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www.pwc.com/globalsoftware100Technology InstitutePwC Global 100Software LeadersDigital intelligence conquers theworld below and the cloud above

Executive summaryThe new PwC Global 100 Software Leaders ranking reveals whois taking advantage of both the evolutionary and revolutionarychanges afoot in technology. While the cloud continues to underpinmassive change, other trends are building on its capabilities tocreate opportunities in digital innovation, industrial capabilities andconvergence within vertical markets. This initial article providesan overview of the trends impacting the global leaders and others.Future articles will examine issues impacting the fastest growingcloud-based companies and the larger software companies inemerging markets.2PwC Global 100 Software Leaders

IntroductionWe are in an era of innovationthat seems to have no precedent.Concurrent advances in softwaredevelopment, mobility, connectivityand analytics have combined tocreate a landscape in which ideasarise, and flourish quickly. Theunderlying foundation to thisinnovation is software—smarter,leaner and better software.The new edition of the PwC Global100 Software Leaders rankingreveals the vendors who are takingadvantage of both the evolutionaryand revolutionary changes afootin technology. While the cloudcontinues to underpin massivechange, other trends are building onits capabilities to create opportunitiesin digital innovation, industrialcapabilities and convergence withinvertical markets.The spoils go to anyone whosecode represents an improvement.As a result, startup vendors arechallenging established softwarecompanies, sometimes withsignificantly better ideas. The PwCGlobal 100 Software Leaders listcontains examples of this. Cloudbased Workday, which appears on theGlobal 100 for the first time at #72,is challenging existing companies inthe human-resources space. Splunk, astartup focused on big-data analyticsdebuting at #100, is challengingestablished firms in similar areas.Customers are seeing rampantchanges as well. Enterprises havethe opportunity to take advantageof various new deployment options,not only from startups, but also fromestablished vendors. The spectrumof options encompasses everythingfrom private to public cloud, fromonsite to offsite hosting and fromperpetual licenses to month-tomonth subscriptions.Our research yields fourkey findings:The partnership landscape alsopercolates. Consider GeneralMotors partnering with Lyft forwhat might be driverless cars, orRoche partnering with Qualcommto improve remote monitoring ofpatients with chronic diseases. Forcompanies seeking to use software—either their own or someone else’s—for a competitive advantage, thechoices may be overwhelming. The move to SaaS significantlyimpacts the revenue of traditionalvendors. The software industry isexperiencing a rapid expansion ofits total addressable market (TAM)and a high level of turbulence. Cloud adoption is creating newsoftware-as-a-service (SaaS)-basedbusiness models. Connected devices and artificialintelligence (AI) are creating newbusiness opportunities.This is the fourth edition of PwC’sGlobal 100 Software Leaders rankingsince 2010. The current editioncontinues our tradition of monitoringand analysing the leading companiesand trends in the industry. Our goalis to help our clients understand boththe obvious and the underlying forcesinfluencing the software industry.Thanks to software, we arenot only living in a time ofunprecedented innovation,but also one of unprecedentedopportunity and uncertainty.PwC3

Global 100 Software LeadersAnalysing the changes between the current Global 100 Software Leaders andthe previous ranking, published in 2014, indicates just how dynamic the marketis. Both lists were compiled for PwC by International Data Corp. (IDC). (Formore information on how the lists are compiled, see the Methodology sectionon page 20.) Fourteen companies fell off the current list, which means 14are new. A churn of 28 seems like quite a bit in just two years. Four of the 14companies that fell off the list were acquired, and one (Compuware) split intotwo companies. Actually, it’s fairly easy to fall off the list. Of the bottom 12 inthe previous list, 10 are gone.Growth and innovation continue apaceThe Global 100 Software Leaders' revenues grew from US 247.5 billion in2012 to US 272.2 billion in 2014, a 10% increase. Meanwhile, the rest of theindustry grew 13% amidst a relatively weak global economy.(US Billion)Growth rate 400 300 200 113.1B 100.1B 86.0B 100.5B 161.5B 171.7B13%16.9% 10006.3%2012Top 10 software companies2014#11-100Rest of the software industrySource: PwC's Global 100 Software Leaders report with data provided by IDC.4PwC Global 100 Software Leaders

“Several companies couldn’t keepup their growth and as a result felloff the list,” says Mark McCaffrey,PwC Global Software Leader, “Thereare others that are large enough tosurvive because they have the cashand the wherewithal to acquirecloud companies.”Many companies show staying power:Microsoft remains at #1, while Oracleand IBM have swapped as #2 and #3,with Oracle edging out IBM. Othercompanies in the top 20 from theprevious list have moved up: Symantec, up one position to #5; EMC, up two at #6; Salesforce, up four to #9 Intuit, up six to #10.A couple of big jumps are worthmentioning: Google leaped from #52to #20, while Dell jumped from #64to #36. (See table on pages 6-9)“Many factors affect downwardmovement,” says Raman Chitkara,PwC Global Technology Leader.“These include the ongoing shiftfrom a licensing to a SaaS businessmodel, competition from startupsand the challenge of digitisation. Insome cases, a lack of agility when itcomes to executing organisationalchange could be the issue.”Some companies are clearly takingadvantage of the SaaS revolution. Thecurrent Global 100 Software Leadersalso ranks SaaS and platform-as-aservice (PaaS) revenue for the top50 companies, and the percentageeach segment comprises of overallsoftware revenue. The companieswith the biggest jump in the combinedpercentage represent a small groupthat is on the cutting edge.Among the top 20 companies the listof SaaS standouts includes: Intuit (#10) with 46% of revenuesfrom SaaS;Moving in the other direction in thetop 20: Adobe (#11) with 23% of revenues; HP, down one position at #8; Cisco Systems (#14) with 35%; CA Technologies, down two at #12; Citrix (#19) with 27%. Adobe, down two at #11.These are indications of companies thatunderstand the changes underway.(See table on pages 12-13)Somecompanies areclearly takingadvantageof the SaaSrevolution.PwC5

Global 100Rank CompanyCountryHQ2014 Softwarerevenue(US M)2014 Totalrevenue(US M)Softwarerevenue as% of total1MicrosoftUSA 62,014 93,45666.4%2OracleUSA 29,881 38,82877.0%3IBMUSA 29,286 92,79331.6%4SAPGermany 18,777 23,28980.6%5SymantecUSA 6,138 6,61592.8%6EMCUSA 5,844 24,43923.9%7VMwareUSA 5,520 6,03591.5%8Hewlett PackardUSA 5,082 110,5774.6%9Salesforce.comUSA 4,820 5,27491.4%10IntuitUSA 4,324 4,57394.6%11AdobeUSA 4,061 4,183.597.1%12CA TechnologiesUSA 4,053 4,41091.9%13SAS*USA 2,884 3,08493.5%14Cisco SystemsUSA 2,836 47,8235.9%15Dassault SystèmesFrance 2,695 3,03888.7%16SiemensGermany 2,613 95,5422.7%17FujitsuJapan 2,527 43,5265.8%18AutodeskUSA 2,413 2,48697.1%19CitrixUSA 2,376 3,14375.6%20GoogleUSA 2,273 66,0013.4%21HitachiJapan 2,159 91,2462.4%22AppleUSA 2,110 199,8001.1%23InforUSA 2,099 2,81574.6%24SynopsysUSA 1,934 2,10092.1%25IntelUSA 1,899 55,8703.4%*Denotes a privately held company6PwC Global 100 Software Leaders

Rank CompanyCountryHQ2014 Softwarerevenue(US M)2014 Totalrevenue(US M)Softwarerevenue as% of total26BMCUSA 1,878 2,08790.0%27SageUK 1,724 1,76297.8%28ADPUSA 1,660 10,60415.7%29Wolters KluwerThe Netherlands 1,539 4,88031.5%30Red HatUSA 1,517 1,74187.1%31OpenTextCanada 1,496 1,85880.5%32SunGard*USA 1,464 2,80852.1%33NECJapan 1,441 28,1515.1%34Cadence Design SystemsUSA 1,435 1,57990.9%35HexagonUK 1,413 3,49740.4%36DellUSA 1,395 58,5002.4%37TeradataUSA 1,221 2,73244.7%38NetAppUSA 1,169 6,25218.7%39NCRUSA 1,157 6,59117.6%40Epic Systems*USA 1,140 1,77064.4%41Constellation SoftwareCanada 1,134 1,23092.2%42McKessonUSA 1,123 168,7110.7%43Mentor GraphicsUSA 1,076 1,23187.4%44PTCUSA 1,073 1,35879.1%45Trend MicroJapan 1,035 1,09095.0%46Nuance CommunicationsUSA 1,009 1,92752.3%47DATEV*Germany 975 1,11987.1%48Esri*USA 960 1,12985.0%49CernerUSA 946 3,40227.8%50ANSYSUSA 917 93698.0%*Denotes a privately held companyPwC7

Rank CompanyCountryHQ2014 Softwarerevenue(US M)2014 Totalrevenue(US M)Softwarerevenue as% of total51InformaticaUSA 914 1,04887.2%52TIBCO*USA 847 1,01683.4%53Software AGGermany 843 1,13874.1%54Optum*USA 819 47,7461.7%55Schneider ElectricFrance 804 33,2522.4%56FiservUSA 781 5,06615.4%57AvayaUSA 766 4,31917.7%58Kronos*USA 762 1,05472.3%59The Attachmate Group*USA 733 87284.1%60GE HealthcareUK 732 18,3004.0%61Epicor SoftwareUSA 731 99473.5%62Verint SystemsUSA 725 1,11065.3%63Concur TechnologiesUSA 724 73299.0%64athenahealthUSA 711 75394.5%65Kaspersky Lab*Russia 695 71197.7%66Wincor NixdorfGermany 666 3,27920.3%67FICOUSA 643 79481.0%68FISUSA 633 6,4009.9%69Misys*UK 611 89668.2%70JDA Software*USA 605 1,00960.0%71SWIFTBelgium 602 79276.0%72WorkdayUSA 592 76077.9%73Genesys TelecommunicationsLaboratories*USA 587 85069.0%74TOTVSBrazil 584 75277.7%75NICE SYSTEMSIsrael 576 1,01256.9%*Denotes a privately held company8PwC Global 100 Software Leaders

Rank CompanyCountryHQ2014 Softwarerevenue(US M)2014 Totalrevenue(US M)Softwarerevenue as% of total76ServiceNowUSA 569 68383.4%77CommVaultUSA 565 61492.0%78Bentley Systems*USA 532 62585.1%79ConvergysUSA 528 2,85618.5%80NeusoftChina 508 1,26940.0%81VismaNorway 507 1,12944.9%82QlikUSA 503 503100.0%83Micro FocusUK 502 51996.7%84ACI WorldwideUSA 489 1,01648.2%85InterSystems*USA 489 489100.0%86Palantir*USA 484 56985.0%87Unit4The Netherlands 480 69668.9%88AllscriptsUSA 477 1,37734.6%89MEDITECHUSA 476 51792.0%90Blackboard*USA 467 66070.7%91Amazon.comUSA 466 88,9880.5%92Micros SystemsUSA 464 90451.3%93PegasystemsUSA 449 59076.1%94NetSuiteUSA 449 55680.6%95MicroStrategyUSA 447 58077.1%96ESET*Slovakia 437 48690.0%97Pitney BowesUSA 430 3,82211.2%98SolarWindsUSA 428 428100.0%99Ultimate SoftwareUSA 420 50683.0%100SplunkUSA 404 43592.9%*Denotes a privately held companyPwC9

Evolution vs. revolutionAs we look to the future, PwC seesan industry experiencing a high levelof turbulence. On the one hand, wesee a lot of evolution. The trends weidentified in previous analyses ofthe software industry continue. Thecloud, in the form of SaaS, PaaS orinfrastructure-as-a-service (IaaS),is becoming increasingly popular asenterprises recognise the flexibilityit brings to applications and otherdeployments. Its adoption is creatingnew SaaS-based business models.Subscription-based deploymentsare increasingly replacing softwarelicensing, which significantlyimpacts the revenue streams oftraditional vendors. Amy Konary,IDC Programme Vice President forSaaS, Business Models and MobileEnterprise Apps, deems 2016 an“inflection point” in the relationshipbetween software subscriptionsand licenses. According to IDCcalculations, subscriptions will grow20% and licensing will decrease1.7% in 2016. One only has to look atAdobe’s 2013 change in strategy—moving from licensing to subscriptionsales—for an example of a companymaking the difficult shift.10PwC Global 100 Software LeadersSoftware industry concentrationThe top 10 global software companies generated almost half of the entireindustry's revenues. The top 5 lag in cloud-based revenues.2014 revenuesOverall softwareindustry revenuesTop 100 revenuesTop 10 softwarecompaniesTop 5 softwarecompaniesTotal SaaS/PaaSrevenues of top 50companiesTop 10 shareof SaaS/PaaSrevenuesTop 5 shareof SaaS/PaaSrevenuesUS 385.3BUS 272.2BUS 171.7BUS 146.1BUS 22.4B% of total71%45%38%% of top 50PaaS/SaaSrevenuesUS 14.0B63%US 6.5B29%Source: PwC's Global 100 Software Leaders report with data provided by IDC.