Office 365 Open For distributor use February 2014 WWLP

Agenda Cloud migration path 3

Overview 4

Why Office 365? 5 Scale reseller + distributor channel Software + service via one agreement Increased value of partners Migration to the annuity business

Office 365 Open overview SKUs are available in Open, Open Value (OV) and Open Value Subscriptions (OVS) 1 year subscription SKU Up-front payment only No minimum order threshold Welcome sent with link to Volume Licensing Service Center (VLSC) Sign VL contract that contains cloud terms & conditions 5x5 product keys stored in VLSC “Copy & Paste” Keys on Office365.com/setup365 Subscription end date set at provision (Manual) “Partner of Record” set up needed to secure (1) Renewal notice, (2) Future advisor fees for transactions processed at Office 365 portal 6

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Hero O365 SKUs sold in Open programs 8 Online Services (launch date) CommercialGovernmentAcademic Open, OV, OVS OpenOVS-ES Office 365 Midsized BusinessXNot Available Office 365 Enterprise Plan 1XX Office 365 Enterprise Plan 3XX Office 365 Enterprise E1 + Exchange Online ArchivingNot AvailableX Office 365 Plan A3 (Student & Faculty)Not AvailableXX1X1

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End-to-end experience: high level process 10 Welcome with OLS activation instructions. also sent to reseller if identified as part of PO.

Partners’ role 11 Sign up to Advisor program (recommended) Validate customer’s order (country, size, etc.) Place order to a distributor Receive welcome from Microsoft Access VLSC and retrieve keys (optional) Invoice end customer Recruit resellers and advisors Train resellers about Office 365 Open Validate resellers’ order Reject: Invalid countries, order size, etc. Invoice reseller Place order to Microsoft

Partners’ role 12 Help end customer activate Office 365 subscription Ensure Partner Of Record is set up correctly Receive renewal reminder (automatic if POR) Renew: Several options exist. Know the difference and implications Ensure keys are activated and Office 365 is provisioned promptly Know the escalation path and guide resellers Ensure resellers are trained on renewal activities Support with renewal

Non – coterminous 13 Open license Office 365 Example: The customer has Open license and has added Office 365 SKU during the last 6 months of the 2 year term. Office 365 expires 6 months after the Open license expires.

Office 365 subscription expiration date seats Example: Customer has an Office 365 subscription with 100 seats. However, in month 10, customer adds 100 additional seats. The expiration date for all 200 seats is now 5 months past the expiration date of the first 100 seats Calculation: (100 seats x10 months) / seats

Cloud migration path Office 365 Add-on for OV 15

Organization-wide commitment concept exists in OV and OVS There are 3 Volume Licensing programs targeted for SMBs Organization-wide commitment means a customer commits to purchase at least a enterprise product to 100% of the organization to obtain a price advantage Office 365 Add-on SKU gives discounted OLS price to help customer avoid paying twice for functionality they have already committed for on-premises. 1 OVS Open programs commitment concepts 16 OV Open Windows (licensed per device) Client Access License Suites (licensed per device or user) Office Pro Plus (licensed per device) Microsoft Office 365 user productivity (licensed per user) 1 Commitments made can’t be terminated mid-term, therefore price discount is provided on OLS.

Office 365 Add-on summary 17 Target existing OV/OVS Customers with organization-wide commitment on Office Pro and/or Client Access License (CAL) Suite Target customers interested in migrating to the Cloud before their agreement expires Customers can experience cloud services at their own pace Recognize ongoing organization-wide investments in SA benefit Maintain existing sales motions via distributors and resellers Microsoft provides discounts to the distributor Discounted price allows partners to pass on the discount to their customers Microsoft does not control the reseller’s price to customer The discount increases based on the amount of functionality the customer has already purchased through on-premises

Office 365 Add-on detail 18 1 Open Value can be sold via managed LSP directly (only in US and Canada). However, Office 365 SKU is not sold in this 1 st tier channel. As a workaround, US LSP can order Office 365 SKU via Open License, referencing the offer code of “O365” together with the qualifying Open Value contract number. Office 365 purchased via OV and OVS What Office 365 service will be applicable? Commercial: Office 365 Midsize business, E1 and E3. Government: Office 365 E1, E1+Archiving, and E3. Education: Office 365 A3 Eligible OV and OVS typesCommercial, government, and education customers. What are the supported migration scenarios? See the next page for detail How discounting is establishedFrom Microsoft to distributor. 1 Microsoft does not set pricing for distributors to resellers or resellers to customers. Operationalizing the offerDistributor places Office 365 order via active OV/S to Microsoft with offer code of “O365”. After a qualification check, Microsoft will issue an invoice with the adjusted price. See detailed page.

Scenarios covered by Office 365 Add-on for OV 19 Commercial GovernmentEducation ME1E3E1 E1+ Archiving E3 A3 Core CAL N/A 1 -14% N/A -10%-7% N/A Faculty: -15% Student: -12% E-CAL 1 N/A Office Pro Plus-39% 2 -25%-11% Faculty: -38% Student: -56% Core CAL or E-CAL + Office Pro Plus -66% 2 -45%-36% Faculty: -51% Student: -56% 1 CAL Suite to M SKU scenario, as well as E-CAL only customer scenario are no longer part of the supported scenaio effective November This offer attemps to give price reduction for equvalent O365 functionality already purchased in the VL Program. There is no equivalent offer in O Discount % updated effective November 2013 to ensure alignment with equivalent offers and policies provide in other Volume Licensing Channels (such as Enterprise Agreement).

New customer guidance 20 Recommended guidance Purchase Office 365 through Open License or Open Value (non-organization wide) New customer No current license Licensing guidance Open License is a flexible and easy to use option for small and medium sized business customers to move to the cloud Put all of your customer’s IT spend onto a single bill Customers are able to purchase as they normally do while continuing to work with their partner of choice, no credit card required Easily plan for and manage your customer’s budget by purchasing a year subscription at a time Note : the Open program 5 license minimum order requirement has been waived for Office 365 Licensing scenario 20

Existing Open License customer guidance 21 Midterm customer guidance Purchase Office 365 through Open License Licensing position Open License Licensing guidance Midterm customers with an existing Open License can purchase Office 365 anytime Renewal customers with expiring SA can purchase Office 365 through Open License. Guidance is for partner supported renewals due to increased customer satisfaction and retention rate Office 365 subscription purchase may not necessarily be coterminous with Open License end date Currently, there is no licensing migration offer for Open License or Open License + Software Assurance (SA) customers Purchase Office 365 through Open License Renewal customer guidance Licensing scenario 21

Existing Open Value (non-organization wide) customer guidance 22 Midterm customer guidance Purchase Office 365 through existing Open Value agreement Licensing position Open Value (non-organization wide) Licensing guidance Customers can purchase Office 365 or purchase additional seats anytime. Note: Add-on SKUs are not applicable for non-organization wide customers Midterm customers with an existing Open Value agreement can purchase Office 365 anytime. Currently, there is no migration offer for Open Value customers At renewal, partner is strongly recommended to assess customer’s future needs and remove potential redundant coverage including SA or CAL. Note: Windows Server CAL is not a component of Office 365 Renew Open Value and purchase Office 365 If customer already has Office 365, renew Office 365 and renew SA for products and services not covered by the Office 365 subscription Renewal customer guidance Licensing scenario 22

Existing Open Value (organization wide) customer guidance 23 Purchase Office 365 Add-on SKUs Licensing position Open Value (organization wide) Licensing guidance Midterm customers can purchase Office 365 Add-on SKUs at a discounted price and in any quantity that is appropriate for their existing commitment Expiring Open Value (organization wide) customers are recommended to renew through Open Value (non-organization wide), which will provide more customer flexibility Renew through Open Value (organization wide) if customer values organizational wide SA+ price benefit Renewal customer guidance Options for alternative customer revnewal scenarios Licensing scenario Renew through Open License if customer needs full licensing flexibility Renew through Open Value (non-organization wide) 23 Midterm customer guidance

Open Value Subscription customer guidance 24 Purchase Office 365 Add-on SKUs Licensing position Open Value Subscription Licensing guidance Midterm customers can purchase a licensing position appropriate Office 365 Add-on SKUs at a discounted price Expiring Open Value Subscription customers are recommended to determine what on-premises products to keep and the velocity in which to move those products to the cloud. See additional information in the speaker notes. Open Value Subscription customers cannot renew SA solely in Open License. License + SA must be purchased If customer renews through Open Value Subscription and purchases Office 365, partner should assess which specific CALs should be purchased from Open License to maintain proper license coverage Renewal customer guidance Licensing scenario Renew through Open License if customer needs full licensing flexibility Renew through Open Value (non-organization wide) Renew through Open Value Subscription if customer values subscription to Windows/CAL enterprise products and other additional subscription products 24 Midterm customer guidance

Office 365 Open recap Office 365 is sold as a 12-month subscription, with up-front payment Reseller does not need to be advisor to sell Open/OV. But advisor status is needed to be a partner of record Customers can convert from product key billing to direct billing via MOSP Partner of Record will receive Office 365 renewal reminder 60, 30, 7 and 1 day prior to expiration OVs year 2 and year 3 anniversary orders still need to be submitted If not renewed by expiration date, notice will be sent to customer to renew directly with Microsoft (MOSP) Partner of record will receive advisor partner fees for transactions completed directly from Office 365 portal Organization-wide committed customers with Office 365 and/or CAL Suite will qualify for a reduced price

Train resellers about Office 365 Open Recruit new cloud resellers Address CPE for existing OV and OVS SMBs through Office 365 Add-on for OV Go Dos Focus on bringing new customers to Office 365. Office 365 OV offer is intended to address CPE for existing VL customers. 26

27 Resources Additional information and resources on Open programs and guidance is available. Learn more at: Licensing on MPNLicensing on MPN

Questions and answers 28 Why is Office 365 not an Enterprise SKU in OV/OVS? Due to systematic limitations, we are not able to offer Office 365 as an Enterprise SKU. How do I increase Office 365 subscription users? 3 Options: (1) Customer buys new product key from Open programs & redeems online, (2) Advisor sends customer order via MOCP, customer pays directly, and (3) Customer purchases seats directly on MOCP. How do I decrease Office 365 subscription users? Reducing the number of seats during the renewal process directly from Office 365 Administrative Portal. What are the options to renew Office 365? 3 Options: (1) Customer buys new product key from Open programs & redeems online, (2) Advisor sends customer order via MOCP, customer pays directly, and (3) Customer purchases seats directly on MOCP. Does the customer have to purchase the same number online as they have on premise? No they don’t. Customer can purchase Office 365 any quantity (seat count) as they like. Will Partners be notified of the upcoming expiration? Partner of Record will receive Office 365 renewal reminder 60, 30, 7 and 1 day prior to expiration, from Office 365 portal. Distributors are notified via weekly report either from Regional Operations Center personnel or posting in partner web folders on a share. Distributors can refer to the Office 365 detail report via local Operations Center (Process vary). Open/OV Agreement expiration notice is independent since it is not coterminous with Office 365 Subscriptions. Can the customer stop paying for on-premises side License/Software Assurance when they move to Office 365? No. OV/OVS Customer must fulfill the commitment for the reminder of their agreement term, at organization-wide level. Decrease of quantity is also not possible. To compensate for that, Office 365 Add-on provides heavily discounted price for Office 365.

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