Oracle Corporation et al v. SAP AG et al

Filing 923

Declaration of Chad Russell in Support of 790 Plaintiffs' Opposition to Defendants' Motions in Limine, Filed Pursuant to Dkt. No. 915 filed by Oracle International Corporation, Oracle USA Inc., Siebel Systems, Inc.. (Attachments: # 1 Exhibit D, # 2 Exhibit N, # 3 Exhibit P, # 4 Exhibit Q, # 5 Exhibit R, # 6 Exhibit T)(Alinder, Zachary) (Filed on 10/4/2010) Modified on 10/5/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 923 Att. 6

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BINGHAM McCUTCHEN LLP DONN P. PICKETT (SBN 72257) GEOFFREY M. HOWARD (SBN 157468) HOLLY A. HOUSE (SBN 136045) ZACHARY J. ALINDER (SBN 209009) BREE HANN (SBN 215695) Three Embarcadero Center San Francisco, CA 94111-4067 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] [e-mail] [e-mail] BOIES, SCHILLER & FLEXNER LLP DAVID BOIES (Admitted Pro Hac Vice) 333 Main Street Armonk, NY 10504 Telephone: [phone] Facsimile: [phone] [e-mail] STEVEN C. HOLTZMAN (SBN 144177) FRED NORTON (SBN 224725) 1999 Harrison St., Suite 900 Oakland, CA 94612 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] DORIAN DALEY (SBN 129049) JENNIFER GLOSS (SBN 154227) 500 Oracle Parkway, M/S 5op7 Redwood City, CA 94070 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Attorneys for Plaintiffs Oracle USA, Inc., et al. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE USA, INC., et al., CASE NO. 07-CV-01658 PJH (EDL) EXHIBIT T TO THE DECLARATION OF Plaintiffs, CHAD RUSSELL IN SUPPORT OF v. PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIONS IN LIMINE SAP AG, et al., Date: September 30, 2010 Time: 2:30 pm Defendants. Place: Courtroom 3, 3rd Floor Judge: Hon. Phyllis J. Hamilton FILED PURSUANT TO DKT. NO. 915
Case No. 07-CV-01658 PJH (EDL)

Dockets.Justia.com

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Case No. 07-CV-01658 PJH (EDL)

EXHIBIT T

Oracle Projected PeopleSoft/J.D. Edwards New License Revenue Losses Projected 3,000 Lost Support Customers / 2,000 Switch to SAP Lost New License Revenue (CrossSell)

SCHEDULE 12.2.SU

2005 Lost New License and Support Revenue (CrossSell) Lost New License Revenue (CrossSell)

2006

2007

2008

2009

2010

2011

2012

2013

2014

BOP Customers Lost to SAP Customers Lost to SAP [1] Annual Attrition Rate[2] Annual Attrition EOP Customers Lost to SAP % PeopleSoft Customers New to Oracle [3] New Oracle Customers Lost to SAP % New Customer License Opportunity Lost New License Customer Purchases New License ASP per Customer
[7] [4]

0 250 3.5% 0 250 42.5% 106 30% 32 $300,000 $9,600,000 50% $4,800,000

250 375 3.5% (9) 616 42.5% 262 30% 79 $300,000 $23,700,000 50% $11,850,000

616 750 3.5% (22) 1,344 42.5% 571 30% 171 $300,000 $51,300,000 50% $25,650,000

1,344 625 3.5% (47) 1,922 42.5% 817 30% 245 $300,000 $73,500,000 50% $36,750,000

1,922 0 3.5% (67) 1,855 42.5% 788 30% 237 $300,000 $71,100,000 50% $35,550,000

1,855 0 3.5% (65) 1,790 42.5% 761 30% 228 $300,000 $68,400,000 50% $34,200,000

1,790 0 3.5% (63) 1,727 42.5% 734 30% 220 $300,000 $66,000,000 50% $33,000,000

1,727 0 3.5% (60) 1,667 42.5% 708 30% 213 $300,000 $63,900,000 50% $31,950,000

1,667 0 3.5% (58) 1,609 42.5% 684 30% 205 $300,000 $61,500,000 50% $30,750,000

1,609 0 3.5% (56) 1,553 42.5% 660 30% 198 $300,000 $59,400,000 50% $29,700,000

Lost New License Revenue (CrossSell) Margin
[5]

Lost New License Revenue (CrossSell) Lost New Support Revenue BOP Support Customers Lost to SAP Support Customers Lost to SAP[1] Annual Attrition Rate[2] Annual Attrition EOP Lost New License Customer Purchases Average New License Customers New License ASP per Customer Support % of License[7] Average Annual Support Fee Lost Support on New License Revenue Margin
[8] [4]

0 32 3.5% 0 32 16 $300,000 22% $66,000 $1,056,000 80% $844,800

32 79 3.5% (1) 110 71 $300,000 22% $66,000 $4,686,000 80% $3,748,800

110 171 3.5% (4) 277 194 $300,000 22% $66,000 $12,804,000 80% $10,243,200

277 245 3.5% (10) 512 395 $300,000 22% $66,000 $26,070,000 80% $20,856,000

512 237 3.5% (18) 731 622 $300,000 22% $66,000 $41,052,000 80% $32,841,600

731 228 3.5% (26) 933 832 $300,000 22% $66,000 $54,912,000 80% $43,929,600

933 220 3.5% (33) 1,120 1,027 $300,000 22% $66,000 $67,782,000 80% $54,225,600

1,120 213 3.5% (39) 1,294 1,207 $300,000 22% $66,000 $79,662,000 80% $63,729,600

1,294 205 3.5% (45) 1,454 1,374 $300,000 22% $66,000 $90,684,000 80% $72,547,200

1,454 198 3.5% (51) 1,601 1,528 $300,000 22% $66,000 $100,848,000 80% $80,678,400

Lost Support on New License Revenue

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Oracle Projected PeopleSoft/J.D. Edwards New License Revenue Losses Projected 3,000 Lost Support Customers / 2,000 Switch to SAP Lost New License Revenue (CrossSell)

SCHEDULE 12.2.SU

2005 TOTAL LOST REVENUE NEW LICENSES

2006

2007

2008

2009

2010

2011

2012

2013

2014

Total Lost New License Revenue (CrossSell) Lost Support on New License Revenue Total Lost New License Revenue $ 9,600,000 1,056,000 $ 10,656,000 $ 23,700,000 4,686,000 $ 28,386,000 $ 51,300,000 12,804,000 $ 64,104,000 $ 73,500,000 26,070,000 $ 99,570,000 $ 71,100,000 41,052,000 $ 112,152,000 $ 68,400,000 54,912,000 $ 123,312,000 $ 66,000,000 67,782,000 $ 133,782,000 $ 63,900,000 79,662,000 $ 143,562,000 $ 61,500,000 90,684,000 $ 152,184,000 $ 59,400,000 100,848,000 $ 160,248,000 $ 548,400,000 479,556,000 $ ,027,956,000 1

TOTAL LOSSES NEW LICENSES Total Lost New License Revenue (CrossSell) Lost Support on New License Revenue Total Losses on New License Revenue Discount Factor (10%)
[9]

$ 4,800,000 844,800 $ 5,644,800 0.9535

$ 11,850,000 3,748,800 $ 15,598,800 0.8668

$ 25,650,000 10,243,200 $ 35,893,200 0.7880

$ 36,750,000 20,856,000 $ 57,606,000 0.7164

$ 35,550,000 32,841,600 $ 68,391,600 0.6512

$ 34,200,000 43,929,600 $ 78,129,600 0.5920

$ 33,000,000 54,225,600 $ 87,225,600 0.5382

$ 31,950,000 63,729,600 $ 95,679,600 0.4893

$ 30,750,000 72,547,200 $ 103,297,200 0.4448

$ 29,700,000 80,678,400 $ 110,378,400 0.4044

$ 274,200,000 383,644,800 $ 657,844,800

(Midyear Convention) PV of Total Losses on New License Revenue Losses as of January 2005 $ 5,382,317 $ 363,589,935 $ 13,521,040 $ 28,283,842 $ 41,268,938 $ 44,536,610 $ 46,252,723 $ 46,944,818 $ 46,816,028 $ 45,946,595 $ 44,637,025 $ 363,589,935

[1] [2] [3] [4] [5] [6] [7] [8]

Notes: Schedule 12.3.SU S&P FAS 141 Valuation report of PeopleSoft as of December 28, 2004 (ORCL 00313160253 at 189, 229) S&P FAS 141 Valuation report indicates that 57.5% of PeopleSoft customers overlapped with Oracles customer base at the time of the acquisition (ORCL 00313160253, at 233). NCI estimate. PeopleSoft, Inc. 2004 Forecast/2005 Planning Model (ORCL00312843868 at 849). NCI Estimate. Oracle Form 10K data for 2004 through 2008 shows a gross margin on New Software Licenses ranging from 43% to 51% ( Schedule 1.1). The partial year adjustment for FY 2005 reflects January May 2005 [5 ÷ 12 = 0.42]. Where applicable, the adjustment for FY 2009 reflects June through October 2008 (date of the shutdown of SAP TomorrowNow) [5 ÷ 12 = 0.42]. 2005 through 2008 data from Oracle Project Spice Operating Model for PSFT [ORCL00313255 Sheets Oracle 2004.12.12 (v1.08 New Sources and Users).xlk]. 2009 and forward data I have assumed to remain the same as the 2008 value. NCI estimate. Oracle Corporation Estimation of the Fair Market Value of Certain Assets and Liabilities of PeopleSoft, Inc., December 28, 2004, ORCL00313160253 at 230.

[9] S&P FAS 141 Valuation used a discount rate of 10% for Existing Technology and Maintenance Agreements and Related Customer Relationships, which represent similar cash flows (Oracle Corporation Estimation of the Fair Market Value of Certain Assets and Liabilities of PeopleSoft, Inc., December 28, 2004, ORCL00313160253 at 177).

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