Global Footprint 65 Countries 500 Memberships 300 Tech

Global Footprint 65+ Countries | 500 Memberships | 300 Tech Companies Our mission is to increase revenue and profit performance of technology companies by optimizing the profitability of services and Xaa. S. 80% of Research-Intensive Model Thought Leadership In the last 4 years… Fortune 100 Tech Firms In the last year… 115 Deep dive audits 1150 Benchmark analyses 7 K Analyst inquiries Amazon “Tech” Category Best Sellers 130 K Benchmark data points 515 K Survey data points 3

Old Model In Trouble New Cloud Model Is a Tough Transition REVENUE TIME

Theme Old Model In Trouble How to Make The Transition Profitable, Far Faster REVENUE TIME

OEM CUSTOMER PARTNER REFRESH EXPAND OPTIMIZE OPERATE ADOPT IMPLEMENT LAND SHIP MAKE

Total Service & Product Revenues $180, 000 $160, 000 USD Millions $140, 000 $120, 000 $100, 000 $80, 000 $60, 000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Sum of Product Revenue Sum of Service Revenue

TSIA TS 50 TSIA Cloud 40 1

Average: 14. 1 Workday 10. 4 Service. Now 8. 6 8. 2 8. 1 7. 9 7. 5 Net. Suite Ultimate Software Demandware Veeva Systems Sales. Force 6. 1 5. 7 5. 6 5. 5 5. 1 Log. Me. In Qualys Google Medidata Athena Health Cornerstone Ondemand 2. 6 Real. Page 2. 1 1. 8 1. 7 1. 4 Constant Contact Jive Software Live. Person Intra. Links Rack. Space Lifelock 0. 0 2. 0 4. 0 6. 0 8. 0 10. 0 12. 0 14. 0 16. 0 1

L Pe ive on r. Ms ar i So n. E w ft G ar I A e N B ht rig c ve No er um ex R k. S ac ac Cp e on arb ite J S ive w oft ar B ae az oi arv ce In Li tra n s Lki oc fel k in nt Co ac Ct nn ha ad e. Bl so avi ar r cu r d N a B w et om ott or l s Tke ne Rie P n ch a al gi olo e Rg es C ing e ra n. Bt le e f n cu it. Cfo esr orn s n to O e Ma em nd eto rk Ve nd a va e S st Lo em y. M s e. I g Tne ur xt a D e a m w nd ar A e the n H a ea G th gl oo le M da edi ta S s. F ale ce For l m eet at G cs Si p ro C s p mue om R e r. Hc ed at C v nt e Q u ys al N e ui t. S te U m lti a S te w oft Sp ar n lu e k P fp roo oi t Gnu ew id ir e So Se i w ft ce rv ar o N e w W kd or ay 25 20 15 10 5 0 Current Last Year 12

New Investor Messaging “Growth + Profits” PROFIT LOSS “Hyper-Growth” Growth Slowdown Losses YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6+ Time COST REVENUE

But Gaa. P Profitability Not Happening at Scale 14

Old Model In Trouble New Cloud Model Is a Tough Transition REVENUE TIME

The Tech Industry Is On a Journey… “Profitable Xaa. S” “Industry transformation” “A new purchasing model is coming” “We have a problem…” 2013 2011 2009 New! JULY 2016 1

"I skate to where the puck is going to be, not where it has been. ” - Wayne Gretzky

Economic Moats 6. Virality/Low Cost of Sales 5. Diverse Revenue Streams 4. Network Effect 3. Economies of Scale 2. Unique Capabilities 1. High Switching Costs 19

Economic Moats 6. Virality/Low Cost of Sales Medium 5. Diverse Revenue Streams High 4. Network Effect Medium 3. Economies of Scale Medium 2. Unique Capabilities High 1. High Switching Costs High 20

Economic Moats License SW Saa. S 1. 0 6. Virality/Low Cost of Sales Medium Low 5. Diverse Revenue Streams High Low 4. Network Effect Medium 3. Economies of Scale Medium Low 2. Unique Capabilities High Medium 1. High Switching Costs High Medium 21

60% 52% 40% 30% 38% 29% 20% 14% 10% 13% 0% Salesforce Avg. Saas Companies Workday Avg. License Software Companies Rackspace Google 23

Yo. Y Growth Rate = 15% Retention Rate = 90% Expansion Rate = 25% $15 m 100% $7 m Churn = 7% Downsell = 3% $100 m Starting ARR: Total $’s Available to Renew at Beginning of Year Xsell = 15% $10 m $3 m 90% Upsell = 10% $90 m Customer Churn Dollars Downsell Dollars Retention Dollars 115% $115 m Upsell Dollars Cross Sell Dollars End of Year Revenue: Total $’s End of Year Source: TSIA SRG Cloud Benchmark Study 24 24

Key LAND ADOPT EXPAND Effectiveness Land New Customer Data Quality Quantity Renewal Sellers Customer Service Teams Who Expensive Labor. Driven, High COS Upsell Sellers Customer Success Team Stickiness Consumption Analytics Platform Large Upsell Sellers Outcome Engineering Efficiency Descriptive Analytics Predictive Analytics Outcome Analytics Customer Growth Teams RENEW X-Sellers Data-driven and CGT-driven Lead Gen Process + Low Labor. Driven, Low COS Cost-Effective Selling Channels 25

Economic Moats License SW Saa. S 1. 0 6. Virality/Low Cost of Sales Medium Low 5. Diverse Revenue Streams High Low 4. Network Effect Medium 3. Economies of Scale Medium Low 2. Unique Capabilities High Medium 1. High Switching Costs High Medium Saa. S 2. 0 Medium 26

Commodities Sell Complex Products To the IT Department Software Eating Hardware. Complexity Cloud Eating On-Prem. Price Per Unit Services Eating Products. Business Buyers Eating IT Budget. Sell Outcome Services To the Business Users 28

POTENTIAL BUSINESS VALUE 1. 0 INCREASE REVENUE 2. 0 REDUCE COSTS 3. 0 AVOID RISK

POTENTIAL BUSINESS VALUE REDUCE COSTS INCREASE REVENUE 1. 2 1. 1 NEW CUSTOMERS RETAIN CUSTOMERS 1. 1. 1. 2 IMPROVE SALES PERFORMANCE 1. 1 DIRECT SALES IMPROVE MARKETING PERFORMANCE 1. 1. 1. 2 INDIRECT SALES 1. 3 EXPAND CUSTOMERS 1. 2. 1 IMPROVE CUSTOMER PERFORMANCE AVOID RISK 1. 4 NEW MARKETS

POTENTIAL BUSINESS VALUE 2. 0 1. 0 REDUCE COSTS INCREASE REVENUE 2. 1 HEADCOUNT 2. 1. 1 TOTAL HC 3. 0 2. 1. 2 PRODUCTIVITY PER HC 2. 1. 3 ATTRITION 2. 1. 3. 1 IMPROVE EMPLOYEE EXPERIENCE AVOID RISK 2. 2 2. 3 OTHER OPEX CAPEX 2. 2. 1 COST TO RUN THE TECH 2. 3. 1 AMOUNT OF TECH REQUIRED

POTENTIAL BUSINESS VALUE 2. 0 1. 0 REDUCE COSTS INCREASE REVENUE 3. 1 STRATEGIC 3. 0 3. 2 FINANCIAL AVOID RISK 3. 3 OPERATIONAL 3. 4 COMPLIANCE 3. 5 REPUTATIONAL

• • Creates competitive differentiation Increases deal margins Elevates the relationship Optimizes CLV But You Must Link Your Products and Services to Value In an Outcome Chain!

Economic Moats License SW Saa. S 1. 0 6. Virality/Low Cost of Sales Medium Low 5. Diverse Revenue Streams High Low 4. Network Effect Medium 3. Economies of Scale Medium Low 2. Unique Capabilities High Medium 1. High Switching Costs High Medium Saa. S 2. 0 Medium High 34

EASY Easy Acquisition Easy Adoption PROFITABLE Maximize Margin 36

Higher Profits Per Customer Harder Purchase Decision FUTURE VALUE AGGREGATOR Easier Purchase Decision MID-TERM WEDGE CURRENT PROFIT MAXIMIZER Lower Profits Per Customer 37

Portfolio & Pricing Financial Keys Customer Engagement Model Key Xaa. S profits decisions live in these three areas

Portfolio And Pricing Customer Engagement Model Financial Keys • Technology offer definition • Value-added service offer definition • Offer(s) pricing model • • New customer landing strategy Adoption framework Customer expansion model Renewal responsibility • • Revenue mix Margin and profit targets Sales and marketing Key performance metrics FUTURE VALUE AGGREGATOR MID-TERM WEDGE CURRENT PROFIT MAXIMIZER 39

Revenue Streams Technology Subscription Premium Annuity Account Services Professional Services Transaction Revenues Aggregate Business Model % of Company Revenue COGS% GM% S&M% TOTALS R&D% G&A% OI% 40

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SOFTWARE PRODUCT GROSS MARGIN SUBSCRIPTION GROSS MARGIN ANNUITY SERVICES GROSS MARGIN High Average PROJECT SERVICES GROSS MARGIN TRANSACTION SERVICES GROSS MARGIN Low 41

Technology Subscription Premium Annuity Account Services % of Company Revenue 90% 100% COGS% 40% 40% GM% 60% 60% S&M% 60% 15% R&D% 20% G&A% 15% -35% 10% Revenue Streams OI% Professional Services Transaction Revenues Aggregate Business Model 56% TOTALS 20% 15% -30. 5% 42

Core Subscription Prices and Margins Get Squeezed! Competitor A’s Price Competitor B’s Price 43

OEM CUSTOMER PARTNER RENEW EXPAND OPTIMIZE OPERATE ADOPT IMPLEMENT LAND SHIP MAKE

OEM CUSTOMER OR PARTNER OEM AND PARTNER RENEW EXPAND OPTIMIZE OPERATE ADOPT IMPLEMENT LAND SHIP MAKE XAAS PLATFORM (Microsoft)

Technology Subscription Premium Annuity Account Services Professional Services % of Company Revenue 70% 20% 100% COGS% 35% 65% 38% GM% 65% 35% 62% S&M% 45% 12% 8% 35% R&D% 18% 10% 5% 15% G&A% 12% 12% -10% 31% 10% Revenue Streams OI% Transaction Revenues Aggregate Business Model 12% 0% 46

Technology Subscription Premium Annuity Account Services Professional Services Transaction Revenues Aggregate Business Model % of Company Revenue 55% 20% 15% 100% COGS% 25% 60% 10% 29% GM% 75% 40% 90% 71% S&M% 42% 10% 5% 5% 26% R&D% 20% 10% 5% 8% G&A% 10% 10% 10% 3% 45% 20% 67% 20% Revenue Streams OI% TOTALS 15% 47

Economic Moats License SW Saa. S 1. 0 Saa. S 2. 0 6. Virality/Low Cost of Sales Low Medium 5. Diverse Revenue Streams High Low High 4. Network Effect Medium 3. Economies of Scale Medium Low 2. Unique Capabilities High Medium 1. High Switching Costs High Medium High 48

Economic Moats License SW Saa. S 1. 0 Saa. S 2. 0 6. Virality/Low Cost of Sales Low Medium 5. Diverse Revenue Streams High Low High 4. Network Effect Medium High 3. Economies of Scale Medium Low High 2. Unique Capabilities High Medium High 1. High Switching Costs High Medium High 49

STATUS QUO END STATE Impact of Investments in New Capabilities Revenue Faster Revenue Growth Costs Lower Labor Costs Impact of Deferred Rev Rec Transformation Time

New Model Can Be Great! • • Old Model • Revenues will decline • Focus: Protect profits REVENUE TIME Revenues will grow Profits will come Catch the new wave Focus: Capture share

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