[Name]
[Title]
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Protection from
tech obsolescence
equipment lifecycle
management
Total solution
financing
Matching
benefits with costs
Alternative
source of
capital
Cash preservation/
minimise upfront
investment
Flexibility to upgrade
to more green
technologies
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• Ongoing disconnect – ‘do more for less’ while the need for agility and
growth
• Companies using financing to improve working capital and balance
sheet positions
• Technology trends driving IT to replace CapEx approach with more
flexible OpEx-based models
• De-capitalisation of IT projects is an essential business case enabler
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These trends are driving organisations to look for more flexibility
IT Leasing
Capacity on Demand
Cloud Computing
IT Outsourcing
Software as a Service
Virtualisation
Managed Services
Manifestations of a broader theme:
The need to de-capitalise IT
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Lower IT investment budgets
Just-in-time IT spending
Different acquisition models
IT Equipment
IT Software
IT Services
Stretch lifecycles
Improve utilisation
Used equipment
Highly selective buys
One-year payback
New service
management tools
Maintain reliability
Improve efficiency
Even more outsourcing
Equipment
leasing
Software
financing
Cloud
economics
Lifecycle
analysis
IT financial
mgmt
IT is maturing
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Management
costs
Energy costs
Legacy costs
Time to
implementation
Time to benefits
KPIs/ metric
alignment
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Cost of
technology
increases over
time
Technology is
often used
beyond its true
economic life
Operating costs
outweigh
acquisition costs
Cost of asset
disposal
Large upfront
acquisition costs
Difficult to scale
and cost on a per
user basis
Latency of
investment and
refresh cycles
Benefits timing
versus costs
Balance sheet
constraints
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OpEx predictability
Short-term OpEx availability
CapEx preservation
Vendor accountability
Purchasing simplification
Diversification of lending
The decision is not only what technology to acquire,
how to acquire the right technology is just as critical
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Business and
technology
alignment
Synchronicity of
business and
technology
change
Technology
change
Financial
Architecture
All stages of your
technology lifecycle
Driving greater alignment
and responsiveness
New projects/
initiatives
Technology
updates/ end of
useful life
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Capital optimisation
Expenses
matched with
arrival of benefits
Tailored
financial
solutions
Flexible end-of-lease
options
Attractive
migration choices
Optimised
lifecycle
management
Lower cost of
acquisition
Less financial and
operational risk
Maximised
shareholder
value
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‘Better way of using
our working capital’
‘Stretched out
cost to match
revenue coming
in’
‘Pay as you go’
Obsolescence
protected
De-risked
swapping Partner
and blades
‘Scale out’
capabilities
‘Makes Cisco
affordable’
‘…and speeds up
ROI’
Maximised
budget
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Benefit
Step
Financing
Multi-Term
Financing
Pay As You
Grow
Flexible
Demand
Lower upfront cost of acquisition
Immediate budget creation
Flexible payments
Match payments to business benefit
Accelerated breakeven
Off balance sheet financing
Pay as you grow benefits
Improved asset management
Faster ramp-up through staged capacity
Ability to evaluate/ return unused buffer
capacity
Variable billing on a usage basis above
minimum commitment
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Pay less in the early stages of the Cisco Data Center implementation and
‘step up’ payments over time.
Customer Payments to Cisco
Allows better alignment of costs to business benefits.
Financing Payments
15
30
45
60
Time (Months)
Committed Payments
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Forgo the upfront purchase of server capacity that is not immediately
required, and have the flexibility to refresh blades more frequently over time.
Customer Payments to Cisco
Accelerate the time to break-even on the data center investment.
Blades/ Expansion Cards
Blades/ Expansion Cards
Blades/ Expansion Cards
Chassis & Base Kit
0
6
12
18
24
30
36..................................................................60
Time (Months)
Committed Payments
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Ready-to-use, continuous replenishment, on-site inventory with payment
deferral, payments financed
$ Deferred invoice in arrears
Buffer capacity
Customer Payments to Cisco
demand
$
$
$
Base capacity
$
0
6
12
18
24
30
36..................................................................60
Time (Months)
Committed Payments
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A shared-risk consumption model for Cisco Unified Computing System with
payments based on usage
Variable
payments
billed monthly as used
Fixed payment
locked into
a lease/ loan
Customer’s Payments to Cisco
usage
Baseline capacity
Time (Duration of Contract)
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INTERNAL
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• Sky Bet primarily offer an online sports betting service
• Sky Poker is one of the UK's leading online poker rooms
• Sky Vegas is where you can find all the best games all in one place
• Sky Bingo lets you play bingo online and connect with a great community
of bingo players
Customer Challenge
• Sky Bet needed a flexible solution to assist with their seasonal business
• Sky Bet wanted a partner to share the risk of capacity utilisation
• Sky Bet needed a flexible technical solution that delivered consolidation,
efficiencies and ease of operational use
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Competition
• HP incumbent for over 24 months
• Procurement resistant to change and driving a pricing discussion
Strategy & Execution
• Cisco moved the goal posts to focus the discussion on architecture, efficiencies
and total cost of ownership
• Initiated a move to Nexus technology from Catalyst 6K, which set Sky on the
path to a Unified Fabric architecture across their business
• Strategic UCS insertion gave the team the opportunity to demonstrate the
benefits across the corporate estate
• Sky visited San Jose to meet experts - adopted UCS almost immediately
• Sky's CFO calling for £50m per annum savings allowed Cisco Capital to be
positioned for the very first time into Sky
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Payments to Cisco
Initial commitment aligned to baseline
capacity requirements
Time
• 100% equipment deployed day one for maximum capacity
• 75% initial base commitment (x blades)
• 25% variable capacity (flexible demand) (x blades)
• Initial commitment charged quarterly in advance – $ / blade / month
• Monthly report to measure active blade usage on UCS
• Flexible demand blades charged quarterly in arrears – $ / blade / month
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Internal Case Study
Gaming
Cisco Capital Flexible Demand provides Cisco with
first UCS pay-per-use model
"Breaking ground with new
business models is always
challenging but Cisco Capital
gave us real differentiation
and was one of the major
factors in successfully
displacing HP from the data
centre.“
Elliott Handworker
Cisco Account Manager
Customer Scenario
• HP server infrastructure struggling to cope with demand spikes from large sporting
events and in-play betting markets
• Big sales challenges: technical team resistant to change; while procurement wanted
to drive a pricing discussion
Solution
• Cisco UCS and Nexus solution acquired using new Flexible Demand model from
Cisco Capital, a first for Cisco worldwide
• Enables Sky Bet to rapidly spin up UCS blades when demand for compute power
peaks and turn them down during quieter periods
Cisco Capital Significance
• For the customer: True capacity on demand (customer pays 75% baseline
commitment with 25% buffer); costs closely aligned with income; further savings
from operational efficiencies
• For the Cisco account team: Displaced HP from the account; opportunity to
position Cisco Intelligent Automation for Cloud and sell through to other Sky
businesses; global first and replicable pay-per-use model
Find more examples of how our customers are using financing from Cisco Capital
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2012
Cisco
Systems,
Inc.
All rights
Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco’s trademarks can be found at
Cisco Confidential
2012
Cisco
and/or its
affiliates.
Allreserved.
rights reserved.
www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (1009R)
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• We can create a robust business case
that supports the business and IT
strategy
• Projects must be proven to provide faster
payback, with less operational risks in
order to be considered for approval
• This is further compounded by traditional
funding models being unable to satisfy
standard key financial metrics such as
cost of capital, ROI, PPU
• These factors are driving a stronger
three-way partnership between the CEO,
CFO and CIO. This team is collectively
responsible for combining IT investment
with both business strategy and financial
decisions
• Cisco Capital is your enabler.
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