SONIC SOFTWARE

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SONIC SOFTWARE

• Changing the Economics of Integration

GREG OCONNORPresident February 19, 2004
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Agenda

• Recap Analyst Day 2003
• Integration Market The Move to ESB
• Goals for 2004
• Health of the Business

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Goals from Analyst Day 2003

• Redefine enterprise messaging landscape with
  SonicMQ

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1 Independent Messaging Vendor
in millions USD
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Goals from Analyst Day 2003

• Redefine enterprise messaging landscape with
  SonicMQ
• Establish Enterprise Service Bus category with
  SonicXQ

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Emergence of ESB Category
A new form of enterprise service bus
(ESB)infrastructure combining MOM, Web
services, transformation and routing intelligence
will be running in the majority of enterprises
by 2005 Roy Schulte
ESB will revolutionize IT and enable
flexible and scalable distributed computing for
generations to come. Sally Hudson
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Emergence of ESB Category
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Goals from Analyst Day 2003

• Redefine enterprise messaging landscape with
  SonicMQ
• Establish leadership in Enterprise Service Bus
  category with SonicXQ
• Deliver next generation standards-based
  integration suite with BPM, XIS and Stylus

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Sonic Business Integration Suite
Sonic XML Server
Sonic Orchestration Server
Adapter
Sonic ESB
SCM
Integration Broker
CRM
Tracking Service
Adapter
Adapter
Adapter
Order Entry
ERP
CRM
SCM
Partner
Finance
Enterprise
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Deliver Next-Generation Suite
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Goals from Analyst Day 2003

• Redefine enterprise messaging landscape with
  SonicMQ
• Establish leadership in Enterprise Service Bus
  category with SonicXQ
• Deliver next generation standards-based
  integration suite with BPM, XIS and Stylus
• Continue to be industrys fastest-growing
  middleware company

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Sonic Software
FY03 Revenue by Category
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Changing the Economics of Integration
Total Sonic Product Line Revenue (Millions)
FY03
FY00
FY01
FY02
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Agenda

• Recap Analyst Day 2003
• Integration Market The Move to ESB
• Goals for 2004
• Health of the Business

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Application Business Integration Market
Overall vs ESB Opportunity
Composite of Industry Analyst and Sonic Software
Estimates
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Why We Had to Invent the ESB

• Because customers were paying too much for failed
  integration projects?

250k - 1M license and 5-7x consulting
costs Projects average 20 months to
complete Fewer than 35 finish on time and on
budget 85 rely on tactical, coded solutions
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Why We Had to Invent the ESB

• Because customers were paying too much for failed
  integration projects?
• Because legacy integration products were
  beginning to crumble under their own weight?

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Enterprise Service Bus (ESB)
Building Blocks for Pervasive Integration

• Enterprise messaging
• Reliable, secure interactions across the extended
  enterprise
• Distributed deployment architecture for high
  scalability
• XML as native data type for document exchange
• Intelligent routing of business transactions
• Itinerary, content and rule-based routing
• Transformation of business data between
  applications
• Service container end-points
• Web services, JCA and Application Server support
• Unified management and monitoring of entire
  services network

Adapter
Distributed Standards-based Connectivity
SCM
Integration Broker
CRM
Tracking Service
Adapter
Adapter
Adapter
Order Entry

• Standards-based platform for reliable
  coordination of applications as loosely-coupled,
  event-driven services

ERP
CRM
SCM
Partner
Finance
Enterprise
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Why We Had to Invent the ESB

• Because customers were paying too much for failed
  integration projects?
• Because legacy integration products were
  beginning to crumble under their own weight?
• Because customers in key industries could see how
  the intersection of technology trends and forces
  of competition in the marketplace were conspiring
  to generate requirements for a cost-effective,
  manageable, standards-based infrastructure that
  could reliably scale?

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Delivering Business ValueABNA
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Delivering Business Value Telecommunications
Integrated provisioning, billing, customer care
(OSS) for 20 million wireless customers over 57
million access lines

• Benefits
• Improved customer service and retention
• Cost-effective regulatory compliance
• Standards-based CLEC customer information access
• Flexible platform for future integration
• 14 major ESB projects underway

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Delivering Business Value National Retail Video
Chain
Improved inventory management and expanded
multi-channel operations for 1800 stores

• Benefits
• Cost-effective connection with home office
• Improved visibility of retail inventory and
  ability to search proximate inventories
• Centralized configuration and management of
  in-store systems
• Accurate and timely reporting of inventory and
  sales reports

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Agenda

• Recap Analyst Day 2003
• Integration Market The Move to ESB
• Goals for 2004
• Health of the Business

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Goals for Analyst Day 2004

• Redefine enterprise messaging landscape with
  SonicMQ
• Trust Your Middleware
• Continue leadership in Enterprise Service Bus
  market
• Raise the bar on platform capabilities
• Double the number of Sonic ESB customers
• 100 customers today
• 300 customers in 2005
• Continue to be industrys fastest-growing
  middleware company
• 40 year-over-year license revenue growth

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SonicMQ 6.0
Trust Your Middleware

• System Availability - current state of the market

• Introducing High Availability for the Masses
• Faster failover time
• No additional hardware required (Veritas, MS-Sun
  Cluster)
• Priced at 15K per high availability pair

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Typical High Availability Configuration
State Persisted to Shared Storage

• Additional software required to manage HA
  configuration
• Hardware locks used to detect failure
• Difficult to distribute
• Failover requires recovery from disk
• Up to 15-min delay
• Only easy operations can resume

Storage
Server A
Server A
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SonicMQ High Availability
HA for the Masses

• Messaging events sent to backup in real time
• Lightweight state engine on backup broker
• Minimal CPU usage
• Dynamic database synching after failure of either
  broker
• Supports full broker functionality

Broker A
Broker A
Events Persistent Messages Delivery Transactions
Subscriptions Etc.
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SonicMQ High Availability
Architecture
Cluster

• Each broker has a hot backup broker on another
  machine
• Failure detection based on network connection
• Transparent to client
• Transactional integrity during failover
• Once and only once delivery

Broker C
?
Broker C
Broker B
Broker A
Broker B
Broker A
Client
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Making HA a Reality
Where Your IT Dollars are Going Today

• Common middleware failure conditions
• Trapped messages
• Messages stuck en route in a failed broker
• Duplicate messages
• Whether a message has been delivered is not
  always known in a failure and a duplicate is sent
  to be safe.
• Out of order messages
• Reconnecting, particularly to another broker, can
  cause a mixed stream of new and old messages
• Whether 99 or 99.999 system-availability goal,
  you must compensate for these conditions to
  ensure that your business keeps running

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Continued Leadership in ESB Market

• Inherit abilities of messaging infrastructure
• Trust Your Middleware
• Enable Sonic ESB to run over WebSphere MQ
• Raise the bar on ESB performance and scalability
• Be first to market with standards-based
  initiatives
• Web services interoperability (WS-stack)
• Java business integration (JSR-208)
• Grid ecosystem (Globus)

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Agenda

• Recap Analyst Day 2003
• Integration Market The Move to ESB
• Goals for 2004
• Health of the Business

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Health of the Business
Field-Focused Expansion

• Incorporated in 5 countries in EMEA 2003
• Incorporated in Japan 2004
• Established west coast development team
• Provided exit strategy for over 20 people from
  TIBCO/BEA in the past 12 months
• 7 developers
• 13 Field people at all levels
• Increasing quota-carrying reps from 18 to 28

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Expanding the Partner Channel

• NA Partners
• Signed Partners 25
• Trained Partner Consultants 51
• EMEA Partners
• Signed Partners 21
• Trained Partner Consultants 140
• Partner-influenced Revenue
• 2003 10
• 2004 20

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Changing the Economics of Integration
Total Sonic Product Line Revenue (Millions)
FY04
FY03
FY00
FY01
FY02
Projected
Per Analysts Estimates
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CONNECT EVERYTHING. ACHIEVE ANYTHING.