Mid Market Opportunities

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Mid Market Opportunities

• Samantha Zammit
• Mid Market - Segment Manager

2
Agenda

• Mid Market Overview
• Local Research Customer Pain Points
• Marketing Messaging Framework
• Opportunity Map
• FY06 Focus Areas
• Next Steps

3
Mid Market Overview
4
Vertical Alignment
Strategic
Health
Major
Corporate
Financial Services
Manufacturing
Prof. Services
Mid Market
Small Biz
5
Mid Market Key Stats

• 19K organisations (excludes Public Sector)
• Upper MM 250-500 seats 1200 orgs
• Core MM 50-249 seats 6000 orgs
• Lower MM 25-50 seats 12000 orgs
• 4 Key Commercial Subsegments
• Prof. Services - 28 VL revenue
• Manufacturing - 24 VL revenue
• Retail - 21 VL revenue
• Financial Services - 12 VL revenue

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FY06 Mid-Market SW Spending by Vertical

• Total Mid-Market IT Spending in FY06 is estimated
  to be US631mn in FY06
• Public Sector, Financial Services
  Telecommunications and Media and Manufacturing
  will account for 87 of all IT Software spending
  in companies of 50-500 employees combined these
  verticals account for US548mn of total MM IT SW
  spend

Source IDC Cube
March 05
7
FY06 Mid Market SW Spending Growth by Vertical

• Australian Mid Market Software expenditure is
  forecast to experience double digit growth from
  FY06 to FY08 SW expenditure will increase from
  US555mn in FY06 to US819mn in FY08
• Financial Services, Telecommunications and Media
  and Wholesale and distribution will experience
  the highest growth rates in FY06 18, 19 and
  18, respectively. Public Sector and Transport
  will have the lowest growth rates - 8 and 5,
  respectively

CAGR 15
Source IDC Cube
March 05
8
Software Expenditure by Sub-Category

• More than 50 of Software expenditure in
  Mid-Market will be derived from System
  Infrastructure SW (i.e. Operating Systems). The
  remainder is split evenly between Applications
  and Application Development Software

Source IDC Cube
March 05
9
SMB Market Evolution
One-off Purchases
Annuity
Solutions and web services
Stand alone Products
Vertical and segment GTM
Broad GTM
Reliance on capable partners
Reliance on capable partners
Independent marketing
Orchestrated marketing
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Local Research and Customer Pain Points
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Top Three Issues Impacting Performance
Total 25-49 PCs 50-250 PCs 251-499
PCs n240 n44 (A) n146 (B) n50
(C) TOP 3 ISSUES IMPACTING
PERFOMANCE Security / viruses 31 32 29 38 Update
/ upgrade infrastructure 21 20 24 12 Improve
software / upgrade 21 25 16 8 Cut costs /
budget 14 11 17 22 New technology 14 14 15 8 Serve
r upgrade 13 16 8 8 Info / data management /
storage 12 14 11 8 Improve internet / web
service 10 9 12 14 Improve hardware /
upgrade 11 14 6 6 Compatibility / system
integration 9 9 11 2 Email / spam 9 11 5 6 Reliabi
lity / stability 9 11 5 4
SECURITY A MAIN ISSUE AT THE MOMENT. UMM LESS
CONCERNED WITH UPGRADING SOFTWARE / HARDWARE AND
MORE CONCERNED WITH COST CUTTING
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What are the Upcoming Priorities for IT
Initiatives?
Wave 4 Wave 5 Wave 6 Wave 7 Wave 8 50-499
PCs 50-499 PCs 50-499 PCs 50-499 PCs 50-499
PCs n300 n300 n300 n253 n196 TOP
3 IT INITIATIVES Security n/a n/a n/a 39 25 Nothin
g, just maintaining 23 20 19 16 19 Ensuring
reliability / stability n/a n/a n/a 14 13 IT
staff training skills enhancement n/a n/a n/a 3 13
Upgrade hardware / infrastructure n/a n/a n/a 6 1
3 Upgrade MS server software 28 16 27 8 12 Consoli
dation / integration / standardisation n/a n/a n/a
14 10 Upgrading MS desk top operating
system 28 19 23 7 10 Connecting information,
people and devices n/a n/a n/a 7 9 Desktop
productivity n/a n/a n/a 2 9 Mobility
solutions n/a n/a n/a n/a 9
MAIN IT INITIATIVES AMONG CMM/UMM RELATE TO
SECURITY OR SIMPLY MAINTAINING CURRENT SYSTEMS
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What are the Upcoming Priorities for IT
Initiatives?
Wave 7 Wave 8 Wave 8 25-49 PCs 25-49 PCs 50-499
PCs n48 n44 n196 TOP 3 IT
INITIATIVES Security 37 32 25 Ensuring
reliability / stability 12 23 13 Nothing, just
maintaining 15 23 19 Upgrading Microsoft server
software 6 18 12 Upgrade hardware /
infrastructure 17 16 13 Upgrade desktop operating
system 10 13 10 Upgrade / developing
software 12 11 3 Upgrade Microsoft applications
software - 11 8 IT staff training / skills
enhancement 10 9 13 Connecting information,
people and devices 8 9 9 Consolidation /
integration / standardisation 8 9 10
SECURITY, ENSURING RELIABILITY AND STABILITY AND
MAINTAINING ARE KEY FOR LMM
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How Important are Proposed Campaigns?
very important
SECURITY STILL OF KEY IMPORTANCE UPGRADING
DESKTOP OS OR APP SOFTWARE SIGNIFICANTLY LESS
IMPORTANT THIS YEAR
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Suitability of Licensing Terms and Purchasing
Options

ONE THIRD ARE INDIFFERENT TO LICENSING TERMS AND
OPTIONS
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How Is Licensing Info Obtained
RATING OF WEBSITE AS INFO SOURCE
WHERE FIND 25-49 50-249 250-499 LICENSING
INFO PCS PCS PCS (N44) (N146) (N50)

Search the Microsoft website 57 53 44 Reseller/Ret
ailer 18 19 16 Internally /Parent
company 14 6 6 MS Partner 11 8 6 MS Account
Manager 7 4 2 Internet 5 9 4 Phone 5 6 6 Consultan
t / Specialist 2 7 2 Other 9 10 6 Dont know /
havent searched 5 7 2
BASE THOSE WHO USE WEBSITE TO FIND LICENSING INFO
IF LOOKING FOR INFORMATION, KEY SOURCES ARE MS
WEBSITE, RESELLER/PARTNER OR AN INTERNAL
DEPARTMENT OR PARENT COMPANY
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Strategic IT Vendors

• Vendors that Mid Market executives deem strategic
  to their IT needs and objectives in the next 12
  mths

Source VAR Business Feb 05 Edition
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Market Dynamics

• Customer Pain Points
• Doing more with less
• Integration and consolidation
• Security patch management
• Complexity licensing

• Technology Trends

• Focus on IT/business alignment
• Demand for evidence on IT investments
• This has driven a shift
• From 'fashion' to 'evaluation'
• From cost containment to growth
• From large scale projects to smaller ones
• From complex projects to simple ones
• From new implementation where value is
• not proven to optimization
• consolidation of existing infrastructure
• From dispersed systems to integrated
• ones in order to streamline processes and
• gain efficiency

• Business Trends
• Need to clearer picture on ROI
• Amalgamation increased number of Australian
  entities become part of international
  organisations
• Standardisation

• Drivers of Satisfaction
• Competitive pricing lack of perceived value
• Security patch management
• Technical support
• Licensing complexity

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Vision Customer Centricity
Im aware and satisfied with Microsoft support
options
Mission
Drive Mid Market satisfaction and revenue through
meaningful relationships.
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Marketing MessagingFramework
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The Infrastructure Maturity Model-Customer View
Basic Uncoordinated, manual infrastructure
Standardized Centrally Managed IT Infrastructure
with some automation
Optimized Managed and consolidated IT
Infrastructure
Dynamic Fully automated IT management dynamic
resource usage and business linked SLAs
Reduce complexity
React
Manage
Agility
Objective
Ability to Change
Slow, weeks to months
Weeks
Days
Minutes
High, As needed
Resource Utilization
Unknown
Known, poor
Rationalized
Policy-based
Processes Automation
Ad hoc
Defined
Mature
BusinessSLAs
Arbitrary SLAs
Class of Service SLAs
Business Alignment
No SLAs
Efficient Cost Center
Business Enabler
Strategic Asset
Perception of IT
Cost Center
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MS Technology Map
Basic Uncoordinated, manual infrastructure
Standardized Centrally Managed IT Infrastructure
with some automation
Optimized Managed and consolidated IT
Infrastructure
Dynamic Fully automated IT management dynamic
resource usage and business linked SLA's
Active Directory

• Group Policy leveraged
• AD integrated apps

• MIIS (SSO)
• ADFS

• AD for Auth

• AD Futures

• Group Policy (Intellimirror)
• SUS
• SMS

Software Distribution Patch

• Windows Update

• SMS
• System Center

• System Center vNext

• Built-in OS Mgmt

• MOM
• MOM Management Packs

• MOM Management Packs

Operations Management

• System Center vNext

• Unmanaged
• Win9x
• WinNT
• W2K

• Managed w/ ADSMS
• W2K
• XP

• Well Managed
• XP SP2
• Longhorn

Desktop

• ISA Server
• Antigen for SharePoint

• Windows Firewall
• Antigen for Exchange

• Windows Rights Management Services

Security

• Managed w/ ADMOM
• W2K
• WS03

• Well-managed
• WS03
• Longhorn

• Unmanaged
• NT4
• W2K

• Longhorn SP1

Server

• RRAS VPN
• Wi-Fi w/IAS
• IPSec Server Isolation

• RRAS VPN Quarantine
• IPSec Domain Isolation

• DHCP, DNS,
• RRAS-Dial Up

• Seamless Network

Networking
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Cross-Sell Scenarios
Communications to BDMs
Portal
Bus. Integration
ERP
CRM
Retail
SQL
Collaboration
Exchange
Security
Mobility
Active Directory
Other Information Worker
Advanced Infrastructure
Office/Windows
Windows Server
License Assessment
Security Assessment
Operations Assessment
Communications to IT Pros
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Opportunity Map
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Opportunity Map

• 14 server install base still on NT 4 10K
  servers
• 48 servers run Exchange 5.5 or earlier
• 30 servers run SQL 7.0 or earlier
• 40 of PCs run WinXP
• 80 customers still with Office 2000 or less

• 26.5m in server upgrade opportunities Win2000,
  Exchange 5.5 and SQL
• 18m in server CAL share opportunities
• 58m in Office upgrade opportunities
• 225m in Office share opportunities
• 6.5m in Client upgrade opportunities

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FY06 Campaigns

• Q1 Theme Connected
• Main Campaign - Outlook Anywhere Campaign
• Surgical
• N-1 Exchange (Exchange 5.5)
• N-1 Windows Server (Win 2000)
• EA Consolidations
• Notes conversions
• MBS
• On-line Marketing ERP CRM
• Vertical targeted Direct Mails

• Q2 Theme Comprehensive
• Main Campaign - Security
• ISA 2004, MOM for workgroups, SMS
• Surgical
• NT 4 upgrades
• SQL Upgrades
• New Packaged MM Server Offering
• MBS
• Event track
• CRM v3.0 launch

• Q3 Theme Productive
• Main Campaign Collaboration
• Windows Share point Services
• Share point Portal Server
• Workflow InfoPath
• Business Intelligence Biz Talk
• Surgical
• N-2 Office
• MBS
• Financials

• Q4 Theme Innovative
• Preparation for Longhorn
• Surgical
• TBA
• MBS
• Supply Chain Management

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Year Round Focus Areas

• Increase annuity grow by 14
• OLV
• Drive VL penetration grow by 19
• OLV, Open
• Software Asset Management (SAM) Compliance
• SAM Engagement Manager Top 30 SAM opps
• CPE
• CPE drivers Tech Support, Licensing Complexity,
  Communications, Relationship, Security
• Compete CSI
• Notes/Novell, Linux Sales Opportunity Managers
  (SOMs)
• Comphot for Partners

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Next Steps

• Make sure that you are profiled
• To leverage our campaigns talk to your PAM or
  Telepam
• We need great partners with some enticing offers
  to get our customers onto our latest platforms
• Get trained up on the value of our latest
  platforms and the why MS story
• Be able to articulate the value of VL and SA to
  your customers
• Get up to speed on new product releases and value
  they will bring to our customers
• Start readying yourselves for the Longhorn wave
• We need 20 TAPs

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