cloud insights - william blair

June 2015 Monthly Update

Cloud InsightsM&A and Capital Markets Perspective on the Cloud Computing Industries:

• Software-as-a-Service

• Platform-as-a-Service

• Infrastructure-as-a-Service

William Blair & Company

Cloud Insights Table of Contents

Summary ............................................................................................................................................................................................................................................................. 1

Public Company Analysis ............................................................................................................................................................................................................................ 3

William Blair & Company Selected Cloud Transactions .............................................................................................................................................................. 6

William Blair & Company Cloud Contacts ........................................................................................................................................................................................... 7

William Blair & Company SaaS Equity Research Coverage ........................................................................................................................................................ 7

Disclosures ......................................................................................................................................................................................................................................................... 9


Cloud Insights Summary 1

Summary

SaaS Mergers and Acquisitions

May included 24 SaaS M&A transactions, totaling $669.5 million in disclosed transaction value, with transaction volume consistent with April, which witnessed 26 M&A transactions, totaling $2,851.1 million. At the same time last year, 27 M&A transactions had been announced, totaling $805.8 million. Notable M&A transactions in May included the following:

Selected SaaS Mergers and Acquisitions

Date Trans. Value Enterprise

Enterprise Value /

Announced Completed ($MM) Value($MM) Target Acquirer(s) LTM Revenue LTM EBITDA

5/28/15 5/28/15 - - Cloud9 Analytics InsideSales.com - -

5/27/15 - $533.5 $467.0 Rally Software Development

CA 5.3x -

5/20/15 5/20/15 - - LiveMinutes FuzeBox - -

5/20/15 5/18/15 - - Frontleaf Zuora - -

5/7/15 5/7/15 - - Mercury Network Serent Capital - -

5/5/15 5/5/15 - - AutoStar Solutions DealerSocket - -

Sources: Capital IQ, FactSet, and 451 Group as of May 31, 2015

SaaS Equity Performance

For May, the broad SaaS group increased 0.1%, the Nasdaq increased 1.3%, and the S&P 500 decreased 0.1%. The large-cap SaaS group decreased 0.9%, midcap increased 2.0%, and small-cap increased by 6.5%.

Indexed Stock Price Performance

Index 2015 YTD May 2015

Large-cap SaaS 9.1% (0.9%)

Midcap SaaS 7.1% 2.0%

Small-cap SaaS 1.3% 6.5%

All SaaS 8.5% 0.1%

NASDAQ 7.1% 1.3%

S&P 500 2.4% (0.1%)

Note: All indices are weighted by current market capitalization Source: FactSet as of May 31, 2015

SaaS Capital Markets

May witnessed one SaaS IPO, one SaaS follow-on, and four SaaS IPO filings:

Shopify (SHOP $17.00), a cloud-based e-commerce platform, completed an initial public offering of $130.9 million.

Paycom Software (PAYC $36.25), a human capital management system, completed a follow-on of $290.0 million.

Alarm.com, a cloud-connected home security and energy platform, filed an S-1 to raise $75.0 million in an initial public offering.

AppFolio, a provider of property management software, filed an S-1 to raise $100.0 million in an initial public offering.

Mindbody, a provider of health management solutions software, filed an S-1 to raise $100.0 million in an initial public offering.

Xactly, a provider of cloud-based incentive compensation solutions, filed an S-1 to raise $75.0 million in an initial public offering.


Cloud Insights 2 Summary

SaaS Venture Capital

May venture investment activity consisted of 35 transactions, totaling $1,215.3 million in disclosed transaction value. Year-over-year, the number of venture capital financings and the total disclosed transaction value increased. May 2014 witnessed 31 transactions, totaling $573.1 million in disclosed transaction value. Notable SaaS venture investments in May included the following:

DocuSign, an electronic document authentication, storage, and management platform, received $278.0 million of funding from Brookside Capital and Bain Capital Ventures in its 11th round of funding

Zenefits, a cloud human resources automation platform provider, received $512.6 million of funding from Insight Venture Partners, TPG, Fidelity Management & Research, The Founders Fund, Khosla Ventures, Andreessen Horowitz, Palm Drive Ventures, and Sound Ventures in its third round of funding.

MuleSoft, an integration platform provider for connecting applications, data sources, and devices on the cloud, received $128.3 million of funding from Bay Partners, Hummer Winblad Venture Partners, MeriTech Capital Partners, Morgenthaler, New Enterprise Associates, Sapphire Ventures, Lightspeed Venture Partners, Adage Capital Management, Sands Capital Management, ServiceNow, Brookside Capital, Cisco Investments, and Salesforce Ventures in its seventh round of funding.

Virgin Pulse, a health engagement platform provider, received $92.0 million of funding from Insight Venture Partners in its second round of financing.

Percolate Industries, a marketing software platform, received $40.0 million of funding from Sequoia Capital, Lightspeed Venture Partners, GGV Capital, First Round Capital, and Lerer Hippeau Ventures in its third round of funding.

CoreDial, a cloud sales, delivery, and billing management software for private labeled cloud services, received $27.5 million of growth funding from LRR Partners.

Loupe, a blueprints storage and management cloud application, received $18.0 million of funding from Sequoia Capital in its seed round of funding.

PaaS and IaaS Activity

Notable events in the PaaS and IaaS sectors in May included the following:

Carpathia Hosting, a cloud operator and managed hostings provider, was acquired by Quality Technology Services Holdings for $326.0 million.

Datagram, a server hosting, Internet access, colocation, and data backup services provider, was acquired by SingleHop for an undisclosed amount.


Cloud Insights Public Company Analysis 3

Public Company Analysis

Year-to-date, the SaaS index was up 8.5%, outperforming the Nasdaq, which was up 7.1%.

Year-to-date, the large-cap SaaS group was up 9.1%, the midcap group was up 7.1%, and the small-cap SaaS group up 1.3%.

SaaS Indexed Stock Price Performance (2015 Year-to-Date)

Note: Groupings based on market caps at December 31, 2014, or market cap at IPO in 2015. Mkt. Cap > $3 billion consists of: ATHN, N, CRM, NOW, ULTI, VEEV, WDAY Mkt. Cap $1 billion to $3 billion consists of: BOX, CSLT, CTCT, CSOD, CVT, TRAK, DWRE, ELLI, FLTX, HUBS, LOGM, MKTO, MDSO, NEWR, PAYC, PCTY, QLYS, RP, RNG, SHOP,

SNCR, ZEN Mkt. Cap < $1 billion consists of: AMBR, BV, BNFT, ECOM, CNXR, FIVN, HGN, IL, JIVE, LPSN, MRIN, MIXT, OPWR, QTWO, RALY, SQI, SREV, SPSC, TNGO, TWOU, TXTR, UPLD,

WK, WIX, YDLE Source: FactSet as of May 31, 2015

Valuation Overview

Note: Groupings based on market caps at December 31, 2014; data points represent median multiples Sources: FactSet and Capital IQ as of May 31, 2015

85

90

95

100

105

110

115

1/1/15 1/16/15 1/31/15 2/15/15 3/2/15 3/17/15 4/1/15 4/16/15 5/1/15 5/16/15 5/31/15

Large-cap (9.1%) Midcap (7.1%) Small-cap (1.3%) NASDAQ (7.1%)

8.1x29.3x

45.3x

6.6x25.2x

38.5x

2.4x

25.8x20.8x

EV / 2015E Revenue EV / 2015E EBITDA EV / 2015E FCF

Large-cap Midcap Small-cap


Cloud Insights 4 Public Company Analysis

Comparable Company Analysis – Groupings Based on Market Caps at December 31, 2014

Market Market Enterprise Enterprise Value/Revenue

Enterprise Value/EBITDA

Enterprise Value/FCF

'14-'15E 2014

Close 5/31/15

Cap ($MM) 12/31/14

Cap ($MM) 5/31/15

Value ($MM)

Revenue Growth

EBITDA Margin LTM 2014 2015E LTM 2014 2015E LTM 2014E 2015E

Large-cap

athenahealth $116.60 $5,550.3 $4,495.3 $4,700.4 5.91x 6.25x 5.12x nmf 31.3x 28.6x nmf nmf nmf 22.0% 19.9%

NetSuite $93.42 $8,377.6 $7,248.2 $7,065.6 11.81x 12.70x 9.69x nmf nmf nmf 41.7x nmf nmf 31.1% 9.1%

salesforce.com $72.75 $37,424.6 $47,691.7 $48,711.5 8.61x 9.26x 7.56x nmf 50.3x 37.1x 55.1x 56.6x 44.5x 22.5% 18.4%

ServiceNow $76.61 $10,062.2 $11,764.6 $11,470.9 15.18x 16.81x 11.57x nmf nmf nmf 52.2x nmf nmf 45.2% 7.6%

Ultimate Software Group $161.79 $4,165.3 $4,624.0 $4,511.3 8.52x 8.92x 7.32x nmf 37.4x 30.0x nmf nmf nmf 21.8% 23.9%

Veeva Systems $27.12 $3,449.0 $3,569.9 $3,141.4 9.34x 10.32x 8.06x 38.5x 36.6x 27.2x 47.9x nmf 46.1x 28.0% 28.2%

Workday $78.92 $15,261.1 $14,946.9 $13,523.3 15.38x 17.78x 12.14x nmf nmf nmf nmf nmf nmf 46.4% (13.6%) Mean 10.68x 11.72x 8.78x nmf 38.9x 30.7x 49.2x 56.6 x 45.3 x 31.0% 13.4% Median 9.34x 10.32x 8.06x nmf 37.0x 29.3x 50.0x 56.6 x 45.3 x 28.0% 18.4%

Midcap

Box $17.64 - $2,123.3 $1,834.7 8.48x 8.66x 6.61x nmf nmf nmf nmf nmf nmf 31.1% (51.8%)

Castlight $8.73 $1,056.4 $818.6 $632.9 11.90x 13.88x 8.30x nmf nmf nmf nmf nmf nmf 67.1% (158.9%)

Constant Contact $27.26 $1,162.5 $876.6 $697.5 2.03x 2.10x 1.86x 17.2x 11.5x 9.4x 18.3x 21.1x 17.1x 13.0% 18.3%

Cornerstone OnDemand $31.13 $1,885.1 $1,679.1 $1,686.3 6.02x 6.39x 4.96x nmf nmf nmf nmf nmf nmf 28.9% (0.8%)

Cvent $26.36 $1,150.5 $1,095.5 $919.0 6.05x 6.46x 5.04x nmf 50.8x 54.5x nmf nmf nmf 28.3% 12.7%

DealerTrack Holdings $41.70 $2,403.5 $2,284.9 $3,086.6 3.25x 3.61x 2.81x 26.8x 16.0x 13.8x 57.0x nmf 51.2x 28.4% 22.6%

Demandware $62.28 $2,089.3 $2,330.8 $2,141.9 12.02x 13.34x 9.18x nmf nmf nmf nmf nmf nmf 45.3% 5.4%

Ellie Mae $63.22 $1,159.0 $1,859.0 $1,787.1 9.74x 11.06x 7.88x 46.6x 39.1x 35.1x nmf nmf nmf 40.3% 28.3%

Fleetmatics Group $41.81 $1,339.6 $1,598.2 $1,450.1 5.92x 6.26x 5.14x 22.9x 19.7x 16.9x 40.8x 42.7x 42.6x 21.9% 31.9%

HubSpot $50.80 $1,055.0 $1,680.5 $1,497.4 11.53x 12.92x 8.97x nmf nmf nmf nmf nmf nmf 44.1% (22.8%)

LogMeIn $63.47 $1,203.1 $1,562.9 $1,330.4 5.68x 5.99x 5.04x 58.9x 26.2x 22.8x 20.4x 20.0x 22.3x 18.9% 22.9%

Marketo $29.83 $1,348.5 $1,260.0 $1,162.7 7.10x 7.75x 5.56x nmf nmf nmf nmf nmf nmf 39.4% (13.2%)

Medidata Solutions $58.01 $2,590.5 $3,201.9 $3,148.0 8.97x 9.40x 7.82x nmf 42.8x 33.4x 45.4x nmf 44.8x 20.2% 22.0%

New Relic $32.73 $1,604.2 $1,545.6 $1,344.8 12.18x 21.29x 9.13x nmf nmf nmf nmf nmf nmf 133.2% (30.0%)

Paycom $34.76 $1,417.4 $2,029.0 $2,019.8 11.94x 13.38x 9.81x nmf nmf 55.7x nmf nmf nmf 36.5% 17.9%

Paylocity $33.48 $1,314.0 $1,694.9 $1,601.7 11.33x 12.34x 9.38x nmf nmf nmf nmf nmf nmf 31.6% 4.6%

Qualys $40.72 $1,257.8 $1,382.7 $1,239.7 8.81x 9.28x 7.48x 46.4x 39.1x 27.6x nmf 41.5x 37.7x 24.1% 23.7%

RealPage $18.26 $1,728.9 $1,452.9 $1,440.1 3.47x 3.56x 3.14x 58.7x 20.4x 18.1x 41.1x 43.8x 28.1x 13.3% 17.4%

RingCentral $17.09 $1,016.3 $1,180.4 $1,066.8 4.50x 4.85x 3.73x nmf nmf nmf nmf nmf nmf 30.2% (8.8%)

Shopify $26.98 - $2,056.1 $2,084.0 16.87x na na nmf na na na na na na na

Synchronoss $44.04 $1,772.5 $1,894.9 $1,931.5 3.93x 4.22x 3.37x 14.5x 12.5x 9.8x nmf nmf 39.4x 25.3% 33.8%

Zendesk $23.03 $1,775.0 $1,982.7 $1,679.9 11.65x 13.22x 8.66x nmf 60.0x 45.9x nmf nmf nmf 52.8% 22.0% Mean 8.34x 9.05x 6.37x 36.5x 30.7x 28.6x 37.2x 33.8 x 35.4 x 36.8% (0.1%) Median 8.64x 8.66x 6.61x 36.6x 26.2x 25.2x 41.0x 41.5 x 38.5 x 30.2% 17.4%

Small-cap

2U $27.76 $797.1 $1,147.5 $1,064.4 8.98x 9.66x 7.24x nmf nmf nmf nmf nmf nmf 33.4% (13.4%)

Amber Road $7.14 $260.1 $186.0 $177.6 2.73x 2.74x 2.43x nmf nmf nmf nmf nmf nmf 12.5% 3.9%

Bazaarvoice $5.72 $627.4 $449.8 $402.0 2.16x 2.19x 1.99x nmf nmf nmf nmf nmf nmf 9.8% (6.0%)

Benefitfocus $35.88 $839.3 $1,025.7 $963.6 6.45x 7.01x 5.52x nmf nmf nmf nmf nmf nmf 27.0% (31.9%)

ChannelAdvisor $11.21 $537.1 $280.1 $218.9 2.48x 2.58x 2.29x nmf nmf nmf nmf nmf nmf 12.4% (23.0%)

Connecture $12.67 $195.3 $275.0 $307.1 3.44x 3.63x 2.98x nmf nmf 28.6x na nmf nmf 22.0% 2.3%

Five9 $5.09 $219.0 $253.7 $229.8 2.11x 2.23x 1.88x nmf nmf nmf nmf nmf nmf 18.3% (22.1%)

Halogen $10.05 $186.0 $219.5 $132.0 2.24x 2.01x 1.57x nmf nmf nmf nmf nmf nmf 27.8% (15.4%)

IntraLinks Holdings $10.63 $667.8 $609.2 $640.9 2.44x 2.51x 2.35x 52.9x 18.5x 18.7x 54.8x nmf nmf 6.4% 13.5%

Jive Software $5.63 $431.7 $421.2 $307.3 1.66x 1.72x 1.56x nmf nmf nmf 16.3x nmf nmf 10.4% (1.0%)

LivePerson $9.57 $770.6 $546.0 $505.1 2.28x 2.41x 2.06x 45.6x 23.1x 25.8x 23.5x nmf nmf 16.7% 10.4%

Marin Software $5.69 $295.9 $205.9 $156.4 1.52x 1.57x 1.36x nmf nmf nmf nmf nmf nmf 15.5% (17.4%)

MiX Telematics $7.70 $209.4 $231.6 $155.4 1.36x 1.32x 1.26x 6.8x 6.5x 6.2x 27.3x 21.0x 20.8x 4.7% 20.3%

Opower $11.84 $709.3 $604.0 $476.6 3.58x 3.71x 3.24x nmf nmf nmf nmf nmf nmf 14.5% (10.3%)

Q2 Holdings $23.71 $644.7 $881.8 $762.5 8.82x 9.64x 7.18x nmf nmf nmf nmf nmf nmf 34.1% (13.2%)

Rally Software $19.42 $286.7 $498.1 $431.5 4.66x 5.00x 4.18x nmf nmf nmf nmf nmf nmf 19.6% (25.9%)

SciQuest $15.26 $397.7 $421.0 $293.7 2.87x 2.84x 2.71x nmf 13.3x 11.6x 41.1x 31.1x 19.8x 4.9% 21.3%

ServiceSource $4.38 $392.1 $372.8 $284.2 1.05x 1.04x 1.15x nmf nmf nmf nmf nmf nmf (9.2%) (7.9%)

SPS Commerce $65.02 $921.8 $1,074.7 $941.1 6.92x 7.36x 5.97x nmf 52.0x 43.4x nmf nmf nmf 23.1% 14.1%

Tangoe $12.71 $506.2 $495.7 $448.0 2.08x 2.11x 1.82x 27.0x 13.3x 12.1x 34.0x 28.0x 21.6x 15.6% 15.9%

Textura $29.11 $725.1 $747.5 $680.2 9.95x 13.52x 7.56x nmf nmf nmf nmf nmf nmf 79.0% (9.6%)

Upland $7.62 $145.4 $116.3 $114.0 1.71x 1.76x 1.60x nmf 29.4x 31.9x 36.9x nmf nmf 10.4% 6.0%

Workiva $13.23 $529.6 $531.7 $466.2 3.89x 4.14x 3.29x nmf nmf nmf na nmf nmf 25.9% (24.5%)

Wix $24.91 $799.9 $962.8 $878.0 5.57x 6.19x 4.32x nmf nmf nmf nmf nmf nmf 43.1% (7.9%)

Yodlee $14.34 $356.6 $321.3 $250.2 2.66x 2.81x 2.27x nmf 45.3x 26.2x nmf nmf nmf 23.5% 6.2% Mean 3.74x 4.07x 3.19x 33.1x 25.2x 22.7x 33.4x 26.7 x 20.7 x 20.1% (4.6%) Median 2.66x 2.74x 2.35x 36.3x 20.8x 25.8x 34.0x 28.0 x 20.8 x 16.7% (7.9%)

Overall

Mean 6.51x 7.05x 5.19x 35.6x 30.2x 26.8x 38.5x 34.0 x 33.5 x 28.2% (0.5%) Mean 5.91x 6.25x 5.04x 38.5x 29.4x 27.2x 41.1x 31.1 x 37.7 x 24.1% 5.4%

Sources: FactSet and Capital IQ as of May 31, 2015


Cloud Insights Public Company Analysis 5

Stock Price and Revenue Multiple Over Time – Groupings Based on Market Caps at December 31, 2014

Market Market 12/31/14

52-Week Low Point 52-Week High Point 5/31/15 Percent Change in Stock Price

Cap ($MM) 12/31/14

Cap ($MM) 5/31/15

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

Stock Price

EV/LTM Rev

12/31/14 to 5/31/15

52-Week Low to 5/31/15

52-Week High to 5/31/15

Large-cap

athenahealth $5,550.3 $4,495.3 145.

70

$145.70 7.52x $107.88 3.13x $153.25 13.11x $116.60 5.91x (20.0%) 8.1% (23.9%)

NetSuite $8,377.6 $7,248.2 $109.17 14.77x $78.23 1.84x $113.88 21.08x $93.42 11.81x (14.4%) 19.4% (18.0%)

salesforce.com $37,424.6 $47,691.7 $59.31 7.66x $51.04 6.97x $78.46 14.79x $72.75 8.61x 22.7% 42.5% (7.3%)

ServiceNow $10,062.2 $11,764.6 $67.85 14.43x $54.05 1.11x $83.52 23.01x $76.61 15.18x 12.9% 41.7% (8.3%)

Ultimate Software Group

$4,165.3 $4,624.0 $146.82 8.03x $125.34 2.32x $183.25 11.43x $161.79 8.52x 10.2% 29.1% (11.7%)

Veeva Systems $3,449.0 $3,569.9 $26.41 10.57x $20.79 8.84x $33.66 22.50x $27.12 9.34x 2.7% 30.4% (19.4%)

Workday $15,261.1 $14,946.9 $81.61 19.78x $75.23 6.30x $97.40 42.49x $78.92 15.38x (3.3%) 4.9% (19.0%)

Midcap

Box - $2,123.3 - - $16.41 7.80x $24.73 13.39x $17.64 8.48x - 7.5% (28.7%)

Castlight $1,056.4 $818.6 $11.70 19.17x $6.52 8.73 x $17.90 260.41x $8.73 11.90x (25.4%) 33.9% (51.2%)

Constant Contact $1,162.5 $876.6 $36.70 3.04x $25.00 1.94x $43.18 3.67x $27.26 2.03x (25.7%) 9.0% (36.9%)

Cornerstone OnDemand

$1,885.1 $1,679.1 $35.20 7.14x $25.99 5.47x $47.00 17.89x $31.13 6.02x (11.6%) 19.8% (33.8%)

Cvent $1,150.5 $1,095.5 $27.84 6.80x $22.13 5.99x $30.30 14.57x $26.36 6.05x (5.3%) 19.1% (13.0%)

DealerTrack Holdings $2,403.5 $2,284.9 $44.31 3.49x $36.43 2.86x $50.59 6.51x $41.70 3.25x (5.9%) 14.5% (17.6%)

Demandware $2,089.3 $2,330.8 $57.54 11.40x $47.30 1.70x $71.61 24.96x $62.28 12.02x 8.2% 31.7% (13.0%)

Ellie Mae $1,159.0 $1,859.0 $40.32 6.65x $27.68 2.54x $67.00 10.32x $63.22 9.74x 56.8% 128.4% (5.6%)

Fleetmatics Group $1,339.6 $1,598.2 $35.49 5.20x $27.75 4.48x $49.18 8.73x $41.81 5.92x 17.8% 50.7% (15.0%)

HubSpot $1,055.0 $1,680.5 $33.61 10.03x $25.79 5.76x $54.92 12.54x $50.80 11.89x 51.1% 97.0% (7.5%)

LogMeIn $1,203.1 $1,562.9 $49.34 4.54x $39.06 3.60x $70.00 12.54x $63.47 5.68x 28.6% 62.5% (9.3%)

Marketo $1,348.5 $1,260.0 $32.72 8.25x $24.00 6.28x $35.63 18.24x $29.83 7.10x (8.8%) 24.3% (16.3%)

Medidata Solutions $2,590.5 $3,201.9 $47.75 7.67x $37.01 6.37x $58.97 13.17x $58.01 8.97x 21.5% 56.7% (1.6%)

New Relic $1,604.2 $1,545.6 $34.84 15.61x $29.66 11.27x $38.65 19.09x $32.73 12.18x (6.1%) 10.3% (15.3%)

Paycom $1,417.4 $2,029.0 $26.33 9.45x $12.28 5.15x $39.75 13.49x $34.76 11.94x 32.0% 183.1% (12.6%)

Paylocity $1,314.0 $1,694.9 $26.11 9.71x $18.50 3.55x $34.83 14.04x $33.48 11.33x 28.2% 81.0% (3.9%)

Qualys $1,257.8 $1,382.7 $37.75 8.57x $22.65 4.57x $55.47 15.34x $40.72 8.81x 7.9% 79.8% (26.6%)

RealPage $1,728.9 $1,452.9 $21.96 4.29x $14.87 3.01x $23.11 8.50x $18.26 3.47x (16.8%) 22.8% (21.0%)

RingCentral $1,016.3 $1,180.4 $14.92 4.07x $10.02 3.02x $17.95 8.61x $17.09 4.50x 14.5% 70.6% (4.8%)

Shopify - $2,056.1 - - $24.11 12.40x $31.10 14.29x $27.20 13.32x - 12.8% (12.5%)

Synchronoss Technologies

$1,772.5 $1,894.9 $41.86 3.74x $31.50 2.91x $54.05 8.50x $44.04 3.93x 5.2% 39.8% (18.5%)

Zendesk $1,775.0 $1,982.7 $24.37 13.16x $11.06 9.41x $28.20 19.58x $23.03 11.65x (5.5%) 108.2% (18.3%)

Small-cap

2U $797.1 $1,147.5 $19.66 6.50x $13.03 4.85x $29.95 9.97x $27.76 8.98x 41.2% 113.0% (7.3%)

Amber Road $260.1 $186.0 $10.22 3.44x $6.81 2.51x $18.09 13.29x $7.14 2.73x (30.1%) 4.8% (60.5%)

Bazaarvoice $627.4 $449.8 $8.04 3.18x $5.21 1.98x $9.39 3.71x $5.72 2.16x (28.9%) 9.8% (39.1%)

Benefitfocus $839.3 $1,025.7 $32.84 5.97x $19.58 3.91x $49.34 16.52x $35.88 6.45x 9.3% 83.2% (27.3%)

ChannelAdvisor $537.1 $280.1 $21.58 5.41x $8.22 1.62x $27.16 16.02x $11.21 2.48x (48.1%) 36.5% (58.7%)

Connecture $195.3 $275.0 $9.01 2.55x $8.04 1.62x $14.39 16.02x $12.67 3.44x 40.6% 57.6% (12.0%)

Five9 $219.0 $253.7 $4.48 1.79x $3.64 0.59x $8.20 5.19x $5.09 2.11x 13.6% 39.8% (37.9%)

Halogen $284.7 $175.6 $7.34 2.04x $7.59 1.88x $10.73 6.86x $10.05 2.21x 36.9% 32.4% (6.3%)

IntraLinks Holdings $670.4 $609.2 $11.90 2.74x $7.76 1.89x $12.28 2.79x $10.63 2.44x (10.7%) 37.0% (13.4%)

Jive Software $779.0 $421.2 $6.03 1.90x $4.88 1.41x $8.75 3.99x $5.63 1.66x (6.6%) 15.4% (35.7%)

LivePerson $802.3 $546.0 $14.10 3.26x $8.10 2.01x $14.70 5.76x $9.57 2.28x (32.1%) 18.1% (34.9%)

Marin Software $334.1 $205.9 $8.46 2.26x $5.36 1.44x $12.65 7.05x $5.69 1.52x (32.7%) 6.2% (55.0%)

MiX Telematics $209.4 $231.6 $6.50 1.15x $5.36 0.93x $10.59 3.01x $3.55 1.36x (45.4%) -33.8% (66.5%)

Opower $709.3 $604.0 $14.23 4.45x $8.70 2.44x $20.45 13.19x $11.84 3.58x (16.8%) 36.1% (42.1%)

Q2 Holdings $644.7 $881.8 $18.84 7.01x $12.44 4.99x $25.75 11.78x $23.71 8.82x 25.8% 90.6% (7.9%)

Rally Software $286.7 $498.1 $11.37 2.62x $8.24 1.66x $19.80 6.79x $19.42 4.93x 70.8% 135.7% (1.9%)

SciQuest $397.7 $421.0 $14.45 2.68x $13.31 1.91x $19.10 8.15x $15.26 2.87x 5.6% 14.7% (20.1%)

ServiceSource International

$392.1 $372.8 $4.68 1.06x $2.81 0.41x $6.17 4.44x $4.38 1.05x (6.4%) 55.9% (29.0%)

SPS Commerce $921.8 $1,074.7 $56.63 6.10x $48.97 2.07x $72.84 9.74x $65.02 6.92x 14.8% 32.8% (10.7%)

Tangoe $506.2 $495.7 $13.03 2.16x $11.03 1.89x $15.68 8.98x $12.71 2.08x (2.5%) 15.2% (18.9%)

Textura $725.1 $747.5 $28.47 10.48x $19.11 2.36x $31.23 19.81x $29.11 9.95x 2.2% 52.3% (6.8%)

Upland $145.4 $116.3 $9.56 3.44x $5.89 1.32x $12.20 9.74x $7.62 1.71x (20.3%) 29.4% (37.5%)

Workiva $529.6 $531.7 $13.40 4.61x $12.25 3.86x $16.53 5.85x $13.23 3.89x (1.3%) 8.0% (20.0%)

Wix $799.9 $962.8 $21.00 4.98x $15.60 4.07x $25.82 16.00x $24.91 5.57x 18.6% 59.7% (3.5%)

Yodlee $356.6 $425.1 $12.20 5.21x $8.90 2.42x $17.97 5.99x $14.34 3.80x 17.5% 61.1% (20.2%)

Sources: FactSet and Capital IQ as of May 31, 2015


Cloud Insights 6 William Blair & Company Selected Cloud Transactions

William Blair & Company Selected Cloud Transactions

Selected M&A Transactions

Selected Public Equity Transactions

Selected Private Equity Transactions

Not Disclosed

has been acquired by

Not Disclosed

has been recapitalized by

Not Disclosed


$157,800,000

has acquired

(PAI Group, Inc)

$178,229,986


Not Disclosed

has merged with

$205,000,000


$532,500,000


Not Disclosed


$130,000,000


$61,042,000

Initial Public Offering

$267,929,750

Initial Public Offering& Follow-On Offering

$46,153,848


$147,487,500

Follow-on Offering

$235,153,754

Initial Public Offering& Follow-On Offerings

$171,818,346

Follow-on Offering

$186,826,425


$158,622,000


$289,875,586


$286,645,242


$695,594,375


$115,848,192


$234,939,011


$91,351,224


$266,512,000


$41,000,000

Private EquityPreferred Stock

Not Disclosed

Private EquityPreferred Stock

TM

Not Disclosed

received a significant investment from

Not Disclosed

Series EPreferred Stock

$54,000,000

Preferred Stock


Cloud Insights William Blair & Company Cloud Contacts 7

William Blair & Company Cloud Contacts

Dan Connolly is a managing director and co-head of the software investment banking practice at William Blair based in Chicago. Dan joined William Blair in 1999. Previously, Dan spent three years in the M&A group at Merrill Lynch & Company. During his career, Dan has successfully completed more than 90 acquisition and financing transactions throughout the world, for which he has received industry recognition, including the 2011 M&A Atlas Technology & Telecom Deal of the Year and the 2012 40 Under 40 M&A Advisor Recognition Award. Dan graduated from the University of Notre Dame where he was twice elected class president, and he received his M.B.A. from Harvard Business School.

[email protected] +1 312 364 8544

Chris Lane is a managing director and co-head of the software investment banking practice at William Blair based in San Francisco. Chris joined William Blair in 2013. Before joining William Blair, Chris spent 12 years with Jefferies in Silicon Valley; before that, he was at Deutsche Bank for 4 years. Chris has led many transformative M&A and capital market transactions in the technology sector, including the sales of Paradigm to Apax Partners; Radiant Systems to NCR; Layer 7 to CA; and i2 to IBM. Chris received a B.A. from Colgate University and an M.B.A. from Northwestern University’s Kellogg School of Management.


Scott Mattson is a managing director of the software and mobility group at William Blair based in Boston. Scott joined William Blair in 2011. Previously, Scott worked at Canaccord Genuity in the technology team for five years covering location technology, software, Internet, and digital media companies. Scott has significant transaction experience including merger and acquisition advisory and public and private financings. Before his investment banking career, Scott was a lieutenant in the Navy where he was responsible for the procurement, maintenance, and modernization of nuclear-powered submarines. Scott graduated with distinction from the United States Naval Academy with a B.S. in economics and earned his M.B.A. from the University of Maryland while serving in the Navy.


Andrew Arno is a director of enterprise and application software at William Blair based in San Francisco. Andrew joined the firm 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 received his B.A. from Columbia University and his M.B.A. from the Haas School of Business at University of California, Berkeley.


Peter Dalrymple is a director in the technology investment banking group at William Blair based in Boston. Peter joined the firm in 2011. Previously, Peter spent three years in the technology investment banking group at Canaccord Genuity focused on software, Internet, and digital media companies. Before his investment banking career, he was an associate with Pelion Venture Partners and also served as the Central and Southeast European country manager for the U.S. Trade & Development Agency. Peter graduated from Bates College with a B.S. in political science and earned an M.B.A. in finance from Northeastern University.


Raphael Grunschlag is a managing director and head of European technology banking at William Blair, focusing on expanding the firm’s technology practice across Europe and the Middle East. Raphael joined the firm in 2012. He has more than 16 years of investment banking experience and has advised on more than $24 billion of transactions, across M&A, ECM, and debt financings. Before joining William Blair, Raphael served as head of European technology investment banking at Bank of America Merrill Lynch (2005-2011), led the European Internet and software team for the CSFB Technology Group (1999-2005), and previously worked at Hambrecht & Quist (1995-1999). Raphael holds a master’s degree in international affairs from Columbia University’s School of International and Public Affairs and a B.A. in Middle East and Asian languages and cultures from Columbia.


Andrew Kaye joined William Blair in 2009 and spent five years based in Shanghai, China, as head of Asian banking and technology. Andy has held positions at CIBC World Markets where he was regional head and Robertson Stephens where he led several technology groups in Europe, as well as heading Israel. Andy holds an M.B.A. with honors from Fordham University, New York, and a B.A. in accounting and marketing from Tel Aviv. [email protected] +44 20 7868 4450


Cloud Insights 8 William Blair & Company SaaS Equity Research Coverage

William Blair & Company SaaS Equity Research Coverage

SaaS Equity Research

Company Ticker Analyst

athenahealth ATHN Ryan Daniels

Benefitfocus BNFT Adam Klauber

Carbonite CARB Bhavan Suri

ChannelAdvisor ECOM Justin Furby

Connecture CNXR Adam Klauber

Cornerstone OnDemand CSOD Justin Furby

Demandware DWRE Justin Furby

The Descartes Systems Group DSGX Matthew Pfau

Ellie Mae ELLI Brandon Dobell

Fleetmatics FLTX Bhavan Suri & Matthew Pfau

HealthStream HSTM Ryan Daniels

MiX Telematics MIXT Bhavan Suri & Matthew Pfau

NetSuite N Justin Furby

Paylocity PCTY Justin Furby

Opower OPWR Matthew Pfau

QAD QADA Bhavan Suri

Rally Software RALY Bhavan Suri

RealPage RP Brandon Dobell

RingCentral RNG Bhavan Suri

salesforce.com CRM Bhavan Suri

SciQuest SQI Matthew Pfau

ServiceNow NOW Justin Furby

SPS Commerce SPSC Matthew Pfau

Textura TXTR Bhavan Suri

Ultimate Software ULTI Justin Furby

Upland Software UPLD Bhavan Suri

Veeva Systems VEEV Bhavan Suri & Amanda Murphy

WageWorks WAGE Robert Napoli

Workday WDAY Justin Furby


June 9, 2015

Cloud Insights Disclosures 9

Disclosures

William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being “Eligible Counterparties” and Professional Clients). This Document is not to be distributed or passed on to any “Retail Clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision. William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com

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