napatech a/s · 47 napatech a/s © copyright 2017 napatech aspiration in a cloud-mobile-iot world,...

1 Napatech A/S © Copyright 2017

Napatech A/SCapital Markets Day April 4, 2017Oslo, Norway

Napatech A/S © Copyright 2017


IntroductionBy Lars Thoresen, Chairman of the Board


Where We Left Off In 2016

MARKET LEADER FOR NETWORK

RECORDER SOLUTIONS

MARKET LEADER IN ACCELERATOR

SOLUTIONS

FRONT-RUNNER IN ACCELERATING

VIRTUALIZED SOLUTIONS

THOUGT LEADERDRIVING EXEPTIONAL

NEW INNOVATION

CLEAR STRATEGY

STRONG SOLUTIONS

BEST CUSTOMERS

GREAT EMPLOYEES

THOUGHT LEADER DRIVING EXCEPTIONAL

NEW INNOVATION

FRONT-RUNNERIN ACCELERATING

VIRTUALIZED SOLUTIONS

MARKET LEADER INACCELERATOR

SOLUTIONS

MARKET LEADER FOR NETWORK RECORDER

SOLUTIONS


INTRODUCTIONKEYNOTE SPEAKER

THE SMARTNIC OPPORTUNITY

NAPATECH FINANCIALS

THE NAPATECH OFFERING

ROADMAP TO 100 MUSD IN 2020

Lars ThoresenNapatech

Chairman of the Board

Ron WilliamsIBM Security

Chief Architect

Jarrod J.S. SiketNapatech

Chief Marketing Officer

Henrik Brill JensenNapatech

Chief Executive Officer

Dan Joe BarryNapatech

VP Positioning and Chief Evangelist

Henrik Brill JensenNapatech

Chief Executive Officer

Agenda



Keynote SpeakerRon WilliamsChief ArchitectIBM Security


The SmartNICOpportunity Jarrod J.S. SiketChief Marketing Officer


Major Trends In Networking And Communications

Cloud Computing

Source: IDC

By

20

20

5GMobile

Internet ofThings

4BILLION

Connected People

25MILLION

Applications

25BILLION

Embedded Systems

50BILLION

Devices and Sensors

50TRILLION

Gbps of Data



Networking Disruption: Cloud-Mobile-IoT Era

We can learn from history:

• Few events-horizons at this scale

• Dominant firms disappeared

• Small firms became household names

• This is not just the next one

• It is the biggest one ever

Ma

infr

am

eC

lie

nt

-Se

rve

rC

lou

d-M

ob

ile-I

oT

Source: The 3rd Platform by IDC


The Cloud Sparked The Revolution

Hyperscale Data Centers, andPercentage of all Servers Deployed

Workloads Deployed:Traditional vs Cloud Data Centers

Standard, high-volume, low-cost servers are now widely deployed, and able to be used for advanced network and security applications

259

300

100

500

0

200

400

600

30%

10%

50%

0%

20%

40%

297

346

399

447

485

2015 2016 2017 2018 2019 2020

75%

300

100

500

0

200

400

600

2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016

Cost-per-hour of standard compute servers

92%

Traditional Data Center (3% CAGR)

Cloud Data Center (2% CAGR)

8%

25%

$0.64

$0.48

$0.28$0.35

Co

st p

er

ho

ur*

$0.15


Applications Raced To The Cloud

Confidential intellectual property that will “never leave our walls for the cloud” in 2010…..

….Now support multi-billion dollar Cloud SaaS companies.

Revenue

Legal

Sourcecode

Bugs File Sharing

FinancialEmail Logs

Credentials

Security

PayrollUCS/PBX



Networks Are Transforming

In Order To Achieve:

• Cloud-Scale Performance

• Cloud-Scale Innovation

• Cloud-Scale Economics

• Cloud-Scale Security

• Cloud-Scale Orchestration

A New Architecture Emerged:

• Software Defined Networking

• Network Virtualization

• Server Virtualization

• Network Functions Virtualization

• Open: stack, compute, …..

Source: VMWARE


Networking Devices Are Transforming to Open Standard Compute Platforms

From Closed, ProprietaryVertical Systems



SmartNICs: When Standard Servers And NICs Fail To PerformT

hro

ug

hp

ut

MP

PS

OVS with DPDK

Napatech

OVS with DPDK

Intel X710

5

37,240

20

60

CP

U U

sag

e (

Co

res)

2

12

4

6

8

10

14

16

2

16

10

30

50

OVS with DPDK

Napatech

OVS with DPDK

Intel X710

CP

U U

sag

e (

Co

res)

Compression with Napatech SmartNIC

SoftwareCompression

5

30

10

15

20

25

35

40

8xless CPU

usage

SmartNICs Are Faster SmartNICs Are More Efficient SmartNICs Save Money

40xless CPU

usage

7xPerformanceImprovement


FPGAs Fulfill The Cloud-Scale Networking Vision

https://www.microsoft.com/en-us/research/publication/configurable-cloud-acceleration/

Configurable Cloud ArchitectureBased on FPGAs

Intel Acquires Altera FPGAFor Record $16.7B

SmartNIC

FPGAOpen, standard,programmable,

fast

ASICClosed, propriety

and multi-yearrevision cycles

NPUClosed, propriety

and multi-yearrevision cycles

MultiCoreMIPS

Generalizedprocessors

unoptimizedfor task

ProprietaryCPU

Closed systemnot open

and standard

Standard chipsetsMulti-year

revisions, unableto offload

Napatech pioneered the use of FPGA-

based NICs for networking


New End-Users Emerge

ServiceProviders

Infrastructure andDefense

Enterprise

Hyperscale CloudOperators

TelcoCable

Managed Services

Fortune 5000BankingFinancial

ManufacturingHealthcare

CivilianDefense

Intelligence

Cloud and Data Center Services

Napatech aims to be the provider of Enterprise Cloud Networking Platforms for every IT organization,Providing cloud-scale hardware performance with the speed of software innovation


High-Growth Applications Require SmartNICs

Firewall

Next-Gen Firewall

Intrusion Detection

Intrusion Prevention

Forensics

Threat Detection

Secure Web Gateway

Surveillance

Data Loss Prevention

Analytics

Trading

Network Recording

5G

CORD

vEPC

vIMS

Quality of Experience

Service Assurance

Performance Monitoring

Load Balancer

SD-WAN

V-CPE

SDN Gateway

Packet Broker

Network Taps

Major market trends allow Napatech to expand to a new range of high-growth applications on virtualized servers in software defined networks

Cyber Security MobileBig Data Infrastructure Testing


New Routes to Market Emerge

Cyber Security MobileBig Data Infrastructure Testing

ServiceProviders

Infrastructureand Defense

EnterpriseCloud and Data center Services

Ap

plica

tio

ns

Ro

ute

s to

ma

rke

tE

nd

-use

rs

Network OEM

Security OEM

Appliance ODM

Server OEM

Server ODM

Software ISV

Enterprise VAR

Direct Sales

Napatech Web Store

The expanding set of end-user demand, and new applications,Rapidly Extends Napatech’s Reach, via pre-existing routes to market.


Market is ready for growth:

• Cloud early adopter success

• Mass markets preparing

Large unit volume potential:

• 12-15M servers shipped

• 3-5M appliances shipped

• Future CPUs with FPGA

Sizeable Revenue within reach:

• 15% of devices with SmartNICs

• 2.25M Servers/appliances

• $1.1B target market with upside

The Time is NOW

Source: Gartner 2016 Hype Cycle For Networking & Communications Source: based on Infonetics, Crehan, Dell’Oro


Comprehensive Solution Provider

Easy to buy

Satisfy end-user demandvia their preferred

methods

PartnerEcosystem

ChannelProgram

SmartNIC Platform

Best in breed

Solution completion,Application benchmarks

ProfessionalServices

Ease of use

Low activation energy, Co-creation services


SmartNIC Platform Portfolio

Hardware

Software(FPGA, driver, APIs)

Virtualization(OVS Offload)

In-line(Fast Path)

Recorder(100% Capture)

Application Engines

PANDIONRecorder

CompressionOpen

SourceCommunity

FuturesEncryption, Search…

ProfessionalServices

Application Store (Future)

Open Source

Commercial

Technical Support Assessment Services Co-Creation Programs

XS S M L XL


Napatech Aspiration

In a Cloud-Mobile-IoT world, of software defined everything…..

Napatech’s Enterprise Cloud Networking Platform™

Flexibly offloads and secures standard, virtualized servers

To boost innovation and return valuable compute resources to services and revenue

Cloud-Scale PerformanceStunning benchmarksHigh speed, few cores

Cloud-Scale EconomicsStunning pricing,right mix of features

Cloud-Scale InnovationHW at SW speed, programmable

Cloud-Scale SecurityMicroSegmentation, Stateful, isolation, rules

A comprehensive portfolio of SmartNICs for every intelligent location in your cloud

From COTS standard servers, to high-end compute and appliances.

Standard SoftwareOVS, DPDK, fast-path

Scalable ProcessingIndustry FPGA metrics

Open, StandardCOTS HW, Open SW

OurWorld

OurCompany

TheBenefits

TheResults

Powered ByLeading Technology

In World-ClassProducts

Napatech aims to help companies reimagine their business,

By bringing cloud-scale economies to every network

To deliver the right data to the right place and the right time

Networking IP~15 years of HW+SW


NapatechFinancialsHenrik Brill JensenChief Executive Officer


Q1 2017 Sales

+17%Q1 2017 sales of USD 8.2 million (7.0)

Q1 SalesHighlights:

• Strong development across business segments

• Development within2017 revenue growth guidance of 10 – 20 %


Profit and Loss – Strong EBITDA Development

(Figures in MDKK) 2016 2015 2014

Revenue 234.7 216.7 182.3

Gross profit 163.6 154.7 133.6

Gross margin 69.7 % 71.4 % 73.3 %

EBITDA 43.5 34.2 18.0

EBIT 6.0 5.5 (5.9)

Cash flow from operating activities 15.2 33.2 10.7

Cash and cash equivalents 47.0 75.9 88.2

Profit and Loss Highlights:

• Strong platform fornext growth cycle

• Cost focused andlean organization

• Solid EBITDA development


Balance Sheet – 78% Equity Ratio

(Figures in MDKK) 2016 2015 2014

• Development projects, completed• Development projects, in progress

Total non-current assets

75.722.5

105.0

70.112.491.4

54.38.7

87.6

• Cash and cash equivalentsCurrent assets

47.0147.7

75.9145.5

88.2137.2

Total assets 261.4 247.6 224.8

Equity 204.4 197.0 189.6

Non-current liabilities 13.4 10.2 5.6

Current liabilities 43.6 40.4 29.6

Total equity and liabilities 261.4 247.6 224.8

Balance Sheet Highlights:

• Development projects completed are the basis for our current revenue

• Development projects in progress increases dueto investments in three product areas – basis for accelerated growth

• 2020 growth strategy fully funded, but acquisitions to enhance opportunities are considered regularly


Gross Margin Development

60%

65%

70%

75%

80%

2011 2012 2013 2014 2015 2016

Margin Development:

• Gross margin is driven by Accelerator product mix and growth in Pandion sales

• More aggressive go-to-market strategy could affect gross margin inthe longer run

• 2017 gross margin guidance of around 68%, is reflecting enhanced Pandion sales including COTS hardware


0%

5%

10%

15%

20%

25%

30%

35%

Q1 Q2 Q3 Q4

2015 2016

EBITDA Margin Development

EBITDA margin:

• Highly scalable business model where revenue growth drives EBITDA

• 2016 EBITDA marginof 19%

• 2017 EBITDA margin guidance of around 20%

54 NAPATECH INTERNAL DOCUMENT DO NOT DISTRIBUTE EXTERNALLYNapatech A/S © Copyright 2017

The NapatechOfferingDan Joe BarryVP Positioning and Chief Evangelist


Fundamental Need Of All Internet UsersStay Connected And Be Secure

Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Be secure

Users



Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Be secure

Users

174%

121%103%

89% 89%74%

49%33% 30%

Lifestyle & Shopping

Utilities & Productivity

MessagingSocial

Health &Fitness

Travel Sports News & Magazines

Music,Media &

Entertainment

Games

Mobile App Year-over-Year Usage Growth in 2014

Source: Flurry



Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Be secure

UsersRemote

Healthcare

Government Services

Augmented Reality

Online Banking

SmartHome



Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Be secure

UsersTOTAL IP Traffic Per

MonthSource: Cisco VNI Report 2015



Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Be secure

Users

1980 1990 2000 2010 2020

Ethernet SpeedsSource: Ethernet Alliance

10M100M

1G

10G

100G

40G

400G

25G

5G

2.5G

50G

200G



Increasing

Internet

dependence

Stay connected

Exploding

volumes

of data

Faster

network

speeds

All services

moving to

the cloud

Be secure

Users

92%

75%

25%

8%

2015 2016 2017 2018 2019 2020

Installed Workloads in Millions

Source: Cisco Global Cloud Index 2016

600

400

200

0


Multitude Of Solutions AvailableTo Ensure Connectivity And Security

Cybersecurity applications ensuring

users be secure

Network management applications ensuring users stay connected


Applications Separate From User ServicesNot Part Of The Data Delivery Path To The User

Users Services


users be secure



Need Insight Into Service Data To Function In Real-Time Without Losing Any Of The Data

Users Services


users be secure


How to get access to reliable service data to

ensure users stay connected and

can be secure?


Napatech Smarter Data Delivery SolutionsEnsure Delivery Of Reliable Data For Analysis

Users Services


users be secure


NapatechSmarter

Data Delivery


Napatech Smarter Data Delivery SolutionsEnsure Delivery Of Reliable Data For Analysis

Typical DatacenterWith thousands of servers supporting user services

Some servers dedicated to network management and

cybersecurity software

Napatech ensures reliable data delivery to these

”appliance” servers

CybersecuritySoftware

NapatechSmarter

Data Delivery

CyberSecuritySoftware


The SmartNIC OpportunityAddressing More Applications In The Datacenter

Address more applications running on other servers in

the datacenter

Bringing more power and value to existing

installed servers

Delivering data to more applications with accelerated

performance

NapatechSmarter

Data Delivery

Virtual Switch

Acceleration

Encryption

Compression



Migration To The CloudDriving Dependency, Growth And Investment

Increasing

internet

dependence

Exploding

volumes of

data

Faster

network

speeds

All services

moving to

the cloud

More

sophisticated

services and

usage

Stay connected

Be secure

Users


What Is The Cloud?Getting Someone Else To Host Your Software

Buy, install and run all your enterprise software

applications on your own servers in your own

datacenter

Buy, install and run all your enterprise

software applications on dedicated servers in a third party datacenter

Use combination of private cloud and

subscription to third party services running

remotely in a third party datacenter

Subscribe to various services running remotely in a third party datacenter

instead of running your own applications

Traditional Datacenter

PrivateCloud

HybridCloud

PublicCloud


Migration To The Cloud Takes Time Napatech Supporting Cloud Migration For Our Customers

TraditionalDatacenters

Private Clouds

Hybrid Clouds

Public Clouds

Smarter real-time

Data Delivery

Smarter on-demandData Delivery

Smarter virtualized

Data Delivery

Challenge to migratenetwork management and cybersecurity solutions


Napatech SmartNIC SolutionsAnticipating Migration Needs And Broadening Scope

Smarter real-time

Data Delivery

Other Virtual

Software

Napatech SmartNIC solutions for

Smarter Real-Time Data Delivery

Napatech SmartNIC solutions

for Smarter On-Demand Data Delivery

Napatech SmartNIC solutions

for Smarter Virtualized Data Delivery

Smarter on-demand

DataDelivery

Smarter virtualized

DataDelivery


NetworkManagement

Software

NetworkManagement

Software

NetworkManagement

Software



Napatech SmartNIC SolutionsSmarter Real-Time Data Delivery

• Our customers rely on Napatech Accelerators to deliver data at high-speeds and data volumes with zero data loss

• The data delivered must be highly accurate and complete to ensure reliable analysis

• Intelligent capabilities enable users to understand and select which kinds of data should be delivered providing full control

• Napatech Software Suite supports all Napatech Accelerators allowing one solution to support many deployment options

Think – Smarter Data Delivery


NapatechAccelerators


Smarter Real-Time Data Delivery Case StudyYahoo Security Solution

Software specialist ntop was engaged by Yahoo! to help develop a 40G and 100G data delivery solution for their security solution. Yahoo! Needed insight into traffic in the datacenter at speeds up to 100G in order to provide a reliable security assessment.

In partnering with Napatech, ntop developed a compact security solution capable of keeping up with the 100G speeds and data volume in the Yahoo! datacenter. Napatech Acclerators ensured that no data was missed or lost so a reliable and accurate picture was provided for analysis.

• Guaranteed data delivery even at 100G• Better insight into datacenter data

making the security solution more reliable

• Re-use of Yahoo! existing security software solutions with no added development costs

The Challenge Solution Benefits

NapatechAccelerators

73 Napatech A/S © Copyright 2017Napatech A/S © Copyright 2017

Napatech SmartNIC SolutionsSmarter On-Demand Data Delivery

NapatechRecorders

• Napatech Pandion is a scalable network recorder that captures, stores and delivers data on-demand

• Focused on network recording of all network data providing users with the freedom to choose any analysis software

• Allows multiple software applications to retrieve data at the same time with an open and easy-to-use interface

• Intelligent features allow the user to specify exactly the data to be retrieved and analyzed providing full control



74 Napatech A/S © Copyright 2017Napatech A/S © Copyright 2017

Smarter On-Demand Data Delivery Case Study Facebook - Data Recording

To safeguard their enterprise from cyber threats, Facebook needed a solution to capture all data packets in real time and store them for up to 90 days for on-demand post-analysis; a task requiring exceptional performance and reliability.

Napatech developed a custom solution that enabled investigation into any security event. This was achieved by integrating the Pandion Flex network recorder with the company’s high-capacity storage solution, thus ensuring that all data packets were captured and stored for quick retrieval for up to 90 days.

• Uncompromised high-speed packet capture

• Ultrafast data retrieval• Seamless integration of the Facebook

SAN and Napatech network recording technology

The Challenge Solution Benefits

NapatechRecorders


Napatech SmartNIC SolutionsSmarter Virtualized Data Delivery

NapatechVirtualization

• Napatech NFV NIC is a versatile and flexible platform that supports multiple acceleration solutions for virtualized environments.

• Napatech virtual switch acceleration solutions enable delivery of more data to more virtual applications at a lower cost

• Napatech also accelerates intensive data processing like decryption and compression with several orders of magnitude

• Napatech enables virtual monitoring allowing users to see what is happening in virtual environments



Smarter Virtualized Data Delivery Case StudyNokia - Compression Acceleration

Nokia had encountered a performance bottleneck related to compression of files for their storage solution. While software compression is possible in software, the compression time can be lengthy and the CPU core consumption is high.

Napatech provided a Proof-of-Concept solution based on the Napatech NFV NIC that could provide hardware accelerated compression at 40 Gbps using only 1 CPU core. The average compression time was improved by a factor of 30 without compromising on the compression ratio.

• Solution used 1 core instead of 40 for software compression

• This results in millions of savings in CAPEX and OPEX at the datacenter level

• Also means more CPU resources for hosting virtual functions

• Now possible to perform fast file compression on-demand at high-speed

Challenge Solution Benefits

NapatechVirtualization


The Roadmap to 100 MUSD by 2020Henrik Brill JensenChief Executive Officer


CMD 2017CMD 2016

Established Napatech growth strategy

Set $100M USD business aspiration for 2020

Accelerated investments in development, sales and marketing

Result: Leading products for growth

segments and strong strategic customer relationships

Current market trends strongly validate Napatech growth strategy

Reaffirms aspirational business growth plans for 2020

Expanding reach through marketing, partners, sales and channels

Result: Be and be perceived as

THE leading SmartNIC solution provider



2020 Strategy Secured by Strong Technology,Portfolio and Organization

Napatech is the leader in FPGA-based solutions, which will become an

inevitable part of every network

Focus on pursuing and exploiting emerging

SmartNIC opportunities that will drive

accelerated growth

Repackage solutions and technologies to fit diverse

market needs

Secure an ecosystem of value-adding partners and

channels

Expanding the core

FIRM STRATEGIC EXECUTIONEXPANDING THE CORELEADING TECHNOLOGY


Accelerated Growth Path Towards 2020

100 MUSD

2016 2020

• Robust portfolio of current customers provides strong business foundation and additional growth opportunities

• Catalogue of ongoing co-creation deployments with market leading customers based on strategic relationships

• Emerging SmartNIC opportunities for accelerated growth driven by digital transformation and migration to the cloud

Napatech is in pole-position to continue to deliver state-of-the-art products, software and technology to an ever expanding range of customers


Napatech’s strategy is to be the #1 vendor of Smarter Data Delivery solutions, leading to an ambition of a 100 MUSD top-line by 2020, based on a strong product portfolio powered by leading-edge core technology

Based on the growth of 8% in 2016, the company expects the profitable revenue growth to continue in 2017, across the business areas

Napatech reiterates that the company is confident with an accelerated growth path towards the 2020 ambition

Short term visibility is limited and will be affected by quarter-to-quarter order fluctuations and general uncertainty

Guidance for 2017:

•Revenue growth 10% - 20%

•Gross margin around 68%

•EBITDA margin around 20%

Management’s Outlook


Stay Informed - Follow Napatech!

WANT TO LEARN MORE?

…about Napatech, Smarter Data Delivery, SmartNICs, IoT, cloud computing, 5G Mobile,

and other trends in the industry?

Sign up for the Napatech News

Sign up for OSE news

Follow us on social media


napatech a/s · 47 napatech a/s © copyright 2017 napatech aspiration in a cloud-mobile-iot world,...

Documents