Delivering Value to Our Customers and Partners Dan Bulucea Platform Strategy Manager Microsoft Eastern Europe.

Delivering Value to OurCustomers and PartnersDelivering Value to Our

Customers and Partners

Dan BuluceaPlatform Strategy Manager

Microsoft Eastern Europe

AgendaAgenda

Market Overview

Microsoft’s Commitment to Customers

Integrated Innovation Advantage

Economic Impact of IT

Why Microsoft

Market Overview

Microsoft’s Commitment to Customers

Integrated Innovation Advantage

Economic Impact of IT

Why Microsoft

Market OverviewIT Industry TrendsMarket OverviewIT Industry Trends

Everyone agrees on one thing: the move to x86

Price/performance and flexibility driving change

Focus on securityIncreasing pressures to do more with lessBroad web services movement24x7 availability essential in a global economy

Everyone agrees on one thing: the move to x86

Price/performance and flexibility driving change

Focus on securityIncreasing pressures to do more with lessBroad web services movement24x7 availability essential in a global economy

Market OverviewMarket TrendsMarket OverviewMarket Trends

IBM want this to be all about their services“Devalue” the platform and monopolize service opportunities

Novell connecting the dots with strategic acquisitions

Attempting an end-to-end platform play on Linux

Oracle supporting Linux adoptionSun delivering strategy “du jour”

Customer demands, platform challenges, cost models

New companies developing roots in the market (e.g., RedHat, MySQL, other Open Source vendors)

IBM want this to be all about their services“Devalue” the platform and monopolize service opportunities

Novell connecting the dots with strategic acquisitions

Attempting an end-to-end platform play on Linux

Oracle supporting Linux adoptionSun delivering strategy “du jour”

Customer demands, platform challenges, cost models

New companies developing roots in the market (e.g., RedHat, MySQL, other Open Source vendors)

Customers Told Us…Customers Told Us…

Protect my dataProtect my data

Increase economic valueIncrease economic value

Reduce downtimeReduce downtime

Leverage existing assetsLeverage existing assets Interoperability

StrongerSecurity

Reliabilityand Availability

IntegratedInnovation

Customer RequirementCustomer Requirement Microsoft CommitmentMicrosoft Commitment

Connect with customers (Revenue)Connect with customers (Revenue)Integrate with partners (Profitability)Integrate with partners (Profitability)Empower employees (Productivity)Empower employees (Productivity)

Best Value

Microsoft CommitmentMicrosoft Commitment Third Party Validation

Go to Go to www.getthefacts.com for complete reportsfor complete reports

Interoperability

Best value

Reliabilityand Availability

IntegratedInnovation

Stronger Security

Proof Of Our Commitment To Customers

Source: Bearing Point, Server Operating System Licensing and Support Cost Comparison – May 2004** Full Support indicates 24x7 support on all servers. Limited Support indicates 24x7 support on only 10% of servers.

Best ValueDoes Linux cost less to acquire?Best ValueDoes Linux cost less to acquire?

Noncommissioned Studies:Noncommissioned Studies:

Best ValueDoes Linux have lower TCO?Best ValueDoes Linux have lower TCO?

An industry problem…An industry problem…

20022002 20032003

120120

3939

8787

4343

Source: OS Bulletins from Vendor Web SitesSource: OS Bulletins from Vendor Web Sites

00252550507575

100100125125

RedHatRedHatMicrosoftMicrosoft

OS Bulletins - 2003OS Bulletins - 2003

……a Microsoft prioritya Microsoft priority

00

1515

3030

4545

6060

32321414

3434

5757

RH8RH8 RH9RH9

180 Days Later180 Days Later

WS00WS00 WS03WS03

+68%

+68%

-56%-56%

1

2

92%92%

Companies Companies Detecting Security Detecting Security

BreachesBreaches

Source: 2003 Computer Security Institute Source: 2003 Computer Security Institute survey of 250 major US companiessurvey of 250 major US companies

SecuritySecurity

SDSD33+C+CSecure by:

DesignDefaultDeployment

Communications

Source: Forrester Research: http://www.forrester.com/Research/Document/Source: Forrester Research: http://www.forrester.com/Research/Document/Excerpt/0,7211,33941,00.htmlExcerpt/0,7211,33941,00.html

8686

128128162162

120120 111111

MicrosoftMicrosoft DebianDebianRed HatRed Hat MandrakeMandrakeSoftSoft

SUSESUSE

All Days of RiskAll Days of Risk

MicrosoftMicrosoft

RedHatRedHat

DebianDebian

MandrakeSoftMandrakeSoft

SUSESUSE

2525

5757

8282

7474

00 1001008080606040402020

5757

Source: “Is Windows More Secure than Linux?”, Forrester, March 2004Source: “Is Windows More Secure than Linux?”, Forrester, March 2004

SecurityIs Linux more secure?SecurityIs Linux more secure?

1. “Linux distributions say they can fix things within just hours, why can’t Microsoft do that?”

2. “Doesn’t Linux have fewer bugs and aren’t they less severe than Windows bugs?”

3. “Isn’t open source software better at fixing vulnerabilities than Microsoft?”

1. “Linux distributions say they can fix things within just hours, why can’t Microsoft do that?”

2. “Doesn’t Linux have fewer bugs and aren’t they less severe than Windows bugs?”

3. “Isn’t open source software better at fixing vulnerabilities than Microsoft?”

Forrester Response: Forrester Response: ““What matters”What matters”

““Microsoft’s averageMicrosoft’s averageof 25 days between of 25 days between disclosure & release of disclosure & release of a fix was the lowest of a fix was the lowest of all the platform all the platform maintainers we maintainers we evaluated.”evaluated.”

Forrester analysis Forrester analysis shows Microsoft shows Microsoft having the fewest having the fewest high-severity flaws of high-severity flaws of any vendor – and 25 any vendor – and 25 less than the next less than the next lowestlowestForrester analysis Forrester analysis shows Microsoft as the shows Microsoft as the only vendor to fix only vendor to fix 100% of the flaws 100% of the flaws discovereddiscovered

Forrester Forrester AnalysisAnalysis

Common Common Customer QuestionsCustomer Questions

SecurityIs Linux more secure?SecurityIs Linux more secure?

ReliabilityReliability

4:20:19

4:59:44

2

2.5

3

3.5

4

4.5

5

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Windows Linux

More reliableWindows prevented 4x more eventsWindows detected over 2x as many issues before the trouble ticket was receivedWindows system issues (created by test proctor) were resolved 20% faster and 8% more successfully

End User PainAverage Service Loss Time

HH:MM:SS

13:11:56

20:55:13

0

5

10

15

20

25

Ho

urs

Windows Linux

Easier to MaintainWindows required approx. 50% less time to complete directory-related tasks with Active Directory vs. OpenLDAPWindows tape drive and printer configurations were completed over 2x fasterImproving system fault tolerance/redundancy required >2x more time for Linux

Configuring the EnvironmentTotal Time for Completed Tasks*

HH:MM:SS

*21% more “proactive” tasks completed on Windows

VeriTest Proof of our System Reliability

InteroperabilityInteroperability

Enable Microsoft technology to work well with Windows and non-Windows applicationsDevelop solutions based on industry standards

Enable Microsoft technology to work well with Windows and non-Windows applicationsDevelop solutions based on industry standards

MS Interoperability ModelMS Interoperability Model

Microsoft’s ApproachMicrosoft’s Approach

Provide rich services that address key business scenariosEnable ISVs to develop solutions and solve niche needs

InteroperabilityInteroperability

InteropInterop

00 80802020 4040 6060

SupportSupport

SecuritSecurityy

Developer PrioritiesDeveloper Priorities

44%44%

65%65%48%48%Interoperability is Interoperability is

very importantvery important

WindowWindowss

00 80802020 4040 6060

LinuxLinuxUnixUnix

Interoperability PrioritizationInteroperability Prioritization

22%22%

79%79%43%43%

Windows Windows interoperability interoperability

is first priorityis first priority

% of IT Decision Makers% of IT Decision Makers00 80802020 4040 6060

LinuxLinux

IBMIBM

Best Support of Best Support of InteroperabilityInteroperability

55%55%

72%72%63%63%

MSMSMicrosoft is doing Microsoft is doing

the most to achieve the most to achieve interoperability interoperability

goalsgoalsSource: Jupiter research survey, 12/03Source: Jupiter research survey, 12/03

Microsoft PlatformMicrosoft Platform

SQL ServerSQL Server

Active DirectoryActive Directory KerberosKerberos

Distributed File Service STSDistributed File Service STS

.NET Framework.NET Framework

MSMQMSMQ Transaction ServiceTransaction Service

ASP.NETASP.NET

PKIPKIVPNVPN RASRAS Smart CardSmart Card

Windows KernelWindows Kernel

SM

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Windows Media ServicesWindows Media Services

Windows ServerWindows Server

WMIWMI Vis

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ConsistentConsistentInterfacesInterfaces

CommonCommonMgmt InfraMgmt Infra

SingleSingleSign-OnSign-On

Customer RequirementsCustomer Requirements

Integrated Data ManagementIntegrated Data Management

KernelKernelInte

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Platform FeaturesPlatform Features

Directory/Security ServicesDirectory/Security Services

Network Access ServicesNetwork Access Services

File/Print ServicesFile/Print Services

Web ServicesWeb Services

Media ServicesMedia Services

Application ServicesApplication Services

Programming FrameworksProgramming Frameworks

**Some services not available in Linux distributions are available at additional cost from vendors such as IBM**Some services not available in Linux distributions are available at additional cost from vendors such as IBM

Linux Platform Linux Platform

MySQLMySQL

Linux KernelLinux Kernel

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J2EE/PHPJ2EE/PHP

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JBOSSJBOSS

Real or Darwin Media Server*Real or Darwin Media Server*

ApacheApache

OpenLDAPOpenLDAP

SambaSamba

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Integrated Innovation

Customer Value – Local EvidenceCustomer Value – Local Evidence

Ahold – Retail (Czech Republic)Consolidation from Linux and Novell to Windows infrastructure

Romgaz – Utility (Romania)Evaluated Linux and OSS but chose Microsoft because of ease-of-use, support and features

Duna TV – Media Service Provider (Hungary)Switch to Microsoft Exchange Server 2003 from Linux cuts operating costs by half

Zotel – Telecommunications (Poland)Switch from Linux to Microsoft reduces IT costs by 30%

TZUM – Retail (Bulgaria)TZUM switched from Linux to Windows Server 2003 for better integration and easier management. Its new IT infrastructure runs 30% more efficiently

IDC EMEA Economic Impact Study, 2004IDC EMEA Economic Impact Study, 2004

AustriaDenmarkFranceGermanyIrelandItalyNetherlandsPortugalSpainUK

Czech RepublicEstoniaHungaryLithuaniaRussiaPolandIsraelSouth AfricaTurkey

• Update of preceding Economic Impact Model studies

• Analyzes the specific contributions of the software sector

• This research covered 19 countries (~82% of IT spending in EMEA):

Microsoft-Related Economic ImpactMicrosoft-Related Economic Impact

Source: IDC IT Economic Impact Study, 2004, 19 Countries

Hardware SoftwareServices & Channels

IT Professionals Total % Total

Czech Rep 1,686 599 12,651 34,221 49,157 40%Estonia 510 209 2,364 3,091 6,174 54%Hungary 1,247 446 8,910 25,913 36,516 41%Lithuania 854 287 6,402 3,714 11,257 54%Poland 3,801 838 21,974 70,016 96,630 50%Russia 7,937 656 38,512 131,286 178,391 55%Total EE Group 16,036 3,035 90,814 268,241 378,125 49%

Microsoft-Related Employees in 2004*

Microsoft-Related Taxes ($M)**

* Employees in companies that create, sell, distribute, or service hardware or software that runs on Microsoft operating systems and IT employees at user organization that developapplications, service, or maintain such hardware or software

** Includes value-added or sales taxes, corporate income taxes, and personal income and social taxes

Czech Rep $181Estonia $29Hungary $231Lithuania $26Poland $565Russia $279Total EE Group $1,312

Economic Impact Study in Slovakia, 2003Economic Impact Study in Slovakia, 2003

Run by Institute of Slovak and World Economy – part of Slovak Academy of Science

Impact of IT on economic growth

Position the Slovak IT sector in regional and global perspectives

Compare impact of IT sector with other branches

Microsoft contribution to Slovak IT sector

Analyzes the impact made by the commercial software model and Microsoft on the local economy

1 SK spent on purchasing of software from Microsoft would generate a nearly 7 SK effect on the Slovak economy

Software Industry Trends in Latvia, 2004Software Industry Trends in Latvia, 2004

Research conducted by Latvian Information Technology and Telecommunication Association (LITTA) Analyzes the business trends in software development, service and distribution industry

Usage of commercial and open source platforms in business and company resources invested in each of these platforms.

Assessment of economic impact of the software industry trends on the national economy

Findings:Commercial software model creates the highest value added for their company - 100% of all respondents

Commercial platform is considered with lower total development costs

BulgariaCroatiaMacedoniaRomaniaSerbia and MontenegroSlovenia

Economic Impact of the IT Sector in South East Europe

The research covers 6 countries:

IDC IT Economic Impact Study, 2005IDC IT Economic Impact Study, 2005

Total IT Employees in 2004

Microsoft-Related Employees in 2004* % Total

Microsoft-Related Taxes ($M)**

Bulgaria 27.462         14.285 52% $32,2

Croatia 20.044 9.365 47% $73,0

Macedonia 2.894 1.613 56% $6,6

Romania 29.251 18.995 65% $63,7

Slovenia 18.222 8.483 47% $109,2

Serbia & Montenegro 24.173 11.844 49% $27

Total Group 122.046 64.585 53% $311

Microsoft Related EmploymentMicrosoft Related Employment

Source: IDC IT Economic Impact Study, 2005, 6 South East European Countries

RevenuesRevenues

In SEE the IT sector generates over $600 million in tax receipts

Includes value-added or sales taxes, corporate income taxes, and personal income and social taxes

Over $300 million of this is attributed to companies and employees working with Microsoft products1 : 8.5

For every dollar of Microsoft revenue in the region, another eight and a half were generated by other companies selling hardware or software that works on Microsoft operating systems, or servicing that software

Source: IDC IT Economic Impact Study, 2005, 6 South East European Countries

Government

Policy

Industry

Interoperability

Security & Quality

Ongoing Relationship

Indemnification

Support

Productivity partnerBreakthroughsIntegrationManageability

ApplicationsCompatibilityHardwarePartners

© 2004 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.