Oracle Corporation et al v. SAP AG et al

Filing 657

Declaration of Zachary J. Alinder in Support of 649 MOTION for Partial Summary Judgment filed byOracle International Corporation, Oracle USA Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54 - 1, # 55 Exhibit 54 - 2, # 56 Exhibit 55, # 57 Exhibit 56, # 58 Exhibit 57, # 59 Exhibit 58, # 60 Exhibit 59, # 61 Exhibit 60, # 62 Exhibit 61, # 63 Exhibit 62, # 64 Exhibit 63, # 65 Exhibit 64, # 66 Exhibit 65, # 67 Exhibit 66, # 68 Exhibit 67, # 69 Exhibit 68, # 70 Exhibit 69, # 71 Exhibit 70, # 72 Exhibit 71, # 73 Exhibit 72, # 74 Exhibit 73, # 75 Exhibit 74, # 76 Exhibit 75, # 77 Exhibit 76, # 78 Exhibit 77, # 79 Exhibit 78, # 80 Exhibit 79, # 81 Exhibit 80, # 82 Exhibit 81, # 83 Exhibit 82, # 84 Exhibit 83, # 85 Exhibit 84, # 86 Exhibit 85, # 87 Exhibit 86, # 88 Exhibit 87, # 89 Exhibit 88, # 90 Exhibit 89, # 91 Exhibit 90, # 92 Exhibit 91, # 93 Exhibit 92, # 94 Exhibit 93, # 95 Exhibit 94, # 96 Exhibit 95, # 97 Exhibit 96, # 98 Exhibit 97, # 99 Exhibit 98, # 100 Exhibit 99, # 101 Exhibit 100, # 102 Exhibit 101, # 103 Exhibit 102, # 104 Exhibit 103, # 105 Exhibit 104, # 106 Exhibit 105, # 107 Exhibit 106, # 108 Exhibit 107, # 109 Exhibit 108, # 110 Exhibit 109, # 111 Exhibit 110, # 112 Exhibit 111, # 113 Exhibit 112, # 114 Exhibit 113, # 115 Exhibit 114, # 116 Exhibit 115, # 117 Exhibit 116, # 118 Exhibit 117)(Related document(s) 649 ) (Howard, Geoffrey) (Filed on 3/3/2010)

Oracle Corporation et al v. SAP AG et al

Doc. 657 Att. 51

Case4:07-cv-01658-PJH Document657-52

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EXHIBIT 52
Dockets.Justia.com

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Supervisory Board Meeting TomorrowNow Status Update
February, 2007

Thomas Ziemen, SAP AG

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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)

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

Customer View

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

Conclusion

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)

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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 The following table illustrates financial figures for TomorrowNow:

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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

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KPI Framework ­ TomorrowNow (Status December 31, 2006)
TomorrowNow Opportunities (in CoD)
24 9 2 28 B ooked Won 74 816 In Process D i sconti nued Lost

Cumulated Number of New Customers & Client Contracts in 2006
2005: 75 new customer contracts 121 total customer contracts

228 91 97 142 139

27 40 Q1/06

54

Q2/06

Q3/06

Q4/06

New Customer Contracts

Total Customer Contracts

2006 Contract Volume (in M)
32,7 21,4 6,4 3,1 Q1/06 12,2 5,5 8,6 Q3/06 13,6

Cumulated* Maintenance Volume Taken Away From Oracle in 2006 (in M)
23,0 28,0 32,3 40,0 41,4

15,0 18,0

19,0

Q2/06

Q4/06

Q1/06

Q2/06

Q3/06

Multi-Year Contracts included

Multi-Year Contracts excluded

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

10.8M maintenance volume lost for Oracle in 2005

Q4/06 Plan

Actual

Cost vs. Revenue in 2006 (Cumulative in M)
20,9 9,9 1,9 3,8 Q2/06 14,6 6,1 9,0

Customer Retention
90% Renewal Rate TR*IM Index 107 Overall Satisfaction 8.5

4,8

Q1/06

Q3/06

Q4/06
Cost Revenue
Customer Retention Customer Satisfaction

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Appendix

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Investments (1) ­ TomorrowNow

Americas (in % of Total)
100% 80% 60% 40% 20% 0% 25% 20% 15% 10% 5% 0%

EMEA (in % of Total)
15% 10% 5%
2005 2006 FC 2007 B

APA (in % of Total)

2005

2006 FC Average Headcount in FTE Local Expenses Contract Volume

2007 B

0%

Average Headcount in FTE Local Expenses Contract Volume

2005

2006 FC

2007 B

Average Headcount in FTE Local Expenses Contract Volume

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Investments (2) ­ TomorrowNow

2,0 1,5 1,0 0,5 0,0
2005

Annual Contract Volume / Local Expense (in m )

2006 FC Americas EMEA APA

2007 B Total

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From Loss for Oracle to Revenues for TomorrowNow

Major KPI for TomorrowNow is the Annual Loss in Contract Volume for Oracle The following factors have to be considered to get from this KPI to the recognized Revenues in the P&L of TomorrowNow: 1. A part of this contract volume will not be renewed 2. A part of the contract volume is due to Safe Passage deals between SAP entities and customers without Revenue impact for TomorrowNow 3. There is a time gap between close of the contract and the recognition of the Revenues 4. Impact due to special rebates / Zero-Dollar-Deal in the context of the "Oracle Disruption Plan"
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TomorrowNow ­ Customer Analysis by December 31, 2006
Booked Contracts by Type
Newly Signed Deals 139 Contracts

Booked Contracts by Product Line
PeopleSoft 129 Contracts JDE World 34 Contracts

61%

56 %

Total 228
39%
Renewal Rate: 90% TR*IM Index: 107 Customer Satisfaction: 8.5 Renewed Deals 89 Contracts Siebel 6 Contracts

Total 228

15 %

2%

26%
JDE OneWorld 59 Contracts

Booked Contracts by Region
Americas 192 Contracts < 50K 130 Contracts

Booked Contracts by Deal Size
50K ­ 100K 47 Contracts

84%

57%

Total 228
EMEA N 12 Contracts EMEA C 9 Contracts

Total 228
22%
APA 15 Contracts Avg. Deal Size: 75K

2 1%

5%
4% 7%

> 100K 51 Contracts

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Customer Satisfaction Survey 2006*
Overall Customer Satisfaction & Retention 2006
107 90

Overall Customer Satisfaction 2006 with Account Mgmt. and Service & Support
7 .6 8 .7 7 .7 8,.8 88 7774 ,.

8 .5

TNow SAP

TNow SAP

Customer Retention

Customer Satisfaction

Customer Satisfaction with Account Mgmt.

Customerr Satisfaction with me Satisfaction with Maintenance & Support Services ance & Support Services

(percentage of TNow customers)

Favorable Reference for TomorrowNow

Likelihood of Maintenance Contract Renewal with TNow
(percentage of TNow customers)

2% 3 % Yes No On certain product lines

3%

High Likelihood (5 - 10) Low Likelihood (1 - 4)

95%
© SAP AG 2007, TomorrowNow ­ Customer Satisfaction Survey 2007 / T. Ziemen 10

97%

* Base CSS 2006: TomorrowNow: n=63 // SAP: n=5,992

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TomorrowNow Outlook ­ FY2007
2007 TNow Opportunity Pipeline by Status
24 9 228 Booked Won 74 816 In Process Dis continued Los t

Q1/2007 TNow Opportunity Analysis
In Process TNow Q1/2007 Opportunities: 332 New Customer Opportunities: 289 Existing Customer Opportunities: 43 In Process Opportunities by Product Line: 121 PSFT, 78 JDE OneWorld, 19 JDE World, 11 Siebel, 103 not assigned In Process Opportunities by Region: 253 Americas, 36 APA, 23 EMEA C, 20 EMEA N Expected Sales Volume: 22.8 million maintenance for Oracle Weighted Sales Volume: 6.9 million maintenance for Oracle 45.6 million lost 13.8 million lost

Number of Client Contracts & Contract Volume 2007 Client Contracts
500
%

Annual Loss for Oracle & TNow Revenue 2007 Cumulative Annual Loss for Oracle (in M)
100
%

Contract Volume (in $M)
50 40 30
+1 9%

TNow Revenue (in M)
25
% +1 48

410
80

90.0
17

400 300 200 100 0 139 New 2006

80

20 47.0 15 10 41.4 5 0

15 8

228

300 New 2007E

20 10 0

42

50

%

60 40 20

41.4

+1

+

22.3

+

9.0
2006E 2007E

2006

2007E

0

2006

2007E

Status: December 31, 2006

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