Discussion Materials May, 2017
This presentation contains “forward - looking” statements, including the long-term target model, that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our future financial performance, including our long-term target model, the impact of competition in our industry and innovation by our competitors, anticipated trends, growth rates and challenges in our business and in the TBM market, our customer base, our anticipated growth and growth strategies, our ability to manage that growth and effect these strategies, our involvement with, and the activities of, the TBM Council, our ability to sell our solutions and expand, our intellectual property position, and any statements of assumptions underlying any of the items mentioned. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate” “predict,” “project,” “potential,”“continue,” “ongoing” or the negativeof these terms or other similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under th e captions “Forward - Looking Statements,” “Risk Factors” and elsewhere in our filings with the U.S. Securities and Exchange Commission, including, without limitation, the Quarterly Report on Form 10-Q filed with the Commission on May 5, 2017. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information become available in the future. This presentation includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission (the “SEC”) rules. These non -GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures.
Market Leader Managing Significant IT Spend Proven SaaS Applications & Analytics Platform Unlock existing Financial and IT data Trusted by IT organizations of all sizes to drive: Transparency for fact-based decisions Planning to align investments Engagement with business on value Optimization to increase efficiency “IT can no longer leave the analysis, management, and optimization of technology management costs to spreadsheets and uncoordinated processes.”
Apptio Pioneered a Finance has ERP Sales has CRM CRM HR has HRM Technology Business Management TBM
Manages theBusinessof IT Transparency Decisions Planning Innovation DATA INGESTION ManagestheWork & & Operations of of IT IT Service Management Financial Vendor Operations Management
Market Leade eaders rship hip Fueled by IT IT Transformation Di Diffe fferen rentiated tiated Pla Platfo tform rm a and nd Appli Applica cations tions TBM TBM Cou ouncil ncil Accele Accelerating ating Cate ategory gory Adoption Adoption Well ell Posi ositione tioned d for for Growth Growth $6 $6 Billion+ Billion+ Total Addressable Market Stron Strong Financ Financia ial Model Model
$ 2.7 TRILLION 1 Glob lobal l Digital Comp omple lex x IT IT Spend Spend Disruption Supply Su ly Chain Yet CIOs Try to Run Their Business on Spreadsheets (1) Gartner, Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2014-2020, 2Q16 Update, July 25, 2016
From To DeliverTechnology Technology as aService Black Box Glass Box Run On-Premise Run on Cloud / Hybrid IT as Cost Center IT as Value Driver
SaaS Applications Cost Transparency IT Benchmarking Business Insights Bill of IT IT Planning Analytics & & Data Platform Integrated Self-Service Analytics Apptio TBM Unified Model™ Cost Analytics Engine ( ATUM™ ) Adaptive Data Management Customer Source Data Service Management ERP / Financial ERP / Financial Vendor Vendor Operations Management
Transparency Planning Engagement Optimization for good cloud decisions to capture cloud investments on value of cloud of all cloud investments Compare TCO of Forecast and plan cloud Expose cloud migration Identify underutilized or on-prem and cloud spend levers to BUs redundant services Identify cloud cost drivers Plan with cloud contract Centralized view of cloud Integrate AWS and Azure across the business terms, renewals and rates across the business billing data Avoid cloud sprawl with Capture cloud costs in Manage cloud Optimize SaaS licensing consolidation build-and-run phases cost recovery and usage for O365/SFDC
Monetizable Competitive Differentiator DATA SOURCES
The run-piece of the budget was huge . We’ve now reduced a third of that and Run costs increased discretionary spend 20x which we’re using to build competitiveness and crowd out innovation to innovate. When it came to planning the business knew their CapEx investment, but not the Inefficient long tail of OpEx. They looked at return on capital, but couldn’t see the run costs use of capital to assess profitability . The Business We had to explain to business leaders that some of their units have employees goes around you that rarely use IT services, while others used every IT service imaginable . Business thinks Business owners tend to forget how much of their old data backups are being stored and how that adds up. IT is free
EXAMPLE ASSUMPTIONS 1 HOW VALUE IS RECOGNIZED EXAMPLE ROI 2 50M 3-5% Shift Run spend to Grow Annual Operating Budget Shift From Run To Grow 60% 8 Automation of IT financial processes Run-the-Business Spend Months Breakeven 10X ROI Better financial 40% stewardship across teams Grow and Transform Spend Over Three Years 1: Example based on purchase of Apptio Cost Transparency Foundation module and implementation services. Forrester applied its methodology to actual data provided by Apptio and interviews with Apptio customers. 2: Apptio commissioned Forrester to review the Apptio ROI model in June 2016 using Forrester’s proprietary Total Economic Impact™ methodology. Forrester deems that the Apptio ROI model conforms to the TEI fundamentals an d principles of a sound business case. The intent is for Apptio to guide customer prospects through a questionnaire and the ROI model to solicit inputs specific to prospect business and technology environment. Forrester believes that this analysis is representative of what companies may achieve with Apptio services based on the inputs provided and any assumptions made. Forrester does not endorse Apptio or its offerings.
TBM BOARD Subway Restaurants SunTrust Banks WorleyParsons CIO EVP & CIO Former CIO Carman Wenkoff Brian Adams Anil Cheriyan MISSION Nationwide Building Society Cox Enterprises MIT A non A non-profit org profit organization anization CIO SVP & CIO Principle Research Scientist Debra Bailey Greg Morrison George Westerman de dedica dicate ted d to adv to advanc ancing ing th the disc discipline ipline of of m manag anaging ing Cisco AOL Microsoft SVP & CIO, IT CIO CIO the business the business of I of IT Guillermo Diaz James LaPlaine Jim DuBois First American Financial AIG Nike SVP & CIO MEMBERS Global CTO Global CIO 3, 3,50 500+ 0+ Larry Godec Mike Brady Jim Scholefield ExxonMobil DuPont Rodan + Fields CIO VP, Info. Technology Global CTO Phuong Tram Mike Brown Ralph Loura Apptio Stanley Black & Decker, Inc University of Pennsylvania VP & CIO CEO University CIO & VP, IT Sunny Gupta Rhonda Gass Tom Murphy Micron CIO Trevor Schulze
Standardized Cost Model Cloud Billing CIO Metrics TBM Taxonomy Financial Fundamentals APPLICATIONS & SERVICES Delivery Metrics IT TOWERS & SUB-TOWERS COST POOLS & SUB- POOLS
$20B+ Revenue ~750 Companies $1B-20B Revenue 10K+ Companies Pricing : Tiers based on $ of IT Spend Managed, # of Applications/Modules
2016 IT Spend 1 SubscriptionFees CurrentTAM (1) Gartner, Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2014-2020, 2Q16 Update, July 25, 2016
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