SSMG 5.0: Pricing, Licensing and Promotions

1. SSMG 5.0: Pricing, Licensing and Promotions Ted Stinson

2. 5.0 Pricing, Licensing and Promotion Session • Goals • Preview details of 5.0 pricing, licensing and promotion plans • Get your feedback via quick polls • Notes and caveats • Still baking, locked down in the next 2 weeks – share up, not out • Mostly related to SF and VCS families on Unix and Linux • Have more to say? • SF Standardization: Breakout 1 (Josh, up next) • ROI Guarantee: Breakout 2 (me, Wed @ 10am) • SF Basic: Breakout 3 (Andy/Doug, Thus @ 10:30am)

3. SSMG 5.0 Strategy • Make Storage Foundation the standard for G5000 data centers to manage storage • Make Server Foundation the standard for G5000 data centers to manage servers and applications • Expand our market from high-end servers running Oracle on Solaris to every server, running every application and workload, on every O/S Standardize on Data Center Foundation to drive down cost, improve service levels, and simplify IT MESSAGE

4. 75% 29% 12% N/A 75% 14% 4% N/A 39% 7% 4% <1% 8% 2% 1% <1% 20% 12% 6% <1% 5.0 Strategy: It’s All About Attach Rate… Tier IV Tier III Tier II Tier I Overall Source: 2004 SF Family attach rate: VxVM, VxFS, SF/HA, SF Editions/HA, SF CFS/HA, SF RAC

5. The Opportunity • Getting our fair “share of wallet” in the G500 drives large upside • Only 100 of the G500 have spent more than $1M on SSMG in last 3 years • Only 185 of the G500 have spent more than $250K • The addressable market is significant • 7M servers will be shipped in 2006 • Non-Windows server CPU’s: 58% Linux; 21% Solaris; 15% AIX; 6% HP-UX • The pain for IT is real, and getting worse • 20M servers installed in 2004; $95B spent to manage • Low-end servers, blades, and virtual machines make the problem worse • It’s time to be bold • Competitive pressure has never been greater (Sun, Oracle, open source) • Our attach rate is lowest on the fastest-growing platforms • When we get in, we stay in • The SF standardization story works

6. 5.0 Pricing and Licensing Principles • Address customer licensing requirements • Support per-CPU pricing • Address virtualized environments • Align with SSMG 5.0 strategy • Increase low-end competitiveness • Enable proliferation • Simplify • Reduce agents, options, packages where possible • Aim for consistency in products, packages and price points

7. Process and Timeline • Milestones to Date • Working team formed and objectives set July 2005 • Initial 5.0 proposal to Kris Hagerman & Exec Staff Sep 2005 • Final proposal to Kris Hagerman & Exec Staff Dec 2005 • Reviews with Peter Donnelly (VP P/L) 1st week Jan 2006 • Reviews with Cynthia Williams (VP Fin) 2nd week of Jan 2006 • KH presentations to JWT and Tom Kendra staffs 2nd week of Jan 2006 • Review with Sales Ops Pricing Leads 3rd week of Jan 2006 • Methodology • Review of competitive and industry benchmarks • Analysis of bookings data • Sales force survey • Discussion with industry analysts (IDC) • Customer focus groups • Next Steps • Moving through approval process with other key stakeholders • Stakeholder approval – now until 2/7 • Finalize skus 15 days prior to channel notification (2/15) • Channel notifications 90 days prior to release (3/1 assuming June 5 GA)

8. Summary 5.0 Pricing and Licensing Recommendations • General • Make CPU-based pricing for SF family and VCS GA; do not EOL tier model • Reduce price in volume segment (Unix and Linux) • Server Foundation • VCS: bundle agents & options; eliminate on standalone basis • Storage Foundation • Remove Flashsnap as an standalone option • Create SF Basic to address new workloads • SF Management server available to all SF customers • EOL FS and VM as standalone products on Solaris • Promotions • SF Standardization: Pre approved discounts • SF Standardization: zero dollar license competitive upgrades for SF • SF Standardization: zero dollar OpForce licenses to deploy SF • SF Standardization: ROI Guarantee

9. Quick Poll #1 • Elimination of agents and options for VCS is a good thing? • Yes • No • Not sure • Should we EOL VxFS and VxVM on Solaris as standalone products? • Yes • No

10. Per CPU pricing

11. Summary • Per CPU pricing is a requirement for SSMG • Per CPU is an industry standard meter • Address need for licensing option where subset of CPUs are lit up • Certain customers have strong preference to purchase based on CPU • Simplifies pricing and licensing • Increasing demand for current per CPU pilot • 2004: 24 transactions for $9M, incl. HBoS $3.4M, Amadeus $1.9M, Clearstream $1.7M • 2005 (3 qtrs.): 67 transactions for $8.8M, incl. Telefonica $1.4M, JPMC $940K • Near daily inquiries into Peter Donnelly’s team about per CPU pilot

12. Recommendation • Recommendation • Optimize per CPU for Tiers 3 and 4 • Retain tier model and optimize for T1 and T2 • Have per CPU and Tier based models available side by side • Post GA evaluate whether to EOL tiering model for 6.0+ • Per socket • Expect some relief on high end discounting pressures • Set differential Unix vs. Linux price points • Benchmark price point Current Pilot Proposed GA(core) (socket) SF std $2,000 $3,750

13. Ratio of per CPU to Tier How will this look to my AIX customers? AIX: Server 50% Populated AIX: Server 100% Populated AIX: Server 75% Populated

14. Ratio of per CPU to Tier How will this look to my HP-UX customers? HP-UX: Server 100% Populated HP-UX: Server 75% Populated HP-UX: Server 50% Populated

15. Ratio of per CPU to Tier How will this look to my Solaris customers? Solaris: Server 100% Populated Solaris: Server 75% Populated Solaris: Server 50% Populated

16. Quick Poll #2 • Should we make per CPU pricing generally available? • Yes • No • Proposed price for SF std of $3,750 per socket? • Too high • Too low • About right

17. How will this look to my HP-UX customers?

18. How will this look to my Solaris customers?

19. Volume Segment Pricing:Linux and Tier 1a, 1b

20. Objectives for volume segment pricing • Adjust for decreasing cost of low end servers • Align Unix tier pricing closer to Linux per CPU • Increase footprint on Tier 1/Linux deployments • Assume more aggressive competitive stance • Low end Solaris (Sparc & x86) market vs. ZFS and Sun clusters • Oracle RAC on Linux to mitigate certification issues

21. Trend in Tier 1 Unix total bookings over last 12 quarters SSMG Total Bookings for Tiers 1A, 1B, 1C By quarter: Q4 CY02 through Q3 CY05

22. Price decline in low end Unix servers Next Generation: Opteron/Niagara Arch Last Generation: UltraSparc III/IV Arch * Tiering not yet published ** SF std price: 1A: $2,495 1B: $4,995 1C: $6,995

23. Proposed Tier 1 Pricing Adjustments

24. Proposed Linux Pricing Adjustments

25. Quick Poll #3 • Should we reduce price on Unix Tier 1a/1b and Linux? • Both • Only Linux • Only Unix Tier 1a/1b • Neither • Proposed reduction for Tier 1a/1b of 40% and 20%? • Too high • Too low • About right • Proposed reduction for SF HA on Linux of ~30%? • Too high • Too low • About right

26. Storage Foundation Basic

27. SF Basic Goals • Gain footprint on under-penetrated workloads • Block native/free tools from further penetrating into the data center • Enable key channels, particularly Linux h/w vendors, to bundle into offerings

28. SF Basic Proposal • SF Basic as free, fully-featured SF Std across all platforms, with deployment throttles • Maximum # volumes and file systems • Only bundled VxFS and VxVM would be supportable (no mixing/matching with 3rd party substitutes) • Full DMP ASL/APM and TPD for enterprise arrays • Select 4.1 and all 5.0 platforms • Pricing & Support • Free download with self-service (knowledgebase) support • Support subscription proposed $95/cpu/year for 24x7

29. Proposed SF Basic Throttles • Full SF Standard features • No VVR, QoSS, FlashSnap, ODM, CIO, other Editions or Enterprise features • Select 4.1 (Linux, Solaris Opteron) and all 5.0 platforms • Maximum 4 volumes • excluding system volumes required for booting – root disks • Maximum 4 file systems • excluding root file systems • All limits per PHYSICAL server (not VMs) • Contractual/EULA enforcement • Honor system similar to other products/licensing • Maximizes flexibility to evolve throttle points • Avoids “the cliff” effect as customer needs/workloads evolve • Code in warnings/upgrade links as limits exceeded

30. Quick Poll #4 • Proposed breakpoints (4 vols, 4 file systems) for SF Basic? • Too high • Too low • Need more breakpoints (eg Max 4 CPUs) • Proposed pricing for SF Basic - $95/per CPU per year? • Too high • Too low • About right • SF Basic is a…? [Multiple Choice] • Really scary • Long overdue • Something I’d position in my accounts

31. SF Standardization Promotions

32. Background • Goal: Increase SF/VCS revenue from non-Solaris platforms • Generate interest and “buzz” in the market and field sales • Create a compelling event to close deals • Promote customer deployment of non-Solaris SF/VCS • Challenges • Revenue cannibalization is risk • Sales is executing against an existing account plan • Solution: Value Delivery Guarantee • Publicized promotion available to any customer who purchases more than $500K of net SF licenses

33. Publicized Promotion (Proposed):The Value Delivery Guarantee • Tagline: “Our software pays for itself. Guaranteed.” • The Guarantee • We will deliver a plan that shows how we can deliver ROI in excess of 100% of their net license purchase within 6 months of purchase • If we can’t, we give them a credit towards the future purchase of Symantec software in the amount of the net license – value delivered • The Program • Customer buys at least $500K of SF Enterprise • Symantec provides 2 weeks free ECS consulting and delivers a blueprint for how to reclaim value from Tier 1 storage and how to avoid costs on other software (e.g. PowerPath, etc…) • The Fine Print • Deals must be closed by end of Fiscal 2007 • Customer must follow our recommendations on implementation • We are not obligated to accept any deal and we will ensure we can succeed before agreeing to terms

34. The Value Delivery Guarantee:Projected ROI Ranges Savings SF Enables

35. The Value Delivery Guarantee:Application of Terms • Customer expresses interest in program to account team or by responding to outbound marketing activities • Account team completes initial profile • Summary Server Forecast • Competitive Products Currently Deployed • Storage Profile and Cost • Request for in-depth ECS assessment reviewed and approved by RM and Promo Deal Desk • Likelihood of customer success • Likelihood of transaction completion • ECS conducts 2 week in depth assessment • With VP Sales and VP PM approval, sales team delivers plan and final proposal to customer • Customer signs addendum with Guarantee terms as part of transaction • Request for refund must be made in writing; reviewed and approved by VP Sales and VPM PM

36. Financial Considerations • Revenue recognition • Deferred 6 months until end of customer option to seek refund • Comp and Quota Relief • Transaction applied towards current quarter quota and comp plan • Refunds paid out deducted against subsequent quarter(s) commission

37. SF Standardization – Base Financial Program • Program applies to UNIX and Linux platforms exclusively • License discount applicable to Storage Foundation Standard and Enterprise editions only • CPU attach rate based on entire Storage Foundation family • Support renewals capped at 5% increase per year • All deals still go through BAF process

38. SF Standardization – Additional Incentives • Installed base migration licenses • Provide standardization solution for existing installed base of servers currently using a competitive product • Pricing: zero dollar licenses; support 23% of list price • Licenses can’t be transferred • OpForce • Make deployment easy using OpForce • OpForce version can only be used to deploy Storage Foundation • Pricing: zero dollar licenses; support 23% of list price

39. Quick Poll #5 • Your take on the ROI Guarantee? [Multiple Choice] • I’m skeptical we can show that much savings • Customers will dismiss • It’ll open doors • It’ll accelerate sales cycles • I have a customer that I’d position this to • Your take on the license trade-in program? [Multiple Choice] • I’m nervous about free licenses • Customers will dismiss • It’ll open doors • It’ll accelerate sales cycles • I have a customer that I’d position this to