HP ProLiant SmartBuy Program April 4th 2005 HP ProLiant Servers Industry Standard Servers © 2004 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice Agenda • Benefits of ProLiant Smart Buy • New Smart Buy servers (NEW!) • Competitive comparison • Smart Buy Q&A & Smart Buy terms and conditions (NEW!) Benefits of Smart Buy Benefits of HP Smart Buys Save up to $1,342 Simple to sell Instant savings! Priced for any budget $649-$5,699 Up-front discounting Why Smart Buys? Richer Partner Benefits SPIFs Available Technology for any needs Broader Availability on Servers Leading Edge Tech Features ProLiant SmartBuy Benefits continued • Everyday Low Price – No Further Discounting allowed SKUs are priced to be competitive to Dell Promo Prices on Dell SMB Store Speed ability to provide best price to customer (eliminate Big Deal process delays) • Partner SPIFs to motivate selling richer configurations Improves sales productivity – BTO Availability for Quick Deliver Currently working on Build to Stock Process to position inventory of SKUs prior to launch Look for available Smart Buy advertisements to run your own customized campaign through campaign central • • Availability Demand Generation – Demand Gen Focused on Smart Buy SKUs. Broad Base Advertising from HP on Smart Buy Configurations • Up to $40 Program Benefits - Smart Buy vs. previous state A la Carte Region Bundles Smart Buy - - Simplified pre-configured product offerings - Everyday low price - Continued availability - - Demand generation aligned to offerings - - Variable channel compensation (6-12%) - - Partner-branded marketing campaign - - Demand shaping SPIFs - - No mail rebates & back-end claims - - Attribute Maximum flexibility (Americas) New Smart Buy servers Which ProLiant’s are available as Smart Buys during this period? • ProLiant ML110 G2 & ML150 G2 Ideal as first server for a Small Business. Easy to set up and deploy • ProLiant ML330 & ML310 G2 For growing businesses running sophisticated Small Business Applications • ProLiant ML350 G4 Small/Medium Business & Workgroup Server with essential availability features • ProLiant ML370 G4 Suitable for any business requiring Industry leading performance, management & availability Note: ML110 G1 Discontinues April 2005. ML330 Discontinues July 31st 2005. ProLiant Smart Buys launching April 4th 2005 • ProLiant ML110 G1 • ProLiant ML330 G1 ProLiant ML110 G2 • ProLiant ML350 G4 • ProLiant ML370 G4 New Server Model Transitions to Transitions to • • ProLiant ML310 G2 • ProLiant ML150 G2 Disco Dates Extended Smart Buy Program – ML 110 G1 – ML110 G2 Transition Part # Description Part # Description 470062-573 ML110 C2.6 MHz 256 MB1X80 470063-217 S-BUY HP ML110G2 C2.8 1X80G Svr 470062-544 ML110 3.0GHz P4 512MB, 2x80GB 470063-207 S-BUY HP ML110G2 P3.0 NHP80 Svr 470062-545 ML110 3.0GHz P4, 1GB 1x72GB 470062-574 ML110 3.0GHz P4, 512MB, 1x36GB DAT40 470062-548 ML110 3.0GHz P4, 1GB, SCSI 1x72GB, SBS 470062-549 ML110 3.0GHz P4, 1GB, SCSI 1x72GB, Windows 470062-546 ML110 3.0GHz P4, 1GB, SCSI 2x72GB, RAID 470063-209 S-BUY HP ML110G2 P3.0 NHP72 Svr No DAT Replacement SKU 470063-211 S-BUY HP ML110G2 P3.2 SBS Svr 470063-210 S-BUY HP ML110G2 P3.2 2003 Svr No SCSI RAID Replacement SKU Note: No SCSI RAID Model on ML110 G2. SATA RAID Model created instead 470063-208. More demand for SATA RAID in this space. Microsoft Windows Server 2003 is drop in the box & Microsoft SBS is Pre-Installed Smart Buy Program – ML 110 G2 Complete SKU List Part # SB Internet Description List Price NEW ILP Save % 470063-217 $649 S-BUY HP ML110G2 C2.8 1X80G Svr $791 $142 18% 470063-206 $1199 S-BUY HP ML110G2 C2.8 2x80G Svr $1448 $249 17% 470063-207 $1299 S-BUY HP ML110G2 P3.0 NHP80 Svr $1527 $228 15% 470063-208 $1499 S-BUY HP ML110G2 P3.0 HP Svr $1766 $267 15% 470063-209 $1649 S-BUY HP ML110G2 P3.0 NHP72 Svr $1898 $249 13% 470063-210 $2299 S-BUY HP ML110G2 P3.2 2003 Svr $2558 $259 10% 470063-211 $2249 S-BUY HP ML110G2 P3.2 SBS Svr $2530 $281 11% Detailed Spec. Information can be found on the Partner Portal. Smart Buy Program – ML 150 G2 Server Part # NEW SB Internet Description List Price ILP Save % 470063-106 $1199 S-BUY HP ML150T2 X3.0 80G Server $1489 $290 19% 470063-107 $1599 S-BUY HP ML150T2 X3.0 160G Server $1923 $324 17% 470063-218 $1969 S-BUY HP ML150T2 X3.2 HPSATA Server $2412 $443 18% 470063-110 $1849 S-BUY HP ML150T2 X3.0 NHP72G Server $2189 $340 18% 470063-108 $2399 S-BUY HP ML150T2 X3.0 HP72G Server $2820 $421 15% 470063-111 $2139 S-BUY HP ML150T2 X3.2 SCSI Server $2649 $510 19% 470063-109 $2399 S-BUY HP ML150T2 X3.0 W2003 Server $2834 $435 15% 470063-112 $2549 S-BUY HP ML150T2 X3.0 72G SBS Server $2965 $416 14% Detailed Spec. Information can be found on the Partner Portal. Smart Buy Program – ML 330 Servers Part # SB Internet Description List Price Disco July 31st ILP Save % 470062-576 $1159 ML330 2.8GHz Xeon 512 MB1X80GB $1311 $152 470062-550 $1599 ML330 2.8GHz Xeon 1GB, 2x80GB $1823 $224 470062-551 $1699 ML330 2.8GHz Xeon, 512MB 2x72GB $2109 $410 470062-575 $2369 ML330 3.0GHz Xeon, 512MB, 1x72GB DAT40 $2611 $242 9% 470062-552 $2799 ML330 3.0GHz Xeon, 1GB, 2x72GB, SA641 $3163 $364 12% 470062-553 $2999 ML330 2.8GHz Xeon,1GB, 1x72GB, SBS, DAT 40 $3480 $481 14% 470062-554 $3459 ML330 2.8GHz Xeon, 1GB, 1x72GB, Windows, DAT 40 $3876 $417 11% 12% 12% 19% Smart Buy Program – ML 330 G1 – ML310 G2 Transition Part # Description Part # Description 470062-576 ML330 2.8GHz Xeon 512 MB1X80GB 470063-178 470062-550 ML330 2.8GHz Xeon 1GB, 2x80GB 470063-179 S-BUY HP ML310T2 X3.0 NHP Svr 470062-551 ML330 2.8GHz Xeon, 512MB 2x72GB 470063-187 S-BUY HP ML310T2 P3.2 72NHP Svr 470062-575 ML330 3.0GHz Xeon, 512MB, 1x72GB DAT40 470062-552 ML330 3.0GHz Xeon, 1GB, 2x72GB, SA641 S-BUY HP ML310T2 C2.8 NHP Server No DAT Replacement SKU 470063-189 S-BUY HP ML310T2 P3.2 SCSI Svr 470062-553 ML330 2.8GHz Xeon,1GB, 1x72GB, SBS, DAT 40 470063-191 S-BUY HP ML310T2 3.2 SBS Svr 470062-554 ML330 2.8GHz Xeon, 1GB, 1x72GB, Windows, 470063-190 S-BUY HP ML310T2 P3.2 DAT 40 Note: OS Models no longer bundled with DAT Drives Microsoft Windows Server 2003 is drop in the box Microsoft Small Business Server 2003 is Pre-Installed W2003 Svr Smart Buy Program – ML 310 G2 Complete SKU List Part # SB Internet Description List Price NEW ILP Save % 470063-178 $849 S-BUY HP ML310T2 C2.8 NHP Server $1030 $181 18% 470063-179 $1369 S-BUY HP ML310T2 P3.0 NHP Svr US $1884 $515 27% 470063-187 $1729 S-BUY HP ML310T2 P3.2 72NHP Svr US $2162 $433 470063-189 $1699 S-BUY HP ML310T2 P3.2 SCSI Svr US $2346 $647 28% 470063-190 $2729 S-BUY HP ML310T2 P3.2 W2003 Svr US $3387 $658 19% 470063-191 $2299 S-BUY HP ML310T2 P3.2 SBS Svr US $2662 $363 14% Detailed Spec. Information can be found on the Partner Portal. 20% Smart Buy Program – ML350 & ML370 SKU LifeCycle Extended Part # SB Internet Description List Price ILP Save % 378710-001 $2399 S-BUY HP ML350T4 X3.2-1M 1G $2622 $223 8% 378711-001 $3999 S-BUY HP ML350T4 X3.2-1M 2G 2X36 SA641 $4493 $494 11% 379301-001 $4999 S-BUY HP ML350T4 X3.2-1M SBS-03 SERVER $5547 $548 10% 379302-001 $5399 S-BUY HP ML350T X3.2-1M W2003 SERVER $5943 $544 9% 378712-001 $4499 S-BUY HP ML370T4 X3.2-1M 2G 2X36 SA641 $5592 $1093 20% 378713-001 $4759 S-BUY HP ML370R4 X3.2-1M 2G 2X36 SA641 $5922 $1163 20% 378304-001 $5699 S-BUY HP ML370T4 3.2-1M 2G W2003 SERVER $7041 $1342 19% Detailed Spec. Information can be found on the Partner Portal. Competitive comparisons What is a ProLiant and how does Smart Buy fit in the competitive equation? The next big thing – What is a ProLiant? Price + Reliability + Security + Simplicity and manageability + Adaptability + Innovation + Connection HP Strategy High tech, low cost, best customer experience Focused innovation that drives real value Affordable technology that offers the best return on investment Customer Best customer experience A superior customer experience with HP and HP technology ProLiant Server Technology Leadership Focus on customer needs • • • • Increase Datacenter flexibility, responsiveness and visibility Remove barriers to IT deployment, operations and management Improve infrastructure leverage with convergence and simplification Optimize return for scarce IT budget dollars Driving useful innovation • • • • • Extend dense server expertise into blade server leadership Balance overall system performance with local I/O & memory advances Pioneer emerging fabric technologies Improve architectural resilience Innovative software options increase feature flexibility, lower entry costs ProLiant by the numbers • Over 8 Million sold • 1 every 20 seconds produced • #1 market share • Best Customer Satisfaction • The 750,000 Remote Lights Out boards in use today have saved IT organizations about 112 million miles of travel – enough to travel around the earth 5,000 times • ProLiant BL20p: best SAP SD Standard Application Benchmark and best SPECweb99_SSL HP ProLiant – the volume leader x86 Worldwide Server Units IBM 17% White Box 12% Others 13% Dell 25% 8 HPQ 33% 6 9* 7 5 Source: IDC Quarterly Server Tracker 4Q03 4 3 22 Months 7 Year s 2 Million 1Million 89 96 Cumulative ProLiant servers shipped 98 99 00 01 02 03 04 *Projected 05 06 HP #1 in x86 server market Worldwide server factory revenue market share: x86 server market 40% HPQ 30% DELL 20% IBM 10% WhiteBox Source: IDC Quarterly Server Tracker 4Q03 0% 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 HP the undisputed IA-32 leader • Ahead of IBM on execution/vision • Ahead of Dell on vision 3Q03 4Q03 Source: Gartner Research (September 2003) Entry Level Servers, Magic Quadrant, 2H03 The future of the HP ProLiant advantage is addressing the infrastructure, not just the server Looking ahead with Innovations that . . . Address the complete infrastructure: Value across technology, people and processes, across the system, across the lifecycle Plan for the long-term; both known and unknown: Ensuring customers can continue to innovate and differentiate their business through IT Ensure consistency & integration: Integration across silos, interchangeable parts, single consoles, same tools, proven engineering, etc. . . While continuing to Execute on . . . Broad but simple Choice • Xeon + Opteron • Smart Buy bundles Everyday Value Trusted Experience • Efficient management for lower cost of ownership • ProLiant 100 series • Delivering reliability customers expect • Ensuring investment protection Feature Comparison – 1/2P ML Servers Shared Features NIC: Single Gigabit ML110 G2 ML310 G2 ML150 G2 Processor Memory Chipset HDD 1P DP, 800 FSB, 1M L2 cache PC3200 DDR Optional Interleaving Intel® E7221 Chipset 4 NHP SCSI, 4 NHP SATA or 4 HP SATA 1P DP, 800 FSB, 1M L2 cache PC3200 DDR Optional Interleaving Intel® E7221 Chipset 2P Xeon 800 FSB PC2700 DDR 333 (4 sockets) Intel Lindenhurst 4 NHP/ HP SCSI, 6 HDD Bays 4 NHP SATA or 4 HP SATA\SAS NHP/ HP SCSI and HP SATA and NHP IDE I/O 3 64b/66MHz PCI-X 1 32b/33MHz 5V PCI 1 PCI-Express Power NHP Power NHP Power NHP Power Lights-Out 100 Remote Mgt Card Full ProLiant Management Suite Lights-Out 100 Remote Mgt Card 1-1-1 Warranty 1-1-1 Warranty Manageability Warranty 2 64b/100MHz PCI-X 1 32b/33MHz 5V PCI 1 PCI-Express 1 PCI-Express Min. 3 64b/66MHz PCI-X 1 32b/33MHz 5V PCI 1-1-1 Warranty Feature Comparison – 2P ML Servers Best ML370 Good ML330 Better ML350 Maximum Performance & Availability Designed for environments that require maximum uptime Essential Availability Lowest Price & Smallest Size • Designed for non-mission critical applications • Quiet during operation • Smallest footprint among 2P ProLiant ML servers • 1 year warranty • Designed for minimum downtime • Hot plug, redundant power supply • Extra fan (optional) • Hot plug SCSI drives (most models) • Price:performance leader • 3 year warranty • Fully redundant (3+3), hot plug fans • Hot plug, redundant power supply • Tool-less chassis • Online spare memory Incorporates traditionally enterprise class features • iLO for remote management • 3 year warranty Availability, Performance, Functionality & Price ProLiant Smart Buy 100 & 300 Series servers 2P ideal for: ML370 Save up to $1,342 with Smart Buy Windows Server 2003 Availability • Leading 2P performance & reliability ML350 Save up to $548 with Smart Buy Windows SBS & Windows Server 2003 Availability • 2P performance with essential availability • File/print • Web servers • Small databases, workgroup applications and Mail & Messaging ML330 Save up to $481 with Smart Buy Windows SBS & Windows Server 2003 Availability • Reliable 2P server for sophisticated small businesses and replicated sites Save up to $658 with Smart Buy Windows SBS & Windows Server 2003 Availability ML110* + ML150 +ML310 • Entry level small business server 1P ideal for: • File & print/fax • Shared web access • Front-end utilities New * Formerly tx21xx series 1P & 2P IA-32 market segmentation $3000 value conscious med/large corporate workgroups enterprise class 1/2P DL/ML300 series BL10e, BL20p price $2000 • 500+ clients • remote locations • infrastructure, db & e-commerce • performance, expansion, manageability availability & stability value conscious sophisticated small-business •1-99 clients •value reliability, ease of use, headroom • dedicated IT resource (savvy) $1000 cost-conscious HPTC solutions •16-128 nodes •performance, industry standards Small business •1-50 clients (usually <10 peer-to-peer) • file & print, web access (modem) Simple, affordable 1/2P ML/DL 100 series performance/features There is opportunity to gain share in the entry-level 1/2P IA-32 market Enterprise-class 1/2P Tower 19%* Simple, affordable entry-level 1/2P Rack 14%** Rack 33%* Unit volume CY 2002: 2.7million units** Competitive Landscape: Intel & other white-box vendors, Dell PowerEdge, Local Heroes Top technology requirements: Tower 34%** Best-in-class industry standard product tailored to specific usages Designed based on the latest industry standard technology - on time Supported by expertise and capabilities from a best-in-class brand Provided at an affordable, aggressive price IDC Projects growth rate of 40-60% 20032006 There are multiple customer usage and workload requirements in the entry-level 1/2P segment - no single server can meet all customers’ needs *IDC estimates ** Internal estimates X86 Servers – 1way (Based on Units) World Wide Vendor United States Unit Shipped Market Share Vendor Canada Unit Shipped Market Share Unit Shipped Vendor Market Share Dell 88,855 27.2% Dell 36,143 42.7% Dell 3,114 48.6% IBM 58,371 17.9% IBM 17,039 20.1% IBM 1,521 23.7% HP 54,265 16.6% HP 12,382 14.6% HP 1,092 17.0% Fujitsu 26,700 8.2% Gateway 807 1.0% 69 1.1% NEC 13,187 4.0% Acer 600 0.7% 26 0.4% Others 85,614 26.2% Others 17,768 21.0% 591 9.2% 326,992 100.0% Total 84,739 100.0% 6,413 100.0% Total YoY Market Growth at 2.0% QoQ Market Growth at 1.7% Acer Rack. Sys. Others Total YoY Market Growth at -16.9% QoQ Market Growth at -14.5% YoY Market Growth at 3.3% QoQ Market Growth at -16.6% 60% 40% 70% 50% 60% 30% 20% Dell 50% IBM HP 40% 10% 40% 30% Dell 20% 20% 10% IBM HP Q403 Q104 Q204 Q304 Q404 HP 0% Q403 0% Q403 Q104 Q204 Arrows represent change in market share vs CQ3 04, Graphs represent market share trend Market growth YoY - CQ4 04 over CQ4 03; QoQ – CQ4 04 over CQ3 04 Source: IDC WW Storage & Server Tracker 3Q04, based on unit shipment IBM ` 30% 10% 0% Dell Q304 Q404 Q104 Q204 Q304 Q404 X86 Servers – 2way (Based on Units) World Wide Vendor United States Unit Shipped Market Share Vendor Canada Unit Shipped Market Share Unit Shipped Vendor Market Share HP 438,350 36.6% HP 163,492 31.7% IBM 10,246 33.5% Dell 280,314 23.4% Dell 163,276 31.6% HP 8,789 28.7% IBM 197,096 16.5% IBM 56,514 11.0% Dell 7,871 25.7% Fujitsu 30,202 2.5% Rack. Sys. 5,612 1.1% 227 0.7% NEC 18,418 1.5% Sun 3,197 0.6% 89 0.3% 233,679 19.5% Others 123,977 24.0% 3,363 11.0% 1,198,059 100.0% Total 516,068 100.0% 30,585 100.0% Others Total YoY Market Growth at 21.6% QoQ Market Growth at 16.6% Sun Rack. Sys. Others Total YoY Market Growth at 25.8% QoQ Market Growth at 11.3% YoY Market Growth at 26.8% QoQ Market Growth at 21.6% 40% 40% HP 40% IBM 30% HP 30% IBM HP Dell Dell Dell 20% 30% 20% ` 20% 10% 10% 10% IBM 0% 0% Q403 Q104 Q204 Q304 Q404 Q403 0% Q403 Q104 Q204 Arrows represent change in market share vs CQ3 04, Graphs represent market share trend Market growth YoY - CQ4 04 over CQ4 03; QoQ – CQ4 04 over CQ3 04 Source: IDC WW Storage & Server Tracker 3Q04, based on unit shipment Q304 Q404 Q104 Q204 Q304 Q404 Why Smart Buys are so effective – ML110 G2 Example as of April, 2005 With Big Deal $791 $791 Smart Buy $649 0% off List ProLiant ML110G2 Server $693* 18% off List & -6% < Dell Dell PowerEdge 420SC Intel® Celeron™ Processor 2.8GHz/533MHz 256MB PC3200 DDR SDRAM DIMM 80-GB SATA 1 year parts, labor, onsite support Intel® Celeron™ Processor 2.53GHz/533MHz (+$125 adjustment) 256MB PC3200 DDR SDRAM DIMM 80-GB SATA 3 year parts, onsite labor (-$149 adjustment) *$693 equalized price; Dell standard ILP $717 Microsoft Small Business Server Attach Opportunity – Customers have to get it somewhere, why not from HP? • Value Proposition − Simple, inexpensive way to purchase, install, and support a customer’s server and server operating system together − Integrated and optimized on the industry’s most reliable and trusted industry standard 600,000 server platform − Price competitiveness against500,000 DELL 400,000 − End user demand generation 300,000 Approx Revenue $420 (M) CY05 Unit Sales Approx Revenue $70 (M) Dell, 600,000* 200,000 HP 100,000 100,000 0 2005 * Estimated Dell Microsoft attached unit sales Smart Buy Q&A & Smart Buy terms and conditions Smart Buy Q&A What is the HP Smart Buy Program? Designed and developed for HP channel partners, the Smart Buy program helps you grow your business by reaching new customers while increasing your margins. Smart Buy offers off-the shelf HP Business Solutions at competitive prices, with amazing savings, excellent availability, and superior HP quality. What are the benefits of the Smart Buy program? Increased profitability. Smart Buy products incorporate variable partner discounts into the partner buy price. Estimated channel margins vary from 6% to 12% for ProLiant Servers – the richer the configuration, the better the margin on the sale Reseller SPIF. Several of the Smart Buy products also give you the advantage of a reseller SPIF via Partner One, as high as $40 per unit Competitive Prices. With special pricing, Smart Buy products offer aggressive savings over comparable, regularly priced configurations. Availability. Smart Buy products are stocked by our distribution partners, so your customers won’t have to wait. No mail-in rebates or back-end claims. HP Smart Buy products are already aggressively priced and so are not eligible for Big Deal Pricing, Public Sector rebates or any other back-end programs. Smart Buy Q&A cont. What additions are being made to the ProLiant Smart Buy Program? We have launched with the existing ML110, ML330, ML350 & ML370 and the ML110G2, ML150G2, and ML310G2 Smart Buy Servers as of April 4th, 2005. Who are the target customers for Smart Buys? HP Smart Buys fit the needs of any business environment. Customers are those who are interested in a low-cost-of-ownership, easy manageability, reliability and expandability. Customers will benefit from the compelling prices, increased productivity and ability to get the job done. Who can take advantage of Smart Buy? All Partners can take advantage of the Smart Buy Program Smart Buy Q&A cont. What are the Terms & Conditions associated with Smart Buy SKUs? Server Smart Buys, as promotional skus, carry different terms and conditions which include: -No additional HP promotional dollars apply - i.e. Big Deal, PS rebates. -Big Deal Customers wishing to purchase Server Smart Buys may do so at list price. Note, Smart Buys WILL NOT be added to Big Deal Letters. -For returns, follow normal process. DOA normal process. (NEW!!!) -Price Protection follows normal process. -Server Smart Buy Lifecycles and prices are subject to change. -No lifecycle extensions whatsoever will be granted for individual accounts Understand it – Common customer questions You read business technology articles and you talk with savvy IT professionals. The message from both is that key business systems are built on servers, but what exactly does that mean? "Server" is a broad term that may quickly bring a host of questions such as: • How is a server different from a desktop system and can you use a high-end desktop in place of a server? − Servers are specifically designed to store, manage, send, and process data across a network. A server is much more than a supercharged desktop system, and can't be replaced by one. Desktop systems are optimized to run user-friendly operating systems, desktop applications, and facilitate other "desktop" tasks. Even if a desktop sports the same processor speed, memory, and hard disk space as a server, they aren't the same because the technologies behind them are engineered for different usage. • How do you know when you need a server? − Servers are designed to bring horsepower where system demands are highest, reduce data bottlenecks, and allow information to flow quickly and freely. Server technology makes them more reliable than desktop systems. • Will you have to replace it in six months? − Server hardware is more powerful than desktop systems, which means they can process data faster and more efficiently. This increase in capability includes a server's processor(s), disk subsystem(s), network interface(s), and more. Servers can easily be extended to support data backup and enhanced security. A server is designed to scale as your needs scale • And of course, how much will it all cost? − HP Smart Buy servers start at just $649