High Technology Report 2010

An IMAP
High Technology
Report
Computing & Internet Software

Global Report — 2010
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For more than 35 years, IMAP has been helping to bring computer
technology companies together via strategic cross-border mergers and
acquisitions. Our vast experience in your industry has taught us that
building a stable platform is fundamental to completing a successful M&A
transaction, as well as to establishing a successful computing network.
When you need to expand, invest, divest or
restructure, you need an advisory that
both knows your business and
has the global connections to
ensure every opportunity
is within your reach. As
these recent closings
demonstrate, IMAP is
that advisory.
IMAP consists of independent advisory operations working together to execute cross-border M&A projects. Each IMAP office is independently owned and operated.
Computing and Internet Software Global Report — 2010
Contents
2009 M&A activity in computing and Internet software.............................. 4
Computing and Internet software sector........................................................... 4
Shifting from capex to opex............................................................................................................ 5
Alternative delivery model — SaaS............................................................................................ 5
Industry-specific capabilities.........................................................................................................6
Vendor consolidation...........................................................................................................................7
IT spending by central governments...........................................................................................7
Trends across industry verticals....................................................................................................7
HOT Trends: Investment opportunities...........................................................8
Mobile applications and computing............................................................................................8
Internet-based models.......................................................................................................................9
Computing and Internet software industry outlook....................................... 11
Statistical Reference (Appendices)

Appendix A: Global Overview.......................................................................................................A-i
Appendix B: Summary of M&A Deals......................................................................................B-i
Appendix C: Growth Drivers .. .................................................................. C-i
Appendix D: Niche Focus Areas ............................................................... D-i
An IMAP
High Technology
Report
IMAP’s Computing & Internet Software Industry Global Report — 2010: Page 3
Large transactions led the way in
sluggish 2009 M&A activity
The economic slowdown had an adverse impact on M&A
M&A Activities at a Glance
activity in the software sector. The sector saw 1,131
LTM ending 1Q 2009 LTM ending 1Q 2010
transactions valued at $27.42 billion USD in twelve months
Transaction value (USD million) 36,752 27,415
(LTM) ending 1Q 2010, witnessing a year-over-year decline
Top 5 transactions (%) 20.1% 46.7%
of 25.4 percent in terms of transaction value ($36.75 billion
Segment No. of transactions Value (USD mn)
USD during the previous period with 2,417 transactions).
C
omputer Hardware &
Dollar volume in this period included one major deal (Sun Applications
1 8,341
Microsystems/Oracle), which represented $8.34 billion Internet Software & Services 18 7,583
USD or nearly 28.1 percent of total dollar volume in the
Application Software 838 5,412
period. Excluding this transaction, the dollar volume would
IT Consulting and Others 10 4,218
have been down 48 percent. During the previous period,
Systems Software 199 1,464
the largest deal was the acquisition of NDS Group by
Top 5 regions No. of transactions Value (USD mn)
Permira Advisers for $1.7 billion USD.
North America 553 12,538
Asia 128 10,755
In terms of business segment, Internet software and
Europe 356 3,620
services accounted for 30 percent of total transaction
South America 19 194
value followed by computer hardware and applications,
Middle East 14 169
which formed nearly 28 percent of the total.
Top 5 countries No. of transactions Value (USD mn)
In terms of country, the US saw the highest transaction US 501 12,342
value of $12.34 billion USD with a total of 501 transactions Japan 15 9,123
in this twelve month period while Japan came in second UK 78 1,386

with a value of $9.12 billion USD through 15 transactions. China 50 1,374
Among regions, North America was the clear leader at Germany 47 964
$12.54 billion USD. Source: Capital IQ, IMAP
Global enterprise application software market

working through bad-economy bugs
The software sector, which contributed around 25 percent to IT spending in 2009 and
mainly consists of the enterprise application market and application development
market, generated revenues of $382 billion USD in 2009. The top few players,
such as Microsoft, SAP, Oracle and Nintendo, generated more than 75 percent
of total revenues from the software business segment in 2009.
2009 saw a decline in application software spending in all regions except

Asia-Pacific. Despite the economy showing signs of a recovery in 2010,
all industry verticals are still witnessing lower spending compared
to pre-recessionary levels due to flat budget growth in the year.
Furthermore, according to Forrester’s Enterprise and SMB
Global IT Spending, 2008-10 in USD Billions
Global IT spending,
1
which includes hardware, software and IT services, 1,750 1,659 1,624

1,512
was estimated at $1.5 trillion USD in 2009, 1,500
decreasing 8.9 percent compared to 2008. The 1,250
decline turned out to be less than expected as the 1,000
US market started recovering in 4Q 2009 while the Computer equipment
750 Communications
Asia Pacific market, especially India, China equipment
500
and Australia, reported better performance. Software
In 2010, it is expected to reach $1.6 trillion USD, 250 IT consulting services
indicating a year-over-year growth of 8.1 percent .2 0 IT outsourcing
2008 2009 2010
1 Consists of spending on computer equipment, communication equipment,
software, IT consulting and systems integration services, and IT sourcing
Source: Forrester Research, IMAP
2 Forrester Research - US And Global IT Market Outlook: Q4 2009
Software Survey, North America and Europe, Q4 2009, effectively manage organizational and business risk will
IT budgets are expected to remain unchanged in 2010. likely result in a continuation of this trend in 2010.
Nevertheless, revenues are expected to reach $419 billion
USD in 2010, growing 9.7 percent year-over-year. This Given the current risk averse environment, companies are
increase would reverse a 7.4 percent decline in 2009. less likely to try entirely new products or risky upgrades.
As a result, vendors are more likely to invest in incremental
With just a moderate increase in IT spending overall, the product enhancements and tighter integration between
enterprise application software market still remains modules rather than major changes to their software:
vulnerable and enterprises are uncertain about near- operating expenditures versus capital expenditures.
term business prospects. However, the bright spot in the
recovering economy is small- and medium-sized business Thus, going forward, vendors are expected to seek smaller
(SMBs). As the economy emerges from the recession, SMBs deals from existing customers via add-on products and
will look for small-business software to automate their business intelligence tools because most customers are
operations and scale up growth. In addition, large software not yet ready to fund major enhancements or expansions.
vendors such as SAP and Oracle will continue to focus on
the SMB market to reinvigorate their revenue growth in
software license sales. The SMB enterprise application Emergence of an alternative
market is expected to reach $80.31 billion USD by 2012, delivery model — SaaS
representing a 10.6 percent CAGR for the period 2008-12.
As companies are shying away from large capital
investments in IT systems, software as a service (SaaS)
is receiving a boost. SaaS is also being driven by SMBs
Enterprises shifting from capex to opex
that are looking to adopt this model as they typically
CIOs and COOs are expected to experience continued find it difficult to afford on-premise systems. Moreover,
pressure to prove that the amount of investment in considering that the tight credit markets will take time
ERP systems is justified and generates a solid return to thaw entirely, many SMBs are looking at SaaS-based
on investment. As a result, the market will have more services to help them minimize upfront capital IT costs.
deliberate spending, more phased rollouts, buying of
licenses only when needed, and hesitancy to invest in more Revenue Growth Comparison in 2009
expensive advanced enterprise software modules.
SaaS Vendors Traditional Vendors
SuccessFactors (+36.8%) Manhattan Associates (-26.8%)
Accordingly, companies are directing much of their
Salesforce.com (+21.2%) QAD (-18.3%)
software investments to areas where they will definitely
Concur (+14.9%) Lawson (-11.1%)
be implemented effectively and get more out of their
Descartes (+11.7%) SAP AG (-7.8%)
existing enterprise investments. The need to more
Ariba (+3.3%) Microsoft (Business Division) (-0.2%)
1 IDC forecast
Source: Bloomberg
Considering these factors, most SaaS vendors reported Industry-specific capabilities are
better performance, with SaaS revenues overall growing crucial to remain competitive
7.98 percent year-over-year in 2009. Deployment of
In addition to preferring low-cost models such as SaaS,
SaaS increased in all areas from customer-relationship
customers are expecting deeper industry expertise
management (CRM) to human-capital management (HCM),
from their software providers to gain a more integrated
as well as spend management. In fact, Salesforce.com
application environment and end-to-end process
posted revenues above $1.3 billion USD, which is a new high
automation. Hence, many companies have combined
for the SaaS industry that was estimated to be $7.5 billion
custom-built applications and customized industry
USD in 2009.
packages to supplement their core software. This
environment leads to a complex setup and ongoing
The increasing popularity of SaaS as a delivery model
integration challenges.
has not only led to increased revenues for SaaS vendors
but also eaten into the revenue of traditional, on-premise
Large enterprise software vendors have added vertical
vendors. However, the latter are still managing to maintain
depth and breadth. Both SAP and Oracle have invested
their operating margins as they rely on maintenance
heavily in industry solutions, each reportedly having
and support revenues, which are naturally recurring. For
capabilities in more than 20 verticals. This strategy to
example, the ratio of maintenance revenue to new licenses
increase industry depth has driven many acquisitions,
of vendors such as CDC, Epicor, Exact, Lawson, Manhattan,
particularly for Oracle. SAP, on the other hand, is building
Oracle, QAD and SAP increased as customers chose not to
industry functionality in-house but it has made several
upgrade and purchase new licenses.
vertical acquisitions to accelerate time-to-market.
Second-tier software providers have found

Enterprise Application Market Spending by Region, 2009 more success in offering deeper industry-
specific functionalities compared with mega-
vendors. Lawson, for example, has successfully
Western Europe 30%
targeted industries such as healthcare, food
Asia/Pacific 9%
and fashion. Other vendors (e.g., Microsoft,
Epicor and Sage) may choose to go down to
sub-industry levels, often relying on partners to
Japan 8%
add the last mile of specialization.
Latin America 3%
Eastern Europe 2% Specialists focus on fewer or even single
Middle East & Africa 2%
verticals. Some do not even provide the core
accounting functionality, which is crucial to any
North America 46%
ERP system. Nevertheless, these specialized
plays are often compelling to customers and
Source: Gartner Research, IMAP may also attract the attention of ERP vendors
looking to partner or acquire. Specialist vendors
offering comprehensive suites to particular
verticals include Deltek (project-based
businesses), Blackbaud (not-for-profit), Mincom
(mining and asset-intensive businesses), QAD
(manufacturing) and IBS (distribution). CGI
Group gives ERP vendors stiff competition in
the government sector, including US federal
as well as state and local governments.
Specialists dominate the lucrative healthcare
market, particularly patient systems. Notable
players include Cerner, Eclipsys, Epic Systems,
McKesson and Siemens.
Functional expansion leading to
vendor consolidation
With customers expecting deeper industry expertise wide variety of departments, functions and systems will be
from their software providers, many companies are made. This will sustain investment in IT by governments in
combining custom-built applications and customized 2010, when the focus will be on rightsizing, underscored by
industry packages to supplement their core software. This government transformation or modernization.
environment leads to a complex setup. To overcome this
challenge, vendors are looking to consolidate by becoming Furthermore, by 2012, up to one in five government
a one-stop shop for all functions. This consolidation trend processes is expected to rely on crowd-sourced data due
is also fuelled by the rising competition between vendors to the increasing influence of communities, individuals and
and lower market valuations of struggling vendors because groups in shaping the direction of businesses and markets.
of the downturn. Thus, social media are becoming increasingly important
as sources of public information, making them mission-
Oracle has been a key proponent of vertical acquisitions, critical for governments.
and SAP as well, though to a lesser extent. Possible plays for
some vendors include acquiring breadth in horizontal areas
such as HR. Peer-to-peer acquisitions among ERP vendors Trends across industry verticals
appear less likely. Vendors may also acquire adjacent Most industries witnessed significant declines in IT
technologies, such as enterprise content management tools. spending in 2009. A majority of these cutbacks in tech
purchases were driven by the fear of recession. These
Vendor Consolidation fears were more intense in some industries, such as retail,
wholesale, transportation and logistics, and financial
Agresso
Lawson Software
services, leading to a sharp cutback in IT spending. Since
IFS the situation is now easing and prices are rebounding,
Active Acquirers Vertical Players Potential Acquirers the pent-up demand in these industries for IT goods and
QAD services should bounce back in 2010.
Oracle Microsoft
Epicor
Infor NetSuite SAP
Exact Software Retail: Gartner expects to see many Tier 1 retailers pursue
The Sage Group IBM
Deltek an m-commerce strategy mainly to avoid lagging on this
Regional Players Private Equity
front. They expect, however, to see only 20 percent of
Intacct
retailers succeeding in their m-commerce initiative. As
IBS Software
many retailers have discovered with the Web, cross-
Source: Forrester Research, IMAP
channel shopping requires more than just launching an
m-commerce presence to enable direct selling.
Public administration represents the largest Manufacturing: By the end of 2011, manufacturers that
IT spending by central governments prioritize future software investments in operational
After the economic crisis, which saw governments technologies such as product life-cycle management (PLM),
announcing massive stimulus packages, tax payers are now manufacturing process management (MPM), manufacturing
demanding funding cuts in the public service arena. There operations management (MOM) and quality management
will be increased attention on how money is being spent at software (QMS), instead of traditional IT and ERP, could
all levels of government. achieve a tenfold return on their investment .1
At the same time, telecommunications and the Internet Education: By 2015, most local education agencies are
are increasingly recognized as critical to economies and expected to cut school construction by 50 percent by using
service delivery. Governments are thus expected to make virtual learning environments to better utilize existing
efforts to move the majority of citizen services to an online facilities.
delivery model to increase transparency and create value
for their constituents. To this end, investment across a 1 Gartner Research
HOTTrends
Investment opportunities in mobile apps and Internet-based models
The economic slump had an adverse impact on most industries, including the software sector. Organizations shifted their
IT spending from capital expenditure to operating expenditure to optimize costs. Various application markets such as
enterprise resource planning (ERP), supply chain management (SCM) and customer relationship management (CRM) were
badly hit in 2009. This gave an impetus to various Internet-based models such as Software-as-a-Service (SaaS), IT management,
virtualization capabilities and open source software. Internet-based computing models in the enterprise software market
requiring little or no implementation work on the customer side, are generally independent of operating systems and are
offered on a subscription or pay-as-you-go basis. This translates into lower adoption barriers for new customers.
1: Mobile applications and computing Mobile Application Market in million USD
Despite the recession, the mobile application1 landscape $10,000 Mobile Application Market
performed well in 2009. There was continuous consumer CAGR 60.9% Europe
$8,000
demand for Apple’s proprietary ecosystem; Google North America
$6,000 South America
acquired the mobile ad network AdMob for $750 million
$4,000 Asia
USD; and Internet service providers (ISPs) entered the M
iddle East &
mobile market (Iliad’s acquisition of France’s fourth 3G $2,000 South Africa
license, as an example). $0
2009 2010 2011 2012
The mobile application market was estimated to be $4.2 Source: GetJar Study, IMAP
billion USD in 2009.2 The number of mobile application
downloads was just over 7 billion in the same year. Going
forward, the mobile application market is expected to penetration of mobile Internet, more functionalities,
reach $17.5 billion USD by 2012, representing an impressive rising adoption of smartphones, and increased and better
three-year CAGR of 60.9 percent. The number of mobile integration of mobile hardware and software.
application downloads is also estimated to grow to nearly
50 billion in 2012. This growth should be driven by increasing Within the mobile application segment, mobile enterprise
application market is expected to be the next growth
1 A mobile application is a software application that runs in a handheld device such as a driver. Mobile enterprise applications are expected to
smartphone. These applications are either pre-installed on phones during manufacture
or downloaded by customers from app stores and other mobile software distribution see massive adoption in 2010 due to increased mobility
platforms.
2 The GetJar study run by an independent consulting firm, Chetan Sharma Consulting
of employees and demand for devices capable of these
functionalities. Carriers and vendors are recognizing the
enterprise as a high-value customer and actively working
towards developing and promoting attractive mobile data
solutions for enterprises.
The mobile enterprise application market was

estimated to be $2.3 billion USD in North
America in 2008.3 This market is made up of
three types of vendors:
· Vendors focused on mobile operating
systems that have developed broad mobile
application development toolkits focused
on a single platform (e.g. Microsoft, Apple
and RIM)
3 http://www.cellular-news.com/story/38739.php
· Mobile specialists with multichannel capability such as The worldwide market for IT services related to cloud
Sybase, IBM, Pyxis Mobile, Spring Wireless and Syclo computing and cloud services was worth almost $2.4 billion
· Application suite vendors that have their own application USD in 2009. By 2013, the market is expected to be worth
suites, such as SAP and Oracle almost $8.1 billion USD. By far, the largest component of
the overall cloud service market is implementation, which
Along with mobile ERP, enterprise mobile cloud applications represents 65 percent of the 2009 IT services market and
(including thin clients and browser-based applications), is estimated to represent 64 percent by the end of 2013.
SaaS, platform as a service (PaaS), and infrastructure
as a service (IaaS) can fuel growth in this market. Going
forward, the mobile enterprise application market in North Smart computing— collaboration,
America is estimated to reach $10.3 billion USD in 2013, a unified communications and voice over IP:
CAGR of 35 percent from 2008 to 2013.1 Smart computing is based on technologies such as service-
oriented architecture, server and storage virtualization,
However, it should be noted that proving return on cloud computing, and unified communications. It adds
investment (ROI) is still a concern for vendors and service to existing technologies new capabilities of real-time
providers of mobile enterprise applications, because situational awareness and automated analysis.
the market is in its nascent stages and customers are
uncertain on whether they will fully obtain the potential Smart computing will help companies optimize process
benefits promised by these applications. results and returns from their balance sheets. Unlike
the horizontal technologies of personal computing and
network computing, smart computing will have a highly
2) Internet-based models vertical industry focus.
Cloud-based application and infrastructure services: Tech vendors have great growth opportunities in this new
Cloud computing is currently emerging as a service cycle but also big challenges in navigating the shift to
offering that leverages Internet hosting capabilities and smart computing. Accordingly, in the US alone, the share of
can be viewed as an evolution of SaaS. Cloud computing the smart computing industry’s vertical solutions in the IT
is generally regarded as IT infrastructure available on market will increase from 6 percent in 2008 to 23 percent
demand and it offers start-ups and SMBs flexible access to in 2016.2 The market is expected to increase from $27
computing capabilities with minimum capital expenditure. billion USD in 2009 to $213 billion USD in 2017 in the US.
Nevertheless, with Amazon.com’s spin-off Amazon Web
Services (AWS) emerging as a leading provider of cloud Linux and open-source software (OSS):
computing services, cloud computing is expected to The phenomenon of OSS, which started 20 years back,
become more influential. has suddenly gained momentum as a possible alternative
to expensive proprietary software. As the open source
IT Spending in Cloud Computing in USD millions movement expands up the software stack, nearly all
software markets are now being impacted in some way.
6,000 Cloud Computing Spending
5,000 CAGR 35.8% The OSS segment is experiencing slow but steady growth.
4,000 The release of the open source Internet browser Firefox
3,000 3.0 by Mozilla in June 2008 was a major event for open
2,000 source applications, with more than 8 million people
1,000 downloading the new version of the software within the
0 first 24 hours after its release. The Firefox browser has
2009 2010 2011 2012 2013 steadily been gaining market share, which had 24.2 percent
Consulting Implementation Management of the overall browser market in February 2010 from 21.8
percent in February 2009.
Source: Gartner Research, IMAP
1 http://www.cellular-news.com/story/38739.php 2 Forrester Research: Smart Computing Drives The New Era Of IT Growth
In a Forrester Research report on enterprise interest on a real-time basis. These functions make BI important in
for OSS, two-thirds of the 1,017 respondents at North economically challenging times. As a result, the BI market
American and European enterprises expressed some was much less affected by the economic crisis than most
interest in open source deployment. other software markets.
Virtualization: All the big sellers of BI software are either parts of larger
PC, server, and storage virtualization is growing and software vendor or private companies with the exception
is being supported by the relatively tough economic of pure-play BI public companies such as MicroStrategy
conditions worldwide. Virtualization is introducing new and Actuate.
ways of packaging client computing applications and
capabilities. As a result, the choice of a particular PC New categories of advanced analytics, including business
hardware platform, and eventually the OS platform, performance solutions, text analytics, predictive analytics,
becomes less critical. Thus, enterprises are proactively and complex event processing, are expected to merge into
building a five- to eight-year strategic client computing the core BI market, thereby further fueling growth. The BI
roadmap outlining an approach to ownership and support, market is expected to reach $14 billion USD by 2014.2
operating system and application selection, deployment
and update, and management and security plans to Social CRM:
manage diversity in the virtualization arena. Social CRM (also known as CRM 2.0) is a business strategy
supported by a system and designed to engage the
Spending on virtualization software technologies is customer in a collaborative interaction that provides
forecast to grow at a 33.6 percent CAGR from 2009 to mutually beneficial value in a trusted and transparent
2013. Growth would be driven by organizations looking to business environment.
lower the total cost of ownership and to increase overall IT
effectiveness.1 The industry has many participants and includes different
types of players such as traditional CRM vendors,
Business intelligence (BI) and analytical software: community platform and social media players, as well as
BI and specialized analytical software such as data mining brand monitoring players. Most of the players provide on-
and predictive analytics, video image analysis, pattern demand subscription-based offerings in social CRM.
recognition, and artificial intelligence algorithms help
businesses or governments analyze patterns or anomalies Social CRM is most likely to be the next big trend in the
entire CRM industry. According to one Gartner report,
1 Gartner Research social CRM is expected to see significant growth, as more
than 80 percent of the enterprise use of social networking
tools in 2010 will be driven by customer engagement
projects. In addition, Forrester mentions that by 2013,
businesses will be spending almost $4.6 billion USD
on Web 2.0 tools, which include advanced Internet
technology and applications such as blogs, wikis,
really simple syndication (RSS), and social
bookmarking. In an April 2008 report, the
research group forecast 43 percent annual
growth in the social media market for the
so-called Enterprise 2.0 as organizations
are investing heavily in social networks.
2 Forrester Research: Market Overview: The Business Intel-

ligence Software Market
Computing and Internet software industry outlook
The enterprise software market underwent a tumultuous contracts are maintenance based, making revenues
phase during the economic slowdown of 2008-2009 recurring in nature. This is unlike vendors in only one market
and the recession that ensued. The sector overall faced or those without a wide geographical presence, whose
pressure in terms of prices which in turn hampered revenues are highly dependent on new contract wins.
margins. This led to vendors making structural changes
in their technology and business model to adapt to the Geographical presence, in particular, cannot be underesti-
changing software demand space. mated because North America still accounts for 45 percent
of all software revenue, which by any standard is a large
Most companies locked in their IT budgets for 2010 with a chunk. While the share of emerging markets is expected to
marginal increase in overall IT spending expected for the increase to 20% by 2013, it is still a small share compared
year. While spending is nowhere close to the depressed with North America. Hence, any future weakness in the US
levels during the recession, it will be some time before markets could have a material impact on revenue. Never-
spending reaches pre-recessionary levels. A meaningful theless, emerging markets will play a huge role in balancing
recovery in spending is expected only in the second half of revenues in the years to come because of their growing
2010. With the recession still fresh, companies are looking demand potential and underpenetrated nature.
to convert their enterprise software needs from capex
to opex. This means vendors with SaaS, virtualization
capabilities and open-source strategy are poised to The software sector has always accounted for
benefit in the near future.
the largest number of all technology related M&A
transactions, over 40%. And, the value received is
This is not to say large vendors with non-SaaS capabilities
very much a function of finding the buyer that can
will be left behind. Due to their sheer size and geographic
diversification, they can price their products aggressively
best exploit the acquired technology. This requires
and also bundle offerings to make packages more advisors to conduct a global search effort, even for
attractive. Moreover, as legacy operators, most of their sellers with modest revenues.
Ron Klammer, IMAP technology advisor, Southport, Connecticut
Software Market Outlook, Quarterly, 2008-2010

Global software vendors’ revenues by category of software (percentage change from prior year)
2008 2009 2010
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q* 1Q* 2Q* 3Q* 4Q*
Operating systems 3% 9% 6% -7% -15% -21% -20% 11% 17% 23% 22% 16%
Middleware 14% 19% 12% 3% 4% -4% -2% 3% 5% 5% 7% 6%
Applications 14% 17% 12% -3% -12% -16% -13% 2% 10% 12% 12% 12%
Total 11% 16% 11% -1% -5% -12% -9% 4% 9% 10% 11% 10%
US software vendors’ revenues by category of software (percentage change from prior year)
2008 2009 2010
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q* 1Q* 2Q* 3Q* 4Q*
Operating systems -3% 3% 1% -7% -14% -23% -20% 8% 10% 16% 16% 14%
Middleware 8% 13% 9% 7% 10% -1% 1% 3% 4% 6% 6% 5%
Applications 5% 7% 4% -4% -11% -15% -13% 0% 6% 9% 9% 9%
Total 6% 9% 7% 1% -1% -9% -8% 3% 6% 8% 8% 8%
Source: 2008 and Q1, Q2, and Q3 2009 quarterly financial reports of 18 large, global software vendors1
1 BEA Systems (prior to acquisition by Oracle), BMC, Business Objects (prior to acquisition by SAP), CA, Cognos (prior to acquisition by IBM), Fujitsu, Hyperion (prior to acquisition by Oracle),
EMC, Hewlett-Packard, Hitachi, IBM, Mercury Interactive (prior to acquisition by Hewlett-Packard), Microsoft, NEC, Oracle, SAP, Sun (prior to acquisition by Oracle), and Symantec.
Appendix A: Global Overview of Computing & Internet Software
(Enterprise Software Industry)
Value chain of the software market

According to IDC, the worldwide software market is composed of three primary software submarkets:
• S
ystem Infrastructure Software: System infrastructure software biggest submarkets in the software industry; the applications market
integrates a computer’s various capabilities but typically does not contributes roughly 60% to total software revenues. The applications
directly affect the performance of tasks that benefit end users. This market can be further classified as follows:
market comes first in the value chain and operates as a foundation for · enterprise application software, which includes content,
the creation of various applications. communications and collaboration (CCC), customer relationship
management (CRM), enterprise resource planning and supply
• A
pplication Development and Deployment: AD&D is a process chain management (ERP & SCM), office suites and digital content
that includes the development of a software product, known as creation (DCC)
software life cycle. The AD&D market is second in the value chain; · enterprise infrastructure software such as middleware and
software development and deployment activity begins with system databases
infrastructure as the base. · information worker software
· content access software
• A
pplications (Consumer and Enterprise): Application software, · educational software
also known as software applications, is computer software designed · simulation software
to help the user perform a single or multiple tasks. This is one of the · media development software
1 IDC’s Software Taxonomy, 2010
Value chain of the enterprise application market

The enterprise application market includes various secondary markets.
Sub-Applications Description
ERP integrates the data and processes of an organization on a cross-functional and enterprise-wide level into one single
system. Usually ERP systems have many components including hardware and software to achieve integration. The two key
ERP components of an ERP system are a common database and a modular software design.
arge ERP vendors include Oracle and SAP and middle-tier ERP vendors include Agresso, Epicor Software and Lawson
L
Software.
CM encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and
S
logistics management. It also includes the crucial components of coordination and collaboration with channel partners,
which can be suppliers, intermediaries, third-party service providers, and customers.2 SCM also addresses issues related to
SCM distribution channels and inventory management.
SAP, Oracle, Infor and Inspur are some of the large SCM vendors, while middle-tier vendors include 7Hills, Accellos,
AdvanceWare Technologies, Fascor and Manhattan Associates.
RM involves the use of technology to organize, automate and synchronize business processes—principally sales activities,
C
but also those for marketing, customer service and technical support. CRM also helps in reducing the time required for sales
CRM cycles while hanging onto potential sales leads.
ajor CRM vendors include SAP and Oracle and midmarket-centric vendors include FrontRange Solutions, Maximizer Software
M
and Sage Software. Salesforce.com and Netsuite are some software-as-a-service (SaaS)-based CRM application providers.
2 Definition by Council of Supply Chain Management Professionals (CSCMP)
Software sector overview and trends growth in 2010. According to Forrester’s Enterprise and SMB Software
• Global IT1 spending was estimated at $1.5 trillion USD in 2009, Survey, North America and Europe, 4Q 2009, a high percentage of
decreasing 8.9 percent compared to 2008. The decline, however, respondents expected to leave their IT budgets unchanged in 2010 and
turned out to be less than expected as the US market started many enterprises remain vulnerable and are uncertain about near-term
recovering in 4Q 2009 while the Asia-Pacific market, especially India, business prospects.3
China and Australia, reported better performance in 2009. Global IT
spending in 2010 is expected to reach $1.6 trillion USD, indicating a • In terms of region, the strongest growth in 2010 should be in Western
year-over-year growth of 8.1 percent.2 and Central Europe, where tech purchases are expected to rise 11.2
percent, boosted by the dollar’s decline against the euro. This would
• Compared to pre-recessionary levels, all verticals have suffered from be followed by Canada at 9.9 percent, Asia-Pacific at 7.8 percent,
lower IT spending, which varies widely by region. The vast majority of and Latin America at 7.7 percent. Eastern Europe, the Middle East
enterprises are expected to continue experiencing almost flat budget and Africa are expected to be the weakest market, rising by just 2.4
percent. With oil prices recovering from bottom levels but still below
1 Consists of spending on computer equipment, communication equipment, software, IT 2008 peak prices, oil-producing economies in the Middle East should
consulting and systems integration services, and IT sourcing
2 Forrester Research - US And Global IT Market Outlook: 4Q 2009 3 Ovum Research
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-i
perform slightly better, leading to a recovery in tech purchases in development as well as acquisitions. This has led to several new
their local currencies. However, their currencies in several cases developments and inclusion of functionalities such as CRM, HR/
have actually weakened against the dollar, bringing down dollar- payroll, and e-commerce.
denominated growth.1
• T
ier 1 Vendors Moving to the Mid-Market: Because the number
• Shifting from regions to countries, the US remains, by a wide margin, of Fortune 500 companies is limited, and most of them already have
the largest of the top 15 markets for IT goods and services. Purchases an ERP system, Tier 1 vendors such as Oracle and SAP have been
of IT goods and services in 2010 are expected to reach $568 billion expanding their marketing efforts downward to penetrate the middle
USD—almost four times more than second place Japan (at $142 market. In doing so, they have modified their strategies by offering
billion). China follows as third at $120 billion USD. scaled down, pre-configured versions of their applications, trying new
methods of implementation, pursuing new distribution channels to
• The global software industry, which mainly consists of the AD&D sell and implement their software, and acquiring mid-market software.
market, is a major contributor to the overall IT industry. From 24 Some examples are the acquisition of Dynamics and Navision
percent in 2004 to 25 percent in 2008, the contribution is expected to by Microsoft, Top Tier by SAP, and Tekton and Emdeon by Sage
reach 25.7 percent in 2010. The software market generated revenues Software.
of $382 billion USD in 2009 and is expected to reach $419 billion USD
in 2010, growing 9.7 percent year-over-year. This increase would • T
ier 3 & 4 Vendors Moving Upward: Software vendors that have
reverse the 7.4 percent decline in 2009 and bring back software traditionally focused on smaller organizations are moving their
purchases above 2008 levels. products upward to the tier 1 and 2 enterprise markets. These vendors
have significantly improved functionality and scalability, allowing
• The top few players, such as Microsoft, SAP, Oracle, and Nintendo, smaller companies to grow without having to change systems.
generated more than 75 percent of total revenues from the software
business segment in 2009. • ISVs marketing themselves as SaaS vendors: Due to the increased
popularity of SaaS, many independent software vendors (ISVs) are
• As per an enterprise and small and medium size business (SMB) trying to reinvent themselves as SaaS companies, using virtualization
software survey by Forrester, firms in North America and Europe, schemes to simulate multi-tenancy and provide them with a quick
despite the hype surrounding new technologies that were introduced time-to-market solution. However, to capture the full benefits of SaaS,
in the market, are still devoting most of their spending on already ISVs need to modify their business model accordingly in terms of
installed technologies. architecture.3
• According to Gartner, the enterprise application market weathered the Trends across industry vertical
economic crisis much better in 2009 than in 2001-02. This is because 2010 is expected to see changes in the enterprise software market
the market has evolved to become a matured market with more as businesses confront the challenge of cutting costs while dealing
penetration, confidence of consumers in IT applications, and a well- with a fundamentally restructured economy. This will require new
balanced geographical and vertical mix.2 business models and technologies because companies will need
• The ERP market, however, was badly hit in 2009, with vendors see- systems specifically designed for competitive advantage in their vertical.
ing dramatic drop-offs in license revenues and professional services. Companies are concentrating on turning back to innovation, strategic
Recent Forrester survey data shows that the majority (67 percent) of initiatives and development of new business operations that map to market
ERP customers have put their ERP spending plans on hold for 2010 as demands. However, such initiatives will need to be funded from savings
well. Nevertheless, 29 percent of customers are planning to upgrade or elsewhere as only few organizations are expected to increase their IT
expand existing ERP implementations (22 percent) or undertake new budgets.4
implementations (7 percent) in 2010. • R
etail: Gartner expects to see many Tier 1 retailers pursue an
• The SCM application market remained diverse in 2009, ranging from m-commerce strategy mainly to avoid lagging on this front. This new
large-scale suite providers to innovative companies with value-adding strategy, however, will see only 20 percent of retailers succeeding in
capabilities. Although growth slowed down in 2009 and is expected their m-commerce initiative. As many retailers have discovered with
to remain moderate during 2010, the market is estimated to post a the Web, cross-channel shopping requires more than just launching an
CAGR of 10.6 percent until 2012. Growth would be fueled by supply m-commerce presence to enable direct selling.
chain organizations focusing on investments in areas of high business • M
anufacturing: By the end of 2011, manufacturers that prioritize
value, notably applications that help reduce costs, drive business future software investments in operational technologies such as
growth, improve customer service and increase efficiency. product life cycle management, manufacturing process management,
• While many CRM technology projects were deferred/cancelled in manufacturing operations management and quality management
2009, this is expected to reverse in 2010. Major trends to watch for in software, instead of traditional IT and ERP, would achieve a tenfold
2010 include the evolution of extended CRM application ecosystems, return on their investment.5
SaaS as the default choice for CRM, and mobile CRM becoming a • G
overnment: Currently, most governments worldwide are focusing
must-have capability. In social media monitoring, an emerging trend in on providing as much public data as possible online to increase
the CRM space, companies are expected to spend around $4.6 billion transparency and create value for constituents. The components of
USD by 2013. society ― which comprise individuals, groups, communities, markets
• Regarding strategy, organizations are likely to shift their IT spending and firms ― play a large role in shaping the direction of society and
from capital expenditure to operating expenditure to optimize costs. business. Hence, they will become a key component in how government
This is giving an impetus to SaaS, IT management, virtualization entities will operate; by 2012, up to one in five government processes will
capabilities and open source software. Internet-based computing rely on crowd-sourced data.
models in the enterprise software market require little or no • E
ducation: By 2015, most local education agencies are expected to cut
implementation work on the customer side, are generally independent school construction by 50 percent by using virtual learning environments
of operating systems, and are offered on a subscription or pay-as- to better utilize existing facilities.
you-go basis. This translates into lower adoption barriers for new
customers.
Trends across function and tier

• Functional expansion: Software vendors are continuing to add new
functionality to their software and are working to become a one-stop
shop for all functions. This change is being facilitated by product
3 http://www.interwest.com/venture-capital-funding/software-as-a-service-saas.html
4 Gartner Research - Top Industry Predictions 2010: The Recession’s Aftermath Proves
1 Forrester Research Challenging
2 www.zdnetasia.com/gartner-enterprise-software-sales-to-drop-in-europe-62052707.html 5 Gartner Research
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-ii
Thumbnail summaries of top 50 computing and internet software companies
(enterprise software industry)
1: MICROSOFT CORP (US)

Developer cum manufacturer that licenses, sells and supports software products. Acquired Opalis Software
Brief description
Inc. in December 2009.
Operating systems for servers, computers and intelligent devices; server applications for distributed computing
Products sold environments; information worker productivity applications; business solutions applications; computing
applications; software development tools; video games.
Active Accessibility, Active Desktop, ActiveMovie, ActiveStore, Azure, InfoPath, Inkseine, InPrivate, IntelliMirror,
Key brands IntelliMorph, IntelliMouse, Microsoft Game Studios, MSN, Outlook, SQL Server, Visio, Visual Basic, Windows
Media, Xbox 360
Markets covered Client, Server and Tools, Online Services Business, Microsoft Business Division, Entertainment and Devices
Geographic coverage (2009) US: 56.6%; Rest of world: 43.4%
Future plans Office 2010 Tech Guarantee program and YAHOO search partnership model to be launched in 2010
Revenue: 58.7 billion USD, year-over-year change: 3.3%
Financials (LTM) Operating profit: 21.8 billion USD, year-over-year change: 8.0%
Net income: 16.3 billion USD, year-over-year change: 17.6%
2: APPLE INC (US)

Designs, manufactures and markets personal computers, mobile communication devices and portable
digital music and video players. Also sells a variety of related software, services, peripherals and networking
Brief description
solutions. Sells its products worldwide through its online stores, retail stores, direct sales force and third-party
wholesalers, resellers and value-added resellers. Acquired digital music service Lala in December 2009.
Products sold Portables, desktops, music-related products, software and services, iPhone, related products
AirTunes, Aperture, Apple, AppleCAT, AppleLink, Apple TV, Cocoa, iMovie, Inkwell, iPhone, iPhoto, Safari,
Key brands
Sand, WebScript, Xcode
Markets covered NA
Geographic coverage (2009) Americas: 44.1%; Europe: 27.5%; Rest of world: 28.4%
Future plans Focus on new product development and overcome challenges of the PC market
3: ORACLE CORP (US)

Develops, manufactures, markets, distributes and services database and middleware software as well as
Brief description
applications software. Acquired Silver Creek Systems and Sun Microsystems in January 2010.
Software business consists of two product segments: 1) new software licenses and 2) software license
Products sold updates plus product support. Services business consists of three operating segments: consulting, on demand
and education.
Applications Unlimited, AutoVue, Case Exchange, JD Edwards EnterpriseOne, Oracle E-Business Suite,
Key brands Oracle Enterprise Manager, Oracle Fusion, Oracle Transparent Gateway, Oracle Video Server, Oracleware,
SQL Module
Markets covered Software and services represented 81% and 19% of its total revenues, respectively
Geographic coverage (2009) US: 43.8%; UK: 6.8%; Japan: 5.11%; Germany: 4.11% France: 3.6%; Canada: 3.17%; Rest of world: 33.3%
Plans to deliver a complete, open, integrated stack of hardware, software and business application solutions
Future plans
and optimize synergy benefits. Plans to form more attractive support plans.
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-iii
4: RESEARCH IN MOTION INC. (Canada)
Designs, manufactures and markets wireless solutions for the worldwide mobile communications market.
Through the development of integrated hardware, software and services, RIM provides platforms and
Brief description
solutions for access to information, including e-mail, phone, SMS, Internet and intranet-based applications.
Acquired Chalk Media Corp. and Certicom Corp in 2009.
Products sold Mobile applications and devices
Key brands BlackBerry
Markets covered Wireless business solutions
Geographic coverage (2009) US: 62.9%; Canada: 8.1%; UK: 6.4%; Rest of world: 22.6%
Future plans Build and operate strategies to handle the pricing pressures on mobile devices and other related services
Financials (LTM) Operating profit: 3.1 billion USD, year-over-year change: NM
5: SAP AG (Germany)
Sells licenses for software solutions and related services; offers consulting, maintenance and training services
Brief description for its software solutions. As of December 31, 2009, the company had more than 95,000 customers in over
120 countries and has 163 subsidiaries.
SAP Business Suite software and international corporations; SAP Business All-in-One solutions; SAP
Products sold Business ByDesign solution; SAP Business One application for SMBs; SAP BusinessObjects portfolio which
covers a variety of demands from small to large companies
Key brands NA
Markets covered Product, consulting and training
Geographic coverage (2009) EMEA: 52.9%; Americas: 33.9%; Asia Pacific: 13.2%
R&D focus on expanding on-demand offerings and mobility—delivering solutions on device; M&A focus is
Future plans
mainly on bolt-on acquisitions which will enhance its industry/technology product portfolios
6: COMPUTER ASSOCIATES (CA), INC. (US)

Independent IT management software company that develops and delivers software that help manage IT
Brief description throughout complex computing environments. Addresses entire computing environment. Acquired Nimsoft,
3Tera, Inc., Cassatt, and Oblicore in 2010.
Products sold Products/services in mainframe and distributed environments spanning IT governance, management, security
Plans to acquire Nimsoft from which it would benefit from its strong presence with managed service providers
Key brands
(MSPs) and emerging enterprises solutions
Infrastructure management, project and portfolio management, security management and data center
Markets covered
automation and virtualization
Geographic coverage (2009) US: 58.7%; Europe: 26.4%; Rest of world: 14.9%
Restructuring efforts in Asia—shift in sales strategy from a direct sales force model to an indirect, partner-led
Future plans
model; plans to make acquisitions to achieve growth
Net income: 742.0 million USD, year-over-year change: 38.8%
7: INTUIT INC (US)

Developer and marketer of business and financial management software solutions for SMBs, financial
Brief description
institutions, consumers and accounting professionals.
QuickBooks financial and business management software, payroll products for SMBs, merchant services,
Products sold
Lacerte and ProSeries professional tax products, outsourced online services
Banknow, Checklock, Eclipse, Expensable, Intellicharge, Intuit, PC Access, Pocket Quicken, Pocket Quicken
Key brands Connect, Proseries, Quickbooks Pro Quicken, Quickguide, Quickzoom, Tax Partner, The Tax Professional’s
Choice, Turboforms
Markets covered Financial management solutions, employee management solutions, payments solutions, consumer tax solutions
Geographic coverage (2009) US: 100.0%
Future plans Focus on Mint.com (platform) rollout and reduce costs
Financials (LTM) Operating profit: 718.5 million USD, year-over-year change: 5.5%
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-iv
8: ADOBE SYSTEMS INC. (US)
Diversified software company which offers creative, business, Web and mobile software and services used
by creative professionals, knowledge workers, etc. for creating, managing, delivering and engaging with
Brief description content and experiences across multiple operating systems, devices and media. Distributes products through
a network of distributors, VARs, systems integrators, independent software vendors and OEMs, direct to end
users and through its www.adobe.com. In 2009, it completed the acquisition of Omniture.
Products sold Prepackaged software
Key brands FRAME
Markets covered Creative solutions, knowledge worker, enterprise, print and publishing, platform, mobile and device solutions
Geographic coverage (2009) Americas: 46.9%; EMEA: 31.5%; Asia: 21.5%
Future plans Launch CS5 (new product) to increase portfolio offerings and focus more on the US market
9: SAGE GROUP (UK)

Development, distribution and support of business management software and related products and services
Brief description for SMBs. Operates in 24 countries. Acquired Aytos CPD, S.L. (Aytos) and disposed of the Tax Compliance
Services division in 2008. Disposed of Sage Pro-Concept S.A. in October 2009.
Products sold NA
Key brands NA
Accounting; industry-specific; human resource (HR) and payroll; customer relationship management (CRM);
Markets covered
payment processing
Geographic coverage (2009) North America: 40.0%; Mainland Europe: 36.2%; UK & Ireland: 16.8%; Rest of world: 7.0%
Future plans Reduce the cost base along with measures to improve license income
10: BMC SOFTWARE INC (US)

Provides management solutions for mainframe and distributed information technology systems. Portfolio of
software solutions spans enterprise systems, applications, databases and IT process management. Acquired
Brief description
MQSoftware and Tideway Systems Limited in 2009. Acquired Phurnace Software, a developer of automation
software in January 2010.
Mainframe and distributed systems, applications, databases and information technology process management
Products sold
functions
ACSM, Assuring Business Availability, BMC Software, Cellular Event Processing Architecture, Mastercell,
Key brands
Mastervision
Markets covered Enterprise service management and mainframe service management
Geographic coverage (2009) US: 62.1%; and Rest of world: 37.9%
Future plans Focus on transformation of sales force
11: FUJI SOFT INC (Japan)

Independent software developer specializing in communications and machine control software, business
Brief description
application software for bank and insurance companies, and operating system software.
Products sold Embedded software, operation software and other software
Key brands NA
Software for control and operational systems, cost saving measures by cutting SG&A expenses, expanding
Markets covered
global footprint through acquisitions, strengthening collaboration within the group
Geographic coverage (2009) Japan: 100%
Future plans Promote cloud computing and on-premise businesses
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-v
12: CITRIX SYSTEMS (US)
Designs, develops and markets technology solutions that enable IT services to be delivered through its virtual
Brief description computing infrastructure on demand, independent of location, device or network. Citrix served over 230,000
customers and over 100 million users in more than 100 countries in 2009.
Products sold Desktop solutions and datacenter/cloud solutions
XenDesktop, XenApp, GoToMeeting, GoToTraining, GoToAssist and GoToMyPC, CitrixXenServer, Citrix
Key brands
Essentials
Markets covered NA
Geographic coverage (2009) Americas: 43.1%; EMEA: 29.8%; Asia-Pacific: 8.0%; Rest of world: 19.1%
Future plans Focus on expanding XenDesktop 4 offerings both as long term and near term trade opportunities
13: SUMISHO COMPUTER (Japan)

Develops a variety of computer software, including software for business applications, electronic commerce,
Brief description
development tools, internet and financial industries. Industrial solutions form a major portion of revenues.
Products sold Industrial solutions, ERP solutions and platform solutions
Key brands NA
Markets covered Packaged software, software development, information services
Geographic coverage (2009) Japan: 100.0%
Focus on projects in the insurance and banking industries; allocating management resources to clients’ IT
Future plans
infrastructure development and certain R&D solutions
14: SALESFORCE.COM (US)

Provides enterprise cloud computing applications; provides a technology platform for customers and
Brief description developers to build and run business applications; offerings can be deployed, customized and integrated with
other software applications; markets its service to businesses on a subscription basis.
Products sold NA
Key brands NA
Markets covered Customer and collaboration relationship management (CRM)
Geographic coverage (2009) Americas: 70.8%; Europe: 17.8%; Asia-Pacific: 11.4%
Future plans Focus on capturing opportunities in the area of enterprise software and may look to make an acquisition
15: MISYS PLC (UK)

Engaged in the development, management and licensing of a variety of software products and solutions to
customers in the financial services and healthcare industries; develops and delivers open source technologies.
Brief description
The merger to form Allscripts-Misys Healthcare Solutions, Inc. (Allscripts) was completed in October 2008.
Misys PLC acquired a 56.8% interest in Allscripts.
Products sold NA
Key brands BankFusion universal banking solution
Markets covered Software solutions to banking, treasury & capital markets, Allscripts healthcare, central services
Geographic coverage (2009) Americas: 60.8%; Europe: 19.1%; Asia-Pacific: 7.15%; UK: 5.68%; Rest of world: 7.38%
Focus on upgrading existing customers along with new customers by selling BankFusion software and
Future plans
creating suitable sales support for BankFusion
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-vi
16: SOFTWARE AG (Germany)
Provides business infrastructure software solutions; products include solutions for managing data, enabling
Brief description service-oriented architecture (SOA) and improving business processes; has more than 80 locations in 70
countries worldwide.
Enterprise transaction systems include software such as Adabas SQL Gateway, Event Replicator, Natural
Products sold
Business Services, Natural Engineer. Other web methods include webMethods Suite and CentraSite
Key brands NA
Markets covered Professional services, maintenance, licenses
Geographic coverage (2008) US: 28.6%; Germany: 11.28%; Spain: 10.9%; Rest of world: 49.2%
Future plans Integrate IDS Scheer (new platform from acquisition) along with cross-selling opportunities; cost control
17: SYBASE INC (US)

Delivers enterprise software and services to manage, analyze and mobilize information; provides open, cross-
Brief description
platform solutions that deliver information anytime and anywhere, providing decision-ready information.
Enterprise class database servers, integration and development products, mobile database, mobile enterprise
Products sold
solutions
Adaptive Server Enterprise, EDI Server, Information Anywhere, Jaguar CTS, Navigation Server, SQL Server,
Key brands
Sybase, Ultralite.net, Warehouse Studio
Infrastructure platform and global services for mobile messaging interoperability and the management and
Markets covered
distribution of mobile content
Geographic coverage (2008) North America: 50.2%; EMEA: 35.3%; Asia Pacific and Latin America: 14.6%
Explore new database architecture and software to power mobile devices; expand offerings in the software
Future plans
and architecture areas through acquisition
18: CHECK POINT SOFT (Israel)

Develops, markets, and supports a range of software and combined hardware and software products and
services for IT security; solutions operate under a unified security architecture that enables total end-to-end
Brief description
security with a single line of unified security gateways and allows a single agent for all endpoint security.
Acquired Nokia Corporation’s security appliance business in April 2009.
Products sold NA
Key brands NA
Markets covered Network and gateway security solutions, data and endpoint security solutions, management solutions
Geographic coverage (2008) EMEA: 44.6%; Americas: 43.2%; Japan: 12.2%
Focus on share buyback, major focus on product revenues in the data security segment rather than
Future plans
maintenance support
Revenue: 924.4 million USD, year-over-year change: 14.3%
Net income 357.5 million USD, year-over-year change: 10.4%
19: MICROS SYSTEMS INC (US)

Designer, manufacturer, marketer and servicer of enterprise information solutions for the global hospitality
Brief description and specialty retail industries. Acquired Fry, Inc., an e-commerce design, development and managed services
provider August 2008.
Software encompassing property-based management systems (PMS), related property-specific modules and
Products sold
applications, central systems including central reservation systems (CRS)
Key brands Fidelio
Enterprise solutions: hotel information systems, restaurant information systems, specialty retail information
Markets covered
systems
Future plans Focus on cost reduction and further improvement in margins
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-vii
20: Open Text Corporation (Canada)
Provides enterprise content management (ECM) software solutions; Open Text ECM Suite enables
corporations to manage traditional forms of content (images, office documents, graphics and drawings) as well
Brief description
as electronic content (Web pages, e-mail and video); offers solutions both as end-user standalone products
and as fully integrated modules. Acquired Vizible Corporation and Vignette Corporation in 2009.
Products sold ECM software products
Key brands NA
Markets covered ECM software solutions
Geographic coverage (2009) North America: 50.4%; Europe: 42.6%; Others: 6.9%
Future plans Launch of a new series of products in mobile applications
21: NOVELL INC (US)

Develops, sells and installs enterprise software positioned in the operating systems and infrastructure software
Brief description
layers of the IT industry worldwide.
SUSE Linux Enterprise Server, an open source server operating system; SUSE Linux Enterprise Desktop, a
Products sold business desktop operating system; SUSE Studio that allows independent software vendors to build software
appliances; SUSE Moblin, a Linux based open source operating system
Key brands Novell ZENworks and PlateSpin
Linux and related solutions for enterprises; identity and security management; systems and resource
Markets covered
management
Geographic coverage (2009) US: 49.3%; EMEA: 34.9%; Asia Pacific: 9.5%; Rest of world: 6.4%
Future plans Focus on improvement in top line in the next 12-18 months and improve fundamentals
Net income: 203.0 million USD, year-over-year change: NM
22: RED HAT INC (US)

Develops and provides open source software and services; offers information and news about open source
software and provides an online community of open source software; collectively developed software is
Brief description distributed under open source licenses, such as the GNU General Public License and GNU Lesser General
Public License, permitting access to the human-readable software source code. Acquired Amentra, Inc., and
Qumranet, Inc. in 2008.
Products sold Operating systems and software
Key brands Red Hat Linux operating system, JBoss Enterprise Middleware
Markets covered Core enterprise operating system platform, enterprise middleware platform and virtualization solutions
Geographic coverage (2009) Americas: 64.7%; EMEA: 21.7%; Asia Pacific: 13.6%
Focus on key go-to-market initiatives and achieve sustained earnings growth. In terms of technology strategy,
Future plans
it aims to promote Enterprise Linux 5.4 and virtualization
23: AUTONOMY CORP (UK)

Developer cum manufacturer that licenses, sells and supports software products; also offers operating system
software, server application software, business and consumer applications software, software development
Brief description
tools and Internet- based solutions. Acquired Interwoven, Inc. in March 2009 and MicroLink, LLC in February
2010.
Products sold Intelligence data operating layer (IDOL) server, IDOL platform, and IDOL protect products
TeamSite, LiveSite, Optimost, MediaBin, MetaTagger, OpenDeploy, ControlHub, Qfiniti Enterprise, Autonomy
Key brands
Explore
Markets covered Business solutions
Geographic coverage (2009) Americas: 69.9%; Rest of world: 30.1%
Future plans Expand through acquisition
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-viii
24: LAWSON SOFTWARE (US)
Provider of enterprise software, services and support targeting customers in specific industries, including equipment
service management and rental, fashion, food and beverage, healthcare, manufacturing and distribution, public
Brief description
sector (US) and service industries, as well as the horizontal market for the strategic human capital management
product line; provides software in 29 languages to more than 4,500 customers in 41 countries.
Software related to business processes, enterprise asset management, equipment service management,
Products sold
CRM, HCM
Business Begins With E, Drill Around, Lawson Ezupdate, Lawson Software, Lawson Suiteexpress Self-Evident
Key brands
Applications, The Information Office, Webtree
Markets covered Software applications and industry-specific solutions
Geographic coverage (2009) Americas: 58.1%; EMEA: 37.8%; Asia Pacific: 4.1%
Focus on expanding product portfolio, leveraging favorable spending trends in HCM, extending its products
Future plans
into the cloud computing application area
25: QUEST SOFTWARE (US)

Designs, develops, markets, distributes and supports enterprise systems management software products.
In addition to perpetual software licenses, it sells time-based software licenses wherein customers pay a
Brief description
single fee for the right to use the software and receive maintenance for a defined period of time. Acquired
PacketTrap Networks, Inc. in December 2009.
Big Brother, Deploydirector, Epurposing, Imagevue, IT Dad, Livereorg, NBSpool, Smartalarm, Spotlight, SQlab
Products sold
Xpert, SQL Navigator, Vista Plus
Key brands Foglight, InTrust, JProbe, MessageStats, SQL Navigator, Benchmark Factory, PowerGUI
Software solution for application management, database management, windows management and
Markets covered
virtualization management
Geographic coverage (2009) US: 62.5%; UK: 9.3%; Rest of world: 28.9%
Future plans Focus on Microsoft’s unified communications strategy
26: ORACLE FINANCIAL (India)

Provides comprehensive IT solutions to the financial services industry worldwide; provides transaction
Brief description
processing and accounting software for banks, investment managers and mutual funds.
Products sold Product licenses and related activities (products); IT solutions and consulting services (services)
Key brands Flexcube suite, Reveleus, MicroBanker
Markets covered Financial services
Europe: 34.2%; US: 29.1%; Asia Pacific: 19.9%; Middle East, India and Africa: 14.8%; Latin America and
Geographic coverage (2009)
Caribbean: 2.1%
Improve its KPO business, which is currently a small part of revenues, and increase margins of maintenance
Future plans
services in light of the tough business climate
27: NEUSOFT CORP (China)

Provides software products such as HR management systems, group financial management systems,
Brief description learning management systems, security operations centers, office management systems, network application
monitoring and management systems, CRM systems; domestic and overseas markets.
Products sold NA
Key brands TalentBase, MPC, SkillBase, NetEye, UniOffice, NetPatrol
Telecommunication, government, electric power, enterprise and electronic commerce, finance, education,
Markets covered
traffic, medical equipment and health services
Geographic coverage (2008) China: 66.8%; Rest of world: 33.2%
Future plans Focus on outsourcing business
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-ix
28: UNIT 4 AGRESSO NV (The Netherlands)
Provides integrated business management software and internet and security solutions; provides information
and communications technology products and services such as the design of e-commerce websites,
Brief description
implementation of security products (including anti-virus products, firewalls and e-mail content filters), ERP
solutions and outsourcing of IT network management.
Products sold NA
Key brands NA
Financial administration applications, applications for logistics and wholesale distribution, software to support
Markets covered production processes, project costing and invoicing systems, as well as software for information management
and reporting
Benelux: 32.9%; UK: 18.8%; Sweden: 13.5%; Spain: 10.6%; Norway: 8.0%; Germany: 4.5%; Rest of world:
Geographic coverage (2009)
11.7%
Future plans Focus on pipeline development and organic license sales
29: TOTVS SA (Brazil)

Develops and markets software solutions including ERP software, CRM software and SCM software. Offers
Brief description performance consulting; outsourcing of administrative processes, technology, and infrastructure; and distance
education.
Products sold ERP software, CRM software, business intelligence software, SCM software
Key brands Logocenter, Totvs, Microsiga, RM Sistemas, TOTVS BMI
Markets covered NA
Geographic coverage (2009) Brazil: 100%
Future plans Focus on diversification of industry verticals to balance out seasonal effects, increase penetration in Brazil
30: PROGRESS SOFTWARE CORPORATION (US)

Supplier of application infrastructure software and services for the development, deployment, integration and
Brief description management of business applications; develops, markets and distributes its products to businesses, industries
and governments worldwide. Acquired Savvion, Inc. in January 2010.
Products sold Software solutions and services
OpenEdge, Orbix, ObjectStore, Apama, Sonic, Progress Actional and FUSE products, DataDirect Connect,
Key brands
DataDirect Shadow, DataXtend
Markets covered Application development platforms, enterprise business solutions, enterprise data solutions
Geographic coverage (2009) North America: 44.8%; EMEA: 42.1%; Latin America: 6.7%; Asia Pacific: 6.3%
Future plans Integrate disparate product lines through new product releases and following a go-to-market strategy
31: INFORMATICA CORP (US)

Provides data integration software and services allowing clients to access, integrate and trust all their
Brief description information assets; infrastructure software categories include data integration and cloud computing. Acquired
29West Inc. in March 2010
Enterprise data integration, data quality, master data management, B2B data exchange, application
Products sold
information lifecycle management, complex event processing, cloud data integration
Key brands Informatica, Openbridge, Powerbridge, Powercapture, Powerplug, Superglue
Markets covered NA
Geographic coverage (2009) North America: 63.0%; Europe: 27.4%; Rest of world: 9.6%
Future plans Market broadening—diversification and growth through acquisitions
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-x
32: COMPUTER ENGINEERING & CONSULTING (Japan)
Independent software development company which installs, manages and provides maintenance services
Brief description for network systems; operates in two business segments—software development and information system
services.
Products sold Software solutions and services
Key brands NA
Markets covered Software development and information system services
Future plans NA
Financials (LTM) Operating profit: 6.6 million USD, year-over-year change: NM
33: NSD CO LTD (Japan)

Independent software development company that offers operating systems, business software for the financial
Brief description industry and process control systems; provides system solution services and information processing services in
addition to operation and management of computer labs.
Products sold Packaged software along with support
Key brands NA
Markets covered Software development
Future plans NA
34: EPICOR SOFTWARE (US)

Designs, develops, markets and supports enterprise application software solutions and services primarily for
Brief description
use by midsized companies and the divisions and subsidiaries of Global 1000 enterprises.
Back office applications for production management, SCM, retail management and financial accounting, as
Products sold
well as front office CRM and service management.
Key brands NA
Solutions for the manufacturing, distribution, services, retail, and hospitality industries as well as a range
of industries and vertical markets within these sectors, including financial services, professional services,
Markets covered
industrial machinery, instrumentation/controls, medical device, consumer goods, automotive, aerospace,
hotels, general merchandise, specialty retail
Geographic coverage (2009) US: 67.4%; Europe: 20.1%; Oceania: 3.9%; Asia: 3.7%; Rest of world: 4.9%
Future plans To improve a back-end loaded revenue model in order to compete with larger and better funded ERP vendors
35: RIVERBED TECHNOLOGY, INC. (US)

Develops solutions for fundamental problems associated with IT performance across wide area networks; sells
its products and support to end users directly through its sales force and indirectly through channel partners,
Brief description
including value-added distributors, VARs, systems integrators and service providers. Acquired Mazu Networks,
Inc. in 2009.
Products sold Steelhead Mobile 3.0, Riverbed services platform
Key brands Riverbed
Markets covered WAN optimization solutions and wide-area data service (WDS) solutions
Geographic coverage (2009) US: 56.1%; EMEA: 26.6%; Rest of world: 17.2%
Future plans Focus on new product development
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xi
36: JDA SOFTWARE GRP (US)
Provides enterprise software solutions for manufacturers, wholesalers and distributors, and retailers as
well as government and aerospace defense contractors; provides pricing, yield management and demand
Brief description management software solutions for travel, transportation, hospitality and media organizations. Purchased a
49.1% interest in Strategix Enterprise Technology GMBH and Strategix Enterprise Technology sp.z.o.o. in July
2009; Acquired i2 Technologies, Inc. (i2) in January 2010.
Products sold NA
Key brands JDA Portfolio, Open Database Merchandising System, Retail Ideas
Markets covered Retail, manufacturing, and distribution; service industries
Geographic coverage (2009) Americas: 70.0%; Europe: 21.4%; Asia Pacific: 8.6%
Future plans To implement price optimization strategies in a recovering economy, improve end-to-end efficiencies
37: MICROSTRATEGY INC (US)

Worldwide provider of business intelligence software; provides analytical performance to business users in
a format that suits them—from high-level dashboards to custom reports and advanced analysis via e-mail,
Brief description
Web, fax, wireless and voice communication channels; web-based architecture provides reporting, security,
performance and standards that are critical for web deployment.
Products sold BI software
Key brands DSS Agent, DSS Broadcaster Server, DSSServer, DSSWeb, Microstrategy, The Intelligence Company
Markets covered Enterprise solutions
Geographic coverage (2009) North America: 60.0%; EMEA: 31.2%; Rest of world: 8.9%
Future plans Focus on development of new products
38: BLACKBOARD INC. (US)

Provides enterprise software applications and related services to the education industry. Acquired Angel
Brief description Learning, Inc and Terriblyclever Design, LLC in 2009. Acquired Saf-T-Net, Inc., which offers AlertNow, a
messaging and mass notification solution, in 2010.
Web-based teaching and learning platforms, on- and off-campus commerce management, online e-commerce
Products sold and payment management, meal plan administration, vending and laundry services, and communications and
notification system solutions
Key brands Blackboard Learn, Blackboard Transact, Blackboard Connect, Blackboard Mobile
Markets covered Software solutions for the educational market
Future plans Promote acquisition based growth strategy
39: TEMENOS GROUP AG (Switzerland)

Provider of banking software which covers financial functions such as deposit-taking, lending and Internet
Brief description banking; offers banks with an overview of clients across the enterprise, enabling them to maximize returns
while streamlining costs.
Temenos T24 (application providing server support to a high number of users), Temenos Corebanking (scalable
Products sold
mainframe retail banking application serving high volume banks and bank outsourcing centers)
Key brands Temenos T24, Temenos Corebanking
Banking software solution systems to the retail, corporate and correspondent, universal, private, Islamic as
Markets covered
well as microfinance and community banking markets
Geographic coverage (2008) EMEA: 63.5%; Americas: 18.5%; Asia: 18.1%
Future plans Focus on margin improvement and cash conversion
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xii
40: CEGID GROUP SA (France)
Develops business management software packages and offers solutions and services to certified public
accountants, retail businesses and the industrial sector as well as fashion, hospitality, services, trade,
Brief description
construction and transport industries; operates through several subsidiaries including, among others, Cegid
SA, Quadratus and Civitas.
Generic business software, business-specific solutions, finance and accounting solutions, payroll/human
Products sold resources management solutions, business management solutions, business intelligence solutions, small
business solutions, e-commerce solutions
Key brands NA
Markets covered Enterprise management software solutions for companies and certified accounting firms
Geographic coverage (2009) France: 100.0%
Future plans Focus on retail businesses, which are defensive in the recessionary environment
Revenue: 346.7 million USD, year-over-year change: NM
41: INDUSTRIAL AND FINANCIAL SYSTEMS - IFS AB (Sweden)

Provides component-based business software; principal offering, IFS Applications, is an ERP solution which
supports the business processes of organizations of various sizes; provides extended ERP functionality,
Brief description including CRM, SCM, PLM, corporate performance management (CPM), enterprise asset management (EAM)
as well as maintenance, repair and overhaul (MRO) capabilities. Company operates in approximately 50
countries through subsidiaries, joint ventures and partners.
Products sold IFS Applications
Key brands NA
ERP solutions focusing on aerospace and defense; automotive; manufacturing; process industries;
Markets covered construction, contracting and service management; retail and wholesale distribution; and utilities and
telecommunications
Geographic coverage (2009) Europe: 76.1%; Americas: 14.5%; Rest of world: 9.4%
Future plans Focus on CRM and SCM applications
42: ARIBA INC. (US)

Provides on-demand spend management solutions; solutions combine on-demand software and services to
Brief description
help companies automate the procurement process.
Products sold Spend management solutions
Key brands NA
Markets covered NA
Geographic coverage (2009) North America: 67.5%; EMEA: 25.8%; Asia Pacific: 6.71%
Future plans Focus on strategic acquisitions in the network area
43: MICRO FOCUS INTERNATIONAL PLC (UK)

Provides enterprise application management solutions and (through its subsidiaries) develops, sells and
supports software. Acquired Relativity Technologies, Inc. in January 2009; application testing/automated
Brief description
software quality business of Compuware Corporation (together being the Compuware Testing and ASQ
Business) in June 2009; and Borland Software Corporation in July 2009.
Application portfolio management (APM), application modernization, application development, application
Products sold
testing and software quality, application life cycle management
Key brands NA
Markets covered Enterprise application software solutions
Geographic coverage (2009) North America: 45.2%; EMEA: 41.2%; Rest of world: 13.7%
Future plans Streamline operations of the recently acquired companies
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xiii
44: UFIDA SOFTWARE COMPANY LIMITED (China)
Principally engaged in the development and distribution of ERP, HRM, office automation, CRM, PLM, product
data management and collaborative product development software as well as unified application platform and
Brief description
enterprise asset management products; also provides SaaS and technology training services in addition to
distribution of software related products.
Products sold EPR solutions
Key brands NA
Markets covered NA
Geographic coverage (2009) China: 100.0%
Future plans Expansion through M&A and better product mix along with a sound marketing model
45: REALDOLMEN NV (Belgium)

ICT company whose portfolio includes business intelligence, CRM and e-business applications as well as
Brief description IT support such as the migration and integration of system applications; provides computer aided design,
geographical information systems, ERP and SCM applications and other related products and services.
Products sold NA
Key brands NA
Markets covered Solutions for private banking, retail, wholesale, telecommunications, logistics, and distribution
Geographic coverage (2008) Belgium: 46.8%; France: 37.9%; Luxembourg: 15.3%
Future plans Focus on CRM
Revenue: 333.2 million USD, year-over-year change: NM
46: SHANGHAI BAOSIGHT SOFTWARE COMPANY LIMITED (China)

Principally engaged in software engineering, software development, outsourcing services, system integration,
intelligent traffic systems and engineering designing; provides enterprise equipment management systems,
solutions in mineral industry, software management solutions for corporation management and control,
Brief description
purchase supply chain management system, enterprise construction project management information
solutions, comprehensive supervision and control system of metro and pumping stations, and automation
supervisory systems.
Products sold Baosight manufacturing execution system (MES), iQualityView, eCop
Key brands NA
Markets covered Software solutions in modern service and mineral industry
Geographic coverage (2009) China: 97.9%; Rest of world: 2.1%
Focus on sales and marketing efforts to increase revenues by capitalizing on growing demand for software
Future plans
solutions
47: EXACT HOLDING NV (The Netherlands)

Integrated business software solutions consist of traditional ERP and related software solutions such as HRM,
Brief description CRM, corporate performance management, project management and electronic workflow; activity is divided
into three categories: software licenses, services and maintenance.
Products sold ERP and eBusiness solutions
Key brands NA
Markets covered SMBs
Geographic coverage (2008) The Netherlands: 42.3%; North America: 25.8%; Rest of world: 31.9%
Future plans To avail of synergy benefits from the recent acquisition of Longview
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xiv
48: ADVENT SOFTWARE, INC. (US)
Offers software and services that automate workflows and data across investment management organizations
as well as information flows between an investment management organization and external parties.
Brief description
Completed the sale of subsidiary, MicroEdge, Inc., to Vista Equity Partners in October 2009. In March 2010,
the company’s wholly owned subsidiary, Advent Norway AS, acquired Goya AS.
Products sold Software products, hosting services, data interfaces, and related maintenance and services
Advent Portfolio Exchange (APX), Advent Warehouse, AXYS, Geneva, Moxy, Rex, WealthLine, Advent
Key brands
custodial data, Advent corporate actions, Advent wealth service, and Advent market data
Markets covered Software solutions to investment management institutions and service providers
Future plans Strategy to improve the sales pipeline and increase efficiency of capital expenditure
49: IBS AB (Sweden)

Provides business systems and supply chain management solutions including software solutions within
business intelligence, CRM, distribution, enterprise application integration, ERP, financials, manufacturing,
Brief description
procurement, supply chain management and warehouse management; also provides services within
consulting, financing, hardware, implementation and methodology.
Products sold Supply chain management and industry-specific software solutions and other services
Key brands NA
Markets covered Distribution, demand-driven manufacturing, financial, and business intelligence
Geographic coverage (2009) Rest of Europe: 44.9%; Nordic Region: 34.8%; Americas: 11.8%; Asia Pacific: 8.4%
Future plans Focus on turnaround cum restructuring along with margin improvement
50: CONCUR TECHNOLOGIES, INC (US)

Global provider of an on-demand employee spend management solutions that unite online travel procurement
with automated expense reporting, streamline corporate event management and optimize process of
Brief description managing vendor payments, employee check requests and direct reimbursements; solutions and services
are sold primarily on a subscription basis and delivered on-demand. Acquired Etap-On-Line, a provider of
business travel and expense management solutions, in August 2009.
Products sold NA
Key brands NA
Markets covered Employee spend management solutions
Geographic coverage (2009) US: 89.9%; Europe: 5.9%; Rest of world: 4.3%
Future plans Focus on partnership with American Express and maintain status as SaaS leaders
Source: Bloomberg, Capital IQ, Factiva, companies’ websites, and presentations
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xv
Thumbnail summaries of software and related activities in various regions
1: NORTH AMERICA
Brief description Largest contributor to IT spending with 38.1% share in 2009
IT Spending in 2009 1
$576 billion USD
Number of listed software
247
companies
Microsoft Corp – $58.7 billion USD
Oracle Corp – $24.2 billion USD
Top 5 domestic companies
Ca Inc – $4.3 billion USD
based on revenues
Intuit Inc. – $3.2 billion USD
Adobe Sys Inc – $3.0 billion USD
·G lobal economic problems have impacted IT budgets; however, the IT industry has not seen the dramatic
reductions that were seen during the dot.com bust.
·S pending was down to the extent of 9% on a Y-o-Y basis in 2009.
Current scenario and ·G oing forward, the gradual economic recovery will enable many US organizations to relieve some of the pent-up
outlook demand for system and network upgrades following last year’s spending cuts. But spending will continue to be
cautious and, in contrast to emerging markets, the SMB sector will struggle to fund new IT initiatives.
· In Canada, a subdued market is forecast to recover from the decline of 2009 and produce growth of 6-8% in IT
spending this year.2
2: WESTERN AND CENTRAL EUROPE

Brief description Second largest contributor to IT spending at 27.1 percent
IT Spending in 2009 $410 billion USD
216
companies
SAP AG – $14.9 billion USD
Sage Group – $2.2 billion USD
Misys PLC Inc – $1.2 billion USD
based on revenues
Software AG – $1.2 billion USD
Autonomy Corp. – $740 million USD
· After Latin America, Western Europe was the worst affected by the economic crisis, IT spending declining 12.1% in
2009.
Current scenario and · France and Italy have seen declines, and growth in the UK and Germany has been more or less flat.
outlook · Following the worst-ever decline in 2009 on a constant currency basis, IT spending in Western Europe is forecast
to be effectively flat in 2010. A few market segments are expected to return to positive growth but market sentiment
across the region remains weak.
3: ASIA PACIFIC
Brief description One of the high growth region in IT spending
374
companies
IT Holdings Corp – $3.4 billion USD
Nihon Unisys – $3.0 billion USD
Fuji Soft Inc – $1.6 billion USD
based on revenues
Sumisho Computer – $1.4 billion USD
Oracle Corp. Japan – $1.2 billion USD
· The region is expected to experience 6-8% growth in IT spending in constant currency terms, following a 3% decline
in 2009. However, China and India are both expected to witness double-digit growth this year. Hardware spending
would experience solid gains this year, driven by pent-up demand and new infrastructure deployment. Following a
Current scenario and
decline of 8% last year, no IT spending growth is forecast for Japan this year.
outlook
· The strongest growth in software spending will be seen in four vertical industries—manufacturing, financial services,
communications, and government. These four verticals should account for 60% of total software spending in Asia
Pacific.
1 Forrester Research
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xvi
4: EASTERN EUROPE, THE MIDDLE EAST AND AFRICA
Brief description Emerging region
35
companies
Check Point Software – $924 million USD
UCS Group Ltd – $168 million USD
Retalix Ltd – $158 million USD
based on revenues
One Software Tec – $131 million USD
Vizrt Ltd – $106 million USD
· The Middle East and North Africa (Mena) enterprise application software (EAS) market largely escaped the worst
effects of the global economic crisis; however, the crisis has a profound impact on the market’s figures for 2009.
Enterprise resource management (ERM) remains the key focus of EAS investment, CRM and SCM. Saudi Arabia is
the largest market in the Middle East for enterprise application (EA), offering vast potential for EA implementation.
· In Central and Eastern Europe, the 20% spending crash of 2009 is likely to be followed by 9% growth in 2010. IT
outlook
spending in the Middle East and Africa is also expected to return to 12% at constant currency this year after a 2.5%
decline last year (according to IDC’s Worldwide Black Book).
· The midmarket remains a major growth avenue for enterprise application software, especially in the emerging
markets. Beyond the US and Western European markets, the majority of companies would be SMBs.
5: LATIN AMERICA
Brief description Contributes 4.6% to global spending
3
companies
Top 5 domestic company
TOTVS SA – $501 million USD
based on revenues
·L atin America was hit the hardest in 2009 with a Y-o-Y decline of 17.1 percent.
· IT spending in Latin America should be up by 5-7% in 2010. Overall spending is expected to gradually accelerate in
Current scenario and line with the recovery in business and consumer confidence.
outlook · Increasing market maturity in some sectors will contribute to price competition as some buyers gravitate towards
low cost solutions.
· The key market of Brazil is likely to return to a more robust level of growth by 2011.
6: BRIC
Brief description Emerging economies with high growth prospects
IT Spending in 2009 NA
132
companies
TOTVS SA – $501 million USD
Beijing Teamsu – $429 million USD
UFIDA Software – $334 million USD
based on revenues
Shanghai Baosight – $330 million USD
Chinasoft International – $142 million USD
· Brazil, Russia, India, and China (BRIC) region have maintained their momentum, with their growth outpacing North
America and Western Europe. Russia lags with weaker demand than its counterparts.2
·C hina is the fastest growing enterprise software market and is predicted to achieve a CAGR of 14.6% from 2008 to
2013.3
· Increasing focus on SMBs has translated into ERP vendors concentrating on more verticals such as insurance,
outlook
power, and food and beverage in this region.
·S pending across the infrastructure and application software segments is expected to increase in 2010;
infrastructure software is estimated to be double that of application software through 2013, with priority spending in
ERP, office suites, operating systems, and database management systems.
Source: Bloomberg, Forrester, Gartner, Factiva, companies’ websites and presentations
2 The Global Enterprise Applications Software Market Forecast Update, 2009-2010 Monday, December 21, 2009
3 http://www.zdnetasia.com/china-fastest-growing-enterprise-software-market-62061982.htm\
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix A-xvii
Appendix B: Summary of M&A Deals1 in the Software Sector
The software sector saw 1,131 deals valued at $27.4 billion USD in LTM ending 1Q 2010, witnessing a decline of 25.4 percent in terms of deal value
($36.8 billion USD during the previous period with 2,417 deals). Dollar volume in this period included one major deal (Sun Microsystems/Oracle), which
represented $8.3 billion USD or nearly 28.1 percent of total dollar volume in the period. Excluding this deal, the dollar volume would have been down
48.0 percent. During the previous period, the largest deal was the acquisition of NDS Group by Permira Advisers for $1.7 billion USD.
Particulars LTM ending 1Q 2009 LTM ending 1Q 2010

Total number of deals 2
2,417 1,131
Deals with available transaction value 878 403
Total transaction value 36,752 (USD mn) $27,415 (USD mn)
Acquisition of NDS Group by Permira Acquisition of Sun Microsystems by
Largest deal
Advisers for $1.7 billion USD Oracle for $8.3 billion USD
Top 5 deals as a %
20.1% 46.7%
of total deal value
In terms of business segment, Internet Software & Services accounts for 30 percent, followed by Computer
Hardware & Applications, which formed nearly 28 percent of total value.
Top Five Segments No. of transactions Value (USD mn)

Computer Hardware & Applications 1 8,341.5
Internet Software & Services 18 7583.9
Application Software 838 5,412.3
IT Consulting and Other Services 10 4,218.6
Systems Software 199 1,464.3
In terms of country, the US saw the highest transaction value of $12.34 billion USD with a total of 501 transactions
in this twelve month period while Japan came in second with a value of $9.12 billion USD through 15 transactions.
Among regions, North America was the clear leader at $12.54 billion USD.
Top Five Countries No. of transactions Value (USD mn)

US 501 12,341.8
Japan 15 9,122.6
UK 78 1,386.3
China 50 1,373.8
Germany 47 963.6
Top Five Regions No. of transactions Value (USD mn)

North America 553 12,537.9
Asia 128 10,755.2
Europe 356 3,620.1
South America 19 193.5
Middle East 14 169.0
1 Only mergers and acquisitions have been considered.

2 Source: Capital IQ
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix B-i
Summary of Transactions in the Software Sector in LTM ending 1Q 2010, by Country
Total Transaction
Total Transaction
Value (USD mn)
Value (USD mn)

Transactions
Transactions
Average EV/
Average EV/
Average EV/
Average EV/
Average EV/
Average EV/
Revenue (x)
Revenue (x)
EBITDA (x)
EBITDA (x)
EBIT (x)
EBIT (x)
in 2009
in 2009
Country Country
United States 503 14,585.4 2.2 20.4 26.4 Hungary 3 11.9 3.0 - -
Japan 15 9,122.6 0.9 8.2 30.1 Poland 1 9.3 - - -
United Kingdom 78 1,386.3 4.0 9.9 12.0 British Virgin
1 8.8 - - -
Islands
China 50 1,373.8 4.7 13.4 9.4
Greece 3 7.8 10.2 24.5 26.6
Germany 47 963.6 2.7 21.5 27.0
Thailand 7 7.2 2.5 116.0 -
Sweden 20 246.1 2.7 6.9 8.1
Malaysia 11 4.8 - - -
Czech Republic 1 200.0 5.7 - -
New Zealand 6 4.4 0.3 - -
Canada 52 196.2 1.4 5.6 21.2
Portugal 1 3.7 3.7 - -
Israel 12 169.0 1.0 12.5 24.2
Taiwan 1 2.6 - - -
India 25 168.9 1.2 - -
Romania 1 1.7 - - -
France 65 155.9 1.1 6.0 7.5
Turkey 4 1.1 - - -
Chile 4 105.0 0.6 6.8 12.8
Singapore 3 1.0 0.0 - -
Italy 19 99.3 0.8 3.9 9.7
Indonesia 1 0.2 - - -
Australia 29 93.9 0.8 - -
Russia 3 - - - -
Switzerland 16 83.3 1.8 10.2 6.8
Argentina 2 - - - -
Belgium 7 74.7 1.2 12.1 16.3
Croatia 2 - - - -
Finland 14 73.8 0.7 8.6 -
Estonia 2 - - - -
Norway 11 71.6 0.7 5.6 6.6
Philippines 2 - - - -
Spain 11 70.7 2.1 - -
Cape Verde 1 - - - -
Brazil 10 62.6 1.1 - -
Colombia 1 - - - -
Netherlands 15 59.1 4.9 - -
Costa Rica 1 - - - -
Austria 13 39.8 1.7 - -
Egypt 1 - - - -
Ireland 10 37.5 - - -
Liechtenstein 1 - - - -
South Africa 15 36.3 0.6 - -
Malta 1 - - - -
Cayman Islands 1 30.4 - - -
Slovakia 1 - - - -
Sri Lanka 1 29.7 0.9 - -
Ukraine 1 - - - -
Hong Kong 5 23.9 - - -
United Arab
South Korea 6 20.6 32.1 15.7 17.1 1 - - - -
Emirates
Denmark 9 15.3 69.8 - - Uruguay 1 - - - -
Total 1,128 29,660 2.8 17.1 19.2
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix B-ii
Top 15 transactions in the Software Sector in LTM
1: Oracle/Sun Microosystems
Announced/Initial Filing Date: 04/19/2009 COMMENTS:
Target/Issuer: Sun Microsystems Inc. The acquisition enables Oracle to better compete
Total Transaction Value ($mm USD) 8,341.51 against IBM and HP as it is now both a hardware
Buyers/Investors: Oracle Corp. (NasdaqGS:ORCL) vendor and operating system supplier while
controlling Java and Solaris.
Percent Sought (%): 100.0
Implied Enterprise Value ($mm USD): 5,638.51 In the first full year, management believes this
acquisition will raise earnings by at least 15 cents and
Implied Enterprise Value/Revenues: 0.45
operating profit by over $1.5 USD billion
Implied Enterprise Value/EBITDA: 8.21
Implied Enterprise Value/EBIT: -
Headquarters-Country: Japan
Primary Industry: Computer Hardware
2: Adobe/Omniture
Target/Issuer: Omniture Inc. (Nasdaq: OMTR) Adobe will combine its content creation tools and
Total Transaction Value ($mm USD) 1,675.72 ubiquitous clients with Omniture’s web analytics,
Buyers/Investors: Adobe Systems Inc. (NasdaqGS:ADBE) measurement, and optimization technologies, thus
changing the e-commerce landscape across all digital
content, platforms, and devices.
Implied Enterprise Value ($mm USD): 5,638.51
The new entity would help marketers in realizing the
full value of their digital assets.
Headquarters-Country: United States
Primary Industry: Internet Software and Services
3: IBM/SPSS
Target/Issuer: SPSS Inc. This deal is expected to expand IBM’s information-
Total Transaction Value ($mm USD) 1,121.61 on-demand software portfolio and business analytics
International Business Machines Corp. capabilities.
Buyers/Investors:
(NYSE:IBM) IBM is expected to build a compelling joint portfolio
Percent Sought (%): 100.0 only when the deal closes which is after a year. This
Implied Enterprise Value ($mm USD): 783.73 will give its competitors time to devise their own
Implied Enterprise Value/Revenues: 2.7 strategies to compete with IBM.

Implied Enterprise Value/EBIT: 13.19
Primary Industry: IT Consulting and Other Services
4: Intel/Wind River Systems

Target/Issuer: Wind River Systems, Inc. Intel will gain stronger software capabilities in
Total Transaction Value ($mm USD) 884.39 embedded systems and mobile devices including
Buyers/Investors: Intel Corporation (NasdaqGS:INTC) smartphones, mobile Internet devices, and other
consumer electronics devices and networking
equipment as well as devices in the aerospace,
Implied Enterprise Value ($mm USD): 793.4 defense and energy sectors. Moreover, Wind River
Implied Enterprise Value/Revenues: 2.24 has thousands of customers in a diverse range of
Implied Enterprise Value/EBITDA: 20.84 markets, strengthening Intel’s market reach.
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix B-iii
5: Autonomy/Interwoven Inc.
Target/Issuer: Interwoven Inc. Autonomy’s clientele includes over 1,200 of the top
Total Transaction Value ($mm USD) 767.57 law firms and 11 of the top 30 accounting firms. The
Buyers/Investors: Autonomy Corp. plc (LSE:AU.) acquisition increase Autonomy’s customer base to
over 20,000 and provides cross-selling opportunities.
Autonomy expects to save around $40 USD million in
Implied Enterprise Value ($mm USD): 1,558.84 the first year as a result of these synergies.
6: JDA Software/12 Technologies

Target/Issuer: I2 Technologies, Inc. (NasdaqGS: ITWO)
The acquisition of i2 Technologies, which has more
Total Transaction Value ($mm USD) 746.94 than 6,000 customers, will help increase JDA’s market
Buyers/Investors: JDA Software Group Inc. (NasdaqGS:JDAS) to include discrete manufacturing and transportation.
Percent Sought (%): 100.0 The combined organization reported annual revenues
Implied Enterprise Value ($mm USD): 561.43 of roughly $617 USD million and will have better
Implied Enterprise Value/Revenues: 2.42 operating leverage. The operating synergies would
produce annual cost savings of approximately $20
USD million.
7: AsiaInfo/Linkage Technologies
Target/Issuer: Linkage Technologies International Holdings Ltd.
The combined company will be called AsiaInfo-
Total Transaction Value ($mm USD) 731.89 Linkage Inc. when the transaction is completed. The
Buyers/Investors: AsiaInfo Holdings Inc. (NasdaqGS:ASIA) new entity will become the world’s second-largest
Percent Sought (%): 100.0 telecom software provider and have over 8,000
Implied Enterprise Value ($mm USD): 731.89 employees. The combined company will also have
Implied Enterprise Value/Revenues: - 34 patents and an additional 27 patents pending
approval in China and the US.
Implied Enterprise Value/EBITDA: -
Headquarters-Country: China
8: Software AG/IDS Scheer

Target/Issuer: IDS Scheer AG (XTRA:IDS) The acquisition will increase the combined entity’s
Total Transaction Value ($mm USD) 719.92 competitive position, especially in infrastructure
Buyers/Investors: Software AG (XTRA:SOW) software and business process management. The
new entity is expected to be accretive to Software
AG’s earnings per share from the first year itself as
Implied Enterprise Value ($mm USD): 582.34 and increase the customer base to 7,500.
Headquarters-Country: Germany
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix B-iv
9: VMware/SpringSource
Target/Issuer: SpringSource, Inc. This combination will help simplify enterprise IT and
Total Transaction Value ($mm USD) 446.0 make customer environments more efficient, scalable
Buyers/Investors: VMware, Inc. (NYSE:VMW) and easier to manage. This new entity will continue
focusing on providing developers and customers the
best experience for developing enterprise and web
Implied Enterprise Value ($mm USD): 446.0 applications on all platforms.
Implied Enterprise Value/Revenues: -
10: Electronic Arts Nederland/Playfish

Target/Issuer: Playfish Limited
The social gaming industry is expected to undergo
Total Transaction Value ($mm USD) 391.26 significant consolidation. Electronic Arts, a traditional
Buyers/Investors: Electronic Arts Nederland B.V. gaming company, can now enter the social gaming
Percent Sought (%): 100.0 arena through the acquisition of Playfish, which
Implied Enterprise Value ($mm USD): 391.26 develops and publishes video games for social
Implied Enterprise Value/Revenues: - networks. Playfish designs games for Facebook,
MySpace, Bebo, Yahoo! and iPhone.
Headquarters-Country: United Kingdom
11: Symphony Technology/MSC Software

Target/Issuer: MSC Software Corporation This transaction will allow Symphony Technology to
Total Transaction Value ($mm USD) 386.68 continue focusing on delivering leading simulation
Buyers/Investors: Symphony Technology Group; Elliott Group solutions. Symphony Technology now has access to
MSC’s market leading simulation solutions.
Implied Enterprise Value ($mm USD): 238.44 MSC is also known for its continuous innovation in the
design simulation space across industries.
12: CA, Inc./Nimsoft

Target/Issuer: Nimsoft, Inc.
CA, traditionally known for managing large
Total Transaction Value ($mm USD) 350.0 mainframe-based systems, will gain access to
Buyers/Investors: CA, Inc. (NasdaqGS:CA) SMBs through the acquisition. The transaction will
Percent Sought (%): 100.0 also extend CA’s leadership position in the service
Implied Enterprise Value ($mm USD): 350.0 assurance market by helping it offer one of the
Implied Enterprise Value/Revenues: - most comprehensive suites in IT monitoring and
management solutions.
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix B-v
13: Raytheon Network Centric Systems/BBN Technologies
Target/Issuer: BBN Technologies Corp.
This acquisition is expected to strengthen Raytheon’s
Total Transaction Value ($mm USD) 350.0 position in networking, communications and video
Buyers/Investors: Raytheon’s Network Centric Systems surveillance and advanced sensing applications.
Implied Enterprise Value ($mm USD): 350.0
14: IT Holding Corp./Sorun Corp.

Target/Issuer: Sorun Corp.
This merger will benefit both ITHD and Sorun as the
Total Transaction Value ($mm USD) 260.9 independent system integrators will help diversify risks
Buyers/Investors: IT Holding Corp. (TSE:3626) and stabilize performance under certain business
Percent Sought (%): 100.0 environments. In the medium term, the combination
Implied Enterprise Value ($mm USD): 155.4 is expected to generate synergies through sharing of
Implied Enterprise Value/Revenues: 0.262 technologies and know-how, economies of scale and
increased corporate value.
Headquarters-Country: Japan
15: CPP Investment Board and KKR/Aricent, Inc.

Target/Issuer: Aricent, Inc.
Kohlberg Kravis Roberts & Co. (KKR) has increased
Total Transaction Value ($mm USD) 255.0 its investment in Aricent. The latter reported its
Buyers/Investors: CPP Investment Board and KKR highest annual revenue so far and continues to grow
Percent Sought (%): 15.0 its customer base.
Implied Enterprise Value ($mm USD): 1700.0
Source: Capital IQ
Only Mergers and Acquistions have been considered
Appendix C: Growth Drivers of Computing and

Internet Software sector (Enterprise Software Industry)
Growth Drivers of the Global Software Market models are expected to drive demand in the future compared with
perpetual license based models. Alternative licensing models including
Stabilization of the global software market started during Q409 SaaS, cloud-based services, and term contracts are expected to be
with recovery and single-digit growth anticipated through 2010 with catalysts to growth in the software market.
accelerating growth in 2011. This recovery has led to changes in market
conditions and business models. Vendors that adapt to these changes
are expected to drive growth in the coming years. Growth Drivers of the Global Computing and
• Horizontal-to-vertical solutions: In an increasingly competitive
software environment, vertically aligned and geographically spaced
Internet Software Market
out specialized vendors are expected to drive demand to create a
• S
MBs to support the software market: The bright spot in the
competitive edge over local players.
recovering economy is SMBs. As the economy emerges from the
• Licensing and alternative delivery models: Subscription based recession, SMBs will look for small-business software to automate
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix C-i
their operations and scale up growth. In addition, large software Customers expect deeper industry expertise from their software
vendors such as SAP and Oracle will continue to focus on the SMB providers to gain a more integrated application environment and end-
market to reinvigorate their revenue growth in software license sales. to-end process automation. Hence, many companies combine custom-
· While SMBs are likely to lead the charge in small-business software built applications and customized industry packages to supplement
investments, it may be difficult for them to make the necessary the core software. This environment leads to a complex setup and
investments. Considering that the tight credit markets will take time integration challenges.
to thaw entirely, many SMBs are looking at SaaS based services to · Large enterprise software vendors have added vertical depth and
help them minimize upfront capital IT costs. breadth. Both SAP and Oracle have invested heavily in industry
solutions, each reportedly having capabilities in more than 20
• T
echnology innovation adds flexibility and usability: The pace of verticals. This strategy to increase industry depth has driven many
technology innovation has continued unabated during the recession. acquisitions, particularly for Oracle. SAP, on the other hand, builds
Better client usability, faster and more accessible analytics, and industry functionality in house but it has made several vertical
process/configuration flexibility are becoming more evident in the acquisitions to accelerate time-to-market.
latest and future releases (e.g. Epicor 9, Oracle Fusion applications) · Second-tier software providers have found more success in offering
of software products that are expected to be the growth catalyst in deeper industry-specific functionalities compared with mega-vendors.
2010 and beyond. Lawson, for example, has successfully targeted industries such as
healthcare, food, and fashion. Other vendors (e.g., Microsoft, Epicor,
and Sage) may choose to go down to sub-industry levels, often
Major Themes in the Enterprise Software Market1 relying on partners to add the last mile of specialization.
· Specialists focus on fewer or even single verticals. Some do not
The year 2009 closed with depressed IT spending levels, revenue even provide the core accounting functionality which is crucial to
contraction among many ERP vendors, and uncertainty about the future. any ERP system. Nevertheless, these specialized plays are often
The industry is expected to experience the following trends in 2010. compelling to customers and may also attract the attention of ERP
vendors looking to partner or acquire. Specialist vendors offering
• F
ocus on getting benefits of ERP software and ROI: CIOs and comprehensive suites to particular verticals include Deltek (project-
COOs are expected to continue facing pressure to prove that the based businesses), Blackbaud (not-for-profit), Mincom (mining
amount of investment in ERP systems is justified and generates a and asset-intensive businesses), QAD (manufacturing), and IBS
solid return on investment. As a result, the market will have more (distribution). CGI Group gives ERP vendors stiff competition in
deliberate spending, more phased rollouts, buying of licenses only as the government sector, including US federal as well as state and
when needed, and hesitancy to invest in more expensive advanced local governments. Specialists dominate the lucrative healthcare
enterprise software modules. market, particularly patient systems. Notable players include Cerner,
· Companies are directing much of their ERP software investments to Eclipsys, Epic Systems, McKesson, and Siemens.
areas where they will definitely be implemented effectively and get
more out of their existing enterprise investments. The need to more • V
endor consolidation: Vendor competition was fierce before the
effectively manage organizational and business risk will likely result recession and is even more so now. Dozens of smaller vendors are
in a continuation of this trend in 2010. starved for cash and unable to fuel R&D and other product innovations
without capital injections. Larger vendors, however, have cash and
· Given corporate aversion to risk, companies are less likely to try some have grown successfully via acquisitions (e.g., Oracle and Infor).
entirely new products or risky upgrades. As a result, vendors are Continued vendor consolidation thus looks inevitable.
more likely to invest in incremental product enhancements and
tighter integration between modules rather than major changes to · The economic downturn has created more acquisition opportunities
their software. by lowering market valuations of struggling vendors. For customers,
vendor consolidation reduces choices, but it also can provide a
· Thus, going forward, vendors are expected to seek smaller measure of stability where vendor viability is a risk.
deals from existing customers via add-on products and business
intelligence tools because most customers are not yet ready to fund · Vendor acquisition is expected to be vertically focused. The key
major enhancements or expansions. driver of acquisitions in 2010 will be gaining depth and share in
specific industry verticals. Oracle has been a key proponent of
• E
RP SaaS in huge demand, but not suitable for large vertical acquisitions, and SAP as well, though to a lesser extent.
organizations: Though larger companies are likely to consider SaaS Possible plays for some vendors include acquiring breadth in
options, they are much less likely than their SMB counterparts to horizontal areas such as HR. Peer-to-peer acquisitions among
adopt these models. As software vendors expand hybrid solutions ERP vendors appear less likely. Vendors may also acquire adjacent
combining the benefits of SaaS with the flexibility of traditional ERP technologies, such as enterprise content management tools.
(e.g., Oracle’s On Demand and SAP’s Business ByDesign offerings),
larger organizations will continue opting for non-SaaS ERP options
that more commonly reduce cost and risk while maximizing business Government Role in the Industry
benefits in the long term. They will, however, be more inclined
to leverage SaaS for some niche applications such as document Public administration represents the largest IT spending by central
management software (DMS), human resource management (HRM), governments.
PLM, and CRM. That said, an exception is GE which implemented a
SaaS SCM to manage $55 billion USD worth of corporate spending After the economic crisis, which saw governments announcing massive
among 500,000 suppliers in 100 countries. stimulus packages, tax payers are now demanding funding cuts in the
· Though SaaS applications are increasing in popularity, the actual public service arena. There will be increased attention on how money is
adoption of core ERP SaaS is expected to remain at less than 5% being spent at all levels of government.
of the overall ERP market in terms of revenues in 2010.2
At the same time, telecommunications and the Internet are being
• C
ustomer is king—it’s a buyers’ market: Even in the most optimistic increasingly recognized as critical to the economy and service delivery.
scenario, overall enterprise software spending in 2010 is not expected Governments are thus expected to make efforts to move the majority
to return to pre-recession levels. Hence, aggressive software pricing of citizen services to an online delivery model to increase transparency
and shared benefit implementation models would continue to be in and create value for their constituents. To this end, investment across
practice, thereby benefiting the buyer. A case in point is Epicor. a wide variety of departments, functions, and systems will be made.
This will sustain investment in IT by governments in 2010 where the
• Increasing focus on industry-specific capabilities and markets: focus will be on rightsizing, underscored by government transformation
or modernization. In addition to rightsizing, social media are becoming
1 http://panorama-consulting.com/top-ten-erp-software-predictions-for-2010/ increasingly important as sources of public information, making them
2 Forrester Research: Trends 2010: ERP Applications mission-critical for governments.
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix C-ii
Appendix D: Niche Focus Areas
The current market conditions are shaping the following niche areas which are expected to become major technology forces in the long run.
Mobile enterprise applications and computing thin clients and browser based applications as well as opportunities
within SaaS, platform as a service (PaaS), and infrastructure as a
• A mobile application is a software application that runs in a handheld service (IaaS) can fuel growth in this market. However, it should
device such as a smartphone. These applications are either pre- be noted that proving ROI is still a concern for vendors and service
installed on phones during manufacture or downloaded by customers providers of mobile enterprise applications because the market is in
from app stores and other mobile software distribution platforms. its nascent stages and there is uncertainty on whether the potential
benefits promised by these applications will be obtained.
• Despite the recession, the mobile landscape performed well in
2009. A growing number of brands launched a mobile presence,
leveraging the increasing consumer awareness of the potential of Trends to Look Out For In Mobile Application
mobile services. There was continuous consumer demand for Apple’s
proprietary ecosystem; Google acquired mobile ad network AdMob
Market:
for a significant USD750 million; and Internet service providers (ISPs)
• Mobile technologies, which are likely to impact short-term mobile
entered the mobile market (Iliad’s acquisition of France’s fourth 3G
strategies and policies, include Bluetooth (3 and 4), mobile Web,
license).
mobile widgets, platform-independent mobile application development
• The mobile application market was estimated to be $4.2 billion USD in tools, application stores, enhanced location awareness, cellular
2009. Further, the number of mobile application downloads were just broadband, touchscreens, mobile to mobile (M2M), and device-
over 7 billion in 2009.1 independent security.
• Going forward, the mobile application market is expected to reach • Application stores3 would continue to flourish, and the number of stores
$17.5 billion USD by 2012, representing a CAGR of 60.9% from is estimated to grow from 8 to 38 during 2009-12. However, none are
2009 to 2012, while the number of mobile application downloads expected to replicate Apple’s success in 2010 because of its dominating
is estimated to grow to nearly 50 billion in 2012. This growth market share and a strong pipeline. Apple’s iTunes store has been
would be driven by increasing penetration of mobile internet, more the leading store with a reported 150,000 mobile apps and 3 billion
functionalities, rising adoption of smartphones, and increased and downloads to date (99.4% of global mobile application sales in 2009)4.
better integration of mobile hardware and software. Google is likely to be the main competitor to Apple in 2010 through its
Android project.5 The major challenge for players such as Google will
• Mobile applications can be primarily divided into two categories: be to integrate hardware and software to promote a compelling user
· Consumer applications: These include messaging such as short experience and to successfully manage a network of developers.
message service (SMS) or multimedia message service (MMS);
• Location-based services (LBS) are expected to have a high impact
mobile Web; and native/rich applications.
within the next two years. These services are not only useful by
· Enterprise applications: A mobile enterprise (mobile ERP) themselves but also can be integrated with other applications such
application is a web-based mobile cloud computing business as mobile advertising, search, and social networking to make those
solution, leveraging the Internet to deliver software as a service to services more relevant to the end user. The increasing penetration of
businesses. This type includes all business modules such as ERP, GPS in mobile phones and availability of LBS applications (iPhone’s
CRM, SCM, and HRM as well as basic utilities such as corporate Application Store had about 2,500 LBS applications in April 2009, up
calendars, address books, bulletin boards, notes and internal from about 200 in August 2008) is expected to bring about faster user
messaging. It also includes field sales force automation and mobile adoption of LBS within the coming years.
field asset management.
• The year 2010 is expected to witness massive adoption of mobile

enterprise applications. Carriers and vendors are recognizing the
Cloud-based application and
enterprise as a high-value customer and actively working towards infrastructure services
developing and promoting attractive mobile data solutions for
enterprises. The mobile enterprise application market in North America • Cloud computing is currently emerging as a service offering which
is estimated to reach $10.3 billion USD in 2013 from $2.3 billion USD leverages internet hosting capabilities and can be viewed as an
in 2008.2 According to Gartner Research, by year-end 2010, 1.2 billion evolution of SaaS. Currently, cloud computing is generally regarded
people will carry handsets capable of mobile commerce, providing a as IT infrastructure available on-demand and offers start-ups and
rich environment for the convergence of mobility and the Web.
3 Application stores are web sites from which free and paid applications can be down-
• Along with mobile ERP, enterprise mobile cloud applications including loaded on to smartphones.
4 The GetJar Study, Paid Content and TechCrunch database
1 The GetJar study run by an independent consulting firm, Chetan Sharma Consulting 5 Android is a software stack for mobile devices that includes an operating system, middle-
2 http://www.cellular-news.com/story/38739.php ware, and key applications.
Global Mobile Application Spending In USD Million, Region Wise, 2009-2012

Region 2009 2010 2011 2012 CAGR
Europe 1,500 2,700 4,600 8,500 78.3%
North America 2,100 3,000 5,100 6,700 47.2%
South America 100 120 150 500 71.0%
Asia 460 500 750 1,350 43.2%
Middle East & South Africa 40 80 200 450 124.1%
GLOBAL TOTAL 4,200 6,400 10,800 17,500 60.9%
Source: GetJar
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix D-i
List of Vendors - Mobile Application Store
Company Online Application Store Free Vs. Paid Application Price Store Size Store Growth
Average Price No. of App New App Addition
Free App Paid App
for Paid App Dec 2009 Dec 2009
Apple iTune App Store 25% 75% $3.62 150,998 13,865
Blackberry Blackberry Application World 24% 76% $8.26 4,746 501
Android Google Android Market 57% 43% $3.27 19,897 3,005
Nokia Nokia Ovi Store 15% 85% $3.47 6,118 734
Palm Palm App Catalog 32% 68% $2.53 1,452 NA
Windows Windows Marketplace for Mobile 22% 78% $6.99 693 NA
Source: Distimo Research: http://www.readwriteweb.com/archives/the_truth_about_mobile_application_stores.php
SMBs flexible access to computing capabilities with minimum capital packaging client computing applications and capabilities. As a result,
expenditure. Nevertheless, with Amazon.com’s spin-off Amazon Web the choice of a particular PC hardware platform, and eventually the
Services (AWS) emerging as a leading provider of cloud computing OS platform, becomes less critical. Thus, enterprises are proactively
services, cloud computing is expected to become more influential. building a five- to eight-year strategic client computing roadmap
outlining an approach to ownership and support, operating system and
• The worldwide market for IT services related to cloud computing application selection, deployment and update, and management and
and cloud services was worth almost $2.4 billion USD in 2009. By security plans to manage diversity in the virtualization arena.
2013, the market is expected to be worth almost $8.1 billion USD.
By far, the largest component of the overall cloud service market is • Spending on x86 server and desktop virtualization software
implementation, which represents 65% of the 2009 IT services market technologies is forecast to grow at a 33.6% CAGR through 2013. The
and will represent 64% by the end of 2013. market is driven by organizations looking to lower the total cost of
ownership and to increase overall IT effectiveness.2
Smart computing ― Collaboration, unified

communications, and voice over IP Business Intelligence (BI) and Analytical Software
• BI and specialized analytical software such as data mining and
• Smart computing will help companies optimize process results and predictive analytics, video image analysis, pattern recognition, and
returns from their balance sheets. Unlike the horizontal technologies artificial intelligence algorithms on a real-time basis help businesses or
of personal computing and network computing, smart computing governments analyze patterns or anomalies.
will have a highly vertical industry focus. Vertical solutions will differ
significantly from vertical offerings in the past—thus the advent of • BI provides in-depth data analysis, which makes it important in
verticals 3.0. Tech vendors will have great growth opportunities economically challenging times. As a result, the BI market was much
in this new cycle but also big challenges in navigating the shift to less affected by the economic crisis than most other software markets
smart computing. Accordingly, in the US alone, the smart computing and will continue to grow to $14 billion USD by 2014.3 New categories
industry’s vertical solutions will increase their share in the IT market of advanced analytics will fuel growth and merge into the core BI
from 6% in 2008 to 23% in 2016.1 Having said that, this solution market, including business performance solutions, text analytics,
market is expected to increase from $27 billion USD in 2009 to $213 predictive analytics, and complex event processing.
billion USD in 2017 in the US.
• All the big sellers of BI software are either parts of larger software
• Smart computing is based on technologies such as service-oriented vendor or private companies with the exception of pure-play BI public
architecture, server and storage virtualization, cloud computing, companies such as MicroStrategy and Actuate.
and unified communications. It adds to existing technologies new
capabilities of real-time situational awareness and automated analysis.
Social CRM
Linux and open-source software (OSS) • Social CRM (also known CRM 2.0) is a business strategy supported
by a system and designed to engage the customer in a collaborative
• The phenomenon of OSS which started 20 years back has suddenly interaction that provides mutually beneficial value in a trusted and
gained momentum as a possible alternative to expensive proprietary transparent business environment.
software. As the open source movement expands up the software
stack, nearly all software markets are now being impacted in some way. • The industry has many participants and includes different types of
players such as traditional CRM vendors, community platform and
• The OSS segment is experiencing slow but steady growth. The social media players, and brand monitoring players. Most of the players
release of the open source internet browser Firefox 3.0 by Mozilla in provide on-demand subscription based offerings in social CRM.
June 2008 is seen as a landmark event for open source applications
with more than 8 million people downloading the new version of the • Social CRM is most likely to be the next big trend in the entire CRM
software within the first 24 hours after its release. The Firefox browser industry. As per a Gartner report, social CRM is expected to see
has steadily been gaining market share, which had 24.23% of the significant growth as over 80% of enterprise use of social networking
overall browser market in February 2010 from 21.8% February 2009. tools in 2010 will be driven by customer engagement projects. In
addition, Forrester says that by 2013, businesses will be spending
• In a Forrester Research report on enterprise interest for OSS, two- almost $4.6 billion USD on Web 2.0 tools which includes advanced
thirds of the 1,017 respondents at North American and European Internet technology and applications such as blogs, wikis, RSS,
enterprises expressed some interest in open source deployment. and social bookmarking. In an April 2008 report, the research group
forecast 43% annual growth in the social media market for the so-called
Enterprise 2.0 as organizations are investing heavily in social networks.
Virtualization
• PC, server and storage virtualization is growing in use and will be
fostered by the tough economy. Virtualization is bringing new ways of
2 Gartner Research
1 Forrester Research: Smart Computing Drives The New Era Of IT Growth 3 Forrester Research: Market Overview: The Business Intelligence Software Market
IMAP’s Computing & Internet Software Industry Global Report — 2010: Appendix D-ii
IMAP’s High Technology Team
Belgium France United Kingdom United States

Peter De Waele Pascal Riviere Dan Bowtell Sandeep Beotra
peter.dewaele@imap.com pascal.riviere@imap.com dan.bowtell@imap.com sandeep.beotra@imap.com
Carl Houghton John Graaff
Denmark India carl.houghton@imap.com john.graaff@imap.com
Stig Madsen Shyam Shenthar Nick Jones Richard Juarez
stig.madsen@imap.com shyam.shenthar@imap.com nick.jones@imap.com richard.juarez@imap.com
Emma Leathley Ronald Klammer
Finland Spain emma.leathley@imap.com ronald.klammer@imap.com
Mikko Sistonen David Serra Loren Lancaster
mikko.sistonen@imap.com david.serra@imap.com loren.lancaster@imap.com
Gene Ramirez
gene.ramirez@imap.com
For a comprehensive list of IMAP advisors and to discover how IMAP

can help you with your M&A transaction, go to www.imap.com.
Cross-border M&A requires local knowledge and
experience. IMAP advisors located around the
world have successfully completed thousands of
M&A transactions. Let IMAP help you with your
M&A project in 2010.
Please visit www.imap.com for more information.
www.imap.com
© COPYRIGHT 2010 IMAP, INC. THIS REPORT AND THE INFORMATION HEREIN IS THE EXCLUSIVE DOMAIN
OF IMAP AND MAY NOT BE USED OR REPRINTED WITHOUT PERMISSION. CONTACT info@imap.com.

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Computing & Internet Software

Statistical Reference (Appendices)

In terms of country, the US saw the highest transaction US 501 12,342

in this twelve month period while Japan came in second UK 78 1,386

Global enterprise application software market

2009 saw a decline in application software spending in all regions except

which includes hardware, software and IT services, 1,750 1,659 1,624

Second-tier software providers have found

1: Mobile applications and computing Mobile Application Market in million USD

The mobile enterprise application market was

2 Forrester Research: Market Overview: The Business Intel-

Software Market Outlook, Quarterly, 2008-2010

Value chain of the software market

Value chain of the enterprise application market

2 Definition by Council of Supply Chain Management Professionals (CSCMP)

Trends across function and tier

1: MICROSOFT CORP (US)

2: APPLE INC (US)

3: ORACLE CORP (US)

6: COMPUTER ASSOCIATES (CA), INC. (US)

7: INTUIT INC (US)

9: SAGE GROUP (UK)

10: BMC SOFTWARE INC (US)

11: FUJI SOFT INC (Japan)

13: SUMISHO COMPUTER (Japan)

14: SALESFORCE.COM (US)

15: MISYS PLC (UK)

17: SYBASE INC (US)

18: CHECK POINT SOFT (Israel)

19: MICROS SYSTEMS INC (US)

21: NOVELL INC (US)

22: RED HAT INC (US)

23: AUTONOMY CORP (UK)

25: QUEST SOFTWARE (US)

26: ORACLE FINANCIAL (India)

27: NEUSOFT CORP (China)

29: TOTVS SA (Brazil)

30: PROGRESS SOFTWARE CORPORATION (US)

31: INFORMATICA CORP (US)

33: NSD CO LTD (Japan)

34: EPICOR SOFTWARE (US)

35: RIVERBED TECHNOLOGY, INC. (US)

37: MICROSTRATEGY INC (US)

38: BLACKBOARD INC. (US)

39: TEMENOS GROUP AG (Switzerland)

41: INDUSTRIAL AND FINANCIAL SYSTEMS - IFS AB (Sweden)

42: ARIBA INC. (US)

43: MICRO FOCUS INTERNATIONAL PLC (UK)

45: REALDOLMEN NV (Belgium)

46: SHANGHAI BAOSIGHT SOFTWARE COMPANY LIMITED (China)

47: EXACT HOLDING NV (The Netherlands)

49: IBS AB (Sweden)

50: CONCUR TECHNOLOGIES, INC (US)

Source: Bloomberg, Capital IQ, Factiva, companies’ websites, and presentations

2: WESTERN AND CENTRAL EUROPE

Source: Bloomberg, Forrester, Gartner, Factiva, companies’ websites and presentations

Particulars LTM ending 1Q 2009 LTM ending 1Q 2010

Top Five Segments No. of transactions Value (USD mn)

Top Five Countries No. of transactions Value (USD mn)

Top Five Regions No. of transactions Value (USD mn)

1 Only mergers and acquisitions have been considered.

• The year 2010 is expected to witness massive adoption of mobile