Table of Contents

Delaware		7372		22-3447504
(State of incorporation)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Philip J. Niehoff, Esq.		William J. Whelan, III, Esq.
John R. Sagan, Esq.		LizabethAnn R. Eisen, Esq.
Mayer, Brown, Rowe & Maw LLP		Cravath, Swaine & Moore LLP
71 South Wacker Drive		825 Eighth Avenue
Chicago, Illinois 60606		New York, New York 10019
(312) 782-0600		(212) 474-1000

Title of Each Class of		Proposed Maximum		Amount of
Securities to Be Registered		Aggregate Offering Price		Registration Fee(1)
Common Stock, par value $0.01 per share		$150,000,000		$16,050(2)

(1)	Calculated pursuant to Rule 457(o) under the Securities Act of 1933.
(2)	Previously paid.

---

Table of Contents

The information in this prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Underwriting

Proceeds to

Price to

Discounts and

Proceeds to

Selling

Public

Commissions

CommVault

Stockholders

Per Share

$

$

$

$

Total

$

$

$

$

Credit Suisse	Goldman, Sachs & Co.

	Thomas Weisel Partners LLC

	RBC Capital Markets

	C.E. Unterberg, Towbin

---

Table of Contents

---

 

		Page
Prospectus Summary			1
Risk Factors			12
Forward-Looking Statements			28
Use of Proceeds			29
Dividend Policy			29
Capitalization			30
Dilution			33
Selected Financial Data			35
Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Business			56
Management			69
The Concurrent Private Placement			80
Principal and Selling Stockholders			81
Certain Relationships and Related Party Transactions			84
Description of Capital Stock			86
Shares Eligible for Future Sale			91
Certain United States Federal Tax Considerations to Non-U.S. Holders			94
Underwriting			97
Legal Matters			104
Experts			104
Where You Can Find More Information			105
Index to Consolidated Financial Statements and Schedule			F-1
EX-23.1: CONSENT & YOUNG LLP

i

---

Table of Contents

1

---

Table of Contents

2

---

Table of Contents

3

---

Table of Contents

4

---

Table of Contents

5

---

Table of Contents

6

---

Table of Contents

7

---

Table of Contents

8

---

Table of Contents

9

---

Table of Contents

10

---

Table of Contents

11

---

Table of Contents

12

---

Table of Contents

	•	the unpredictability of the timing and magnitude of orders for our software applications — during fiscal 2005 and 2006 and the three months ended June 30, 2006, a majority of our quarterly revenues was earned and recorded near the end of each quarter;
	•	the possibility that our customers may cancel, defer or limit purchases as a result of reduced information technology budgets;
	•	the possibility that our customers may defer purchases of our software applications in anticipation of new software applications or updates from us or our competitors;
	•	the ability of our original equipment manufacturers and resellers to meet their sales objectives;
	•	market acceptance of our new applications and enhancements;
	•	our ability to control expenses;
	•	changes in our pricing and distribution terms or those of our competitors;
	•	the demands on our management, sales force and services infrastructure as a result of the introduction of new software applications or updates; and
	•	the possibility that our business will be adversely affected as a result of the threat of terrorism or military actions taken by the United States or its allies.

13

---

Table of Contents

14

---

Table of Contents

15

---

Table of Contents

	•	our customers’ budgetary constraints;
	•	the timing of our customers’ budget cycles and approval processes;
	•	our customers’ willingness to replace their current software solutions;
	•	our need to educate potential customers about the uses and benefits of our products and services; and
	•	the timing of the expiration of our customers’ current license agreements or outsourcing agreements for similar services.

16

---

Table of Contents

	•	continuing to retain, motivate and manage our existing employees and attract and integrate new employees;
	•	continuing to provide a high level of services to an increasing number of customers;
	•	maintaining the quality of product and services offerings while controlling our expenses;
	•	developing new sales channels that broaden the distribution of our software applications and services; and
	•	developing, implementing and improving our operational, financial, accounting and other internal systems and controls on a timely basis.

17

---

Table of Contents

	•	competitive pricing pressure on the rates that we can charge for our services;
	•	the complexity of our customers’ information technology environments and the existence of multiple non-integrated legacy databases;
	•	the resources directed by our customers to their implementation projects; and
	•	the extent to which outside consulting organizations provide services directly to customers.

	•	difficulties in staffing and managing our international operations;
	•	foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls;
	•	general economic conditions in the countries in which we operate, including seasonal reductions in business activity in the summer months in Europe and in other periods in other countries, could have an adverse effect on our earnings from operations in those countries;
	•	imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements may occur, including those pertaining to export duties and quotas, trade and employment restrictions;
	•	longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable;
	•	competition from local suppliers;
	•	costs and delays associated with developing software in multiple languages; and
	•	political unrest, war or acts of terrorism.

18

---

Table of Contents

19

---

Table of Contents

	•	patents;
	•	copyright and trademark laws;
	•	trade secrets;

20

---

Table of Contents

	•	confidentiality procedures; and
	•	contractual provisions.

21

---

Table of Contents

	•	diversion of management’s attention during the acquisition and integration process;
	•	costs, delays and difficulties of integrating the acquired company’s operations, technologies and personnel into our existing operations and organization;
	•	adverse impact on earnings as a result of amortizing the acquired company’s intangible assets or impairment charges related to write-downs of goodwill related to acquisitions;
	•	issuances of equity securities to pay for acquisitions, which may be dilutive to existing stockholders;
	•	potential loss of customers or key employees of acquired companies;
	•	impact on our financial condition due to the timing of the acquisition or our failure to meet operating expectations for acquired businesses; and
	•	assumption of unknown liabilities of the acquired company.

22

---

Table of Contents

23

---

Table of Contents

	•	variations in our quarterly or annual operating results;
	•	changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business;
	•	the public’s response to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
	•	changes in accounting standards, policies, guidance or interpretations or principles;
	•	sales of common stock by our directors, officers and significant stockholders;
	•	announcements of technological innovations or enhanced or new products by us or our competitors;
	•	our failure to achieve operating results consistent with securities analysts’ projections;
	•	the operating and stock price performance of other companies that investors may deem comparable to us;
	•	broad market and industry factors; and
	•	other events or factors, including those resulting from war, incidents of terrorism or responses to such events.

24

---

Table of Contents

25

---

Table of Contents

	•	our ability to issue preferred stock with terms that the board of directors may determine, without stockholder approval;
	•	a classified board in which only a third of the total board members will be elected at each annual stockholder meeting;
	•	advance notice requirements for stockholder proposals and nominations; and
	•	limitations on convening stockholder meetings.

26

---

Table of Contents

27

---

Table of Contents

28

---

Table of Contents

29

---

Table of Contents

	•	on an actual basis;
	•	on a pro forma basis after giving effect to each of the following events as if each had occurred at June 30, 2006:

	•	the conversion of all outstanding shares of our preferred stock into a total of                      shares of common stock upon the closing of this offering;
	•	the payment of $           million in satisfaction of the cash amount due to holders of our Series A, B, C, D and E preferred stock upon its conversion into common stock upon the completion of this offering (including accrued dividends, and assuming the offering is completed on                          , 2006);
	•	the borrowing of $           million under our new term loan on or immediately prior to the closing date of this offering in connection with the payments to the holders of our Series A, B, C, D and E preferred stock; and
	•	the completion of the concurrent private placement of                      shares of our common stock at the public offering price and the application of the proceeds therefrom. Assuming an offering price of $           per share (the midpoint of the estimated price range shown on the cover page of this prospectus) we will raise $           million in proceeds from the concurrent private placement.

	•	on a pro forma as adjusted basis after giving effect to our receipt of the net proceeds from our sale of                      shares of common stock in this offering at an assumed public offering price of $           (the midpoint of the estimated price range shown on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as if it had occurred at June 30, 2006.

30

---

Table of Contents

					As of June 30, 2006
													Pro Forma As
					Actual				Pro Forma				Adjusted(1)
					(In thousands, except share and
					per share amounts)
Cash and cash equivalents					$	53,501			$				$
Term loan, current portion					$	—			$				$
Long-term debt:
	Term loan, less current portion				$	—			$				$
Cumulative redeemable convertible preferred stock, $0.01 par value per share, authorized in Series A, B, C, D and E: 7,000,000 total shares authorized, 3,166,254 total shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma or pro forma as adjusted						100,579				—				—
Stockholders’ deficit:
	Convertible preferred stock, $0.01 par value per share, authorized in Series AA, BB and CC: 22,150,000 total shares authorized, 19,251,820 total shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma or pro forma as adjusted					94,352				—				—
	Preferred stock, $0.01 par value per share, no shares authorized, issued or outstanding, actual or pro forma;         shares authorized, no shares issued or outstanding, pro forma as adjusted					—				—				—
	Common stock, par value $0.01 per share,            shares authorized,            shares issued and outstanding, actual;            shares authorized,            shares issued and outstanding, pro forma;            shares authorized,            shares issued and outstanding, pro forma as adjusted					388
	Additional paid-in capital					—
	Accumulated deficit					(165,303	)
	Accumulated other comprehensive income					200
		Total stockholders’ equity (deficit)				(70,363	)
			Total capitalization		$	30,216			$				$

(1)

A $1.00 increase in the assumed initial public offering price of $           per share would increase each of cash and cash equivalents, additional paid-in capital and total capitalization by $           million and would decrease borrowings under our new term loan and total stockholders’ deficit by $           million and $           million, respectively, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price of $           per share would decrease each of cash and cash equivalents, additional paid-in capital and total capitalization by $           million and would increase borrowings under our new term loan and total stockholders’ deficit by $           million and $           million, respectively, assuming the number of shares offered by us, as set forth on the cover

31

---

Table of Contents

	page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Share information above excludes:

	•	shares of common stock available for issuance under our 1996 Stock Option Plan, including                      shares of common stock issuable upon exercise of outstanding stock options as of                     , 2006 at a weighted average exercise price of $           per share; and
	•	shares of common stock initially available for issuance under our 2006 Long-Term Stock Incentive Plan.

32

---

Table of Contents

	•	the conversion of all outstanding shares of our preferred stock into a total of                      shares of common stock;
	•	the payment of $           million in cash in satisfaction of the cash amount due to holders of our Series A, B, C, D and E preferred stock upon its conversion into common stock (including accrued dividends, and assuming the offering is completed on                          , 2006);
	•	the borrowing of $           million under our new term loan on or immediately prior to the closing date of this offering in connection with the payments to the holders of our Series A, B, C, D and E preferred stock; and
	•	the completion of the concurrent private placement of                      shares of our common stock at the public offering price and the application of the proceeds therefrom. Assuming an offering price of $           per share (the midpoint of the estimated price range shown on the cover page of this prospectus) we will raise $           million in proceeds from the concurrent private placement.

Assumed initial public offering price per share					$
	Pro forma net tangible book value per share as of June 30, 2006		$
	Increase per share attributable to new investors
Pro forma as adjusted net tangible book value per share after this offering
Dilution per share to new investors					$

33

---

Table of Contents

			Shares Purchased								Total Consideration								Average
																			Price per
			Number				Percent				Amount				Percent				Share
			(In thousands, except share and per share data)
Existing stockholders									%		$						%		$
New investors
	Total							100.0	%		$					100.0	%		$

	•	shares of common stock available for issuance under our 1996 Stock Option Plan, including                      shares of common stock issuable upon exercise of outstanding stock options as of                     , 2006 at a weighted average exercise price of $           per share; and
	•	shares of common stock initially available for issuance under our 2006 Long-Term Stock Incentive Plan.

34

---

Table of Contents

35

---

Table of Contents

																									For the
																									Three Months Ended
					For the Year Ended March 31,																				June 30,
					2002				2003				2004				2005				2006				2005				2006
					(In thousands, except per share data)
Statement of Operations Data:
Revenues:
	Software:
		QiNetix			$	17,460			$	29,485			$	39,474			$	49,598			$	62,422			$	12,463			$	18,788
		Vault 98				314				—				—				—				—				—				—
			Total software			17,774				29,485				39,474				49,598				62,422				12,463				18,788
	Services					11,677				14,840				21,772				33,031				47,050				9,660				14,734
	Hardware, supplies and other					1,397				94				—				—				—				—				—
			Total revenues			30,848				44,419				61,246				82,629				109,472				22,123				33,522
Cost of revenues:
	QiNetix software					255				932				1,168				1,497				1,764				337				272
	Vault 98 software					1				—				—				—				—				—				—
	Services					6,449				6,095				8,049				9,975				13,231				2,683				4,513
	Hardware, supplies and other					1,146				72				—				—				—				—				—
			Total cost of revenues			7,851				7,099				9,217				11,472				14,995				3,020				4,785
Gross margin						22,997				37,320				52,029				71,157				94,477				19,103				28,737
Operating expenses:
	Sales and marketing					27,352				29,842				37,592				43,248				51,326				11,853				15,307
	Research and development					15,867				16,153				16,214				17,239				19,301				4,338				5,418
	General and administrative					6,291				6,332				8,599				8,955				12,275				3,081				4,653
	Depreciation and amortization					3,021				1,752				1,396				1,390				1,623				383				497
	Goodwill impairment					1,194				—				—				—				—				—				—
Income (loss) from operations						(30,728	)			(16,759	)			(11,772	)			325				9,952				(552	)			2,862
Interest expense						(22	)			—				(60	)			(14	)			(7	)			(4	)			—
Interest income						631				297				134				346				1,262				175				524
Income (loss) before income taxes						(30,119	)			(16,462	)			(11,698	)			657				11,207				(381	)			3,386
Income tax (expense) benefit						232				52				—				(174	)			(451	)			16				(45	)
Net income (loss)						(29,887	)			(16,410	)			(11,698	)			483				10,756				(365	)			3,341
Less: accretion of preferred stock dividends						(5,661	)			(5,661	)			(5,676	)			(5,661	)			(5,661	)			(1,411	)			(1,411	)
Net income (loss) attributable to common stockholders					$	(35,548	)		$	(22,071	)		$	(17,374	)		$	(5,178	)		$	5,095			$	(1,776	)		$	1,930
Net income (loss) attributable to common stockholders per share(1):
	Basic				$	(0.98	)		$	(0.60	)		$	(0.47	)		$	(0.14	)		$	0.09			$	(0.05	)		$	0.03
	Diluted				$	(0.98	)		$	(0.60	)		$	(0.47	)		$	(0.14	)		$	0.08			$	(0.05	)		$	0.03
Weighted average shares used in computing per share amounts:
	Basic					36,224				36,741				37,201				37,424				37,678				37,615				38,079
	Diluted					36,224				36,741				37,201				37,424				61,866				37,615				64,220

			As of March 31,																				As of June 30,
			2002				2003				2004				2005				2006				2005				2006
			(In thousands)
Balance Sheet Data:
Cash and cash equivalents			$	27,704			$	7,611			$	22,958			$	24,795			$	48,039			$	29,879			$	53,501
Working capital				20,626				5,633				13,164				13,441				24,139				13,152				28,243
Total assets				37,802				26,489				41,779				47,513				72,568				50,389				78,060
Cumulative redeemable convertible preferred stock:
	Series A through E, at liquidation value			76,508				82,170				87,846				93,507				99,168				94,919				100,579
Total stockholders’ deficit				(53,554	)			(75,561	)			(75,910	)			(81,010	)			(73,664	)			(82,736	)			(70,363	)

(1)	See page F-12 in the consolidated financial statements for a reconciliation of the basic and diluted earnings per share calculation.

36

---

Table of Contents

	History and Background

37

---

Table of Contents

	Sources of Revenues

38

---

Table of Contents

	Description of Costs and Expenses

	•	Cost of Software Revenue, consists primarily of third party royalties and other costs such as media, manuals, translation and distribution costs;
	•	Cost of Services Revenue, consists primarily of salary and employee benefit costs in providing customer support and other professional services; and
	•	Cost of Hardware, Supplies and Other Revenue, consists primarily of third party costs related to the procurement of products for resale to our customers. We substantially completed the phase out of our sales of third party hardware in September 2001.

	•	Sales and Marketing, consists primarily of salaries, commissions, employee benefits and other direct and indirect business expenses, including travel related expenses, sales promotion expenses, public relations expenses and costs for marketing materials and other marketing events (such as trade shows and advertising);
	•	Research and Development, which is primarily the expense of developing new software applications and modifying existing software applications, consists principally of salaries and benefits for research and development personnel and related expenses; contract labor expense and consulting fees as well as other expenses associated with the design, certification and testing of our software applications; and legal costs associated with the patent registration of such software applications;
	•	General and Administrative, consists primarily of salaries and benefits for our executive, accounting, human resources, legal, information systems and other administrative personnel. Also included in this category are other general corporate expenses, such as outside legal and accounting services and insurance; and
	•	Depreciation and Amortization, consists of depreciation expense primarily for computer equipment we use for information services and in our development and test labs.

39

---

Table of Contents

	Revenue Recognition

40

---

Table of Contents

	Stock-Based Compensation

41

---

Table of Contents

		Three Months Ended
		June 30, 2006
Dividend yield			None
Expected volatility			55	%
Risk-free interest rate			4.95% - 5.04	%
Expected life (in years)			6.25

		Number of								Retrospective Fair
		Options								Value per
Grant Date		Granted				Exercise Price				Common Share				Intrinsic Value
May 5, 2005			719,500			$	2.25			$	3.46			$	1.21
July 29, 2005			922,750				2.35				4.18				1.83
September 19, 2005			1,600,000				2.35				4.59				2.24
November 3, 2005			749,000				3.35				5.17				1.82
January 26, 2006			668,700				3.75				5.54				1.79
March 2, 2006			327,250				4.05				6.42				2.37
April 20, 2006			300,000				5.85				6.49				0.64
May 3, 2006			179,500				6.30				6.54				0.24

42

---

Table of Contents

43

---

Table of Contents

	•	The continued execution of our business model which resulted in total revenues increasing 32% in fiscal 2006 compared to fiscal 2005 and 52% in the three months ended June 30, 2006 compared to the three months ended June 30, 2005. We have experienced such revenue growth in both the United States and in our international operations.
	•	Software revenue generated through our original equipment manufacturer agreements increased approximately $8.5 million, or 425%, in fiscal 2006 compared to fiscal 2005 due higher revenue from our arrangement with Dell as well as revenue generated from an original equipment manufacturer arrangement we entered into with Hitachi Data Systems in March 2005.
	•	We achieved our fourth consecutive quarter of profitability for three months ended June 30, 2006.
	•	As of June 30, 2006, we have licensed our software applications to approximately 4,000 registered customers representing an increase of approximately 50% compared to March 31, 2005.
	•	We have continued to enhance our QiNetix software suite with the introduction of QiNetix Data Classification in 2005 and QiNetix ContinuousDataReplicator in 2006. In addition, we have released numerous enhancements to our existing QiNetix software applications.

44

---

Table of Contents

	•	The passage of time between grant dates, which led to the shifting of the time periods that such valuations are based upon.
	•	The probability weighting of being able to proceed with an IPO with an offering price of no less than $6.26 per share, which is the minimum offering price without being potentially blocked by the Series CC preferred stockholders.
	•	In January 2006, we engaged investment bankers to initiate the process of an initial public offering and began drafting a registration statement.

	•	For the three months ended March 31, 2005, we had the most profitable quarter in our history, generating earnings of approximately $1.6 million;
	•	We achieved our first fiscal year of profitability for the year ended March 31, 2005;
	•	We entered into an original equipment manufacturer arrangement with Hitachi Data Systems; and
	•	The possibility of an initial public offering remained relatively low and a probability estimate of 30% was assigned under the PWER method as a result of the significant milestones to be achieved.

	•	For the three months ended June 30, 2005, revenues and earnings exceeded budget;
	•	We increased our earnings forecast for the remainder of fiscal 2006; and
	•	We increased the probability estimate for the initial public offering scenario under the PWER method to 40% as a result of our revenues and earnings exceeding budget.

	•	For the three and six months ended September 30, 2005, earnings exceeded our original budget and revised forecasts;
	•	In the six months ended September 30, 2005, we started to achieve substantial revenue growth from our original equipment manufacturer arrangements with Dell and Hitachi Data Systems; and
	•	We increased the probability estimate for the initial public offering scenario under the PWER method to 60% as a result of our earnings exceeding forecast and the substantial revenue growth we achieved from our original equipment manufacturer agreements.

45

---

Table of Contents

	•	On January 10, 2006, we initiated the process of an initial public offering when we held an organizational meeting; as a result, we increased the initial public offering scenario to 65% under the PWER method;
	•	We achieved consecutive quarters of profitability for the first time;
	•	For the three and nine months ended December 31, 2005, earnings exceeded our original budget and revised forecasts; and
	•	We continued to generate cash flows from operations significantly exceeding budgeted, revised forecast and prior year amounts.

	•	We achieved our third quarter of consecutive profitability and completed our most profitable fiscal year for the year ended March 31, 2006;
	•	We continued to generate cash flows from operations significantly exceeding budgeted and prior year amounts.

46

---

Table of Contents

	Accounting for Income Taxes

	Software Development Costs

																For the Three
				For the Year Ended												Months Ended
				March 31,												June 30,
				2004				2005				2006				2005				2006
Revenues:
	Software				64	%			60	%			57	%			56	%			56	%
	Services				36				40				43				44				44
		Total revenues			100	%			100	%			100	%			100	%			100	%
Cost of revenues:
	Software				2	%			2	%			2	%			2	%			1	%
	Services				13				12				12				12				13
		Total cost of revenues			15				14				14				14				14
Gross margin					85	%			86	%			86	%			86	%			86	%

47

---

Table of Contents

	Three months ended June 30, 2006 compared to three months ended June 30, 2005

	Revenues

	Cost of Revenues

	Operating Expenses

48

---

Table of Contents

	Interest Income

	Fiscal year ended March 31, 2006 compared to fiscal year ended March 31, 2005

	Revenues

	Cost of Revenues

49

---

Table of Contents

	Operating Expenses

	Interest Income

	Income Tax (Expense) Benefit

	Fiscal year ended March 31, 2005 compared to fiscal year ended March 31, 2004

	Revenues

50

---

Table of Contents

	Cost of Revenues

	Operating Expenses

	Interest Income

	Income Tax (Expense) Benefit

51

---

Table of Contents

52

---

Table of Contents

			Preferred				Total
Date of Financing			Stock Series				Amount
			(In millions)
May 1996				A			$	30.6
July 1997				B				5.2
December 1997				C				5.0
October 1998				D				3.0
March 1999				E				3.0
April 2000				AA				25.0
December 2000				BB				33.4
February 2002				CC				21.3
September 2003				CC				14.7
	Total						$	141.2

	•	$14.85 per share, or $47.0 million in the aggregate; and
	•	accumulated and unpaid dividends of $1.788 per share per year since the date the shares of preferred stock were issued, or $           million in the aggregate, assuming that this offering closes on                     2006.

53

---

Table of Contents

		Payments Due By March 31,
Contractual Obligations(1)		Total				2007				2008				2009				2010				2011				Thereafter
Operating leases		$	5,833			$	2,186			$	2,516			$	994			$	96			$	41			$	—

(1)

In connection with this offering, we intend to enter into a new $20 million term loan pursuant to which we intend to borrow $           million on or immediately prior to the closing date of this offering. We estimate the payments under this term loan will be $           million in fiscal 2007, $           million in fiscal 2008 and $           million in fiscal 2009. The term loan will mature in fiscal 2009.

54

---

Table of Contents

	Interest Rate Risk

55

---

Table of Contents

•	high-performance data protection, including backup and recovery;
•	disaster recovery of data;
•	data migration and archiving;
•	global availability of data;
•	replication of data;
•	creation and management of copies of stored data;
•	storage resource discovery and usage tracking;
•	data classification; and
•	management and operational reports and troubleshooting tools.

	•	an indexing engine that systematically identifies and organizes all data, users and devices accessible to our software products;
	•	a cataloging engine that contains a global database describing the nature of all data, such as the users, applications and storage with which it is associated;
	•	a policy engine that enables customers to set rules to automate the management of data;
	•	a data movement engine that transports data using network communication protocols; and
	•	a media management engine that controls and catalogs disk, tape and optical storage devices, as well as the data written to them.

56

---

Table of Contents

57

---

Table of Contents

	•	Effective Management of Widely Distributed and Networked Data. Most existing data management software products were designed to manage local server-attached storage environments, and do not as easily or effectively manage data in today’s heterogeneous, widely distributed and tiered storage architectures.
	•	Ease of Data Management Application Integration. A number of vendors offering point products have attempted to address distributed and networked storage management requirements, but these disparate products are not easily integrated with other data management applications and can result in additional costs to the user, including storage infrastructure costs and higher implementation, training, administration, maintenance and support costs.
	•	Global Scalability. Data management solutions consisting of combinations of point products initially designed to address server-attached storage environments have underlying software architectures that are both cumbersome to deploy and more difficult to scale across networked storage and geographic boundaries.
	•	Centralized Data Management. Most data management solutions consisting of combinations of point products lack the ability to comprehensively manage all data management applications across the global enterprise from a single, unified point of control.
	•	Ability to Effectively Prioritize Stored Data Across Applications. Several existing solutions include combinations of point products that attempt to manage data based on its assigned priority in a tiered storage environment. However, these offerings lack a specifically designed tiered storage management architecture that can seamlessly integrate the classification, indexing and cataloging of data with features that enable user-defined policies and automated migration of data across a tiered storage environment.
	•	Lower Total Cost of Ownership. The inherent limitations of many data management software products can result in increased capital and operating costs. These costs are related to the increased use of storage hardware and media, additional infrastructure requirements (such as servers and storage network devices) and higher personnel costs, including implementation, training, administration, maintenance and support.

58

---

Table of Contents

	•	Dynamic Management of Widely Distributed and Networked Data. QiNetix is specifically designed to optimize management of data on tiered storage and widely distributed data environments, including SAN and NAS. Our architecture enables the creation of policies that automate the movement of data based on business goals for availability, recoverability and disaster tolerance. User-defined policies determine the storage media on which data should reside based on its assigned value.
	•	Unified Suite of Applications Built upon a Common Technology Engine. All QiNetix applications share common components of our underlying software code, which drives significant cost savings versus the point products or loosely integrated solutions offered by our competitors. In addition, we believe that each of the individual data management applications in our QiNetix suite delivers superior performance, functionality and total cost of ownership benefits. These solutions can be delivered to our customers either as part of our unified suite or as stand-alone applications. We also believe that our architecture will allow us to more rapidly introduce new applications that will enable us to expand beyond our current addressable market.
	•	Global Scalability and Seamless Centralized Data Management. Our software is highly scalable, enabling our customers to keep pace with the growth of data and technologies deployed in their enterprises. We use the same underlying software architecture for large global enterprise, small and medium sized business and government agency deployments. We offer a centralized, browser-based management console from which policies automatically move data according to users’ needs for data access, availability and cost objectives. With QiNetix, our customers can automate the discovery, management and monitoring of enterprise-wide storage resources and applications.
	•	State-of-the-Art Customer Support Services. We offer 24/7 global technical support. Our support operations center at our Oceanport, New Jersey headquarters is complemented by local support resources, including centers in Europe, Australia, India and China. Our worldwide customer support organization provides comprehensive local and remote customer care to effectively address issues in today’s complex storage networking infrastructures. Our customer support process includes the expertise of product development, field and customer support engineers. In addition, we incorporate into our software many self-diagnostic and troubleshooting capabilities and provide automated web-based support capabilities to our customers. Furthermore, we have implemented a voice-over-IP telephony system to tie our worldwide support centers together with an integrated call center messaging and trouble ticket management system.
	•	Superior Professional Services. We are committed to providing high-value, superior professional services to our customers. Our Global Professional Services group provides complete business solutions that complement our software sales and improve the overall user experience. Our end-to-end services include assessment and design, implementation, post-deployment and training services. These services help our customers improve the protection, disaster recovery, availability, security and regulatory compliance of their global data assets while minimizing the overall cost and complexity of their data infrastructures.

59

---

Table of Contents

	•	Lower Total Cost of Ownership. Our software solutions built on our QiNetix architecture enable our customers to realize compelling total cost of ownership benefits, including reduced capital costs, operating expenses and support costs.

	•	Extending our Technology Leadership, Product Breadth and Addressable Markets. We intend to use our technology base, internal development capabilities and strategic industry relationships to extend our technology leadership in providing software to manage globally distributed data. Specifically, we plan to continuously enhance existing software applications and introduce new data management software applications that address emerging data and storage management trends, incorporate advances in hardware and software technologies as they become available and take advantage of market opportunities.
	•	Enhancing and Expanding our Customer Support and Other Professional Services Offerings. We plan to continue investing in the people, partners, technologies, software and services enhancements necessary to provide our customers with the industry’s most comprehensive product support and professional services. We intend to continue creating and delivering innovative services offerings and product enhancements that result in faster deployment of our software, simpler system administration and rapid resolution of problems. We also intend to enhance our web-based support initiatives and broaden our global support infrastructure.
	•	Expanding Distribution Channels and Geographic Markets Served. We plan to continue investing in the expansion of our distribution channels, both geographically and across all enterprises. We intend to maintain and grow our direct sales force as well as our distribution relationships, including those with value-added resellers, corporate resellers, systems integrators and original equipment manufacturers. We have made significant investments to extend our global reach, such as establishing sales and support offices in China and a development and support office in India. We intend to continue making investments to extend our global reach and increase our distribution throughout the Americas, Europe, Australia and Asia.
	•	Broadening and Developing Strategic Relationships. We plan to broaden our distribution and technology partnerships to increase existing product sales and introduce new applications. Our unified platform simplifies integration with our partners’ solutions and the implementation of unique functionality to meet their needs. We also intend to broaden our existing relationships and develop new relationships with leading technology partners, including software application and infrastructure hardware vendors. We believe that these types of strategic relationships will allow us to package and distribute our data management software to our partners’ customers, increase sales of our software through joint-selling and marketing arrangements and increase our insight into future industry trends.

60

---

Table of Contents

QiNetix Suite of Data Management Applications		Functionality
• Galaxy Backup and Recovery		High-performance backup and restoration of enterprise data
• QuickRecovery		Recovery of files and applications by taking advantage of snapshot technologies
• ContinuousDataReplicator		Continuous capture of changes to data and copying of those changes to a secondary location for disaster recovery and fast recovery of individual files
• DataMigrator		Active migration and archiving of data to less expensive secondary storage indexed for search and retrieval
• DataArchiver		Archiving and indexing of e-mail messages and attachments for compliance and legal discovery purposes
• Data Classification		Creation of a catalog of key attributes about primary data to enable intelligent, automated policy-based data movement and management
• StorageManager		Storage resource discovery and usage tracking of applications, files, organizations and individual users
• QNet		Consolidated management and reporting on data management service levels and data movement operations

	QiNetix Galaxy Backup and Recovery

	QiNetix QuickRecovery

	QiNetix ContinuousDataReplicator

61

---

Table of Contents

	QiNetix DataMigrator

	QiNetix DataArchiver

	QiNetix Data Classification

	QiNetix StorageManager

	QiNetix QNet

62

---

Table of Contents

	•	Real-Time Support. Our support staff are available 24/7 by telephone to provide first response and manage the resolution of customer issues. In addition to phone support, our customers have access to an online product support database for help with troubleshooting and operational questions. Innovative use of web-based diagnostic tools provides problem analysis and resolution often without the need for onsite support personnel. Our software design is also an important element in our comprehensive customer support, including “root cause” problem analysis, intelligent alerting and troubleshooting assistance. Our software is directly linked to our online support database allowing customers to analyze problems without engaging our technical support personnel.
	•	Significant Network and Hardware Expertise. Our support engineers have extensive knowledge of complex applications, servers and networks. We proactively take ownership of the customer’s problem, regardless of whether the issue is directly related to our products or to those of another vendor. We have also developed and maintain a knowledge library of storage systems and software products to further enable our support organization to quickly and effectively resolve customer problems.
	•	Global Operations. We enhanced our Oceanport, New Jersey support operations with a new state-of-the-art technical support center which became operational in April 2006. We also have established key support operations in Hyderabad, India, Oberhausen, Germany and Shanghai, China, which are complemented by regional support centers in other worldwide locations. Furthermore, we have implemented a voice-over-IP telephony system to tie our worldwide support centers together with an integrated call center messaging and trouble ticket management system. We have designed our support infrastructure to be able to scale with the increasing globalization of our customers.

	•	Assessment and Design Services. Our assessment and design services assist customers in determining data and storage management requirements, designing solutions to meet those requirements and planning for successful implementation and deployment.

63

---

Table of Contents

	•	Implementation and Post-deployment Services. Our professional services team helps customers efficiently configure, install and deploy our QiNetix suite based on specified business objectives. Our SystemCare Review Services assist our customers with assessing the post-deployment operational performance of our QiNetix suite.
	•	Training Services. We provide global onsite and offsite training for our products. Packaged or customized customer training courses are available in instructor-led or computer-based formats. We offer in-depth training and certification for our resellers in pre- and post-sales support methodologies, including web access to customizable documentation and training materials.

64

---

Table of Contents

	•	one CommServe;
	•	one or more MediaAgents; and
	•	one or more iDataAgents.

	•	CommServe. The CommServe acts as the command and control center of the CommCell and handles all requests for activity between MediaAgent and iDataAgent components. The CommServe contains the centralized event and job managers and the index catalog. This database includes information about where data resides, such as the library, media and content of data. The centralized event manager logs all events, providing unified notification of important events. The job manager automates and monitors all jobs across the CommCell.
	•	MediaAgent. The MediaAgent is a media independent module that is responsible for managing the movement of data between the iDataAgents and the physical storage devices. Our MediaAgents communicate with a broad range of storage devices, generating an index for use by each of our QiNetix applications. The MediaAgent software supports most storage devices, including automated magnetic tape libraries, tape stackers and loaders, standalone tape drives and magnetic storage devices, magneto-optical libraries, virtual tape libraries, DVD-RAM and CD-RW devices.
	•	iDataAgent. The iDataAgent is a software module that resides on the server or other computing device and controls the data being protected, replicated, migrated or archived, often referred to simply as the “client” software. iDataAgents communicate with most open and network file systems and enterprise relational databases and applications, such as Microsoft Exchange, Microsoft SharePoint, Notes Domino Server, GroupWise, Oracle, Informix, Sybase, DB2 and SAP, to generate application aware indexes pertinent to granular recovery of application objects. The agent software contains the logic necessary to extract (or recover) data and send it to (or receive it from) the MediaAgent software.

65

---

Table of Contents

	•	CA (formerly known as Computer Associates International, Inc.);
	•	EMC;
	•	Hewlett-Packard;
	•	IBM; and
	•	Symantec.

66

---

Table of Contents

67

---

Table of Contents

68

---

Table of Contents

Name		Age				Position
N. Robert Hammer			64			Chairman, President and Chief Executive Officer
Alan G. Bunte			52			Executive Vice President and Chief Operating Officer
Louis F. Miceli			57			Vice President and Chief Financial Officer
Ron Miiller			39			Vice President of Sales, Americas
Anand Prahlad			38			Vice President, Product Development
Suresh P. Reddy			43			Vice President, Worldwide Technical Services & Support
Steven Rose			48			Vice President, Europe, Middle East and Asia
David West			41			Vice President, Marketing and Business Development
Thomas Barry(1)(2)			48			Director
Frank J. Fanzilli, Jr.(3)			49			Director
Armando Geday			44			Director
Keith Geeslin(3)			53			Director
Edward A. Johnson			43			Director*
F. Robert Kurimsky(1)(2)			67			Director
Daniel Pulver(3)			37			Director
Gary B. Smith(2)			45			Director
David F. Walker(1)(2)			52			Director

	*	Mr. Johnson will resign as a director immediately prior to the closing of the offering.

(1)	Member of the Audit Committee.
(2)	Member of the Nominations and Governance Committee.
(3)	Member of the Compensation Committee.

69

---

Table of Contents

70

---

Table of Contents

71

---

Table of Contents

72

---

Table of Contents

	•	Mr. Fanzilli formerly served in several capacities at Credit Suisse Securities (USA) LLC. Affiliates of Credit Suisse Securities (USA) LLC hold 3,044,000 shares of our Series A, B, C, D and E preferred stock, which will be converted into                 shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	Mr. Geeslin was formerly a managing partner of the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. The Sprout Group, together with its affiliates, holds 3,044,000 shares of our Series A, B, C, D and E preferred stock, which will be converted into                 shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	Mr. Pulver was formerly a director of Credit Suisse Securities (USA) LLC and a principal at DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. DLJ Merchant Banking funds hold 1,299,426 shares of our Series A, B, C, D and E preferred stock, which will be converted into                 shares of our common stock and the right to receive $           million in cash upon the completion of the offering.

73

---

Table of Contents

																		Long-Term
						Annual Compensation												Compensation Awards
														Other Annual				Securities Underlying
Name and Principal Position		Year				Salary				Bonus				Compensation(1)				Options
N. Robert Hammer			2006			$	363,462			$	236,250			$	70,930(2)
Chairman, President and Chief Executive Officer
Alan G. Bunte			2006				264,546				123,000
Executive Vice President and Chief Operating Officer
Louis F. Miceli			2006				257,631				123,000
Vice President and Chief Financial Officer
David West			2006				221,154				63,000
Vice President, Marketing and Business Development
Ron Miiller			2006				207,692				189,820
Vice President of Sales, Americas
Scott Mercer(3)			2006				179,111				173,968
Vice President, Europe, Middle East and Asia

(1)	Other than Mr. Hammer, none of our six most highly-compensated executive officers received other annual compensation exceeding $50,000 for the year ended March 31, 2006.
(2)	Mr. Hammer’s other annual compensation for the year ended March 31, 2006 included our payment of $23,504 for airfare for Mr. Hammer between his residence in Florida and our headquarters in Oceanport, New Jersey and $22,200 related to housing costs for the rental of an apartment for Mr. Hammer in New Jersey. No other item of Mr. Hammer’s other annual compensation individually exceeded 25% of Mr. Hammer’s total other annual compensation for the year ended March 31, 2006.
(3)	Mr. Mercer passed away in January 2006.

74

---

Table of Contents

75

---

Table of Contents

Individual Grants

Potential Realizable

Value at Assumed Annual

Number of

Percent of

Rates of Stock Price

Securities

Total Options

Appreciation for

Underlying

Granted to

Exercise

Option Term(2)

Options

Employees in

Price per

Expiration

Name

Granted

Fiscal Year(1)

Share

Date

5%

10%

N. Robert Hammer

%

$

$

$

Alan G. Bunte

Louis F. Miceli

David West

Ron Miiller

Scott Mercer(3)

(1)	Based on options to purchase an aggregate of            shares of common stock granted by us during the year ended March 31, 2006.
(2)	Potential realizable values are net of exercise price, but before the payment of taxes associated with exercise. Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by rules of the Securities and Exchange Commission and do not represent our estimate or projection of our future common stock prices. These amounts represent certain assumed rates of appreciation in the value of the common stock from the fair market value on the date of grant. Actual gains, if any, on stock option exercises are dependent on the future performance of the common stock and overall stock market conditions. The amounts reflected in the table may not necessarily be achieved.
(3)	Mr. Mercer passed away in January 2006.

76

---

Table of Contents

Number of Securities

Value of Unexercised

Shares

Underlying Unexercised

In-the-Money Options

Acquired

Options at March 31, 2005

at March 31, 2005(2)

on

Value

Name

Exercise

Realized(1)

Exercisable

Unexercisable

Exercisable

Unexercisable

N. Robert Hammer

$

$

$

Alan G. Bunte

Louis F. Miceli

David West

Ron Miiller

Scott Mercer(3)

(1)	Based on the fair market value of our common stock on the date of exercise of the options, as determined by the board of directors, less the applicable exercise price per share, multiplied by the number of shares issued upon exercise of the option.
(2)	There was no public trading market for our common stock as of March 31, 2006. Accordingly, these values have been calculated on the basis of an assumed initial offering price of $           per share (the midpoint of the estimated price range shown on the cover page of this prospectus), less the applicable exercise price per share, multiplied by the number of shares underlying such options.
(3)	Mr. Mercer passed away in January 2006.

	1996 Stock Option Plan

77

---

Table of Contents

	2006 Long-Term Stock Incentive Plan

78

---

Table of Contents

79

---

Table of Contents

80

---

Table of Contents

	•	each person who we know beneficially owns more than 5% of our common stock;
	•	our directors and named executive officers;
	•	all of our directors and executive officers as a group; and
	•	the selling stockholders.

Percentage

Number of

Beneficially Owned

Number of Shares

Shares Being

Number of Shares

Beneficially Owned

Sold in the

Beneficially Owned

Before the

After the

Name and Address of Beneficial Owner

Before the Offering

Offering

After the Offering

Offering

Offering

N. Robert Hammer(1)

Alan G. Bunte(2)

Louis F. Miceli(3)

David West(4)

Ron Miiller(5)

Anand Prahlad(6)

Suresh P. Reddy(7)

Thomas Barry(8)

Frank J. Fanzilli, Jr.(9)

Armando Geday(10)

Keith Geeslin(11)

Edward A. Johnson

F. Robert Kurimsky(12)

Daniel Pulver

Gary B. Smith(13)

David F. Walker

Putnam OTC and Emerging Growth Fund(14)

TH Lee, Putnam Investment Trust(14)

81

---

Table of Contents

Percentage

Number of

Beneficially Owned

Number of Shares

Shares Being

Number of Shares

Beneficially Owned

Sold in the

Beneficially Owned

Before the

After the

Name and Address of Beneficial Owner

Before the Offering

Offering

After the Offering

Offering

Offering

Putnam Discovery Growth Fund(14)

Putnam World Trust II — Putnam Emerging Information Sciences Fund(14)

DLJ Capital Corporation(15)

DLJ ESC II, L.P.(15)

DLJ First ESC, L.P.(15)

DLJ International Partners, C.V.(15)

DLJMB Funding, Inc.(15)

DLJ Merchant Banking Partners, L.P.(15)

DLJ Offshore Partners, C.V.(15)

Sprout IX Plan Investors, L.P.(15)

Sprout Capital VII, L.P.(15)

Sprout Capital IX, L.P.(15)

Sprout CEO Fund, L.P.(15)

Sprout Entrepreneurs’ Fund, L.P.(15)

Sprout Growth II, L.P.(15)

All directors and named executive officers as a group(16)

	*	Less than 1%.

	(1)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(2)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(3)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(4)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(5)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(6)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(7)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(8)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
	(9)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.

82

---

Table of Contents

(10)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
(11)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
(12)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
(13)	Includes options to acquire                      shares of common stock which are exercisable within 60 days of                     , 2006.
(14)	These entities are affiliates of Putnam Investment Management, LLC, One Post Office Square, Boston, Massachusetts 02109.
(15)	These entities are affiliates of Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629.                     of these shares are subject to a voting trust agreement. The trustee of the voting trust is Wells Fargo Bank, N.A. and its address is                     . See “Description of Capital Stock — Voting Trust Agreement” for more information regarding this agreement.
(16)	Includes options to acquire shares of common stock which are exercisable within 60 days of                     , 2006.

83

---

Table of Contents

	•	Affiliates of Credit Suisse Securities (USA) LLC will receive approximately $                million in cash upon the completion of the offering.
	•	Thomas Barry, one of our directors, holds directly 10,166 shares of our Series B preferred stock, which will be converted into            shares of our common stock and the right to receive approximately $                million in cash upon the completion of the offering.
	•	Edward A. Johnson, one of our directors, is currently a managing director of Credit Suisse Securities (USA) LLC and a partner at DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. DLJ Merchant Banking funds hold 1,299,426 shares of our Series A, B, C, D and E preferred stock, which will be converted into                 shares of our common stock and the right to receive $           million in cash upon the completion of the offering. Mr. Johnson will resign his position as a director of our company immediately prior to the completion of the offering.
	•	Frank J. Fanzilli, Jr., one of our directors, formerly served in several capacities at Credit Suisse Securities (USA) LLC. Affiliates of Credit Suisse Securities (USA) LLC hold 3,044,000 shares of our Series A, B, C, D and E preferred stock, which will be converted into                 shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	Keith Geeslin, one of our directors, was formerly a managing partner of the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. The Sprout Group, together with its affiliates, holds 3,044,000 shares of our Series A, B, C, D and E preferred stock, which will be converted into                      shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	Daniel Pulver, one of our directors, was formerly a director of Credit Suisse Securities (USA) LLC and a principal at DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. DLJ Merchant Banking funds hold 1,299,426 shares of our Series A, B, C, D and E preferred stock, which will be converted into                      shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	N. Robert Hammer, our chairman, president and chief executive officer, was a partner of the Sprout Group until November 2003. The Sprout Group, together with its affiliates, holds

84

---

Table of Contents

		3,044,000 shares of our Series A, B, C, D and E preferred stock, which will be converted into                      shares of our common stock and the right to receive $           million in cash upon the completion of the offering. Mr. Hammer also holds directly 3,333 shares of our Series B preferred stock and beneficially owns 47,204 shares of our Series D preferred stock, which will collectively be converted into                      shares of our common stock and the right to receive $           million in cash upon the completion of the offering.
	•	Louis F. Miceli, our vice president and chief financial officer, purchased and holds 1,667 shares of our Series B preferred stock as a direct investment, which will be converted into                      shares of our common stock and the right to receive approximately $           million in cash upon the completion of the offering.
	•	Messrs. Barry, Fanzilli, Geeslin, Pulver, Hammer and Bunte also own limited partnership interests in certain investment funds associated with the Sprout Group and DLJ Merchant Banking, which investment funds collectively own                 shares of our common stock and preferred stock which will be converted into the right to receive                 shares of our common stock and $                million in cash upon completion of the offering. The ownership interests of Messrs. Barry, Fanzilli, Greeslin, Pulver, Hammer and Bunte in these funds in the aggregate is less than 10% of the total membership interests in these funds.

85

---

Table of Contents

86

---

Table of Contents

	•	the tenth anniversary of the agreement;
	•	the written election of Credit Suisse First Boston Private Equity, Inc., an affiliate of Credit Suisse Securities (USA) LLC, Credit Suisse Securities (USA) LLC or the holders of the majority of the shares of common stock subject to the voting trust agreement and the satisfaction of specified requirements; or
	•	the transfer of all of the shares of common stock subject to the voting trust agreement in a matter permitted thereunder.

87

---

Table of Contents

	Board of Directors

	•	that the board of directors be divided into three classes, as nearly equal in size as possible, with staggered three-year terms;
	•	that directors may be removed only for cause by the affirmative vote of the holders of at least 662/3 % of the shares of our capital stock entitled to vote; and
	•	that any vacancy on the board of directors, however occurring, including a vacancy resulting from an enlargement of the board, may only be filled by vote of a majority of the directors then in office.

	Stockholder Actions and Special Meetings

	•	any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting; and
	•	special meetings of the stockholders may only be called by the chairman of the board of directors, our chief executive officer, or by the board of directors.

88

---

Table of Contents

	Board Consideration of Change of Control Transactions

	•	a comparison of the proposed consideration to be received by stockholders in relation to the then current market price of our capital stock; and
	•	the impact of the transaction on our employees, suppliers and customers and its effect on the communities in which we operate.

	Amendment

	Preferred Stock

	•	prior to that date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
	•	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than statutorily excluded shares; or

89

---

Table of Contents

	•	on or subsequent to such date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 662/3 % of the outstanding voting stock which is not owned by the interested stockholder.

	•	any person that is the owner of 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the date of determination; and
	•	the affiliates and associates of any such person.

90

---

Table of Contents

Maximum Number
of Shares		Date
		After the date of this prospectus
		After 90 days from the date of this prospectus (subject, in some cases, to volume limitations and contractual vesting schedules)
		After 100 days from the date of this prospectus (subject, in some cases, to volume limitations and contractual vesting schedules and subject to the conditions for early release from the lock-up agreements described below)
		After 180 days from the date of this prospectus (subject, in some cases, to volume limitations and contractual vesting schedules)

	•	grants of employee stock options pursuant to our stock option plan or long term incentive plan;
	•	issuances of common stock pursuant to the exercise of such options;
	•	the delivery of common stock to holders of our Series A, B, C, D, E, AA, BB or CC preferred stock upon the conversion of the preferred stock into common stock; and
	•	the delivery of common stock in effectuation of the            reverse stock split.

91

---

Table of Contents

	•	offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or enter into a transaction which would have the same effect;
	•	enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any such transaction is to be settled by delivery of our common stock or other securities, in cash or otherwise; or
	•	publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement;

	•	one percent of the number of shares of common stock then outstanding (approximately                      shares immediately after this offering); or
	•	the average weekly trading volume of our common stock on The NASDAQ Global Market during the four calendar weeks before a notice of the sale on Form 144 is filed.

92

---

Table of Contents

93

---

Table of Contents

	•	a citizen or resident of the United States;
	•	a corporation (including for this purpose any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof;
	•	an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
	•	a trust that is subject to the primary supervision of a U.S. court and to the control of one or more U.S. persons, or that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

94

---

Table of Contents

	•	the holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met;
	•	such gain is effectively connected with the holder’s conduct of a trade or business within the United States and, if certain tax treaties apply, is attributable to a U.S. permanent establishment maintained by the holder (and, in which case, if you are a foreign corporation, you may be subject to an additional branch profits tax equal to 30% or a lower rate as may be specified by an applicable income tax treaty);
	•	the holder is subject to the Internal Revenue Code provisions applicable to certain U.S. expatriates; or
	•	we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes and, assuming that our common stock is deemed to be “regularly traded on an established securities market,” the holder held, directly or indirectly at any time during the five-year period ending on the date of disposition or such shorter period that such shares were held, more than five percent of our common stock. We have not been, are not and do not anticipate becoming, a United States real property holding corporation for United States federal income tax purposes.

95

---

Table of Contents

	•	the income associated with such payments is otherwise exempt from U.S. federal income tax;
	•	the payor or broker does not have actual knowledge or reason to know that you are a U.S. person; and
	•	you have furnished to the payor or broker a valid Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-U.S. person, or other documentation upon which it may rely to treat the payments as made to a non-U.S. person in accordance with U.S. Treasury regulations (or you otherwise establish an exemption).

	•	the proceeds are transferred to an account maintained by you in the United States;
	•	the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or
	•	the sale has some other specified connection with the United States as provided in U.S. Treasury regulations,

	•	a U.S. person;
	•	a controlled foreign corporation for U.S. tax purposes;
	•	a foreign person 50% or more of whose gross income is effectively connected with the conduct of a U.S. trade or business for a specified period; or
	•	a foreign partnership, if at any time during its tax year one or more of its partners are “U.S. persons,” as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or such foreign partnership is engaged in the conduct of a U.S. trade or business,

96

---

Table of Contents

Underwriter			Number of Shares
Credit Suisse Securities (USA) LLC
Goldman, Sachs & Co.
C.E. Unterberg, Towbin, LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
RBC Capital Markets Corporation
Thomas Weisel Partners LLC
	Total

Per Share

Total

Without

With

Without

With

Over-allotment

Over-allotment

Over-allotment

Over-allotment

Underwriting Discounts and Commissions paid by us

$

$

$

$

Expenses payable by us

$

$

$

$

Underwriting Discounts and Commissions paid by the selling stockholders

$

$

$

$

Expenses payable by the selling stockholders

$

$

$

$

97

---

Table of Contents

	•	issuances of common stock pursuant to the exercise of options outstanding on the date of this prospectus;
	•	grants of employee stock options pursuant to our stock option plan or long term incentive plan;
	•	issuances of common stock pursuant to the exercise of such options;
	•	the delivery of common stock to holders of our Series A, B, C, D, E, AA, BB or CC preferred stock upon the conversion of such preferred stock into common stock; and
	•	the delivery of common stock in effectuation of the            reverse stock split.

	•	offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock or enter into a transaction that would have the same effect;
	•	enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise; or
	•	publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement;

98

---

Table of Contents

	•	Affiliates of Credit Suisse Securities (USA) LLC own approximately      % of our common stock as of                     , 2006 (calculated without giving effect to this offering or the conversion of any shares of preferred stock into common stock), 98.1% of our Series A preferred stock, 89.8% of our Series B preferred stock, 100% of our Series C preferred stock, 80.9% of our Series D Preferred Stock, 100% of our Series E preferred stock, 13.4% of our Series AA preferred stock, 30.0% of our Series BB preferred stock and 15.4% of our Series CC preferred stock, and, upon completion of the offering and related transactions, will own approximately      % of our common stock. See “Principal and Selling Stockholders.” Concurrently with the completion of the offering, affiliates of Credit Suisse Securities (USA) LLC will deposit all shares of our common stock held by them that exceed 5.0% of our then outstanding common stock into a voting trust under which the shares will be voted by an independent trustee. See “Principal and Selling Stockholders” and “Description of Capital Stock — Voting Trust Agreement” for more information regarding the voting trust agreement.
	•	Mr. Thomas Barry, one of our directors, is a limited partner in an investment fund associated with DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Barry.
	•	Mr. Edward A. Johnson, one of our directors, also serves as a managing director of Credit Suisse Securities (USA) LLC and a partner at DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. Mr. Johnson will resign his position as a director of our

99

---

Table of Contents

		company immediately prior to the completion of the offering. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Johnson.
	•	Mr. Frank J. Fanzilli, Jr., one of our directors, formerly served in several capacities at Credit Suisse Securities (USA) LLC. Currently, Mr. Fanzilli is a limited partner in an investment fund associated with the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Fanzilli.
	•	Mr. Keith Geeslin, one of our directors, formerly served in several capacities at various affiliates of Credit Suisse Securities (USA) LLC, including as a managing partner of the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. Currently, Mr. Geeslin is a limited partner in certain investment funds associated with DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC, and the Sprout Group. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Geeslin.
	•	Mr. Daniel Pulver, one of our directors, formerly served as a director of Credit Suisse Securities (USA) LLC and a principal at DLJ Merchant Banking, the corporate leveraged buyout arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. Currently, Mr. Pulver is a limited partner in an investment fund associated with DLJ Merchant Banking. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Pulver.
	•	Mr. N. Robert Hammer, our chairman, chief executive officer and president, formerly served in several capacities at various affiliates of Credit Suisse Securities (USA) LLC, including as a venture partner of the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. Currently, Mr. Hammer is a limited partner in certain investment funds associated with the Sprout Group. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Hammer.
	•	Mr. Alan G. Bunte, our executive vice president and chief operating officer, is a limited partner in an investment fund associated with the Sprout Group, the venture capital arm of Credit Suisse’s asset management business, which conducts its activities through affiliates of Credit Suisse Securities (USA) LLC. See “Management” and “Certain Relationships and Related Party Transactions” for more information regarding Mr. Bunte.
	•	An affiliate of RBC Capital Markets Corporation owns approximately 2.2% of our Series BB preferred Stock and 0.095% of our Series CC preferred stock, and upon completion of the offering and related transactions will own approximately      % of our common stock.
	•	Affiliates and related parties of C.E. Unterberg, Towbin, LLC own approximately 5.0% of our Series CC preferred stock, and upon completion of the offering and related transactions will own approximately      % of our common stock.
	•	Affiliates of Credit Suisse Securities (USA) LLC will receive $           million of the net proceeds to us from the offering, the concurrent private placement and borrowings under our new term loan in satisfaction of amounts due upon the conversion of their holdings of our Series A, B, C, D and E preferred stock (including accrued dividends, and assuming the offering is completed on                     2006). See “Certain Relationships and Related Party Transactions” for more information regarding these payments.

100

---

Table of Contents

	•	the information in this prospectus and otherwise available to the underwriters;
	•	market conditions for initial public offerings;
	•	the history and the prospects for the industry in which we compete;
	•	the ability of our management;
	•	the prospects for our future earnings;
	•	the present state of our development and our current financial condition;
	•	the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies; and
	•	the general condition of the securities markets at the time of this offering.

	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
	•	Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.
	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over- allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

101

---

Table of Contents

	•	Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
	•	In passive market making, market makers in the common stock who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchases of our common stock until the time, if any, at which a stabilizing bid is made.

	(a) it has not made or will not make an offer of shares to the public in the United Kingdom within the meaning of section 102B of the Financial Services and Markets Act 2000 (“FSMA”), as amended, except to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require the publication by our Company of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority (“FSA”);
	(b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of the FSMA does not apply to our Company; and
	(c) it has complied with, and will comply with, all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

	(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
	(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
	(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the manager for any such offer; or
	(d) in any other circumstances which do not require the publication by our Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

102

---

Table of Contents

103

---

Table of Contents

104

---

Table of Contents

105

---

Table of Contents

Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of March 31, 2005 and 2006 and June 30, 2006 (unaudited)		F-3
Consolidated Statements of Operations for the years ended March 31, 2004, 2005 and 2006 and the three months ended June 30, 2005 (unaudited) and 2006 (unaudited)		F-4
Consolidated Statements of Stockholders’ Deficit for the years ended March 31, 2004, 2005 and 2006 and the three months ended June 30, 2006 (unaudited)		F-5
Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2005 and 2006 and the three months ended June 30, 2005 (unaudited) and 2006 (unaudited)		F-6
Notes to Consolidated Financial Statements		F-7
Schedule II — Valuation and Qualifying Accounts		F-32

F-1

---

Table of Contents

	/s/ Ernst & Young LLP

F-2

---

Table of Contents

			March 31,												Pro Forma
											June 30,				June 30,
			2005				2006				2006				2006
											(Unaudited)				(Unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	24,795			$	48,039			$	53,501			$
	Trade accounts receivable, less allowance for doubtful accounts of $602 and $475 at March 31, 2005 and 2006, respectively, and $534 at June 30, 2006			18,305				18,238				17,528
	Prepaid expenses and other current assets			1,986				1,877				1,571
Total current assets				45,086				68,154				72,600
Property and equipment, net				2,085				3,322				3,675
Other assets				342				1,092				1,785
Total assets			$	47,513			$	72,568			$	78,060			$
Liabilities, cumulative redeemable convertible preferred stock and stockholders’ deficit
Current liabilities:
	Accounts payable		$	1,755			$	1,565			$	1,878			$
	Accrued liabilities			10,451				12,685				13,067
	Term loan			166				—				—
	Deferred revenue			19,273				29,765				29,412
Total current liabilities				31,645				44,015				44,357
Deferred revenue, less current portion				3,281				3,036				3,476
Term loan, less current portion				—				—				—
Other liabilities				90				13				11
Commitments and contingencies
Cumulative redeemable convertible preferred stock:
Series A through E, at liquidation value				93,507				99,168				100,579
Stockholders’ deficit:
Convertible preferred stock, $.01 par value: 5,000 shares Series AA authorized, 4,362 issued and outstanding; 5,000 shares Series BB authorized, 2,758 issued and outstanding; 12,150 shares Series CC authorized, 12,132 issued and outstanding; liquidation value $96,339 at June 30, 2006				94,352				94,352				94,352
Common stock, $.01 par value, 120,850 shares authorized, 37,617, 37,920 and 38,762 shares issued and outstanding at March 31, 2005 and 2006 and June 30, 2006, respectively;           shares issued and outstanding pro forma at June 30, 2006 (unaudited)				377				379				388
Additional paid-in capital				—				4,506				—
Deferred compensation				(61	)			(8,134	)			—
Accumulated deficit				(175,904	)			(165,148	)			(165,303	)
Accumulated other comprehensive income				226				381				200
Total stockholders’ deficit				(81,010	)			(73,664	)			(70,363	)
			$	47,513			$	72,568			$	78,060			$

F-3

---

Table of Contents

															Three Months Ended
			Year Ended March 31,												June 30,
			2004				2005				2006				2005				2006
															(Unaudited)				(Unaudited)
Revenues:
	Software		$	39,474			$	49,598			$	62,422			$	12,463			$	18,788
	Services			21,772				33,031				47,050				9,660				14,734
Total revenues				61,246				82,629				109,472				22,123				33,522
Cost of revenues:
	Software			1,168				1,497				1,764				337				272
	Services			8,049				9,975				13,231				2,683				4,513
Total cost of revenues				9,217				11,472				14,995				3,020				4,785
Gross margin				52,029				71,157				94,477				19,103				28,737
Operating expenses:
	Sales and marketing			37,592				43,248				51,326				11,853				15,307
	Research and development			16,214				17,239				19,301				4,338				5,418
	General and administrative			8,599				8,955				12,275				3,081				4,653
	Depreciation and amortization			1,396				1,390				1,623				383				497
Income (loss) from operations				(11,772	)			325				9,952				(552	)			2,862
Interest expense				(60	)			(14	)			(7	)			(4	)			—
Interest income				134				346				1,262				175				524
Income (loss) before income taxes				(11,698	)			657				11,207				(381	)			3,386
Income tax (expense) benefit				—				(174	)			(451	)			16				(45	)
Net income (loss)				(11,698	)			483				10,756				(365	)			3,341
Less: accretion of preferred stock dividends				(5,676	)			(5,661	)			(5,661	)			(1,411	)			(1,411	)
Net income (loss) attributable to common stockholders			$	(17,374	)		$	(5,178	)		$	5,095			$	(1,776	)		$	1,930
Net income (loss) attributable to common stockholders per share:
	Basic		$	(0.47	)		$	(0.14	)		$	0.09			$	(0.05	)		$	0.03
	Diluted		$	(0.47	)		$	(0.14	)		$	0.08			$	(0.05	)		$	0.03
Weighted average shares used in computing per share amounts:
	Basic			37,201				37,424				37,678				37,615				38,079
	Diluted			37,201				37,424				61,866				37,615				64,220
Unaudited pro forma net income (loss) attributable to common stockholders per share:
	Basic										$								$
	Diluted										$								$
Unaudited pro forma weighted average shares used in computing per share amounts:
	Basic
	Diluted

F-4

---

Table of Contents

																																	Accumulated
					Convertible																												Other
					Preferred Stock								Common Stock								Additional												Comprehensive
																					Paid-In				Deferred				Accumulated				Income
					Shares				Amount				Shares				Amount				Capital				Compensation				Deficit				(Loss)				Total
Balance at March 31, 2003						14,461			$	79,650				37,399			$	374			$	—			$	—			$	(155,656	)		$	71			$	(75,561	)
	Stock options exercised													168				2				371																373
	Repurchase and retirement of common stock													(8	)			—																				—
	Issuance of shares in private placement					4,791				14,702																												14,702
	Issuance of common stock warrant to a customer																					1,696																1,696
	Comprehensive income (loss):
		Net loss																												(11,698	)							(11,698	)
		Other comprehensive income (loss):
			Foreign currency translation adjustment																															250				250
	Total comprehensive income (loss)																																					(11,448	)
	Deferred compensation related to stock options																					86				(86	)											—
	Amortization of deferred compensation																									4												4
	Accretion of dividends on preferred stock																					(2,153	)							(3,523	)							(5,676	)
Balance at March 31, 2004						19,252				94,352				37,559				376				—				(82	)			(170,877	)			321				(75,910	)
	Stock options exercised													61				1				151																152
	Repurchase and retirement of common stock													(3	)			—																				—
	Comprehensive income (loss):
		Net income																												483								483
		Other comprehensive income (loss):
			Foreign currency translation adjustment																															(95	)			(95	)
	Total comprehensive income (loss)																																					388
	Amortization of deferred compensation																									21												21
	Accretion of dividends on preferred stock																					(151	)							(5,510	)							(5,661	)
Balance at March 31, 2005						19,252				94,352				37,617				377				—				(61	)			(175,904	)			226				(81,010	)
	Stock options exercised													303				2				703																705
	Comprehensive income:
		Net income																												10,756								10,756
		Other comprehensive income:
			Foreign currency translation adjustment																															155				155
	Total comprehensive income																																					10,911
	Acceleration of stock options																					263																263
	Deferred compensation related to stock options																					9,201				(9,201	)											—
	Amortization of deferred compensation																									1,128												1,128
	Accretion of dividends on preferred stock																					(5,661	)															(5,661	)
Balance at March 31, 2006						19,252				94,352				37,920				379				4,506				(8,134	)			(165,148	)			381				(73,664	)
	Stock options exercised													67				1				154																155
	Cashless exercise of stock warrants and related shares issued pursuant to preemptive rights													775				8				(8	)															—
	Comprehensive income:
		Net income																												3,341								3,341
		Other comprehensive income (loss):
			Foreign currency translation adjustment																															(181	)			(181	)
	Total comprehensive income																																					3,160
	Stock-based compensation																					1,265								132								1,397
	Reversal of deferred compensation upon adoption of SFAS 123(R)																					(4,506	)			8,134				(3,628	)							—
	Accretion of dividends on preferred stock																					(1,411	)															(1,411	)
Balance at June 30, 2006 (unaudited)						19,252			$	94,352				38,762			$	388			$	—			$	—			$	(165,303	)		$	200			$	(70,363	)

F-5

---

Table of Contents

																Three Months Ended
				Year Ended March 31,												June 30,
				2004				2005				2006				2005				2006
																(Unaudited)				(Unaudited)
Cash flows from operating activities
Net income (loss)				$	(11,698	)		$	483			$	10,756			$	(365	)		$	3,341
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation and amortization				1,425				1,431				1,682				392				553
	Noncash stock compensation				4				21				1,391				51				1,397
	Issuance of common stock warrants				1,696				—				—				—				—
	Changes in operating assets and liabilities:
		Accounts receivable			(352	)			(2,759	)			67				1,575				710
		Prepaid expenses and other current assets			225				(588	)			109				440				306
		Other assets			3				(120	)			105				82				(189	)
		Accounts payable			1,018				(1,060	)			(664	)			(740	)			93
		Accrued expenses			214				2,617				2,234				(399	)			382
		Deferred revenue and other liabilities			8,366				3,815				10,170				4,381				85
Net cash provided by operating activities					901				3,840				25,850				5,417				6,678
Cash flows from investing activities
Purchase of property and equipment					(1,244	)			(1,860	)			(2,814	)			(281	)			(906	)
Net cash used in investing activities					(1,244	)			(1,860	)			(2,814	)			(281	)			(906	)
Cash flows from financing activities
Proceeds from issuance of preferred stock					14,702				—				—				—				—
Proceeds from term loan					497				—				—				—				—
Repayments on term loan					(131	)			(200	)			(166	)			(50	)			—
Deferred offering costs					—				—				(486	)			—				(284	)
Proceeds from issuance of common stock					372				152				705				1				155
Net cash provided by (used in) financing activities					15,440				(48	)			53				(49	)			(129	)
Effects of exchange rate — changes in cash					250				(95	)			155				(3	)			(181	)
Net increase in cash and cash equivalents					15,347				1,837				23,244				5,084				5,462
Cash and cash equivalents at beginning of period					7,611				22,958				24,795				24,795				48,039
Cash and cash equivalents at end of period				$	22,958			$	24,795			$	48,039			$	29,879			$	53,501
Supplemental disclosures of cash flow information
Interest paid				$	60			$	14			$	7			$	4			$	—
Income taxes paid				$	15			$	48			$	483			$	107			$	177

F-6

---

Table of Contents

1.	Nature of Business

2.	Summary of Significant Accounting Policies

	Basis of Presentation

	Unaudited Pro Forma Information

	•	the conversion of all outstanding shares of preferred stock into a total of                      shares of common stock;
	•	the payment of $          in satisfaction of the cash amount due to holders of Series A, B, C, D and E preferred stock upon its conversion into common stock (including accrued dividends, and assuming the initial public offering is completed in               2006);
	•	the borrowing of $          under a new term loan at an interest rate equal to 30-day LIBOR plus 1.50%, and assumed to be           % per year in connection with the payments to the holders of Series A, B, C, D and E preferred stock (assuming that the initial public offering and the concurrent private placement are priced at $          per share, the midpoint of the estimated price range shown on the cover of the prospectus); and
	•	the completion of the concurrent private placement of                      shares of the Company’s common stock at the public offering price and the application of the proceeds therefrom. Assuming an offering price of $           per share (the midpoint of the estimated price range shown on the cover page of the prospectus) the Company will raise $          in proceeds from the concurrent private placement.

F-7

---

Table of Contents

							Three Months
			Year Ended				Ended
			March 31, 2006				June 30, 2006
Net income attributable to common stockholders			$	5,095			$	1,930
Plus:
	Elimination of accretion of preferred stock dividends			5,661				1,411
Less:
	Interest expense associated with term loan borrowings, net of taxes of $
Pro forma net income attributable to common stockholders			$				$

							Three Months
			Year Ended				Ended
			March 31, 2006				June 30, 2006
Basic weighted average number of shares used in computing per share amounts				37,678				38,079
Plus:
	Shares issued upon conversion of outstanding preferred stock
	Shares issued in the concurrent private placement
Basic pro forma weighted average number of shares used in computing per share amounts

							Three Months
			Year Ended				Ended
			March 31, 2006				June 30, 2006
Diluted weighted average number of shares used in computing per share amounts				61,866				64,220
Less:
	Dilutive effect of common stock warrants
Plus:
	Shares issued upon conversion of outstanding preferred stock
	Shares issued in the concurrent private placement
Diluted pro forma weighted average number of shares used in computing per share amounts

F-8

---

Table of Contents

	Use of Estimates

	Revenue Recognition

F-9

---

Table of Contents

	•	Persuasive evidence of an arrangement with the customer exists. The Company’s customary practice is to require a purchase order and, in some cases, a written contract signed by both the customer and the Company, a signed SOW evidencing the scope of certain other professional services, or other persuasive evidence that an arrangement exists prior to recognizing revenue on an arrangement.
	•	Delivery or performance has occurred. The Company’s software applications are usually physically delivered to customers with standard transfer terms such as FOB shipping point. Software and/or software license keys for add-on orders or software updates are typically delivered via email. If products that are essential to the functionality of the delivered software in an arrangement have not been delivered, the Company does not consider delivery to have occurred. Services revenue is recognized when the services are completed, except for customer support, which is recognized ratably over the term of the customer support agreement, which is typically one year.
	•	Vendor’s fee is fixed or determinable. The fee customers pay for software applications, customer support and other professional services is negotiated at the outset of an arrangement. The fees are therefore considered to be fixed or determinable at the inception of the arrangement.
	•	Collection is probable. Probability of collection is assessed on a customer-by-customer basis. Each new customer undergoes a credit review process to evaluate its financial position and ability to pay. If the Company determines from the outset of an arrangement that collection is not probable based upon the review process, revenue is recognized on a cash-collected basis, assuming all of the other basic revenue recognition criteria are met.

F-10

---

Table of Contents

	Cost of Revenue

	Accounting for Income Taxes

	Net Income (Loss) Attributable to Common Stockholders per Share

F-11

---

Table of Contents

															Three Months Ended
			Year Ended March 31,												June 30,
			2004				2005				2006				2005				2006
															(Unaudited)				(Unaudited)
Reconciliation of net income (loss) to undistributed net income (loss) allocable to common stockholders for the basic computation:
	Net income (loss)		$	(11,698	)		$	483			$	10,756			$	(365	)		$	3,341
	Accretion of preferred stock dividends(1)			(5,676	)			(5,661	)			(5,661	)			(1,411	)			(1,411	)
	Net income (loss) attributable to common stockholders			(17,374	)			(5,178	)			5,095				(1,776	)			1,930
	Undistributed net income allocable to Series AA, BB and CC convertible preferred stock, if converted(2)			—				—				(1,730	)			—				(651	)
	Undistributed net income (loss) allocable to common stockholders		$	(17,374	)		$	(5,178	)		$	3,365			$	(1,776	)		$	1,279
Basic net income (loss) attributable to common stockholders per share:
	Basic weighted average shares outstanding			37,201				37,424				37,678				37,615				38,079
	Basic net income (loss) attributable to common stockholders per share		$	(0.47	)		$	(0.14	)		$	0.09			$	(0.05	)		$	0.03
Reconciliation of net income (loss) to net income (loss) attributable to common stockholders for the diluted computation:
	Net income (loss)		$	(11,698	)		$	483			$	10,756			$	(365	)		$	3,341
	Accretion of preferred stock dividends(1)			(5,676	)			(5,661	)			(5,661	)			(1,411	)			(1,411	)
	Net income (loss) attributable to common stockholders		$	(17,374	)		$	(5,178	)		$	5,095			$	(1,776	)		$	1,930
Diluted net income (loss) attributable to common stockholders per share:
	Basic weighted average shares outstanding			37,201				37,424				37,678				37,615				38,079
	Series AA, BB and CC convertible preferred stock			—				—				19,374				—				19,374
	Dilutive effect of stock options			—				—				4,384				—				6,241
	Dilutive effect of common stock warrants			—				—				430				—				526
	Diluted weighted average shares outstanding			37,201				37,424				61,866				37,615				64,220
	Diluted net income (loss) attributable to common stockholders per share		$	(0.47	)		$	(0.14	)		$	0.08			$	(0.05	)		$	0.03

F-12

---

Table of Contents

(1)	Net income is reduced by the contractual amount of dividends ($1.788 per share) due on the Company’s Series A through E cumulative redeemable convertible preferred stock.
(2)	In the years ended March 31, 2004 and 2005 and the three months ended June 30, 2005, net loss attributable to common stockholders is not allocated to the preferred stockholders because the Company’s preferred stock does not participate in losses. In the year ended March 31, 2006 and the three months ended June 30, 2006, net income attributable to common stockholders is reduced by the participation rights of the Series AA, BB and CC convertible preferred stock related to cash dividends declared by the Company. Net income attributable to common stockholders is not allocated to the Series A through E cumulative redeemable convertible preferred stock because such stockholders only participate in cash dividends in excess of their contractual dividend amount of $1.788 per share, and the Company did not have the ability to distribute amounts in excess of $1.788 per share in the year ended March 31, 2006 and the three months ended June 30, 2006.

														Three Months Ended
		Year Ended March 31,												June 30,
		2004				2005				2006				2005				2006
														(Unaudited)				(Unaudited)
Stock options			9,529				11,357				—				11,909				1,287
Convertible preferred stock			32,039				32,039				12,665				32,039				12,665
Common stock warrants			4,615				4,615				—				4,615				—
Total options, preferred stock and warrants exercisable or convertible into common stock			46,183				48,011				12,665				48,563				13,952

	Software Development Costs

	Cash and Cash Equivalents

	Accounts Receivable and Allowance for Doubtful Accounts

F-13

---

Table of Contents

	Concentration of Credit Risk

	Fair Value of Financial Instruments

	Property and Equipment

	Long-Lived Assets

F-14

---

Table of Contents

	Deferred Revenue

		March 31,
										June 30,
		2005				2006				2006
										(Unaudited)
Current:
Deferred software revenue		$	711			$	2,957			$	856
Deferred services revenue			18,562				26,808				28,556
		$	19,273			$	29,765			$	29,412
Non-current:
Deferred services revenue		$	3,281			$	3,036			$	3,476

	Accounting for Stock-Based Compensation

F-15

---

Table of Contents

			Year Ended March 31,
															Three Months Ended
			2004				2005				2006				June 30, 2005
															(Unaudited)
Net income (loss)			$	(11,698	)		$	483			$	10,756			$	(365	)
Less: Accretion of preferred stock dividends				(5,676	)			(5,661	)			(5,661	)			(1,411	)
Net income (loss) attributable to common stockholders, as reported				(17,374	)			(5,178	)			5,095				(1,776	)
Add: Stock-based compensation recorded under APB 25				4				21				1,391				51
Less: Stock-based compensation expense determined under fair value method for all awards				(4,321	)			(4,438	)			(5,321	)			(1,013	)
Pro forma net income (loss) attributable to common stockholders				(21,691	)			(9,595	)			1,165				(2,738	)
Less: Undistributed net income allocable to Series AA, BB and CC convertible preferred stock, if converted				—				—				(395	)			—
Pro forma undistributed net income (loss) allocable to common stockholders			$	(21,691	)		$	(9,595	)		$	770			$	(2,738	)
Net income (loss) attributable to common stockholders per share, as reported:
	Basic		$	(0.47	)		$	(0.14	)		$	0.09			$	(0.05	)
	Diluted		$	(0.47	)		$	(0.14	)		$	0.08			$	(0.05	)
Pro forma net income (loss) attributable to common stockholders per share:
	Basic		$	(0.58	)		$	(0.26	)		$	0.02			$	(0.07	)
	Diluted		$	(0.58	)		$	(0.26	)		$	0.02			$	(0.07	)

F-16

---

Table of Contents

		Year Ended March 31,
														Three Months Ended
		2004				2005				2006				June 30, 2005
														(Unaudited)
Dividend yield			None				None				None				None
Expected volatility			65	%			54	%			48	%			49	%
Risk-free interest rate			3.69	%			4.08	%			4.26	%			3.98	%
Expected life (in years)			7.00				7.00				7.00				7.00

		Three Months Ended
		June 30, 2006
		(Unaudited)
Dividend yield			None
Expected volatility			55	%
Risk-free interest rates			4.95%-5.04	%
Expected life (in years)			6.25

F-17

---

Table of Contents

														Three Months Ended
		Year Ended March 31,												June 30,
		2004				2005				2006				2005				2006
														(Unaudited)				(Unaudited)
Cost of services revenue		$	—			$	—			$	25			$	2			$	26
Sales and marketing			—				—				468				30				617
Research and development			—				—				137				7				187
General and administrative(1)			4				21				761				12				567
Stock-based compensation expense		$	4			$	21			$	1,391			$	51			$	1,397

(1)	The year ended March 31, 2006 includes $263 of stock-based compensation expense related to the acceleration of the vesting period related to 81 stock options.

	Advertising Costs

	Foreign Currency Translation

	Comprehensive Income (Loss)

	Recent Accounting Pronouncements

F-18

---

Table of Contents

3.	Property and Equipment

		March 31,
										June 30,
		2005				2006				2006
										(Unaudited)
Computer equipment		$	11,316			$	11,983			$	12,217
Furniture and fixtures			1,276				1,344				1,401
Purchased software			760				924				1,073
Other machinery and equipment			1,787				2,278				2,371
Leasehold improvements			599				912				1,187
			15,738				17,441				18,249
Less accumulated depreciation and amortization			(13,653	)			(14,119	)			(14,574	)
		$	2,085			$	3,322			$	3,675

4.	Accrued Liabilities

		March 31,
										June 30,
		2005				2006				2006
										(Unaudited)
Compensation and related payroll taxes		$	5,493			$	5,943			$	5,627
Other			4,958				6,742				7,440
		$	10,451			$	12,685			$	13,067

5.	Line of Credit and Term Loan

F-19

---

Table of Contents

6.	Commitments and Contingencies

Year ending March 31:
	2007		$	2,186
	2008			2,516
	2009			994
	2010			96
	2011			41
			$	5,833

7.	Cumulative Redeemable Convertible Preferred Stock: Series A through E

F-20

---

Table of Contents

										Shares				Undeclared				Total
						Shares				Issued and				Dividends				Unpaid
		Date of Issuance				Authorized				Outstanding				Per Share				Dividends
Series A			May 1996				3,000				2,040			$	18.07			$	36,849
Series B			July 1997				1,000				346				16.00				5,536
Series C			December 1997				1,000				333				15.28				5,092
Series D			October 1998				1,000				247				13.43				3,320
Series E			March 1999				1,000				200				13.05				2,611

8.	Stockholders’ Deficit

F-21

---

Table of Contents

	Series AA Convertible Preferred Stock

	Series BB Convertible Preferred Stock

	Series CC Convertible Preferred Stock

F-22

---

Table of Contents

	Common Stock Warrants

F-23

---

Table of Contents

	Shares Reserved for Issuance

Exercise of common stock options			15,402
Conversion of Series A Stock			8,159
Conversion of Series B Stock			1,384
Conversion of Series C Stock			1,333
Conversion of Series D Stock			989
Conversion of Series E Stock			800
Conversion of Series AA Stock			4,484
Conversion of Series BB Stock			2,758
Conversion of Series CC Stock			12,132
			47,441

9.	Stock Plans

							Weighted-
			Number				Average
			of				Exercise
			Options				Price
Options outstanding at March 31, 2003				7,348				2.33
	Options granted			3,022				2.40
	Options exercised			(168	)			.97
	Options canceled			(673	)			2.93
Options outstanding at March 31, 2004				9,529				2.31
	Options granted			2,349				2.83
	Options exercised			(62	)			2.46
	Options canceled			(459	)			2.90
Options outstanding at March 31, 2005				11,357				2.77
	Options granted			4,987				2.79
	Options exercised			(303	)			2.31
	Options canceled			(867	)			2.76
Options outstanding at March 31, 2006				15,174				2.78
	Options granted			480				6.02
	Options exercised			(67	)			2.32
	Options canceled			(185	)			2.93
Options outstanding at June 30, 2006 (unaudited)				15,402				2.88

F-24

---

Table of Contents

						Weighted-Average
		Outstanding												Number of				Weighted-
		Options at				Remaining								Options				Average
		June 30,				Contractual				Exercise				Exercisable at				Exercise
Range of Exercise Prices		2006				Life				Price				June 30, 2006				Price
$0.0125			19				2.92			$	0.0125				19			$	0.0125
2.00			1,788				6.67				2.00				1,424				2.00
2.25			665				8.85				2.25				171				2.25
2.35			2,349				9.17				2.35				31				2.35
2.40			95				8.08				2.40				43				2.40
2.50			2,192				5.05				2.50				1,940				2.50
2.65			758				8.48				2.65				308				2.65
3.00			4,201				6.03				3.00				3,583				3.00
3.35			681				9.35				3.35				0				0.00
3.60			614				7.58				3.60				347				3.60
3.75			615				9.57				3.75				0				0.00
4.00			624				4.52				4.00				624				4.00
4.05			321				9.67				4.05				0				0.00
5.85			300				9.81				5.85				0				0.00
6.30			180				9.84				6.30				0				0.00
$0.0125-6.30			15,402				7.18			$	2.88				8,490			$	2.78

Stock options outstanding			14,812
Weighted average exercise price		$	2.87
Aggregate intrinsic value		$	54,323
Weighted average remaining contractual life (in years)			7.10

F-25

---

Table of Contents

										Retrospective
		Number of				Exercise				Fair Value per				Intrinsic
Grants Date		Options Granted				Price				Common Share				Value
May 5, 2005			719			$	2.25			$	3.46			$	1.21
July 29, 2005			923				2.35				4.18				1.83
September 19, 2005			1,600				2.35				4.59				2.24
November 3, 2005			749				3.35				5.17				1.82
January 26, 2006			669				3.75				5.54				1.79
March 2, 2006			327				4.05				6.42				2.37
April 20, 2006 (unaudited)			300				5.85				6.49				0.64
May 3, 2006 (unaudited)			180				6.30				6.54				0.24
			5,467

	•	For the three months ended March 31, 2005, the Company had its most profitable quarter in its history, generating earnings of approximately $1,600;
	•	The Company achieved its first fiscal year of profitability for the year ended March 31, 2005;
	•	The Company entered into an original equipment manufacturer arrangement with Hitachi Data Systems; and
	•	The possibility of an initial public offering remained relatively low and a probability estimate of 30% was assigned under the PWER method as a result of the significant milestones to be achieved.

	•	For the three months ended June 30, 2005, revenues and earnings exceeded budget;
	•	The Company increased its earnings forecast for the remainder of fiscal 2006; and
	•	The Company increased the probability estimate for the initial public offering scenario under the PWER method to 40% as a result of revenues and earnings exceeding budget.

F-26

---

Table of Contents

	•	For the three and six months ended September 30, 2005, earnings exceeded the Company’s original budget and revised forecasts;
	•	In the six months ended September 30, 2005, the Company started to achieve substantial revenue growth from its original equipment manufacturer arrangements with Dell and Hitachi Data Systems; and
	•	The Company increased the probability estimate for the initial public offering scenario under the PWER method to 60% as a result of earnings exceeding forecast and the substantial revenue growth the Company achieved from its original equipment manufacturer agreements.

	•	On January 10, 2006, the Company initiated the process of an initial public offering when it held an organizational meeting; as a result, the Company increased the initial public offering scenario to 65% under the PWER method;
	•	The Company achieved consecutive quarters of profitability for the first time;
	•	For the three and nine months ended December 31, 2005, earnings exceeded original budget and revised forecasts; and
	•	The Company continued to generate cash flows from operations significantly exceeding budgeted, revised forecast and prior year amounts.

	•	The Company achieved its third quarter of consecutive profitability and completed its most profitable fiscal year for the year ended March 31, 2006;
	•	The Company continued to generate cash flows from operations significantly exceeding budgeted and prior year amounts.

F-27

---

Table of Contents

10.	Income Taxes

		Year Ended March 31,
		2004				2005				2006
Domestic		$	(6,585	)		$	3,778			$	12,901
Foreign			(5,113	)			(3,121	)			(1,694	)
		$	(11,698	)		$	657			$	11,207

		Year Ended March 31,
		2004				2005				2006
Federal		$	—			$	83			$	239
State			—				89				172
Foreign			—				2				40
		$	—			$	174			$	451

		Year Ended March 31,
		2004				2005				2006
Statutory federal income tax expense (benefit) rate			(34.0	)%			34.0	%			34.0	%
State and local income tax expense (benefit), net of federal income tax effect			(2.4	)%			13.5	%			0.9	%
Foreign earnings taxed at different rates			1.5	%			12.6	%			0.5	%
Permanent differences			4.2	%			21.5	%			(3.6	)%
Research credits			(14.3	)%			(111.3	)%			(6.9	)%
Other differences, net			0.1	%			11.2	%			1.9	%
Change in valuation allowance			44.9	%			45.0	%			(22.8	)%
Effective income tax expense (benefit) rate			0.0	%			26.5	%			4.0	%

F-28

---

Table of Contents

			March 31,
			2005				2006
Deferred tax assets:
	Net operating losses		$	42,566			$	38,120
	Depreciation and amortization			3,579				2,974
	Accrued expenses			170				512
	Deferred revenue			436				1,045
	Deferred compensation			—				425
	Allowance for doubtful accounts and other reserves			134				197
	Tax credits			9,799				10,897
Total deferred tax assets				56,684				54,170
Less valuation allowance				(56,684	)			(54,170	)
Net deferred tax assets			$	—			$	—

F-29

---

Table of Contents

11.	Employee Benefit Plan

12.	Segment Information

																Three Months
				Year Ended March 31,												Ended June 30,
				2004				2005				2006				2005				2006
																(Unaudited)				(Unaudited)
Revenue:
	United States			$	43,227			$	60,562			$	77,762			$	15,766			$	24,444
	Other				18,019				22,067				31,710				6,357				9,078
		Total		$	61,246			$	82,629			$	109,472			$	22,123			$	33,522

				March 31,
												June 30,
				2005				2006				2006
												(Unaudited)
Long-lived assets:
	United States			$	1,789			$	3,298			$	4,026
	Other				638				1,116				1,434
		Total		$	2,427			$	4,414			$	5,460

F-30

---

Table of Contents

13.	Subsequent Events

F-31

---

Table of Contents

						Additions —
		Balance at				Charged to								Balance at
		Beginning of				Costs and								End of
		Period				Expenses				Deductions				Period
Year Ended March 31, 2004:
Allowance for doubtful accounts		$	303			$	482			$	99			$	686
Valuation allowance for deferred taxes(1)		$	51,130			$	5,257			$	—			$	56,387
Year Ended March 31, 2005:
Allowance for doubtful accounts		$	686			$	107			$	191			$	602
Valuation allowance for deferred taxes(1)		$	56,387			$	297			$	—			$	56,684
Year Ended March 31, 2006:
Allowance for doubtful accounts		$	602			$	40			$	167			$	475
Valuation allowance for deferred taxes(1)		$	56,684			$	—			$	2,514			$	54,170
Three Months Ended June 30, 2006 (unaudited):
Allowance for doubtful accounts		$	475			$	75			$	16			$	534
Valuation allowance for deferred taxes(1)		$	54,170			$	—			$	7,827			$	46,343

(1)	Adjustments associated with the Company’s assessment of its deferred tax assets. The reduction in the valuation allowance for deferred taxes in the year ended March 31, 2006 and the three months ended June 30, 2006 is primarily due to utilization of federal and state net operating loss carryforwards.

F-32

---

Table of Contents

---

Table of Contents

Item 13.	Other Expenses of Issuance and Distribution.

SEC registration fee			$	16,050
NASD filing fee				15,500
NASDAQ listing fee				*
Accounting fees and expenses				*
Legal fees and expenses				*
Printing and engraving expenses				*
Transfer agent’s fees				*
Blue sky fees and expenses				*
Miscellaneous				*
	Total		$	*

*	To be completed by amendment.

Item 14.	Indemnification of Directors and Officers.

II-1

---

Table of Contents

Item 15.	Recent Sales of Unregistered Securities.

	(1)	In July 2003, the registrant issued an amended and restated warrant to purchase                      shares of its common stock at an exercise price of $           per share to EMC Investment Corporation, an accredited investor. The warrant expired without being exercised on February 2, 2006. The amended and restated warrant was issued to replace a warrant to purchase                      shares of the registrant’s common stock at an exercise price of $           per share, subject to certain adjustments, that had been issued by the registrant to the holder in November 2000. The original warrant was issued to the holder in connection with the holder’s purchase of shares of the registrant’s Series BB preferred stock. No other persons were offered the opportunity to purchase the warrant or participate in the exchange and no commission or other remuneration was paid or given directly or indirectly to any person for soliciting the exchange. The issuance of the replacement warrant was therefore exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

II-2

---

Table of Contents

	(2)	In September 2003, the registrant sold 4,790,802 shares of registrant’s Series CC preferred stock to four individuals and 21 investment funds and other investment entities for approximately $15 million. Each of the investors was an accredited investor. The offer and sale was exempt from registration pursuant to Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

	(3)	In December 2003, the registrant issued a warrant to purchase                      shares of its common stock at an exercise price of $           per share to Dell Ventures, L.P., an accredited investor, in connection with the registrant’s entering into a software licensing agreement with Dell Products, L.P. as an original equipment manufacturer. The number of warrant shares and exercise price are subject to customary antidilution adjustments upon the occurrence of certain events. The issuance of the warrant was exempt from registration pursuant to Section 4(2) of the Securities Act.
	(4)	On June 15, 2006, the registrant issued                     shares of its common stock upon the cashless exercise of the warrant held by Dell Ventures, L.P. that was issued to it in December 2003. The issuance of the shares was exempt from registration pursuant to Section 4(2) of the Securities Act. The number of common shares issued on a cashless basis was equal to the vested warrants less the number of shares of common stock having an aggregate market price equal to the aggregate exercise price of the vested warrants. Market price was determined as the greater of (i) a product obtained by multiplying the Company’s trailing 12-month revenues by six and (ii) the price of common stock sold in a qualified financing transaction within six months of the cashless exercise. During the year ended March 31, 2004, CommVault recorded $1,696,000 as a non-cash reduction of revenue in connection with this transaction at the time the warrants were issued. In the three months ended June 30, 2006, CommVault recorded $7,753 as an increase to common stock with a corresponding decrease to additional paid-in capital related to the common stock issued in connection with the cashless exercise and the preemptive rights held by the holders of CommVault’s Series AA, BB and CC preferred stock.
	(5)	On June 15, 2006, concurrently with the issuance of shares to Dell Ventures, L.P., the registrant issued                 shares of common stock to holders of its Series AA, BB and CC preferred stock in accordance with the preemptive rights of such holders. The registrant issued shares to each holder as if each holder held a warrant for the shares to which it was entitled pursuant to its preemptive rights and exercised such warrant on a cashless basis. The registrant issued such shares on the same terms that it issued shares to Dell Ventures, L.P. on the same date. The registrant was required to issue such shares to comply with the preemptive rights of holders of Series AA, BB and CC preferred stock, which such holders acquired when they acquired shares of Series AA, BB and CC preferred stock between April 2000 and September 2003. Under the terms of the Series AA, BB and CC preferred stock, the issuance of such shares was automatic and occurred without any action or election by the holders of Series AA, BB and CC preferred stock. The issuance of shares was exempt from registration pursuant to Section 4(2) of the Securities Act.
	(6)	Concurrently with the closing of this offering, the registrant will issue                 shares of its common stock to Aman Ventures, Mark Francis, K. Flynn McDonald, Greg Reyes, Reyes Family Trust, Van Wagoner Capital Partners, L.P., Van Wagoner Crossover Fund, L.P. and Marc Weiss in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act.
	(7)	From January 1, 2003 to the date of this filing, the registrant granted options to purchase approximately                      shares of common stock under the registrant’s 1996 Stock Option Plan. Approximately                      shares of common stock have been issued upon exercise of these options. All options were granted under Rule 701 promulgated under the Securities Act or, in the case of certain options granted to N. Robert Hammer, Section 4(2) of the Securities Act.

II-3

---

Table of Contents

Item 16.	Exhibits and Financial Statement Schedules.

Item 17.	Undertakings.

	(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
	(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

---

Table of Contents

	COMMVAULT SYSTEMS, INC.

	By:	/s/ N. ROBERT HAMMER

	N. Robert Hammer
	Chairman, President and Chief Executive Officer

Signature				Title
/s/ N. ROBERT HAMMER*   N. Robert Hammer				Chairman, President and Chief Executive Officer
/s/ LOUIS F. MICELI*   Louis F. Miceli				Vice President, Chief Financial Officer
/s/ BRIAN CAROLAN*   Brian Carolan				Chief Accounting Officer
/s/ THOMAS BARRY*   Thomas Barry				Director
/s/ FRANK J. FANZILLI, JR.*   Frank J. Fanzilli, Jr.				Director
/s/ EDWARD A. JOHNSON*   Edward A. Johnson				Director
/s/ ARMANDO GEDAY*   Armando Geday				Director
/s/ KEITH GEESLIN*   Keith Geeslin				Director
/s/ F. ROBERT KURIMSKY*   F. Robert Kurimsky				Director
/s/ DANIEL PULVER*   Daniel Pulver				Director

II-5

---

Table of Contents

Signature				Title
/s/ GARY SMITH*   Gary Smith				Director
/s/ DAVID F. WALKER*   David F. Walker				Director
*By: /s/ N. ROBERT HAMMER   N. Robert Hammer Attorney-in-fact

II-6

---

Table of Contents

Exhibit
No.				Description
	1	.1*		Form of Underwriting Agreement
	3	.1**		Amended and Restated Certificate of Incorporation of CommVault Systems, Inc., dated as of August 29, 2003
	3	.2*		Amended and Restated Certificate of Incorporation of CommVault Systems, Inc., dated as of            , 2006
	3	.3*		Amended and Restated Bylaws of CommVault Systems, Inc.
	4	.1*		Form of Common Stock Certificate
	5	.1*		Opinion of Mayer, Brown, Rowe & Maw LLP
	9	.1*		Voting Trust Agreement
	10	.1**		Loan and Security Agreement, dated May 2, 2006, between Silicon Valley Bank and CommVault Systems, Inc.
	10	.2*		CommVault Systems, Inc. 1996 Stock Option Plan, as amended
	10	.3*		CommVault Systems, Inc. 2006 Long-Term Stock Incentive Plan
	10	.4*		Form of Non-Qualified Stock Option Agreement
	10	.5**		Employment Agreement, dated as of February 1, 2004, between CommVault Systems, Inc. and N. Robert Hammer
	10	.6**		Form of Employment Agreement between CommVault Systems, Inc. and Alan G. Bunte and Louis F. Miceli
	10	.7**		Form of Corporate Change of Control Agreement between CommVault Systems, Inc. and Alan G. Bunte and Louis F. Miceli
	10	.8**		Form of Corporate Change of Control Agreement between CommVault Systems, Inc. and David West, Ron Miiller, Scott Mercer and Steven Rose
	10	.9**		Form of Indemnity Agreement between CommVault Systems, Inc. and each of its current officers and directors
	10	.10**		Amended and Restated Registration Rights Agreement, dated as of September 2, 2003, by and among CommVault Systems, Inc. and the Series AA investors
	10	.11**		Amended and Restated Registration Rights Agreement, dated as of September 2, 2003, by and among CommVault Systems, Inc. and the Series BB investors
	10	.12**		Amended and Restated Registration Rights Agreement, dated as of September 2, 2003, by and among CommVault Systems, Inc. and the Series CC investors
	10	.13*		Registration Rights Agreement, dated           , 2006 by and between CommVault Systems, Inc. and certain holders of Series A, B, C, D and E preferred stock
	10	.14**		Purchase Agreement, dated April 14, 2000, by and between Microsoft Corporation, certain investors and CommVault Systems, Inc.
	10	.15**		Purchase Agreement, dated November 10, 2000, by and between EMC Investment Corporation, certain investors and CommVault Systems, Inc.
	10	.16**		Series CC Purchase Agreement, dated as of February 14, 2002, by and between funds and accounts managed by affiliates of Putnam Investments, LLC, certain investors and CommVault Systems, Inc.
	10	.17**		Series CC Purchase Agreement, dated as of September 2, 2003, by and between certain investors and CommVault Systems, Inc.
	10	.18†**		Software License Agreement, dated December 17, 2003, by and between Dell Products L.P. and CommVault Systems, Inc.
	10	.19†**		Addendum One to the License and Distribution Agreement, dated May 5, 2004, by and between Dell Products L.P. and CommVault Systems, Inc.
	10	.20†**		Addendum Two to the License and Distribution Agreement, dated November 22, 2004, by and between Dell Products L.P. and CommVault Systems, Inc.

---

Table of Contents

Exhibit
No.				Description
	10	.21†**		Addendum Three to the License and Distribution Agreement, dated April 28, 2005, by and between Dell Products L.P. and CommVault Systems, Inc.
	10	.22†**		Addendum Five to the License and Distribution Agreement, dated June 6, 2006, by and between Dell Products L.P. and CommVault Systems, Inc.
	10	.23†**		CommVault Systems Reseller Agreement, effective as of April 6, 2005, between CommVault Systems and Dell Inc.
	10	.24**		Letter Agreement, dated February 8, 2002, between the holders of Series A through E Preferred Stock and CommVault Systems, Inc.
	10	.25**		Stockholders Agreement, dated as of May 22, 1996, among DLJ Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout CEO Fund L.P., David H. Ireland, Scotty R. Neal, Robert Freiburghouse and CommVault Systems, Inc.
	10	.26**		Amendment to the Stockholders Agreement, dated July 23, 1998, among DLJ Merchant Banking Partners, L.P., DLJ International Partners C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout CEO Fund L.P., David H. Ireland, Scotty R. Neal, Robert Freiburghouse and CommVault Systems, Inc.
	10	.27**		Second Amendment to the Stockholders Agreement, dated November 6, 2000, among DLJ Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout CEO Fund L.P., David H. Ireland, Scotty R. Neal, Robert Freiburghouse and CommVault Systems, Inc.
	10	.28**		Third Amendment to the Stockholders Agreement, dated February 14, 2002, among DLJ Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout CEO Fund L.P., David H. Ireland, Scotty R. Neal, Robert Freiburghouse and CommVault Systems, Inc.
	10	.29**		Fourth Amendment to the Stockholders Agreement, dated September 2, 2003, among DLJ Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout CEO Fund L.P. , David H. Ireland, Scotty R. Neal, Robert Freiburghouse and CommVault Systems, Inc.
	10	.30**		Fifth Amendment to the Stockholders Agreement, dated May 22, 2006, by and among DLJ Merchant Banking Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc., DLJ Capital Corporation, DLJ First ESC, L.P., DLJ ESC II, L.P., Sprout Growth II, L.P., Sprout Capital VII, L.P., Sprout Capital IX, L.P., Sprout Entrepreneurs’ Fund, L.P., Sprout IX Plan Investors, L.P., Sprout CEO Fund L.P., Thomas J. Barry, Larry Cormier, Randy Fodero, Robert Freiburghouse, Bob Gailus, N. Robert Hammer, David H. Ireland, Lou Miceli, Tom Miller, Scotty R. Neal and CommVault Systems, Inc.
	21	.1**		List of Subsidiaries of CommVault Systems, Inc.
	23	.1		Consent of Ernst & Young LLP
	23	.2*		Consent of Mayer, Brown, Rowe & Maw LLP (included in Exhibit 5.1)
	24	.1**		Powers of Attorney (included on the signature page to the original registration statement)

*	To be filed by amendment.

**	Previously filed.
†	Confidential treatment has been requested for portions of this document. Omitted portions have been filed separately with the SEC.

 

                                             (MAYER, BROWN, ROWE & MAW LLP LOGO)

August 7, 2006                                      Mayer, Brown, Rowe & Maw LLP
                                                           71 South Wacker Drive
                                                    Chicago, Illinois 60606-4637

                                                         Main Tel (312) 782-0600
                                                         Main Fax (312) 701-7711
                                                          www.mayerbrownrowe.com

By EDGAR & UPS

Securities and Exchange Commission
Division of Corporate Finance
Attention: Mark P. Shuman, Branch Chief - Legal
100 F Street, N.E.
Washington, D.C. 20549

Re:     CommVault Systems, Inc. Amendment No. 2 to
        Registration Statement on Form S-1 filed June 30,
        2006 (File No. 333-132550)

Dear Mr. Shuman:

        This letter responds to the Staff's comment letter, dated July 19, 2006,
addressed to N. Robert Hammer, Chairman of the Board, President and Chief
Executive Officer of CommVault Systems, Inc. ("CommVault"), related to the
above-referenced filing. CommVault's responses to the Staff's comments are set
forth herein. To facilitate the Staff's review, CommVault's responses are set
forth below the headings and numbered comments used in the Staff's comment
letter, which are reproduced in bold face text. The supplemental materials
referenced herein will accompany the hard copy of this letter, which has been
forwarded to you via overnight courier. CommVault is contemporaneously filing an
amended Form S-1.

AMENDMENT NO. 2 TO REGISTRATION STATEMENT ON FORM S-1

GENERAL

1.      PLEASE NOTE COMMENT 2 OF OUR LETTER DATED APRIL 13, 2006. WE NOTE A
        NUMBER OF BLANK SPACES THROUGHOUT YOUR REGISTRATION STATEMENT FOR
        INFORMATION THAT YOU ARE NOT ENTITLED TO OMIT UNDER RULE 430A OF THE
        SECURITIES ACT. IN PARTICULAR, WE NOTE THAT OPTION INFORMATION IN THE
        TABLES PRESENTED ON PAGES 72 AND 73 THAT OTHERWISE DOES NOT REQUIRE
        PRICING INFORMATION TO COMPLETE IS MISSING. IN LIGHT OF THE RECENT END
        OF YOUR FISCAL YEAR, IT APPEARS THAT SUCH INFORMATION SHOULD BE READILY
        ASCERTAINED AND PRESENTED.

Noted. Prior to circulating a preliminary prospectus, information that is
currently blank but not permitted to be omitted pursuant to Rule 430A will be
filled in.

2.      WE NOTE THAT YOU HAVE NOT YET PROVIDED PRICE RANGES FOR THIS OFFERING.
        WE WILL CONTINUE TO PROCESS YOUR AMENDMENTS WITHOUT PRICE RANGES.
        HOWEVER, SINCE THE




 Berlin Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles
                   New York Palo Alto Paris Washington, D.C.

     Independent Mexico City Correspondent: Jauregui, Navarrete y Nader S.C.

Mayer, Brown, Rowe & Maw LLP operates in combination with our associated English
           limited liability partnership in the offices listed above.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 2


        PRICE RANGE TRIGGERS A NUMBER OF DISCLOSURE MATTERS, PLEASE NOTE THAT WE
        WILL NEED SUFFICIENT TIME TO PROCESS THE AMENDMENT WHEN IT IS INCLUDED.
        PLEASE UNDERSTAND THAT ITS EFFECT ON DISCLOSURE THROUGHOUT THE DOCUMENT
        MAY CAUSE US TO RAISE ISSUES ON AREAS NOT PREVIOUSLY COMMENTED UPON.

Understood.

RISK FACTORS

3.      WE NOTE YOUR DISCLOSURE ON PAGE 70 OF EXPENSES PAID TO MR. HAMMER FOR
        HIS TRAVEL AND LIVING ACCOMMODATIONS IN LIGHT OF HIS RESIDENCE IN
        FLORIDA. IT APPEARS THAT MR. HAMMER'S RESIDENCE IN FLORIDA AND HIS
        AVAILABILITY IN YOUR OFFICES AND FOR YOUR BUSINESS RAISE A RISK THAT
        WARRANT DISCUSSION IN THIS SECTION. PLEASE QUANTIFY THE AMOUNT OF TIME
        THAT MR. HAMMER IS GENERALLY EXPECTED TO SPEND PHYSICALLY IN YOUR
        OFFICES IN NEW JERSEY, IF NOT OTHERWISE TRAVELING FOR BUSINESS, AND
        WHETHER THE MAINTENANCE OF HIS RESIDENCY IN FLORIDA REQUIRES HIM TO
        SPEND A THRESHOLD AMOUNT OF TIME THERE. PLEASE ALSO ADDRESS THE BASIS
        FOR RELYING ON A NONRESIDENT CHIEF EXECUTIVE OFFICER AS OPPOSED TO A
        RESIDENT CHIEF EXECUTIVE OFFICER.

CommVault does not believe the location in which Mr. Hammer maintains his
residence has any impact on his ability to perform his responsibilities as chief
executive officer. Accordingly, it does not consider his residence in Florida to
present a material risk warranting discussion.

Mr. Hammer has maintained his residence in Florida since joining CommVault as
chief executive officer in 1998. Mr. Hammer has demonstrated his ability to lead
CommVault, as evidenced by CommVault's strong performance during his tenure as
chief executive officer. Mr. Hammer has developed and implemented CommVault's
strategies and has established a proven track record of success. His residence
in Florida has not had a negative impact on his ability to lead CommVault and
CommVault does not believe his residence will have any negative impact on the
quality of his service or his ability to meet his obligations as chief executive
in the future. CommVault did not consider his residence to be a material factor
in selecting him for the position.

CommVault does not have a requirement or expectation that Mr. Hammer spend a
minimum amount of time physically in its offices in Oceanport, New Jersey. Mr.
Hammer spends time physically in CommVault's offices in New Jersey, or
elsewhere, as required to effectively lead and manage the company.

CommVault does not believe that Mr. Hammer is required to spend a threshold
amount of time in Florida in order to maintain his resident status.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 3


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION, PAGE 40

4.      WE NOTE YOUR DISCLOSURE ON PAGE 41 AND YOUR DISCUSSION OF THE MATERIAL
        WEAKNESS RELATED TO YOUR REVENUE RECOGNITION PROCEDURES FOR CERTAIN
        MULTIPLE-ELEMENT ARRANGEMENTS. IT APPEARS THAT YOU WERE PREVIOUSLY
        RECOGNIZING SOFTWARE REVENUE UNDER THE RESIDUAL METHOD BEFORE PERSUASIVE
        EVIDENCE OF AN ARRANGEMENT EXISTED FOR THE PROFESSIONAL SERVICES ELEMENT
        (THE UNDELIVERED ELEMENT) IN SUCH ARRANGEMENTS. WHAT IMPACT DID THIS
        WEAKNESS HAVE ON YOUR REVENUES RECOGNIZED IN FISCAL 2005 AND 2004? ALSO,
        EXPLAIN WHY A STATEMENT OF WORK IS ONLY REQUIRED FOR PROFESSIONAL
        SERVICES PERFORMED IN CONJUNCTION WITH MULTIPLE-ELEMENT ARRANGEMENTS.
        WHAT DO YOU USE AS PERSUASIVE EVIDENCE OF AN ARRANGEMENT FOR
        PROFESSIONAL SERVICES THAT ARE PERFORMED ON A STAND-ALONE BASIS?

Prior to fiscal 2006, it was CommVault's customary business practice to rely
upon a signed purchase order from its customers as persuasive evidence of the
professional services element of an arrangement. Such purchase orders reflected
the daily or weekly rate for services as well as the number of days or weeks
sold. In fiscal 2006, CommVault changed its customary business practice and
began requiring and utilizing a statement of work signed by the customer for the
sale of its other professional services greater than $10,000 (excluding
training), in addition to a signed purchase order. Since the statement of work
requirement was not part of CommVault's customary business practice in fiscal
2005 and fiscal 2004, the material weakness that was identified during the
preparation of CommVault's fiscal 2006 financial statements had no impact on
these years.

Professional services are traditionally only sold in connection with the sale of
software as part of a multiple-element arrangement. Beginning in fiscal 2006,
when professional services greater than $10,000 (excluding training) are sold
and performed on a stand-alone basis or sold in conjunction with
multiple-element arrangements, both a signed purchase order and statement of
work are required as persuasive evidence of such an arrangement prior to revenue
recognition. The prospectus has been revised to include expanded disclosure on
CommVault's other professional services that are sold and performed on a
stand-alone basis.

STOCK-BASED COMPENSATION, PAGE 41

5.      WE NOTE THAT YOU REFER TO AN UNRELATED VALUATION SPECIALIST TO DETERMINE
        THE FAIR VALUE OF YOUR COMMON STOCK RETROACTIVELY. WHEN YOU REFER TO AN
        INDEPENDENT VALUATION OR APPRAISAL, DISCLOSE THE NAME OF EXPERT AND
        INCLUDE THE EXPERT'S CONSENT WITH THE FILING. REFER TO RULE 436(b) UNDER
        THE SECURITIES ACT. ALTERNATIVELY, YOU MAY REMOVE THIS REFERENCE. PLEASE
        REVISE NOTE 9 AND ELSEWHERE THROUGHOUT THE DOCUMENT ACCORDINGLY.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 4


The reference to the unrelated valuation specialist has been removed from the
prospectus.

6.      WE NOTE YOUR RESPONSE TO COMMENT 11 OF OUR LETTER DATED MAY 26, 2006 AND
        THE VALUATION INFORMATION INCLUDED IN YOUR SUPPLEMENTAL MATERIALS BINDER
        AND YOUR REVISED DISCLOSURE IN MANAGEMENT'S DISCUSSION AND ANALYSIS.
        WITH RESPECT TO SUCH INFORMATION PLEASE EXPLAIN THE FOLLOWING AND REVISE
        YOUR DISCLOSURE TO INCLUDE A DISCUSSION OF EACH:

        -  EXPLAIN THE PROBABILITY WEIGHTING OF 80 PERCENT TO THE INCOME
           APPROACH AND 20 PERCENT TO THE MARKET APPROACH USED IN THE
           THIRD-PARTY VALUATION ANALYSES UNDER THE "REMAINS PRIVATE" SCENARIO
           AND THE REASONS FOR SUCH WEIGHTING.

The significant portion of the value derived under the income approach is the
calculation of the terminal value, which in this analysis is based on data from
publicly traded guideline companies. In addition, the income approach allows for
the full utilization of CommVault's net operating loss carryforwards as it is a
forward looking model, as compared to the market approach that focuses on
historical results. Lastly, based on CommVault's stage of development and its
ability to generate profits only recently, it is more likely that a potential
investor in CommVault's common stock would place the bulk of their emphasis on
future expectations rather than on historical performance. As such, it is
CommVault's opinion that the income approach provides a much more meaningful
indication of value and, therefore, a greater emphasis has been placed on this
approach and relatively less weight upon the value determined by the market
approach. Accordingly, a weight of 80% was applied to the income approach and a
weight of 20% was applied to the market approach.

The prospectus has been revised to include the requested disclosure.

        -  EXPLAIN YOUR USE OF A 25 PERCENT DISCOUNT IN YOUR INCOME APPROACH
           ANALYSIS UNDER THE "REMAINS PRIVATE" SCENARIO AT JANUARY 2005 AND
           YOUR USE OF A 20 PERCENT DISCOUNT FOR THE REMAINDER OF YOUR VALUATION
           DATES AND THE REASONS FOR EACH. PROVIDE A SIMILAR ANALYSIS FOR THE
           DISCOUNTS USED IN YOUR FAIR VALUE APPROACH UNDER THE "PUBLIC COMPANY"
           SCENARIO.

The risk-adjusted discount rate was based on the inherent risk of a hypothetical
investment in CommVault's common stock. An appropriate rate of return required
by a hypothetical investor in CommVault was determined based on: (1) well
established venture capital rates of return published in the Practice Aid for
firms engaged in bridge financing in anticipation of a later IPO and (2)
CommVault's calculated cost of capital. Based on this data, CommVault applied
discount rates ranging from 20% to 25% under both the "remains private" scenario
and "public company" scenario. A discount rate of 25% was used for the January
2005 valuation date and was lowered to 20% for the subsequent valuation dates
based on the lower inherent risk of investing in CommVault as it continued to
develop its products and achieved increased profitability.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 5


The prospectus has been revised to include the requested disclosure.

        -  PROVIDE A DISCUSSION OF THE SPECIFIC FACTORS CONSIDERED IN SELECTING
           THE COMPARABLE COMPANIES USED IN THE MARKET APPROACH.

A search for guideline companies was made through Standard Industrial
Classification (SIC) code 7372 - Prepackaged Software. This search revealed
numerous publicly-traded companies in this industry. From this total population
of over 500 guideline companies, eight companies were selected as comparable
companies for inclusion in the valuation analysis. The following were the
specific factors considered in selecting the comparable companies:

      -    Scope and breadth of product offerings;

      -    Annual revenue;

      -    Stage of development;

      -    Prospects for growth; and

      -    Risk profile

Although each of the comparable companies differ in some respects from
CommVault, they are generally influenced by similar business and economic
conditions and are considered to offer alternative investment opportunities.

The prospectus has been revised to include the requested disclosure.

        -  WE NOTE YOUR RESPONSE TO COMMENT 15 OF OUR LETTER DATED MAY 26, 2006
           WHERE YOU INDICATE CERTAIN FACTORS CONSIDERED IN DETERMINING THE 35
           PERCENT MARKETABILITY DISCOUNT IN YOUR "REMAINS PRIVATE" ANALYSIS.
           PLEASE EXPLAIN AND DISCLOSE HOW YOU APPLIED THESE FACTORS IN
           DETERMINING THAT A DISCOUNT OF 35 PERCENT WAS APPROPRIATE.

Under the "remains private" scenario, it is assumed that CommVault will continue
as a going concern, private enterprise. The value of privately-held shares of
common stock is not directly comparable to the value of publicly-traded shares
of similar common stock as shareholders of privately-held companies do not have
the same access to trading markets that shareholders of publicly-traded stocks
do. Therefore, the market value of CommVault's common stock must be adjusted to
reflect its lack of liquidity and ready market, assuming CommVault continues to
operate as a private company.

CommVault has one significant restriction on the marketability of its common
stock related to the blocking rights of its Series CC preferred stockholders if
Commvault were to conduct an IPO that has an offering price of less than $6.26
per share, on an as adjusted basis. In addition, there is also no guarantee of
future dividends being paid. After considering these factors, as well as the
results of a number of empirical studies, IRS Revenue Ruling 77-287 involving
the issue of discounts for lack of marketability and certain other company
specific factors (such as the

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 6


prospects for liquidity absent an IPO and the estimated volatility of
CommVault's common stock), a 35% discount for lack of marketability was deemed
appropriate to apply to the common stock.

The prospectus has been revised to include the requested disclosure.

        -  EXPLAIN WHY THE PROBABILITY WEIGHTING FOR THE PUBLIC COMPANY SCENARIO
           INCREASED BY ONLY 500 BASIS POINTS FROM 60 PERCENT AT NOVEMBER 3,
           2005 TO 65 PERCENT AT JANUARY 10, 2006 WHEN YOU HAD ACTUALLY
           INITIATED THE OFFERING PROCESS.

While CommVault formally initiated the offering process on January 10, 2006,
there was no assurance that CommVault would actually proceed with the actual
offering. CommVault had also initiated an offering process once before in early
2004, but subsequently decided to not proceed with an actual offering.
Additionally, an IPO at an offering price of less than $6.26 per share could
potentially be blocked by the Series CC preferred stockholders. There was no
assurance as of January 26, 2006 that such an offering price could be obtained.
CommVault first needed to achieve its forecasted results for the quarter and
fiscal year ending March 31, 2006 ("Fiscal 2006") before increasing the
probability weighting.

The most significant increase in the probability of an IPO occurred in early
March 2006 as it became apparent that Fiscal 2006 earnings would exceed forecast
and budgeted amounts therefore greatly increasing the probability of a
successful IPO. In addition, CommVault believes with hindsight that an increase
of 500 basis points from 60 percent at November 3, 2005 to 65 percent at January
10, 2006 is reasonable given that almost seven months have passed since
CommVault initiated the offering process, market conditions have deteriorated
during this time period, and CommVault has yet to complete the offering.

The prospectus has been revised to include the requested disclosure.

7.      WE FURTHER NOTE THAT YOUR EXPANDED DISCUSSION OF THE REASSESSED FAIR
        VALUE OF YOUR COMMON STOCK FOR EACH GRANT DATE DOES NOT INCLUDE A
        DISCUSSION OF THE FACTORS THAT CONTRIBUTED TO THE DIFFERENCE BETWEEN THE
        FAIR VALUE AS OF THE DATE OF EACH GRANT AND THE ESTIMATED OFFERING
        PRICE. YOUR DISCUSSION SHOULD CLARIFY THE REASONS FOR ANY DIFFERENCE
        BETWEEN THE FAIR VALUE AT EACH OPTION GRANT DATE AND THE ESTIMATED
        OFFERING PRICE RANGE. SEE PARAGRAPH 182 OF THE AICPA PRACTICE AID FOR
        VALUATION OF PRIVATELY-HELD-COMPANY EQUITY SECURITIES ISSUED AS
        COMPENSATION. PLEASE REVISE ACCORDINGLY.

CommVault has reviewed paragraph 182 and related disclosure example 2 contained
in the Practice Aid and has revised the prospectus (beginning on page 44) to
include a discussion of the factors that contributed to the difference between
the fair value as of the date of each grant during fiscal 2006 and the three
months ended June 30, 2006 and the estimated offering range of $6.50 per share
and $7.50 per share. Based on the potential blocking rights of the Series CC
preferred stockholders, CommVault is not currently prepared to conduct an
offering at a price

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 7


less than $6.50 per share. This price is based on where CommVault stands right
now and this minimum offering threshold could change depending upon changes in
the business or market conditions.

The specific estimated offering range will not be disclosed in this amendment of
the prospectus, but the assumption is $7.00 per share (the midpoint of $6.50 per
share and $7.50 per share).

FINANCIAL STATEMENTS

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE, PAGE F-11

8.      WE NOTE YOUR RESPONSE TO COMMENT 26 OF OUR LETTER DATED MAY 26, 2006 AND
        YOUR REVISED DISCLOSURES ON PAGE F-12 WHERE YOU INCLUDE THE DILUTIVE
        EFFECT OF STOCK OPTIONS AND COMMON STOCK WARRANTS IN YOUR CALCULATIONS
        OF EARNINGS PER SHARE FOR THE YEAR ENDED MARCH 31, 2006. PLEASE PROVIDE
        YOUR CALCULATIONS TO SUPPORT THE STOCK OPTIONS FOR 4,384,000 SHARES OF
        COMMONS STOCK AND WARRANTS FOR 430,000 SHARES OF COMMON STOCK INCLUDED
        IN YOUR DETERMINATION OF DILUTED EARNINGS PER SHARE.

A copy of CommVault's calculations supporting the stock options and warrants
included in its determination of diluted earnings per share is located behind
Tab A in the binder of supplemental materials accompanying this filing.

NOTE 7. CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK; SERIES A THROUGH E,
PAGE F-18


9.      WE NOTE YOUR RESPONSE TO COMMENT 57 OF OUR LETTER DATED APRIL 13, 2006
        WHERE YOU INDICATED THAT SINCE THE SHARES OF SERIES A, B, C, D AND E
        PREFERRED STOCK WERE ISSUED WHEN THE UNDERLYING COMMON STOCK WAS
        WORTHLESS, YOU DETERMINED THAT ANY VALUE ASCRIBED TO THE BENEFICIAL
        CONVERSION FEATURE WAS DE MINIMUS.

        -  TELL US THE FAIR VALUE OF THE COMMON STOCK AT THE ISSUANCE DATE FOR
           EACH OF THE SERIES A, B, C, D AND E PREFERRED STOCK AND TELL US HOW
           YOU DETERMINED SUCH VALUE. WE NOTE FROM YOUR RESPONSE TO COMMENT 29
           OF OUR LETTER DATED MAY 26, 2006 THAT BASED ON A CONTEMPORANEOUS
           VALUATION PERFORMED BY AN UNRELATED THIRD-PARTY VALUATION SPECIALIST,
           YOU DETERMINED THE FAIR VALUE OF YOUR COMMON STOCK IN APRIL 2000 AND
           NOVEMBER 2000 TO BE $2.50 AND $4.00, RESPECTIVELY. EXPLAIN HOW THE
           FAIR VALUES AS DETERMINED ON THE DATES YOU ISSUED THE SERIES A
           THROUGH E PREFERRED STOCK COMPARE TO THE FAIR VALUES AS DETERMINED BY
           THE VALUATION SPECIALIST AND DISCUSS THE SIGNIFICANT FACTORS THAT
           CONTRIBUTED TO THE DIFFERENCE BETWEEN SUCH VALUES.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 8


        The following table summarizes CommVault's private placement of Series
        A, B, C, D and E preferred stock (in millions except per share data):



                                                                                                                  Series A - E
                                                    Cash                                                      Liquidation Value in
Series of                Preferred                Balance                      Estimated      Series A - E    Excess of Estimated
Preferred    Month of      Shares   Total Amount  at Month    Total Shares     Post-Money      Liquidation    Post-Money Valuation
  Stock      Issuance      Issued    Raised (1)      End    Outstanding (2)  Valuation (3)      Value (4)          (3) - (4)
  -----      --------      ------    ----------      ---    ---------------  -------------      ---------          ---------
                                                                                      

    A        May 1996       2.1        $30.6        $6.5         24.5

    B       July 1997       0.3        $ 5.2        $2.9         29.4           $36.7            $39.8              ($3.1)

    C        December       0.3        $ 5.0        $3.1         33.6           $42.0            $46.5              ($4.5)
               1997

    D      October 1998     0.3        $ 3.7        $4.0         36.9           $46.1            $54.2              ($8.1)

    E       March 1999      0.2        $ 3.0        $4.0         39.7           $49.7            $59.4              ($9.7)

  Total                     3.2        $47.5



        (1) At each Series A, B, C, D and E preferred stock issuance date,
            CommVault issued each one share of preferred stock and eight shares
            of common stock for $15.00 of total consideration. CommVault
            allocated $14.90 to each share of preferred stock and $0.10 to the
            eight shares of common stock.

        (2) Total shares outstanding include both common stock issued and
            preferred stock on an as if-converted basis.

        (3) Calculated as total amount raised divided by total common share
            equivalent dilution percentage. For example, using the Series B
            preferred stock issuance the $36.7 million is calculated as follows:

            -   4,152,000 common stock equivalents issued (346,000 preferred
                shares convertible into 1,384,000 common shares plus 2,768,000
                common shares issued in conjunction with Series B preferred
                stock). The total change in shares outstanding from May 1996 to
                July 1997 also includes common stock issued in connection with
                the exercise of stock options.

            -   4,152,000 common stock equivalents represents approximately
                14.12% dilution (4,152,000 divided by 29,395,737 common share
                equivalents outstanding after issuance)

            -   Total amount raised of approximately $5.2 million divided by
                14.12% equals estimated post-money valuation of approximately
                $36.7 million.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 9


        (4) Upon conversion, the Series A, B, C, D and E preferred stock is
            entitled to $14.85 per preferred share plus all accrued but unpaid
            dividends of $1.788 per share per year.

        The fair value of CommVault's common stock at each issuance date of its
        Series A, B, C, D and E preferred stock was approximately $0.01 per
        share. Such fair value was based on the following circumstances that
        existed during the periods of issuance:

            -   Consideration paid for each share of preferred stock was $14.90.
                Immediately after the issuance of such preferred stock, holders
                (subject to approval by the holders of a majority of the then
                outstanding preferred stock) could convert each share of
                preferred stock into four shares of common stock, a cash payment
                of $14.85 per share and any accrued but unpaid dividends (annual
                dividends equal approximately a 12% annual return). At no point
                during the issuance period was the estimated post money
                valuation amount disclosed in the table above greater than the
                Series A, B, C, D and E liquidation value.

            -   $25 million of the proceeds raised from the Series A preferred
                stock in May 1996 were used to finance CommVault's buy-out from
                Lucent. The remaining $5.6 million of the Series A preferred
                stock financing was used to fund working capital and was
                subsequently depleted in approximately one year requiring
                CommVault to raise additional funding through the Series B
                preferred stock issuance.

            -   A liquidation event generating proceeds less than the
                preferential rights of the Series A, B, C, D and E preferred
                stock would have prohibited the common stockholders from
                receiving any value for their common shares. There was no
                possible liquidation event during the period of issuance that
                would have generated enough proceeds to allow the common
                stockholders to receive any value for their common shares.

            -   CommVault's legacy products had limited capabilities and did not
                address the broader data management market opportunities. As a
                result, CommVault's product sales achieved no growth from fiscal
                1997 to fiscal 1999. In April 1998, CommVault's board of
                directors and its new management team changed the strategic
                direction of CommVault which would eventually result in the
                release of CommVault's Galaxy data protection software in
                February 2000.

            -   CommVault accumulated $43.6 million in net losses during the
                issuance period. Consequently, CommVault was required to raise
                additional cash (i.e. Series B, C, D and E preferred stock) to
                cover its operating expenses and to meet its payroll obligations
                from May 1996 to early 2000. During this period, CommVault's
                only viable funding source was the same investor group that
                funded the Series A preferred stock. Therefore, all of the
                follow on rounds (Series B, C, D and E) were done under the
                exact same pricing and terms as the

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 10


                Series A preferred stock round. During each of the issuance
                periods for the B, C, D and E rounds, CommVault was often not
                able to obtain funding until it was essentially out of cash.

            -   Cash outflows used for operating and investing activities
                totaled $42.8 million during the issuance period as a result of
                making the required investment and building the necessary
                technological and resource infrastructure to develop emerging
                applications in the storage market. From the Series E preferred
                stock issuance in March 1999 through the release of the Galaxy
                data protection software in February 2000 CommVault invested
                approximately $10 million in research and development activities
                primarily related to the continued development of its Galaxy
                data protection software.

CommVault determined the fair value of its common stock in April 2000 and
November 2000 based on a valuation performed by an unrelated valuation
specialist. The increase in fair value of CommVault's common stock from
approximately $0.01 per share in March 1999 to approximately $2.50 per share in
April 2000 and $4.00 per share in November 2000 was primarily due to the
introduction of CommVault's Galaxy data protection software in February 2000.
CommVault's Galaxy data protection software specifically targeted the Windows NT
environment and addressed the challenges of data management arising from the
growth of Web servers, e-commerce and online messaging by offering a distributed
architecture designed to improve the management of both existing and emerging
storage models. Prior to February 2000, CommVault generated revenue from the
sale of third party hardware as well as from its Vault 98 technology. These
legacy products had limited capabilities and did not address the broader data
management market opportunities. As a result, CommVault achieved no growth in
its product sales from inception in May 1996 through February 2000.

In addition, the significant changes in CommVault's management team in 1998 and
1999 also contributed to the increase in fair market value of CommVault's common
stock from March 1999 to April 2000 and November 2000. Specifically, CommVault's
current chief executive officer and chief operating officer joined CommVault in
March 1998 and December 1999, respectively. The current chief operating officer
was a consultant to CommVault working directly on the Galaxy project before he
joined CommVault as an employee in December 1999. The chief executive officer
and chief operating officer were directly responsible for the initial concept
and development of CommVault's Galaxy data protection software as well as its
continued development and deployment.

        -   TELL US HOW YOU DETERMINED THE AMOUNT OF THE BENEFICIAL CONVERSION
            FEATURE AT EACH DATE. IN THIS REGARD, WE NOTE THAT UPON CONVERSION,
            THE STOCKHOLDER WILL RECEIVE CASH PROCEEDS EQUAL TO THEIR INITIAL
            INVESTMENT IN THE PREFERRED STOCK IN ADDITION TO FOUR SHARES OF
            COMMON STOCK FOR EACH SHARE OF PREFERRED STOCK. TELL US HOW YOU
            CONSIDERED THIS INFORMATION IN YOUR CALCULATIONS OF THE BENEFICIAL
            CONVERSION FEATURE. WE REFER YOU TO ISSUE 15 OF EITF 00-27, BY
            ANALOGY.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 11


From May 1996 through March 1999, CommVault issued 3,166,254 shares of Series A,
B, C, D and E preferred stock and 25,330,032 shares of related common stock. At
each Series A, B, C, D and E preferred stock issuance date, CommVault issued
each one share of preferred stock and eight shares of common stock for $15.00 of
total consideration. CommVault allocated the $15.00 of proceeds at the time of
issuance based on the relative fair value of the Series A, B, C, D and E
preferred stock and the underlying common stock. Each share of preferred stock
is convertible, in whole or in part, into: 1) four shares of common stock 2) a
cash payment of $14.85 per preferred share and 3) all accrued and unpaid
dividends of $1.788 per preferred share per year. Any election by the holders of
the Series A, B, C, D and E preferred stock, made before a qualified initial
public offering requires the approval of a majority of Series AA and CC
preferred stockholders. As discussed in the first bullet to comment 9 above, the
fair value of CommVault's common stock on each issuance date was approximately
$0.01 per share. As a result, $14.90 was allocated to each share of Series A, B,
C, D and E preferred stock issued and $0.10 was allocated to each eight shares
of common stock issued (approximately $0.01 per common share).

By analogy to Issue 15 of EITF 00-27, CommVault subsequently calculated the
value of the beneficial conversion feature as the excess of (1) the fair value
at the commitment date of the common stock portion of the conversion option over
(2) the proceeds of the convertible instrument allocated to the common stock
portion of the conversion option. Since there is no excess value in the above
calculation, the value of the beneficial conversion feature is de minimus.

        -   CONSIDERING THAT THE CONVERSION OF THE PREFERRED STOCK IS CONTINGENT
            UPON STOCKHOLDER APPROVAL, TELL US HOW YOU DETERMINED WHEN THE
            BENEFICIAL CONVERSION FEATURE SHOULD BE RECOGNIZED. WE REFER YOU TO
            ISSUE 2 OF EITF 00-27.

At the time of issuance of the Series A, B, C, D and E preferred stock, the
conversion feature of such preferred stock was not contingent upon stockholder
approval. As a result, CommVault recognized the de minimus value of the
beneficial conversion feature at the time of each Series A, B, C, D and E
preferred stock issuance analogous with Issue 15 of EITF 00-27.

The conversion feature of the Series A, B, C, D and E preferred stock did not
become contingent upon the approval of the Series AA and CC preferred
stockholders until such Series AA and CC preferred stock was issued. The Series
AA preferred stock was issued in April 2000 and the Series CC preferred stock
was issued in February 2002 and September 2003.

Further, in accordance with EITF Topic D-42, on the date of redemption of the
Series A, B, C, D and E preferred stock into common stock CommVault will reduce
net income attributable to common stockholders by the excess of the (1) fair
value of the consideration transferred to the holders of the preferred stock
over (2) the carrying amount of the preferred stock recorded in CommVault's
balance sheet. Based on the current estimated IPO price of $7.00 per share, this
charge would be approximately $89 million.

Mayer, Brown, Rowe & Maw LLP



Securities and Exchange Commission
August 7, 2006
Page 12


ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES.

10.     WE NOTE YOUR DISCLOSURE REGARDING THE ISSUANCE OF SHARES TO CERTAIN
        HOLDERS OF PREFERRED STOCK TRIGGERED BY THEIR PREEMPTIVE RIGHTS WITH
        RESPECT TO THE ISSUANCE OF SHARES TO DELL VENTURES UPON DELL VENTURES'
        CASHLESS EXERCISE OF A WARRANT. WE FURTHER NOTE YOUR STATEMENT THAT THE
        HOLDERS PAID NO CONSIDERATION FOR THE SHARES. REVISE TO EXPLAIN THE
        MECHANICS OF THE CASHLESS EXERCISE FEATURE AND DESCRIBE IN QUANTITATIVE
        TERMS HOW THAT ARRANGEMENT FOR THE EXERCISE OF THE WARRANTS WAS APPLIED
        IN THIS CIRCUMSTANCE. PLEASE EXPLAIN THE BASIS UPON WHICH YOU STATE THAT
        CASHLESS EXERCISE OF DELL VENTURES' WARRANT INVOLVED "NO CONSIDERATION."

The prospectus has been revised to include the requested disclosure.

CommVault has removed the disclosure that shares were issued to the holders of
the Series AA, BB and CC preferred stockholders for no consideration. Pursuant
to the preemptive rights of the Series AA, BB and CC preferred stockholders that
were triggered by the exercise of the warrant, such Series AA, BB and CC
preferred stockholders (other than individuals that also own Series A through E
Stock) purchased 145 shares of common stock on a cashless basis.

        Should you have any questions regarding the foregoing or the amended
Registration Statement, please contact Philip Niehoff at (312) 701-7843 or Wendy
Gallegos at (312) 701-8057.

                                            Very truly yours,


                                            /s/  WENDY GALLEGOS





cc:     Daniel Lee, Securities and Exchange Commission
        Warren Mondschein, CommVault Systems, Inc.