1. Software as a Service USC Guest Lecture February 29, 2012
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2. Overview Cornerstone OnDemand History of the Software Industry
Making Saas Work
Cornerstone has spend significant time and resources to develop a client service strategy that is fundamentally focused on our mutual success. This strategy is a result of 12 years of learnings from managing relationships with clients in the evolving software-as-service business model. These learnings have been transformed into an engagement model that is clear, concise and actionable.
Our success together will require a commitment from both of our organizations. In order to make those commitments, both parties must see value in the relationship, understand expectations and have a clear vision for success. Cornerstone has devised an easy way to articulate vision, value and expectation. Over the next 30 minutes, I will explain exactly what our relationship will look like as we embark on this journey together. Specifically, we will touch on each of the following:
Our Client Success Framework which essential clearly articulates what our relationship will look like over time. When we get into it, I think that you will agree that this framework makes Cornerstone very different that other solution providers in the market. This will drive the overall flow of our discussion today.
The process by which we will take your from concept to a live solution and specifically how you will be successful in getting to that point, including Implementation and what we call Incubation.
The Cornerstone Client Community
Cornerstone understand that success is not just a point in time, but an ongoing exercise. That said, we will focus on how we will collaborate to ensure that the Cornerstone solution continues to be fluid and change with you over time. We call this Optimization. And, of course, how we will ensure that you continue to realize maximum value from the investment that you will make in Cornerstone.
Finally, I will touch on the services that are available to you to ensure that this value is, in fact, realized.
With that, let’s get started…
Saas Challenges
Question Time

3. Cornerstone OnDemand Brief Background
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4. Who is Cornerstone?
NASDAQ: CSOD Comprehensive learning and talent management solution delivered as software- as-a-service (SaaS)
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

5. Integrated, Comprehensive Solution
Coming Soon
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

6. Solving Organizational Challenges
Developing Talent
Engaging Employees
Improving Business Execution
Building a Leadership Pipeline
Integrating with the Extended Enterprise of Customers, Vendors and Distributors
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

7. The Fastest Growing SaaS Vendor*
7,500,000 subscribers
4,920,000 subscribers
3,350,000 subscribers
805 Customers
2,070,000 subscribers
481 Customers
859,000 subscribers
280 Customers
168 Customers
Revenue
105 Customers
Performance
Blended Learning
Social Collaboration
Succession Management
Compensation
People Finder
Observation Checklist
Advanced E-Commerce
Social Reviews
Cloud Packaging
Employee Recognition
PRODUCTS
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2010
Notes: * based on publicly traded companies over $50 million in revenue

8. Validation in 2011 Analyst Research
“LEADER”
“LEADER”
“LEADER”
“LEADER”
2011 Magic Quadrant for Employee Performance Management
2011 Magic Quadrant for Corporate Learning Systems
2011 Integrated Talent Management Marketscape
2011 Forrester Wave: Talent Management
Best-in-class performance and succession capability
Customer experience is better-than- average or best-in-class
Noted vision for social collaboration strategy
Definitive market leader
Only pure-play SaaS leader
Most visionary LMS Company
Notes intuitive product and overall customer experience
Specifically noted by IDC:
Strong functional capabilities
True multitenant SaaS for scalability
Product innovation
Solid customer references
Specifically noted by Forrester:
Overall leader in both learning and performance
Highest score for any vendor in performance management
Maintains good customer relationships
Only pure-play SaaS leader in BOTH of Gartner’s flagship talent management Magic Quadrants
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

9. Blue-Chip Clients FINANCIAL SERVICES RETAIL & DISTRIBUTION
TECHNOLOGY & MEDIA
BUSINESS SERVICES
HEALTHCARE
MANUFACTURING
ENERGY & UTILITIES
PUBLIC SECTOR
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

10. Organically Grown
ITM buyers today are looking for full integrated suites to solve ITM challenges. If you look at the landscape, today this is what you’d typically see.
Many vendors have grown through acquisition and there is a tremendous amount of consolidation. CSOD from day one is committed to an organically grown application and is one of the only vendors on the market today with this strategy.
Best yet – you will be making NO COMPRISES as the solution is truly best-of-breed learning AND performance.
Transition: Let’s talk about how this organic growth path has significant advantages to you as a client.
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

11. Brief History
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

12. On-Demand Delivery Multi-tenant, multi-user Net-native applications
Versionless
Instantaneous upgrades
Fast performance
Limitless scalability
Community development
Turnkey application hosted on behalf of clients
Traditional client-server with HTML front-ends
Limited data integration
Limited upgrades
Limited performance
Limited scalability

13. Multi-tenancy Shared infrastructure
One “instance” of the application & underlying stack servicing multiple “tenants”
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

14. SaaS Definitions Software delivered as a service
The opposite of “on premise”
Defined by the negatives – unlike on premise software
No hardware
No upgrades
No capacity planning
No troubleshooting
No IT
No falling behind in releases
No massive outlay
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

15. SaaS Software – built by software companies
Service – what do you think of when you think about reliable services?
Telephone – landline or cell?
Electricity – in some countries
Mail
Your bank
IRS
Immigration
Nordstrom Customer Service
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

16. SaaS
Gartner defines SaaS as "software that's owned, delivered and managed remotely by one or more providers."
The provider delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers anytime, on a pay-for-use basis, or as a subscription based on use metrics.
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

17. SaaS Companies Human Capital Management CRM Finance & Accounting
Expense Management
Office Productivity
Project Management & Collaboration
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

18. SaaS Market Projections
Growth rates of >16% p/a vs 6.6%
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

19. SaaS Adoption in N.America
Business factors driving SaaS adoption (Gartner)
The benefits of rapid deployment and rapid ROI, less upfront capital investment, and a decreased reliance on limited implementation resources encourage SaaS deployments.
With SaaS, responsibility for continuous operation, backups, updates and infrastructure maintenance shifts risk and resource requirements from internal IT to vendors or service providers.
A heightened awareness of and growing intolerance for misspent investments on shelfware motivate buyers to purchase on-demand solutions.
A shortage of skilled professional resources within internal IT departments and system integrator organizations contributes to adoption.
Painful reminders of lengthy, unsuccessful deployment cycles spur buyers to investigate simpler, quicker alternatives.
Rising maintenance fees and the imperative to update to Web 2.0 technologies contribute to legacy replacement decisions.
An increase in the number of executives as buyers or influencers also drives growth.
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

20. SaaS vs Cloud Computing
Differences between SaaS & Cloud Computing?
SaaS – leverages yet predates Cloud Computing
What other services leverage Cloud Computing?
PaaS – platform as a service
IaaS – infrastructure as a service
XaaS
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

21. Making SaaS Work
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

22. Typical SaaS Org Chart
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

23. Primary Functions Application Developers & Architects
Work with Product Management to define, design and build the platform and software applications that will be delivered to clients
Works closely with Client Care to address defects in a timely manner (SLA typical)
Quality Assurance
Using manual and automated regression test tools, tests the application before it is released to production
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

24. Primary Functions Configuration & Release Management
Manages source code libraries, versions
Deploys to various test, demo and production environments
Works with client-facing Release Management to minimize client impact
Follows predictable release cycle for patches, hotfixes and major releases
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

25. Primary Functions Release Management
Fixed release calendar is planned and published
Example: 2012 Quarterly Releases at CSOD
Winter – March 3rd
Spring – June 8th
Summer – September 7th
Autumn – November 30th
Three week User Acceptance Testing (UAT)
Client education to prepare for release

26. Primary Functions Technology Operations PMO
Builds, manages & monitors infrastructure
Infrastructure = data centers, networks, hardware
Helpdesk function internally
Escalation point for Client Care
Ensures uptime SLA is met
PMO
Oversees all Technology projects
Manages rigorous feature enhancement prioritization process
Alerts management to project risk & resource need
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

27. Security & Compliance
Works with Security Steering Committee to safeguard all virtual and physical assets
Custodian of client data
Critical function in a SaaS company
Works with external audits to ensure compliance requirments are met
Meets with clients to address infosec concerns
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

28. SQL C# ASP.NET with AJAX CSOD Technology
Commitment to Microsoft technologies:
BACK-END
SQL
BUSINESS LAYER C#
FRONT-END
ASP.NET with AJAX
Entire network structure as well the delivery platform is all Microsoft based.
Delivered as a pure software as a service solution.

29. CSOD Technology Technologies Tools
Microsoft Shop
100% browser based
ASP.Net 4.0 C#
SQL Server 2008
Ajax
Web services
WCF
JQuery Mobile
Tools
Microsoft Visual Studio 2010
Microsoft Team Foundation Server
Microsoft SQL Server Management Studio
Red Gate ANTS Profiler
HP QTP (Mercury)
Microsoft Premier Support for Developers

31. CSOD Security & Compliance
Current SAS70 Type II
C & A government accreditation at Moderate level
21 CFR Part 11
Preparing for ISO27001 standard in 2012
Monthly external vulnerability scans
Completed numerous external penetration tests
Full 3rd party penetration tests quarterly

32. SaaS Challenges
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

33. Technology Challenges
Scalability
Application Performance
Global Footprint
Languages
Localization
Support
Recruiting Challenges
Security Functions
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Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

34. Client Concerns Will my data be secure?
Will I get data back when I leave?
How to address Data Sovereignty?
Page load time in remote areas
Integration with other applications
Do I have to take the upgrade?
Defects & stability
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011

35. Question Time
All information herein is strictly confidential and may not be shared or reproduced.
Cornerstone & Cornerstone OnDemand are registered trademarks of Cornerstone On Demand, Inc. Cornerstone OnDemand ©2011