Industry Overview March 22, 2012

Transcription

1 Industry Overview March 22, 2012 TMPTMPTMPTMPTMPTMP Information Management Software Rob Owens Jesse Hulsing It s All About the Insights: Data Discovery Providers Positioned for Long-Term Growth Hunger for insights drives BI to top of spending priority list. Increasing volumes of data (both structured and semi-structured), the proliferation of mobile devices and Moore s law are driving monumental change in the data management and analytics industry. While much of the hype over the past year has centered on the storage and processing layer, business intelligence (the front-end, user-facing layer) perhaps provides the most opportunity for growth. This is reflected in CIO spending surveys, which identify BI and analytics as the top spending priority for Pacific Crest Securities See final page for important disclosures. Data discovery at forefront of BI demand. Disruptive providers QlikView (QLIK, $30.38, Outperform), TIBCO s (TIBX, $30.88, Outperform) Spotfire, and Tableau continue to be the biggest beneficiaries of demand for tools that explore data more effectively. While in-memory and associative search are differentiators, total cost of ownership (TCO), ease of use and time to deploy are all compelling reasons to purchase data discovery tools. Ease of use, lower cost expands market opportunity. While the $8 billion to $10 billion business intelligence market is ripe for disruption, newer data discovery tools from QlikView, TIBCO and Tableau often augment existing deployments. Our conversations with resellers and customers tell us that BI is often provided to users who previously used Excel or Access. Given the number of Excel power users worldwide, we believe the long-term addressable market for BI could exceed $25 billion. Data discovery vendors taking different paths to address market. Although the market opportunity is large, each data discovery player has a defined set of strengths and weaknesses. In our view, TIBCO is very well positioned to grab share in the high-end enterprise market, due to its strengths in statistical modeling, ability to handle big data and TIBCO s existing sales force targeting enterprises. Tableau has had considerable success in the Web and startup user base (as well as traditional verticals), primarily due to its ease of implementation, quality of visualization and excellent Web client. Qlik has used its strong reseller channel, ease of implementation and compelling drill-down capabilities to appeal to a broad base of customers. Competitive responses are lackluster, but Exalytics, HANA and SaaS could emerge as longer-term threats. Although QlikView, Tableau and TIBCO are often used to augment existing programs rather than rip and replace, traditional BI vendors have started to unleash a variety of competitive responses to fight threats to their installed bases. Early rollouts lack maturity, but the in-memory nature of Exalytics and HANA could limit the long-term penetration of data discovery vendors. Additionally, the emergence of software as a service (SaaS) BI tools such as Domo and GoodData should be viewed as a threat to on-premise BI providers, particularly QlikView. TIBX and QLIK are our top picks to invest in multiyear secular trend. Given the growing importance of data to today s businesses, we believe BI will remain a top priority well into the future. We view this as a multibillion-dollar market, and believe investors should be exposed to this trend for the long run.

2 2 Overview It s Not About Storage or Processing, It s About the Insights Garnered Increasing data volumes (both structured and semi-structured), the proliferation of mobile devices, and Moore s law are driving monumental change in the data management and analytics industry. While much of the hype over the last year has centered on the storage and processing layer, business intelligence (the front end, user-facing layer) perhaps provides the most opportunity for growth. Over the past five years, BI has evolved from a staid, IT-driven tool associated with cubes and reports into a dynamic end-user-focused tool that provides new levels of insights. We ve moved from static cubes and reports to technology catering to the ipad generation. This is market-expanding technology that we believe could help triple the BI market over the next 10 to 15 years. There are multiple ways for investors to get involved with the top spending priority for 2012, but our top picks remain the two leaders in the data discovery space: TIBX and QLIK. BI Is 2012 s Top Spending Priority 2012 CIO Spending Priorities (Gartner) 2011 CIO Spending Priorities (Gartner) 1. Analytics and BI 1. Cloud computing, including SaaS 2. Mobile technologies 2. Virtualization 3. Cloud Computing, including SaaS 3. Mobile technologies 4. Collaboration/workflow technologies 4. IT management 5. Legacy Modernization 5. Analytics and BI 6. IT Management 6. Networking, voice and data communications 7. CRM 7. Enterprise applications 8. ERP applications 8. Collaboration technologies 9. Security 9. Infrastructure 10. Virtualization 10. Web 2.0 Source: Gartner Dominant Trends in Technology Are Reshaping BI BI has been a priority for CIOs over the past decade. The central premise of consolidating, cleansing and providing one version of the truth to decision makers has singlehandedly pushed date warehousing, data integration and the rest of the BI ecosystem to the top of the list for IT investments. Drivers for the Rise of Data Discovery Tools 1 The growth of data 2 The consumerization of IT 3 The decreasing cost of DRAM + Machine Data Exabytes of Data Transaction Data million members of the US workforce grew up with the internet 2007 Cost/GB: $ Cost/GB: $1 Sources: Pacific Crest Securities, U.S. Census Bureau Data discovery is the latest evolution of BI, and has been driven by three main factors: the general growth of data, the internet generation making up an increasingly large percentage of the workforce and thus influencing technology purchases, and the declining cost of memory (in five years the cost of a gigabyte of memory has declined 90%).

3 3 Illustrative Example: Associative Search Drives Speed-of-Thought Drill Down 1 Who is our most lucrative customer on trade size vs. commission basis? 3 Let's call the sales manager to find out. 2 Ventana? Why have we only traded with them once? Sources: Qlik, Pacific Crest Securities Associative Search, In-Memory Drive Differentiation of Data Discovery The challenge with traditional BI and reporting is that reports and dashboards are generally preconfigured by the IT department. This is due to the general complexity of the underlying software and data modeling. Some drill-down potential is available, but only on a preplanned line of thinking. For example, using an equity capital markets example, a daytop tradessales person responsible drill down may be possible using a preconfigured dashboard, but the ability to quickly pursue a line of thinking such as who isn t being tapped into effectively (as shown above), is more difficult. The declining cost of memory has allowed vendors such as Qlik, Tableau and TIBCO to provide answers much more quickly. Speed of thought or speed of click drill down becomes possible, providing a much richer user experience. TIBCO, Qlik and Tableau also provide users with unique approaches to exploring the data. For example, Qlik uses associative search, which enables line-of-thought-driven data discovery (see example above). Relatively Low Cost, Low Overhead and Low Training Time Expands Market Data discovery s total cost of ownership is compelling due to three factors: (1) the tools generally require no existing infrastructure, such as a data warehouse or extract-load-translate (ETL) tool. (2) The cost of license and implementation is relatively low. For example, a 2009 IDC study indicated that QlikView provided a 53% lower TCO than competitors. Tableau has generated similar results, with the German Business Analytics Research Council (BARC) ranking Tableau No. 12 for total cost of ownership. (3) Anecdotally, ramp time for users is considerably faster than with traditional BI tools. In our view, these three factors democratize BI. Because memory can be pulled directly into the BI tool, users require relatively limited technical expertise, and total cost is lower than with traditional BI tools, and data discovery tools become a viable replacement option for users who previously would have used Microsoft Excel or Access for their querying and business intelligence purposes.

4 4 Data Discovery Has the Potential to Triple the BI Market 1 ~ 12m MS Access Users 33% (DW use case) 3 seats/license $250 (conservative/seat) $3 Billion Incremental Market Opp. 2 ~75m MS Excel Power Users 20m already using BI $250 (conservative/seat) $13.75 Billion Incremental Market Opp. 2 ~$13.75B 1 ~$3B ~$3B ~$9B ~$9B ~$9B Traditional BI Market Traditional BI + MS Access Traditional BI + MS Access + Excel Source: Pacific Crest Securities estimates Capturing the Power User Is a Massive Market Opportunity As mentioned above, we believe the traditional BI market is not an accurate measure of the full opportunity for data discovery. Our conversations with resellers and customers tell us that tools like QlikView and Tableau are often used to augment existing BI tools and provide additional functionality to analysts as well as previous non-users of BI. Perhaps the best measure of the potential of analytics and business intelligence products is the Excel power user base. According to Microsoft, there are roughly 500 million installed users of Office, including Excel. Of this, we estimate 15% are power users and therefore candidates for data discovery BI tools. Applying Gartner s BI usage statistics, we assume that 28% of the potential 75 million BI users are already equipped with a BI tool. By our estimates, this leaves a greenfield opportunity of 55 million seats, which, at a very conservative average seat price of $250, equates to almost $14 billion in additional long-term total addressable market. Implications Qlik, TIBCO, Tableau Are the Leaders in Data Discovery Over the past three years, Qlik, Tableau and TIBCO Spotfire have risen from fringe providers to legitimate threats to traditional BI vendors. This is reflected in growth rates: Qlik grew its license sales 41% in Spotfire grew approximately 50% in Tableau grew bookings 94% in Expansion of the customer base and product maturation has also moved these three providers up the ranks in third-party market research reports, such as Gartner s. This has provided additional validation, which has further aided in expanding each vendor s customer base.

5 5 Gartner Business Intelligence Magic Quadrant (Evolution ) Reflects Maturation of Data Discovery Offerings Ability to Execute Sources: Gartner, visualign.files.wordpress.com Completeness of Vision Each Provider Has Defined Strengths and Weaknesses Although the market opportunity is large, each data discovery player has a defined set of strengths and weaknesses. In our view, TIBCO is very well positioned to grab share in the high-end enterprise market, due to its strengths in statistical modeling, ability to handle big data and TIBCO s existing sales force targeting enterprise. Tableau has had considerable success in the Web and startup user base (as well as traditional verticals), primarily due to ease of implementation, quality of visualization and excellent Web client. Qlik has used its incredibly strong reseller channel, ease of implementation and compelling drill-down capabilities to appeal to a broad base of customers.

6 6 Comparing and Contrasting QlikView, TIBCO and Tableau Strengths Weaknesses S+ Analytics Toolset Enterprise Deployments Spotfire Silver (SaaS) Big Data Support Reseller Channel Time to Implement Data Drill Down and Visualization Reseller Channel Time to deployment Big Data Support Modeling/Analytics Price Ease of Visualization Big Data Web Client Integration with Data Warehouse Channel Modeling/Analytics Source: Pacific Crest Securities Mobile and Collaboration Are Emerging Growth Opportunities A recent InformationWeek poll listed Ability for users to share and collaborate as priority for 59% of technology decision makers. QlikView s QV11 release answers the call and includes collaborative workspaces and numerous sharing features. In QV11 s collaborative workspace, users can invite other users (even those without a license) to participate in brainstorming or decision-making sessions. TIBCO and Tableau are also beating the collaboration drum, and the group will likely incorporate more social-centric features into their products. The land and expand adoption pattern utilized extensively by QlikView and Tableau benefits from collaboration; the more users who interact with the product, the more who will likely want their own license. Mobile presents another major opportunity for the group, and is a natural extension of the PC-based dashboard. Gartner predicts that, by 2013, 33% of BI functionality will be consumed via handheld devices. Of current BI users, 20% are already using mobile functionality, and 33% plan to deploy mobile BI in TIBCO, QlikView and Tableau all have released products targeting mobile users. In our view, Qlik s is currently the strongest. Derivatives Competitive Responses Emerging Though QlikView, Tableau and TIBCO are often used to augment existing products rather than rip and replace, traditional BI vendors have started to unleash a variety of competitive responses to fight threats to their installed bases. Departmental and lineof-business deployments often can grow into full-scale enterprise deployments. In our view, this will likely occur more frequently as data discovery products mature.

7 7 BI Vendors by Market Share Revenue % Competitive Response 1. SAP % HANA, BOBJ Explorer 2. Oracle % Exalytics 3. SAS Institute % SAS Visual Data Discovery 4. IBM % Limited (product in labs) 5. Microsoft % PowerPivot, Crescent 6. Microstrategy ~454 ~4.4% Visual Insight Source: Gartner HANA, Exalytics Could Emerge as Long-Term Threat While we remain skeptical of any near-term impact HANA and Exalytics may have on the data discovery market, the in-memory nature of each product could change into a threat within the next three to five years. The challenge for Oracle and SAP will be advancing OBIEE s and BusinessObject s data discovery and visualization capabilities. While in-memory enables QlikView, Tableau and Spotfire, the true advantage of these products lies in visualization and the ability of end users to explore data without handholding from IT. Ease of implementation and TCO will likely always favor Tableau and QlikView, but this advantage begins to slip in large enterprise implementations pulling in multiple data sources. For example, for QlikView, this requires significant scripting, and has been a challenge in the past. SaaS a Long-Term Threat Though TIBCO and Tableau have rolled out SaaS solutions, the emergence of vendors like Birst, GoodData ($28.5 million in venture funding), and Domo ($63 million in venture funding) is a threat to the current on-premise deployment style preferred by Qlik. Qlik has yet to roll out a cloud solution, preferring to provide BI to OEM partners. We feel that this must change in the long run, as a SaaS option will likely be appealing to middle-market customers, which are a staple for Qlik s Channel partners. Conclusion TIBX and QLIK Are Top Picks to Play Multiyear Secular Trend Given the growing importance of data to today s businesses, we believe BI will remain a top priority well into the future. Qlik and TIBCO are nimble enough to incorporate advances in mobile and collaborative technologies into their existing technology platforms. Additionally, growing awareness of data discovery and continued improvements to back-end ETL functionality should drive expansion into larger enterprise deployments. We view this as a multibillion-dollar market, and believe investors should be exposed to this trend for the long run.

8 8 Company Profile TIBCO Software Inc. Ticker: TIBX Rating: Outperform Price: $30.88 TIBCO s Exposure to Data Discovery Should Help Propel Strong Growth Spotfire emerging as growth engine. TIBCO s Optimization line of business (Spotfire and complex event processing) grew nearly 50% in Due to strong secular tailwinds, we believe another year of robust growth is likely. Spotfire is uniquely positioned as an enterprise-class data discovery tool, with strong analytics and big-data capabilities. TIBCO began training its broader sales team on Spotfire in the back half of last year, and we ve heard of a strong pick up in channel partner adds in recent years. To illustrate, the U.S. region has added 18 reseller partners since the latter half of 2010, taking the total to 25. FTL is an underappreciated product cycle. TIBCO s Faster Than Light (FTL) messaging product has the potential to spur growth in TIBCO s core middleware line of business, in our view. A multimillion-dollar deal was publicly announced in December, and any rebound in financial services spending should amplify the impact. TIBX remains a top pick for TIBCO s unique product footprint, exposure to strong secular tailwinds, and expanding sales team give us confidence in another year of strong growth. With license growth expectations in the low-teens range, continued strength in Spotfire or the emergence of an FTL product cycle should be catalysts for upside. Our price target remains $32, but we will revisit after earnings. Market Data Revenue (M) FY ends 11/30 12-month target $32 F2011 F2012E F2013E 52-week range $31-$18 Q1 $185.3 $221.1 $255.9 Shares outstanding (M) Q2 $216.4 $238.9 $266.2 Market capitalization (B) $5.31 Q3 $229.0 $255.7 $277.9 Average daily volume (M) 2.1 Q4 $289.5 $321.9 $356.4 Float (M) Year $920.2 $1,037.6 $1,156.4 Dividend yield NA Previous estimate - - Dividend/share NA First Call mean $1,041.2 $1,161.2 P/R 5.8x 5.1x 4.6x Balance Sheet Y/Y growth 22.0% 12.8% 11.4% Cash (M) $308.4 Net cash/share $1.79 Earnings per Share Debt (M) $68.1 F2011 F2012E F2013E Debt/total capital 7.4% Q1 $0.16 $0.19 $0.27 Shareholders' equity (M) $849.2 Q2 $0.21 $0.24 $0.28 Tangible book value/share $1.74 Q3 $0.23 $0.29 $0.30 Q4 $0.42 $0.46 $0.49 Year $1.01 $1.17 $1.33 Previous estimate - - First Call mean $1.15 $1.32 P/E 30.5x 26.3x 23.2x FCF/share $1.12 $1.38 $1.52 Sources: Company reports, Bloomberg, Thomson ONE, Pacific Crest Securities estimates

9 9 Price Target Our 12-month price target for TIBX is $32, which is based on 23x our F2013 EPS estimate of $1.33, plus cash. Market and macroeconomic factors could interfere with this price target, as could a slowdown in IT spending, increased competition from IBM, Oracle Corporation, SAP AG and others, or a reversal in recent focus on bottom-line results by management. Investment Thesis TIBCO Software, Inc. is a leading enterprise software middleware vendor with particular strength in real-time application integration. As interest in and adoption of serviceoriented architecture (SOA) and business process management (BPM) have increased, TIBCO has expanded its corporate positioning and product offerings to address the emerging trends in the enterprise middleware market. However, the market is still in the early-adopter phase, and the increasing interest in SOA has driven increased competition from much larger enterprise software vendors such as Oracle Corporation, IBM Corporation and SAP AG. In addition, enterprise IT departments have been burned by the latest software buzzwords in the past and are wary of making a large investment without a clear return on investment. As a result, investments in SOA technologies have been somewhat slow to materialize. SOA and BPM have the potential to revolutionize the way enterprises build and implement applications, and SOA is becoming widely accepted in IT departments. While the transition is still in the relatively early stages, more clear use cases are emerging around consolidated views of key data, real-time analytics, as well as the need to support a more distributed application infrastructure due to growing adoption of cloud platforms. As a result, spending on next-generation application infrastructure should improve TIBCO s recent license growth rates. In addition, management focus and organizational changes should enable more consistent results on the top line and improved growth in EPS as sales productivity improves and top-line growth returns.

10 TIBX Income Statement FY ends 11/30 FEB MAY AUG NOV FEB MAY AUG NOV FEB MAY AUG NOV Figures in millions, except as noted F1Q11 F2Q11 F3Q11 F4Q11 F2011 F1Q12E F2Q12E F3Q12E F4Q12E F2012E F1Q13E F2Q13E F3Q13E F4Q13E F2013E Revenue $185.3 $216.4 $229.0 $289.5 $920.2 $221.1 $238.9 $255.7 $321.9 $1,037.6 $255.9 $266.2 $277.9 $356.4 $1,156.4 Licenses $70.1 $82.0 $90.9 $134.7 $377.6 $80.6 $91.1 $99.6 $152.6 $424.0 $97.9 $100.3 $102.6 $165.6 $466.3 Total Service & maintenance $115.3 $134.4 $138.1 $154.8 $542.6 $140.6 $147.7 $156.0 $169.3 $613.7 $157.9 $166.0 $175.3 $190.8 $690.0 Cost of revenue $47.3 $55.8 $59.1 $64.9 $227.1 $59.7 $61.4 $64.3 $68.6 $254.0 $63.3 $66.4 $70.0 $78.9 $278.6 Cost of license $4.1 $4.8 $4.4 $6.4 $19.8 $4.8 $4.6 $5.0 $7.6 $22.0 $4.9 $5.0 $5.1 $8.3 $23.3 Cost of Service & Maintenance $43.1 $51.1 $54.7 $58.4 $207.3 $54.8 $56.9 $59.3 $60.9 $232.0 $58.4 $61.4 $64.9 $70.6 $255.3 Gross profit $138.1 $160.6 $169.8 $224.7 $693.1 $161.5 $177.5 $191.4 $253.3 $783.7 $192.5 $199.8 $207.9 $277.5 $877.8 Operating expenses $97.5 $109.8 $112.2 $124.8 $444.4 $116.8 $119.7 $120.1 $138.9 $495.4 $126.8 $131.7 $133.8 $155.2 $547.5 R&D $30.0 $33.2 $33.1 $35.4 $131.7 $35.0 $36.0 $36.0 $39.0 $146.0 $40.0 $42.0 $43.0 $45.0 $170.0 S&M $58.3 $64.8 $67.6 $77.4 $268.2 $70.8 $71.7 $71.6 $86.9 $300.9 $76.8 $77.2 $77.8 $96.2 $328.0 G&A $9.2 $11.8 $11.5 $12.0 $44.5 $11.0 $12.0 $12.5 $13.0 $48.5 $10.0 $12.5 $13.0 $14.0 $49.5 Operating income $40.5 $50.8 $57.6 $99.8 $248.8 $44.7 $57.8 $71.3 $114.4 $288.2 $65.8 $68.1 $74.1 $122.3 $330.2 Interest and other income/loss ($0.9) ($1.6) ($1.2) ($0.9) ($4.6) $0.8 $0.8 $0.8 $0.8 $3.0 $0.8 $0.8 $0.8 $0.8 $3.0 Pretax income $39.7 $49.1 $56.4 $98.9 $244.2 $45.5 $58.5 $72.1 $115.2 $291.2 $66.5 $68.9 $74.9 $123.0 $333.2 Taxes $12.3 $12.8 $16.9 $26.7 $68.7 $13.2 $17.6 $21.6 $34.6 $86.9 $20.0 $20.7 $22.5 $36.9 $100.0 Net income/loss $27.3 $36.3 $39.4 $72.2 $175.5 $32.3 $41.0 $50.4 $80.6 $204.3 $46.6 $48.2 $52.4 $86.1 $233.3 Pro forma EPS $0.16 $0.21 $0.23 $0.42 $1.01 $0.19 $0.24 $0.29 $0.46 $1.17 $0.27 $0.28 $0.30 $0.49 $1.33 Diluted Shares Outstanding Free cash flow $34.8 $44.7 $57.2 $57.4 $194.1 $34.7 $58.5 $53.3 $93.3 $239.8 $59.3 $65.1 $54.6 $87.2 $266.2 FCF/share $0.20 $0.26 $0.33 $0.33 $1.12 $0.20 $0.34 $0.31 $0.54 $1.38 $0.34 $0.37 $0.31 $0.50 $1.52 As a % of sales Gross margin 74.5% 74.2% 74.2% 77.6% 75.3% 73.0% 74.3% 74.9% 78.7% 75.5% 75.2% 75.1% 74.8% 77.9% 75.9% Operating margin 21.9% 23.5% 25.2% 34.5% 27.0% 20.2% 24.2% 27.9% 35.5% 27.8% 25.7% 25.6% 26.7% 34.3% 28.6% Pretax margin 21.4% 22.7% 24.6% 34.2% 26.5% 20.6% 24.5% 28.2% 35.8% 28.1% 26.0% 25.9% 26.9% 34.5% 28.8% Effective tax rate 31.0% 26.0% 30.0% 27.0% 28.1% 29.0% 30.0% 30.0% 30.0% 29.8% 30.0% 30.0% 30.0% 30.0% 30.0% Net margin 14.7% 16.8% 17.2% 24.9% 19.1% 14.6% 17.2% 19.7% 25.0% 19.7% 18.2% 18.1% 18.9% 24.2% 20.2% Y/Y % change Revenue 19.5% 24.9% 24.1% 20.0% 22.0% 19.3% 10.4% 11.7% 11.2% 12.8% 15.7% 11.4% 8.7% 10.7% 11.4% License revenue 29.4% 32.0% 28.7% 17.4% 25.2% 14.9% 11.2% 9.7% 13.3% 12.3% 21.6% 10.0% 3.0% 8.5% 10.0% Service & maintenance 14.3% 20.9% 21.3% 22.4% 19.9% 22.0% 9.9% 13.0% 9.4% 13.1% 12.3% 12.3% 12.4% 12.7% 12.4% Operating income 33.5% 31.0% 28.2% 31.1% 30.7% 10.3% 13.8% 23.7% 14.6% 15.9% 47.1% 17.9% 3.9% 6.9% 14.6% Pretax income 35.2% 28.8% 30.2% 31.7% 31.3% 14.5% 19.1% 27.7% 16.4% 19.3% 46.3% 17.6% 3.9% 6.8% 14.4% Net income 36.9% 37.9% 32.3% 34.1% 34.8% 18.1% 12.8% 27.9% 11.6% 16.4% 44.3% 17.6% 3.9% 6.8% 14.2% EPS 33.9% 34.2% 31.0% 34.8% 33.0% 17.8% 13.3% 27.1% 10.3% 16.0% 43.4% 17.0% 3.3% 6.2% 13.5% Sequential % change Licenses -38.9% 17.0% 10.8% 48.3% % 13.2% 9.3% 53.2% % 2.4% 2.3% 61.4% - Service & maintenance -8.9% 16.7% 2.7% 12.1% % 5.1% 5.6% 8.5% % 5.1% 5.6% 8.8% - Revenue -23.2% 16.8% 5.8% 26.4% % 8.0% 7.0% 25.9% % 4.1% 4.4% 28.2% - 10 Sources: Company reports, Pacific Crest Securities estimates

11 Disclosures The material contained herein is based on data from sources considered to be reliable. However, Pacific Crest Securities (PCS) does not guarantee or warrant the accuracy or completeness of the information. The information is not intended to be used as the primary basis of investment decisions, nor, because of individual client requirements, should it be construed as a representation by PCS as an offer, or the solicitation of an offer, to buy or sell a security. The opinions and estimates expressed reflect the current judgment of PCS and are subject to change without notice. This report may contain forward-looking statements, which involve risk and uncertainty. Actual results may differ significantly from the forward-looking statements. PCS may perform or seek to perform investment banking services for the issuers of these securities. No portion of an analyst s compensation is based on a specific banking transaction; however, part of his/her compensation may be based upon the overall firm revenue and profitability, of which investment banking is a component. Individuals associated with PCS or PCS itself may have a position in the securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise. This communication is intended solely for use by PCS clients. The recipient agrees not to forward or copy the information to any other person. PCS makes a market in the shares of Oracle Corporation, Qlik Technologies Inc., SAP AG and TIBCO Software Inc. Analyst Certification The research analyst(s) principally responsible for the analysis of any security or issuer in this report certifies that the views expressed in this research report accurately reflect the personal views of the research analyst(s) about the subject securities or issuers, and certifies that no part of his or her compensation was, or will be, directly or indirectly related to the specific recommendations or views contained in this report. Ratings Definitions and Distribution as of March 22, 2012 Rating Rating Definition % of Securities with This Rating % of Securities with IB Services* Outperform (O) We expect the stock to outperform the analyst s coverage sector over the coming 12 months. 43.8% 14.8% Sector Perform (SP) Underperform (U) Not Rated (NR) We expect the stock to perform in line with the analyst s coverage sector over the coming 12 months. We expect the stock to underperform the analyst s coverage sector over the coming 12 months. We have not assigned an investment rating to the stock, or we have temporarily suspended its rating. *Indicates the percentage of securities with this rating for which investment banking services have been provided in the past 12 months. Source: Pacific Crest Securities 49.8% 6.0% 3.5% 0.0% 3.0% 0.0% 11 Abbreviation Key NA NC Not available No change NE NM No estimate Not meaningful P/E P/R Price to earnings Price to revenue FCF Cash flow from operations per share, excluding capital expenditures Pacific Crest Ratings for ORCL Rating: Outperform, Target Price: 32 Closing Price March 21, 2012: $ /24/09: O,T:N/A 6/24/09: O, T: $24 12/18/09: O, T: $32 3/26/10: O, T: $40 12/17/10: O, T: $41 3/25/11: O, T: $42 12/1/11: O, T: $43 12/21/11: O, T: $ $ /24/09 5/7/09 6/22/09 8/5/09 9/18/09 11/2/09 12/16/09 2/2/10 3/18/10 5/3/10 6/16/10 7/30/10 9/14/10 10/27/10 12/10/10 1/26/11 3/11/11 4/26/11 6/9/11 7/25/11 9/7/11 10/20/11 12/5/11 1/20/12 3/6/12 Sources: Bloomberg, Pacific Crest Securities

12 12 Pacific Crest Ratings for QLIK Rating: Outperform, Target Price: 36 Closing Price March 21, 2012: $ /22/11: O, T: $29 4/29/11: O, T: $31 7/29/11: O, T: $35 10/10/11: O, T: $28 10/28/11: O, T: $30 2/21/12: O, T: $ $ /15/10 8/27/10 10/12/10 11/24/10 1/10/11 2/24/11 4/8/11 5/24/11 7/8/11 8/22/11 10/5/11 11/17/11 1/4/12 2/17/12 Pacific Crest Ratings for TIBX Rating: Outperform, Target Price: 32 Closing Price March 21, 2012: $ /24/09: SP,T:N/A 1/19/10: O, T: $12 3/26/10: O, T: $14 8/3/10: O, T: $15 9/24/10: O, T: $20 12/22/10: O, T: $27 3/25/11: 3/30/11: O, T: $29 $31 6/24/11: O, T: $32 9/23/11: O, T: $29 12/22/11: O, T: $ $ /24/09 5/7/09 6/22/09 8/5/09 9/18/09 11/2/09 12/16/09 2/2/10 3/18/10 5/3/10 6/16/10 7/30/10 9/14/10 10/27/10 12/10/10 1/26/11 3/11/11 4/26/11 6/9/11 7/25/11 9/7/11 10/20/11 12/5/11 1/20/12 3/6/12 Sources: Bloomberg, Pacific Crest Securities