Out of the Cloud of Cloud Computing:

Transcription

1 Out of the Cloud of Cloud Computing: KPMG s perspective on Financial and IP Aspects September 14, 2011

2 Our case study begins Support License

3 Our case study begins

4 Amount of capital paid in prior to an IPO for public SaaS companies $M Blackboard Concur Technologies 30.2 Constant Contact 37.3 DealerTrack 48.0 DemandTrack 42.0 HireRight 29.2 Kenexa 54.5 LivePerson 41.6 NetSuite 84.9 Omniture 66.9 RightNow Technologies 32.2 Salary.com 5.7 Salesforce.com 64.5 Solera 5.7 SuccessFactors 54.5 Taleo 36.9 Ultimate Software 25.1 Vocus 26.4 Mean 43.5 Median X the amount of capital required for a traditional model software company to reach profitability/ipo. Wachovia Securities, May 2008 the state of the SaaS market

5 Amount of capital paid in prior to an IPO for public SaaS companies $M Blackboard Concur Technologies 30.2 Constant Contact 37.3 DealerTrack 48.0 DemandTrack 42.0 HireRight 29.2 Kenexa 54.5 LivePerson 41.6 NetSuite 84.9 Omniture 66.9 RightNow Technologies 32.2 Salary.com 5.7 Salesforce.com 64.5 Solera 5.7 SuccessFactors 54.5 Taleo 36.9 Ultimate Software 25.1 Vocus 26.4 Mean 43.5 Median X the amount of capital required for a traditional model software company to reach profitability/ipo. These public SaaS companies, on average, raised about $25M at strong valuation mark ups, and invested this amount primarily on sales and marketing in the year prior to going public. Wachovia Securities, May 2008 the state of the SaaS market

6 Amount of capital paid in prior to an IPO for public SaaS companies $M Blackboard Concur Technologies 30.2 Constant Contact 37.3 DealerTrack 48.0 DemandTrack 42.0 HireRight 29.2 Kenexa 54.5 LivePerson 41.6 NetSuite 84.9 Omniture 66.9 RightNow Technologies 32.2 Salary.com 5.7 Salesforce.com 64.5 Solera 5.7 SuccessFactors 54.5 Taleo 36.9 Ultimate Software 25.1 Vocus 26.4 Mean 43.5 Median X the amount of capital required for a traditional model software company to reach profitability/ipo. These public SaaS companies, on average, raised about $25M at strong valuation mark ups, and invested this amount primarily on sales and marketing in the year prior to going public. Salesforce.com raised $47M in November 1999 at a 224% step up in valuation and IPO d just five months later in March Wachovia Securities, the state of the SaaS market

7 Amount of capital paid in prior to an IPO for public SaaS companies $M Blackboard Concur Technologies 30.2 Constant Contact 37.3 DealerTrack 48.0 DemandTrack 42.0 HireRight 29.2 Kenexa 54.5 LivePerson 41.6 NetSuite 84.9 Omniture 66.9 RightNow Technologies 32.2 Salary.com 5.7 Salesforce.com 64.5 Solera 5.7 SuccessFactors 54.5 Taleo 36.9 Ultimate Software 25.1 Vocus 26.4 Mean 43.5 Median X the amount of capital required for a traditional model software company to reach profitability/ipo. These public SaaS companies, on average, raised about $25M at strong valuation mark ups, and invested this amount primarily on sales and marketing in the year prior to going public. Salesforce.com raised $47M in November 1999 at a 224% step up in valuation and IPO d just five months later in March Data shows that Wall Street gives much better valuations (multiples that are possibly 2x-3x greater) to those SaaS companies able to demonstrate strong revenue and subscriber growth rates. Wachovia Securities, the state of the SaaS market

8 License vs. SAAS A US Based 3rd Party Reseller License Government (OCS) Grants Tech IP 15% withholding

9 License vs. SAAS Total available OCS funding budget in million NIS Government (OCS) Grants Tech IP

10 License vs. SAAS Total approved OCS budgets and funding vs. requested budgets Government (OCS) Grants Tech IP

11 License vs. SAAS Number of companies approved vs. requested Government (OCS) Grants Tech IP

12 License vs. SAAS Technology Risk Innovation Government (OCS) Grants Tech IP

13 Contractual terms

14 Being a service organization

15 Achieving growth through acquisitions? SAAS Target $7M

16 Achieving growth through acquisitions? A US based Venture Capital fund SAAS Target Tech IP

17 Achieving growth through acquisitions EARNOUT? SAAS Target

18 Achieving growth through acquisitions SAAS Target

19 2011 KPMG Somekh Chaikin, an member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.