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.
+49 (0) 6227 7-46465
f
+49 (0) 6227 78-27529
m
+49 (0) 171 30 85 240
alexander.sieferer@sap.com
Global Account Director TNS Technology
´
Tel.
+49 (0) 89 5600 - 1740
f
+49 (0) 89 5600 - 1437
m
+49 (0) 170 38 73 196
michael.ranke@tns-infratest.com
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
68
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