by Steve Schmidt, VP Product Management, Flexera Software Presented at SoftSummit 2010

1. Taking on the Cloud!
T ki th Cl d!
Steve Schmidt
VP Product Management
Flexera Software

2. Agenda
The Cloud: Organizing and Seeing Patterns
SaaS Strategies and Solutions
Virtual Appliance St t i and S l ti
Vi t l A li Strategies d Solutions
What’s Next?

3. Cloud Computing Market Segments
Cloud Applications
Software as a Service (SaaS)
ERP, CRM,
Email,
Collaborative
Apps
Cloud Platform
Platform as a Service (PaaS)
App Development
Development,
Web Infrastructure,
Data Warehousing
Cloud Infrastructure
Infrastructure as a Service (IaaS)
Servers, OS,
Networking,
N t ki
Storage
Sources: Flexera Software analysis, based on IDC and Gartner

4. Cloud Computing Market Segments
Cloud Applications
Software as a Service (SaaS)
Packaged Software High-Tech
ERP, CRM, Virtual Appliances Manufacturers
Pure-play SaaS Software + Services
Email, for Packaged SW Virtual Appliances
Collaborative
Apps
Cloud Platform
Platform as a Service (PaaS)
App Development APIs
App Development
Development,
Web Infrastructure,
Data Warehousing
Cloud Infrastructure
Infrastructure as a Service (IaaS)
Servers, OS,
Networking,
N t ki
Storage
Sources: Flexera Software analysis, based on IDC and Gartner
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

5. Cloud Market Size Forecasts Increasing
Worldwide SaaS Revenue, 2005–2014: Comparison of
December 2008 and June 2010 Forecasts
Worldwide SaaS Revenue Growth, 2006–2014: Comparison of
December 2008 and June 2010 Forecasts
Source: IDC, May 2010
Source: IDC, May 2010
5

6. SaaS Application Segment the Largest
2014
Share
WW SaaS will
grow from 5.7% of
52%
apps revenue in
2009 to 14.5% in
2014
evenue ($M)
SaaS spending
(CAGR= 25.4%)
will grow nearly 5x
faster than “all
software
software” spending 20%
Re
2009-2014
28%
2009-2014 CAGR:
25.4%
Applications
Source: IDC, Worldwide SaaS Forecast, May 2010
Application Develop/Deploy
System Infrastructure

7. Cloud Computing Expected to Drive Revenue Growth
and Lower Costs
Source: Flexera Software Virtualization and Cloud Computing Business Model Trends Survey, June 2010

8. Multiple Monetization Strategies Exist for Software
in the Cloud
1 2 3 4
Business as usual Bursts of Use Pay by Hour Pay to Accelerate
Source: Flexera Software Virtualization and Cloud Computing Business Model Trends Survey, June 2010

9. Packaged Applications Are Being Deployed in Highly
Mobile Virtual Servers
Source: Flexera Software Virtualization and Cloud Computing Business Model Trends Survey, June 2010
More software producers think virtualization usage grew…very few are in doubt anymore
p g g y y

10. Virtualization Now Expected to Grow Revenue
Source: Flexera Software Virtualization and Cloud Computing Business Model Trends Survey, June 2010
More software producers think virtualization offers up to 50% revenue growth…very
few think it is more of a revenue risk

11. Virtual Appliance Market Growing Rapidly for
Software Vendors and High Tech Manufacturers
A virtual appliance is a software stack packaged as a virtual machine
image. The software stack can replace a physical device.
• ~ 1400 VMware appliances, of which ~ 500
are telco/networking devices
• Device categories in VMware marketplace:
• Networking
• Security
• St
Storage
• Representative companies
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

12. Over 60% of High-Tech Manufacturers Consider
Virtual Appliances a Priority
Which of the following are high priority business problems for your COMPANY?
Source: Flexera Software High-Tech Market Survey, 2010

13. SaaS Strategies and
Solutions
13

14. SaaS Business Challenges and Strategies
CHALLENGES STRATEGIES
Many pure-play SaaS companies have Package and price offerings to match
“one-size fits all” packaging resulting in what customers want to buy WITHOUT
missed revenues. SaaS business models involving e g ee g
o g engineering
need to change on a dime to address an
evolving market.
Example: NetSuite has only two options:
NetSuite and NetSuite CRM+
SaaS providers are losing 40-60% of Protect service against revenue leakage
potential revenues to credential sharing
t ti l t d ti l h i to
t credential sharing
d ti l h i
abuse
SaaS providers have a “one size fits all” License (e.g., annual, concurrent use,
approach to li
h licensing, leaving potential
i l i i l trials, etc.) service according to h
i l ) i di how
customers and revenues out customers want to pay for access
Example: ESRI offers a day-pass
p yp
for some products
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

15. Flexera Software Solutions for SaaS Providers
STRATEGIES SOLUTIONS
Package and price FlexNet Operations
offerings to match what • Define service bundles based on features
customers want to buy • Create entitlements for service bundles
WITHOUT involving
i l i • PProvision S S users b
i i SaaS based on entitlements
d titl t
engineering • Automate subscription management, upsells and cross-sells
• Customer insights on products and versions

16. Strategy 1: Package Offerings to Match What
Components Customers Want to Buy
“One Size Fits All” Packaging = Missed “Best Fit” Packaging = Unlock
customers and revenues customers and revenues
Lite…
Standard…
St d d
Premium…

17. Flexera Software Solutions for SaaS Providers
STRATEGIES SOLUTIONS
Package and price FlexNet Operations
offerings to match what • Define service bundles based on features
customers want to buy • Create entitlements for service bundles
WITHOUT involving
i l i • PProvision S S users b
i i SaaS based on entitlements
d titl t
engineering • Automate subscription management, upsells and cross-sells
• Customer insights on products and versions
Protect service against FlexNet Operations
revenue leakage to • Create entitlements for service bundles
credential sharing • Define license usage policies (e.g., 1 user on 5 machines)
• Track and report usage against entitlements
FlexNet Publisher
• Augment user credentials with machine identities to formulate
license usage policies

18. Strategy 2: Prevent Revenue Leakage Due to
Credential Sharing Abuse
iTunes like model where my
credentials work on 1, 2, 5, etc.
machines, but I have to talk to the
ISV if I exceed the
SaaS
business rules in place Services
Machine Identity
+
Credentials
Sue Jan Tom

19. Flexera Software Solutions for SaaS Providers
STRATEGIES SOLUTIONS
Package and price FlexNet Operations
offerings to match what • Define service bundles based on features
customers want to buy • Create entitlements for service bundles
WITHOUT involving
i l i • PProvision S S users b
i i SaaS based on entitlements
d titl t
engineering • Automate subscription management, upsells and cross-sells
• Customer insights on products and versions
Protect service against FlexNet Operations
revenue leakage to • Create entitlements for service bundles
credential sharing • Define license usage policies (e.g., 1 user on 5 machines)
• Track and report usage against entitlements
FlexNet Publisher
• Augment user credentials with machine identities to formulate
license usage policies
License (e g annual
(e.g., annual, FlexNet Operations
concurrent use, trials, etc.) • Define license models (e.g., concurrent, annual/expiring, trials)
service according to how • Create entitlements based on license models
customers want to pay for • Enforce license models
access • Automate trial-to-paid conversion and subscription management
p p g
FlexNet Publisher – optional
• Enforce license models such as concurrent use models

20. Strategy 3: License Offerings to Match How
Customers Want to Pay
“One Size Fits All” Licensing = “Best Fit” Licensing = Unlock
Missed customers and revenues customers and revenues
Standard…
Free with paid
conversion
Day Pass
Annual
subscription
Concurrent
use
se

21. Solution for Strategies 1 and 3: Flexible Packaging
and Licensing
Login
g
• User ID/Password
FlexNet
User Operations
1
SaaS SaaS
Application Provider
2
3 Check user’s entitlement
• Service bundle
• Login allowed/denied
• Entitlement valid dates
based on validity of
entitlement
• Application configured to
service bundle purchased

22. Solution for Strategy 2: Preventing Credential
Sharing Abuse
Login
• UUser ID/P
ID/Passwordd
• Machine identity FlexNet
User Operations
1
SaaS SaaS
Application Provider
2
FlexNet 3 Check user’s entitlement
Publisher • Login allowed/denied • Service bundle
• Entitlement valid dates
based on policies
• License policy (e.g., login
• Application configured to
within allowed number of
service bundle purchased
machines)

23. Virtual Appliance
Strategies and
Solutions
23

24. Value Proposition 1: Allow Service Providers to Grow
Capacity On-demand without Deploying Hardware
“Easy Procurement and Elastic Response -
Instead of overpaying for capacity they don’t need,
NetScaler customers can now buy 90-day Burst
Pack licenses and apply them when sudden traffic
surges threaten application performance and
availability.
Compelling Economics and Better Capacity
Planning - Burst Pack licenses make it economical
to instantly increase datacenter capacity, giving
datacenter managers much needed time to p
g plan for
permanent capacity upgrades.
Broad NetScaler Support - Burst Pack licenses
can be applied to both NetScaler VPX virtual
appliances and NetScaler MPX hardware
NetScaler virtual appliances (VPX 10, appliances.”
200, 1000) – grow capacity from 10
Mbps to 1000 Mbps with a license
p p
upgrade vs device upgrade
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

25. Value Proposition 2: Consolidate Hardware Functions to
Reduce Space, Energy and Admin Costs
Space
Value Proposition 3: Upsell/cross-sell Capabilities Over
p p p
Time without Deploying Hardware
Multi function
Multi-function device: Riverbed Steelhead
• R l
Replace up to 5 physical servers with
h i l ih
virtual machines on RSP
• Runs on most Steelhead appliance
models
• Run almost any VMware virtual machine
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

26. High-Tech Mfr Business Challenges and Strategies
CHALLENGES STRATEGIES
Device manufacturers face eroding Push hardware costs to end customers
margins on hardware products by making device capabilities available as
pure software
Enable up- and cross-sell revenues by
delivering capabilities as software add-ons
g p
or on a trial basis
Service providers need to provision capacity Allow service providers to dial up/dial
to meet peak demand which leads to down capacity on-demand without
unused capacity during off-peak periods deploying hardware, eliminating unused
hardware
Service providers and branch office Consolidate many capabilities into one
locations need to reduce power device
consumption, space and administrative
costs

27. Flexera Software Solution for Virtual Appliances
STRATEGIES SOLUTION
Push hardware costs to end FlexNet Embedded
customers by making device capabilities • IP protection of virtual appliances
p pp
available as pure software • Automate capacity and capability
provisioning and de-provisioning
Enable upsell/cross-sell revenues by
• Enable field-upgrade of capacity and
delivering capabilities as software add-
add
capabilities f virtual appliances
biliti for i t l li
ons or on a trial basis
• Report deployment of virtual appliances
Allow service providers to dial up/dial provisioned in the Cloud to FlexNet
Operations
p
down capacity on-demand without
on demand
FlexNet Operations
deploying hardware, eliminating unused
hardware • Automate capacity and capability
provisioning and de-provisioning
• Automate cross-sells and upsells of
Consolidate many capabilities into one
capabilities
device
• Compare capacity and capabilities
owned versus deployed at customer

28. Use Cases and Deployment Models
Public Cloud (Online) Private Cloud (Offline)
1) Service provider / 2) Service provider /
customer upgrades capacity customer provisions a pool
Capacity
p y to handle a temporary of capacity to be shared by
demand spike in a public many virtual appliances into
cloud a private, offline cloud
Capabilities 3) Customer in a branch office location adds additional
C t i b h ffi l ti dd dditi l
virtual appliances into an existing machine to enhance
its functionality

29. Solution: Service Provider Provisioning a Pool of
Capacity in a Public Cloud
Manufacturer
1 Order FlexNet
10,000 Mbps of load
balancing capacity
Operations
Synchronize License Server records
Activate capacity • Appliance 1: 2,000
=10,000 Mbps activations of
• Appliance 2: 3,000
devices in the • Unused Capacity: 5,000
3 6 cloud
Provision 2 License Server 1: Active
License Server Capacity = 10,000 Mbps
appliances VM
VM
Service Provider
/ Customer
Virtualization Technology Activate /deactivate
5
VM
5 capacity for
APP VM VM
appliances
OS APP APP
Provision Virtual
FlexNet
4 Appliances OS OS
Embedded
Virtual Appliance 1: Virtual Appliance 2:
Capacity = 2,000 Mbps Capacity = 3,000 Mbps

30. Solution: Service Provider Provisioning a Pool of
Capacity in a Private Offline Cloud
Private,
Manufacturer
1 Order FlexNet
10,000 Mbps of load
balancing capacity
Operations
License Server records
Activate capacity • Appliance 1: 2,000
=10,000 Mbps • Appliance 2: 3,000
• Unused Capacity: 5,000
3
Provision 2 License Server 1: Active
License Server Capacity = 10,000 Mbps
appliances VM
VM
Service Provider
/ Customer
Virtualization Technology Activate /deactivate
5
VM
5 capacity for
APP VM VM
appliances
OS APP APP
Provision Virtual
FlexNet
4 Appliances OS OS
Embedded
Virtual Appliance 1: Virtual Appliance 2:
Capacity = 2,000 Mbps Capacity = 3,000 Mbps

31. Solution: Augmenting Capabilities by Provisioning
a Virtual Appliance into an Existing Machine
Appliance
Manufacturer
Order FlexNet
1
Appliance Operations
3 Activate Appliance
VM VM
APP APP
VM
APP
FlexNet
End OS Embedded OS
OS
Customer Virtualization Technology
Provision Branch Office Physical Device
y
2 Add-On
Add O
Appliance
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

32. Cloud Computing – What’s Next
Cloud Applications
Software as a Service (SaaS)
Packaged Software High-Tech
ERP, CRM, Virtual Appliances Manufacturers
Pure-play SaaS Software + Services
Email, for Packaged SW Virtual Appliances
Collaborative
Apps
Cloud Platform
Platform as a Service (PaaS)
App Development APIs
App Development
Development,
Web Infrastructure,
Data Warehousing
Cloud Infrastructure
Infrastructure as a Service (IaaS)
Servers, OS,
Networking,
N t ki
Storage
Sources: Flexera Software analysis, based on IDC and Gartner
Note: The companies mentioned illustrate the trend but may not be Flexera Software customers

33. Learn more:
See the roadmap presentations
Tuesday afternoon on:
• Fl N t O
FlexNet Operations
ti
• FlexNet Embedded
• Fle Net P blisher
FlexNet Publisher