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Orrick Presentation How long will the music keep playing and what should an entrepreneurs strategy be in this environment

September 23, 2014

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The Cloud Market Has Bounded Back Nicely and Valuations are Rich

260%  

230%  

173%  160%  149%  

80%

100%

120%

140%

160%

180%

200%

220%

240%

260%

280% BVP  Cloud  Computing  Index38  Publicly  Traded  Cloud  CompaniesIndexed  as  of  Jan.  2011  |  @  9/19/14

BVP  Cloud  Index Nasdaq  Index S&P  Index Dow  Jones

Cloud Multiples are Lower Than Feb/Mar Levels But Still Healthy Compared to Historical Standards

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9.6x

4.8x

6.1x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x1/1/2012

2/1/20

123/1/20

12

4/1/20

125/1/20

12

6/1/20

127/1/20

12

8/1/20

12

9/1/20

1210

/1/201

2

11/1/201

212

/1/201

2

1/1/2013

2/1/20

133/1/20

13

4/1/20

135/1/20

13

6/1/20

137/1/20

13

8/1/2013

9/1/20

1310

/1/201

3

11/1/201

312

/1/201

3

1/1/20

14

2/1/20

143/1/20

14

4/1/20

145/1/20

14

6/1/20

147/1/20

14

8/1/20

14

9/1/20

14

NTM  Multiples  Over  Time

NTM  Multiples

Cloud Valuations Are Rich Compared To On-Prem Software

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Cloud On-­‐Prem

Total  Market  Cap  ($  in  mm) $159,731 $1,024,518

Median  2015  Revenue  ($  in  mm) $238 $5,951

Median  FCF  Margin 6.6% 25.1%

#  of  Companies 38 12

#  of  Companies  >$1bn  Market  Cap 23 12

2015  Revenue  Mut

Median 5.4x 3.8x

Low 1.0x 2.3x

High 16.2x 6.3x

Cloud includes the 38 public companies in the BVP Cloud Index.!On-Prem includes Adobe, Autodesk, CA, Citrix, EMC, IBM, Intuit, Microsoft, Oracle, Red Hat, SAP, VMware!

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Multiples Have Been Even Higher In the Private Markets

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300+ Great Cloud Companies Are Already At Escape Velocity

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You!!

The Panel

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Byron Deeter !Bessemer!

Vik Singh !CEO/Co-Founder Infer!

Jason Green !Emergence Capital!

Godard Abel CEO/Founder SteelBrick !

Kirk Dunn !COO Cloudera!