LATAM Support+Health(FY08_BusinessPlan_Final)

LATAM Support & Health

FY08 Business Plan

Contents

Service Line 7 Definition, Organization and Offerings

Service Line 7 Market

Opportunity Assessment

Offerings x Opportunities mapping

Partner Strategy

Financials

Skills Assessment and Readiness Plan

Investments / Area Initiatives

General Implementation schedule

Subsidiary Call to Action

FY07 S&H Commitments/Strategy

Grow •Grow Services Revenue and Contribution Margin by driving operational excellence

Drive•Drive CPE increasing CHI•Penetration in CAS leveraging new Offerings•S&H Strategy in LATAM

Innovate •Develop the capabilities to bring new products to the customers

Win •New customers to increase CAS penetration and Services Revenue

Contents





Partner Strategy

Financials





LATAM Premier Organization

• RHQ Roles– S&H Svc Line Lead– Svcs Operations

• Reporting

– Svcs Controller– Sales Excellence

• Sales initiatives

• 5 Subsidiaries on the Field– 3 Multi-country Subs– 2 Subs with a planned

RPM dedicated to SL7

“Premier” Support &

HealthCom

mer

cial

Te

chni

cal

Supp

ort (

GTS

C)CritSit

CSS

PFE

SMSGR

S&H Delivery Headcount & Contacts

Mexico

Brazil

São

South Cone

Caribbean & Central America

Andean

SALES MANAGERS (VICTOR)SEM’S TAM’S

KAREL OLIVEIRA (SUPPORT PRACTICE MANAGER)SUPPORT ENGAGEMENT MANAGERS

TAM’S

EDWIN RODRIGUES (S&H PRGR MANAGER) JORGE BEDOYA (OPERATIONS MGR)

FEW TAM’S & SE’S

MANUEL RUIVAL (OPS MANAGER & S&H PROGR. MANAGER)

EM’SSE’S

TAM’S

PFEBudget = 30Actual = 39

9.38%

43.31%9.86%15.43%

22.02%

Regional PFE Labor

Andean

Brazil

C&CA

Mexico

South Cone

22 ACTUAL24 BUDGET

15 ACTUAL17 BUDGET

11 ACTUAL12 BUDGET

18 ACTUAL20 BUDGET

16 ACTUAL18 BUDGET

TAMBudget = 94Actual = 84

Relevant FY08 Cross-group Tactics

PFE• Facilitate the adoption of a

PFE capacity planning process across LATAM

• Facilitate communication and integration of the PFE management team with Services Field

• Develop a closer relationship with PFE Regional Management with periodic planning and review sessions

GTSC• Facilitate better

communication with field to optimize escalation and staffing processes

• Work closer wuth GTSC to review field concerns and issues and address sub specific needs

CritSit• Team up closely with

CritSit team to review recent cases, analyze trends and participate in the review sessions

• Drive field participation on CritSit review meetings

WW Support & Health Team• Better communication• Early awareness of new

Offerings by LATAM participating on development and early adoption

• Leverage good practices, programs and Offerings from other geographies

A new Taxonomy for SL7 Offerings

Family (Brand)

PremierEssenti

alMSPA

OfferingPremier Global

Premier StandardPremier

PlusPremier

Foundation

Essential 0

Essential 1

MSPA Standard

MSPA Plus

Add-onsCustom Support

Dedicated Support EngineeringSolution Support

US National SupportUS Third Tier Support

Features/ComponentsAvailable for Offering or Add-onAssessment Programs (RAPS)Workshops & Workshop PlusSLM/DCMDynamics specialised services

Exclusive to Add-on onlySecurity patches for legacy productsDSE

• Corp team launches Offerings and Add-on Services

• Version control Offerings, Add-on Services and Components through Premier Catalog

• IP from:oPFEo ISGoWorkshop PlusoField

• Documented in Premier catalog

9

MCP extends Premier into the Solution Market

Premier Premier “Ultimate” MCP Foundation Lite MCP Premium

Problem Resolution Services

Preventative Services (RAPS,

SLM/DCM, Workshops,

BSA)

Enhanced Critical

Situation

Application Support

Preventative Services

(RAPS, SLM/DCM, Workshops

, BSA)

Enhanced Critical

Situation

Application Support

Lifecycle Architecture Engagement and Solution

Guidance

Service Level Agreement


QFE Critical Situation


SLM/DCM, Workshops,

BSA)


Enhanced Critical

Situation


SLM/DCM, Workshops,

BSA)



SLM/DCM, Workshops,

BSA)

Enhanced Critical

Situation

Application Support

Lifecycle Architecture Engagement and Solution

Guidance


QFE Critical Situation

Premier Support ® is targeted at those customers with multiple Microsoft product implementations seeking the highest quality support

MCP is targeted at customers about to embark on very arge and complex business solution implementations such as mainframe migrations, new systems development,

Custom Agreements

Other Proactive Services

Solution Management

S&H 18 Month Release Roadmap

Contents





Partner Strategy

Financials





FY07 LATAM Support & Health Overview

Highlights• 38% YoY revenue growth in FY07• 11% above Budget

(1% above Forecast)

Challenges• Global Premier• Optimize Organization Model• Delivery quality• Better integration with PFE, GTSC,

CritSit• Leverage SKUs on sales• PFE

Opportunities• New Offerings• Best practices sharing• MSPA• Co-delivery with Partners• SAB

Lowlights• Offerings Delivery • Field Operations and Execution• Global agreements (process, timing)• Field education on Support Offerings

LATAM FY07 Support & Health in Numbers

Index FY07 FY06

Revenue $27,611,208 $20,493,590

RM $7MM $385K

CAS Penetration * 22.4% 22.2%

Major Penetration * 68.2% 77%

Proactive Ratio 1.42 1.50

Billable Utilization 49.844% 51.677%

Total Utilization 52.247% 53.341%

Fin. Burn Rate 60.366% 147.582%

NSAT 177 185

* For reference only, In FY07 we have different segmentation

Market SummaryBeyond BRIC in Latin America

The year 2007 will mark the fourth consecutive year of IT Spending growth in Latin America

IT Infrastructure in Latin America is on its way to Dynamic IT

Latin America comes out of the shadows in the off shore services market

Services Oriented Architecture (SOA) goes from idea to reality in 2007

Mobility is moving the consumer segment up market

Managed Services in Latin America: Clash of three worlds in the new world

©2007 IDC

• IT spending is expected to grow 12.8% in 2007 in Latin America.

• The year 2007 will mark the fourth consecutive year of IT Spending growth in Latin America

• There are several initiatives from both the government and private sector to offer PCs at a lower price so more people can have access to technology.

• In this last year PC installed base grew significantly due to a decrease on prices and higher purchase capacity.

• The number of cell phones and the growing amount of applications existent on these devices is also an example of this trend. Some cell phone companies recently announced their best quarter ever in Latin America

• On the enterprise side, every vertical sector is doing well right now and several of them are investing more than ever in IT.

Competition in LATAM

27%

2%

50%

21%

Hardware

Software

Services

Other Revenues

28%

72%

Hardware

Software

Services

7%

85%

8%

Hardware

Software

Services

9%

33%

56%

2%

Hardware

Software

Services

Other Revenues

Source: LATAM Market Intelligence

SL7 Revenue Growth Plan

• Growth Plano FY05/FY04 34%o FY06/FY05 18.1%o FY07/FY06 40.76% o FY08/FY07 19%

Revenue Growth

12,949,618

17,352,391

20,493,590

28,945.684

34,000,000

Chart Title

FY04 FY05 FY06

FY07 (Forecast) FY08 (Plan)

• FY07 CMo US$7MMo 28%

• CAS Penetrationo FY06 22.2%o FY07 22.4%o FY08 26.5% o FY09 30.6%o FY10 34.6%

SL7 CM Growth Plan

CM Growth

(4,865,000)

385,000

6,469,000

7,856,000

Enterprise Support CM Growth (US$)

FY05 FY06

FY07 (Forcast) FY08 (Plan)

CM Growth

-28.04%

1.88%

23.43% 23.90%

Enterprise Support CM Growth (%)

FY05 FY06 FY07 (YTD) FY08 (Plan)

S&L Growth Potential

FY07 (actual)

FY08 (forecast)

Andean 70,345,886 214,491,446

Brazil 179,673,857 86,443,812

CCA 83,392,551 93,176,288

Mexico 154,236,889 198,635,280

South Cone 72,924,945 75,418,022

LATAM 560,574,128 668,164,848

Server & Tools

FY07 (actual) FY08 (plan)

28,945,684 34,000,000

Actual % of S&T 5% 5%

As of 20% S&T(IDC recommends)

112,114,826 133,632,848

16% YoY

Services19% YoY

• S&H is growing faster than EPG S&T• S&H revenue is lower than the recommended IDC and

market recommended % of S&T investments• FY08 proposed S&H revenue growth is shy if compared

with current potential− SAB trend and influence− Brazil One Services and new MCS to Premier

conversion rules− Pipeline strength

• Improved focus from EPG (CAS Penetration, EA Attach) and SMS&P (CPE initiative)

FY08 FY09 FY10

41% 22% 24% 28%

$35,313,734 $43,789,031 $56,049,959

Revenue stretch growth proposal

Contents





Partner Strategy

Financials





Opportunities & Challenges

LOW HANGING FRUIT ISSUES TO ADDRESS

• Premier Refresh• PFE database

– Commitment level

• Proactive sell of SKUs– Customer push back– SDP

• CritSit initiative*(CPE)

• Communication – Exceptions x Compliance

• Pricing (Tool)• TAM delivery• Services + CSS SLA

Software Assurance Dynamics feature Joint Scorecards *

Split schedules Reinforcement of Business Rules

Old and new

Customers without contract Letter of Intent during renewal Letter of Understanding for BIF’ed deals Incident Hours (Project Rescue)

Opportunities Challenges

Opportunities Segmentation

CAS•1027 CAS Customers in LATAM•We reached 226 CAS customers with Premier Offerings in FY07•We plan 40 new CAS customers in FY08 (25% in CAS penetration)

Major•88 Major customers in LATAM•We reached 60 Major customers with Premier Offerings in FY07

•The 68% of Major penetration gives us little space to grow in the segment bidding our focus to increasing the CAS Penetration

68.2%

28.9%

Contents





Partner Strategy

Financials





Support & Health Offerings OverviewFY07 average

FY07 Picture• Essential

– 108 Active Essential Contracts – 62 New– Total Revenue = $1.065MM

• Premier– 499 Active Premier Contracts

• 43 Premier Foundation• 405 Premier Standard• 51 Premier Plus

– 188 New– Total Revenue = $35.381MM– 319 in CAS

• Partner Advantage– 46 Active MS Partner Advantage Contracts (8 New)– Total Revenue = $1.707MM

• Premier Global– 28 Active Contracts (1.227MM)

• Other– Small number of requests for Legacy Support on

recent acquisitions– Small number of opportunities for Extended or

Custom Support (pricing still a showstopper)– Mission Critical and 3rd Tier Support Programs

extensively discussed in Brazil and Mexico

FY08 Opportunities

FY08 Challenges• Support for recent acquisitions

• Legacy Contract• Integration with Premier

• New Support Offerings– Early awareness– Preparation

• Dynamics integration into Premier– Assess the market

• Premier Industry or Vertical Flavor

• CAS penetration• MSPA for Hosters• Mobility

– Manufactures/OEM– Operators– Enterprise Customers

• MSPA– Partner with SMS&P– MSPA Regional

# of Offerings by type

Essential

Premier

Global Premier

MSPA

Offerings by Revenue

Essential

Premier

Global Premier

MSPA

Offerings Roadmap to Plan

Premier Foundation Standard Plus Essential

Global Premier

MSPA (+MESI)

Andean 119 19 98 1 46 10 12Brazil 149 14 95 40 42 19 17CCA 238 8 90 6 26 13 9Mexico 133 19 98 16 5 7 8South Cone 150 13 129 2 5 6 19TOTALS 789 73 510 65 124 55 65

Offerings distribution in FY07 eoy

Premier Essential

Global Premier

MSPA MCP DynamicsSol.

SupportUS

NationalPremier Ultimate

Total Offerings

Andean 63.3% 24.5% 5.3% 6.4% 5 2 90Brazil 65.4% 18.4% 8.3% 7.5% 2 1 4 112CCA 78.8% 15.9% 4.5% 0.8% 1 65Mexico 86.4% 3.2% 4.5% 5.2% 1 1 1 1 73South Cone 83.8% 2.8% 3.4% 10.6% 2 86

Offerings, add-ons & features to support FY08 plan

As percentage of S&H Brand Offerings As absolute number of Offerings + Feature sold

S&H Offerings Backlog Pipeline Weighted Pipeline FY Forecast FY Budget Premier Revenue $16,566,103 $20,517,734 $8,421,138 $35,525,418 $33,901,262

Current forecast, pipeline & backlog supporting the plan

Contents





Partner Strategy

Financials





SL7 Partner Strategy

• Official S&H strategy for Partners today focus on providing Support thru the Gold Partner Program and the MSPA Offering

• There is no strategy to use Partners to delivery our offerings

• In LATAM we will move a few steps forward by:– Working with SMS&P to create a program to re-sell

Essential and Premier Foundation offerings thru partners– Working with SMS&P to broad MSPA offering to reach

their partners– Leverage Andean SA hrs co-delivery model– Design an Area model to include Partner Offerings and/or

resources in the Premier Offerings

Contents





Partner Strategy

Financials





SL7 Revenue Growth Plan

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Enterprise Support Revenue Growth

FY04

FY05

FY06

FY07

FY08

• Growth Plano FY05/FY04 34%o FY06/FY05 18.1%o FY07/FY06 34.7% o FY08/FY07 19%

• Actualo FY06 Revenue = $20.493MMo FY07 Revenue = $28.846MMo FY07/FY06 40.76% YoYo 16.1% over budget in FY07

• Actual Revenue Growtho FY04 = $12,949,618o FY05 = $17,352,391o FY06 = $20,493,208o FY07 = $28,945.684o FY08 = $32,871,000 Plan

Strategic Planning – P&L (Services View)

Andean Brazil CCA RHQ Mexico South Cone Total Latam

FY08 FY08 FY08 FY08 FY08 FY08 FY08Revenue

Support

External

CSA Revenue - - - - - - -

SA Revenue 272 111 164 - 450

61 1,058

Premier Revenue 5,377 10,655 3,966 - 6,590 4,972

31,561 Total External 5,649 10,766 4,130 - 7,040 5,033

32,619 Internal

30 38

- - 67

117

252

Total Support Adjusted Revenue 5,679 10,803 4,130 - 7,108 5,150 32,871

Delivery Expenses

Support ExpensesCSA Expenses - - - - - - -

SA Expenses (included in the Premier Expenses)

- - - - - - -

TAM Expenses -

Delivery CPH Expenses 2,013 2,357 1,312 - 3,044 1,425

10,151

Shared Resources 274 310 - - - -

584

Other Support Expenses 694

51 200 - 362

649 1,956

Total TAM Expenses 2,981 2,718 1,512 - 3,407 2,073

12,690 Engineering Expenses

PFEs Expenses 738 3,706 604 - 566 1,440 7,053

GTSC Expenses 996 1,785 563 - 900 1,026 5,271

Total Engineering Expenses 1,734 5,491 1,167 - 1,466 2,466

12,324 Total Support Expenses 4,715 8,209 2,679 - 4,872 4,539

25,014 Delivery Margin

Support 964 2,595 1,451 - 2,235 611

7,857

Support % 17.0% 24.0% 35.1% 0.0% 31.4% 11.9% 23.9%OPEX

Sales & Marketing Expenses 1,105 3,753 297 - 1,273 145

6,573

General & Administration Expenses 1,306 1,613 824 1,219 1,146 491

6,598

Total Opex 2,411 5,366 1,121 1,219 2,420 636

13,172

Contribution Margin 1,646 598 946 (2,748) 2,858 782

4,083

CM% 8.9% 2.3% 8.4% 0.0% 12.7% 6.1% 4.5%

CONSTANT US$ (THOUSANDS)

Strategic Planning - Metrics

Andean Brazil CCA RHQ Mexico South Cone LATAM

FY08 FY08 FY08 FY08 FY08 FY08 FY08

Billed Revenue 6,293 11,449 4,731 - 8,010 5,362 35,846

Average CPH 113 162 132 - 96 95 114

TAM Utilization 45.8% 52.0% 50.0% 62.0% 60.0% 54.5% 70.0%

Engineering Expenses (w/ PSfD, PFE OH)

1,734 5,491 1,167 - 1,466 2,466 12,324

PFE CPM 1.83 2.08 1.98 - 1.90 1.80 2.08

GTSC CPM 1.90 1.90 1.90 - 1.90 1.90 1.90

Average Headcount 18 15 10 - 32 15 89

EOP Headocunt 19 13 11 - 34 12 90

CONSTANT US$ (THOUSANDS)

LATAM SAB ResultsFrom good to great in FY08

FY07 as of Jan07 FY07 as of Feb07 FY07 as of Mar07 FY07 as of Apr07

Andean 150600.0006 197904.1671 197904.1671 201154.167

Brazil 33999.9998 61333.3333 93866.6665 93866.6665

CCA 101009.9986 119926.6651 133369.998599999

135789.9987

Mexico 209250 232600 375250 414062.5

South Cone

82497.4995 90997.4995 105397.4995 109897.4995

LATAM 577357.4985 702761.664999999

905788.3317 954770.8317

$100,000

$300,000

$500,000

$700,000

$900,000

$1,100,000

Premier SAB Recognition Growth

US

$

• SAB included with priority and high potential on account planning

• Team up with Licensing and Operations to release and update SAB Premier addressable revenue

• Monthly progress follow up and actions

• $2.3MM already converted to be recognized during FY08 (>100% growth YoY)

• Over $3MM from SAB on our P&L in FY08

• FY08 Challenges: SAB in new opportunities Business rules Better report

Contents





Partner Strategy

Financials





Readiness

Delivery• TAM

excellence• CPE• Quality of

Services

Offerings• New

Releases• Operations

refresh• Sales

capacity

Strategy• Symmetry

alignment• S&H +

Sales Excellence

• Advanced TAMming workshop: focusing on relationship management to improve TAMs soft skills

• TAM delivery: focusing on COS and PSDM to improve TAM delivery capabilities in the field

Contents





Partner Strategy

Financials





Partnership with Operations and SBPG• Contract Activation Process

and Opportunity review helped to eliminate activation of non-compliance Offerings with a mandatory review and proper recommendation for all exceptions

• Better understanding of Global Premier process issues and needs

Account Planning Process• Enterprise Support

Offerings addressable revenue tool for all accounts in LATAM (per country, per ATU) based on S&T spending

• Participation on account planning with Field Svcs Sales to support opportunities with Premier strategies

Closer relationship with Services Sales • Detailed opportunity analysis• Proactive exception analysis• Premier Offerings Sales

practices optimization• Best Practice Sharing (“Try

before you Buy”, synchronization with EPG Licensing cycles, synchronization with Customers’ Budget cycles, working with Partners)

Software Assurance Benefits• SAB Addressable

revenue tool (ongoing improvements)

• Fastest growing region in Premier activation

Leveraging FY07 Best Practices

Strategy driven by Scorecard Worldwide Services FY08 Scorecard WW Latam

Win Customers

1 # Offerings Sold: IT Architecture and Planning (Major Only) 22 52 # Offerings Sold: Core IO 10 23 # Offerings Sold: Business Productivity IO 2 24 # Offerings Sold: Application Platform IO 2 15 # Offerings Sold: Business Applications 5 16 # Offerings Sold: Industry 3 17 # Offerings Sold: Support & Health (Premier) 517 430

Drive Satisfaction (Top Box)

8 Customer Satisfaction - Support (Premier) 73% 79%9 Customer Satisfaction - Consulting 59% 72%

10 Customer Satisfaction - CSS Non-Premier 68% 76%11 Partner Satisfaction - Services Survey +3 Pts +3 Pts12 Customer Environment Health Index + 1 Pts + 1 Pts13 CSS Days to Solution <7 days 70% 63%

Grow the Business

14 Enterprise Services Revenue ($M) $2,892 $94

15 # Net New Customers Premier - CAS 36 4016 # ITAP Advisor Offerings Sold (ESC) - Major 10 217 Consulting Utilization 57% 56%18 Enterprise Services Contribution Margin $ ($M) $577.3 $3.4

19 Enterprise Services Contribution Margin % 20.0% 3.6%

Innovate

20 # Managed IP components published for Field Consumption 1 1 People

21 Management Health Index 100% 100%22 Organizational Health Pulse (WHI) 80% 80%23 Organization Blueprint Adoption 100% 100%24 # FTE of Key Roles Certified 0% 0%

People

• TAM Role refinement in LATAM

• TAM Career Model and WHI• Services Readiness on

Premier Execution

Execution

• Quality of Services• Excellence on Fundamentals• Eagle eye on Burn Rate and

RM

Support Operations

• Solidify CAP and SBPG• Premier “proactive renew”• Facilitate Operations smooth

flow with the field

Offerings Sales

• Document Regional Trends and Specifics

• Take Offerings compliance to the next level

• EPG sales alignment

Contents





Partner Strategy

Financials





LATAM Offerings Release Roadmap

US National Support

Pilot

Dynamics SKUs

Contents





Partner Strategy

Financials





Exceptions: from many to few

• From good to great– Contribution Margin– CPE– S&H Offerings Business Rules

• Currently under the exception management– Requests for exception must include details and business

justification– Public Sector cases– Opportunity RM study

Exceptions in % of Activations

50%

?

FY08 Risks to Execution

• Services Reorganization– How to effectively prepare and be prepared?

• Field Svcs Sales Readiness– Sell the right offerings– Deliver with Quality

• PFE – Capacity Planning / Heads– Delivery of Proactive Services– Timely response of reactive incidents

RoB and further

• S&H RoB– Monthly MBU with Kathleen Hogan & Luca Barone

• Information and Resources– LATAM Support & Health Portal– http://team/sites/latam_offerings/default.aspx

LATAM Support+Health(FY08_BusinessPlan_Final)

Documents

offerings service line

services field

premier catalog ip

pfe management team

contents service line

pfe regional management

field concerns

review sessions gtsc