Metastorm. Chris Desautelle CFO Metastorm Inc. 1

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1 Metastorm Bob bfarrell Chairman & CEO Chris Desautelle CFO 2009 Metastorm Inc. 1

2 Metastorm Overview BPMS enterprise software market leader Sell into 3 high growth software markets EA, BPA, BPM Market leadership positions from Gartner and Forrester 2009 $67 million $73 million in bookings ~75% of revenue is software (perpetual licenses) and maintenance with 90%+ gross margins EBITDA $1.2 million (exclusive of stock based compensation andunusualitems) 1,200+ customers (on maintenance) in 40 countries Cross vertical with focus in financial services, business services, government, retail, life sciences Global distribution & delivery capability Direct in US, UK, Asia (Hong Kong), Germany and Benelux; via distribution partners in EMEA 2009 Metastorm Inc. 2

3 Management Team Name Experience Robert J. Farrell Chairman and CEO Christopher S. Desautelle Chief Financial Officer Eileen M. Garry Chief Marketing Officer Greg Carter Chief Technology Officer Janet Halma EVP of Global Sales Operations & Customer Support Robin Martin EVP & GM International Swata Gandhi General Counsel 2009 Metastorm Inc. 3

4 Metastorm Enterprise WHAT WE DO 2009 Metastorm Inc. 4

5 A Distinct Approach to Process Management See what you have and how it fits together. Metastorm ProVision Without understanding where you are, how do you know where to go? Metastorm ProVision is an industry leading Enterprise and Business Architecture (EA) software tool that allows you to comprehensively discover and model your business strategy, goals, organization, processes, systems, information and more and then understand dthe interrelationships ti so you can systematically and comprehensively plan changes to the enterprise at all levels. Think about how to best execute your business. Metastorm ProVision BPA Processes are ultimately the means by which you do work and deliver value. Metastorm ProVision BPA is an industry leading Business Process Analysis (BPA) solution that allows you to discover and model your current business processes and then conduct sophisticated simulations and analysis of where and how they can be improved to deliver greater value and improved business resource optimization. Metastorm ProVision BPA also includes Metastorm Discovery for humancentric process discovery allowing for more accurate data collection, analysis and process improvement. Do things in the optimal way. Metastorm BPM Once you understand where you need to go and how you want to do things, Metastorm BPM is the comprehensive, industry leading BPMS platform you need to rapidly and cost effectively design, automate, deploy, manage, monitor, and report on your human and system based business processes, so you can continuously improve them. Metastorm Integration Manager (MIM) Dated back office systems and unreliable data often act as major barriers to effective execution. MIM allows you to quickly "service enable" and integrate into a broad range of challenging computing environments as well as easily deploy system based business processes, provide effective Managed File Transfer, and strengthen SOA and legacy modernization i efforts Metastorm Inc. 5

6 Our Software Solves High value, Process related Challenges for Our Customers Anti Money Laundering Know Your Customer Engineering Change Orders New Product Introduction, Product Design Loan Application Management New Customer Intake New Customer On boarding Sarbanes Oxley Six Sigma ITIL SCOR, DCOR CCOR Order Management & Tracking Sales & Operations Planning Corporate Actions Agent & Loan Automation Customer Request Management Insurance Claims Basel II, MIFiD UK Online 2005, efoia Strategic Sourcing New Store Opening Customer Service/Help Desk Credit Issuance & Processing HIPAA Compliance New Group Setup & Enrollment Billing & Claims Management Pre surgery Patient Processing Critical Incident Report Tracking Payer Record Management Purchasing/Procurement Patient Referral Contract/Grant Management Citizen Response Services Case Management Correspondence Management Facilities Management GPEA, efoia Compliance Homeland Security Collaboration DoDAF Referral Management Client Matter Intake Client Conflict Processing Contract Management Travel & Expense Shdli Scheduling Case Management 2009 Metastorm Inc. 6

7 Proven, Documented Results Read 80+ Success Stories on our website at Metastorm Inc. 7

8 Customer Deployment Lifecycle Expanding users, processes and modules within the enterprise $100 $150k $150 $750k multiple follow on sales $750 $1,500k+ $1 500k Metastorm Inc. 8

9 Software Bookings from Existing Customers 80% 70% 60% 65% 58% 74% 63% 72% 50% 40% 30% 20% 10% 35% 43% 0% Q08 4Q Metastorm Inc. 9

10 Selected Enterprise Accounts 2009 Metastorm Inc. 10

11 Metastorm Enterprise MARKET / COMPETITIVE LANDSCAPE 2009 Metastorm Inc. 11

12 Forrester Market Sizing Forecast: Worldwide BPM Market Growth, 2006 To 2011 Source: Forrester, July Metastorm Inc. 12

13 Market Trends BPM Executive Priority Source: BPTRENDS February 2010 Survey Business executives think processes, and improving processes, are among their most pressing strategic goals 2005 excited about the idea of BPMS systems 2009 engaged in major process redesigns Organization s current interest in BPM? Major strategic commitment by executive mgmt 28% 26% 19% Significant commitment to multiple high level process projects 23% 24% 33% Initial commitment to limited number of mid and low level projects 23% 25% 29% Exploring opportunities 20% 23% 16% No Interest 6% 2% 3% 2009 Metastorm Inc. 13

14 No Surprise in Business Drivers Source: BPTRENDS February 2010 Survey Everyone largely agreed that their 1 st priority was to save money; 2 nd was increase coordination and improve customer satisfaction Major business drivers causing you to focus on process change? Need to save money by reducing costs/improving gproductivity 33% 56% 58% Need to improve existing products, create new products, enter new LOB 19% 36% 25% One time event (M&A) 2% 4% 5% Government or business risk management (SOX, ISO) 11% 17% 14% Need to improve customer satisfaction 19% 37% 32% Need to improve management coordination or responsiveness 23% 51% 45% Need to improve management of IT resources (ERP) 9% 19% 18% Other 9% 11% 7% 2009 Metastorm Inc. 14

15 BPMS Market Growth Source: BPTRENDS February 2010 Survey % using BPM; 11% likely to acquire in % using BPM; 25% likely to acquire in % using BPM; 21% would acquire in next 13 months Planned BPM product purchases in 2009/ Graphic modeling tool (Visio, PPT) 20% 15% 16% Repository based Modeling tool (MEGA, IBM, ProVision) 23% 23% 21% BPM Suite to manage runtime execution of process 11% 25% 21% Tools for managing rule based process 26% 15% 15% Process monitoring/bi tool 15% 23% 22% Training in process strategy, architecture or performance 22% 22% 19% Training in process analysis and design 21% 29% 22% Training in process redesign and methodology 27% 23% 19% Training i in BPM systems 16% 22% 21% Attendance at BPM conferences 33% 40% 36% 2009 Metastorm Inc. 15

16 The Market Innovation vs. Infrastructure Process Framework Independent, market-leading vendors 100% focused on enterprise-level process innovation Infrastructure Platform Monolithic platform of highly hl diversified ifi d technology 2009 Metastorm Inc. 16

17 Leadership Credentials Enterprise Architecture Magic Quadrant Q409 Business Process Analysis Magic Quadrant Q408 Business Process Management Suites Magic Quadrant Q109 Managed File Transfer Magic Quadrant Q309 Enterprise Architecture Business Process Analysis IT Planning Business Process Management Forrester Wave Q109 Forrester Wave Q109 Forrester Wave Q109 Forrester Wave Q Metastorm Inc. 17

18 Metastorm Enterprise FINANCIAL OVERVIEW 2009 Metastorm Inc. 18

19 Financial Highlights Software Orientation 73% of revenue is software (primarily perpetual licenses) and maintenance with 90%+ gross margins Growth have grown revenue at a CAGR of 23% since 2004 Strong Profitability EBITDA profitable since 2005 (2008 excluding one time charges) 2010 EBITDA margins expected to reach 10% Strong balance sheet ~$10 million cash Current ratio 2.5 (excluding deferred revenue) No debt 2009 Metastorm Inc. 19

20 Revenue: Increasing Market Share 4 year CAGR of 25% exceeds market growth over same period $80.0 ($ - Millions) $74.9 $67.7 $77.6 $70.0 $59.7 $60.0 $50.0 $42.1 $40.0 $30.0 $25.3 $20.0 $10.0 $ Forecast 2009 Metastorm Inc. 20

21 Financials ($-thousands) 2009 Actual 2010 Forecast Revenue $67,723 $77,560 Licenses 22,457 27,055 Services 18,479 21,319 Maintenance 26,787 29,185 Cost of Revenue (1) 19,337 21,767 Licenses 1,999 2,112 Services 15,671 18,261 Maintenance 1,667 1,394 Gross Profit 48,386 55,792 Operating Expenses (1) 47,206 54,832 EBITDA $1,180 $960 EBITDA ex Investment $1,180 $5,581 Gross Margin 71% 72% EBITDA Margin ex investment 2% 7% Headcount R&D Outsource Metastorm Inc. (1) Excludes depreciation and amortization and stock compensation expense 21

22 Headcount 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 F Sales Management Quota SE/ISR Business Development Professional Services/Training Customer Services Marketing Research & Development Other Sub-total: Employees Outsourced R&D Total FTE Metastorm Inc. 22

23 Metastorm Enterprise GROWTH STRATEGY 2009 Metastorm Inc. 23

24 Strategy Growth and Consolidation Generate organic growth in excess of market growth Maintain and organically grow market leadership by addressing converging technology of all things process Maintain EBITDA profitability and positive cash flow Extend organic growth through strategic acquisitions Expand dbusiness footprint t Acquire industry vertical expertise Diversity and fill out technology stack Continue to evaluate ways to increase and realize shareholder value 2009 Metastorm Inc. 24

25 Growth Areas Enterprise Modeling & Business Architecture BPA Business Process Analysis ducts C urren nt Pro Process Discovery Business Process Management Business Process Integration Business Rules Execution Document / Content Management Governance, RiskManagement & Compliance Active Active Expa ansion n Area as Vertical / Process based Applications Active Analytics / Process Intelligence Scale / Geographic Distribution Active 2009 Metastorm Inc. 25

26 The Unexpected Value of Business To The Power of 3 Monitor IMPACT on strategy and goals to guide future change BPA Identify FOCUS areas for optimal improvement Make the RIGHT change 2009 Metastorm Inc. 26