Steve Kerr

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Steve Kerr Business Development Manager SMSP
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Agenda

• Microsoft Financing Update Global Local
• Product Definition
• Customer Benefits why customers buy
• Partner Benefits why use Microsoft Financing
• How to Quote Sell Microsoft Financing
• Submitting Processing Deals
• Resources References
• Questions?

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Global Update

• FY06 record year for MS Financing
• Total volume gtUS410m
• Up 115 on FY05
• New markets opened
• Increased global team

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Local Update

• Microsoft Financing launched officially in April
  2006
• Some mainstream industry press coverage
• Partner briefing sessions in Syd Melb
• Key Message
• Aim is to provide a simple, easy affordable
  financing to assist partners enable sales of
  Microsoft solutions.
• Simple straightforward financing
• Easy low doc loans, high approval rates
• Affordable competitive rates, no fees

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Local Update

• FY07 first full year in Australia
• FY06 Q4
• over 3.5m booked
• License (software only) financing
• 60 total funding
• 25 transactions
• Average deal size 560,000
• Total Solution Funding
• 40 total funding
• 75 transactions
• Average deal size 107,000 (15,000 - 350,000)
• Main focus awareness integration

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Local Update

• New people
• Katrina Braund, SMB Sales Program Manager
• joins
• Steve Kerr, Business Development Manager, SMSP
• Trevor Hudson, Business Development Manager, EPG
• New Marketing Initiatives
• New Promotions
• Partner Product Training
• Get ready now!

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Microsoft Financing Product Definition

• Microsoft Financing is a financing program
  offered and administered by
• De Lage Landen (DLL)
• DLL is a subsidiary of Rabobank
• DLL provide back office support in 11 countries,
  including US, UK, Canada, Australia NZ
• Microsoft policy direction
• Pricing
• Credit assessment
• Break-even philosophy

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Microsoft Financing Product Definition

• Simple loan finance
• Principal interest loans
• License financing and Total Solution Financing
• License Financing (software only)
• Enterprise Agreements
• Select L or LSA
• Open License Agreements
• Software Assurance
• Microsoft Dynamics Products

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Microsoft Financing Product Definition

• Total Solution Financing
• Software
• Microsoft software
• ISV software
• Third party software
• Partner Services
• Implementation or migration
• Ongoing services
• Hardware
• Must have a Microsoft component

• Any combination
• No minimum hardware

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Microsoft Financing Product Definition

• Terms
• Minimum deal size - 15,000
• Repayment terms from 2 to 5 years
• Flexible repayment structures
• Monthly in arrears
• Deferred payments
• Structured payments
• Cater to annuity licenses or milestone
  implementation
• Competitive rates
• Majority of deals between 7.5 8.75 (Bank
  Financing, secured against property _at_ 7.95)
• No application fees or management fees

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Microsoft Financing Product Definition

• What we cannot do
• We cannot provide a lease on hardware
• We cannot provide 0 finance (although you can!)
• We cannot pay commissions on deals
• We cannot offer tax /or legal advice on the
  suitability of a financing program.

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Microsoft Financing Customer Benefits

• Customers can deploy solutions now enjoy the
  benefits today.
• Customers can budget confidently over time
  predictable cash flow.
• Competitive cost of funds

• Match payments with usage.
• No residuals or balloon payments
• Customers can make decisions based on
  requirements, not upfront cost.

You wouldnt dream of paying cash upfront for
your office space. Why would you for your IT
solutions?
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Microsoft Financing Customer Benefits
Microsoft Office Professional (55,000) Microsoft
Windows XP (22,000) Microsoft Windows ServerTM
(4,000) Microsoft Exchange Server
(8,000) Services or other Microsoft Products
(11,000)
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Microsoft Financing Customer Benefits

• Microsoft Financing can provide maximum
  flexibility
• Payment deferrals
• Variable payments
• Customers can increase payments as they deploy
  more solutions
• Milestone implementations
• Line of credit facilities
• Free up cash and other credit facilities for core
  business
• Financing may improve return on investment.
• Easy to apply, easy to document

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Microsoft Financing Partner Benefits

• Increased deal sizes
• Financed deals are between 15 40 larger than
  non-financed deals
• Less reliance on discounting focus on payments,
  not price
• Create cross sell and up-sell opportunities
• Shorter sales cycle
• Close deals sooner

At least half of our new client wins have been
fuelled by the availability of financing Bryan
Stuart, CFO, Junction Solutions
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Microsoft Financing Partner Benefits

• Stronger Client Relationships
• Become a Total Solution Provider
• Develop multi-level relationships within customer
  management
• Protect your customers
• Revenue recognition remains the same
• Remuneration as if customer paid cash.
• Invoices paid within 48 hours of receipt
• conditional upon deal approval and all required
  original documentation provided.

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Microsoft Financing Partner Benefits

• Define future sales opportunities
• Clearly defined payment cycle
• Create opportunity to discuss upgrade strategy
• Microsoft Financing is very competitive
• Aim is to support sales of Microsoft products

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Microsoft Financing How to Sell

• Introduce early in the sales process
• Change focus from upfront price to budget
• Expand the scope of the project
• Meet exceed customer expectations with regard
  to flexibility simplicity
• Get MS Financing involved
• Provide high perceived value payment options
• E.g. No-cost payment deferrals or discount / 0
  interest offers

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Microsoft Financing Quoting Examples

• Standard quotes
• Line of Credit / Milestone
• Zero Cost Deferment
• Discount Rate or 0 Financing

Taxis can be tough to get, especially when you
really need one. Same with IT solutions. Current
needs dont always map to current budgets. Well,
now they do. With Microsoft Financing, youre the
hero.
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Microsoft Financing Standard Quote

• Download calculator from www.microsoftfinancing.co
  m
• Online calculator
• Example
• 200,000
• 4 years
• 4,915.51 (24.58 per ,000 financed)

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Microsoft Financing Milestone Implementation

• Request quote via Microsoft Financing
• Example
• 100,000 on day 1
• 50,000 in 3 months
• 50,000 at end of project (6 months)
• 5 year upgrade cycle

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Microsoft Financing Zero Cost Repayment Deferral

• Request quotation via Microsoft Financing
• Example
• 200,000
• 4 year term
• 4,915.51
• Customer payments beginning in 3 months, invoice
  payment today
• Use 4,204.12 (or 2.1 discount) to offset
  interest, and book your deal today!

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Microsoft Financing Discount Interest Rate
Quotation

• Refer to Microsoft Financing for quotation
• Example 0 interest rate
• 200,000
• 4 years
• Payments 200,000 / 48 4,166.67
• Required subsidy 30,468.57 (15.2 discount)

• Example 5 interest rate
• 200,000
• 4 years
• Payments 4,605.86
• Required subsidy 12,598.92 (6.3 discount)

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Microsoft Financing Discount Rate Table

• 200,000 rate subsidy reference table
• To be used as a guide only. Please refer to
  Microsoft Financing for actual quotation.

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Microsoft Financing Applications Documentation

• Deals less than 500,000
• Deals greater than 500,000
• Milestone, Line of Credit or structured deals

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Microsoft Financing Less than 500,000

• One Shot Loan Agreement
• Request Directors guarantees private companies
• Waived for businesses trading more than 5 years
  with gt10m turnover
• Direct Debit
• Deals over 100,000 audited financial
  statements
• Available to download from www.microsoftfinancing.
  com
• Credit decision times
• Less than 100,000 24 hours
• 100,000 - 500,000 2 business days

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Microsoft Financing Greater Than 500,000 or
Structured

• Master Loan Guarantee Document
• Individual one-page loan schedule
• Request Directors guarantees
• 2 years audited financial statements
• DLL to prepare documentation
• Credit Decision
• 500,000 to 1m 3 business days
• gt1,000,000 5 business days

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Microsoft Financing Variances

• KPI Variances
• Interest Rate adjustments
• Documentation changes
• No financial statements
• No Directors guarantees
• We will work as quickly as we can to meet your
  clients unique requirements.
• Our aim is to enable sales.

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Microsoft Financing FY 07

• Marketing customer partner
• Campaigns to be confirmed
• Smarter Sales Series
• Online Training Program

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Microsoft Financing
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Microsoft Financing Further Information

• Take Action
• Apply to participate now
• Visit the MS Financing Booth
• Marketing materials
• Quoting demos
• ask the experts
• Go online
• www.microsoftfinancing.com
• Australian New Zealand content
• Documentation
• Marketing materials
• Quoting

• Steve Kerr
• v-steke_at_microsoft.com
• 0448 864 168
• DLL
• 1800 799 673
• Applications settlements

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Steve Kerr Business Development Manager SMSP