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Perpetual License vs.

SaaS Subscription Revenue Models


| Deb Sahoo | MBA, Finance, University of Michigan | MS, EE, University of Southern California | B-Tech, EE, IIT |
Assumptions ($ in Millions)
PSO as % of License Boookings
PSO Conversion
License Bookings Growth
Prepaid Maintenance Attach Rate
Maintenance Renewal Rate

60%
75%
40%
25%
90%

Subscription as % of License
Subscription Renewal Rate
PSO as % of Subscription
PSO Conversion

40%
95%
65%
80%

For simplicity, all bookings assumed to take place in last day of quarter
PSO revenue is delayed by one quarter from time of bookings
YR
Perpetual Business Model
Bookings
License Bookings
Prepaid Maintainance Bookings

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

1Q14

2Q14

25.0
6.3

35.0
8.8

45.0
11.3

60.0
15.0

35.0
8.8

49.0
12.3

63.0
15.8

84.0
21.0

49.0
12.3

68.6
17.2

88.2
22.1

117.6
29.4

68.6
17.2

96.0
24.0

123.5
30.9

164.6
41.2

165.0
41.3

5.6
5.6

7.9
7.9

10.1
10.1

13.5
13.5

5.1
7.9
12.9

7.1
11.0
18.1

9.1
14.2
23.3

12.2
18.9
31.1

4.6
7.1
11.0
22.7

6.4
9.9
15.4
31.7

8.2
12.8
19.8
40.8

10.9
17.0
26.5
54.4

4Q14

2011

2012

54%
14%

231.0
57.8

0%

37.1
37.1

2013

50%
12%

323.4
80.9

8%

33.4
52.0
85.4

2014

47%
12%

452.8
113.2

46%
11%

12%

30.1
46.8
72.8
149.6

15%

Subtotal of Maintenance Bookings

6.3

8.8

11.3

15.0

14.4

20.1

25.9

34.5

25.2

35.3

45.3

60.5

39.8

55.7

71.7

95.6

41.3

PSO
Total Monthly Bookings

15.0
46.3

21.0
64.8

27.0
83.3

36.0
111.0

21.0
70.4

29.4
98.5

37.8
126.7

50.4
168.9

29.4
103.6

41.2
145.0

52.9
186.5

70.6
248.6

41.2
149.6

57.6
209.4

74.1
269.2

98.8
359.0

99.0
305.3

32%
100%

138.6
464.5

30%
100%

194.0
683.7

28%
100%

271.7
987.2

28%
100%

Revenue
License Revenue
Maintenance
PSO
Total Monthly Revenue
Growth

25.0
25.0

35.0
1.6
11.3
47.8

45.0
3.8
15.8
64.5

60.0
6.6
20.3
86.8

35.0
10.3
27.0
72.3
189%

49.0
12.3
15.8
77.1
61%

63.0
15.2
22.1
100.2
55%

84.0
18.8
28.4
131.2
51%

49.0
23.7
37.8
110.5
53%

68.6
26.4
22.1
117.1
52%

88.2
30.2
30.9
149.3
49%

117.6
35.1
39.7
192.4
47%

68.6
41.6
52.9
163.1
48%

96.0
45.2
30.9
172.1
47%

123.5
50.3
43.2
217.0
45%

164.6
56.9
55.6
277.1
44%

165.0
11.9
47.3
224.1

74%
5%
21%
100%

231.0
56.7
93.2
380.8
70%

61%
15%
24%
100%

323.4
115.4
130.4
569.2
49%

57%
20%
23%
100%

452.8
194.0
182.6
829.4
46%

55%
23%
22%
100%

10.0

14.0

18.0

24.0

14.0

19.6

25.2

33.6

19.6

27.4

35.3

47.0

27.4

38.4

49.4

65.9

66.0

61%

92.4

43%

129.4

36%

181.1

32%

9.5
9.5

13.3
13.3

17.1
17.1

22.8
22.8

9.0
13.3
22.3

12.6
18.6
31.3

16.2
23.9
40.2

21.7
31.9
53.6

8.6
12.6
18.6
39.8

12.0
17.7
26.1
55.8

15.4
22.7
33.5
71.7

20.6
30.3
44.7
95.6

0%
0%
0%
0%

62.7
62.7

29%
0%
0%
29%

59.6
87.8
147.3

17%
24%
0%
41%

56.6
83.4
122.9
262.9

10%
15%
22%
47%

Y1 Subscription Renewals
Y2 Subscription Renewals
Y3 Subscription Renewals
Subtotal Renewals
PSO
Total Monthly Bookings
Revenue
New Monthly Subscriptions
Subscription Renewals
PSO
Total Monthly Revenue
Growth

6.5
16.5

3Q14

Y1 Renewal Maintainance Bookings


Y2 Renewal Maintainance Bookings
Y3 Renewal Maintainance Bookings
Total Renewal Maintainance Bookings

SaaS BusinessModel
Bookings
New Monthly Subscriptions

4Q13

94.9

166.2

262.8

9.1
23.1

11.7
29.7

15.6
39.6

9.1
32.6

12.7
45.6

16.4
58.7

21.8
78.2

12.7
54.7

17.8
76.5

22.9
98.4

30.6
131.2

17.8
85.1

25.0
119.1

32.1
153.2

42.8
204.3

42.9
108.9

39%
100%

60.1
215.2

28%
100%

84.1
360.8

23%
100%

117.7
561.7

21%
100%

2.5
5.2
7.7

6.0
7.3
13.3

10.5
9.4
19.9

16.5
12.5
29.0

17.5
2.4
7.3
27.2
253%

18.9
5.7
10.2
34.8
162%

20.7
10.0
13.1
43.8
120%

23.1
15.7
17.5
56.2
94%

24.5
18.9
10.2
53.6
97%

26.5
23.4
14.3
64.1
84%

29.0
29.1
18.3
76.5
75%

32.3
36.8
24.5
93.6
66%

34.3
41.2
14.3
89.8
68%

37.0
47.3
20.0
104.4
63%

40.6
55.2
25.7
121.5
59%

19.0
21.8
40.8

47%
0%
53%
100%

73.6
18.1
43.1
134.7
230%

55%
13%
32%
100%

103.0
87.1
60.3
250.4
86%

41%
35%
24%
100%

144.3
180.6
84.4
409.2
63%

35%
44%
21%
100%