Enterprise AgreementValue Assessment

I.T. Driving Strategic Differentiationand Delivering Business Value

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“Companies that manage their IT investments most successfully generate returns as much as 40% higher than those of their competitors.”

Ross, Weill, “Six IT Decisions”Jeanne W. Ross, Peter Weill “Six IT Decisions Your IT People Shouldn’t Make”Harvard Business Review

“Companies with effective IT governance have profits that are 20% higher than other companies pursuing similar strategies.”

Ross, Weill, “IT Governance”Jeanne W. Ross, Peter Weill “IT Governance on One Page”MIT Center for Information Systems Researchhttp://web.mit.edu/cisr/working%20papers/cisrwp349.pdf

I.T. Makes a Difference

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“By 2012, IT’s contribution will be cited in the top three success factors by at least half of top performing businesses.

IT barriers will be cited in the top three failure factors by least half of the lowest performers."

Mahoney & Berg, Gartner

Calculate Impact on business revenue / expense from I.T. enabled business initiatives

I.T. Enabled Business Outcomes*

a. Retaining customers and enhancing existing relationships

b. Maintaining competitive advantagec. Attracting new businessd. Attracting and retaining skilled workers/talente. Reducing costs via better efficiencies

* Gartner—Early findings from the 2010 Gartner CEO and Business Executive Survey

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1

Business Value of I.T. Executive Summary

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(Customer Name) Profit & Loss Business Value

Yr1 Yr2 Yr3Revenue

Revenue Growth & Retention

Revenue via Competitive Differentiation

New Business Revenue

Revenue Growth resulting from Staff Retention

Expense

Cost Reduction via Competitive Differentiation

Cost Reduction via Business Efficiency

Cost Reduction from Staff Retention

Estimated Value Years 1 – 3 (provide a Low – High estimate for each year)

a b

b

c d e

d e

1

EA Value Financial Perspective

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Attribute Description Est. Valuea. Software License Cost

• 15% lower price for new licenses (L&SA)• 5% lower price on renewals • Additional 15% reduction for Full Platform Agreements

(L&SA)

(Calculate per customer)

b. Cost of Capital • Average savings = cost of capital for 6 months (i.e. interest on the customers money) * average true-up for the customer

(Calculate per customer)

c. No Price Increase for Term of Agreement

• Average savings = estimated uplift % in prices during 3 year period * total true-up purchases

(Calculate per customer)

d. Component vs. Packaged Pricing

• Example of Office Pro in a Platform EA for $187 vs. Office Standard in Select. EA Pricing for Pro is actually cheaper.

(Calculate per customer)

e. EAP Pricing • Standard (15%) and/or Premium (40%) discounts applied to license for a specific list of products when the customer makes an enterprise commitment

(Calculate per customer)

f. ECI Pricing • Enrollment for Core Infrastructure (ECI) packaging provides an additional 20% discount when purchasing Windows Server and Systems Center together

(Calculate per customer)

Calculate Cost Savings for customer based on EA packaging & pricing

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EA Value Technology Access / Usage

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Attribute Description Est. Valuea. Workforce Profiling Develop 2 – 3 employee profiles and related software

requirements. Model costs of CALs for these different groups over term of EA. (Pricing impact: component EAs are priced 15% higher than full platform for L&SA and 5% higher for SA only. Modeling of benefits required.)

(Calculate per customer)

b. Multi-Vendor Maintenance & Education

Time and budget invested to maintain and manage multiple I.T. Infrastructure or Productivity products.

Calculate cost of multi-vendor IT environment

Calculate Cost Savings based on custom user profiles & integrated vendor environment

3

EA Value Business Management

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Attribute Description Est. ValueBudget Retention EA commitment requires regular payment and maintenance of

software vs. sporadic purchase process / timeline. Result is typically a more consistent / dependable I.T. budget for the customer

Soft

Software License Management

EA requires less administration based on annual true-up Soft

Technology Access EA includes licensing options for the following software, not available in Select: • Windows Intune • Office 365 • Virtual Desktop • MDOP • BitLocker • Roaming Use Rights • Windows To Go • Companion Rights for Windows RT

Soft

Technology Access EA includes immediate access to new product releases during the term of your EA agreement.

Soft

Summarize soft benefits to ensure customer understanding & value

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Business Value of your Enterprise AgreementExecutive Summary

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(Customer Name) Profit & Loss EA Business Value

Yr1 Yr2 Yr3

Revenue

…

Expense

Software License Cost Savings … …

Reduced Cost of Capital … …

No Price Increase during EA Term … …

EA Packaging Savings … …

ECI Savings … …

EAP Savings … …

Workforce Profile Savings … …

Vendor Displacement Cost Savings … …

Estimated Value Years 1 – 3 (provide an estimated low – high value of the EA for each year)

42 3

2a

2b

2c

2d

2e

2f

3a

3b

Business Value Executive Summary

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(Customer Name) Profit & Loss Business Value

Yr1 Yr2 Yr3Revenue

Revenue Growth & Retention

Expense

Cost Reduction

Software & Support Savings

Estimated Value Years 1 – 3 (provide a Low – High estimate for each year)

1a

1b

1b

1c

1d

1e

1d

1e

Strategic Business Value & Differentiationvia Effective Microsoft Investment

2a

2b

2c

2d

2e

2f3a

3b

EA Value Additional Resources

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SMSG Readiness: “Selling the Absolute Value of an EA”; Link

Gartner: “Choosing Between Microsoft’s Select and Enterprise Agreements”, Link

Gartner: “Profiling Users Can Reduce Costs in Your Microsoft Enterprise Agreement” Link

Gartner: “Microsoft Makes Windows SA More Compelling for Some, Less for Others”, Link

Appendix

Robust IT infrastructure is a key driver of productivity

and growth.

Information technology gives managers more insight

and control.

Firms with better IT have more productive

employees.

Linking IT to Business Performance

Isolating the impact of all IT functions on productivity shows that IT infrastructure is a key determinant of superior productivity.

Information technology fuels profitable revenue

growth.

Companies in the top 25% of IT capability grew revenue 6.8% faster per year than their peers in the bottom 25% of IT capability.

Managers in firms that are supported by better information systems have significantly better insight into, and control over, key dimensions of their business.

The firms in the top 25% of IT capability enjoy 23% higher revenue per employee than their peers in the bottom 25% of IT capability.

Harvard Business School, Keystone Strategy, Inc., March 2006

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IO Capability IO Subcapability B S R D

Core IO

Identity and Access Management

Identity and Access Management

Desktop, Device, and Server Management

Desktop Management

Virtualization

Server Management

Mobile Device Management

Security and Networking Security and Networking

Data Protection and Recovery Data Protection and Recovery

Core Infrastructure

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IO Capability IO Subcapability B S R D

BP IO

Unified Communications

MessagingInstant Messaging and PresenceVoiceConferencing

CollaborationCollaborative Workspaces & PortalsSocial Computing

Enterprise Content Management

Document & Records ManagementWeb Content ManagementForms

Enterprise Search Enterprise Search

Business IntelligencePerformance ManagementReporting and AnalysisData Warehousing

BPIO (People Productivity)

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IO Capability IO Subcapability B S R D

AppPlat

User Experience Client and Web DevelopmentSOA and Business Process

Process, Workflow, and Integration

Data Management Data Infrastructure—Custom LOB/ISV LOB

Development Dev Platform, App Life Cycle Mgmt and Custom Apps

Application Platform

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