Oracle Corporation et al v. SAP AG et al

Filing 1155

Declaration of Thai Le in Support of 1154 Opposition/Response to Motion In Limine filed byOracle International Corporation. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W, # 24 Exhibit X, # 25 Exhibit Y, # 26 Exhibit Z)(Related document(s) 1154 ) (Howard, Geoffrey) (Filed on 5/10/2012)

EXHIBIT E

SAP Priorities by Cluster
Expand Addressable
Market by Organic Growth
~$30bn

~$70bn

Business User

Duet
Usability (Project Muse)
Analytics

Midmarket

A1s without compromise
Modernized simplified A1 (“New A1”)
“New A1” as appliance for 2 industries
CRM on Demand, deployment models

Platform

Service Enablement of ERP2005 (BPP)
Establish SAP NetWeaver as the
integration platform #1
Enterprise SOA showcases

Leader in
Business User
Solutions
#1 Midmarket
#1 Business
Process
Platform

#1 ERP

Leader in
Industry
Solutions
+
#1 CRM, #1 SCM
#1 SRM, #1 PLM
#1 ERP

2005

2010E

#1 CRM, #1 SCM,
#1 SRM, #1 PLM

Ecosystem

Industries

Improve solution for “services
industries”
New industry positioning

Suite

Stabilize CRM
Accelerate ERP upgrade
End-to-end supportability
SCM

Best-Run SAP

BPR for volume business

© SAP AG 2006, Global Service & Support Manager Info Session, G. Oswald / 2

2

Accelerated Progress Towards 2010 Vision…

mySAP ERP 2005 generally available
mySAP ERP evolves into a BPP

2006

Launch
Strategic
Products

Duet, SAP xApps
SAP Analytics, BI-Accelerator
SAP CRM On-Demand
First pilot customer testing of
enhanced midmarket portfolio

2007

mySAP Business Suite on a BPP

ESOA Roadmap
Completed

Enhanced Midmarket portfolio available

© SAP AG 2006, Title of Presentation / Speaker Name / 3

3

…And Doubling of Addressable Market by 2010

mySAP Business Suite on a BPP
Enhanced midmarket portfolio available

…

2007

Enterprise
Service-Oriented
Architecture
Established

…

~20% market share, $15bn in product
revenue (CAGR 2007-2010 of 15%)

2010

Addressable
Market $75bn

~100,000 customers
~2/3 of installed base on Enterprise SOA
~50% of SAP‘s software revenues
from new products
~40-45% of SAP‘s order entry from
midmarket

© SAP AG 2006, Title of Presentation / Speaker Name / 4

4

Comprehensive Competitive Environment
SaaS

Service
Provider

The White Space
Consulting
Custom Develop.

SaaS

Embedded
Software

Web
Platform

Enterprise
Application Software

Middleware
Infrastructure

© SAP AG 2006, Global Service & Support Manager Info Session, Gerhard Oswald / 5

5

Personal
Productivity

Information
Worker /
Analytics

Product
Data Mgmt

Engineering

Core

Web 2.0

Oracle – Building Blocks
Oracle Building Blocks

Source: SSM
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 6

6

Oracle – Complete Stack

Source: SSM
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 7

7

Chronology of Oracle’s Growth by Acquisition Strategy
2005
Jan

Feb

PeopleSoft/
JD Edwards
($ 10.3B)

Mar

Apr

Retek Oblix
($ 0.7B)

Mai

Jun

TripleHop

Jul

Aug

Sep

Oct

ProfitLogic

TimesTen

i-Flex G-Log Innobase
($ 1.0B)
Context Media

Nov

Thor

Dec

TempoSoft

OctetString

2006
Jan

Feb

Mar

Apr

Mai

Siebel HotSip Sleepycat Net4Call
($ 5.9B)
Portal
360Commerce
Software

Jun

Jul

Demantra

Aug

Sep

Context Media: Enterprise content integration software
G-Log: Logistics management
i-Flex: Banking
Innobase: Open source database
Oblix: Identity management
OctetString: Identity management
PeopleSoft/JD Edwards: Enterprise applications
ProfitLogic: Retail
Retek: Retail
TempoSoft: Retail
Thor: Identity management
TimesTen: Real time data management software
TripleHop: Enterprise search products and technology

Since January 2005, Oracle has made more than
20 acquisitions, totaling approx. US$ 21B

Nov

Dec

Sigma Dynamics Sunopsis Stellent

Telephony@Work

2005 Acquisitions

Oct

MetaSolv

SPL

2006 Acquisitions
Demantra: SCP
Portal Software, HotSip and Net4Call: Telecom software
Siebel: CRM
Sigma Dynamics: Real-time predictive analytics technology
Sleepycat: Open Source DB
Telephony@Work: Telecom software
360Commerce: Retail
Sunopsis: Data integration
MetaSolv Software: OSS service fulfillment, media & communication
Stellent: Enterprise content management software
SPL: Utilities & tax management software

„Oracle would have to spend an est. $17B on acquisitions to
generate a sustained EPS CAGR of 20% over the next three
years (2007-2009) “ BernsteinResearch, Oct16, 2006

© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 8

8

Financial Performance – SAP vs. Oracle (1/2)
Q1/FY07

YoY R4Q(Q2/06-Q1/07)

in US$ millions

Product
Software
–
–

Applications
Database & Middleware

Maintenance
–
–

Applications
Database & Middleware

Services
Consulting
Training
On Demand
Total

+29%
+28%

12,407
5,079

+21%
+22%

228
576

+80%
+15%

1,404
3,675

+66%
+11%

1,941

+18%

7,328

+20%

700
1,241)

+16%
+20%

2,738
4,590

+39%
+11%

846
633
88
125

+33%
+33%
+19%
+49%

3,049
2,272
339
438

+20%
+17%
+16%
+40%

3,591

+30%

15,456

+21%

Q3/2006

YoY R4Q(Q4/05-Q3/06)

in US$ millions*

Product
Software
Maintenance

47%
(-1)

33%
(+1)

3% 2%

Maintenance

Consulting

Training

On Demand

37%

YoY

+13%
+17%
+10%

7,956
3,699
4,257

+14%
+16%
+13%

827
712
115

+8%
+8%
+8%

3,308
2,847
461

+11%
+10%
+15%

Other

21

-11%

88

-9%

Total

2,842

+11%

11,352

+13%

15%

Software

(-1)

in US$ millions*

1,994
875
1,119

Services
Consulting
Training

Rolling 4 Quarters

YoY

in US$ millions

2,745
804

33%
(+1)

1% 4%
Software
Consulting
Other

25%
Maintenance
Training

Source: SSM

* SAP revenues in US$ based on quarter end exchange rates
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 9

9

Relative Size – Total Software Revenue
(rolling 4 quarters; based on application software revenues)
70%
60%
50%

51%

51%

53%

53%

54%

55%

57%

55%

58%

60%

60.4%

61.6% 61.4%

SAP1)
59.5%

50%

40%

33
PP

34
PP

37
PP

ORCL acquires
SEBL

30%

20%

ORCL acquires
PSFT &
RETK

PSFT acquires
JDEC

26.5%

25.3%
16.4%

PSFT

10%

27.4%

MSFT1)2)

13.2% 13.3% 13.1% 13.1%
SEBL
8.8%

JDEC
RETK

0%
Q2 02Q1 03

Q3 02Q2 03

Q4 02Q3 03

Q1 03Q4 03

Q2 03Q1 04

Q3 03Q2 04

Q4 03Q3 04

Q1 04Q4 04

Q2 04Q1 05

Q3 04Q2 05

Q4 04Q3 05

Q1 05Q4 05

Q2 05Q1 06

Source: CMI Analysis based on Company Data and Financial Analysts Estimates as of October 12th 2006
1) Forecast by Financial Analysts (MSFT) and SAP internal estimates
2) Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)
© SAP AG 2006, Global Service & Support Manager Info Session, G. Oswald / 10

10

ORCL2)

Q3 05Q2 06

Q4 05Q3 06E

New Application License Revenue – SAP vs. Oracle
New Application License Revenue (in US$ Mn*)
Oracle***

SAP

SAP as % of Oracle

3,961
559%
525%

3,365
488%

370%
376%

384%
1,658

1,396

238%

268%
1,478

199%
895
710

696

563
350
152
-36% 17%

Q1/05
Q3/05

127

639
266

123%
789
641

269

228

57% 16%

9% 20%

52% 18%

28% 18%

77% 14%

83% 13%

Q2/05
Q4/05

Q3/05
Q1/06

Q4/05
Q2/06

2005

Q1/06
Q3/06

Q2/06
Q4/06

* SAP revenues in US$ based on quarter end exchange rates
** Estimates based on analyst reports from CIBC, Jefferies & Company, Morgan Stanley
*** Closest respective quarters (Oracle Fiscal Year ends May 31)
© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 11

11

875

80% 23%

Q3/06
Q1/07

340
28% 19%

65% 18%

Q4/06E**
Q2/07

2006E**

Source: SSM

Oracle Q2/FY2007 Results – New Application Licenses
On December 18, Oracle reported new application license revenue of US$ 340M for
Q2/FY2007 which is an increase of 28% over Q2/FY2006
Oracle’s application growth is overstated since the comparison does not consider the
independent results for Siebel in Q2/FY2006 (-11% adjusted growth instead of +28%)
500

US$ Mn

400

383

300

Siebel
117

Organic Growth
Reported Growth
Adjusted Growth

∆=-1

1%
%
+ 28

∆=
∆=+1%

340
Siebel
72

200

100

0

Oracle
(incl. PSFT, Retek)
266

Oracle
(incl. PSFT, Retek)
268

Q2/FY2006

Q2/FY2007

© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 12

12

“Let’s beat the enemy” – SAP vs. Oracle

“

“Let me give you a word of warning and it's a very serious
word of warning. We have just won a few battles. This is
the beginning of the war, not the end of the war. You
have to assume my dear colleagues that we are dealing
with a very shrewd, very smart, very tough and a very
rich competitor. And it will not simply sit there and simply
accept the fact that we are going to take every day market
share away from them (…) We are just at the letter A and
we have many more letters to work our way through (…) So
I’m calling on everyone: the war is out there, we are dealing
with a very mean, very tough competitor and on behalf of
everyone who fights these people every day I'm calling
upon everyone: let’s act as a united SAP so that we can
beat the enemy (…)”
Leo Apotheker
Member of the SAP AG Executive Board
SAP AG

Source: SSM
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 13

13

Battleground: Oracle vs. SAP
Maintenance (Installed Base)
Oracle Weapons

SAP Weapons

Defensive

Offensive

Offensive

• Applications Unlimited +

• Safe Passage +

• OFF SAP Program o

• Lifetime Support +

• TomorrowNow ++

• Systime -

• MAR Program +

+

o

SAP Weapons

Defensive
• Maintenance Strategy +

SAP Weapons

Defensive

Defensive
• Ecoystem (SDN) +

• Industry Solutions ++

• Netweaver o

Offensive
• ESOA Roadmap +
• Midmarket Solutions/A1S +

Oracle Weapons
Defensive

Offensive

SAP

+
o

o

+

Oracle

• Best of breed (on OFM) +

none

Oracle Weapons
Defensive
• Ecoystem (ODN) ++

• Oracle Accelerate o

• Technology Bundles +

Offensive

Offensive

• OnDemand (e.g. Siebel) +

• Fusion MW ++

o

• Fusion Apps +

o

Oracle Weapons

SAP Weapons

Defensive
• 11g Grid computing ++

Offensive
• Linux Support o

• Technology Bundles +
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 14

Offensive
• Push DB2 and SQL Server +
• Project „No Database“ ++

Database

14

Defensive
none

Middleware

(New) Applications

• Best of suite ++

Safe Passage Update
January 11, 2007

Thomas Ziemen
Service Solution Management
SAP AG

15

Safe Passage Offering
Safe Passage is a smooth way consisting of license
credit, maintenance and productized migration support
for constrained Oracle customers who want to escape
uncertain waters and enter the safe haven of SAP.
Applications
Best-in-class mySAP business software applications
Integration of your IT landscape (SAP NetWeaver)
Recognition of your previous investments (up to 75% license credit) in
Oracle, PSFT, JDE, Siebel or Retek
Migration Services
A flexible roadmap to the future, founded on SAP NetWeaver*
Assessment of current Oracle, PSFT, JDE, Siebel or Retek implementation
Free of charge migration tools and predefined content provided by SAP
and Partners
Maintenance
Support for PSFT, JDE or Siebel via SAP subsidiary, TomorrowNow
50% savings on current support and maintenance fees
* included with your mySAP license
Source: SSM
© SAP AG 2006, Title of Presentation / Speaker Name / 16

16

Safe Passage Offering – Extended in the Course of Time
SAP Apps

2005

PeopleSoft,
JD Edwards

Jan

Retek

TomorrowNow
PeopleSoft,
JD Edwards

May

Sep

Siebel

Oct

2006
Oracle EBS*

Jan

May

Baan
(EMEA C only)

Siebel

Dec

2007
Jan

Apr
* Not officially announced, but part of Safe Passage Program according to Apollo
** Not finally decided yet (depending on demand development in EMEA C)
*** Not decided yet (Board approval needed)
© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 17

17

Baan**
Oracle EBS***

What is Safe Passage?
A current Oracle, PeopleSoft, JD Edwards, Retek, or Siebel
customer that chooses to either replace their existing
implementation in favor of SAP or defer migration to Oracle
Fusion by purchasing a maintenance contract from
TomorrowNow.

Software Discount:
The customer accepts the license discount from SAP and replaces their
existing PSFT, JDE, Siebel, Retek, or Oracle E-Business implementation

TomorrowNow Maintenance Only:
The customer just purchases a TomorrowNow maintenance contract

Competitive Replacement:
The customer replaces their existing PSFT, JDE, Siebel, Retek, or Oracle
E-Business implementation but the deal is not officially booked as Safe
Passage

© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 18

18

Safe Passage/TomorrowNow – Installed Base
26 Joint Customers

266 Safe Passage
Customers *

216 TomorrowNow
Customers

Characteristics:
Larger customers
Upgrades planned
SAP experience (already
SAP customer, Joint
customers)
“No Oracle”-strategy
Short project cycles
High support risk aversion

Characteristics:
Smaller customers
Not SAP-minded
No SAP experience / history
Running on old releases
(functional gaps)
No upgrades considered
Not decided yet (“Shoppers”)

Status December 31, 2006,
* Safe Passage December deals not included yet
© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 19

19

Review 2006: SAP / TomorrowNow Collaboration

© SAP AG 2006, SBD_Update / Eric Brunelle / 20

20

Safe Passage – Customer Tracking
Customer Tracking, Jan 2007
No.

266

With Messages („Active Installations“)
With Prod. Systems („Live Customers“)
Customer Satisfaction* (n=47)

* CSS 2006, Q18: „Overall Satisfaction with SAP Service & Support“ /
10-point scale (1= very dissatisfied, 10= extremely satisfied)
© SAP AG 2006, Thomas Ziemen, Service Solution Management

21

70 %

168

With Called-Off SAP Installations

100 %

187

Total Number of Safe Passage Customers

% of Total

63 %

135

51 %

8.0 (SAP average: 7.4)

Source: SSM

Outlook 2007: Conversion Program

30% of TomorrowNow customers think
TomorrowNow is a first step on the road to SAP

20% of TomorrowNow customers think SAP is
too big for them as they are smaller companies

50% of TomorrowNow customers are open and
know they will switch somewhere

Source: Assumption from Bob Geib - TomorrowNow
© SAP AG 2006, SBD_Update / Eric Brunelle / 22

22

Convert2Win: Customer Segmentation 2007

TomorrowNow
Installed Base

201 customers (Status: Nov. 2006)

58 customers (Status: Nov. 2006)
TNow/SAP
Joint customers
Step 1: check contract duration
Check Contract
Duration

If contract duration is short, e.g. 1 year, go to Step 2

Step 2: check customer profile
Check
Profile

Release status: is the customer running older releases, e.g. PSFT 7.x?
Mindset: is the customer „SAP-minded“? To be checked w/ TNow

Step 3: engage w/ customer (assumption: 5 to 10 customers)
Engage w/
Customer

Different options available: at customer site, infoday, invitation to Sapphire,
etc.

Customer segmentation to be done in January-February 2007
in collaboration w/ TomorrowNow

© SAP AG 2006, Title of Presentation / Speaker Name / 23

23

Safe Passage Applications – Key Achievements 2006

200

Safe Passage – 2006 Customers
Cumulative Number of Deals 200*

Selected 2006 Customers

74*

150
100
50
0

27

74

126

126

Q1/06
Q2/06
Q3/06
Q4/06
126 Safe Passage deals signed in 2006
(50 Americas, 23 EMEA C, 29 EMEA N, 24 APA)
140 Safe Passage deals signed in 2005
(77 Americas, 17 EMEA C, 28 EMEA N, 18 APA)

* Forecast
Safe Passage – 2006 License Revenue
Cumulated Yearly Net Software Value (in €M)
300*

300
250

114.5*

200
150
100
50
0

185.5
60.6

185.5

94.5

Q1/06
Q2/06
Q3/06
Q4/06
€ 185.5M license volume lost for Oracle in 2006
Approx. € 170.0M license volume lost for Oracle in 2005
* Forecast

© SAP AG 2006, Global Service & Support Manager Info Session, Gerhard Oswald / 24

24

Safe Passage – Customer Analysis by December 31, 2006
Deals by Industry

10%
Consumer
Products

Deals by Product Line
Retail

High Tech

14%

Others

9%

Total
266

18%
4%5% 6%

JD Edwards

Manufacturing

8%
7%
7%
6%
6%

Oil & Gas

33%
PeopleSoft

Public Sector

30%

28%

Financials
Pharmaceuticals

Retek

Telecommunications

Deals by Region

Oracle

1% 11%
2%

Baan

Professional Services
Service Provider

Total
266

Siebel

Deals by Contract Size
€ 0.2M – € 1.0M

EMEA N
57 Deals

Americas
127 Deals

21%
EMEA C
40 Deals

40%

48%

< € 0.2M

Total
266

2 5%

15%

Total
266
3 5%

16%

APA
42 Deals

Avg. Deal Size € 1.5M

© SAP AG 2006, Global Service & Support Manager Info Session, Gerhard Oswald / 25

25

> € 1.0M

Safe Passage – Customer Analysis by December 31, 2006
Retek
1%

Siebel
13%

Deals by Product Line
JD Edwards

33%
PeopleSoft

30.000 Oracle
Application
Customers

JDE
23%

EBS
45%

30%

Total
266
28%

Retek

PSFT
18%

Deals by Region

Oracle EBS

1% 11%
2%

Baan

Siebel

Deals by Contract Size
€ 0.2M – € 1.0M

EMEA N
57 Deals

Americas
127 Deals

21%
EMEA C
40 Deals

40%

48%

< € 0.2M

Total
266

2 5%

15%

Total
266
3 5%

16%

APA
42 Deals

Avg. Deal Size € 1.5M

© SAP AG 2006, Global Service & Support Manager Info Session, Gerhard Oswald / 26

26

> € 1.0M

Baan Competitive Replacement Program
Early References in Belgium and Netherlands

Market Potential
EMEA N
500

EMEA C

1000

N. America

Total
2600

Selected Implementation Partners
1000

100

APA

Target 2006: 10 deals (7 contracts already signed)
Target 2007: 30 deals
Milestones

Maintenance & Migration Services
TomorrowNow
- As of January 1st, 2007
- 3 dedicated headcount out of Amsterdam
- Partner Picolog as subcontractor for second
level support

Launch in EMEA Central in Q3 via Press Release
on September 25, 2006
Marketing campaign in Q4
- Baan customer satisfaction survey via external
tele company
- Baan customers w/ high or medium interest
currently being mailed by SAP

Migration Tools & Content
- Leveraging SAP ADM infrastructure
- First Baan content pack available in December 2006

Customer Infodays
- e.g. Itelligence, w/ 32 Baan customers in Stuttgart
(currently 5 opportunities out of the event)

© SAP AG 2006, Global Service & Support Manager Info Session, Gerhard Oswald / 27

27

Management Summary – TommorowNow
Value
Proposition

SAP View
Hurt Oracle by taking away maintenance revenue
Serves as bridge for future SAP license business for (smaller, not SAP-minded customers)
Customer View
Offer lower priced 24x7 maintenance alternative to PeopleSoft, JD Edwards,
and Siebel customers with 50% savings on current support and maintenance fees
Provide those customers with a choice to migrate to SAP (at their own pace)

TomorrowNow established as cornerstone of the Safe Passage Program

Business
Case
Analysis

Safe Passage pipeline (403 opportunities currently in process), TomorrowNow pipeline (816 open
opportunities), and revenues justify the cost of the acquisition and additional operating expenses
Installed base grown to 216 customers with 228 TomorrowNow customer contracts signed in 2006 (139
new contracts and 89 renewals in 2006; 121 signed in 2005 with 75 new deals and 46 renewals)
In total € 41.4 million reduction of Oracle maintenance revenue since acquisition of TomorrowNow
€ 9.0 million TomorrowNow stand-alone revenue in 2006 (€ 3.5 million in 2005)

Field: Another year needed to finalize global alignment with SAP Sales organization

Lessons
Learned

Marketing: Oracle Disruption Campaign Q3/2006 resulted in high lead success rate for
TomorrowNow, i.e. high return on marketing investments
Oracle Turn up the Heat Campaign resulted in 150+ opportunities for TomorrowNow (17 contracts signed)

F&A: Globalization of business in cooperation with SAP regions is a challenge and was
underestimated as such
Need to actively manage regional shared services for TNow
TomorrowNow is a strategic investment and serves as strategic weapon against Oracle:

Conclusion

Take away maintenance revenue from Oracle
Create pre-pipeline of future SAP customers

TomorrowNow still operates at a loss in 2006 but Break-even is expected for 2008
after completion of globalization and business scoping in 2007 (in line with board
assumption to become a profitable business within 2-3 years after acquisition)

© SAP AG 2006, TNow Acquisition Monitoring, 28

SAP STRICTLY CONFIDENTIAL

28

KPI Framework – TomorrowNow (Status December 31, 2006)
Cumulated Number of New Customers & Client
Contracts in 2006

TomorrowNow Opportunities (in CoD)
24

2005: 75 new customer contracts
121 total customer contracts

9
228
Booked

816

91

27 40

54

Q1/06

Won
In Process
Discontinued
Lost

74

228
142
97

Q2/06

Q3/06

New Customer Contracts

40,0 41,4

32,7
21,4

Q1/06

12,2
5,5

8,6

Q2/06

Q3/06

Multi-Year Contracts included

15,0 18,0

13,6

Multi-Year Contracts excluded

Q1/06

Q2/06

6,1

3,8

Q3/06

© SAP AG 2006, TNow Acquisition Monitoring, 29

Q3/06

Customer Retention
TR*IM Index 107
Overall Satisfaction 8.5
Acc. Mgmt: 8.7
S&S: 8.8
95% as References
97% likely Renewal rate

9,0

Q4/06
Cost

Q2/06

28,0 32,3

Q4/06
Plan

* Since Acquisition (doubled contract volume of newly signed TomorrowNow deals)

20,9
9,9

23,0

€ 10.8M maintenance volume lost for Oracle in 2005

14,6
1,9

19,0

Q1/06

Q4/06

Cost vs. Revenue in 2006 (Cumulative in €M)

4,8

Q4/06

Total Customer Contracts

Cumulated* Maintenance Volume
Taken Away From Oracle in 2006 (in €M)

2006 Contract Volume (in €M)

6,4 3,1

139

Revenue

SAP STRICTLY CONFIDENTIAL

29

Actual

TomorrowNow
Customer Satisfaction Survey 2006

Thomas Ziemen
Service Solution Management, SAP AG
December 2006

30

Sample Structure
Out of 188 available addresses 63 interviews were conducted, a considerable
total response rate of 33%

Sample by Region

Sample by Area of work

Total
Addresses

AME

Non-AME

Total

188

166

22

125
63

Interviews

63

56

7

Response
rate

33%

33%

IT

LoB

unknown unknown unknown

31%

55

3

Sample by Industry
Total

Manufacturing

Service
Industries

Trade

Financial
Services

Public
Services

Addresses

188*

87

38

13

14

34

Interviews

63

29

11

6

6

11

Response
rate

33%

33%

28%

46%

42%

32%

* Industry information is missing for 2 out of 188 available addresses
Base: 2006
TomorrowNow, Inc. Proprietary and Confidential

31

Other

5

Summary
In the first customer satisfaction survey of TomorrowNow customers a very high level of
customer retention was measured, with an overall TRI*M Index of 107
The customer retention level for North America (NA) is 106, for non-NA countries it is
slightly higher with 110
The overall satisfaction with TomorrowNow is also on a very high level with 8.5
Overall, Performance and Maintenance Services clearly drive customer retention,
whereas most Benefits (e.g. 24x7 support, 30 minute response time) do not have a
high impact
In terms of Performance, quality and reliability of maintenance support and
particularly solution expertise are most relevant and should be further improved
The primary support engineer for the customer's account meets the customers'
expectations, should therefore be maintained, while other benefits such as longer
support periods or lower maintenance fees are less relevant
Regarding Maintenance Services, general problem-solving abilities in critical
situations are well-performing
An enormous high amount of 95% of TomorrowNow customers consider themselves a
favorable reference for TomorrowNow
Almost 100% of TomorrowNow customers would renew their maintenance contract
with TomorrowNow in the future, which is another very positive feedback

TomorrowNow, Inc. Proprietary and Confidential

32

TRI*M Index by Region and Area of work
The overall TRI*M Index (indicating the level of customer retention) of TomorrowNow
is performing very high, non-NA even higher
TRI*M Index by Region
107

106 107

110

100 *

Total

North America
(NA)

SAP

TomorrowNow

SAP

TomorrowNow

85*

Adapted SAP

SAP

TomorrowNow

90

Non-NA

* Adapted to TNow sample: NA = USA + Canada, Non-NA = UK, Singapore, Australia, New Zealand

TRI*M Index is a calculated value based on satisfaction, recommendation likelihood, repurchase intention and competitive benefits
Base: Total: 63 / North America (NA): 56 / Non-NA: 7 // SAP global: 5,992 / SAP adapted global: 1,274 / SAP NA: 876 / SAP Non-NA: 398
TomorrowNow, Inc. Proprietary and Confidential

33

TRI*M Customer Typology by Region
The vast majority of TomorrowNow customers are highly retained, in particular outside
of AME

retained customers

customers who compare

6%
5%

7%
5%

89%

88%

Total

AME

customers at risk

100%

Non-AME

TRI*M Customer Typology is based on the TRI*M Index and allows a categorization of customers according to their retention
Base: Total: 63 / AME: 56 / Non-AME: 7
TomorrowNow, Inc. Proprietary and Confidential

34

TRI*M Index by Sector
Whereas Manufacturing and Public Services exceed the overall TRI*M Index,
customer retention is on the lowest level in the Financial Services industry

107

115

109

108

107

97

92

90

112

112

107

103

89

89

107
89

85

Total

Manufacturing

Service
Industries

Trade

Financial
Services

SAP Global

SAP North America

TomorrowNow

SAP Global

SAP North America

TomorrowNow

SAP Global

SAP North America

TomorrowNow

SAP Global

SAP North America

TomorrowNow

SAP Global

SAP North America

TomorrowNow

SAP Global

SAP North America

TomorrowNow

62

Public
Services

TRI*M Index is a calculated value based on satisfaction, recommendation likelihood, repurchase intention and competitive benefits
Base: Total: 63 / Manufacturing: 29 / Service Industries: 11 / Trade: 6 / Financial Services: 6 / Public Services: 11
SAP North America Total: 876 / Manufacturing: 549 / Service Industries: 127 / Trade: 60 / Financial Services: 25 / Public Services: 115
SAP Global Total: 5,992 / Manufacturing: 3,371 / Service Industries: 1,273 / Trade: 430 / Financial Services: 360 / Public Services: 558

TomorrowNow, Inc. Proprietary and Confidential

35

TRI*M Questions
The very positive overall TRI*M Index derives from the high level throughout all
four aspects of customer satisfaction and loyalty

TomorrowNow

8.5

SAP North America

Overall satisfaction

8.4

SAP Global

7.6

8.7

TomorrowNow

Likelihood to recommend

8.8

SAP North America
SAP Global

Likelihood to renew contract
(SAP: Likelihood to repurchase)

8.0

8.4

TomorrowNow

8.7

SAP North America
SAP Global

Benefits / competitive advantage

TomorrowNow

8.0

8.2
8.4

SAP North America
SAP Global

7.8

Q1: 1 is very dissatisfied and 10 is very satisfied
Q2: 1 is definitely will not recommend TomorrowNow and 10 definitely will recommend TomorrowNow
Q3: 1 is definitely would not renew maintenance contract and 10 definitely would renew maintenance contract
Q4: 1 is the benefits or advantages of using TomorrowNow are very poor and 10 the benefits or advantages of using TomorrowNow are excellent
TomorrowNow, Inc. Proprietary and Confidential

36

Satisfaction with Account Management by Region
Overall satisfaction with account management among TomorrowNow customers
is on a very high level in and outside of North America
8.7

8.7
8,2*

8.5

8.7

Total

North America
(NA)

SAP

TomorrowNow

SAP

TomorrowNow

7.4*

Adapted SAP

SAP

TomorrowNow

7.7

Non-NA

* Adapted to TNow sample: NA = USA + Canada, Non-NA = UK, Singapore, Australia, New Zealand

Q7: Using a 10-point scale, where 1 is very dissatisfied and 10 is very satisfied, how satisfied are you with TomorrowNow’s account
management overall?
Base: Total: 63 / North America (NA): 56 / Non-NA: 7 // SAP global: 5,102 / SAP adapted global: 1,221 / SAP NA: 864 / SAP Non-NA: 357
TomorrowNow, Inc. Proprietary and Confidential

37

Satisfaction with Account Management by Sector
While overall satisfaction with TomorrowNow's account management is highest in
Manufacturing, respondents from Financial Services are remarkably less satisfied

Total

Manufacturing

Financial
Services

SAP Global

7.6

SAP North America

TomorrowNow

Trade

8.6

7.4

TomorrowNow

SAP Global

SAP North America

TomorrowNow

Service
Industries

7.7

SAP Global

7.7

SAP Global

SAP North America

8.5

8.4
7.6

TomorrowNow

SAP North America

8.8

8.2
7.7

TomorrowNow

SAP Global

SAP North America

TomorrowNow

7.7

8.8

8.7

8.5

SAP North America

9.0
8.5

SAP Global

8.7

Public
Services

Q7: Using a 10-point scale, where 1 is very dissatisfied and 10 is very satisfied, how satisfied are you with TomorrowNow’s account
management overall?
Base: Total: 63 / Manufacturing: 29 / Service Industries: 11 / Trade: 6 / Financial Services: 6 / Public Services: 11
TomorrowNow, Inc. Proprietary and Confidential

38

Satisfaction with Maintenance & Support Services
Overall customer satisfaction with TomorrowNow's maintenance & support services is
remarkably high, too:
Overall Satisfaction with Maintenance
& Support Services by Region
8.8
7.8*

Total

North America

SAP

TomorrowNow

7.3 *

TomorrowNow

SAP
Adapted SAP

TomorrowNow

7.4

8.7
8.0

SAP

8.8

Non-NA

* Adapted to TNow sample: NA = USA + Canada, Non-NA = UK, Singapore, Australia, New Zealand

Q5: Using a 10-point scale, where 1 is very dissatisfied and 10 is very satisfied, how satisfied are you with the quality and reliability of
TomorrowNow’s maintenance support?
Base: Total: 63 / NA: 56 / Non-NA: 7 // SAP global: 4,328 / SAP adapted global: 989 / SAP North America (NA): 691 / SAP Non-NA: 298
TomorrowNow, Inc. Proprietary and Confidential

39

Details: Satisfaction with Maintenance & Support
Services (1/2)

9.3

9.1

9.0

9.0

8.8
8.3
7.8

7.5

Tax Updates

Legal Updates

Fixes for serious
issues

Support in critical
situations

SAP Global

SAP North America

TomorrowNow

SAP Global

*

SAP North America

*

TomorrowNow

TomorrowNow

*

TomorrowNow

TomorrowNow

7.1

Time required to
come up with a
solution

* question not asked in SAP survey

Q9: Using a 10-point scale, where 1 is very dissatisfied and 10 is very satisfied, how satisfied are you with TomorrowNow’s maintenance
& support services?
Base: Total: 63
TomorrowNow, Inc. Proprietary and Confidential

40

Details: Satisfaction with Maintenance & Support
Services (2/2)

8.9

Information on
progress

Technical knowledge
of support engineer

*

Availability of
support engineer

TomorrowNow

*

TomorrowNow

TomorrowNow

SAP Global

SAP North America

TomorrowNow

Quality of problem
resolution

9.0

7.3

TomorrowNow

7.6

7.4

SAP Global

7.8

9.0

8.8

SAP North America

8.9

*

Personalized service

* question not asked in SAP survey

Q9: Using a 10-point scale, where 1 is very dissatisfied and 10 is very satisfied, how satisfied are you with TomorrowNow’s maintenance
& support services?
Base: Total: 63
TomorrowNow, Inc. Proprietary and Confidential

41

Reference for TomorrowNow
An enormous amount of 95% of TomorrowNow customers would consider
themselves a favorable reference:
(SAP NA: 4%)

2% 3%

(SAP NA: 13%)

Yes

No

On certain product lines

95%
(SAP North America: 83%)

Q12: Would you consider yourself a favorable reference for TomorrowNow?
Base: Total: 63 / Yes: 60 / No: 1 / On certain product lines: 2
TomorrowNow, Inc. Proprietary and Confidential

42

TomorrowNow Customer Retention
An enormous amount of 95% of TomorrowNow customers would consider
themselves a favorable reference:

Retention & CS

CS for AccMgmt & Services

3%

2% 3%

Yes

High Likelihood (5 - 10)

No
Low Likelihood (1 - 4)
On certain product lines

97%

95%

TomorrowNow, Inc. Proprietary and Confidential

43

Likelihood of Maintenance Contract Renewal
Almost 100% of TomorrowNow customers feel very comfortable with renewing their
maintenance contract in the future
3%

High Likelihood (5 - 10)

Low Likelihood (1 - 4)

97%

Q3: How likely would you be to renew your maintenance contract with TomorrowNow in the future?
1 is definitely would not renew maintenance contract and 10 definitely would renew maintenance contract
Base: Total: 63 / High Likelihood: 61 / Low likelihood: 2
TomorrowNow, Inc. Proprietary and Confidential

44

The Voice of the Customer
“From initial contact, to reference checks, to Q&As, to contract negotiations, through
onboarding, and now into full maintenance and support, the experience with
TomorrowNow has been first class. I'm very impressed”
“TomorrowNow support personnel have been very supportive in helping with our
different problems. In some cases, they have gone above and beyond in helping
us. Thank you”
“Overall perception is: Seem to get an early acknowledgement of our cases. Lots of
activity on some cases but don't seem to get to resolution. On other cases, not
evidence of activity”
“The technical help we received was outstanding”
“Would like a forum to search for resolutions”
“Keep annual cost low and keep delivering payroll tax patches”
“[We need a] formalized and standard certification process for OS, DB,
peripherals and tools that are continuing to march forward while our supported
applications suite (Peoplesoft) remains at an old release level”
“Cannot find anything to add to their excellent performance”
TomorrowNow, Inc. Proprietary and Confidential

45

Outlook 2007
We will continue the customer satisfaction survey for TomorrowNow customers in
2007 in two survey waves, each representing ~50% of total customer base:
Wave 1:

April/May 2007

Wave 2:

October/November 2007

Contact
Alexander W. Sieferer

Michael L. Ranke

Program Director, SAP Service Solution Management
´
Tel.
[phone]
f
[phone]
m
[phone]
[e-mail]

Global Account Director TNS Technology
´
Tel.
[phone] - 1740
f
[phone] - 1437
m
[phone]
[e-mail]

TomorrowNow, Inc. Proprietary and Confidential

46

Appendix
Sample Structure
TRI*M Typology

TomorrowNow, Inc. Proprietary and Confidential

47

TRI*M Customer Typology by Sector
In parallel to their lower level of customer retention, customers from the Financial
Services industry are much more at risk than customers from the other industries

retained customers

6%
5%

89%

3%
7%

customers who compare

customers at risk

9%
9%

90%

33%

100%

100%
82%
67%

Total

Manufacturing

Service Industries

Trade

Financial Services

Public Services

TRI*M Customer Typology is based on the TRI*M Index and allows a categorization of customers according to their retention
Base: Total: 63 / Manufacturing: 29 / Service Industries: 11 / Trade: 6 / Financial Services: 6 / Public Services: 11
TomorrowNow, Inc. Proprietary and Confidential

48

TomorrowNow – Delivery Status by December 31, 2006
KPI

Status

Comment

Lost Maintenance for Oracle

Doubled cumulated volume of newly signed TNow maintenance contracts (50% of previous fees)

# of Deals in 2006

126 booked SP deals, 139 new TNow contracts and 89 TNow renewals in 2006
Slightly below Forecast 12 due to lower charge backs expectations and aggressive Oracle Lifetime
Support strategy
Forced Oracle into maintenance fee battle

Revenue TNow
TNow Installed Base

Currently 31% of TNow’s customers are in addition SAP clients (incl. accordant cross selling potential)

TNow Pipeline

TNow pipeline steadily increasing

TNow Involvement

Current TNow involvement in active Safe Passage pipeline equals 23% (59 opportunities in total)

Cost TNow

Slightly above Forecast 12 due to higher Marketing expenses

Headcount

Headcount plan adapted according to revenue numbers

Cumulative Maintenance
Lost for Oracle (in €M)

Cumulat. # of Deals in 2006
(SP / TNow Stand-Alone)

Cumulative Revenue TNow
(in €M)

TNow Installed Base

228

40,0 41,4
18,0
15,0

23,0
19,0

Q1/06

Q2/06

28,0 32,3

126
74

142

216

126

91

6,0

30 40

7,5 6,8
3,8

2,4 1,9

0,5

Q1/06

Q2/06

1,2

10,7 10,4

125

184

152

1,2 1,3

0,7

45

Q3/06
Forecast

Q4/06
Actual

TNow Pipeline
(Stand-Alone)

958

1.051

Q1/06

Q2/06

Q3/06

Q4/06

Safe Passage TomorrowNow

TNow Involvement in
SP Pipeline (in Process)
1.151

328

319

Q3/06

Q4/06

Internal Charge Backs Forecast Actual

51

54

67

Q1/06

Q2/06

Q3/06

Q4/06

TNow Clients

Cumulative Cost TNow
(in €M)

Joint TNow/SAP Clients

Headcount
(in FTE)

311
21,7 22,1

231

121 111

14,6 15,2
455

133 129

140 140

Q1/06

Q2/06

Q3/06

165 157

9,6 9,7
3,9 4,7
46

Q1/06

Q2/06

Q3/06

Q4/06

64

69

57

Q1/06

Q2/06

Q3/06

Q4/06

TNow Pipeline Safe Passage Pipeline TNow Involvement
© SAP AG 2006, Service Solution Management / Thomas Ziemen / 49

Q1/06

Q2/06

Q3/06
Forecast

Q4/06
Actual

Forecast

49

Q4/06
Actual

TomorrowNow – 2006 Selected Customers

EMEA

Americas

APA

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 50

50

TomorrowNow – Customer Analysis by December 31, 2006
Booked Contracts by Type

Booked Contracts by Product Line

Newly Signed Deals
139 Contracts

PeopleSoft
129 Contracts

JDE World
34 Contracts

61%

56 %

Total
228
39%
Renewal Rate: 90%
TR*IM Index: 107
Customer Satisfaction: 8.5

26%
2%

Siebel
6 Contracts

Renewed Deals
89 Contracts

Booked Contracts by Region
Americas
192 Contracts

15%

Total
228

JDE OneWorld
59 Contracts

Booked Contracts by Deal Size
< € 50K
130 Contracts

84%

€ 50K – € 100K
47 Contracts

57%

Total
228
EMEA N
12 Contracts
EMEA C
9 Contracts

Total
228

2 1%

5%
4% 7%

22%
APA
15 Contracts

Avg. Deal Size: € 75K

© SAP AG 2006, Service Solution Management / Thomas Ziemen / 51

51

> € 100K
51 Contracts

TomorrowNow (Stand-Alone) – Analysis of New Customers in 2006
New Customer Contracts by Industry

New Customer Contracts by Product Line

Manufacturing

Others

PeopleSoft
67 Contracts

High Tech

15%

JDE World
23 Contracts

12%

Total
139

37%

17%
Consumer
Products

11%
8%

47%

Prof. Services

4% 6% 7%

32%

Retail

Insurance

4%

Siebel
5 Contract

Healthcare

New Customer Contracts by Region
Americas
107 Contracts

Total
139

JDE OneWorld
44 Contracts

New Customer Contracts by Deal Size
< € 50K
77 Contracts

77%

€ 50K – € 100K
31 Contracts

56 %

Total
139
EMEA N
11 Contracts
EMEA C
7 Contracts

Total
139

22%

8%
5%

22%

10 %
APA
14 Contracts

Avg. Deal Size: € 81K

Status: December 31, 2006
© SAP AG 2006, Service Solution Management / Thomas Ziemen / 52

52

> € 100K
31 Contracts

Oracle Disruption Campaign / SP II – Program Timing

Wave 1 – Turn up the Heat (Q1D)
Aug 8th – Sep 2006

Wave 2 - Advertising
Sept 12th – Mid Oct 2006

Wave 3 – Targeted Marketing
Oct 2006 – 2007

Launch Date:
• Aug 8th

Launch Date:
• Sep 12th

Launch Date:
• Oct 2006

Tactics:
• Telemarketing
• AE call blitz
• Landing Page
• Email
• Limited time offers

Tactics:
• Advertising: Awareness
building
• SAP.com: Re-launch
• Online: Banners, landing
page

Tactics:
• Direct Marketing (DM, Email, &
Online)
• Enhanced Offers
• Events: Apollo-on-the-Road
• PR/AR

Messages:
• Focus on offer to close
• Lack of future support
options with Oracle

Messages:
• Focus on lack of future
support to Oracle customers
• You have a choice
• Save money, Buy time

Messages:
• Focus on value of SAP
• The ease of migration
• Match current pains to offers to
show value of SAP
Source: Apollo

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 53

53

Successful Marketing Campaign around Tomorrow Now
With a lead success rate of 3,3% compared to a typical rate of 1 to 1,5% the following
campaign was conducted in the US, EMEA NEWS and APA in the time from August to
October 2006:

Objective

Defer Oracle’s Q1 revenue and identify at risk business and attract
to SAP

Tactics

Aggressive Tele-marketing and Direct Mail campaign aimed at
the Oracle Customer Base with attractive license credit and
TomorrowNow maintenance offers

Results

Organizations
Called

Total
Leads

License
Offer

12.992

435

64

TOTALS

Comments

TNow
Offer
295

Both
Offers
76

1.

All numbers updated based on APA numbers update

2.

Total number of TNow leads on next slides (379) is higher (+8) since some customers already engaging
with TNow but not approached via the campaign heard about the offering and asked for the same
conditions before signing the contract

3.

Calling has been resumed in EMEA NEWS mid of October as the region didn’t get any leads due to the
holiday season. Results of call resumption should be available soon

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 54

54

Oracle Disrupt Q1 Campaign: Results (as of Nov 6th, 2006)
Key Findings

435 Prospects generated by Telemarketing
Singapore 3 (1%)

India 33 (8%)

Malaysia 10 (2%)
ANZ 55 (13%)

Most leads generated in the US

Canada 7 (2%)

Campaign not executed in EMEA
Central

UK 12 (3%)

No leads generated in Nordics,
France, Italy, and Spain (calling
resumed on Oct 16th in NEWS)

US 315 (71%)

435 Prospects distributed by offer

Most leads generated for Offer 1
(TomorrowNow)

Both offers: 76
(17%)
Offer 2: 64
(15%)
Offer 1: 295
(68%)

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 55

55

Oracle Q1D Campaign: TNow Leads (Status: Jan 8th 2007)
400

379

14

180

350
300
250

62

200
150

108

100
50

42

0

25
17
Total No. handed
over by SAP

Existing
leads

Deals rejected
by TNow

Open
leads

Sales
Leads & Opps

Signed
Contracts

Total number handed over by SAP: handed over by Telemarketing agencies to SAP (379)
Existing leads: a company the TNow AE had already been actively in contact with (14)
Deals rejected by TNow: no product fit, no interest, customer did not want a call, wants to stay with Oracle, inaccurate
lead information (180)
Open leads: lead not assigned to an AE; qualified by Telemarketing first (62)
Sales leads and opps: includes in process leads (83 leads which have been assigned to AEs) and converted leads
(25 leads that have turned into an opportunity; expected to be won)
Signed contracts: 17 new TNow customers signed via Q1D campaign, representing approx. € 3.6 million maintenance
volume taken away from Oracle. Based on information available, the converted leads could represent an
additional €1.3 million maintenance volume taken away from Oracle

© SAP AG 2006, Service Solution Management / Thomas Ziemen / 56

56

TNow
Planning 2007ff

57

TomorrowNow Outlook – FY2007
2007 TNow Opportunity Pipeline by Status

Q1/2007 TNow Opportunity Analysis
In Process TNow Q1/2007 Opportunities: 332

9

New Customer Opportunities: 289

228

Existing Customer Opportunities: 43

Booked

In Process Opportunities by Product Line: 121 PSFT, 78 JDE
OneWorld, 19 JDE World, 11 Siebel, 103 not assigned

Won

In Process Opportunities by Region: 253 Americas, 36 APA, 23
EMEA C, 20 EMEA N

In Process
Discontinued

Expected Sales Volume: € 22.8 million
maintenance for Oracle

Lost

816

Weighted Sales Volume: € 6.9 million
maintenance for Oracle

Annual Loss for Oracle & TNow Revenue 2007
Cumulative Annual
Loss for Oracle (in €M)

15

%

41.4

20

40

10
41.4

20
0

2006

2007E

5
0

22.3

9.0
2006E

500

400

%

+1
17

47.0

Client Contracts

New Customers
500

+1
45

80
60

25

€ 13.8 million lost

Number of New Customers & Client Contracts 2007

TNow Revenue (in €M)

90.0

100

€ 45.6 million lost

400

300

300

200
100
0

2007E

Status: December 31, 2006
© SAP AG 2005, Global Service & Support Info Session, G. Oswald / 58

58

97
%

74

+

139
2006

10

1%

+

24

450

200

280
2007E

100
0

228
2006

2007E

Financial Scorecard – TomorrowNow
When conducting a financial review for TomorrowNow the following two aspects have
to be considered:
TomorrowNow on a Stand-Alone basis, as well as
Safe Passage implications which reflect a reduction of the expenses due to charge
out to SAP entities

* Internal Plan excluding Baan and Oracle

© SAP AG 2006, TNow Acquisition Monitoring, 59

SAP STRICTLY CONFIDENTIAL

59

Service Delivery Readiness – TomorrowNow
TomorrowNow Forecast 12/2006

Global

Americas

EMEA

APA

Headcount (in FTE)

157

116

21

20

Number of Offices

10

6

2

2

TomorrowNow Support Services
30-minute initial response time and corrective action on a 24x7 scale, dedicated
support engineer for each account
Ongoing tax and legislative updates, advanced expert on demand services
(e.g. technology upgrades)
Supported Products:
PeopleSoft
Enterprise
PeopleSoft 7.x,
8.x (Commercial
& Public Sector)
HCM, NA
Payroll,
Financials,
Distribution,
Manufacturing

J.D. Edwards
World
J.D. Edwards
World A7.x, 8.x
HCM, NA
Payroll,
Financials,
Distribution,
Manufacturing

© SAP AG 2006, TNow Acquisition Monitoring, 60

J.D. Edwards
OneWorld

Siebel

J.D. Edwards
OneWorld XE
8.11
HCM, NA
Payroll,
Financials,
Distribution,
Manufacturing

Siebel 5.x, 6.x,
7.0x, 7.5x, and
7.7x
Call Center,
Sales, Service,
Marketing,
Partner
Management,
Reporting &
Analytics

SAP STRICTLY CONFIDENTIAL

60

Baan
Will start
January 1, 2007
(Baan IV, Baan
ERP)

Oracle
EBS
Currently under
Investigation
(EBS 10.7, 11,
11i)

Gartner on Oracle’s Application Roadmap
Oracle Application Roadmap

Source: SSM
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 61

61

Oracle Customer Base – Applications
Application Product Lines

Siebel
13%

# of Customers

E-Business Suite

Retek
1%

13,500

PeopleSoft Enterprise

5,500

JD Edwards EnterpriseOne

4,000

JDE World

3,000

Siebel

4,000

Retek

200

TOTAL

Oracle
Applications

JDE
23%

30,200

EBS
45%

PSFT
18%

Source: CMI Estimates 10/2006

10.7 or earlier
11.0
1%
5%
11i v10
6%

Key Gartner Findings:
By mid-2005, users in as much as 40% of Oracle's installed base
will start planning an upgrade to v.10 of 11i to access its new
functions, UI and integration capabilities (0.8 probability)

Oracle
EBS

With no support end date driving users, less than 10% of Oracle's
installed base will be live on v.10 of 11i by the end of 2005 (0.7
probability)
Oracle database v.8i will be de-supported in 2005, causing
application users of v.11i1 through v.11i6 to execute an upgrade
to avoid running on a de-supported database version
Source: Gartner Research 10/2005
© SAP AG 2006, Oracle Strategy Review / Nov 21, 2006 / T. Ziemen / 62

62

11i v9
60%

11i v1-6
3%
11i v7
7%

11i v8
18%

Prioritization by region and application

EMEA
Central

EMEA
News

LA

Canada

US

TN

PeopleSoft HR

M

H

M

H

H

H

PeopleSoft CRM

L

H

M

M

M

H

JDE 1W

M

H

H

M

M

H

JDE World

M

H

H

L

L

H

Siebel

H

M

L

L

M

H

Retek

L

L

L

L

L

L

Baan

H

L

L

L-M

L-M

M

Oracle EBS

L

H

H

H

H

M (will go
high in
2007)

Infor

H

H

L-M

L-M

L-M

L

H = High Priority
M = Medium Priority
L = Low Priority

1 Safe Passage Summit notes v1/ Samantha Hilton / 63

63

Global Organization and Governance Model
TNow Board of Directors

SAP Board Area GSS

Andrew Nelson / Greg Tomb / Mark White

Gerd Oswald / Bernd Welz

TNow President & CEO

SAP TNow Global Biz Owner

Andrew Nelson

Thomas Ziemen

Total No. of Offices: 10
Total No. of Employees: 95 by end of 2005 (+170%)
157 by end of 2006 (+ 65%)
209 by end of 2007 (+ 30%)

Maidenhead

Pleasonton

TNow Americas

Entities / Offices:
Amsterdam (NL)
Maidenhead (UK)

Amsterdam

Employees:
14 by end of 2005
21 by end of 2006

Denver
Atlanta

Bryan
Entities / Offices:
Bryan (USA)
Mexico City
Atlanta (USA)
Denver (USA)
Pleasonton (USA)
Mexico City (Mexico)
Sao Leopoldo (BRA) - planned for 2007

Employees:
72 by end of 2005
116 by end of 2006

TNow EMEA

(Sao Leopoldo)

Singapore

TNow APA

Entities / Offices:
Singapore
Sydney
Employees:
9 by end of 2005
20 by end of 2006

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 64

64

Sydney

TNow
KPIs/Bonusplan
2007

65

TomorrowNow – Bonus Funding Plan 2007
Bonus Funding Measures for Sales and Marketing
No

Performance Indicator

Weight

Evaluation of Target Achievement (%)

1 Strategic Planning (3-Year-Biz-Plan, Maintenance Strategy,
Globalization, Operationalization)

15% By Management Judgement

2 Safe Passage Deal Support and Cross Sell Opportunities

15% Based on Number of bundled Deals and Number of generated Safe
Passage leads, by Management Judgement

3 TNow closed Sales (stand-alone Contract Activity)

30% Total new + renewal Contract Activity = US$15M/quarter (US$60M/year) =
100% Achievement

4 TNow Cost Management (according to revenue numbers)

15% Stay in Budget = 100%, 10% over Budget = 0%, 5% under Budget = 150%

5 TNow Customer Satisfaction

25% Scale from 1 to 10: 7.5 = 100%, 6.5 = 0%, 8.0 = 150%

Bonus Funding Measures for Service and IT
No Performance Indicator

Weight

Evaluation of Target Achievement (%)

1 Service Quality

30% Based on positive Case Closure, No of Updates on Time

2 TNow Customer Satisfaction

25% Scale from 1 to 10: 7.5 = 100%, 6.5 = 0%, 8.0 = 150%

3 TNow closed Sales (stand-alone new + renewal Contract Activity)

30% Total new + renewal Contract Activity = US$15M/quarter (US$60M/year) =
100% Achievement

4 TNow Cost Management (according to revenue numbers)

15% Stay in Budget = 100%, 10% over Budget = 0%, 5% under Budget = 150%

Proposal discussed and agreed with Mark White and Thomas Ziemen
© SAP AG 2006, Title of Presentation / Speaker Name / 66

66

TomorrowNow – Bonus Funding Plan 2006 (Achievements)
Bonus Funding Measures for Marketing & Sales, IT & Services
KPI Funding Measures - Marketing & (non-commissioned) Sales
Strategic Planning (3-Year-Biz-Plan, Maintenance Strategy, Globalization, Operationalization)
SafePassage Deal Support
TNow closed Sales (stand-alone new + renewal Contract Activity)
TNow Cost Management (according to revenue numbers)
TNow Customer Satisfaction
2006 VIP Funding Level (%) - Marketing & (non-commissioned) Sales

Weighted
Achievement
15%
15%
52%
15%
63%
159,250%

Calculation Comments from Jan-2006 presented to Gerd Oswalt:
By Management Judgement
Based on Number of bundled Deals, by Management Judgement
Total new + renewal Contract Activity = US$5M/quarter (US$20M/year) = 100% Achievement
Stay in Budget = 100%, 10% over Budget = 0%, 5% under Budget = 150%
Scale from 1 to 10: 7.0 = 100%, 6.0 = 0%, 7.5 = 150%

KPI Funding Measures - IT & Services
Service Quality
TNow Customer Satisfaction
TNow closed Sales (stand-alone new + renewal Contract Activity)
TNow Cost Management (according to revenue numbers)
2006 VIP Funding Level (%) - IT & Services

Weighted
Achievement
30%
63%
52%
15%
159,250%

Calculation Comments from Jan-2006 presented to Gerd Oswalt:
Based on positive Case Closure, No of Updates on Time
Scale from 1 to 10: 7.0 = 100%, 6.0 = 0%, 7.5 = 150%
Total new + renewal Contract Activity = US$5M/quarter (US$20M/year) = 100% Achievement
Stay in Budget = 100%, 10% over Budget = 0%, 5% under Budget = 150%

NOTES:
1. 2006 contract activity calc is very conservative: (YTD closed contracts) + (December's contracts
risk weighted >= 95% likelihood to close) [Albert van Wissen, Global CFO, TomorrowNow]
2. Overachievement for both (a) Contract Activity, and (b) Customer Satisfaction, were calculated on a
straight line basis instead of using accelerators. I am comfortable with this for 2006 assuming the
overall funding % is approved, but will seek formally agreed accelerators for equivalent KPIs in 2007
[Andrew Nelson, CEO TomorrowNow]

Discussed and agreed with Mark White and Thomas Ziemen
© SAP AG 2006, Title of Presentation / Speaker Name / 67

67

GSS Oracle Strategy Review

THANK YOU !

© SAP AG 2006, Oracle Strategy Review / Sep15, 2006 / T. Ziemen / 68

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