CHANGES IN THE MARKET BRING NEW OPPORTUNITIES FOR DIFFERENTIATION AND GROWTHINNOVATORS AND MARKET LEADERS DON’T SIT STILL As the pace of digital transformation intensifies and technologies advance, companies are at greater risk of being disrupted.Progressive technology innovators have modernized their billing systems and embraced subscription models with great success. ADOBE, the popular creator of multimedia and creativity software products, including Photoshop and Acrobat, boldly upended its traditional sales model and moved from selling shrink-wrapped software to offering subscriptions of varying lengths, levels and By 2020, all new entrants and price points. After moving to a SaaS model, Adobe experienced a 41% increase in 80% of historical software vendors revenue and secured 3 million new subscribers. As of 2017, recurring revenues from will offer subscription-based subscription represented 86% of its total revenue.5 business models, regardless of whether the software resides 3 on-premises or in the cloud. HOOTSUITE, the social media management platform company, shifted from a free to - GARTNER a paid service by introducing a range of value-added features and services delivered to the customer via a subscription-based freemium model. Within six months following the shift, Hootsuite saw its customer base increase by more than 40%. Since 2014, Hootsuite has grown its subscriber base from 10 to 18 million and has achieved 35%+ year-over-year revenue growth among new enterprise customers.6 Vendors who rolled out new subscription models were able to acquire new customers 4 on average 20% faster. VMWARE, an enterprise virtualization leader, moved away from perpetual products to - GARTNER introduce new subscription-based services. The company established a subscription delivery platform to integrate the customer service and support experiences for customers to view purchases, file support tickets and purchase add-on services, all while supporting a large global reseller channel. Since the initial transition, VMware has continued to expand its 7 subscription offerings and has realized double-digit revenue growth. 3. Source: Gartner: Forecast: Cloud Subscription and Recurring Billing Management, North America, 2019, 26 February 2019, G00370035 4. Source: Gartner: Key Lessons for Transitioning from Perpetual to Page 2 of 6 Subscription Software Licensing, Published: 3 January 2019 ID: G00377999, 5. Source: Adobe’s Cloud-Based Subscription Will Continue To Grow Its Revenue, North America, 11 September 2017 6. Source: Hoot- suite Closes Out 2018 Celebrating 10 Years of Customer Success, North America, 31 January 2019, 7. Source: The Good Times Continue for VMware, Salesforce and Many Other Software Names, North America, 2018, December 5