hightechnologyreport2010

8/8/2019 HighTechnologyReport2010

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An IMAPHigH TecHnology

Report

Compuing & Inerne SowareGlobal Repor 2010


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Weve go connecionsall around he world.You are all abou connecing he world, and so are we.For more han 35 years, IMAP has been helping o bring compuerechnology companies ogeher via sraegic cross-border mergers andacquisiions. Our vas experience in your indusry has augh us habuilding a sable plaorm is undamenal o compleing a successul M&Aransacion, as well as o esablishing a successul compuing nework.

When you need o expand, inves, dives orresrucure, you need an advisory ha

boh knows your business andhas he global connecions o

ensure every opporuniyis wihin your reach. As

hese recen closingsdemonsrae, IMAP isha advisory.

IMAP consists of independent advisory operations working together to execute cross-border M&A projects. Each IMAP ofce is independently owned and operated.


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IMAPs Computing & Internet Software Industry Global Report 2010: Page 3

C o m p u t i n g a n d i n t e r n e t S o f t w a r e g l o b a l r e p o r t 2 0 1 0

Conens2009 M&A activity in computing and Internet soware ............................. 4Computing and Internet soware sector........................ ............................. ..... 4

Shiing rom capex o opex ........................................................................................................... 5

Alernaive delivery model SaaS ........................................................................................... 5

Indusry-specic capabiliies ........................................................................................................6

Vendor consolidaion ..........................................................................................................................7

IT spending by cenral governmens ..........................................................................................7

Trends across indusry vericals ...................................................................................................7

Trends: Investment opportunities .................................................... ......8

Mobile applicaions and compuing ...........................................................................................8Inerne-based models ......................................................................................................................9

Computing and Internet sotware industry outlook ......................................11

Statistical Reerence (Appendices)

Appendix A: Global Overview ......................................................................................................A-i

Appendix B: Summary o M&A Deals .....................................................................................B- i

Appendix C: Growh Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-i

Appendix D: Niche Focus Areas .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-i

HOT

An IMAPHigH TecHnology

Report


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The soware secor, which conribued around 25 percen o IT spending in 2009 andmainly consiss o he enerprise applicaion marke and applicaion developmenmarke, generaed revenues o $382 billion USD in 2009. The op ew players,

such as Microso, SAP, Oracle and Ninendo, generaed more han 75 perceno oal revenues rom he soware business segmen in 2009.

2009 saw a decline in applicaion soware spending in all regions excepAsia-Pacic. Despie he economy showing signs o a recovery in 2010,all indusry vericals are sill winessing lower spending comparedo pre-recessionary levels due o a budge growh in he year.Furhermore, according o Forresers Enerprise and SMB

Global enerprise applicaion soware markeworking hrough bad-economy bugs

Large ransacions led he way insluggish 2009 M&A aciviy

The economic slowdown had an adverse impac on M&Aaciviy in he soware secor. The secor saw 1,131ransacions valued a $27.42 billion USD in welve monhs(LTM) ending 1Q 2010, winessing a year-over-year declineo 25.4 percen in erms o ransacion value ($36.75 billionUSD during he previous period wih 2,417 ransacions).Dollar volume in his period included one major deal (SunMicrosysems/Oracle), which represened $8.34 billionUSD or nearly 28.1 percen o oal dollar volume in heperiod. Excluding his ransacion, he dollar volume wouldhave been down 48 percen. During he previous period,he larges deal was he acquisiion o NDS Group by

Permira Advisers or $1.7 billion USD.

In erms o business segmen, Inerne soware andservices accouned or 30 percen o oal ransacionvalue ollowed by compuer hardware and applicaions,which ormed nearly 28 percen o he oal.

In erms o counry, he US saw he highes ransacionvalue o $12.34 billion USD wih a oal o 501 ransacionsin his welve monh period while Japan came in secondwih a value o $9.12 billion USD hrough 15 ransacions.Among regions, Norh America was he clear leader a

$12.54 billion USD.

M&A Activities at a GlanceLTM ending 1Q 2009 LTM ending 1Q 20

Transaction value (USD million) 36,752 27,415

Top 5 transactions (%) 20.1% 46.7%

Segment No. o transactions Value (USD mn)

Computer Hardware &Applications

1 8,341

Internet Software & Services 18 7,583

Application Software 838 5,412

IT Consulting and Others 10 4,218

Systems Software 199 1,464

To 5 regions No. o transactions Value (USD mn)

North America 553 12,538

Asia 128 10,755

Europe 356 3,620

South America 19 194

Middle East 14 169

To 5 countries No. o transactions Value (USD mn)

US 501 12,342

Japan 15 9,123

UK 78 1,386

China 50 1,374

Germany 47 964

Source: Capital IQ, IMA


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Soware Survey, Norh America and Europe, Q4 2009,IT budges are expeced o remain unchanged in 2010.

Neverheless, revenues are expeced o reach $419 billionUSD in 2010, growing 9.7 percen year-over-year. Thisincrease would reverse a 7.4 percen decline in 2009.

Wih jus a moderae increase in IT spending overall, heenerprise applicaion soware marke sill remainsvulnerable and enerprises are uncerain abou near-erm business prospecs. However, he brigh spo in herecovering economy is small- and medium-sized business(SMBs). As he economy emerges rom he recession, SMBswill look or small-business soware o auomae heiroperaions and scale up growh. In addiion, large soware

vendors such as SAP and Oracle will coninue o ocus onhe SMB marke o reinvigorae heir revenue growh insoware license sales. The SMB enerprise applicaionmarke is expeced o reach $80.31 billion USD by 2012,represening a 10.6 percen CAGR or he period 2008-12.

Enerprises shiing rom capex o opex

CIOs and COOs are expeced o experience coninuedpressure o prove ha he amoun o invesmen inERP sysems is jusied and generaes a solid reurn

on invesmen. As a resul, he marke will have moredeliberae spending, more phased rollous, buying olicenses only when needed, and hesiancy o inves in moreexpensive advanced enerprise soware modules.

Accordingly, companies are direcing much o heirsoware invesmens o areas where hey will denielybe implemened eecively and ge more ou o heirexising enerprise invesmens. The need o more

1 IDC forecast

eecively manage organizaional and business risk willlikely resul in a coninuaion o his rend in 2010.

Given he curren risk averse environmen, companies areless likely o ry enirely new producs or risky upgrades.As a resul, vendors are more likely o inves in incremenalproduc enhancemens and igher inegraion beweenmodules raher han major changes o heir soware:operaing expendiures versus capial expendiures.

Thus, going orward, vendors are expeced o seek smallerdeals rom exising cusomers via add-on producs andbusiness inelligence ools because mos cusomers areno ye ready o und major enhancemens or expansions.

Emergence o an alernaivedelivery model SaaS

As companies are shying away rom large capialinvesmens in IT sysems, soware as a service (SaaS)is receiving a boos. SaaS is also being driven by SMBsha are looking o adop his model as hey ypicallynd i difcul o aord on-premise sysems. Moreover,considering ha he igh credi markes will ake imeo haw enirely, many SMBs are looking a SaaS-based

services o help hem minimize upron capial IT coss.

Revenue Growt Comarison in 2009

SaaS Vendors Traditional Vendors

SuccessFactors (+36.8%) Manhattan Associates (-26.8%)

Salesforce.com (+21.2%) QAD (-18.3%)

Concur (+14.9%) Lawson (-11.1%)

Descartes (+11.7%) SAP AG (-7.8%)

Ariba (+3.3%) Microsoft (Business Division) (-0.2%)

Source: Bloomberg

Global IT1 spending,which includes hardware, soware and IT services,was esimaed a $1.5 rillion USD in 2009,decreasing 8.9 percen compared o 2008. Thedecline urned ou o be less han expeced as heUS marke sared recovering in 4Q 2009 while he

Asia Pacic marke, especially India, Chinaand Ausralia, repored beter perormance.In 2010, i is expeced o reach $1.6 rillion USD,indicaing a year-over-year growh o 8.1 percen .2

1 Consists of spending on computer equipment, communication equipment,

software, IT consulting and systems integration services, and IT sourcing

2 Forrester Research - US And Global IT Market Outlook: Q4 2009Source: Forrester Research, IMAP

Computer equipment

Communicationsequipment

Software

IT consulting services

IT outsourcing

Global IT Sending, 2008-10 in USD Billions

1,750

1,500

1,250

1,000

750500

250

0

2008

1,659

2009

1,512

2010

1,624


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Considering hese acors, mos SaaS vendors reporedbeter perormance, wih SaaS revenues overall growing7.98 percen year-over-year in 2009. Deploymen oSaaS increased in all areas rom cusomer-relaionshipmanagemen (CRM) o human-capial managemen (HCM),as well as spend managemen. In ac, Salesorce.com

posed revenues above $1.3 billion USD, which is a new highor he SaaS indusry ha was esimaed o be $7.5 billionUSD in 2009.

The increasing populariy o SaaS as a delivery modelhas no only led o increased revenues or SaaS vendorsbu also eaen ino he revenue o radiional, on-premisevendors. However, he later are sill managing o mainainheir operaing margins as hey rely on mainenanceand suppor revenues, which are naurally recurring. Forexample, he raio o mainenance revenue o new licenseso vendors such as CDC, Epicor, Exac, Lawson, Manhatan,Oracle, QAD and SAP increased as cusomers chose no oupgrade and purchase new licenses.

Indusry-specic capabiliies arecrucial o remain compeiive

In addiion o preerring low-cos models such as SaaS,cusomers are expecing deeper indusry experiserom heir soware providers o gain a more inegraed

applicaion environmen and end-o-end processauomaion. Hence, many companies have combinedcusom-buil applicaions and cusomized indusrypackages o supplemen heir core soware. Thisenvironmen leads o a complex seup and ongoinginegraion challenges.

Large enerprise soware vendors have added vericaldeph and breadh. Boh SAP and Oracle have invesedheavily in indusry soluions, each reporedly havingcapabiliies in more han 20 vericals. This sraegy oincrease indusry deph has driven many acquisiions,

paricularly or Oracle. SAP, on he oher hand, is buildingindusry uncionaliy in-house bu i has made severalverical acquisiions o accelerae ime-o-marke.

Second-ier soware providers have oundmore success in oering deeper indusry-specic uncionaliies compared wih mega-vendors. Lawson, or example, has successullyargeed indusries such as healhcare, oodand ashion. Oher vendors (e.g., Microso,Epicor and Sage) may choose o go down osub-indusry levels, oen relying on parners o

add he las mile o specializaion.

Specialiss ocus on ewer or even singlevericals. Some do no even provide he coreaccouning uncionaliy, which is crucial o anyERP sysem. Neverheless, hese specializedplays are oen compelling o cusomers andmay also atrac he atenion o ERP vendorslooking o parner or acquire. Specialis vendorsoering comprehensive suies o paricularvericals include Delek (projec-basedbusinesses), Blackbaud (no-or-pro), Mincom(mining and asse-inensive businesses), QAD(manuacuring) and IBS (disribuion). CGIGroup gives ERP vendors si compeiion inhe governmen secor, including US ederalas well as sae and local governmens.Specialiss dominae he lucraive healhcaremarke, paricularly paien sysems. Noableplayers include Cerner, Eclipsys, Epic Sysems,McKesson and Siemens.

Source: Gartner Research, IMAP

Enterrise Alication Market Sending b Region, 2009

Western Europe 30%

North America 46%

Asia/Pacic 9%

Japan 8%

Latin America 3%

Eastern Europe 2%

Middle East & Africa 2%


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Funcional expansion leading ovendor consolidaion

Wih cusomers expecing deeper indusry experiserom heir soware providers, many companies arecombining cusom-buil applicaions and cusomized

indusry packages o supplemen heir core soware. Thisenvironmen leads o a complex seup. To overcome hischallenge, vendors are looking o consolidae by becominga one-sop shop or all uncions. This consolidaion rendis also uelled by he rising compeiion beween vendorsand lower marke valuaions o sruggling vendors becauseo he downurn.

Oracle has been a key proponen o verical acquisiions,and SAP as well, hough o a lesser exen. Possible plays orsome vendors include acquiring breadh in horizonal areassuch as HR. Peer-o-peer acquisiions among ERP vendors

appear less likely. Vendors may also acquire adjacenechnologies, such as enerprise conen managemen ools.

Public adminisraion represens he largesIT spending by cenral governmens

Aer he economic crisis, which saw governmensannouncing massive simulus packages, ax payers are nowdemanding unding cus in he public service arena. There

will be increased atenion on how money is being spen aall levels o governmen.

A he same ime, elecommunicaions and he Inerneare increasingly recognized as criical o economies andservice delivery. Governmens are hus expeced o makeeors o move he majoriy o ciizen services o an onlinedelivery model o increase ransparency and creae valueor heir consiuens. To his end, invesmen across a

Active Acquirers

ORACLE

INfOR

ThE SAGE GROUp

Agresso

Deltek

Lawson Software

Regional Players

IFS

Intacct

Vertical Players

IBS Software

QAD

Epicor

NetSuite

Exact Software

Source: Forrester Research, IMAP

Vendor Consolidation

potential Acquirers

MICROSOfT

SAp

IBM

pRIVATE EQUITy

wide variey o deparmens, uncions and sysems will bemade. This will susain invesmen in IT by governmens in2010, when he ocus will be on righsizing, underscored by

governmen ransormaion or modernizaion.

Furhermore, by 2012, up o one in ve governmenprocesses is expeced o rely on crowd-sourced daa dueo he increasing inuence o communiies, individuals andgroups in shaping he direcion o businesses and markes.Thus, social media are becoming increasingly imporanas sources o public inormaion, making hem mission-criical or governmens.

Trends across indusry vericals

Mos indusries winessed signican declines in ITspending in 2009. A majoriy o hese cubacks in echpurchases were driven by he ear o recession. Theseears were more inense in some indusries, such as reail,wholesale, ransporaion and logisics, and nancialservices, leading o a sharp cuback in IT spending. Sincehe siuaion is now easing and prices are rebounding,he pen-up demand in hese indusries or IT goods andservices should bounce back in 2010.

Retail: Garner expecs o see many Tier 1 reailers pursue

an m-commerce sraegy mainly o avoid lagging on hisron. They expec, however, o see only 20 percen oreailers succeeding in heir m-commerce iniiaive. Asmany reailers have discovered wih he Web, cross-channel shopping requires more han jus launching anm-commerce presence o enable direc selling.

Manuacturing: By he end o 2011, manuacurers haprioriize uure soware invesmens in operaionalechnologies such as produc lie-cycle managemen (PLM),manuacuring process managemen (MPM), manuacuringoperaions managemen (MOM) and qualiy managemen

soware (QMS), insead o radiional IT and ERP, couldachieve a enold reurn on heir invesmen .1

Education: By 2015, mos local educaion agencies areexpeced o cu school consrucion by 50 percen by usingvirual learning environmens o beter uilize exisingaciliies.

1 Gartner Research


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Invesmen opporuniies in mobile apps and Inerne-based models

TrendsHOT

1: Mobile applicaions and compuing

Despie he recession, he mobile applicaion1 landscape

perormed well in 2009. There was coninuous consumerdemand or Apples proprieary ecosysem; Googleacquired he mobile ad nework AdMob or $750 millionUSD; and Inerne service providers (ISPs) enered hemobile marke (Iliads acquisiion o Frances ourh 3Glicense, as an example).

The mobile applicaion marke was esimaed o be $4.2billion USD in 2009.2 The number o mobile applicaiondownloads was jus over 7 billion in he same year. Goingorward, he mobile applicaion marke is expeced oreach $17.5 billion USD by 2012, represening an impressive

hree-year CAGR o 60.9 percen. The number o mobileapplicaion downloads is also esimaed o grow o nearly50 billion in 2012. This growh should be driven by increasing

1 A mobile application is a software application that runs in a handheld device such as a

smartphone. These applications are either pre-installed on phones during manufacture

or downloaded by customers from app stores and other mobile software distribution

platforms.

2 The GetJar study run by an independent consulting rm, Chetan Sharma Consulting

peneraion o mobile Inerne, more uncionaliies,rising adopion o smarphones, and increased and beter

inegraion o mobile hardware and soware.

Wihin he mobile applicaion segmen, mobile enerpriseapplicaion marke is expeced o be he nex growhdriver. Mobile enerprise applicaions are expeced osee massive adopion in 2010 due o increased mobiliyo employees and demand or devices capable o heseuncionaliies. Carriers and vendors are recognizing heenerprise as a high-value cusomer and acively workingowards developing and promoing atracive mobile daasoluions or enerprises.

The mobile enerprise applicaion marke wasesimaed o be $2.3 billion USD in NorhAmerica in 2008.3 This marke is made up ohree ypes o vendors:

Vendors ocused on mobile operaingsysems ha have developed broad mobileapplicaion developmen oolkis ocusedon a single plaorm (e.g. Microso, Appleand RIM)

3 http://www.cellular-news.com/story/38739.php

The economic slump had an adverse impac on mos indusries, including he soware secor. Organizaions shied heirIT spending rom capial expendiure o operaing expendiure o opimize coss. Various applicaion markes such asenerprise resource planning (ERP), supply chain managemen (SCM) and cusomer relaionship managemen (CRM) werebadly hi in 2009. This gave an impeus o various Inerne-based models such as Soware-as-a-Service (SaaS), IT managemen,virualizaion capabiliies and open source soware. Inerne-based compuing models in he enerprise soware markerequiring litle or no implemenaion work on he cusomer side, are generally independen o operaing sysems and areoered on a subscripion or pay-as-you-go basis. This ranslaes ino lower adopion barriers or new cusomers.

Source: GetJar Study, IMA

Mobile Alication MarketCAGR 60.9%

Mobile Alication Market in million USD

Europe

North America

South America

Asia

Middle East &South Africa

$10,000

$8,000

$6,000

$4,000

$2,000

$0

2009 2010 2011 2012


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The worldwide marke or IT services relaed o cloudcompuing and cloud services was worh almos $2.4 billionUSD in 2009. By 2013, he marke is expeced o be worhalmos $8.1 billion USD. By ar, he larges componen ohe overall cloud service marke is implemenaion, whichrepresens 65 percen o he 2009 IT services marke and

is esimaed o represen 64 percen by he end o 2013.

Smart computing collaboration,unifed communications and voice over IP:Smar compuing is based on echnologies such as service-oriened archiecure, server and sorage virualizaion,cloud compuing, and unied communicaions. I addso exising echnologies new capabiliies o real-imesiuaional awareness and auomaed analysis.

Smar compuing will help companies opimize processresuls and reurns rom heir balance shees. Unlikehe horizonal echnologies o personal compuing andnework compuing, smar compuing will have a highlyverical indusry ocus.

Tech vendors have grea growh opporuniies in his newcycle bu also big challenges in navigaing he shi osmar compuing. Accordingly, in he US alone, he share ohe smar compuing indusrys verical soluions in he ITmarke will increase rom 6 percen in 2008 o 23 percenin 2016.2 The marke is expeced o increase rom $27

billion USD in 2009 o $213 billion USD in 2017 in he US.

Linux and open-source soware (OSS):The phenomenon o OSS, which sared 20 years back,has suddenly gained momenum as a possible alernaiveo expensive proprieary soware. As he open sourcemovemen expands up he soware sack, nearly allsoware markes are now being impaced in some way.

The OSS segmen is experiencing slow bu seady growh.The release o he open source Inerne browser Fireox3.0 by Mozilla in June 2008 was a major even or open

source applicaions, wih more han 8 million peopledownloading he new version o he soware wihin hers 24 hours aer is release. The Fireox browser hasseadily been gaining marke share, which had 24.2 perceno he overall browser marke in February 2010 rom 21.8percen in February 2009.

2 Forrester Research: Smart Computing Drives The New Era Of IT Growth

Mobile specialiss wih mulichannel capabiliy such asSybase, IBM, Pyxis Mobile, Spring Wireless and Syclo

Applicaion suie vendors ha have heir own applicaionsuies, such as SAP and Oracle

Along wih mobile ERP, enerprise mobile cloud applicaions

(including hin cliens and browser-based applicaions),SaaS, plaorm as a service (PaaS), and inrasrucureas a service (IaaS) can uel growh in his marke. Goingorward, he mobile enerprise applicaion marke in NorhAmerica is esimaed o reach $10.3 billion USD in 2013, aCAGR o 35 percen rom 2008 o 2013.1

However, i should be noed ha proving reurn oninvesmen (ROI) is sill a concern or vendors and serviceproviders o mobile enerprise applicaions, becausehe marke is in is nascen sages and cusomers are

uncerain on wheher hey will ully obain he poenialbenes promised by hese applicaions.

2) Inerne-based models

Cloud-based application and inrastructure services:Cloud compuing is currenly emerging as a serviceoering ha leverages Inerne hosing capabiliies andcan be viewed as an evoluion o SaaS. Cloud compuingis generally regarded as IT inrasrucure available ondemand and i oers sar-ups and SMBs exible access ocompuing capabiliies wih minimum capial expendiure.

Neverheless, wih Amazon.coms spin-o Amazon WebServices (AWS) emerging as a leading provider o cloudcompuing services, cloud compuing is expeced obecome more inuenial.

1 http://www.cellular-news.com/story/38739.php

Source: Gartner Research, IMAP

Cloud Comuting SendingCAGR 35.8%

IT Sending in Cloud Comuting in USD millions

Consulting Implementation Management

2009 2010 2011 2012

5,000

4,000

3,000

2,000

1,000

0

6,000

2013


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In a Forreser Research repor on enerprise ineresor OSS, wo-hirds o he 1,017 respondens a NorhAmerican and European enerprises expressed someineres in open source deploymen.

Virtualization:

PC, server, and sorage virualizaion is growing andis being suppored by he relaively ough economiccondiions worldwide. Virualizaion is inroducing newways o packaging clien compuing applicaions andcapabiliies. As a resul, he choice o a paricular PChardware plaorm, and evenually he OS plaorm,becomes less criical. Thus, enerprises are proacivelybuilding a ve- o eigh-year sraegic clien compuingroadmap oulining an approach o ownership and suppor,operaing sysem and applicaion selecion, deploymenand updae, and managemen and securiy plans omanage diversiy in he virualizaion arena.

Spending on virualizaion soware echnologies isorecas o grow a a 33.6 percen CAGR rom 2009 o2013. Growh would be driven by organizaions looking olower he oal cos o ownership and o increase overall ITeeciveness.1

Business intelligence (BI) and analytical soware:BI and specialized analyical soware such as daa miningand predicive analyics, video image analysis, paternrecogniion, and aricial inelligence algorihms help

businesses or governmens analyze paterns or anomalies

1 Gartner Research

on a real-ime basis. These uncions make BI imporan ineconomically challenging imes. As a resul, he BI markewas much less aeced by he economic crisis han mosoher soware markes.

All he big sellers o BI soware are eiher pars o larger

soware vendor or privae companies wih he excepiono pure-play BI public companies such as MicroSraegyand Acuae.

New caegories o advanced analyics, including businessperormance soluions, ex analyics, predicive analyics,and complex even processing, are expeced o merge inohe core BI marke, hereby urher ueling growh. The BImarke is expeced o reach $14 billion USD by 2014.2

Social CRM:Social CRM (also known as CRM 2.0) is a business sraegysuppored by a sysem and designed o engage hecusomer in a collaboraive ineracion ha providesmuually benecial value in a rused and ransparenbusiness environmen.

The indusry has many paricipans and includes dierenypes o players such as radiional CRM vendors,communiy plaorm and social media players, as well asbrand monioring players. Mos o he players provide on-demand subscripion-based oerings in social CRM.

Social CRM is mos likely o be he nex big rend in heenire CRM indusry. According o one Garner repor,social CRM is expeced o see signican growh, as morehan 80 percen o he enerprise use o social neworkingools in 2010 will be driven by cusomer engagemenprojecs. In addiion, Forreser menions ha by 2013,

businesses will be spending almos $4.6 billion USDon Web 2.0 ools, which include advanced Inerne

echnology and applicaions such as blogs, wikis,really simple syndicaion (RSS), and social

bookmarking. In an April 2008 repor, heresearch group orecas 43 percen annual

growh in he social media marke or heso-called Enerprise 2.0 as organizaionsare invesing heavily in social neworks.

2 Forrester Research: Market Overview: The Business Intel-

ligence Software Market


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Soware Marke Oulook, Quarerly, 2008-2010Global sotware vendors revenues b categor o sotware (ercentage cange rom rior ear)

2008 2009 2010

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q* 1Q* 2Q* 3Q* 4Q*

Oerating sstems 3% 9% 6% -7% -15% -21% -20% 11% 17% 23% 22% 16%

Middleware 14% 19% 12% 3% 4% -4% -2% 3% 5% 5% 7% 6%

Alications 14% 17% 12% -3% -12% -16% -13% 2% 10% 12% 12% 12%

TOTAL 11% 16% 11% -1% -5% -12% -9% 4% 9% 10% 11% 10%

US sotware vendors revenues b categor o sotware (ercentage cange rom rior ear)2008 2009 2010

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q* 1Q* 2Q* 3Q* 4Q*

Oerating sstems -3% 3% 1% -7% -14% -23% -20% 8% 10% 16% 16% 14%

Middleware 8% 13% 9% 7% 10% -1% 1% 3% 4% 6% 6% 5%

Alications 5% 7% 4% -4% -11% -15% -13% 0% 6% 9% 9% 9%

TOTAL 6% 9% 7% 1% -1% -9% -8% 3% 6% 8% 8% 8%

Source: 2008 and Q1, Q2, and Q3 2009 quarterly nancial reports of 18 large, global software vendors1

1 BEA Systems (prior to acquisition by Oracle), BMC, Business Objects (prior to acquisition by SAP), CA, Cognos (prior to acquisition by IBM), Fujitsu, Hyperion (prior to acquisition by Oracle),

EMC, Hewlett-Packard, Hitachi, IBM, Mercury Interactive (prior to acquisition by Hewlett-Packard), Microsoft, NEC, Oracle, SAP, Sun (prior to acquisition by Oracle), and Symantec.

The enerprise soware marke underwen a umuluousphase during he economic slowdown o 2008-2009and he recession ha ensued. The secor overall acedpressure in erms o prices which in urn hamperedmargins. This led o vendors making srucural changesin heir echnology and business model o adap o hechanging soware demand space.

Mos companies locked in heir IT budges or 2010 wih amarginal increase in overall IT spending expeced or heyear. While spending is nowhere close o he depressedlevels during he recession, i will be some ime beorespending reaches pre-recessionary levels. A meaningulrecovery in spending is expeced only in he second hal o2010. Wih he recession sill resh, companies are looking

o conver heir enerprise soware needs rom capexo opex. This means vendors wih SaaS, virualizaioncapabiliies and open-source sraegy are poised obene in he near uure.

This is no o say large vendors wih non-SaaS capabiliieswill be le behind. Due o heir sheer size and geographicdiversicaion, hey can price heir producs aggressivelyand also bundle oerings o make packages moreatracive. Moreover, as legacy operaors, mos o heir

Compuing and Inerne soware indusry oulookconracs are mainenance based, making revenuesrecurring in naure. This is unlike vendors in only one markeor hose wihou a wide geographical presence, whoserevenues are highly dependen on new conrac wins.

Geographical presence, in paricular, canno be underesi-maed because Norh America sill accouns or 45 perceno all soware revenue, which by any sandard is a largechunk. While he share o emerging markes is expeced oincrease o 20% by 2013, i is sill a small share comparedwih Norh America. Hence, any uure weakness in he USmarkes could have a maerial impac on revenue. Never-heless, emerging markes will play a huge role in balancingrevenues in he years o come because o heir growingdemand poenial and underpeneraed naure.

The soware sector has always accounted orthe largest number o all technology related M&Atransactions, over 40%. And, the value received isvery much a unction o nding the buyer that canbest exploit the acquired technology. This requiresadvisors to conduct a global search efort, even orsellers with modest revenues.

Ron Klammer, IMAP technology advisor, Southport, Connecticut


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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-i

Appendix A: Global Overview o Compuing & Inerne Soware(Enerprise Soware Indusry)

Value chain o he soware markeAccording to IDC, the worldwide software market is composed of three primary software submarkets:

Soware secor overview and rends

Sstem Inrastructure Sotware: System infrastructure softwareintegrates a computers various capabilities but typically does notdirectly affect the performance of tasks that benet end users. Thismarket comes rst in the value chain and operates as a foundation forthe creation of various applications.

Alication Develoment and Deloment: AD&D is a processthat includes the development of a software product, known assoftware life cycle. The AD&D market is second in the value chain;software development and deployment activity begins with systeminfrastructure as the base.

Alications (Consumer and Enterrise): Application software,also known as software applications, is computer software designedto help the user perform a single or multiple tasks. This is one of the

biggest submarkets in the software industry; the applications marketcontributes roughly 60% to total software revenues. The applicationsmarket can be further classied as follows:

enterprise application software, which includes content,communications and collaboration (CCC), customer relationshipmanagement (CRM), enterprise resource planning and supplychain management (ERP & SCM), ofce suites and digital contentcreation (DCC)

enterprise infrastructure software such as middleware anddatabases

information worker software content access software educational software simulation software media development software

Value chain o he enerprise applicaion markeThe enterprise application market includes various secondary markets.

Sub-Alications Descrition

ERp

ERP integrates the data and processes of an organization on a cross-functional and enterprise-wide level into one singlesystem. Usually ERP systems have many components including hardware and software to achieve integration. The two keycomponents of an ERP system are a common database and a modular software design.

Large ERP vendors include Oracle and SAP and middle-tier ERP vendors include Agresso, Epicor Software and LawsonSoftware.

SCM

SCM encompasses the planning and management of all activities involved in sourcing, procurement, conversion, andlogistics management. It also includes the crucial components of coordination and collaboration with channel partners,

which can be suppliers, intermediaries, third-party service providers, and customers.2

SCM also addresses issues related todistribution channels and inventory management.

SAP, Oracle, Infor and Inspur are some of the large SCM vendors, while middle-tier vendors include 7Hills, Accellos,AdvanceWare Technologies, Fascor and Manhattan Associates.

CRM

CRM involves the use of technology to organize, automate and synchronize business processesprincipally sales activities,but also those for marketing, customer service and technical support. CRM also helps in reducing the time required for salescycles while hanging onto potential sales leads.

Major CRM vendors include SAP and Oracle and midmarket-centric vendors include FrontRange Solutions, Maximizer Softwareand Sage Software. Salesforce.com and Netsuite are some software-as-a-service (SaaS)-based CRM application providers.

2 Denition by Council of Supply Chain Management Professionals (CSCMP)

1 IDCs Software Taxonomy, 2010

Global IT1 spending was estimated at $1.5 trillion USD in 2009,decreasing 8.9 percent compared to 2008. The decline, however,turned out to be less than expected as the US market startedrecovering in 4Q 2009 while the Asia-Pacic market, especially India,China and Australia, reported better performance in 2009. Global ITspending in 2010 is expected to reach $1.6 tr illion USD, indicating ayear-over-year growth of 8.1 percent.2

Compared to pre-recessionary levels, all verticals have suffered fromlower IT spending, which varies widely by region. The vast majority ofenterprises are expected to continue experiencing almost at budget

1 Consists of spending on computer equipment, communication equipment, software, IT

consulting and systems integration services, and IT sourcing

2 Forrester Research - US And Global IT Market Outlook: 4Q 2009

growth in 2010. According to Forresters Enterprise and SMB SoftwareSurvey, North America and Europe, 4Q 2009, a high percentage ofrespondents expected to leave their IT budgets unchanged in 2010 andmany enterprises remain vulnerable and are uncertain about near-termbusiness prospects.3

In terms of region, the strongest growth in 2010 should be in Westernand Central Europe, where tech purchases are expected to rise 11.2percent, boosted by the dollars decline against the euro. This wouldbe followed by Canada at 9.9 percent, Asia-Pacic at 7.8 percent,and Latin America at 7.7 percent. Eastern Europe, the Middle Eastand Africa are expected to be the weakest market, r ising by just 2.4percent. With oil prices recovering from bottom levels but still below2008 peak prices, oil-producing economies in the Middle East should

3 Ovum Research


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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-ii

perform slightly better, leading to a recovery in tech purchases intheir local currencies. However, their currencies in several caseshave actually weakened against the dollar, bringing down dollar-denominated growth.1

Shifting from regions to countries, the US remains, by a wide margin,the largest of the top 15 markets for IT goods and services. Purchasesof IT goods and services in 2010 are expected to reach $568 billionUSDalmost four times more than second place Japan (at $142billion). China follows as third at $120 billion USD.

The global software industry, which mainly consists of the AD&Dmarket, is a major contributor to the overall IT industry. From 24percent in 2004 to 25 percent in 2008, the contribution is expected toreach 25.7 percent in 2010. The software market generated revenuesof $382 billion USD in 2009 and is expected to reach $419 billion USDin 2010, growing 9.7 percent year-over-year. This increase wouldreverse the 7.4 percent decline in 2009 and bring back softwarepurchases above 2008 levels.

The top few players, such as Microsoft, SAP, Oracle, and Nintendo,generated more than 75 percent of total revenues from the softwarebusiness segment in 2009.

As per an enterprise and small and medium size business (SMB)software survey by Forrester, rms in North America and Europe,despite the hype surrounding new technologies that were introducedin the market, are still devoting most of their spending on alreadyinstalled technologies.

According to Gartner, the enterprise application market weathered theeconomic crisis much better in 2009 than in 2001-02. This is becausethe market has evolved to become a matured market with morepenetration, condence of consumers in IT applications, and a well-balanced geographical and vertical mix.2

The ERP market, however, was badly hit in 2009, with vendors see-ing dramatic drop-offs in license revenues and professional services.Recent Forrester survey data shows that the majority (67 percent) ofERP customers have put their ERP spending plans on hold for 2010 aswell. Nevertheless, 29 percent of customers are planning to upgrade orexpand existing ERP implementations (22 percent) or undertake newimplementations (7 percent) in 2010.

The SCM application market remained diverse in 2009, ranging fromlarge-scale suite providers to innovative companies with value-addingcapabilities. Although growth slowed down in 2009 and is expected

to remain moderate during 2010, the market is estimated to post aCAGR of 10.6 percent until 2012. Growth would be fueled by supplychain organizations focusing on investments in areas of high businessvalue, notably applications that help reduce costs, drive businessgrowth, improve customer service and increase efciency.

While many CRM technology projects were deferred/cancelled in2009, this is expected to reverse in 2010. Major trends to watch for in2010 include the evolution of extended CRM application ecosystems,SaaS as the default choice for CRM, and mobile CRM becoming amust-have capability. In social media monitoring, an emerging trend inthe CRM space, companies are expected to spend around $4.6 billionUSD by 2013.

Regarding strategy, organizations are likely to shift their IT spendingfrom capital expenditure to operating expenditure to optimize costs.This is giving an impetus to SaaS, IT management, virtualizationcapabilities and open source software. Internet-based computing

models in the enterprise software market require little or noimplementation work on the customer side, are generally independentof operating systems, and are offered on a subscription or pay-as-you-go basis. This translates into lower adoption barriers for newcustomers.

Trends across function and tier

functional exansion: Software vendors are continuing to add newfunctionality to their software and are working to become a one-stopshop for all functions. This change is being facilitated by product

1 Forrester Research

2 www.zdnetasia.com/gartner-enterprise-software-sales-to-drop-in-europe-62052707.html

development as well as acquisitions. This has led to several newdevelopments and inclusion of functionalities such as CRM, HR/payroll, and e-commerce.

Tier 1 Vendors Moving to te Mid-Market: Because the numberof Fortune 500 companies is limited, and most of them already havean ERP system, Tier 1 vendors such as Oracle and SAP have beenexpanding their marketing efforts downward to penetrate the middlemarket. In doing so, they have modied their strategies by offeringscaled down, pre-congured versions of their applications, trying newmethods of implementation, pursuing new distribution channels to

sell and implement their software, and acquiring mid-market software.Some examples are the acquisition of Dynamics and Navisionby Microsoft, Top Tier by SAP, and Tekton and Emdeon by SageSoftware.

Tier 3 & 4 Vendors Moving Uward: Software vendors that havetraditionally focused on smaller organizations are moving theirproducts upward to the tier 1 and 2 enterprise markets. These vendorshave signicantly improved functionality and scalability, allowingsmaller companies to grow without having to change systems.

ISVs marketing temselves as SaaS vendors: Due to the increasedpopularity of SaaS, many independent software vendors (ISVs) aretrying to reinvent themselves as SaaS companies, using virtualizationschemes to simulate multi-tenancy and provide them with a quicktime-to-market solution. However, to capture the full benets of SaaS,ISVs need to modify their business model accordingly in terms ofarchitecture.3

Trends across industry vertical

2010 is expected to see changes in the enterprise software marketas businesses confront the challenge of cutting costs while dealingwith a fundamentally restructured economy. This will require newbusiness models and technologies because companies will needsystems specically designed for competitive advantage in their vertical.Companies are concentrating on turning back to innovation, strategicinitiatives and development of new business operations that map to marketdemands. However, such initiatives will need to be funded from savingselsewhere as only few organizations are expected to increase their ITbudgets.4

Retail: Gartner expects to see many Tier 1 retailers pursue anm-commerce strategy mainly to avoid lagging on this front. This newstrategy, however, will see only 20 percent of retailers succeeding intheir m-commerce initiative. As many retailers have discovered with

the Web, cross-channel shopping requires more than just launching anm-commerce presence to enable direct selling.

Manuacturing: By the end of 2011, manufacturers that prioritizefuture software investments in operational technologies such asproduct life cycle management, manufacturing process management,manufacturing operations management and quality managementsoftware, instead of traditional IT and ERP, would achieve a tenfoldreturn on their investment.5

Government: Currently, most governments worldwide are focusingon providing as much public data as possible online to increasetransparency and create value for constituents. The components ofsociety which comprise individuals, groups, communities, marketsand rms play a large role in shaping the direction of society andbusiness. Hence, they will become a key component in how governmententities will operate; by 2012, up to one in ve government processes willrely on crowd-sourced data.

Education: By 2015, most local education agencies are expected to cutschool construction by 50 percent by using virtual learning environmentsto better utilize existing facilities.

3 http://www.interwest.com/venture-capital-funding/software-as-a-service-saas.html

4 Gartner Research - Top Industry Predictions 2010: The Recessions Aftermath Proves

Challenging

5 Gartner Research


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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-iii

Thumbnail summaries o op 50 compuing and inerne soware companies(enerprise soware indusry)

1: MICROSOfT CORp (US)

Brie descritionDeveloper cum manufacturer that licenses, sells and supports software products. Acquired Opalis SoftwareInc. in December 2009.

products sold

Operating systems for servers, computers and intelligent devices; server applications for distributed computing

environments; information worker productivity applications; business solutions applications; computingapplications; software development tools; video games.

Ke brandsActive Accessibility, Active Desktop, ActiveMovie, ActiveStore, Azure, InfoPath, Inkseine, InPrivate, IntelliMirror,IntelliMorph, IntelliMouse, Microsoft Game Studios, MSN, Outlook, SQL Server, Visio, Visual Basic, WindowsMedia, Xbox 360

Markets covered Client, Server and Tools, Online Services Business, Microsoft Business Division, Entertainment and Devices

Geograic coverage (2009) US: 56.6%; Rest of world: 43.4%

future lans Ofce 2010 Tech Guarantee program and YAHOO search partnership model to be launched in 2010

financials (LTM)Revenue: 58.7 billion USD, year-over-year change: 3.3%Operating prot: 21.8 billion USD, year-over-year change: 8.0%Net income: 16.3 billion USD, year-over-year change: 17.6%

2: AppLE INC (US)

Brie descritionDesigns, manufactures and markets personal computers, mobile communication devices and portabledigital music and video players. Also sells a variety of related software, services, peripherals and networkingsolutions. Sells its products worldwide through its online stores, retail stores, direct sales force and third-partywholesalers, resellers and value-added resellers. Acquired digital music service Lala in December 2009.

products sold Portables, desktops, music-related products, software and services, iPhone, related products

Ke brandsAirTunes, Aperture, Apple, AppleCAT, AppleLink, Apple TV, Cocoa, iMovie, Inkwell, iPhone, iPhoto, Safari,Sand, WebScript, Xcode

Markets covered NA

Geograic coverage (2009) Americas: 44.1%; Europe: 27.5%; Rest of world: 28.4%

future lans Focus on new product development and overcome challenges of the PC market


3: ORACLE CORp (US)

Brie descritionDevelops, manufactures, markets, distributes and services database and middleware software as well asapplications software. Acquired Silver Creek Systems and Sun Microsystems in January 2010.

products soldSoftware business consists of two product segments: 1) new software licenses and 2) software licenseupdates plus product support. Services business consists of three operating segments: consulting, on demandand education.

Ke brandsApplications Unlimited, AutoVue, Case Exchange, JD Edwards EnterpriseOne, Oracle E-Business Suite,Oracle Enterprise Manager, Oracle Fusion, Oracle Transparent Gateway, Oracle Video Server, Oracleware,SQL Module

Markets covered Software and services represented 81% and 19% of its total revenues, respectively

Geograic coverage (2009) US: 43.8%; UK: 6.8%; Japan: 5.11%; Germany: 4.11% France: 3.6%; Canada: 3.17%; Rest of world: 33.3%

future lansPlans to deliver a complete, open, integrated stack of hardware, software and business application solutionsand optimize synergy benets. Plans to form more attractive support plans.



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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-iv

4: RESEARCh IN MOTION INC. (Canada)

Brie descrition

Designs, manufactures and markets wireless solutions for the worldwide mobile communications market.Through the development of integrated hardware, software and services, RIM provides platforms andsolutions for access to information, including e-mail, phone, SMS, Internet and intranet-based applications.Acquired Chalk Media Corp. and Certicom Corp in 2009.

products sold Mobile applications and devices

Ke brands BlackBerry

Markets covered Wireless business solutions

Geograic coverage (2009) US: 62.9%; Canada: 8.1%; UK: 6.4%; Rest of world: 22.6%

future lans Build and operate strategies to handle the pricing pressures on mobile devices and other related services

financials (LTM)Revenue: 14.95 billion USD, year-over-year change: 35.1%Operating prot: 3.1 billion USD, year-over-year change: NMNet income: 2.5 billion USD, year-over-year change: 29.8%

5: SAp AG (German)

Brie descritionSells licenses for software solutions and related services; offers consulting, maintenance and training servicesfor its software solutions. As of December 31, 2009, the company had more than 95,000 customers in over120 countries and has 163 subsidiaries.

products soldSAP Business Suite software and international corporations; SAP Business All-in-One solutions; SAPBusiness ByDesign solution; SAP Business One application for SMBs; SAP BusinessObjects portfolio whichcovers a variety of demands from small to large companies

Ke brands NA

Markets covered Product, consulting and training

Geograic coverage (2009) EMEA: 52.9%; Americas: 33.9%; Asia Pacic: 13.2%

future lansR&D focus on expanding on-demand offerings and mobilitydelivering solutions on device; M&A focus ismainly on bolt-on acquisitions which will enhance its industry/technology product portfolios


6: COMpUTER ASSOCIATES (CA), INC. (US)

Brie descritionIndependent IT management software company that develops and delivers software that help manage ITthroughout complex computing environments. Addresses entire computing environment. Acquired Nimsoft,3Tera, Inc., Cassatt, and Oblicore in 2010.

products sold Products/services in mainframe and distributed environments spanning IT governance, management, security

Ke brandsPlans to acquire Nimsoft from which it would benet from i ts strong presence with managed service providers(MSPs) and emerging enterprises solutions

Markets coveredInfrastructure management, project and portfolio management, security management and data centerautomation and virtualization

Geograic coverage (2009) US: 58.7%; Europe: 26.4%; Rest of world: 14.9%

future lansRestructuring efforts in Asiashift in sales strategy from a direct sales force model to an indirect, partner-ledmodel; plans to make acquisitions to achieve growth

financials (LTM)Revenue: 4.3 billion USD, year-over-year change: 0.1%Operating prot: 1.3 billion USD, year-over-year change: 26.1%Net income: 742.0 million USD, year-over-year change: 38.8%

7: INTUIT INC (US)

Brie descritionDeveloper and marketer of business and nancial management software solutions for SMBs, nancial

institutions, consumers and accounting professionals.

products soldQuickBooks nancial and business management software, payroll products for SMBs, merchant services,Lacerte and ProSeries professional tax products, outsourced online services

Ke brandsBanknow, Checklock, Eclipse, Expensable, Intellicharge, Intuit, PC Access, Pocket Quicken, Pocket QuickenConnect, Proseries, Quickbooks Pro Quicken, Quickguide, Quickzoom, Tax Partner, The Tax ProfessionalsChoice, Turboforms

Markets covered Financial management solutions, employee management solutions, payments solutions, consumer tax solutions

Geograic coverage (2009) US: 100.0%

future lans Focus on Mint.com (platform) rollout and reduce costs

financials (LTM)Revenue: 3.2 billion USD, year-over-year change: 3.6%Operating prot: 718.5 million USD, year-over-year change: 5.5%Net income: 460.1 million USD, year-over-year change: 6.2%


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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-v

8: ADOBE SySTEMS INC. (US)

Brie descrition

Diversied software company which offers creative, business, Web and mobile software and services usedby creative professionals, knowledge workers, etc. for creating, managing, delivering and engaging withcontent and experiences across multiple operating systems, devices and media. Distributes products througha network of distributors, VARs, systems integrators, independent software vendors and OEMs, direct to endusers and through its www.adobe.com. In 2009, it completed the acquisition of Omniture.

products sold Prepackaged software

Ke brands FRAME

Markets covered Creative solutions, knowledge worker, enterprise, print and publishing, platform, mobile and device solutionsGeograic coverage (2009) Americas: 46.9%; EMEA: 31.5%; Asia: 21.5%

future lans Launch CS5 (new product) to increase portfolio offerings and focus more on the US market


9: SAGE GROUp (UK)

Brie descritionDevelopment, distribution and support of business management software and related products and servicesfor SMBs. Operates in 24 countries. Acquired Aytos CPD, S.L. (Aytos) and disposed of the Tax ComplianceServices division in 2008. Disposed of Sage Pro-Concept S.A. in October 2009.

products sold NA

Ke brands NA

Markets covered Accounting; industry-specic; human resource (HR) and payroll; customer relat ionship management (CRM);payment processing

Geograic coverage (2009) North America: 40.0%; Mainland Europe: 36.2%; UK & Ireland: 16.8%; Rest of world: 7.0%

future lans Reduce the cost base along with measures to improve license income


10: BMC SOfTWARE INC (US)

Brie descrition

Provides management solutions for mainframe and distributed information technology systems. Portfolio ofsoftware solutions spans enterprise systems, applications, databases and IT process management. AcquiredMQSoftware and Tideway Systems Limited in 2009. Acquired Phurnace Software, a developer of automationsoftware in January 2010.

products sold

Mainframe and distributed systems, applications, databases and information technology process management

functions

Ke brandsACSM, Assuring Business Availability, BMC Software, Cellular Event Processing Architecture, Mastercell,Mastervision

Markets covered Enterprise service management and mainframe service management

Geograic coverage (2009) US: 62.1%; and Rest of world: 37.9%

future lans Focus on transformation of sales force


11: fUJI SOfT INC (Jaan)

Brie descritionIndependent software developer specializing in communications and machine control software, businessapplication software for bank and insurance companies, and operating system software.

products sold Embedded software, operation software and other software

Ke brands NA

Markets coveredSoftware for control and operational systems, cost saving measures by cutting SG&A expenses, expandingglobal footprint through acquisitions, strengthening collaboration within the group

Geograic coverage (2009) Japan: 100%

future lans Promote cloud computing and on-premise businesses



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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-vi

12: CITRIX SySTEMS (US)

Brie descritionDesigns, develops and markets technology solutions that enable IT services to be delivered through its virtualcomputing infrastructure on demand, independent of location, device or network. Citrix served over 230,000customers and over 100 million users in more than 100 countries in 2009.

products sold Desktop solutions and datacenter/cloud solutions

Ke brandsXenDesktop, XenApp, GoToMeeting, GoToTraining, GoToAssist and GoToMyPC, CitrixXenServer, Cit rixEssentials

Markets covered NA

Geograic coverage (2009) Americas: 43.1%; EMEA: 29.8%; Asia-Pacic: 8.0%; Rest of world: 19.1%

future lans Focus on expanding XenDesktop 4 offerings both as long term and near term trade opportunities


13: SUMIShO COMpUTER (Jaan)

Brie descritionDevelops a variety of computer software, including software for business applications, electronic commerce,development tools, internet and nancial industries. Industrial solutions form a major portion of revenues.

products sold Industrial solutions, ERP solutions and platform solutions

Ke brands NA

Markets covered Packaged software, software development, information services

Geograic coverage (2009) Japan: 100.0%

future lansFocus on projects in the insurance and banking industries; allocating management resources to clients ITinfrastructure development and certain R&D solutions


14: SALESfORCE.COM (US)

Brie descritionProvides enterprise cloud computing applications; provides a technology platform for customers anddevelopers to build and run business applications; offerings can be deployed, customized and integrated withother software applications; markets its service to businesses on a subscription basis.

products sold NA

Ke brands NA

Markets covered Customer and collaboration relationship management (CRM)

Geograic coverage (2009) Americas: 70.8%; Europe: 17.8%; Asia-Pacic: 11.4%

future lans Focus on capturing opportunities in the area of enterprise software and may look to make an acquisition


15: MISyS pLC (UK)

Brie descrition

Engaged in the development, management and licensing of a variety of software products and solutions tocustomers in the nancial services and healthcare industries; develops and delivers open source technologies.The merger to form Allscripts-Misys Healthcare Solutions, Inc. (Allscripts) was completed in October 2008.Misys PLC acquired a 56.8% interest in Allscripts.

products sold NA

Ke brands BankFusion universal banking solution

Markets covered Software solutions to banking, treasury & capital markets, Allscripts healthcare, central services

Geograic coverage (2009) Americas: 60.8%; Europe: 19.1%; Asia-Pacic: 7.15%; UK: 5.68%; Rest of world: 7.38%

future lansFocus on upgrading existing customers along with new customers by selling BankFusion software andcreating suitable sales support for BankFusion



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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-vii

16: SOfTWARE AG (German)

Brie descritionProvides business infrastructure software solutions; products include solutions for managing data, enablingservice-oriented architecture (SOA) and improving business processes; has more than 80 locations in 70countries worldwide.

products soldEnterprise transaction systems include software such as Adabas SQL Gateway, Event Replicator, NaturalBusiness Services, Natural Engineer. Other web methods include webMethods Suite and CentraSite

Ke brands NA

Markets covered Professional services, maintenance, licenses

Geograic coverage (2008) US: 28.6%; Germany: 11.28%; Spain: 10.9%; Rest of world: 49.2%

future lans Integrate IDS Scheer (new platform from acquisition) along with cross-selling opportunities; cost control


17: SyBASE INC (US)

Brie descritionDelivers enterprise software and services to manage, analyze and mobilize information; provides open, cross-platform solutions that deliver information anytime and anywhere, providing decision-ready information.

products soldEnterprise class database servers, integration and development products, mobile database, mobile enterprisesolutions

Ke brandsAdaptive Server Enterprise, EDI Server, Information Anywhere, Jaguar CTS, Navigation Server, SQL Server,Sybase, Ultralite.net, Warehouse Studio

Markets covered Infrastructure platform and global services for mobile messaging interoperability and the management anddistribution of mobile content

Geograic coverage (2008) North America: 50.2%; EMEA: 35.3%; Asia Pacic and Latin America: 14.6%

future lansExplore new database architecture and software to power mobile devices; expand offerings in the softwareand architecture areas through acquisition


18: ChECK pOINT SOfT (Israel)

Brie descrition

Develops, markets, and supports a range of software and combined hardware and software products andservices for IT security; solutions operate under a unied security architecture that enables total end-to-endsecurity with a single line of unied security gateways and allows a single agent for all endpoint security.Acquired Nokia Corporations security appliance business in April 2009.

products sold NA

Ke brands NA

Markets covered Network and gateway security solutions, data and endpoint security solutions, management solutions

Geograic coverage (2008) EMEA: 44.6%; Americas: 43.2%; Japan: 12.2%

future lansFocus on share buyback, major focus on product revenues in the data security segment rather thanmaintenance support

financials (LTM)Revenue: 924.4 million USD, year-over-year change: 14.3%Operating prot: 424.1 million USD, year-over-year change: 19.0%Net income 357.5 million USD, year-over-year change: 10.4%

19: MICROS SySTEMS INC (US)

Brie descritionDesigner, manufacturer, marketer and servicer of enterprise information solutions for the global hospitalityand specialty retail industries. Acquired Fry, Inc., an e-commerce design, development and managed services

provider August 2008.

products soldSoftware encompassing property-based management systems (PMS), related property-specic modules andapplications, central systems including central reservation systems (CRS)

Ke brands Fidelio

Markets coveredEnterprise solutions: hotel information systems, restaurant information systems, specialty retail informationsystems


future lans Focus on cost reduction and further improvement in margins

financials (LTM)Revenue: 867.9 million USD, year-over-year change: 4.4%Operating prot: 145.3 million USD, year-over-year change: 3.2%Net income: 98.2 million USD, year-over-year change: 1.9%


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IMAPs Computing & Internet Software Industry Global Report 2010: Appendix A-viii

20: OpEN TEXT CORpORATION (Canada)

Brie descrition

Provides enterprise content management (ECM) software solutions; Open Text ECM Suite enablescorporations to manage traditional forms of content (images, ofce documents, graphics and drawings) as wellas electronic content (Web pages, e-mail and video); offers solutions both as end-user standalone productsand as fully integrated modules. Acquired Vizible Corporation and Vignette Corporation in 2009.

products sold ECM software products

Ke brands NA

Markets covered ECM software solutions

Geograic coverage (2009) North America: 50.4%; Europe: 42.6%; Others: 6.9%

future lans Launch of a new series of products in mobile applications


21: NOVELL INC (US)

Brie descritionDevelops, sells and installs enterprise software positioned in the operating systems and infrastructure softwarelayers of the IT industry worldwide.

products soldSUSE Linux Enterprise Server, an open source server operating system; SUSE Linux Enterprise Desktop, abusiness desktop operating system; SUSE Studio that allows independent software vendors to build softwareappliances; SUSE Moblin, a Linux based open source operating system

Ke brands Novell ZENworks and PlateSpin

Markets covered Linux and related solutions for enterprises; identity and security management; systems and resourcemanagement

Geograic coverage (2009) US: 49.3%; EMEA: 34.9%; Asia Pacic: 9.5%; Rest of world: 6.4%

future lans Focus on improvement in top line in the next 12-18 months and improve fundamentals

financials (LTM)Revenue: 849.7 million USD, year-over-year change: 9.9%Operating prot: 135.0 million USD, year-over-year change: 101.4%Net income: 203.0 million USD, year-over-year change: NM

22: RED hAT INC (US)

Brie descrition

Develops and provides open source software and services; offers information and news about open sourcesoftware and provides an online community of open source software; collectively developed software isdistributed under open source licenses, such as the GNU General Public License and GNU Lesser GeneralPublic License, permitting access to the human-readable software source code. Acquired Amentra, Inc., andQumranet, Inc. in 2008.

products sold Operating systems and software

Ke brands Red Hat Linux operating system, JBoss Enterprise Middleware

Markets covered Core enterprise operating system platform, enterprise middleware platform and virtualization solutions

Geograic coverage (2009) Americas: 64.7%; EMEA: 21.7%; Asia Pacic: 13.6%

future lansFocus on key go-to-market initiatives and achieve sustained earnings growth. In terms of technology strategy,it aims to promote Enterprise Linux 5.4 and virtualization


23: AUTONOMy CORp (UK)

Brie descrition

Developer cum manufacturer that licenses, sells and supports software products; also offers operating systemsoftware, server application software, business and consumer applications software, software development

tools and Internet- based solutions. Acquired Interwoven, Inc. in March 2009 and MicroLink, LLC in February2010.

products sold Intelligence data operating layer (IDOL) server, IDOL platform, and IDOL protect products

Ke brandsTeamSite, LiveSite, Optimost, MediaBin, MetaTagger, OpenDeploy, ControlHub, Qniti Enterprise, AutonomyExplore

Markets covered Business solutions

Geograic coverage (2009) Americas: 69.9%; Rest of world: 30.1%

future lans Expand through acquisition



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24: LAWSON SOfTWARE (US)

Brie descrition

Provider of enterprise software, services and support targeting customers in specic industries, including equipmentservice management and rental, fashion, food and beverage, healthcare, manufacturing and distribution, publicsector (US) and service industries, as well as the horizontal market for the strategic human capital managementproduct line; provides software in 29 languages to more than 4,500 customers in 41 countries.

products soldSoftware related to business processes, enterprise asset management, equipment service management,CRM, HCM

Ke brandsBusiness Begins With E, Drill Around, Lawson Ezupdate, Lawson Software, Lawson Suiteexpress Self-EvidentApplications, The Information Ofce, Webtree

Markets covered Software applications and industry-specic solutions

Geograic coverage (2009) Americas: 58.1%; EMEA: 37.8%; Asia Pacic: 4.1%

future lansFocus on expanding product portfolio, leveraging favorable spending trends in HCM, extending its productsinto the cloud computing application area


25: QUEST SOfTWARE (US)

Brie descrition

Designs, develops, markets, distributes and supports enterprise systems management software products.In addition to perpetual software licenses, it sells time-based software licenses wherein customers pay asingle fee for the right to use the software and receive maintenance for a dened period of time. AcquiredPacketTrap Networks, Inc. in December 2009.

products sold Big Brother, Deploydirector, Epurposing, Imagevue, IT Dad, Livereorg, NBSpool, Smartalarm, Spotlight, SQlabXpert, SQL Navigator, Vista Plus

Ke brands Foglight, InTrust, JProbe, MessageStats, SQL Navigator, Benchmark Factory, PowerGUI

Markets coveredSoftware solution for application management, database management, windows management andvirtualization management

Geograic coverage (2009) US: 62.5%; UK: 9.3%; Rest of world: 28.9%

future lans Focus on Microsofts unied communications strategy


26: ORACLE fINANCIAL (India)

Brie descritionProvides comprehensive IT solutions to the nancial services industry worldwide; provides t ransactionprocessing and accounting software for banks, investment managers and mutual funds.

products sold Product licenses and related activities (products); IT solutions and consulting services (services)

Ke brands Flexcube suite, Reveleus, MicroBanker

Markets covered Financial services

Geograic coverage (2009)Europe: 34.2%; US: 29.1%; Asia Pacic: 19.9%; Middle East, India and Africa: 14.8%; Latin America andCaribbean: 2.1%

future lansImprove its KPO business, which is currently a small part of revenues, and increase margins of maintenanceservices in light of the tough business climate


27: NEUSOfT CORp (Cina)

Brie descrition Provides software products such as HR management systems, group nancial management systems,learning management systems, security operations centers, ofce management systems, network applicationmonitoring and management systems, CRM systems; domestic and overseas markets.

products sold NA

Ke brands TalentBase, MPC, SkillBase, NetEye, UniOfce, NetPatrol

Markets coveredTelecommunication, government, electric power, enterprise and electronic commerce, nance, education,trafc, medical equipment and health services

Geograic coverage (2008) China: 66.8%; Rest of world: 33.2%

future lans Focus on outsourcing business



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28: UNIT 4 AGRESSO NV (Te Neterlands)

Brie descrition

Provides integrated business management software and internet and security solutions; provides informationand communications technology products and services such as the design of e-commerce websites,implementation of security products (including anti-virus products, rewalls and e-mail content lters), ERPsolutions and outsourcing of IT network management.

products sold NA

Ke brands NA

Markets covered

Financial administration applications, applications for logistics and wholesale distribution, software to support

production processes, project costing and invoicing systems, as well as software for information managementand reporting

Geograic coverage (2009)Benelux: 32.9%; UK: 18.8%; Sweden: 13.5%; Spain: 10.6%; Norway: 8.0%; Germany: 4.5%; Rest of world:11.7%

future lans Focus on pipeline development and organic license sales


29: TOTVS SA (Brazil)

Brie descritionDevelops and markets software solutions including ERP software, CRM software and SCM software. Offersperformance consulting; outsourcing of administrative processes, technology, and infrastructure; and distanceeducation.

products sold ERP software, CRM software, business intelligence software, SCM software

Ke brands Logocenter, Totvs, Microsiga, RM Sistemas, TOTVS BMI

Markets covered NA

Geograic coverage (2009) Brazil: 100%

future lans Focus on diversication of industry verticals to balance out seasonal effects, increase penetration in Brazil


30: pROGRESS SOfTWARE CORpORATION (US)

Brie descritionSupplier of application infrastructure software and services for the development, deployment, integration andmanagement of business applications; develops, markets and distributes its products to businesses, industriesand governments worldwide. Acquired Savvion, Inc. in January 2010.

products sold Software solutions and services

Ke brandsOpenEdge, Orbix, ObjectStore, Apama, Sonic, Progress Actional and FUSE products, DataDirect Connect,DataDirect Shadow, DataXtend

Markets covered Application development platforms, enterprise business solutions, enterprise data solutions

Geograic coverage (2009) North America: 44.8%; EMEA: 42.1%; Latin America: 6.7%; Asia Pacic: 6.3%

future lans Integrate disparate product lines through new product releases and following a go-to-market strategy


31: INfORMATICA CORp (US)

Brie descritionProvides data integration software and services allowing clients to access, integrate and trust all theirinformation assets; infrastructure software categories include data integration and cloud computing. Acquired29West Inc. in March 2010

products soldEnterprise data integration, data quality, master data management, B2B data exchange, applicationinformation lifecycle management, complex event processing, cloud data integration

Ke brands Informatica, Openbridge, Powerbridge, Powercapture, Powerplug, Superglue

Markets covered NA

Geograic coverage (2009) North America: 63.0%; Europe: 27.4%; Rest of world: 9.6%

future lans Market broadeningdiversication and growth through acquisitions



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32: COMpUTER ENGINEERING & CONSULTING (Jaan)

Brie descritionIndependent software development company which installs, manages and provides maintenance servicesfor network systems; operates in two business segmentssoftware development and information systemservices.

products sold Software solutions and services

Ke brands NA

Markets covered Software development and information system services

Geograic coverage (2009) Japan: 100%

future lans NA

financials (LTM)Revenue: 458.9 million USD, year-over-year change: 21.0%Operating prot: 6.6 million USD, year-over-year change: NMNet income: 14.9 million USD, year-over-year change: NM

33: NSD CO LTD (Jaan)

Brie descritionIndependent software development company that offers operating systems, business software for the nancialindustry and process control systems; provides system solution services and information processing services inaddition to operation and management of computer labs.

products sold Packaged software along with support

Ke brands NA

Markets covered Software development

Geograic coverage (2009) Japan: 100%future lans NA


34: EpICOR SOfTWARE (US)

Brie descritionDesigns, develops, markets and supports enterprise application software solutions and services primarily foruse by midsized companies and the divisions and subsidiaries of Global 1000 enterprises.

products soldBack ofce applications for production management, SCM, retail management and nancial accounting, aswell as front ofce CRM and service management.

Ke brands NA

Markets covered

Solutions for the manufacturing, distribution, services, retail, and hospitality industries as well as a rangeof industries and vertical markets within these sectors, including nancial services, professional services,

industrial machinery, instrumentation/controls, medical device, consumer goods, automotive, aerospace,hotels, general merchandise, specialty retail

Geograic coverage (2009) US: 67.4%; Europe: 20.1%; Oceania: 3.9%; Asia: 3.7%; Rest of world: 4.9%

future lans To improve a back-end loaded revenue model in order to compete with larger and better funded ERP vendors


35: RIVERBED TEChNOLOGy, INC. (US)

Brie descrition

Develops solutions for fundamental problems associated with IT performance across wide area networks; sellsits products and support to end users directly through its sales force and indirectly through channel partners,including value-added distributors, VARs, systems integrators and service providers. Acquired Mazu Networks,Inc. in 2009.

products sold Steelhead Mobile 3.0, Riverbed services platformKe brands Riverbed

Markets covered WAN optimization solutions and wide-area data service (WDS) solutions

Geograic coverage (2009) US: 56.1%; EMEA: 26.6%; Rest of world: 17.2%

future lans Focus on new product development



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36: JDA SOfTWARE GRp (US)

Brie descrition

Provides enterprise software solutions for manufacturers, wholesalers and distributors, and retailers aswell as government and aerospace defense contractors; provides pricing, yield management and demandmanagement software solutions for travel, transportation, hospitality and media organizations. Purchased a49.1% interest in Strategix Enterprise Technology GMBH and Strategix Enterprise Technology sp.z.o.o. in July2009; Acquired i2 Technologies, Inc. (i2) in January 2010.

products sold NA

Ke brands JDA Portfolio, Open Database Merchandising System, Retail Ideas

Markets covered Retail, manufacturing, and distribution; service industriesGeograic coverage (2009) Americas: 70.0%; Europe: 21.4%; Asia Pacic: 8.6%

future lans To implement price optimization strategies in a recovering economy, improve end-to-end efciencies

financials (LTM)Revenue: 385.8 million USD, year-over-year change: 1.2%Operating prot: 51.5 million USD, year-over-year change: 4.2%Net income: 26.3 million USD, year-over-year change: NM

37: MICROSTRATEGy INC (US)

Brie descrition

Worldwide provider of business intelligence software; provides analytical performance to business users ina format that suits themfrom high-level dashboards to custom reports and advanced analysis via e-mail ,Web, fax, wireless and voice communication channels; web-based architecture provides reporting, security,performance and standards that are critical for web deployment.

products sold BI software

Ke brands DSS Agent, DSS Broadcaster Server, DSSServer, DSSWeb, Microstrategy, The Intelligence CompanyMarkets covered Enterprise solutions

Geograic coverage (2009) North America: 60.0%; EMEA: 31.2%; Rest of world: 8.9%

future lans Focus on development of new products


38: BLACKBOARD INC. (US)

Brie descritionProvides enterprise software applications and related services to the education industry. Acquired AngelLearning, Inc and Terriblyclever Design, LLC in 2009. Acquired Saf-T-Net, Inc., which offers AlertNow, amessaging and mass notication solution, in 2010.

products soldWeb-based teaching and learning platforms, on- and off-campus commerce management, online e-commerceand payment management, meal plan administration, vending and laundry services, and communications andnotication system solutions

Ke brands Blackboard Learn, Blackboard Transact, Blackboard Connect, Blackboard Mobile

Markets covered Software solutions for the educational market


future lans Promote acquisition based growth strategy

financials (LTM)Revenue: 377.0 million USD, year-over-year change: 20.8%Operating prot: 85.6 million USD, year-over-year change: NMNet income: 7.9 million USD, year-over-year change: NM

39: TEMENOS GROUp AG (Switzerland)

Brie descritionProvider of banking software which covers nancial functions such as deposit-taking, lending and Internetbanking; offers banks with an overview of clients across the enterprise, enabling them to maximize returnswhile streamlining costs.

products soldTemenos T24 (application providing server support to a high number of users), Temenos Corebanking (scalablemainframe retail banking application serving high volume banks and bank outsourcing centers)

Ke brands Temenos T24, Temenos Corebanking

Markets coveredBanking software solution systems to the retail, corporate and correspondent, universal, private, Islamic aswell as micronance and community banking markets

Geograic coverage (2008) EMEA: 63.5%; Americas: 18.5%; Asia: 18.1%

future lans Focus on margin improvement and cash conversion

financials (LTM)Revenue: 370.3 million USD, year-over-year change: 9.9%Operating prot: 75.7 million USD, year-over-year change: NMNet income: 68.6 million USD, year-over-year change: 6.0%


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40: CEGID GROUp SA (france)

Brie descrition

Develops business management software packages and offers solutions and services to certied publicaccountants, retail businesses and the industrial sector as well as fashion, hospitality, services, trade,construction and transport industries; operates through several subsidiaries including, among others, CegidSA, Quadratus and Civitas.

products soldGeneric business software, business-specic solutions, nance and accounting solutions, payroll/humanresources management solutions, business management solutions, business intelligence solutions, smallbusiness solutions, e-commerce solutions

Ke brands NA

Markets covered Enterprise management software solutions for companies and certied accounting rms

Geograic coverage (2009) France: 100.0%

future lans Focus on retail businesses, which are defensive in the recessionary environment

financials (LTM)Revenue: 346.7 million USD, year-over-year change: NMOperating prot: 37.0 million USD, year-over-year change: NMNet income: 25.0 million USD, year-over-year change: 3.0%

41: INDUSTRIAL AND fINANCIAL SySTEMS - IfS AB (Sweden)

Brie descrition

Provides component-based business software; principal offering, IFS Applications, is an ERP solution whichsupports the business processes of organizations of various sizes; provides extended ERP functionality,including CRM, SCM, PLM, corporate performance management (CPM), enterprise asset management (EAM)as well as maintenance, repair and overhaul (MRO) capabilities. Company operates in approximately 50countries through subsidiaries, joint ventures and partners.

products sold IFS Applications

Ke brands NA

Markets coveredERP solutions focusing on aerospace and defense; automotive; manufacturing; process industries;construction, contracting and service management; retail and wholesale distribu

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