1 Market Opportunity Who begins too much accomplishes little German Proverb

Market Opportunity After this session, you will: 1. Understand the ‘universe’ for hosted messaging and collaboration. 2. Understand the opportunity drivers for new customers and follow-on sales. Messaging and Collaboration SMB Companies Hosting Session Objectives During this session, we will: 1.Discuss whether the research data is aligned with your own market data and understanding 2.Discuss ways in which your market is evolving 3.Discuss the opportunity drivers as they related to your marketplace Discussion Topics

Trends & Opportunities Hosting SaaS Overall messaging/collaboration market –MAPI –Mobility and Voice over IP –SharePoint HMC overlap and integration opportunities –Live Communication Server & Windows-based Web and SQL Server

4

5

6

7

SME Customer Needs Existing ApplicationsNew Applications Beat the Competition Advanced Collaboration & Workforce Automation Project management CRM and SFA Issue management Document management Departmental portals Real-Time Communications & Collaboration Secure IM VoIP Web meetings WAP enablement Peace Of Mind Hands-Off Operations No distractions On-demand storage Archival Security Virus protection Physical security Data security Reliability & Availability SLAs High availability infrastructure Solid 24x7 Tech Support Off-site Backup Get More Done Collaboration Shared contacts Shared resources Task assignment Task Tracking File sharing Scheduling Meeting Management Invitations Shared calendar Free/Busy Scheduling Response Tracking Anywhere Access Mobile Devices Always Up-to-date access to , Calendar, Contacts, & Tasks from Windows Mobile Devices Remote Access Secure Access to /Calendar/Conta cts/Tasks from Laptops while traveling File access while traveling Access from any PC using Outlook Web Access Offline access when not connected

SMB Customer Needs Existing Applications New Applications Beat the Competition Advanced Collaboration & Workforce Automation Project management CRM and SFA Issue management Document management Departmental portals Real-Time Communications & Collaboration Secure IM VoIP Web meetings WAP enablement Peace Of Mind Hands-Off Operations No distractions On-demand storage Archival Security Virus protection Physical security Data security Reliability & Availability SLAs High availability infrastructure Solid 24x7 Tech Support Off-site Backup Get More Done Collaboration Shared contacts Shared resources Task assignment Task Tracking File sharing Scheduling Meeting Management Invitations Shared calendar Free/Busy Scheduling Response Tracking Anywhere Access Mobile Devices Always Up-to-date access to , Calendar, Contacts, & Tasks from Windows Mobile Devices Remote Access Secure Access to /Calendar/Conta cts/Tasks from Laptops while traveling File access while traveling Access from any PC using Outlook Web Access Offline access when not connected Microsoft Solution for Windows-Based Hosting Microsoft Windows SharePoint Services Microsoft Exchange Server Microsoft Live Communications Server Microsoft LiveMeeting New Applications

Hosted Exchange Drivers Peace of Mind  Operational freedom –Off-site back-up –Threat protection –Tech support –High availability Anywhere Access  Mobility and remote access –Employees in home or branch office –Mobile device synchronization – while traveling Get More Done  Collaboration –Better ways to share and track files –Check and share calendars –Share information Source: Edge Research 50% have high needs in at least one of these areas 16% have high needs in at least two of these areas There are 217k “Best Candidate” Companies in the UK

Hosted Exchange Drivers – Size and Industry By Size –Companies with <50 employees By Industry/Vertical Market –Professional Services –Manufacturing –Wholesale and Retail –Construction –IT Services –Non-profit –Finance Best Candidates Other Companies

Hosted Exchange Drivers – Pricing and Timing Acceptable Price Point Purchasing Time Frame Other Best Opportunity 18% 20 €12 monthsPredisposed to outsourcing; early adopters Short-Term Opportunity 7%10 €12 months Mid-Term Opportunity 9% 10 €12-24 months Long-Term Opportunity 3% 10 €24+ months 52% of UK SMB Companies expressed an interest in adopting Hosted Messaging and Collaboration at some price. Source: Edge Research

Hosted Exchange Drivers – Pricing and Timing Acceptable Price Point Purchasing Time Frame Other Best Opportunity 18% $ 3012 monthsPredisposed to outsourcing; early adopters Short-Term Opportunity 7% $ 1512 months Mid-Term Opportunity 9% $ months Long-Term Opportunity 3% $ months 52% of SMB Companies expressed an interest in adopting Hosted Messaging and Collaboration at some price. Source: Edge Research

SharePoint Opportunity Drivers – Key SMB Business Needs Project Management –39% stated need to coordinate schedules, tasks, document sharing and progress reports both internally and externally. Problem Resolution –35% stated need to assign responsibility, track progress and resolve problems. Centralized Document Management –26% stated need to coordinate updating and distributing of important company documents, contact lists, procedures and policies. Departmental Portals –22% stated need for direct link access to current company information, regardless of location in office or remote. CRM –28% stated need to share and update information on contacts with customers and business partners. Source: Edge Research

Additional Hosted Services SMBs are Likely to Consider Within Next 12 Months Likeliness to Consider Additional Hosted Services in Next 12 Months  Voice over IP and Hosted Customer Relationship Management are the top areas of interest. Sample size: 904 Percents do not add to 100 because respondent could select more than one Nordic Hosted Messaging and Collaboration Study, Edge Strategies, March 2005

What is SaaS? One-Time License Fee & Annual Maintenance Complex Upgrade Process Multiple Versions in Marketplace Need to Support Multiple Environments Dedicated Infrastructure Per Customer What’s Driving SaaS Viability? Increasing broadband penetration Improvements in remote access technologies General increases in computing capacity and corresponding cost reductions Virtualization technologies Improvements in technologies for development of web-based applications Software as a Service Software on Demand Hosted Application Management (ASP) Source: Amy Konary, IDC Directions, 2006 Private InfrastructurePublic Infrastructure One-to-OneOne-To-Many Perpetual LicenseSubscription ASP Model SaaS Model

$ $ $ $ $ $ Why is SaaS Important? Lower implementation and on-going costs Lower risk than traditional implementations Free up IT resources to focus on more strategic initiatives Much quicker implementation timeframe Shorter Sales Cycle Lower Cost of Sales Tighter relationship with customers Quicker time to market Lower support/maintenance costs Predictable recurring revenue REVENUE OPPORTUNITY 30% of all software sales by % of businesses either have SaaS or are considering SaaS SP/ISV Drivers End Customer Drivers

SIMPLIFYING DISTRIBUTION Accelerate SaaS acceptance rate in enterprise, mid-market, and SME companies through consulting relationships Distribution channel that works, with buyers looking to find highly relevant solutions Suite of integrated applications Thorough certification process Application directory Repository of selected applications Customer Trust SaaS Strategy Phase II MARKET CHALLENGES Lack of providers with application and integration experience Lack of integration between applications No certification process Finding the right SaaS applications challenging for customers Lack of quality distribution channels for ISVs Customer Confusion

SaaS: The Opportunity 79% of IT managers responding to a recent IDC survey have already purchased or are currently reviewing SaaS offerings. Over 50% of ISVs now receiving funding are SaaS based SMB, Mid-market, Enterprise Opening for service providers to partner with ISVs

Challenges in SaaS Hosting Traditional processes for development, delivery, and support of applications are not well suited for SaaS Application architectures must change to address requirements such as multi-tenancy, security, scalability, and operational supportability A complete lack of standards for the deployment of SaaS applications for things such as ordering, provisioning, metering, and billing The challenge of the go-to-market approach – to sell direct, or to sell through an indirect channel of resellers, service providers, or outsourcers

Background Materials