamblair.com aarno@williamblair.com pvihtelic@williamblair.com phuber@williamblair.com
+1.415.248.5902 +1.415.248.5905 +1.415.248.5911 +1.415.248.5901

3. Table of Contents
Summary 1
M&A Overview 3
Transaction Detail 3
M&A Valuations 4
Transaction Analysis 5
Capital Markets Overview 6
Public Company Analysis 8
Venture Capital Activity 11
Transaction Analysis 11
William Blair & Company Selected Cloud Transactions 13
SaaS Professional Biographies 14
William Blair & Company SaaS Equity Research Coverage 15
Notes 16
Disclosures 17

5. Summary
Summary
SAAS MERGERS & ACQUISITIONS
While the public equity markets have been volatile over the past quarter, the SaaS M&A environment continues
to be robust. During third quarter 2011, 53 SaaS M&A transactions were announced, compared with 29
announced in third quarter 2010. Dollar volume for third quarter 2011 was up year-over-year, with $2.4 billion in
total disclosed transaction value, versus $788 million during third quarter 2010. Both the total number of
transactions and dollar volume for year-to-date 2011 are up nearly double over the prior period. Year-to-date
2011 has witnessed 123 transactions totaling $4.8 billion in disclosed transaction value compared with the
corresponding period in 2010, which witnessed 76 transactions totaling $2.1 billion in disclosed transaction
value. Notable M&A transactions in third quarter 2011 included:
Fizzback, a provider of customer feedback management solutions, announced that it is being acquired by
NICE Systems for $80 million (or roughly 7.3x LTM revenue).
Ning, a provider of social website and online community creation and management solutions, announced
that it is being acquired by Glam Media.
Assistly, a provider of customer service management software, announced that it is being acquired by
salesforce.com for $50 million.
Plimus, a provider of e-commerce solutions for the SMB marketplace, announced that it is being acquired by
Great Hill Partners for $115 million.
Blackboard, a publicly listed provider of software solutions for the education industry, announced that it is
being acquired by Providence Equity Partners for $1.8 billion (or roughly 3.8x LTM revenue).
SAAS EQUITY PERFORMANCE
SaaS stocks have underperformed the broader market Index 2011 YTD September
during 2011. The SaaS index underperformed the NASDAQ Large-cap SaaS -11.8% -7.9%
and the S&P 500 with Large and Small Cap SaaS groups Midcap SaaS -18.5% -14.9%
losing 11.8% and 12.1%, respectively, while the Mid Cap Small-cap SaaS -12.1% -8.9%
SaaS group lost 18.5% since the beginning of 2011. For All SaaS -13.6% -9.3%
September, the SaaS index underperformed the NASDAQ NASDAQ -8.3% -6.2%
and the S&P 500, losing 9.3%, compared with losses of S&P 500 -3.1% -5.7%
6.2% and 5.7%, respectively.
SAAS CAPITAL MARKETS
Third quarter 2011 witnessed two SaaS public equity offerings, which included one initial public offering and one
follow-on offering, as well as four SaaS initial public offering filings:
ServiceSource International, which provides solutions that drive increased renewals of maintenance, support
and subscription agreements for technology companies, completed its follow-on offering of $181 million
(including the overallotment). ServiceSource priced its follow-on offering at a 5.5% discount to its filing price
and a 0.7% discount to the closing price of its stock on the day of pricing. However, the stock is up 86.7%
since its initial public offering in March of this year. William Blair acted as an underwriter for ServiceSource’s
IPO and follow-on offering.
Tangoe, which provides communications lifecycle management solutions, completed its initial public offering
of $101 million (including the over allotment). Tangoe traded up 17% on its first day of trading and is
currently up 16% since pricing.
Demandware, which provides e-commerce solutions, filed for a $100 million IPO. William Blair is acting as
an underwriter for Demandware’s initial public offering.
Eloqua, Jive Software and BazaarVoice have also filed for their respective IPOs.
1

6. Summary (cont'd)
Summary (cont'd)
SAAS VENTURE CAPITAL
Despite the slowdown in the public equity markets, the SaaS venture funding environment continues to be
healthy. During third quarter 2011, 54 SaaS venture transactions were announced, compared with 51 announced
in third quarter 2010. Dollar volume for third quarter 2011 was up year-over-year, with $603 million in transaction
value, versus $302 million during third quarter 2010. Venture investments for the year-to-date 2011 period are up
significantly year-over-year compared with the prior period. Year-to-date 2011 has witnessed 144 transactions
totaling $976 million in transaction value, whereas the same period in 2010 witnessed 117 transactions totaling
$615 million in transaction value. Notable venture investments in third quarter 2011 included:
Rearden Commerce, an e-commerce platform company, raised $133 million in funding from Citigroup,
American Express and JP Morgan Chase. Rearden Commerce has raised $328 million in total funding to
date.
Steelwedge Software, which provides sales planning and performance management solutions, raised $16
million from Mainsail Partners.
MINDBODY, which provides business management software for businesses in yoga, pilates, day spa, and
fitness markets, raised $21 million from Bessemer Venture Partners and Catalyst Investors.
Box.net, which provides online file storage, sharing and collaboration solutions, raised $50 million from
Meritech Capital Partners, Andreessen Horowitz, Emergence Capital Partners, Draper Fisher Jurveston,
Scale Venture Partners, U.S. Venture Partners, salesforce.com and others.
Inkling, which provides a prediction market platform for corporations, start-ups, academic, non-profit and
government institutions, raised $17 million in funding led by Tenaya Capital.
Cvent, a provider of event management and Web survey solutions, raised $136 million in a minority
transaction from New Enterprise Associates and Insight Venture Partners, with Greenspring Associates also
participating.
PAAS AND IAAS ACTIVITY
Notable events in the PaaS and IaaS sectors in third quarter 2011:
Carbonite, which provides online back-up solutions for consumers, completed its initial public offering of $72
million (including the over allotment). Carbonite traded up 23.5% on its first day of trading and is currently
up 48.1% since pricing. William Blair acted as an underwriter for Carbonite’s initial public offering
Cloud.com, a provider of software infrastructure platforms for cloud providers, has been acquired by Citrix
Systems for about $190 million.
10gen, a provider of platform-as-a-service technology designed to help developers build Web sites and
applications, raised $20 million from Sequoia Capital, Union Square Ventures and Flybridge Capital
Partners.
iGware, a provider of software and infrastructure tools that support consumer devices, was acquired by Acer
for about $395 million in total consideration.
GoodData Corporation, which provides a business intelligence platform-as-a-service that enables
companies to collaborate around data, raised $15 million from Andreessen Horowitz as well as existing
investors Windcrest Partners, General Catalyst Partners and Fidelity Growth Partners Europe.
Salesforce.com announced the extension of its social enterprise platform, which offers a real-time
multitenant application development environment that enables the creation of cloud, mobile and social apps.
Database.com, Salesforce’s on-demand cloud database for developers, has become available to developers
and ISVs.
As always, we encourage you to contact us if we may be of assistance.
Best regards,
Mark McNay Andrew Arno Patrick Vihtelic Paul Huber
Partner & Managing Director Director Associate Senior Analyst
mmcnay@williamblair.com aarno@williamblair.com pvihtelic@williamblair.com phuber@williamblair.com
www.williamblair.com 2

7. M&A Overview
M&A Overview Transaction Detail
The number of SaaS M&A transactions announced increased by over two times when comparing LTM
09/11 to LTM 09/10.
LTM 09/11 – 177 transactions (58 with disclosed transaction values totaling $6.5 billion).
LTM 09/10 – 88 transactions (20 with disclosed transaction values totaling $2.7 billion).
53 M&A transactions were announced in third quarter 2011, compared with 29 in third quarter 2010.
M&A Activity Detail
($ in millions) Number of Transactions Dollar Value
LTM LTM LTM LTM
2008 2009 2010 09/10 09/11 2008 2009 2010 09/10 09/11
Annual
Disclosed 13 14 30 20 58 $1,854 $2,826 $3,432 $2,654 $6,457
Undisclosed 18 25 82 68 119 - - - - -
TOTAL 31 39 112 88 177 $1,854 $2,826 $3,432 $2,654 $6,457
Source: Capital IQ as of September 30, 2011.
Annual M&A Detail
Transaction Value LTM Transaction Value # of Transactions
Transaction Value Number of
($ in millions) Transactions
$7,000 180
$6,000 160
140
$5,000
120
$4,000 100
$3,000 80
60
$2,000
40
$1,000 20
$0 0
2006 2007 2008 2009 2010 LTM LTM
09/10 09/11
Transaction
$2,302 $6,005 $1,854 $2,826 $3,432 $2,654 $6,457
Value
Number of
32 46 31 39 112 88 177
Transactions
Source: Capital IQ as of September 30, 2011.
3

8. M&A Overview (cont'd)
M&A Valuations M&A Overview (cont'd)
The volume and number of announced M&A transactions are both up during the last 12 months when
compared with the corresponding period in 2010.
On a monthly basis, September 2011 witnessed 17 SaaS M&A transactions totaling $326.5 million in
disclosed transaction value compared with 11 transactions totaling $167.5 million in September 2010.
While revenue multiples are down slightly during LTM 09/11, M&A activity has increased significantly
over the prior period.
M&A Valuation Analysis
($ in millions) Annual
LTM LTM
2008 2009 2010 09/10 09/11
Volume
Number of Announced Transactions 31 39 112 88 177
Number of Disclosed Transactions 13 14 30 20 58
Total Dollar Volume $1,854 $2,826 $3,432 $2,654 $6,457
Average Transaction Size $143 $202 $114 $133 $111
EV/LTM Revenues
Number of Disclosed Transactions 7 3 8 7 21
Mean 2.88x 4.03x 5.04x 5.64x 4.13x
Median 2.80x 4.60x 2.83x 3.90x 3.31x
EV/LTM EBITDA
Number of Disclosed Transactions 3 2 1 2 2
Mean 15.9x 47.7x 19.0x 34.5x 15.9x
Median 18.5x 47.7x 19.0x 34.5x 15.9x
Source: Capital IQ as of September 30, 2011.
www.williamblair.com 4

9. M&A Overview (cont'd)
M&A Overview (cont'd) Transaction Analysis
Private venture-backed companies account for nearly half of the acquisition targets, while private
independent targets account for the majority of acquisition targets over the last 12 months.
Cash continues to be the most common form of consideration disclosed during the last 12 months,
making up 69% of transactions with a disclosed consideration.
M&A Activity by Target Ownership
Private – V.C. Backed Private – Independent Public
Percent of
Transactions
75%
50%
25%
0%
2006 2007 2008 2009 2010 LTM 09/10 LTM 09/11
Private – V.C. Backed 60% 57% 52% 62% 50% 45% 44%
Private – Independent 34% 26% 35% 31% 48% 52% 56%
Public 6% 17% 13% 7% 2% 2% 1%
M&A Activity by Consideration
Not Disclosed Cash Stock
Percent of
Transactions
100%
75%
50%
25%
0%
2006 2007 2008 2009 2010 LTM 09/10 LTM 09/11
Not Disclosed 47% 50% 42% 43% 73% 75% 69%
Cash 34% 33% 39% 50% 21% 22% 22%
Stock 19% 17% 16% 7% 5% 3% 10%
Source: Capital IQ as of September 30, 2011.
5

10. Capital Markets Overview
Capital Markets Overview
Tangoe priced its IPO during third quarter 2011, raising $100.9 million in total.
ServiceSource International priced its follow-on offering during third quarter 2011, raising $181.1 million
in total.
Annual SaaS Public Offering Activity ($ Volume by IPO, Follow-On and Convertible Debt)
Initial Public Offerings Follow-On Offerings PIPEs Convertible Debt Offerings
($ in millions)
$2,500 Initial Public Offerings Follow-On Offerings PIPEs Convertible Debt Offerings
$2,000
$1,500
$1,000
$500
$0
2006 2007 2008 2009 2010 LTM 09/10 LTM 09/11
Initial Public Offerings $145.0 $805.0 - $194.9 $486.5 $486.5 $537.2
Follow-Ons Offerings $439.4 $934.8 $177.0 $457.9 $631.3 $521.7 $1,220.0
PIPEs - - $251.0 - - - -
Convertible Debt Offerings - - - - $1,029.6 $854.6 $175.0
Source: Capital IQ and Dealogic as of September 30, 2011.
www.williamblair.com 6

11. Capital Market Overview (cont'd)
Capital Market Overview (cont'd)
LTM SaaS Public Equity Offering Detail
Market Cap % Change Pricing to Offer Price Discount to
Offering Primary Post
Filing Pricing Offer Size as % of Offering First First
Company Date Date Filing Range Price ($ in MM) Offering Dilution ($ in MM) Day Week To Date Filing Price Last Sale
09/30/2011
IPO
Filed
Bazaarvoice 08/26/11 - - - $ 86.3 - - - - - - - -
Jive Software 08/24/11 - - - $ 100.0 - - - - - - - -
Eloqua 08/24/11 - - - $ 100.0 - - - - - - - -
Demandware 07/15/11 - - - $ 100.0 - - - - - - - -
WageWorks 04/25/11 - - - $ 49.0 - - - - - - - -
Trustwave 04/21/11 - - - $ 100.0 - - - - - - - -
Priced
Tangoe 04/16/10 07/26/11 $9.00 - $11.00 $ 10.00 $ 100.9 74.4% 23.9% $ 314.0 16.5% 19.2% 13.1% - -
Responsys 12/23/10 04/20/11 $8.50 - $10.00 $ 12.00 $ 91.4 85.3% 14.4% $ 529.3 28.3% 33.0% (10.2%) - -
Ellie Mae 04/30/10 04/14/11 $9.00 - $11.00 $ 6.00 $ 50.7 59.2% 24.5% $ 122.4 12.8% 19.0% (7.3%) - -
ServiceSource International 12/20/10 03/24/11 $7.50 - $ 9.00 $ 10.00 $ 137.3 71.3% 14.6% $ 655.1 21.8% 21.8% 32.1% - -
Cornerstone OnDemand 09/29/10 03/16/11 $9.00 - $11.00 $ 13.00 $ 157.0 62.1% 16.1% $ 606.3 46.7% 38.0% (3.5%) - -
Follow-On
Priced
ServiceSource International 07/18/11 07/28/11 - $ 17.50 $ 181.1 13.3% 2.0% $ 1,202.2 (8.0%) 2.0% (24.5%) -8.6% -0.7%
SPS Commerce 06/08/11 06/09/11 - $ 16.50 $ 19.9 100.0% 0.0% $ 211.8 (9.7%) (0.1%) (1.3%) -6.9% -6.9%
Kenexa 05/16/11 05/19/11 - $ 27.75 $ 95.7 100.0% 12.9% $ 739.1 16.6% 11.4% (43.6%) -1.6% -0.9%
IntraLinks Holdings 03/25/11 04/06/11 - $ 25.50 $ 219.9 16.7% 2.7% $ 1,372.0 (0.8%) 10.8% (70.5%) -11.1% -0.3%
SciQuest 03/09/11 03/30/11 - $ 14.25 $ 77.3 21.2% 5.2% $ 319.7 (2.9%) 0.2% 4.8% -5.3% -2.4%
RealPage 11/17/10 12/06/10 - $ 25.75 $ 266.5 38.6% 6.0% $ 1,736.0 9.4% 8.7% (20.6%) -1.2% -0.4%
IntraLinks Holdings 11/19/10 12/06/10 - $ 20.00 $ 200.0 20.0% 3.8% $ 1,067.6 (4.8%) (4.1%) (62.5%) -2.9% -2.1%
SPS Commerce 11/12/10 12/02/10 - $ 12.25 $ 35.2 3.5% 0.9% $ 151.9 0.7% 15.3% 33.0% -8.3% -5.4%
Synchronoss Technologies 11/12/10 11/17/10 - $ 25.40 $ 124.4 90.1% 12.1% $ 930.1 (1.0%) 3.5% (1.9%) -3.1% -2.3%
Note: William Blair clients highlighted.
Source: FactSet and Dealogic as of September 30, 2011.
7

12. Public Company Analysis
Public Company Analysis
Since the beginning of 2011, the SaaS Index has underperformed against the NASDAQ composite,
losing 13.6%, while the NASDAQ has lost 8.3% for the year.
Since the beginning of 2011, the Large and Small Cap SaaS groups have lost 11.8% and 12.1%,
respectively, while the Mid Cap SaaS group lost 18.5%.
SaaS Indexed Stock Price Performance
Mkt. Cap >$1B (-11.8%) Mkt. Cap $500 MM to $1B (-18.5%)
Mkt. Cap <$500M (-12.1%) NASDAQ (-8.3%)
130
120
110
100
90
80
12/31/10 1/31/11 3/3/11 4/3/11 5/3/11 6/3/11 7/3/11 8/3/11 9/3/11
Note: Market cap groupings based on December 31, 2010, stock price
Mkt. Cap > $1 B consists of: ATHN, BBBB, CNQR, CRM, LOGM, N, RP, SFSF, TLEO, ULTI
Mkt. Cap $500 MM to $1B consists of: CTCT, CSOD, IL, LPSN, MDSO, MKTG, RNOW, SNCR, SREV, TRAK, VOCS
Mkt. Cap < $500 MM consists of: CNVO, DMAN, ELLI, KNXA, SDBT, SPSC, SQI, TNGO
Source: FactSet as of September 30, 2011.
Valuation Overview
$1 B+ Market Cap $500 MM to $1 B Market Cap <$500 MM Market Cap
49.7x
41.3x
32.3x
25.9x
23.0x
6.2x
15.1x
3.8x
2.0x
EV / 2011E Revenue EV / 2011E EBITDA EV / 2011E FCF
Source: FactSet as of September 30, 2011.
Note: Market cap groupings based on September 30, 2011 stock price. Data points represent median multiples.
www.williamblair.com 8

13. Public Company Analysis (cont'd)
Public Company Analysis (cont'd)
Stock Price and Revenue Multiple Over Time
Market 12/31/08 Low Point High Point 9/30/11 % Change in Stock Price
Cap Stock EV/LTM Stock EV/LTM Stock EV/LTM Stock EV/LTM 12/31/08 to Low Point High Point
($ MM) Price Rev Price Rev Price Rev Price Rev 9/30/11 to 9/30/11 to 9/30/11
athenahealth Inc. $2,207.3 $ 37.62 9.33 x $22.05 3.04x $69.25 9.48x $59.55 7.50x 58.3% 170.1% -14.0%
Blackboard Inc. $1,573.8 $26.23 2.98 x $23.00 2.51x $48.80 4.23x $44.66 3.53x 70.3% 94.2% -8.5%
Concur Technologies Inc. $2,092.3 $ 32.82 6.21 x $18.20 3.00x $57.87 8.93x $37.23 5.34x 13.4% 104.6% -35.7%
Constant Contact Inc. $519.9 $13.25 3.44 x $12.60 1.69x $35.60 5.48x $17.29 2.12x 30.5% 37.2% -51.4%
Convio Inc. $153.6 NA NA $6.95 1.09x $12.91 2.51x $8.41 1.39x NA 21.0% -34.9%
Cornerstone OnDemand Inc. $642.6 NA NA $12.13 9.32x $22.74 26.23x $12.54 9.84x NA 3.4% -44.9%
DealerTrack Holdings Inc. $677.1 $ 11.89 1.13 x $9.28 0.71x $25.49 3.75x $15.67 2.08x 31.8% 68.9% -38.5%
DemandTec Inc. $196.9 $8.07 2.09 x $5.40 1.33x $14.07 4.62x $6.54 1.50x -19.0% 21.1% -53.5%
Ellie Mae Inc. $116.1 NA NA $3.80 0.88x $7.30 4.73x $5.56 1.68x NA 46.3% -23.8%
IntraLinks Holdings Inc. $430.6 NA NA $6.64 1.83x $31.76 9.76x $7.51 2.69x NA 13.1% -76.4%
Kenexa Corp. $444.1 $ 7.98 0.75 x $3.83 0.30x $32.87 4.11x $15.64 1.66x 96.0% 308.4% -52.4%
LivePerson Inc. $556.4 $1.82 0.87 x $1.68 0.73x $14.71 6.16x $9.95 4.00x 446.7% 492.3% -32.4%
LogMeIn Inc. $803.4 NA NA $15.43 3.57x $47.22 10.56x $33.21 5.64x NA 115.2% -29.7%
Medidata Solutions Inc. $415.1 NA NA $13.64 1.48x $27.11 3.69x $16.44 1.85x NA 20.5% -39.4%
NetSuite Inc. $1,908.3 $ 8.44 2.67 x $6.74 1.94x $42.64 13.39x $27.01 8.40x 220.0% 300.7% -36.7%
RealPage Inc. $1,470.2 NA NA $14.52 5.71x $32.80 12.79x $20.45 6.34x NA 40.8% -37.7%
Responsys Inc. $534.1 NA NA $10.44 3.87x $17.80 7.67x $10.78 3.87x NA 3.3% -39.4%
RightNow Technologies Inc. $1,117.9 $7.73 1.20 x $5.84 0.73x $36.18 5.64x $33.05 5.01x 327.6% 465.9% -8.7%
salesforce.com Inc. $16,199.0 $ 32.01 3.31 x $25.77 2.46x $159.32 12.55x $114.28 8.36x 257.0% 343.5% -28.3%
SciQuest Inc. $300.5 NA NA $10.65 4.74x $17.90 8.04x $14.94 5.31x NA 40.3% -16.5%
ServiceSource $923.8 NA NA $11.75 4.53x $22.29 9.05x $13.21 4.85x NA 12.4% -40.7%
SoundBite Communications Inc. $38.7 $14.60 NMF $1.30 0.02x $3.41 0.47x $2.50 0.27x -82.9% 92.3% -26.7%
SPS Commerce Inc. $203.7 NA NA $8.60 1.52x $18.71 3.90x $16.29 3.48x NA 89.4% -12.9%
SuccessFactors Inc. $1,974.0 $5.74 2.25 x $4.98 1.61x $40.27 13.55x $22.99 6.84x 300.5% 361.6% -42.9%
Synchronoss Technologies Inc. $977.4 $ 10.66 2.23 x $8.23 1.59x $35.20 7.03x $24.91 4.05x 133.7% 202.7% -29.2%
Taleo Corp. $1,106.9 $7.83 1.20 x $7.09 1.06x $37.94 5.66x $25.72 3.50x 228.5% 262.8% -32.2%
Tangoe Inc $371.2 NA NA $8.75 2.59x $13.98 4.78x $11.31 3.90x NA 29.3% -19.1%
Ultimate Softw are Group Inc. $1,263.3 $14.60 1.97 x $12.95 1.67x $60.37 6.60x $46.72 4.94x 220.0% 260.8% -22.6%
Vocus Inc. $356.1 $ 18.21 3.51 x $11.66 1.74x $32.67 5.36x $16.76 2.26x -8.0% 43.7% -48.7%
Source: FactSet as of September 30, 2011.
Note: Low point and high point reflect data since December 31, 2008.
9

14. Public Company Analysis (cont'd)
Public Company Analysis (cont'd)
Comparable Company Analysis
Market Enterprise '10 - '11 2011
Close Cap Value Enterprise Value / Revenue Enterprise Value / EBITDA Enterprise Value / FCF Revenue EBITDA
Name 09/30/11 ($ MM) ($ MM) LTM 2011E 2012E LTM 2011E 2012E LTM 2011E 2012E Growth Margin
athenahealth Inc. $59.55 $2,207.3 $2,102.9 7.50x 6.55x 5.08x 41.3x 33.2x 24.4x 57.2x nmf 46.7x 30.8% 19.7%
Blackboard Inc. $44.66 $1,573.8 $1,700.2 3.53x 3.15x 2.83x 20.8x 13.6x 10.9x 23.8x 17.5x 15.2x 20.7% 23.2%
Concur Technologies Inc. $37.23 $2,092.3 $1,771.3 5.34x 4.83x 3.97x 30.7x 18.3x 13.7x 44.7x 36.5x 27.4x 20.0% 26.4%
Constant Contact Inc. $17.29 $519.9 $413.8 2.12x 1.93x 1.60x 23.8x 11.8x 8.4x 32.3x 20.7x 14.3x 23.1% 16.4%
Convio Inc. $8.41 $153.6 $102.7 1.39x 1.29x 1.12x 14.5x 9.7x 7.3x 44.1x 14.2x 9.2x 14.5% 13.2%
Cornerstone OnDemand Inc. $12.54 $642.6 $556.7 9.84x 7.65x 5.16x nmf nmf nmf nmf nmf 37.6x 66.5% nmf
DealerTrack Holdings Inc. $15.67 $677.1 $606.9 2.08x 1.79x 1.61x 10.3x 8.6x 7.0x 15.8x 51.7x 21.0x 38.7% 20.8%
DemandTec Inc. $6.54 $196.9 $132.7 1.50x 1.46x 1.30x nmf 45.3x 21.9x 24.5x 21.3x 14.7x 12.9% 3.2%
Ellie Mae Inc. $5.56 $116.1 $78.5 1.68x 1.56x 1.27x 16.0x 10.6x 6.4x nmf 19.1x 12.9x 16.4% 14.7%
IntraLinks Holdings Inc. $7.51 $430.6 $553.7 2.69x 2.55x 2.28x 7.7x 7.8x 6.8x 11.4x 12.9x 9.4x 17.9% 32.9%
Kenexa Corp. $15.64 $444.1 $399.8 1.66x 1.42x 1.26x 15.7x 8.9x 7.3x 41.3x 16.3x 11.9x 41.3% 16.0%
LivePerson Inc. $9.95 $556.4 $482.0 4.00x 3.60x 2.98x 19.2x 14.0x 11.5x 34.8x 28.4x 19.3x 21.8% 25.7%
LogMeIn Inc. $33.21 $803.4 $619.3 5.64x 5.18x 4.25x 33.8x 19.7x 15.8x 20.6x 19.9x 15.6x 18.4% 26.2%
Medidata Solutions Inc. $16.44 $415.1 $321.3 1.85x 1.73x 1.56x 9.4x 7.2x 5.9x 32.3x 10.0x 8.9x 11.4% 24.2%
NetSuite Inc. $27.01 $1,908.3 $1,790.0 8.40x 7.64x 6.42x nmf nmf 57.0x nmf nmf 45.1x 21.2% 9.6%
RealPage Inc. $20.45 $1,470.2 $1,403.0 6.34x 5.35x 4.22x 46.2x 24.5x 18.0x 56.2x 39.2x 27.2x 39.4% 21.8%
Responsys Inc. $10.78 $534.1 $452.2 3.87x 3.40x 2.79x 20.9x 19.6x 15.2x nmf 32.1x 24.3x 41.4% 17.4%
RightNow Technologies Inc. $33.05 $1,117.9 $1,036.9 5.01x 4.57x 3.87x 43.8x 32.9x 20.8x nmf nmf 27.8x 22.2% 13.9%
Salesforce.com Inc. $114.28 $16,199.0 $16,196.5 8.36x 7.43x 5.92x 57.8x 42.4x 30.9x nmf 41.6x 30.1x 34.3% 17.5%
SciQuest Inc. $14.94 $300.5 $250.5 5.31x 4.62x 3.95x 34.2x 23.3x 16.9x 32.2x 19.1x 14.9x 27.8% 19.8%
ServiceSource $13.21 $923.8 $852.0 4.85x 4.44x 3.62x nmf nmf 38.0x nmf nmf nmf 25.6% 5.8%
SoundBite Communications Inc.* $2.50 $38.7 $10.3 0.27x 0.26x 0.24x nmf nmf 17.9x nmf nmf nmf 2.3% nmf
SPS Commerce Inc. $16.29 $203.7 $173.9 3.48x 3.08x 2.56x 45.1x 34.5x 20.9x nmf 52.8x 22.8x 26.6% 8.9%
SuccessFactors Inc. $22.99 $1,974.0 $1,724.1 6.84x 5.49x 4.36x nmf nmf nmf 49.7x 37.1x 25.5x 49.9% 2.2%
Synchronoss Technologies Inc. $24.91 $977.4 $820.9 4.05x 3.60x 3.01x 26.1x 13.5x 10.9x nmf 28.3x 18.7x 34.0% 26.8%
Taleo Corp. $25.72 $1,106.9 $958.5 3.50x 2.97x 2.54x 28.3x 13.3x 11.8x 38.5x 34.7x 18.3x 33.5% 22.3%
Tangoe Inc $11.31 $371.2 $328.2 3.90x na na nmf 27.5x 18.1x nmf 41.2x 21.9x na na
Ultimate Software Group Inc. $46.72 $1,263.3 $1,215.8 4.94x 4.50x 3.76x 54.8x 26.4x 17.9x 59.6x 48.6x 28.6x 18.6% 17.1%
Vocus Inc. $16.76 $356.1 $239.6 2.26x 2.09x 1.80x nmf 13.7x 9.6x 14.9x 13.9x 9.1x 17.3% 15.3%
*Indicates excluded from mean and median calculation due to low enterprise value.
Source: FactSet as of September 30, 2011.
www.williamblair.com 10

15. Venture Capital Activity
Venture Capital Activity Transaction Analysis
The total number of venture investments increased 28% when comparing LTM 09/11 with LTM 09/10,
while dollar volume also was up 53% for the same periods.
Year-over-year, third quarter 2011 was up in venture capital activity; third quarter 2011 witnessed 55
venture investments totaling $622 million, while third quarter 2010 witnessed 51 venture investments
totaling $302 million.
On a monthly basis, September 2011 witnessed 21 SaaS venture transactions totaling $235.5 million in
disclosed transaction value compared with 21 transactions totaling $125.6 million in September 2010.
Annual Venture Capital SaaS Activity
Transaction Value LTM Transaction Value # of Transactions
Transaction Value Number of
($ in millions) Transactions
$2,000 250
$1,600 200
$1,200 150
$800 100
$400 50
$0 0
2008 2009 2010 LTM 09/10 LTM 09/11
Transaction Value $1,296 $961 $901 $997 $1,530
Number of Transactions 133 134 157 163 208
Quarterly Venture Capital SaaS Activity
Transaction Value Number of Transactions
Transaction Value Number of
($ in millions) Transactions
$700 70
$600 60
$500 50
$400 40
$300 30
$200 20
$100 10
$0 0
Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Transaction Value $257 $129 $132 $228 $219 $382 $176 $133 $302 $290 $312 $290 $622
Number of Transactions 31 15 22 21 45 46 27 38 51 41 51 58 55
Source: Capital IQ and VentureSource as of September 30, 2011.
11

16. Venture Capital Activity (cont'd)
Transaction Analysis (cont’d) Venture Capital Activity (cont'd)
The number of early- and later-stage investments for LTM 09/11 increased significantly compared with
levels seen in LTM 09/10; however, the number of series B and series C transactions have remained
relatively flat.
The median transaction size has remained relatively flat for series A, series C, and Later Stage
transactions, while Series B transactions have seen a slight increase in median transaction size.
Number of SaaS Transactions by Round
LTM 09/10 LTM 09/11
60 54
50
40
40 34 33 35
27 28
30
21
20
10
0
Series A Series B Series C Later Stage
Median SaaS Transaction Size by Round
($ in millions) LTM 09/10 LTM 09/11
15
$12 $12
10 $9 $9 $9
$6
5
$2
$2
0
Series A Series B Series C Later Stage
Source: Capital IQ, VentureSource and William Blair estimates as of September 30, 2011.
www.williamblair.com 12

17. William Blair & Company Selected Cloud Transactions
William Blair & Company Selected Cloud Transactions
Selected M&A Transactions
received a significant
has been acquired by investment from has been acquired by has been acquired by has been acquired by
has been acquired by has acquired has been acquired by has been acquired by has been acquired by
Selected Public Equity Transactions
$71,875,000 $51,750,000 $91,351,224 $318,436,530 $156,975,000
Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering
& Follow-on
$132,781,530 $422,108,000 $53,124,000 $91,673,000 $206,816,000
Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering Initial Public Offering
& Follow-on & Follow-on & Follow-on & Follow-on
$66,000,000 $303,514,000 $120,081,000 $708,860,000 $126,500,000
Initial Public Offering Follow-on Offerings Initial Public Offering Initial Public Offering Initial Public Offering
& Follow-on & Follow-ons
Selected Private Placement Transactions
$10,000,000 $54,000,000 $50,000,000
Series E
Preferred Stock
from existing investors and Convertible Convertible
Preferred Stock Preferred Stock
13

18. SaaS Professional Biographies
SaaS Professional Biographies
SaaS Professional Biographies
Mark McNay
Partner and Group Head, San Francisco
Mark McNay joined William Blair & Company in 2000 as Group Head of the West Coast Investment
Banking Team based in San Francisco. Prior to joining William Blair & Company, he was a Managing
Director and Head of the Internet Banking Group at Volpe Brown Whelan & Company and a Managing
Director at Smith Barney, where at various times he headed the Consumer/Retailing Group and the Los
Angeles Corporate Finance Office. He is a graduate of Georgetown University (B.S.) and Columbia
University (M.B.A.).
Andrew Arno
Director, San Francisco
Andrew Arno is a Director in William Blair & Company’s West Coast Investment Banking Team based in
San Francisco. He joined William Blair & Company in 2004. From 2000 to 2002, he was an Investment
Banking Associate at WR Hambrecht+Co. in the technology group. From 1997 to 2000, he worked at The
Shattan Group LLC, a boutique investment bank focused on private equity placements. He is a graduate
of Columbia University (B.A.) and the Haas School of Business at UC Berkeley (M.B.A.).
Patrick Vihtelic
Associate, San Francisco
Patrick Vihtelic is an Associate in William Blair & Company’s West Coast Investment Banking Team
based in San Francisco. While at William Blair & Company, Patrick has been focused on executing
mergers & acquisitions, public equity offerings and private equity placements for technology companies.
He joined William Blair & Company in 2008 after spending time at a boutique investment bank in San
Francisco. Before investment banking, Patrick spent a summer working at Motorola as a Financial
Analyst in the mobile division. He is a graduate of Indiana University (B.S.).
Paul Huber
Senior Analyst, San Francisco
Paul Huber is a Senior Analyst in William Blair & Company’s West Coast Investment Banking Team
based in San Francisco. He joined William Blair & Company in 2010 and is focused primarily on
supporting transaction execution. Before joining William Blair & Company, he was an Investment Banking
Analyst at Financial Technology Partners LP, a boutique investment bank in San Francisco. He is a
graduate of Brown University (A.B.).
www.williamblair.com 14

19. William Blair & Company SaaS Equity Research Coverage
William Blair & Company SaaS Equity Research Coverage
SaaS Equity Research
Company Ticker Analyst
athenahealth, Inc. ATHN Daniels, Ryan
Blackboard Inc. BBBB Dobell, Brandon
Concur Technologies, Inc. CNQR Lederman, Laura
Constant Contact, Inc. CTCT Lederman, Laura
Convio, Inc. CNVO Lederman, Laura
Cornerstone OnDemand, Inc. CSOD Lederman, Laura
DemandTec, Inc. DMAN Lederman, Laura
Ellie Mae, Inc. ELLI Dobell, Brandon
Kenexa Corporation KNXA Lederman, Laura
NetSuite Inc. N Lederman, Laura
RealPage, Inc. RP Lederman, Laura
Responsys, Inc. MKTG Lederman, Laura
RightNow Technologies, Inc. RNOW Lederman, Laura
salesforce.com, inc. CRM Lederman, Laura
SciQuest, Inc. SQI Lederman, Laura
ServiceSource International, Inc. SREV Lederman, Laura
SPS Commerce, Inc. SPSC Lederman, Laura
Ultimate Software Group, Inc. ULTI Lederman, Laura
Vocus, Inc. VOCS Lederman, Laura
15

20. Notes
Notes
www.williamblair.com 16

21. William Blair & Company, L.L.C. is a global investment firm offering investment banking, asset
management, equity research, institutional and private brokerage, and private capital to individual,
institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their
financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients’
interests first and foremost. We place a high value on the enduring nature of our client relationships,
the quality of our products and services, and the continuity and integrity of our people. For more
information, please visit www.williamblair.com.
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