JANUARY 2014 S OFTWARE S ECTOR MONTHLY REVIEW ADVISORY SERVICES PRIVATE PLACEMENTS PUBLIC OFFERINGS FAIRNESS OPINIONS

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1 JANUARY 2014 S OFTWARE S ECTOR MONTHLY REVIEW ADVISORY SERVICES PRIVATE PLACEMENTS PUBLIC OFFERINGS FAIRNESS OPINIONS

2 INSIDE THIS ISSUE Industry Insights 3 Select Headlines 3 Macroeconomic Environment 4 Market Performance 5 Sector Market Performance 6 SaaS Valuation & Metrics 7 Recent IPOs & Performance 8 Precedent M&A Transactions 9 Recent Financing Activity 10 Comparable Company Analyses 11 Janney Team 18 Sources 19 Janney Montgomery Scott LLC is a US broker-dealer registered with the US Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. Janney Montgomery Scott and Janney are trade-names for Janney Montgomery Scott LLC and its affiliates. Janney provides investment banking, private placement, merger, acquisition and divestiture services, which includes investment advisory, fairness opinion, solvency opinion, valuation opinion, restructuring advisory and portfolio management services. Janney gathers its data from sources it considers reliable; however, it does not guarantee the accuracy or completeness of the information provided within this publication. The materials presented reflect information known to the authors at the time this publication was written, which is subject to change. Janney makes no warranties, expressed or implied, regarding the accuracy of this material. Officers, directors and partners in the Janney group of companies may have investments in the securities of the companies discussed herein. Janney or its affiliates may from time to time provide investment banking or related services to these companies. Like all Janney employees, the authors of this publication receive compensation that is affected by overall firm profitability. Any public companies included in the Janney indices are companies commonly used for industry information to show performance within a sector. These indices do not include all public companies that could be categorized within the sector and were not created as benchmark; do not imply benchmarks and do not constitute recommendations for a particular security and/or sector. The charts and graphs used in this report have been compiled by Janney solely for purposes of illustration. All charts are current as of the date of issuance of this report. This Monthly Review mentions a number of companies; however, none of these companies are subject of the Monthly Review. The companies mentioned may include Janney financial advisory clients, as well as companies involved in transactions where Janney has provided these services to other participants in the transactions. Page 2

3 Industry Insights Sochi isn t the only city focused on security; San Francisco will be hosting the RSA Conference in a few weeks and as the years pass and the names of threats change, one thing remains the same attacks continue to grow in frequency and complexity. Symantec s 2013 Internet Security Threat Report found that there was a 42% increase in targeted attacks in Many of the same trends that excite investors mobile, social, big data, cloud, smart machines are driving this increase and the proverbial genie is out of the bottle as the Internet of Things continues to proliferate. Attacks are also getting more expensive. It is estimated that the recent data breach at Target could cost the company over $1 billion. Further, the actors involved continue to transition from hackers seeking to demonstrate their acumen at penetrating cyber defenses to sophisticated cyber criminals and nation states. Gartner forecasts the 2013 global security software and services market to be $67 billion, and grow at a 8.7% CAGR to $86 billion in It is interesting to note that while there has been an explosion of application software-focused IPO s and M&A, security technology activity has been tepid. Last year s big security IPO was FireEye (up 275% since its IPO) but only seven security IPOs have priced since On the M&A front, there has been a bit more activity over the past two years, but really only a few blockbuster transactions, including: Mandiant/FireEye, Sourcefire/Cisco, Trusteer/IBM, and private equity firm Thoma Bravo s purchase of Websense. Why the lack of activity? First, many of the traditional buyers, EMC, Cisco, HP, Symantec, Intel have been inwardly focused, dealing with struggling legacy businesses, leadership transitions, divestitures and shareholder activism. In addition, VC s have spent more time focusing on investments in SaaS application businesses over the past few years as these businesses are less expensive to scale, have a clear customer acquisition strategy, and have been richly valued by the public markets. Consequently, fewer security start-ups receive investment dollars. In addition, those fewer start-ups that have produced solid growth rates have been able to raise additional growth capital at very attractive valuations, making it challenging for many of the public companies trading at lower multiples to reach a mutually acceptable purchase price. Despite these challenges, we expect 2014 and 2015 to be very active with new companies coming to market, robust M&A activity as the incumbents get their collective houses in order and begin to search for new growth opportunities, new entrants (Experian/41st Parameter) as well as recently minted IPO companies getting their public company footing and beginning to implement acquisition strategies (FireEye/Mandiant). The themes are the same; the Internet of Things is an irreversible movement, attacks continue to grow in frequency and complexity, breaches are costing more money, IT security and governance budgets are growing and IT security customers are willing to go best of breed but would prefer an integrated layered approach. The result should be gold for companies that can take advantage of this dynamic market opportunity and deliver on growth that is so richly valued by investors today. SELECT HEADLINES Dassault Systemes has agreed to buy Accelrys, which provides scientific software for the energy, aerospace and industrial goods sectors, at a price of $12.50 per share. The all-cash deal values the company at about $750 million. (Reuters, 1/30) Ensighten announced a $40 million round of venture funding from Insight Venture Partners. Ensighten has now raised $55.5 million since starting up at the end of (Venturebeat.com, 1/29) Cloud software firm VMware announced its intent to acquire AirWatch, an enterprise mobile device management and security provider for a total of $1.54 billion in cash, installment payments and unvested stock options. (WSJ, 1/22) MemSQL, a big data firm that helps retrieve and analyze data real-time, has raised $35 million in Series B funding from Accel Partners and Khosla Ventures. Proceeds will be directed to product development and support to users. (Techcrunch, 1/22) GE has agreed to acquire API Healthcare, a healthcare workforce management software and analytics solutions provider. API Healthcare s solutions are used by more than 1,600 hospitals and staffing agencies in the U.S. (Businesswire.com, 1/21) Infor purchased PeopleAnswers, maker of cloud-based software that analyzes behavioral traits of job candidates. (WSJ.com, 1/8) FireEye, a provider of security software, has acquired Mandiant, a company known for emergency responses to computer network breaches. Based on the current value of shares in FireEye, the deal is worth more than $1 billion. (Nytimes, 1/2) Page 3

4 MACRO STORY The Conference Board Consumer Confidence Index, which had decreased in November, rebounded in December. The Index now stands at 78.1, up from 72.0 in November (1). Consumers appraisal of overall current conditions improved. Says Lynn Franco, Director of Economic Indicators at The Conference Board: Looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects. The U.S. Department of Labor reported that the unemployment rate was 6.6 percent in January, the lowest level since late Yet, U.S. payrolls rose a seasonally adjusted 113,000 in January after December's lackluster gain of 75,000 jobs, marking the weakest two-month stretch of job creation in three years. Consumer Confidence (1) Unemployment Rate (2) Source Release Date Actual Volatility Index (3) % Chg MoM % Chg YoY Estimate Conference Board 12/31/ % 38.2% 84.1 Reuters / U. of Michigan 1/17/ % 8.9% % 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Interest Rate Forecasts (%) (4) Security 01/31/14 Fed Funds Target Source 1Q 14 Release Date 2Q 14 Actual Forecast 3Q 14 % Chg MoM 4Q Month LIBOR Year T-Note Year T-Note Year T-Note % Chg YoY US Dept. of Labor 1/28/ % -16.5% As of January 31, 2014 Page 4

5 MARKET PERFORMANCE SAAS INDEX vs. MARKET INDICES (3) Last Week Last Month 5% 4% NASDAQ S&P 500 Dow Jones SaaS Index Non-SaaS Index 12% 10% NASDAQ S&P 500 Dow Jones SaaS Index Non-SaaS Index 3% 8% 2% 6% 4% 1% 2% 0% 0% -1% -2% -2% -4% -3% 1/24 1/27 1/28 1/29 1/30 1/31-6% 1/2 1/10 1/20 1/28 Last Quarter 2013 January % 14% NASDAQ S&P 500 Dow Jones SaaS Index Non-SaaS Index 70% 60% NASDAQ S&P 500 Dow Jones SaaS Index Non-SaaS Index 12% 10% 50% 8% 40% 6% 30% 4% 20% 2% 0% 10% -2% 0% -4% -10% Nov-13 Dec-13 Jan-14 Jan-13 Feb-13 Mar-13 Apr-13 Jun-13 Jul-13 Aug-13 Oct-13 Nov-13Dec-13 Jan-14 Refer to the comparable sets attached for information about companies within SaaS and Non-SaaS(all other sub-sector) indices; as of January 31, 2014 Page 5

6 SECTOR MARKET PERFORMANCE YEAR TO DATE (3) 5% 0% 5% 0% 5% 0% 5%) Jan-14 Jan-14 Jan-14 Fast Growth SaaS Moderate Growth SaaS Global Diversified Business Intelligence ERP Platforms, Development Tools & Deployment Supply Chain Management And Logistics Network Infrastructure Technical & Embedded Applications Comms Software Storage/Content Management IT Security Management Mobile Solutions Healthcare Vertical / Other Refer to the comparable sets attached for information about companies within each index; as of January 31, 2014 Page 6

7 SAAS VALUATION & METRICS (5) Median EV / LTM Revenue Median EV / 2014E Revenue Median EV / 2013A Revenue 20.0x 18.0x 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x < 20% 20%-30% 30%-40% 40%-50% >50% Median EV / 2014E Revenue 18.0x 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x < 20% 20%-30% 30%-40% 40%-50% >50% Revenue Growth Rate Revenue Growth Rate Median LTM Gross Profit Margin Companies with Positive LTM EBITDA Median Gross Profit Margin 80% 70% 60% 50% 40% 30% 20% 10% 0% < 20% 20%-30% 30%-40% 40%-50% >50% # Companies Total # In Set Total # Profitable < 20% 20%-30% 30%-40% 40%-50% >50% Revenue Growth Rate Revenue Growth Rate Refer to the comparable sets attached for information about companies within SaaS index; as of January 31, 2014 Page 7

8 RECENT IPOs & PERFORMANCE (6) Tech IPO Activity Software IPO Activity $2, $2, $2, $2, Millions (USD) $1,500.0 $1, Number of Deals Millions (USD) $1,500.0 $1, Number of Deals $ $ $0.0 1/13 3/13 5/13 7/13 9/13 11/13 1/14 ($ in millions, except per share data) Total $ Raised Date Company Ticker # of IPOs 0 $0.0 Recent Select IPO Activity Shares Offered (mm) Offer Price Total Amount (mm) 1/13 3/13 5/13 7/13 9/13 11/13 1/14 Total $ Raised - Software Initial / Offer % Change Software 1 Day 1 Week 1 Month 11/06/13 Mavenir Systems MVNR 5.5 $10.00 $54.5 (37.5%) (4.5%) (14.0%) 14.6% 10/15/13 Veeva Systems VEEV 13.0 $20.00 $ % 85.8% 108.0% 110.7% 09/26/13 RingCentral RNG 7.5 $13.00 $ % 40.0% 30.1% 40.0% 09/25/13 Covisint Corporation COVS 6.4 $10.00 $ % 23.1% 34.7% 30.5% 09/19/13 FireEye FEYE 17.5 $20.00 $ % 80.0% 108.2% 111.0% 09/17/13 Benefitfocus BNFT 5.7 $26.50 $ % 102.1% 80.9% 83.3% 08/08/13 Cvent CVT 6.4 $21.00 $ % 56.8% 47.6% 92.2% 08/08/13 MiX Telematics MIXT 6.3 $16.00 $ % 13.3% -6.0% -3.5% 06/06/13 Textura Corporation TXTR 5.8 $15.00 $ % 39.4% 43.3% 104.0% 05/22/13 ChannelAdvisor Corp. ECOM 6.6 $14.00 $ % 31.7% 21.9% 7.1% 05/16/13 Marketo MKTO 7.0 $13.00 $ % 77.7% 89.0% 38.7% 05/16/13 Tableau Software DATA 9.4 $31.00 $ % 63.7% 70.7% 78.9% 04/11/13 Rally Software Development RALY 6.0 $14.00 $ % 27.2% 23.7% 29.0% 03/21/13 Marin Software MRIN 7.5 $14.00 $ % 16.1% 17.4% 6.5% 03/19/13 Model N MODN 7.8 $15.50 $ % 28.9% 29.4% 30.1% 0 Page 8

9 PRECENDENT M&A TRANSACTIONS > $20MILLION (7) Ann. Date Target Acquirer EV ($mm) Rev. EV/ EBITDA 01/30/14 Accelrys Inc. Dassault Systemes SA $ x 58.2x 01/29/14 Digitalsmiths Corporation TiVo Inc. $ /24/14 Payment Processing, Inc. Global Payments Inc. $ /23/14 Project Rover, Inc. AOL Inc. $ /22/14 Scout Analytics, Inc. ServiceSource International, Inc. $ x - 01/08/14 PeopleAnswers, LLC INFOR, INC. $ /06/14 KANA Software, Inc. Verint Systems Inc. $ /06/14 Parature, Inc. Microsoft Dynamics $ /20/14 Responsys, Inc. Oracle Corporation $1, x 119.1x 12/19/13 Dealer.com, Incorporated Dealertrack Technologies, Inc. $ /16/13 Total Specific Solutions B.V. Constellation Software $ x - 12/16/13 WANDL, Inc. Juniper Networks, Inc. $ /09/13 QHR Enterprise Management Solutions Division Logibec Groupe Informatique Ltee $ /06/13 Cloudmeter, Inc. Splunk, Inc. $ /03/13 SunGard Asset Arena GP3, Asset Arena Manager Blackfin Capital Partners SAS $ /02/13 Digital Insight Corporation NCR Corp. $1, x - 12/02/13 Topsy Labs, Inc. Apple Inc. $ /26/13 Applied Systems, Inc. Hellman & Friedman LLC; JMI Equity $1, /25/13 Roadnet Technologies, Inc. Omnitracs, Inc /19/13 Tier 3, Inc. CenturyLink Inc $ /13/13 PROFITsystems, Inc. Accellos, Inc /30/13 ServiceMesh Computer Sciences Corporation $ /30/13 Soluto Asurion /24/13 APIphany Microsoft /24/13 Cameleon Software PROS Holdings /23/13 BigMachines Oracle, Inc /22/13 TribeHR NetSuite /07/13 Confio Software, Inc. SolarWinds, Inc. $ /01/13 The 41st Parameter Inc. Experian plc $ x - 09/30/13 The Active Network, Inc. Vista Equity Partners $ x 71.4x 09/23/13 Greenway Medical Technologies, Inc. Vitera Healthcare Solutions, LLC $ x - 09/26/13 Braintree Payment Solutions, LLC PayPal, Inc. $ /03/13 CombineNet, Inc. SciQuest, Inc. $ x - 09/03/13 Trusteer, Ltd IBM $ x - 08/23/13 Omnitracs, Inc. Vista Equity Partners $ /19/13 Alert Logic, Inc. Welsh, Carson, Anderson & Stowe Page 9

10 RECENT FINANCING ACTIVITY (7) Date Name $mm Investors Business Description 01/29/14 Ensighten, Inc. $40.0 Insight Venture Partners; Volition Capital LLC 01/29/14 Origami Logic, Inc. $15.0 Accel Partners; Lightspeed Venture Partners; JAFCO Ventures 01/27/14 Autogrid Systems, Inc $12.7 Foundation Capital; Voyager Capital; E.ON SE, Investment Arm 01/23/14 CloudOne Corporation $2.9 Elevate Ventures; HKS Capital Advisors Designs and develops enterprise tag management and privacy software solutions for businesses that enables businesses to manage websites, tags, as well as track, measure and collect customer information Engages in developing visual analytical products for business users. Its visual analytical products enable to explore, interact, and glean insights from data Develops software platforms that enables electricity providers and consumers to forecast generation, consumption, and other grid conditions at unprecedented levels Focuses on cloud computing and Software as a Service for development tools. It offers IBM Rational, a software development tool. 01/22/14 MemSQL, Inc. $35.0 Accel Partners; First Round Capital; Khosla Ventures; Data Collective Provides a real-time analytics platform for handling real-time transactions and analytic workloads for companies worldwide 01/22/14 Chart.io, Inc. $2.2 Avalon Ventures, LLC Provides enterprise analytics tools for small and medium businesses 01/15/14 Canvas Solutions, Inc. $2.1 - Provides software solutions for business functions, such as field service automation, fleet and vehicle management, human resources and time management, inspections and surveys 01/14/14 Studio SBV, Inc. $14.0 Highland Capital Partners; The Founders Fund D/b/a Oyster, develops a solution for mobile reading across various mobile devices 01/14/14 Vision Critical Communications, Inc. $3.2 Difference Capital Financial Inc. (TSX:DCF) 01/14/14 GetOne Rewards LLC $2.5 Atlanta Technology Angels; Milestone Venture Partners; Fulcrum Equity Partners, Inc. Provides software products, research services, and business solutions for market research in the online world Develops software and mobile applications that digitalizes traditional loyalty card system into social media, mobile communication, and marketing engine platform 01/13/14 KSI Data Sciences, LLC $2.5 The Launch Place Develops an enterprise software commercial video and data management solutions for remote sensing platforms or unmanned aircrafts, vehicles, and other mobile devices and equipments for U.S. military and government agencies. 01/08/14 thisclicks LLC $4.0 e.ventures; Greycroft Partners LLC; Arthur Ventures Designs and develops employee scheduling, communication and attendance software applications for businesses 01/06/14 Applause, LLC $43.0 Egan-Managed Capital; Goldman Sachs Group, Merchant Banking Division; Mass Ventures; QuestMark Partners; Longworth Venture Partners; Scale Venture Partners; Mesco Ltd., Investment Arm Develops an application analytics tool that monitors and measures the quality and user satisfaction of a mobile application 01/06/14 Frogtek LLC $1.5 - Offers a point-of-sale software application that allows micro-retailers to record various store expenses and revenues directly on a mobile phone or tablet Page 10

11 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO Fast-Growth SaaS (2014E-2015E Revenue >25%) Salesforce.com, Inc $ % $36,500 $38,254 $3,760 $4,053 $5,239 ($19) $657 $874 NM $0.34 $ % 76.6% 10.2x 9.4x 7.3x NM 58.3x 43.7x NM NM NM NM Workday, Inc % 16,193 15, (106) (63) (56) NM (0.56) (0.59) 50.0% 61.1% 37.7x 33.2x 22.0x NM NM NM NM NM NM NM ServiceNow, Inc % 8,800 8, (42) NM (0.08) % 63.4% 20.2x 13.3x 9.6x NM NM 87.3x NM NM NM NM NetSuite Inc % 7,855 7, (38) NM % 67.4% 18.5x 14.2x 11.1x NM NM NM NM NM NM NM Concur Technologies, Inc % 6,803 6, % % 69.2% 11.3x 9.1x 7.4x NM 56.3x 42.4x NM NM NM NM athenahealth, Inc % 5,483 5, % % 59.0% 10.5x 9.6x 7.6x NM 51.4x 43.4x NM NM NM NM Xero Limited % 4,282 4, (18) (22) (29) NM (0.23) (0.31) 5.1% NM 95.8x 81.6x 42.7x NM NM NM NM NM NM NM Veeva Systems Inc % 3,961 3, % % 59.9% 19.7x 18.0x 14.1x 95.9x 81.7x 73.0x NM NM NM NM Medidata Solutions, Inc % 3,377 3, % % 74.1% 12.4x 11.7x 9.3x 76.4x 45.7x 36.5x NM 86.2x 74.8x NM Cornerstone OnDemand, Inc % 2,968 2, (29) 1 13 NM (0.21) (0.02) 39.0% 70.7% 17.7x 15.9x 11.2x NM NM NM NM NM NM NM Demandware, Inc % 2,203 2, (15) (2) 4 NM (0.23) (0.08) 37.5% 72.1% 22.1x 20.7x 15.1x NM NM NM NM NM NM NM Marketo, Inc % 1,607 1, (36) (31) (24) NM (1.45) (0.78) 28.0% 58.5% 17.4x 15.6x 11.7x NM NM NM NM NM NM NM Benefitfocus, Inc % 1,594 1, (18) (21) (27) NM (1.32) (1.49) 50.0% 42.5% 15.7x 14.7x 11.7x NM NM NM NM NM NM NM Cvent, Inc % 1,549 1, % N/A 73.6% 13.4x 12.6x 10.2x NM NM NM NM NM NM NM Fleetmatics Group PLC % 1,475 1, % % 74.5% 8.3x 7.7x 6.0x 31.4x 24.9x 19.3x 83.7x 46.8x 35.7x 2.54 RingCentral, Inc % 1,136 1, (28) (23) (21) NM (1.05) (0.55) 43.7% 61.7% 7.7x 7.3x 5.8x NM NM NM NM NM NM NM ChannelAdvisor Corporation % (5) (9) (16) NM (0.91) (1.02) 25.0% 73.2% 14.3x 13.4x 10.7x NM NM NM NM NM NM NM Textura Corporation % (33) (7) 7 NM (0.44) % 68.6% 17.3x 10.5x 6.9x NM NM NM NM NM NM NM Rally Software Development Corp % (15) (14) (13) NM (0.84) (0.74) 25.0% 78.1% 6.1x 5.7x 4.6x NM NM NM NM NM NM NM Diligent Board Member Services, Inc % % % 78.8% 5.1x 3.8x 3.0x 16.8x 13.7x 7.9x 48.7x 38.3x 20.7x 0.97 Mean 85.4% 5,418 5, (9) % (0.15) % 67.5% 19.1x 16.4x 11.4x 55.1x 47.4x 44.2x 66.2x 57.1x 43.7x 1.76 Median 89.9% 2,586 2, (16) % (0.14) % 69.2% 15.0x 12.9x 9.9x 53.9x 51.4x 42.9x 66.2x 46.8x 35.7x 1.76 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 11

12 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO Moderate-Growth SaaS (2014E-2015E Revenue <25%) The Ultimate Software Group, Inc. $ % $4,571 $4,491 $410 $503 $619 $59 $116 $ % $1.87 $ % 58.9% 10.9x 8.9x 7.3x 75.8x 38.6x 28.2x NM 87.2x 67.1x NM Dealertrack Technologies, Inc % 2,048 2, % % 43.3% 4.5x 4.3x 3.7x 32.6x 17.5x 15.2x NM 36.1x 33.1x NM OpenTable, Inc % 1,752 1, % % 74.5% 9.1x 8.7x 7.4x 29.1x 20.3x 16.8x 64.6x 38.2x 34.0x 3.80 RealPage, Inc % 1,746 1, % % 60.8% 4.6x 4.4x 3.7x 29.9x 18.7x 14.7x NM 37.7x 29.5x NM Responsys, Inc % 1,400 1, % % 53.2% 6.7x 6.4x 5.4x 96.9x 53.6x 39.9x NM NM NM NM SPS Commerce, Inc % 1, % % 69.6% 9.7x 9.2x 7.6x NM 72.1x 55.9x NM NM NM NM LogMeIn, Inc % % % 88.7% 3.9x 3.8x 3.3x NM 19.6x 15.4x NM 62.8x 44.1x NM LivePerson Inc % % % 76.1% 3.9x 3.8x 3.3x 71.8x 33.3x 26.0x NM 65.9x 52.7x NM Ellie Mae, Inc % % % 75.7% 5.1x 5.1x 4.4x 23.1x 16.8x 14.1x 52.2x 26.5x 24.0x 2.61 Tangoe, Inc % % % 54.6% 3.6x 3.5x 3.0x 40.2x 22.1x 17.5x NM 27.9x 23.0x NM E2open, Inc % (19) (8) 2 NM (0.36) (0.01) 25.0% 61.3% 9.8x 7.9x 6.5x NM NM NM NM NM NM NM Callidus Software Inc % (10) NM % 53.7% 6.4x 6.2x 5.4x NM 68.0x 45.2x NM NM 88.1x NM IntraLinks Holdings, Inc % (0) NM % 72.5% 2.5x 2.5x 2.5x NM 15.9x 14.2x NM 83.0x 60.5x NM Bazaarvoice, Inc % (35) (16) (13) NM (0.29) (0.20) N/A 67.9% 2.7x 2.6x 2.4x NM NM NM NM NM NM NM Ebix Inc % % % 80.4% 2.6x 2.6x 2.6x 6.5x 6.5x 6.8x 11.9x 9.1x 8.9x 0.59 Marin Software Incorporated % (28) (26) (24) NM (1.08) (0.96) 25.0% 58.6% 3.0x 2.8x 2.3x NM NM NM NM NM NM NM Diligent Board Member Services, Inc % % % 78.8% 5.1x 3.8x 3.0x 16.8x 13.7x 7.9x 48.7x 38.3x 20.7x 0.97 Zix Corporation % % % 83.6% 5.2x 5.1x 4.6x 23.6x 18.2x 14.4x 48.6x 23.6x 18.7x 2.43 Vocus Inc % (3) NM N/A 79.6% 1.2x 1.2x 1.2x NM 8.6x 7.8x NM 44.0x 34.6x NM Model N, Inc % (17) 3.9% 0.16 (0.87) N/A 54.7% 1.3x 1.3x 1.8x 33.4x 18.2x NM NM 63.4x NM NM Selectica, Inc % N/A N/A (6) N/A N/A NM N/A N/A N/A 53.2% 1.2x N/A N/A NM N/A N/A NM N/A N/A NM Mean 77.8% % % 66.6% 4.9x 4.7x 4.1x 40.0x 27.2x 21.2x 45.2x 46.0x 38.5x 2.08 Median 84.6% % % 67.9% 4.5x 4.0x 3.5x 31.3x 18.7x 15.3x 48.7x 38.2x 33.6x 2.43 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 12

13 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO Global Diversified Google Inc. $1, % $394,547 $342,449 $59,825 $68,604 $78,281 $17,905 $25,695 $30, % $ % 56.8% 5.7x 5.0x 4.4x 19.1x 13.3x 11.1x 44.2x 22.3x 18.8x 2.60 Microsoft Corporation % 315, ,590 83,433 88,525 95,825 31,828 31,717 34, % % 71.5% 3.1x 2.9x 2.7x 8.1x 8.1x 7.5x 18.3x 13.7x 12.5x 2.29 International Business Machines Corporation % 191, ,638 99,751 99, ,843 24,299 27,733 29, % % 48.6% 2.2x 2.2x 2.2x 9.1x 8.0x 7.5x 16.0x 9.9x 8.9x 1.45 Oracle Corporation % 165, ,624 37,552 39,318 41,312 16,289 19,508 21, % % 81.6% 4.1x 3.9x 3.7x 9.4x 7.9x 7.2x 20.2x 12.1x 11.0x 2.02 Amazon.com Inc % 164, ,874 74,452 89, ,519 3,547 6,785 9, % % 27.2% 2.1x 1.8x 1.5x 44.5x 23.3x 17.4x NM NM 85.1x NM Intel Corporation % 121, ,347 52,708 53,147 54,542 20,632 20,907 22, % % 59.8% 2.2x 2.2x 2.1x 5.6x 5.5x 5.2x 16.2x 13.2x 12.4x 1.47 Cisco Systems, Inc % 117,144 85,181 48,816 47,744 46,905 14,058 15,868 16, % % 61.1% 1.7x 1.8x 1.8x 6.1x 5.4x 5.2x 16.1x 10.9x 10.9x 1.61 SAP AG % 91,285 93,373 23,159 24,218 25,910 7,577 8,734 9, % % 70.3% 4.0x 3.9x 3.6x 12.3x 10.7x 9.9x 23.7x 16.0x 14.6x 1.98 Hewlett-Packard Company % 55,355 66, , , ,216 13,029 13,948 13, % % 23.3% 0.6x 0.6x 0.6x 5.1x 4.8x 4.9x 11.6x 8.1x 7.8x NM EMC Corporation % 49,882 47,862 23,222 24,570 26,248 6,040 7,389 7, % % 62.3% 2.1x 1.9x 1.8x 7.9x 6.5x 6.1x 22.4x 12.4x 11.1x 1.73 VMware, Inc % 38,793 33,068 5,207 6,023 6,977 1,503 2,158 2, % % 86.0% 6.4x 5.5x 4.7x 22.0x 15.3x 13.0x 51.2x 25.3x 21.0x 2.70 Adobe Systems Inc % 29,588 27,929 4,055 4,077 4, ,059 1, % % 85.5% 6.9x 6.9x 5.7x 36.2x 26.4x 16.6x NM 53.0x 29.1x NM Intuit Inc % 20,869 20,252 4,231 4,335 4,633 1,437 1,652 1, % % 86.7% 4.8x 4.7x 4.4x 14.1x 12.3x 11.1x 29.2x 23.1x 19.9x 2.24 Symantec Corporation % 14,902 13,106 6,799 6,650 6,828 1,960 2,092 2, % % 83.6% 1.9x 2.0x 1.9x 6.7x 6.3x 5.9x 17.5x 12.1x 10.8x 2.19 Dassault Systemes SA % 14,753 12,843 2,794 2,869 3, , % % 87.2% 4.6x 4.5x 4.2x 14.9x 13.4x 12.4x 35.0x 24.9x 23.4x 3.89 CA Technologies % 14,481 13,398 4,582 4,492 4,589 1,566 1,751 1, % % 85.8% 2.9x 3.0x 2.9x 8.6x 7.7x 7.4x 16.4x 12.4x 11.9x 1.49 Citrix Systems, Inc % 10,078 9,344 2,918 3,172 3, , % % 86.1% 3.2x 2.9x 2.7x 14.4x 10.2x 9.1x 42.0x 18.6x 16.4x 3.00 Mean 88.7% 106,561 98,185 37,988 39,888 42,415 9,644 11,110 12, % % 68.4% 3.4x 3.3x 3.00x 14.4x 10.9x 9.3x 25.3x 18.0x 19.2x 2.19 Median 88.7% 55,355 66,273 23,222 24,570 26,248 6,040 7,389 9, % % 71.5% 3.1x 2.9x 2.69x 9.4x 8.1x 7.5x 20.2x 13.5x 12.5x 2.10 Business Intelligence Tableau Software, Inc. $ % $4,781 $4,554 $193 $315 $412 ($2) $4 $20 NM ($0.22) $ % 91.8% 23.6x 14.5x 11.1x NM NM NM NM NM NM NM $226 Informatica Corporation % 4,380 3, ,059 1, % % 83.2% 3.9x 3.5x 3.1x 22.6x 12.8x 11.3x 50.2x 24.8x 21.7x Qlik Technologies, Inc % 2,398 2, % % 87.1% 4.8x 4.6x 3.9x NM 53.0x 34.9x NM NM 64.1x NM 235 Pegasystems Inc % 1,725 1, % % 69.6% 3.1x 3.0x 2.7x 19.0x 21.5x 17.9x 46.5x 33.1x 30.4x MicroStrategy Inc % 1,421 1, % % 75.9% 1.8x 1.7x 1.6x 23.2x 15.3x 14.2x NM 51.3x 42.2x NM 357 PROS Holdings, Inc % 1, % % 69.7% 7.1x 6.8x 5.6x NM 39.5x 34.2x NM 68.8x 67.3x NM 91 Actuate Corporation % % % 85.6% 2.1x 1.9x 1.8x 18.7x 9.0x 8.2x 60.5x 20.1x 18.1x Mean 89.9% 2,305 2, % % 80.4% 6.6x 5.1x 4.3x 20.9x 25.2x 20.1x 52.4x 39.6x 40.6x Median 92.3% 1,725 1, % % 83.2% 3.9x 3.5x 3.1x 20.8x 18.4x 16.1x 50.2x 33.1x 36.3x Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 13

14 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO ERP Sage Group plc $ % $7,369 $7,952 $2,228 $2,277 $2,259 $646 $653 $ % $0.37 $ % 94.2% 3.6x 3.5x 3.5x 12.3x 12.2x 11.8x 22.2x 18.0x 17.3x 3.17 QAD Inc % % % 56.0% 0.9x 0.9x 0.8x 21.6x 12.8x 11.6x 74.0x 30.1x 28.6x 4.93 American Software, Inc % % N/A 54.7% 2.2x 2.1x 1.9x 14.2x 10.6x 8.9x 32.5x 22.9x 21.9x NM Hubwoo % N/A N/A 3 N/A N/A 8.3% N/A N/A N/A 9.5% 0.7x N/A N/A 8.7x N/A N/A NM N/A N/A NM Mean 93.4% 1,992 2, % % 53.6% 1.8x 2.2x 2.11x 14.2x 11.9x 10.7x 42.9x 23.7x 22.6x 4.05 Median 94.1% % % 55.4% 1.5x 2.1x 1.95x 13.2x 12.2x 11.6x 32.5x 22.9x 21.9x 4.05 Supply Chain Management and Logistics Aspen Technology, Inc. $ % $4,238 $4,019 $349 $399 $432 $97 $129 $ % $0.85 $ % 85.6% 11.5x 10.1x 9.3x 41.6x 31.2x 36.3x 74.7x 53.4x 64.3x 5.74 Manhattan Associates, Inc % 2,591 2, % N/A 56.3% 5.9x 5.5x 5.0x 22.9x 19.2x 17.2x 40.8x 33.5x 29.6x NM The Descartes Systems Group Inc % % % 67.5% 6.0x 5.8x 5.1x 21.3x 19.6x 16.8x 75.6x 20.8x 17.8x 7.56 ModusLink Global Solutions, Inc % N/A N/A 11 N/A N/A 1.4% N/A N/A N/A 10.4% 0.3x N/A N/A 18.3x N/A N/A NM N/A N/A NM Mean 95.9% 1,999 1, % % 55.0% 5.9x 7.1x 6.49x 26.0x 23.3x 23.4x 63.7x 35.9x 37.3x 6.65 Median 98.4% 1,746 1, % % 61.9% 6.0x 5.8x 5.10x 22.1x 19.6x 17.2x 74.7x 33.5x 29.6x 6.65 Storage / Content Management NetApp, Inc. $ % $14,430 $10,153 $6,413 $6,410 $6,638 $938 $1,403 $1, % $2.59 $ % 60.4% 1.6x 1.6x 1.5x 10.8x 7.2x 6.7x 34.9x 16.4x 14.4x 2.49 Open Text Corporation % 5,844 5,875 1,373 1,870 1, % % 72.8% 4.3x 3.1x 2.9x 14.3x 9.8x 8.9x 42.6x 14.2x 12.4x 2.84 Brocade Communications Systems, Inc % 4,147 3,759 2,223 2,185 2, % % 63.4% 1.7x 1.7x 1.7x 7.3x 6.4x 5.8x 24.8x 11.6x 11.3x 2.76 CommVault Systems, Inc % 3,266 2, % % 87.3% 4.9x 4.2x 3.7x 26.8x 16.4x 13.2x 55.7x 34.6x 29.7x 2.65 Carbonite, Inc % % (0.13) (0.02) 27.5% 67.5% 1.9x 1.7x 1.4x 50.7x 24.1x 14.0x NM NM NM NM Falconstor Software Inc % N/A N/A (8) N/A N/A NM N/A N/A N/A 73.5% 0.7x N/A N/A NM N/A N/A NM N/A N/A NM Platforms, Development Tools & Deployment Mean 78.9% 4,671 3,799 1,792 2,248 2, % % 70.8% 2.49x 2.47x 2.26x 22.0x 12.8x 9.7x 39.5x 19.2x 16.9x 2.69 Median 84.4% 3,706 3, ,870 1, % % 70.1% 1.79x 1.72x 1.69x 14.3x 9.8x 8.9x 38.8x 15.3x 13.4x 2.71 Red Hat, Inc. $ % $10,709 $9,742 $1,482 $1,691 $1,935 $303 $479 $ % $1.56 $ % 84.8% 6.6x 5.8x 5.0x 32.2x 20.3x 17.5x 73.7x 36.2x 31.2x 4.10 TIBCO Software Inc % 3,494 3,289 1,070 1,153 1, % % 71.3% 3.1x 2.9x 2.6x 17.0x 10.6x 9.4x 46.1x 18.4x 15.9x 3.29 Software AG % 3,087 3,237 1,324 1,340 1, % % 68.2% 2.4x 2.4x 2.3x 9.6x 8.7x 7.9x 19.2x 12.8x 11.5x 6.40 Progress Software Corp % 1,255 1, % % 89.9% 3.1x 3.0x 2.9x 11.0x 8.2x 7.8x 27.3x 16.6x 15.8x 3.04 Magic Software Enterprises Ltd % N/A N/A 27 N/A N/A 19.5% N/A N/A 13.0% 40.9% 1.9x N/A N/A 9.5x N/A N/A 29.6x N/A N/A 2.28 BSQUARE Corp % N/A N/A (2) N/A N/A NM N/A N/A N/A 16.9% 0.2x N/A N/A NM N/A N/A NM N/A N/A N/A Mean 88.2% 3,146 2, ,132 1, % % 62.0% 2.9x 3.5x 3.21x 15.8x 12.0x 10.7x 39.2x 21.0x 18.6x 3.82 Median 89.3% 2,171 2, ,246 1, % % 69.7% 2.8x 2.9x 2.75x 11.0x 9.6x 8.7x 29.6x 17.5x 15.8x 3.29 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 14

15 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO IT Security Management Check Point Software Technologies Ltd. $ % $12,853 $11,686 $1,394 $1,475 $1,562 $772 $852 $ % $3.65 $ % 88.4% 8.4x 7.9x 7.5x 15.1x 13.7x 12.9x 26.2x 17.9x 16.4x 2.92 Qihoo 360 Technology Co. Ltd % 12,410 12, , % % 87.6% 21.8x 18.2x 11.3x 82.4x 52.8x 32.4x NM 70.4x 44.0x NM FireEye, Inc % 8,819 8, (108) (118) (129) NM (3.20) (1.39) 35.0% 73.0% 62.6x 53.1x 20.9x NM NM NM NM NM NM NM Palo Alto Networks, Inc % 4,310 3, (7) NM % 72.8% 8.8x 8.1x 6.1x NM 83.0x 44.2x NM NM NM NM Trend Micro Inc % 4,189 2,910 1,062 1,024 1, % N/A N/A 12.5% 81.5% 2.7x 2.8x 2.6x 8.1x 8.8x 8.1x 23.1x N/A N/A 1.93 Fortinet Inc % 3,465 2, % % 70.6% 4.8x 4.2x 3.8x 33.9x 21.8x 17.5x 75.1x 43.1x 34.8x 3.95 Barracuda Networks, Inc % 1,745 1, (0) NM % 76.6% 7.2x 6.5x 5.6x NM 31.6x 35.0x NM NM NM NM Proofpoint, Inc % 1,454 1, (20) (6) 3 NM (0.49) (0.22) 30.0% 69.8% 9.8x 7.7x 6.3x NM NM NM NM NM NM NM Imperva Inc % 1,373 1, (14) 0 8 NM (0.13) % 78.3% 10.0x 9.2x 7.4x NM NM NM NM NM NM NM AVG Technologies N.V % % N/A 83.9% 2.2x 2.2x 2.3x 6.7x 6.2x 6.7x 15.2x 8.1x 8.6x NM Epiq Systems, Inc % % % 52.6% 1.9x 1.8x 1.6x 10.7x 7.8x 7.1x 40.7x 14.7x 13.9x 4.07 F-Secure Oyj % % (4.2% ) 95.5% 1.8x 1.8x 1.8x 9.0x 7.9x 8.3x 19.1x 18.9x 17.9x (4.77) Guidance Software, Inc % (9) (5) 8 NM (0.54) (0.06) N/A 67.5% 2.5x 2.7x 2.5x NM NM 37.2x NM NM NM NM VASCO Data Security International Inc % % N/A 64.0% 1.3x 1.3x 1.2x 12.6x 12.0x 7.7x 34.4x 31.1x 19.8x NM CYREN % (1) N/A N/A NM N/A 78.5% 3.1x 3.0x 2.6x NM N/A N/A NM 66.5x 25.2x NM Mean 87.9% 3,544 3, % % 76.0% 9.9x 8.7x 5.6x 22.3x 24.6x 19.7x 33.4x 33.9x 22.6x 1.62 Median 91.6% 1,454 1, % % 76.6% 4.8x 4.2x 3.8x 11.6x 12.9x 12.9x 26.2x 25.0x 18.9x 2.92 Systems & Network Management Splunk, Inc. $ % $8,263 $7,911 $268 $293 $397 ($44) $6 $30 NM ($0.01) $ % 89.1% 29.5x 27.0x 20.0x NM NM NM NM NM NM NM SolarWinds, Inc % 2,998 2, % % 92.3% 9.0x 8.5x 6.9x 18.7x 15.9x 15.9x 38.4x 25.5x 25.9x 1.67 Compuware Corporation % 2,196 2, % N/A 62.2% 2.2x 2.7x 2.8x 16.2x 12.5x 10.1x 35.7x 28.4x 18.8x N/A NetScout Systems, Inc % 1,467 1, % % 78.9% 3.5x 3.1x 2.7x 14.7x 10.7x 9.3x 31.5x 22.2x 18.9x NM Mean 82.7% 3,731 3, % % 80.6% 11.0x 10.3x 8.08x 16.6x 13.0x 11.7x 35.2x 25.4x 21.2x 1.67 Median 85.7% 2,597 2, % % 84.0% 6.2x 5.8x 4.82x 16.2x 12.5x 10.1x 35.7x 25.5x 18.9x 1.67 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 15

16 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO Technical & Embedded Applications Autodesk, Inc. $ % $11,562 $10,248 $2,294 $2,259 $2,246 $462 $588 $ % $1.62 $ % 88.5% 4.5x 4.5x 4.6x 22.2x 17.4x 19.1x 58.0x 31.7x 33.7x 5.27 Ansys, Inc % 7,277 6, % % 87.5% 7.8x 7.6x 6.9x 16.7x 15.3x 13.7x 38.3x 24.9x 23.6x 2.74 Synopsys Inc % 6,152 5,235 1,962 1,968 2, % % 82.2% 2.7x 2.7x 2.5x 14.5x 10.1x 8.2x 36.2x 17.4x 14.9x 4.53 Cadence Design Systems Inc % 4,063 3,755 1,460 1,569 1, % % 86.3% 2.6x 2.4x 2.2x 11.1x 7.6x 6.9x 32.5x 14.5x 13.0x 2.50 Mentor Graphics Corp % 2,384 2,400 1,087 1,157 1, % % 84.0% 2.2x 2.1x 1.9x 12.2x 8.7x 7.9x 29.7x 13.1x 11.9x 2.97 Opera Software ASA % 1,798 1, % N/A 44.7% 6.4x 5.8x 4.4x 22.9x 20.4x 14.3x 56.8x 41.9x 25.6x N/A PDF Solutions Inc % % % 60.0% 6.4x 6.2x 5.3x 21.5x 16.2x 12.4x 42.3x 22.6x 18.2x 2.12 Exa Corporation % % % 70.1% 3.2x 3.1x 2.8x 79.4x 44.9x 34.5x NM NM NM NM Cimatron Ltd % % % 87.1% 2.0x 1.9x 1.9x 13.0x 12.5x 10.1x 26.5x 20.9x 18.5x 0.81 GSE Systems Inc % N/A 45 (3) N/A N/A NM N/A (0.04) N/A 27.7% 0.3x 0.3x 0.3x NM N/A N/A NM NM NM NM Mean 86.6% 3,427 3, % % 71.8% 3.8x 3.7x 3.29x 23.7x 17.0x 14.1x 40.0x 23.4x 19.9x 2.99 Median 88.0% 2,091 2, % % 83.1% 2.9x 2.9x 2.62x 16.7x 15.3x 12.4x 37.3x 21.8x 18.4x 2.74 Comms Software VeriSign, Inc. $ % $8,052 $7,609 $950 $964 $1,025 $594 $615 $ % $2.35 $ % 80.8% 8.0x 7.9x 7.4x 12.8x 12.4x 11.7x 31.8x 25.0x 22.4x 2.12 Amdocs Limited % 6,920 5,709 3,384 3,612 3, % % 35.3% 1.7x 1.6x 1.5x 9.1x 8.0x 7.5x 23.4x 13.4x 12.6x 2.92 Nuance Communications, Inc % 4,859 6,366 1,855 1,954 2, % % 62.1% 3.4x 3.3x 3.0x 26.6x 10.8x 12.3x NM 12.7x 13.2x NM NeuStar, Inc % 2,122 2, % % 76.4% 2.8x 2.6x 2.6x 6.5x 5.5x 5.8x 14.1x 9.0x 9.2x 0.64 Interactive Intelligence Group Inc % 1,536 1, % % 64.2% 4.5x 3.9x 3.4x 51.1x 67.0x 68.4x NM NM NM NM Vonage Holdings Corporation % % % 69.3% 1.1x 1.2x 1.1x 10.6x 9.3x 9.2x 26.4x 24.8x 26.6x x8 Inc % % % 70.3% 5.6x 4.6x 3.8x 58.4x 44.1x 32.3x NM 72.0x 48.3x 4.00 Mavenir Systems, Inc % (7) (3) 0 NM (0.57) (0.30) N/A 54.7% 3.5x 3.2x 2.68x NM NM NM NM NM NM NM Evolving Systems Inc % % % 71.7% 3.9x 3.9x 3.16x 14.7x 14.5x 10.2x 28.7x 24.7x 17.3x 1.65 Mean 84.7% 2,861 2, , % % 65.0% 3.8x 3.6x 3.19x 23.7x 21.5x 19.7x 24.9x 26.0x 21.4x 2.18 Median 93.3% 1,536 1, % % 69.3% 3.5x 3.3x 3.03x 13.7x 11.6x 10.9x 26.4x 24.7x 17.3x 1.95 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 16

17 SOFTWARE SECTOR MONTHLY REVIEW As of January 31, 2014 ($ in millions, except per share) Market Statistics Operating Metrics Valuation Multiples % of LTM Next 5 Yr LTM Stock 52 Week Market Enterprise Revenue EBITDA EBITDA EPS EPS Growth Gross Profit EV / Revenue EV / EBITDA PE Multiple PEG Company Price High Cap. Value LTM 2014E 2015E LTM 2014E 2015E Margin 2014E 2015E Rate Margin LTM 2014E 2015E LTM 2014E 2015E LTM 2014E 2015E RATIO Healthcare Cerner Corporation $ % $19,528 $18,815 $2,911 $3,332 $3,736 $736 $1,164 $1, % $1.66 $ % 82.3% 6.5x 5.6x 5.0x 25.6x 16.2x 14.2x 54.5x 34.2x 29.5x 3.03 Allscripts Healthcare Solutions, Inc % 2,923 3,408 1,373 1,368 1, % % 39.9% 2.5x 2.5x 2.4x NM 18.8x 14.3x NM 61.4x 37.1x NM MedAssets, Inc % 1,364 2, % % 78.0% 3.2x 3.2x 3.0x 10.4x 9.9x 9.2x 39.4x 17.0x 15.7x 3.03 Quality Systems Inc % 1,108 1, % % 55.8% 2.3x 2.2x 1.9x 13.9x 9.8x 9.6x 31.0x 23.2x 20.5x 2.58 Omnicell, Inc % % % 0.0% 2.2x 1.9x 1.7x 15.8x 10.1x 8.9x 41.4x 22.0x 19.5x 2.58 Computer Programs & Systems Inc % % % 46.7% 3.6x 3.4x 3.3x 13.5x 12.0x 11.5x 23.4x 20.6x 19.4x 1.95 Accelrys Inc % % % 73.5% 3.6x 3.4x 3.1x 54.1x 17.6x 15.1x NM 39.1x 32.4x NM Merge Healthcare Incorporated % % % 57.8% 1.8x 1.8x 1.8x 26.2x 11.1x 8.7x NM 39.1x 11.5x NM Simulations Plus, Inc % N/A N/A 41.2% % 83.6% 7.8x 6.9x 6.2x 18.9x N/A N/A 34.2x 25.3x 22.4x 1.71 Mean 87.2% 3,065 3, % % 57.5% 3.7x 3.4x 3.2x 22.3x 13.2x 11.5x 37.3x 31.3x 23.1x 2.48 Median 95.7% % % 57.8% 3.2x 3.2x 3.0x 17.3x 11.6x 10.5x 36.8x 25.3x 20.5x 2.58 Vertical / Other Constellation Software Inc. $ % $4,556 $4,657 $1,131 $1,192 $1,557 $96 $229 $ % $9.00 $ % 31.9% 4.12x 3.9x 3.0x 48.6x 20.3x 15.1x 80.2x 23.9x 18.3x 2.76 MICROS Systems, Inc % 4,179 3,555 1,304 1,374 1, % % 52.4% 2.7x 2.6x 2.4x 13.9x 11.5x 10.9x 29.5x 20.6x 18.5x 1.97 Tyler Technologies, Inc % 3,400 3, % % 46.1% 8.3x 8.1x 7.0x 44.0x 37.4x 29.2x 93.2x 69.5x 55.4x 3.88 Guidewire Software, Inc % 3,162 2, % N/A 52.6% 8.7x 8.5x 7.3x NM 77.3x 60.4x NM NM NM NM Verint Systems Inc % 2,429 2, , % % 68.3% 3.1x 3.0x 2.6x 15.3x 13.9x 12.7x 43.2x 16.2x 14.9x 4.80 NICE Systems Ltd % 2,370 2, ,022 1, % 2.83 N/A 12.0% 61.6% 2.3x 2.1x 1.9x 12.6x 8.4x 7.2x 46.0x 13.8x N/A 3.83 j2 Global, Inc % 2,080 2, % % 82.8% 4.2x 3.9x 3.7x 10.0x 8.9x 8.4x 22.4x 16.0x 15.3x 1.60 Blackbaud Inc % 1,532 1, % % 54.6% 3.5x 3.4x 3.1x 18.0x 15.7x 16.0x 56.2x 28.1x 26.5x 3.31 ServiceSource International, Inc % (10) NM % 42.1% 1.8x 1.8x 1.5x NM 29.3x 19.4x NM NM 61.4x NM Jive Software, Inc % (54) (21) (15) NM (0.55) (0.46) 25.0% 62.0% 3.8x 3.7x 3.0x NM NM NM NM NM NM NM Saba Software, Inc % (10) 1 4 NM (0.04) (0.02) 20.0% 62.9% 3.1x 2.7x 2.6x NM NM 93.5x NM NM NM NM Sapiens International Corporation N.V % % % 37.6% 2.2x 2.2x 1.9x 18.2x 15.9x 13.2x 38.4x 21.1x 21.7x 2.40 ClickSoftware Technologies Ltd % (3) 4 8 NM % 57.1% 2.1x 2.1x 2.0x NM 50.5x 27.2x NM NM 91.8x NM Support.com, Inc % (2) 13.0% 0.30 (0.07) 20.0% 52.8% 0.9x 0.8x 1.0x 6.9x 4.5x NM 24.6x 9.2x NM 1.23 Mean 82.5% 1,866 1, % % 54.6% 3.6x 3.5x 3.1x 20.8x 24.4x 26.1x 48.2x 24.3x 36.0x 2.87 Median 91.3% 1,806 1, % % 53.7% 3.1x 2.8x 2.6x 15.3x 15.8x 15.5x 43.2x 20.6x 21.7x 2.76 Source: Capital IQ, Bloomberg, Public Filings and consensus estimates. Page 17

18 JANNEY TEAM LEADERSHIP Chris White Head of Banking Jordie Maine Executive Vice President Head of Capital Markets Tim Scheve President CEO Gregory Voetsch Head of Equities Andrew Maddaloni Head of SOFTWARE & CAPITAL MARKETS Gregory Roth Investment Banking Brandon Eck Investment Banking James McNaughton Investment Banking Charlie Mather Capital Markets Will Corkhill Capital Markets Shawn Milne Thomas McCrohan Tony Wible Joseph Foresi Bill Choi David Lau Director Capital Markets Andrew Kurz Vice President Investment Banking Robert Dickey Associate Investment Banking Matt Corrado Associate Capital Markets Andrew Trask Associate Capital Markets Robert Simmons Associate Michael Carroll Associate Corbin Woodhull Associate Len DeProspo Associate Maurali Sankar Associate Jeff Rossetti Associate Wanda Lee Analyst Investment Banking Erik Hannemann Analyst Investment Banking Nicholas Petrick Analyst Investment Banking Page 18

19 SOURCES 1. The Conference Board 2. US Department of Labor 3. Capital IQ 4. Bloomberg 5. Company Filings, Capital IQ 6. Ipreo 7. Press releases, Company Filings, Capital IQ MERGERS & ACQUISITIONS Exclusive Sales Acquisition Advisory Management Buyouts Leveraged Buyouts Fairness Opinions Corporate Defense PUBLIC OFFERINGS Initial Public Offerings Follow-on Offerings High-Grade and High-Yield Debt Subordinated Debt Convertible Securities PRIVATE PLACEMENTS PIPEs Private Equity Senior Debt Convertible Securities Preferred Securities Registered Direct Established in 1832, Janney Montgomery Scott LLC provides comprehensive financial advice and superior service to individual, corporate and institutional investors. A full-service, financial services firm, Janney is committed to providing our clients advice through a wealth management approach by focusing on the delivery of strategic financial plans that utilize a variety of financial products and services best suited to help meet their financial goals. Janney is equally committed to providing our corporate and institutional clients objective advice for the successful execution of their unique business plans. Janney provides advice and service to clients through a network of professionals in branch offices located along the entire east coast. Janney is an independently operated subsidiary of The Penn Mutual Life Insurance Company, the seventh largest mutual insurance company in the nation, and is a member of the New York Stock Exchange, Financial Industry Regulatory Authority and Securities Investor Protection Corporation. Page 19