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)

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Oracle Corporation et al v. SAP AG et al Doc. 657 Att. 51 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page1 of 14 EXHIBIT 52 Dockets.Justia.com Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page2 of 14 Ex 52 - Page 1 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page3 of 14 Supervisory Board Meeting TomorrowNow Status Update February, 2007 Thomas Ziemen, SAP AG Ex 52 - Page 2 SAP-OR00141570 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page4 of 14 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) SAP AG 2006, TNow Acquisition Monitoring, 1 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 3 SAP-OR00141571 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page5 of 14 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: SAP AG 2006, TNow Acquisition Monitoring, 2 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 4 SAP-OR00141572 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page6 of 14 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, 3 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 5 SAP-OR00141573 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page7 of 14 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 SAP AG 2006, TNow Acquisition Monitoring, 4 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 6 SAP-OR00141574 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page8 of 14 Appendix Ex 52 - Page 7 SAP-OR00141575 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page9 of 14 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 SAP AG 2006, TNow Acquisition Monitoring, 6 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 8 SAP-OR00141576 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page10 of 14 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 SAP AG 2006, TNow Acquisition Monitoring, 7 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 9 SAP-OR00141577 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page11 of 14 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" SAP AG 2006, TNow Acquisition Monitoring, 8 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 10 SAP-OR00141578 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page12 of 14 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 SAP AG 2006, TNow Acquisition Monitoring, 9 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 11 SAP-OR00141579 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page13 of 14 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 Ex 52 - Page 12 SAP-OR00141580 Case4:07-cv-01658-PJH Document657-52 Filed03/03/10 Page14 of 14 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 SAP AG 2006, TNow Acquisition Monitoring, 11 SAP STRICTLY CONFIDENTIAL Ex 52 - Page 13 SAP-OR00141581

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