cloud services overview
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PRIVATE AND CONFIDENTIAL TECHNOLOGY FOCUS. BROAD REACH. OPTIMAL RESULTS.
Cloud Services Overview
Peter Falvey
Managing Director
P. 1.617.598.0437
Jason Myler
Managing Director
P. 1.617.598.0438
Jeffrey Cook
Vice President
P. 1.617.598.0439
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Cloud Services Will Continue to be an Active Sector in 2013
Strong growth outlook: The pace of Cloud / SaaS enterprise adoption has increased rapidly
and previously held reservations from CTOs (security issues, integration headaches, etc.) have
largely evaporated
Large Opportunity for systems integrators and consultants: With 84% of new software
expected to be SaaS in the coming years, a large market has been created for systems
integrators and consultants to help enterprises integrate their disparate legacy systems with
Cloud applications
Highly fragmented market beginning to consolidate: The Cloud services market is highly
fragmented though a wave of consolidation has recently begun
- Global systems integrators (GSIs) snapping up companies to grow/improve their Cloud
services offerings (e.g. Dell launching a salesforce.com practice)
- Increased appetite by GSIs to acquire pure-play Cloud services providers (e.g. NTT
acquiring Centerstance)
We expect the level of investment and transaction activity in Cloud services to
accelerate in the coming year
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Strong growth potential and rapid corporate adoption will continue to attract
investment and transaction activity in the Cloud services market
Cloud Services Market Gaining Momentum
CHANGING GLOBAL MIX OF IT SERVICES
TRENDS / DRIVERS IN CLOUD SERVICES MARKET IT BUDGETS MOVE TO THE CLOUD
~$110 billion market expected to grow to
$207 billion by 2016 (17%+ CAGR)
- Cloud services spending to outpace
overall IT spending in the coming years
SaaS, the second largest component of the
Cloud services market was estimated to
reach $14.5 billion in spending in 2012
The CRM market in particular, a market
behind much of the momentum in adoption
of Cloud services, is expected to grow to $14
billion by 2015
Salesforce.com has emerged as the SaaS
CRM solution of choice and serves as a key
beachhead in the Cloud landscape Source: IDC, Forrester Research, Gartner, Wall Street Research
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Market Map
Consulting/Services Apps/Solutions Development
Ta
rge
ts
Acq
uir
ers
= Global Systems Integrators (“GSIs”) = Salesforce.com (SFDC) Platinum Partners
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Cloud Services Companies Appeal to Financial & Strategic Buyers
Source: SEC Filings, Company Press Releases, Wall Street Research, CapitalIQ, PitchBook
Acquired by
October 2012
Acquired by
September 2012
Investment from
September 2012
Acquired by
August 2012
Acquired by
April 2012
Investment from and
March 2012
Investment from To acquire
March 2012
Investment from
February 2012
Recapitalized by Riordan, Lewis &
Haden
May 2012
Acquired by
October 2012 Workday Services
Investment from
November 2012
Acquired by
December 2011
Investment from
December-January 2012
To acquire
Acquired by To be merged with
September 2012
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Falvey Partners Overview
FOCUS SELECT TRANSACTION EXPERIENCE
December 2011
Has acquired
July 2012
Has been
acquired by
September 2011
Series D
Convertible
Preferred Stock
Led by
September 2012
Has been
acquired by
A portfolio company of
July 2011
Has been acquired
by a portfolio
company of
April 2011
Has been
acquired by
July 2011
Has been
acquired by
February 2011
Growth equity
investment from
July 2011
Has been
acquired by
March 2011
Has divested
its diagnostic
solutions unit
November 2010
Has received an
investment from
A portfolio company of
October 2010
PGI Notify and Send
platforms acquired by
August 2010
Two divisions have been
acquired by a portfolio
company of
April 2010
Has been
acquired by
August 2010
Series C
Convertible
Preferred Stock
Led by
SERVICES
Sell-side or buy-side M&A
Growth capital raising
Board and corporate advisory
SECTOR
Software / SaaS
Tech-enabled business services
IT services
Internet / digital media
COMPANY TYPE
$50M - $250M in enterprise value
Growing, with established scale
Profitable or near-term path to profitability
Falvey Partners is a leading advisory firm serving
mid-market clients across technology sectors
Founded in 2012 by Peter Falvey and key members of the Morgan Keegan / Revolution Partners team
Falvey Partners professionals have closed dozens of software transactions representing billions of
dollars in transaction value
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Astadia is a leading consultancy, implementation and integration partner enabling the
deployment of Cloud computing solutions for large enterprises. The company is among the
most experienced Cloud solutions providers, having completed more than 6,000 projects for
over 2,500 customers. This experience produced valuable vertical expertise in the industries
driving migration to the Cloud, such as telecom, media, high-tech, and healthcare/life sciences.
The company has also completed significant engagements in several other verticals, including
financial services, energy, construction, education and retail/consumer. This industry
experience is complemented by rapid project delivery methodologies that match the time to
market and rapid business transformation needs of Cloud computing implementations. Astadia
has deep functional experience delivering solutions for Cloud-based Customer Relationship
Management (CRM) applications, Call Center applications (service Cloud), Compensation
Management, and Marketing Automation applications. The company is headquartered in
Dallas, Texas with regional offices across the United States, United Kingdom and India.
Client Situation Solutions Results
Developed Astadia’s “multi
vertical/multi Cloud technology
deployment with blue-chip customer
base” expertise methodology and
crafted growth story around this
thesis
Identified and approached most
relevant potential financial investors
and/or buyers and ran a time
disciplined multi-city roadshow
Structured comparative analysis to
evaluate offers objectively based on
deal structure, terms and long-term
equity participation
VC investors were looking for an exit
after a nearly five-year hold period and
venture lenders were looking for
liquidity
Company and a competing IB firm had
run a limited but unsuccessful sale
process exclusively targeting strategic
buyers
Company had grown nicely but lacked
operating profitability
Growth capital required to take
advantage of unique market
opportunity in the Cloud Services
sector
Sale of Company to Gores Group –
combined with recently acquired
mobile network and IT solutions
assets from Adecco
Received multiple LOIs and
negotiated with interested parties
simultaneously in order to create a
competitive process and drive
valuation
VC investors provided liquidity and
potential significant upside from
retained minority ownership in
combined entity
Case Study: Astadia – Sale to The Gores Group
Has been acquired by
September 2012
To be merged with