Leo Hanna
Sales Director – System Center, Microsoft Corporation

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Your objectives
IT challenges
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

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Become a trusted technology advisor/partner
Generate services revenue at a profit
Provide exemplary service and exceptional business value
Build competencies on industry-leading solutions that enable long-term value and stability

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Add new business value for customers
Use management as a differentiator
Management and Security solutions are becoming more important to driving down cost
Lots of low hanging fruit (Exchange Server,
Windows Vista deployments, Microsoft SQL
Server)
Aligns with Microsoft’s sales priorities and initiatives
Opportunity to create services to deliver System
Center “Service Manager

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Your objectives
IT challenges
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

Speed will become a major business differentiator in a connected world
70% of IT budgets are spent maintaining what we have
IT infrastructure must change to meet business demands
– becoming more
"real-time"
We need to harness the power of technology to improve IT infrastructure agility, cost, and quality of service

Provide business value through IT operations and infrastructure
Communicate business value of IT operations and infrastructure
Improve service delivery
Control, maintain, and secure desktops and mobile devices

“Even the most skilled IT professionals can’t manage the complexity of today’s IT landscape using only traditional manual system management processes. In fact, the use of system management processes that rely on manual procedures is one of the major sources of human error.
Manual processes can cause increased reaction times to changes in the IT environment. Such processes are also difficult to audit, which makes them a risk in today’s highly regulated environment.”
Bronna Shapiro
“Applying Intelligent Automation to Business Continuity.”
Z/Journal. June/July 2006

Lack of product integration
Product complexity
Inability to address new technologies

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Your objectives
IT challenges today
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

Increased IT productivity
Automated, streamlined management
Less enduser downtime
Platform for Network and Systems Management
“Configuration management databases (CMDBs) will provide a single source of truth for IT infrastructures. . . .CMDBs will provide a unified view of network assets and their configurations, map device and application dependencies, and let us manage services, not machines.”
Andrew Conry-Murray
“CMDBs: An IT Goldmine?”
Network Computing. Jan. 22, 2007

Macro Trends in Infrastructure
•
From Projects to Strategies
•
From Back-Burner to Front-And-Center
$9.9 billion in
2005
Growing at 7.7
CAGR
~$13+ billion in 2010
Management Market size
Systems, Network and Storage
Market Requirements
• Clear end-to-end view of IT Infrastructure
• Reduce and manage complexity effectively through automation and predictability
• Enforceable IT policies mapped to business requirements
Technology Enablers
• Policy-based management
• Virtualization and automation
• Service-oriented architecture
• Operationally aware applications

Number
1.
Companies
Hewlett-Packard Company
2.
IBM
5.
6.
3.
4.
BMC Software Inc.
Computer Associates Intl.
Microsoft Corporation
NEC Corporation
7.
8.
9.
Hitachi Limited
Fujitsu Limited
Cisco Systems Inc.
2003 2004 2005 Yr/Yr q
$937 $1,025 $1,113 9%
$678 $716 $757 6%
$577
$597
$309
$275
$624
$633
$369
$343
$682
$631
$416
$381
9%
0%
13%
11%
$302
$243
$255
$353 $381
$295 $331
$268 $286
8%
12%
7%
IDC 2005 Top System Management Vendors. Dollars in millions

“We expect to see robust growth . . . as the need for IT governance, services support, and improved software development team productivity drive ongoing demand for software configuration management tools.”
Worldwide Software Change and Configuration Management 2005 Vendor
Shares
Melinda-Carol Ballou, IDC, December 2006

“When I ask enterprise clients who the management market share leaders will be in 2007, a majority of them say Microsoft.”
Jean-Pierre Garbani
Vice-president of Forrester Research
Forrester

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Your objectives
IT challenges today
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

 Self-managed systems
 Increased IT productivity and reduced costs
 Simplified systems management
 Improved service levels
 Enhanced compliance
 Greater business agility

WS-
Management
Multi-level: operating systems, applications
Capture knowledge in models
ITIL-based
Process and
Knowledge
Embedded

Desktop standardization
Comprehensive
PC security
Directory-based authentication
PC standards compliance
Automated software distribution
Directory-based user provisioning
Automated user data backup
Model-based management
Dynamic allocation of resources

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Your objectives
IT challenges today
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

Management Is Important to Microsoft:
1.
2.
A manageable system is becoming the rule, not the exception.
In the IT “war on costs,” managing systems is key. Core IO is the methodology; System Center technologies are enablers.
3.
Management is a key initiative in the move from reactive to proactive in systems lifecycles
Expand the Portfolio
Service Manager
Virtualization
System Center Essentials
Target New Segments
Mid-market
Drive Existing Solutions
Strengthen Value Proposition
Core IO
“Attach”
Introduce Service Models
Asset Management
Remote Monitoring and Management

Storage
Management
Service
Management
Configuration & Release
Management
Event & Performance
Management

2008
2007

Enables knowledge-driven management of your physical and virtual IT environment Fuels
Productivity
Best for
Windows
Integrates with and simplifies management of the Microsoft
Windows-based systems and applications your company already has implemented
Provides enterprise capabilities to manage the largest and most complex infrastructures
Enterprise
Strength
Foundation for Growth
Includes an extensible architecture, interoperability, and process management framework enabling you to adapt as your infrastructure grows or changes

Worldwide Customer Usage
 11,000+ Microsoft Operations Manager customers
 22,000+ Systems Management Server customers
(used by 50+ percent of “Large Enterprises”)
Fastest Growing Major Systems Management
Vendor*
* Source: IDC 2005 Top System Management Vendors
System Center “represents a route for Microsoft to gain a significant share of the systems management market.”
Microsoft “will become a significant player in the systems management market over the next five years.”
Computer Business Review Online

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Worldwide Market for Desktop Deployment
$179B
$160B
$143B $33B
$28B
$23B
$83B
$81B
$78B
$42B
$52B
$63B
What does this mean?
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Substantial growth in desktop services over the next three years fueled by
Microsoft
®
Windows
Vista™ and the 2007 Microsoft
®
Office System
Windows client and applications deployment growing fast
Desktop Services PC Hardware Windows OS/APPX

 ~65% unit share (new shipments) in
2006 according to IDC
 Over 60% market share of the e-mail server market
 20% revenue share in 2005 with growth of 14% compared to the prior year, whereas Oracle only grew 7.3% and IBM only grew 5.5%

Global MM Mgmt Software spending = $3.9 billion*
Microsoft
®
System Center Essentials 2007 provides a unified management solution that enables IT professionals in mid-size organizations to proactively manage their IT environment with increased efficiency.
 “Attach" Opportunity: Management capabilities for multiple
Microsoft technologies
 Build a Management Pack Practice: Any Management
Pack built for Operations Manager 2007 works on
Essentials 2007
*Source WW MM Overview (AMI)

Microsoft estimate: For every $1 of software revenue, there are $n of services revenue that partners can realize
Significant systems management services opportunities, especially in small and mid-market
Services Best Practices
 Build alliances that drive business growth
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Earn a Microsoft Partner Program competency
Focus more on business velocity than deal size
Diversify into complimentary practice areas

# of Deals (Productivity + Ramp)
EPG-Operations Management
EPG-Change Management
SMS&P-Midmarket Solutions
TOTAL Number of Deals
Year 1
4
6
1
Year 2
1
9
13
2
Year 3
2
15
21
3
3
Projected 3-year net cash flow ($ Thousands)
$350.0
$300.0
$250.0
$315.2
$201.7
$200.0
License Revenue ($ Thousands)
Service Revenue ($ Thousands)
License Margin ($ Thousands)
Service Margin ($ Thousands)
Initial Year 1
$ -
Year 2
$ -
Year 3
$ -
$ 193 $ 389 $ 589
$ $ $ -
$ 109 $ 220 $ 334
License Margin %
Service Margin %
0%
57%
0%
57%
Skills Development ($ Thousands) $ (25) $ (19) $ (19) $ (19)
0%
57%
Net Cash Flow ($ Thousands)
Net Margins %
$ (25) $ 90 $ 202 $ 315
47% 52% 53%
$150.0
$100.0
$50.0
$-
$(50.0)
Initial
$(24.9)
$90.4
Year 1 Year 2 Year 3
• Relatively low upfront investments: cross-train existing staff
• Establish dedicated practice after first 2-3 wins
• Lower cost-of-sales: higher win rate, shorter sales cycle
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Strong customer demand; greater deal velocity
• Attractive deployment services opportunity
Net profit after 3 years ($ Thousands) $ 582
Ratio Investment/profit (3 year) 7.2
Deals to Breakeven (# of deals) 1.4
Source: team analysis; partner interviews

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Your objectives
IT challenges today
The systems management market
Why Microsoft
Why Microsoft System Center
System Center opportunities
Helping you succeed
Summary and next steps

Optimize and Secure Your Core Infrastructure
 Materials that focus on the overall high-level message
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Supporting individual messages for Security and
Manageability to enable you to execute an integrated marketing campaign.
Bill of Materials
 Readiness materials, marketing resources and templates, event hosting resources, and sales resources

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Your objectives
IT challenges today
The systems management market
Why Microsoft
Why Microsoft Systems Center
System Center opportunities
Helping you succeed
Summary and next steps

 Strong need for systems management due to IT infrastructure complexity
 IT spending on systems management is growing and expected to continue
 Microsoft is investing heavily and establishing itself as a leader in systems management
 System Center provides a comprehensive systems management solution
 Windows Vista deployment, attach scenarios, midmarket, and services all provide opportunities to generate systems management revenue
 Microsoft provides technical and sales support to help you succeed

 Become a System Center Partner
 Achieve System Management specialization in the
Advanced Infrastructure competency
 Build a management practice on Operations
Manager
 Build a deployment practice on SMS
 Build a managed-services practice for mid-market customers based on Operations Manager and
Essentials
 Participate in product launches and customer campaigns

© 2007 Microsoft Corporation. All rights reserved.
This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.

© 2007 Microsoft Corporation. All rights reserved. Microsoft, Active Directory, Dynamics, SharePoint, SQL Server, Windows Server, and Windows Vista are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners
This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.