Software

MoffettNathanson’s Software research is led by Adam Holt. Adam is among the best known and most widely respected research analysts on Wall Street. He has 17 years of experience as a Software analyst – as the Global Head of Software Research at both J.P. Morgan and Morgan Stanley. At Morgan Stanley, Adam was ranked the #1 Software analyst in America by Institutional Investor Magazine and/or Greenwich Associates for six consecutive years. Prior to joining MoffettNathanson, Adam was a Partner at Qatalyst Partners, where he led the firm’s Software investment banking practice, and helped the firm complete over $60 billion of software-related M&A and financing transactions.

COMPANY NEWS

CONFERENCE CALL REPLAY | PaaS Wars; Demystifying the PaaS Market and Related Investment Opportunities

April 17, 2018 8:00 AM PDT / 11:00 AM EDT

Click here for the replay

Conference call materials

We believe that a fundamental change in the way applications are being built, delivered and managed is creating one of the bigger software opportunities we have seen in our 20+ years in the business, while representing a real risk to legacy vendors that make up roughly $122B of software and services spend that can potentially be disrupted by PaaS and hybrid models. Simply, PaaS automates the infrastructure for building, delivering and managing applications in the cloud, while hybrid delivery leverages this technology to complement and enhance on premise software.

Over the next 4 years, we expect cloud based workloads to grow 20-25%, driven by a) more propriety apps (which are over 50% of all apps) moving to the cloud and b) extensions of SaaS apps both of which will cause the PaaS layer to become one of the most important and fastest growing segments in the entire tech stack. In our universe, Red Hat and Salesforce are the best positioned from PaaS and hybrid adoption, have the most financial upside from these shifts and remain two of our top picks, while Microsoft is also well positioned to benefit.

In this report and on this call we detail:

- How and why application development has changed (complete with a detailed technical overview)

- How the platform as a service market is becoming one of the most important layers in the technology stack, set to disrupt $122B of revenue comprised of legacy middleware tools, on premise discrete software tools, database and analytics, and custom app development services

- The realistic opportunity for PaaS providers and how we are just beginning to climb the steepest part of the S-Curve Adoption Cycle with PaaS adoption just over 25% going to 41% over the next three years

- The major players in the market and a detailed comparison of how the technology stacks and go to market capabilities differ

- How different platforms are leveraged for specific use cases

- The winners and losers in the shift in application development

- The fundamental impact to stocks under coverage and the major public cloud providers

COVERAGE LIST

Adam Holt

Partner

Adam has over 22 years of research, investing and advisory experience at Qatalyst, Morgan Stanley, JP Morgan and Hambrecht & Quist. Most recently, Adam led the software practice at Qatalyst Partners, an M&A and capital advisory firm. During Adam’s tenure, Qatalyst announced or completed over $60B worth of software transactions including four of the largest software deals ever—the sale of Informatica to Permira for $5.4B, Concur to SAP for $8.3B, Netsuite to Oracle for $9.4B and LinkedIn to Microsoft for $28.1B. At Morgan Stanley and JP Morgan, Adam was ranked as the #1 software analyst on the Institutional Investor All-American Team in 2010, 2011 and 2012, and ranked #1 for six years in the Greenwich Institutional poll. Adam participated in more than 50 equity offerings totaling more than $8B in value that created over $100B in market cap. Adam has also helped lead roughly a dozen private investments. Past public clients include Advent Software, Blackbaud, Financial Engines, Microsoft, Oracle, Palo Alto Networks, Qliktech, Responsys, Salesforce, ServiceNow, SolarWinds, Splunk, SuccessFactors, Taleo, VMware and Workday. At Qatalyst, Adam helped lead transactions for Advent, CA, Citrix, Concur, Datalogix, Genesys, Informatica, Intuit, LinkedIn, Netsuite, RelateIQ and others. Adam graduated cum laude from Princeton University with a B.A. in Religious Studies and lives in San Francisco with his wife and two daughters.

Raymond McDonough, CFA

Senior Research Associate

Raymond McDonough joined MoffettNathanson in March 2017 to cover Software with Adam Holt. Prior to joining MoffettNathanson, Raymond was a Director at Oppenheimer and Company, joining the firm in 2014 to cover the Communications and Cloud Services Sector with a focus on Cloud Services (Internet Infrastructure and Cloud Computing). Prior to Oppenheimer, Raymond spent four years on the buy side as a generalist. Raymond graduated from Loyola University Maryland in 2010 with a B.B.A. in Finance and a minor in American Studies, and is also a CFA charterholder.

Priya Parasuraman

Senior Research Associate

Priya Parasuraman joined MoffettNathanson in October 2017 and covers the Software sector with Adam Holt. She has 15 years experience in research, start-up advisory, venture capital and corporate development. Most recently Priya was at Wells Fargo Securities focusing on the software, security and enterprise infrastructure sector. She also advised technology entrepreneurs. Prior to that Priya was at Oppenheimer as a senior associate covering multiple technology sectors including software. She started her career at TVS Group in corporate development and moved to TVS Venture Capital. Priya received a Master of Science in Finance from Boston College, an MBA from BIM in India and a Bachelors degree in Mathematics from University of Madras. She lives in Lexington, MA with her husband and son.

Shaan Sheikh, CFA

Senior Research Associate

Shaan Sheikh covers the U.S. Software & Services Sector with Adam Holt. He joined MoffettNathanson in May 2017. Previously, Shaan was a Senior Associate at Morgan Stanley, where he covered the Energy sector and contributed to a top Institutional Investor ranked team. Shaan graduated from the University of Pennsylvania in 2007, earning Bachelor degrees in Finance and Engineering. He also received an MBA from Columbia Business School, and is a CFA Charterholder.

Date	Event	Location
March 2018	Meetings & Group Lunch with Brad Smith, CEO & Chairman of Intuit	New York, NY
March 2018	Group Dinner with Larry Bohn and David Fialkow, Senior Partners at General Catalyst Management	Boston, MA
March 2018	Group Meeting with Charles Philips, former President of Oracle, and current CEO of INFOR	New York, NY
March 2018	Meeting with Keith Block, the Vice Chairman and President of Salesforce	Washington, DC / Baltimore, MD / New York, NY
Spring 2018	Group Meeting with Dave DeWalt, former CEO of Documentum and FireEye, and current CEO of NightDragon	TBD
April 2018	Meeting with Jim Whitehurst, CEO, and Eric Shander, CFO, at Red Hat Headquarters	Raleigh, NC

Research Reports

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Software

COMPANY NEWS

COVERAGE LIST

Adam Holt

Partner

Raymond McDonough, CFA

Senior Research Associate

Priya Parasuraman

Senior Research Associate

Shaan Sheikh, CFA

Senior Research Associate

Research Reports

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