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MGI Latest Research

MGI Research coverage enables IT executives, users and investors to make more informed, timely and critical go/no-go decisions on issues that directly affect valuations, market entry and exit, major investments, acquisitions and divestitures. MGI core quantitative research helps technology vendors and investors to more accurately assess and benchmark company operating performance and strategy and identify ways for improvement in growth, gains in market share and valuation multiples. MGI core quant data underpins MGI Advisory Services and Benchmarking engagements. Research themes focus on the major non-linear industry trends such as virtualization, cloud computing, SaaS, emerging mobile platforms, 4G, social media and Agile and their impact on the user, vendor and investor strategies. Access to MGI research materials is available by Subscription. Select research notes are available in our Research Store. Subscribers get priority access to all published research as well as analyst consultation. Among companies covered are Salesforce.com, Oracle, Google, Microsoft, SAP, IBM, HP, CA, BMC and others.


SaaS Valuation 2012: What Price is Right?

Our growth-based valuation approach to Software as a Service (SaaS) companies has received significant industry recognition and use. Five public SaaS acquisitions confirmed our SaaS valuation model last published in March of 2011.  During 2011 and 1Q2012, SaaS companies maintained and even expanded the valuation premium gap to the rest of the software sector.  Even though acceptance of SaaS among business and IT buyers has grown meaningfully in 2011 and Q12012, production use indicates a very early stage of adoption. As the market matures, revenue growth remains the dominant valuation factor. Other SaaS valuation variables such as cash flow growth, expansion in GAAP profitability, and a premium for dominant market share are likely to gain prominence by 2014-2015. This Research Note provides updated valuation benchmarks and a revised SaaS valuation formula. It reviews key operating data, risks to SaaS valuations, equity market performance, and MGI’s outlook for SaaS M&A. Key issues include:

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Download this file (MGI Research SaaS Valuation Apr 2012.pdf)SaaS Valuation 2012: What Price is Right?

The Future of Mobile Apps – One on One with a Market Leader

2011 was a landmark year in which more apps were developed for mobile devices than for all other platforms combined. Enterprise demand for building mobile apps is hot – and hasn’t gone unnoticed by the major software companies.  SAP’s recently acquired Syclo, and Symantec announced two mobile software deals in March.  Sam Lakkundi, the head of strategy at Kony Solutions, a leading provider of mobile enterprise application platform (MEAP) offers his views on the future of mobile apps, the opportunities and risks associated with HTML5, and what leading financial services companies are doing to differentiate themselves with mobile apps.

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Download this file (MGI Research - 20 Questions with Sam Lakkundi Kony Solutions.pdf)20 Questions with Sam Lakkundi of Kony Solutions

SaaS Procurement: 20 Questions with the CEO of Coupa Rob Bernshteyn

The procurement software market is undergoing major disruption as SaaS companies offer a value proposition that many business executives find compelling.  Ariba (MGI Score: 577) and Concur (MGI score 958) are two publicly listed companies that compete in this broadly defined procurement/spend management market space.  Venture-backed Coupa now claims to be able to contractually guarantee its customers a 1% reduction in operating spend and a number of blue chip customers are already using this cloud-based solution. In an in-depth 20 Questions conversation with Andrew Daily of MGI Research, Rob Bernshteyn, the CEO of this Silicon Valley-based company sounds off on a spectrum of topics - from Coupa's approach to procurement and spend management to the role of central IT to the tradeoffs Coupa is making to stimulate growth and long-term market position. 

The CIO’s Role in IT Negotiations - 15 Best Practices

With formal IT spending consuming anywhere from one to fifteen percent of revenues, CIOs, CFOs and CEOs often ask: "What specific actions should every CIO be taking to improve the outcome of IT negotiations?".  In response to these client requests, the MGI analytic team collaborated with our Senior Adviser Joe Galuszka to create a set of actionable CIO best practice for IT negotiation. This report details the top 15 actions that every CIO can take to ensure maximum negotiation leverage and effectiveness.  Employing these best practices has enabled clients to improve negotiated results by 10-25%+, - resulting in hundreds of thousands, and even millions of dollars in net savings – not to mention significantly improved contract terms and conditions and improved vendor relationships.

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Download this file (MGI Research - CIOs Role in IT Negotiations - 15 Best Practices.pdf)15 Negotiation Best Practices for CIOs

Using Force.com in Higher Ed - Interview with the CEO of Enrollment Rx

We view the Higher Education market as being ripe for a significant IT transformation. The higher education software vertical was once perceived as having little appetite for technology.  That is no longer the case. Today, higher ed is feeling the full force of all the disruptive technologies at a time when pressure to reduce costs is rising.  Enrollment Rx CEO Lawrence Levy joins us for 20 Questions, and shares his views on the major changes taking place in higher ed technology, as well as his experience of running his business on salesforce.com’s Force.com platform, and why the established CRM and SIS vendors in higher ed should be concerned about their customers.
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Download this file (MGI Research - 20 Questions with Enrollment Rx CEO Levy.pdf)Using Force.com in Higher Ed

Can Microsoft Catch Up in Agile? - Interview with a Microsoft Tools Expert

In this wide-ranging interview with Telerik executive and Microsoft tools expert Joel Semeniuk we discuss Agile in the Microsoft context and the prospects for Telerik in this fast moving market. 

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Download this file (20 Questions with Telerik EVP Joel Semeniuk.pdf)Can Microsoft Catch Up in Agile

Mobile Enterprise Application Platforms (MEAPs): A Buyer’s Guide

Mobility is becoming the mainstream platform for application access and for on-line transactions. This research report aims to help companies optimize their mobile development strategies and make more intelligent choices with regard to mobile app development tools. We examine the various strategies for automating mobile apps development and specifically look at the applicability and requirements for Mobile Enterprise Application Platforms (MEAPs) - software development environments that can automate creation of mobile applications for many mobile environments from a single code base. The report focuses on how organizations can transition their mobile application strategies from disposable to reusable, from artisanal to industrial, what tools are appropriate for which types of mobile apps and how to evaluate such tools. The research contained in the report blends and balances both the LOB and marketing views of mobile choices with those emanating from within the IT organizations. To view a PDF version of this Buyer's Guide Summary please, click here

Attachments: (For Subscribers)
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Download this file (MGI Research - Mobile Apps Platforms Buyers Guide Feb 2012.pdf)MEAP Buyer's Guide

Trusted Cloud - Market Size Estimates

Impact Scenario for Trusted Cloud AdoptionWe estimate the size of the Trusted Cloud services market at slightly over $2 Billion in 2016 up from less than $500 Million in 2012. We see it as a specialized, high-growth opportunity significantly shaped by demand for cloud computing services from US federal, state and local government.

In a cloud computing context, Information Security is consistently one of the top concerns of business and IT executives. Despite vendor assurances of tight security controls within the cloud and statistically a relatively low rate of security incidents, most potential and actual cloud services buyers see the cloud as essentially a black box and its security as something they are asked to take on faith. Cloud suppliers like Amazon Web Services, Rackspace, Salesforce.com and others point out the miniscule current number of service disruptions due to security issues and the large ongoing investment into increased security controls. Many cloud suppliers have gone to great lengths to hire top security talent and obtain security certifications from government and industry bodies. Still, there continues to be a lingering fear and doubt about how secure the digital assets placed into the cloud are. Is security holding back the rate of cloud adoption? Would the adoption accelerate dramatically if the cloud was perceived to be more secure? What do vendors have to do to make users feel that the cloud can be trusted? Would customers be willing to pay extra for an additional layer of security and does that translate into a business opportunity?  In this research report we assess the probability for at a potential new market that we term as Certified Trusted Cloud or CTC, address its evolution scenarios and estimate its market size. The report is focused on the US, non-consumer sector.

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Download this file (MGI Research - Trusted Cloud Market Study January 2012.pdf)Trusted Cloud Analysis and Market Size Forecast 2012

20 Questions with Rootstock Software CEO Pat Garrehy

Rootstock SoftwareUntil recently, successful SaaS companies have excluded core manufacturing functionality, and focused on departmental and/or horizontal functionality far from the plant floor.  That’s about to change. Rootstock Software, founded by a team of experienced manufacturing ERP experts, is creating a new generation of manufacturing applications based in the cloud. In this 20 Questions session with Rootstock Software CEO Pat Garrehy we explore the following key issues:

  • The feasibility of using a SaaS model for manufacturing apps
  • How to leverage cloud platforms like Force.com and NetSuite for complex applications and
  • The experience of selling and deploying SaaS manufacturing apps into customer environments of different sizes, locations and industries

Pat Garrehy is singularly qualified to share his views on these topics. Prior to his role as the CEO of Rootstock, Pat has served for over 20 years as the CEO of Relevant Business Systems, a full-suite ERP solution for defense and aerospace industries. Simillarly, Rootstock is unique amongst manufacturing-focused SaaS vendors to run in both the NetSuite and Salesforce (Force.com) clouds.

Attachments: (For Subscribers)
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Download this file (MGI Research 20 Questions with Rootstock Software CEO Pat Garrehy.pdf)20 Questions with Pat Garrehy - CEO of Rootstock Software
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