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The Volatile Economy Panel Dr. Tom Campbell • Moderator

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Page 1: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

The Volatile Economy Panel

Dr. Tom Campbell • Moderator

Page 2: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

Cyrus Lam Managing Director

KPMG Corporate Finance LLC

The Volatile Economy Panel

Dr. Tom Campbell Dean and Donald P. Kennedy Chair in

Law and Professor of Economics

Chapman University School of Law

Rob Townsend Partner

Morrison & Foerster

Anthony Armstrong Managing Director in the Investment

Banking Division of Credit Suisse

Paul Deninger Senior Managing Director

Evercore Partners

Page 3: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

“Stacks” T While multiple competing stacks remain, the picture has not changed significantly by recent M&A activity today

Competitive Position: Limited / Niche Product Offerings Competitive Market Share Leadership Position Missing & Desired?

APPLICATION

CONSULTINGEMC Consulting Services MCS IBM Global Services HP Services / EDS Oracle Consulting Services Cisco Services SAP Custom Development Perot Systems

BPO IBM Global Services HP Services / EDS Perot Systems

IT OUTSOURCING EMC Managed Services IBM Global Services HP Services / EDS Perot Systems

SYSTEMS INTEGRATION EMC Impl. & Int. Services MCS IBM Global Services HP Services / EDS Oracle Consulting Services Cisco Services SAP Consulting Perot Systems

VERTICAL FOCUS Broad Vertical Coverage Partners Broad Vertical Coverage Broad Vertical Coverage Broad Vertical Coverage Broad / Carriers Broad Vertical CoverageBroad, Incl.

Public Sector

ENTERPRISE

APPLICATIONDuet

Algorithmics, i2, Partners

(SAP, others)

Partners

(SAP, others)

Oracle 11 / PeopleSoft

/Siebel / Right Now / ArtMySAP Suite, R/3

MID-MARKET

APPLICATIONDynamics

Partners

(SAP, others)

Partners

(SAP, others)Small Business Suite

All-in-One Business One

BBD

DESKTOP APPLICATIONS Office Lotus StarOffice WebEx

MIDDLEWARE, TOOLS &

BI

Windows Server / BizTalk

/ Visual Studio

WebSphere / Cognos /

RationalAutonomy, Mercury

Fusion / BEA / Hyperion

/ JAVA / Glass Fish /

Endeca

NetWeaver / Business

ObjectsSarvega / Havok / NMS

DATABASE Greenplum SQL Server DB2/Informix Neoview, Vertica11g/MySQL/

EndecaSybase

OPERATING SYSTEMS VMwareWindows /

Hyper-V

UNIX AIX / Linux /

Mainframe OSHP-UX/Linux Solaris / OpenSolaris Wind River

SYSTEM MANAGEMENT Smarts System Center Tivoli OpenView / Opsware

KACE / SilverBack

everdream /

ASAP Software

SECURITY RSAConsumer: OneCare /

Defender SMB: ForefrontTivoli / ISS / Q1 Labs ArcSight ASA / IOS / IronPort SecureWorks McAfee

STORAGE/CONTENT

MANAGEMENT

EMC / Documentum /

Legato / IsilonTivoli / Filenet / Netezza StorageApps ZFS / Lustre/Endeca

SERVERS Windows ServerI/P/Z/X Series / Platform

ComputingProLiant / Integrity Sun Fire / Blade

Project California /

CrescendoPowerEdge

NETWORKING ProCurve/3ComCisco Series / Catalyst /

NexusForce10 Networks Wifi / WiMAX

STORAGESymmetrix / CLARiiON /

CelerraVSS DATAllegro

IBM / NTAP & LSI

(OEM)

HP (CPQ, 3PAR,

LeftHand) / Hitachi

(OEM)

StorageTekStorage Ntwking /

Partners (EMC)

EqualLogic/

Compellent

INF

RA

.

MG

MT

S

OF

TW

AR

E S

TA

CK

S

ER

VIC

ES

S

YS

TE

MS

Page 4: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

The Consolidation of Profit Pools and Adjacent Growth Bets As IT growth slows, the leading incumbents are consolidating positions in existing core profit

pools and using this leverage to move into adjacencies for growth

MSFT: $221B

SAP: $73B

ORCL: $160B

CA: $11B

BMC: $6B

SYMC: $12B

ACN: $37B

IBM: $216B

EMC: $49B

NTAP: $15B

CSCO: $100B

JNPR: $13B

DELL: $27B

HP: $53B Market Capitalization (1):

(1) As of 11/10/11

Applications

„11E Revenue Mix

Infrastructure

Management/

Security

Consulting

IT/ITO Services

Storage

Networking

Servers

> $1.2 trillion

Incumbent Vendor Strategies

Erode Services Profit

Pool with

SAAS/SOA?

Convergence of

storage, network

and security

management

VMware server

virtualization

Illustrative „11E

EBITDA Margin

> $300 billion

Aggressive

acquisition

strategy to

move upstack

Virtualized

Services

Acadia

Storage

networking

Application

aware

networking

Security

appliances

Customer wallet share

capture by leveraging

breadth of portfolio

“Own”

middleware

fabric

$160bn

$205bn

$616bn

$42bn

$168bn

$88bn

~ $67bn / 42%

~ $72bn / 35%

~ $92bn / 15%

~ $8bn / 19%

~ $50bn / 30%

~ $14bn / 16%

Build end-to-end

stack from

“application to

disk”

“Own” BI/Analytics

Page 5: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

The Volatile Economy

Emerging Growth Markets • Robert Townsend, Morrison & Foerster • November 2011

Page 6: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

Global Equity Capital Markets Review*

Source: *Thomson Reuters Equity Capital Markets Review first nine months 2011

Global IPOs and Emerging Markets

Page 7: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

Emerging Markets M&A Activity Trend

Source: Press release mergermarket League Tables of Legal Advisers to M&A Q1-Q3 2011

Page 8: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

BRIC Capital Markets/M+A Volume

Source: Dealogic, DB BRIC Capital Markets Feb. 2011

IPOs

China Dominates M&A Volumes

More Balanced

Page 9: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

Asia-Pacific M&A Sector Breakdown Q3’11

*Source: mergermarket Monthly M+A Insider Q3 Edition October 2011

Page 10: The Volatile Economy Panel - Intel Capital€¦ · ENTERPRISE APPLICATION Duet Algorithmics, i2, Partners (SAP, others) Partners (SAP, others) ... HP-UX/Linux Solaris / OpenSolaris

Communicate. Collaborate. Innovate.