iPass corporate presentaion

March 2011March 2011

IPASS INC.

Company Overview

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections

F d L ki St t tForward-Looking StatementsThe information contained in this presentation regarding iPass' belief that its new open Mobile Platform provides a compelling and value-focused set of integrated mobility offerings to the enterprise and to channel and carrier partners; iPass' belief that its new Open Mobile Platform

d f ti lit t l t l i it b i d l f t k i t i d l t l dd d l tf b i th t lland functionality are central to evolving its business model from a network services-centric model to a value-added platform business that sells enterprise mobility services via a cloud-based infrastructure; iPass' belief that it's driving forward in having a meaningful impact on changing the economics of mobility for the enterprise; iPass’ belief that technology innovation will create stockholder value over the long-term; iPass’ belief that there’s a compelling new opportunity around the company’s Wi-Fi assets with potential carriers; and iPass’ projections of any financial results are forward-looking statements.

Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including: the risk that current poor economic conditions and reduction in business travel will have a greater negative impact on iPass than it predicts; the risk that iPass' new mobility platform does not achieve customer acceptance or does so slower than iPass predicts; the risk that iPass will experience unexpected technical or other delays in the implementation of added functionality to its new platform; the risk that iPass may not be able to generate revenue from new services if market acceptance of those new services is not as iPass expects; the risk that the rate of decline in use of narrowband/dial technology as a means of enterprise connectivity may be faster than iPass predicts; the risk that iPass will not be ablein use of narrowband/dial technology as a means of enterprise connectivity may be faster than iPass predicts; the risk that iPass will not be able to generate broadband revenues in the manner expected; rapidly emerging changes in the nature of markets served by iPass, which may not be compatible with iPass' services; increased competition, which may cause pricing pressure on the fees iPass charges; the risk that iPass could unexpectedly lose current integrated broadband access points if one or more current broadband access point providers perceive iPass' services to be competing with the provider's services in a manner that renders the relationship with iPass detrimental to the provider; and the risk that iPass may not be able to establish additional relationships with broadband access point providers, including providers of 2.5G/3G/4G Mobile Data at the level iPass expects and if it is unable to negotiate such relationships on terms acceptable to both iPass and the providers on theData, at the level iPass expects and if it is unable to negotiate such relationships on terms acceptable to both iPass and the providers on the timeframe iPass currently expects for any number of reasons, including perceived competition with the providers.

Detailed information about these and other factors that could potentially affect iPass' business, financial condition and results of operations is included in iPass' quarterly and other filings with the SEC and is available on the company’s Web site at www.ipass.com and at the SEC's Web site at www.sec.gov. iPass undertakes no responsibility to update any information in this presentation if any forward-looking statement later


turns out to be inaccurate.

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Non GAAP Financial Meas resNon-GAAP Financial MeasuresThis presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). iPass management evaluates and makes operating decisions using various performance measures. In addition to iPass’ GAAP results, the company also considers non-GAAP metrics, including Adjusted EBITDA, defined as net income (loss) before interest, income taxes, depreciation p y , g j , ( ) , , pand amortization, restructuring charges, impairment charges, certain state sales and federal tax items, stock compensation expense and revenue adjustments related to the correction of historical billing errors.

Management uses these non-GAAP financial measures as components of its comparison of results with its business plan and individual operating budgets and to assist in the allocation of resources. Management excludes from its non-GAAP financial measures certain items in order to facilitate it i f th bilit d f f th ' ti b it b li th t h it t l t d t thits review of the comparability and performance of the company's core operations because it believes that such items are not related to the company's ongoing core operating performance. Management adjusts for the excluded items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of the company's control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual or infrequent and the company does not expect them to occur in the ordinary course of business; they are non-operational; or they represent non-cash expenses involving stock option grants. iPass believes that the presentation of these non-GAAP financial measures is useful to investors.

Management uses certain non-GAAP financial measures as a component for the measurement of incentive compensation. Detailed information, definitions and reconciliations of non-GAAP to GAAP financial measures are included in the company’s quarterly and annual filings with the SEC and is available on the company’s Web site at www.ipass.com and at the SEC's Web site at www.sec.gov.

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections 3

Company Overview Presentation

iPass Overview ………………………………………….…. 5

Th E t i M bilit O M bil B i 10The Enterprise Mobility Open Mobile Business ……….... 10

The Carrier Off-load & Enablement Business ………..…. 23

Financial Results Highlights ………………….................. 27

Key Take-Aways ………………………………………….... 32


iPass Overview


iPass is a leading enterprise mobility provider focused on delivering cloud‐based services to large and multi‐national enterprises and telecom carriers, enabling them to manage the

Investment Profile

Real-Time Enterprise Mobility Needs Around Compliance Cost-Control & End-User Experience

g p , g geconomics, complexity, compliance and security needs of the global mobile workforce.

ATTRACTIVE MARKET & OPPORTUNITIES

Real Time Enterprise Mobility Needs Around Compliance, Cost Control & End User Experience

Meaningful Carrier Needs Around Mass Market Wi-Fi Off-load and International Roaming

IPASS’ UNIQUE & COMPELLING ADVANTAGES

Unmatched Global Wi-Fi Network and Authentication/Transaction Fabric

Unique Open Mobile SaaS Platform

Strong and Long-standing Relationships with Tier-1 Enterprise Customers

Transforming Company from Network-Centric Arbitrage Model to Value-Add Cloud-Based Platform

FOCUSED NEW TEAM & BOARD


New Leadership, Financial Discipline and Focus on Driving Meaningful Stockholder Value

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FOCUSED NEW TEAM & BOARD

iPass’ Two Broad Business OpportunitiesiPass is leveraging it’s unique assets to pursue two compelling business

opportunities: the enterprise mobility space with its Open Mobile Platform, and new opportunities with global carriers for mass market Wi‐Fi offload,

international roaming and related needs.

Two Business Opportunities1. MORE DEVELOPED VALUE PROPOSITION: Open Mobile Enterprise Mobility Platform

C i Off l d & I i l R i2. NEWLY-EMERGING OPPORTUNITY: Carrier Off-load & International Roaming

Leveraging the Same Set of AssetsImportantly, these businesses both leverage iPass’ unique set of assets and competencies in network connectivity management, cloud-based service provisioning, transaction authentication and

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL

p gWi-Fi network expertise.

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Leveraging iPass’ Unique AssetsThere’s strong alignment how iPass’ assets line-up to support success

in the two business opportunities around enterprise mobility

Enterprise Mobility Business Wi‐Fi Enablement Business

in the two business opportunities around enterprise mobility and carrier mass-market Wi-Fi off-load.

iPass’ Core AssetsNetwork Access Contracts Connection ManagersNetwork Access Contracts

Wi‐Fi Authentication Fabric

Connection Managers

Profile Configuration Management

Location/Access Method Updates User Experience Data Collector

Network Access Config and Enforcement User Policy Config and Enforcement

Usage Reporting & Analytics

Transaction Processing

Transaction Clearing

Network Access Config and Enforcement User Policy Config and Enforcement


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Operational Support

Transaction Clearing

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The Enterprise Mobility Open Mobile Business


The State of Enterprise Mobility

The mobile ecosystem for enterprises is chaotic, expensive and out-of-control

E i h b i Enterprises are caught between carriers and consumers

The control point has shifted from the VPNto the Internet

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL 10

The Mobility Trends That Are Playing OutThe Mobility Trends That Are Playing-Out For The Enterprise …

N h thi! !• 64% of mobile don’t know how much

bili• 64% of mobile don’t know how much

bili

Mobile bill >2x and more variable

• Corporate liable, personal use• Corporate liable, personal use

No such thing as an “enterprise device”! !

mobility costs• Mobility costs $1448 annually per worker• 66% of enterprises see mobility spend

going up; 38% by more than 5%

mobility costs• Mobility costs $1448 annually per worker• 66% of enterprises see mobility spend

going up; 38% by more than 5%

• Individual liable, Mixed use• 36% see smartphones driving mobility

spend increase; 30% see 3G costs driving increase

• Individual liable, Mixed use• 36% see smartphones driving mobility

spend increase; 30% see 3G costs driving increase

Fragmentation worsens More mobile attacks !!• Countries, carriers, devices, connections• 25% of enterprises manage more than 5

carriers; and 15% manage more than 10• 2+ devices/user; 3+ connections/device

• Countries, carriers, devices, connections• 25% of enterprises manage more than 5

carriers; and 15% manage more than 10• 2+ devices/user; 3+ connections/device

• Very profitable activity• Billions of new threats opening• Data privacy, asset, operational and

compliance risks

• Very profitable activity• Billions of new threats opening• Data privacy, asset, operational and

compliance risks

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL 11Sources: iPass Mobile Workforce Survey, February 2010 and March 2011; iPass Enterprise Mobile Cost Survey, June 2010

… And The Mobile Worker Trends That Are Impacting Enterprise IT

1. Security and Cost/Productivity Imbalance

2 Th H C t d M bil W k2. The Hyper-Connected Mobile Worker

3. The Post PC Era: The Laptop is the New Desktop, p p p,The Smartphone/Tablet is the new Laptop

4 The Technical Chasm is Multi Generational & Global4. The Technical Chasm is Multi-Generational & Global

5. Multi-Mobile (the “Mobile Stack”) Rules the Day

IPASS PROPRIETARY AND CONFIDENTIALsmarter connections IPASS PROPRIETARY AND CONFIDENTIAL

*Data from the 2010 iPass IT Costs of Enterprise Mobility Survey Results and 2010 Mobile Workforce Report

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The iPass Solution: Enterprise Value Proposition

The iPass Open Mobile Platform delivers cloud‐based services to enable enterprises to manage the economics, complexity, compliance

and security needs of their global mobile workforce.

Radically improve mobility economics

R l ti i th bil iRevolutionize the mobile user experience

Enforce control at the point of connectEnforce control at the point of connect

Extend across all networks and devices


Extend across all networks and devices

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Th iP S l i C i V l P i iThe iPass Solution: Carrier Value Proposition

Differentiation, Higher-Value Conversationacross market segments and from competition

Optimize Revenue and Increase ARPUup-sell and cross-sell new services

Customer Retentionoffering a “seamless” user experience

Change the Economics of Service Managementcontrolling mobility services complexity


The iPass Enterprise Mobility OfferingsiPass offers a compelling suite of enterprise mobility services through two

broad offerings: (1) Mobility Management Platform Services andbroad offerings: (1) Mobility Management Platform Services, and (2) Mobile Network Services.

Network ServicesNetwork ServicesOpen Mobile PlatformOpen Mobile Platform

connection manager

global mobile broadband network (Wi-Fi, OpenAccess, In-Flight, etc.)

reporting & analytics

• provides an excellent user experience with always-on, auto-connect, intuitive user interface

bl th IT ith t h d i ibilit

• provides the enterprise with access to the world’s largest commercial Wi-Fi network.

policy management

• enables the IT manager with unmatched visibility across the enterprise’s mobility devices, networks and users

• ensures efficient and effective security and li f ll ti t th d


compliance for all connections at the edge

The simplest and smartest connection manager th t d li t d bil

Enterprise Offering Details:

that delivers remote and mobile access.

Ubiquitous Master Connection Management Across MultipleManagement Across Multiple Devices and Networks

Automatic, Zero-Click Connectivity

iPass Open Mobile Client

Smart Network Selection™

No-Fee OpenAccess

iPass Open Mobile Client(end user experience)Web-based Management Portal

Customizable Experience to Enterprise Configuration and Style


Data Collection Engine

The reporting and analytics functionality that provides the


enterprise with the intelligence they need to optimize the quality, security and cost of their mobile network activity.

Mobile User Management• Real-time view into mobility usage across the enterprise• Track access by connection methody• Track user success and failures for mobile usage• Track deployment of iPass software and updates

Mobile Broadband Management• View usage of iPass & 3rd-party Mobile Broadband devices• Categorize users into high and low usage

C


• Catch and reduce international roaming

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Policy manager functionality that provides enforcement of y g y penterprise security, spend & other policies across global fleet of

laptop, netbook and mobile devices

Web-based creation

Policy distribution

Any state change

Enhanced 3G Controlsa ced 3G Co t o s


272,000 Mobile Network Venues in 101 Countries


Wired – 2,00072 CountriesWired – 2,00072 CountriesWired – 2,00072 Countries

Wi-Fi – 270,00091 Countries



96 of the Top 100 Airportsand 657 Airports WW

North America30,000

Asia-Pacific165,000

Europe70,000

Over 41,000 Hotels andConvention Centers WW

Over 110,000 Retail Locations WW,

More than 6,000 iPass validated Free Wi-Fi locations

Middle East, Africa and Rest of World

3,000

Latin, Central andSouth America

4,000Premium Inflight Wi-Fi service –Available on 3,800 daily U.S. flights

US CN UK JP Mobile


US, CN, UK JP Mobile broadband

iPass’ Unique Mobility Infrastructure & Network Assets

The iPass Cloud: 5 data centers around the world

Large distributed authentication network and clearing house consisting of 350+ carriers and over 3500 enterprises.

Support for broad range of mobile devices from Windows to Mac laptops to iPhone, Blackberry, Symbian, Android and Windows Mobile

400 t k t i l di AT&T D t h T l k BT

Broad ecosystem support from Cisco, Juniper, Dell, Lenovo, Qualcomm, Checkpoint, Nokia, RIM and others

World’s largest Wi-Fi footprint with over 270,000 hotspots and hotel

400 network partners including AT&T, Deutsche Telekom, BT, Orange, NT, Sprint, Telstra


g p , pEthernet locations in 101 countries.

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Strong Reputation With Tier-1 Customers

More Than 3,500 Customers 240 of the Forbes 500


The Carrier Off-load & Enablement Business


Imminent Bandwidth Constraints Driving The Second Wave Of Wi‐Fi

Exciting New Opportunity With iPass Wi-Fi Assets

Explosion in bandwidth consumptionDriven by video based apps on more

g f

Driven by video based apps on more capable smartphones and tabletsAnnual hotspot connects anticipated to grow to over 11 billion by 2014By 2012, handhelds are anticipated to y , paccount for half of hotspot connects

LTE exacerbates the problemExisting experience shows that higher bandwidth leads to higher usagebandwidth leads to higher usage

Carriers are readjusting their service strategyAT&T, Verizon, T-Mobile, O2 and others are abandoning unlimited data plans


Wi-Fi offload gaining momentum as a result

iPass’ New Wi-Fi Offload/Roaming Value Proposition

1. DOMESTIC OFFLOAD – Provide carriers with a client/connection technology and authentication solution that enables mobile users (Smartphones) to access a range of Wi‐Fi networks in home market

2. INTERNATIONAL ROAMING – Provide carriers with a client/connection technology and authentication solution that enables mobile subscribers to access Wi‐Fi networks while travelling internationally

CDMA CarriersCDMA Carriers GSM CarriersGSM CarriersCDMA CarriersCDMA Carriers GSM Carriers GSM Carriers


Why iPass’ Wi-Fi Position is Unique

Effi i t Cl d B d Off i Wi Fi ConnectionEfficient Cloud-Based OfferingAbility to manage preferred networks and configure user profilesCore and edge hierarchical

Wi-Fi Connection Management Expertise

Integral to end-to-end user experienceEnable Wi-Fi user experience tog

architectureSaaS-based interfaces

Enable Wi Fi user experience to resemble Mobile (e.g., auto-connect)

Proven Authentication FabricThe ‘Visa’ model for transaction

Largest Commercial Wi-Fi Network

processingDelegated authentication and tie to carrier credential/policiesLeverages existing industry-standard

In-place Wi-Fi asset and relationshipsModel is extensible and evolves over time – Mobile carriers can strike own commercial relationships and still


Leverages existing, industry-standard interfaces into mobile network

commercial relationships and still leverage platform for implementation

Financial Results Highlights


Q4 2010 Financial Highlights

Q4 2010 Q3 2010Change

Favorable / (Unfavorable)

Revenue $38.6 $38.1 $0.5 1%

(in millions, except per share amounts)

Revenue $38.6 $38.1 $0.5 1%

Operating Expenses $37.9 $39.4 $1.5 4%

Adj EBITDA(1) $0 1 ($0 3) $0 4 n/mAdj. EBITDA( ) $0.1 ($0.3) $0.4 n/m

Cash & Investments(2) $30.7 $34.1 ($3.4) (10%)

_________________________(1) Non‐GAAP metrics exclude restructuring, amortization of intangibles, stock‐based compensation and certain state and federal tax items; see

t t Q4 2010 i l 10 K d th SEC fili f ili ti f GAAP t GAAP b d f d fi iti


notes to Q4 2010 earnings press release, 10‐K and other SEC filings for reconciliation of GAAP to non‐GAAP numbers and for definitions.(2) In December 2010, iPass paid $4 million in a special cash dividend; additionally, in 2009, iPass distributed $30 million in cash dividends and

from November 2009 through August 2010, iPass repurchased approximately 5m shares of the Company’s common stock for $6 million.

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Revenue Overview

Q4 2010 % of Total% Change vs. Q3 2010

Enterprise Mobility Services (EMS):(in millions)

Network Revenues $26.0 67% 2%

Platform Revenues 4.2 11% (3%)

Fees & Other Services 1 3 4% (10%)Fees & Other Services 1.3 4% (10%)

Total EMS Revenue $31.5 82% 1%

Managed Network Services (MNS) 7.1 18% 4%

Total Revenue $38.6 100% 1%


Revenue By Geography: 59% US, 41% ROW

Monetized Users and Value Creation

Long-term Value Creation Achieved By Driving Increased Usage

Q4 2010 Q3 2010 Q4 2009

Long term Value Creation Achieved By Driving Increased Usage

Total Average Monthly Monetized Users 624,000 621,000 689,000

Platform UsersImplied ARPU (monthly)

560,000$2.48

552,000

$2.58

612,000

$1.98

Network UsersImplied ARPU (monthly)

190,000$45.72

192,000

$44.46

222,000

$42.45


Initiatives and Priorities To Drive Growth

Sign Customers onto Open Mobile PlatformSign Customers onto Open Mobile Platform• Migrate existing customers and partners to Open Mobile platform.• Bring-on new enterprise customers to Open Mobile.

D i Pl tf UDrive Platform Usage• Increase penetration of usage into enterprise customers.• Increase frequency-of-use from month to month.

Continue to Drive Carrier Distribution and Service Offerings• Build-out Open Mobile-based carrier platform.• Pursue opportunities around Wi-Fi off-load & authentication needs.

Drive Platform Features & Functionality• Deliver value-added Platform roadmap and new services.


Key Take-Aways


Focused on Continuing to Build Stockholder

Strong, new senior management & board of directors.

Focused on Continuing to Build Stockholder Value

Transforming company from network-centric arbitrage model to SaaS-based, value-add mobility platform.

Driving innovation and creating technology value.

Driving high margin revenue growth with Open Mobile PlatformDriving high-margin revenue growth with Open Mobile Platform.

Leveraging unique and largest global Wi-Fi network and authentication platform around new Carrier Wi-Fi opportunitiesauthentication platform around new Carrier Wi-Fi opportunities.

Managing with financial discipline. • Reduced operating cost structure: Q4’10 OpEx down 26% YoY


• Returned $34m in cash to stockholders and repurchased $6m in stock• Stabilized foundation: $30m in Cash and zero Debt at 12/31/10

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Thank You.


iPass corporate presentaion

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