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IBM Think!Thursday Sales Enablement Series

IBM Think!Thursday Sales Enablement Series. IBM Software Think!Thursday Processor Value Unit Licensing Kickoff July 27th, 2006. IBM Virtual Innovation Center Think!Thursday Details.

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IBM Think!Thursday Sales Enablement Series

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  1. IBM Think!Thursday Sales Enablement Series IBM Software Think!Thursday Processor Value Unit Licensing Kickoff July 27th, 2006

  2. IBM Virtual Innovation Center Think!Thursday Details • Presentation and Audio replays available from the IBM Virtual Innovation Center (http://www.ibm.com/partnerworld/vic) • VIC Think!Thursday access instructions: • Must add Think!Thursday to your VIC profile • After logging in, select Product selections from the left hand navigation bar • Select “Add a product” • Select the Software Brand “Think!Thursday sales series” of your choice and click Submit • Refresh by clicking on the VIC link at the top of the left hand navigator. • To access Think!Thursday from the VIC • After logging in, select “Selling Resources” from the left-hand navigation bar • Select the Software Brand “Think!Thursday sales series” of your choice from the Sales & marketing section

  3. IBM Think!Thursday Program Information • Think!Thursday Presentations and Audio Replays on the VIC • Overview Tab / Upcoming Events by Software Brand • Find upcoming sales series details and presentations prior to the event • Overview Tab / Current Replays subsection by Software Brand • Find current month’s sales series previously held including presentations and audio replays • Resides here for 1 week after live call, then located under Education Tab. • Education Tab by Software Brand • Find archive of all prior IBM Software brand sales series presentations and audio replays • IBM Think!Thursday schedule of events • IBM Virtual Innovation Center (Upcoming Events) • PartnerWorld Marketing and Enablement calendar • Think!Thursday Program Feedback – Program Managers: • Alex Kaplin (akaplin@us.ibm.com) • Amy Malkasian (amalkasi@us.ibm.com) • Mike Ryan (meryan@us.ibm.com)

  4. Processor Value Unit Licensing Executive Kickoff • Brigitte Acke,IBM AP Software Channel Sales Executive

  5. Processor Value Unit Licensing for MiddlewareEvolving the Structure to Provide a Foundation for the Future Processor Value Unit Overview Education July 27, 2006

  6. General Education Agenda • What is this Announcement • Software Licensing Background • Changing Processor Technology • Software Vendor Licensing Response • Processor Value Unit Licensing • Summary

  7. What is this Announcement? • A licensing structure and strategy for per processor priced middleware in Passport Advantage • Simple conversion from current licensing • Effectively software prices do not change for existing processors • Announced and GA’d on July 25, 2006

  8. Per Processor Software Licensing • Historically, one license entitlement for each processor core in the server • A significant number of SWG middleware products use per processor licensing Server Core Core Core Core 4 Entitlements Required SWG Revenue on x86 vs RISC Platforms Revenue is split fairly evenly between x86 and RISC • Double digit growth on x86 IBM Power Sun Sparc HP PA RISC HP Itanium Intel Xeon AMD Opteron

  9. 1 Core 1 Core 1 Core 1 Core 1 Core 1 Core 1 Core 1 Core 1 Core Same Workload What Exactly Is the “Processor” Dual-core Chip Single-core Chip 1 2 1 2 1 1 2 1 1 • IBM defines processor = core However, Not All Processor Cores Are Created Equal The number of processor cores required for a given workload varies by processor technology

  10. Year 1 4 Proc Year 3 1 Core 2 Proc Year 5 1 Core 1 Proc 1 Core 1 Core 1 Core 1 Core 1 Core Constant Workload One Processor Core Improve Core Strategy Core Disparity Core Performance Multi-core Strategy Time Historically, Fewer Processor Cores are Needed over Time Faster processor cores are capable of running more work Processor Core Disparity Will Increase • IBM Power processor core performance increasing • Intel / AMD processor core performance is expected to be flat

  11. X86 X86 X86 X86 Software Vendors Are Differentiating by Processor Type This Has Added Complexity To Software Licensing . . . x86 Server On x86 dual-core chips, 0.50 license entitlements are required per processor (IBM per processor policy for x86 dual-core is “1 entitlement for 2 cores”) • 2 Dual-core Chips • 4 Processor Cores 2 Entitlements Required IBM has three different middleware per processor core license entitlement levels today (Result: fractional licenses) * Microsoft per core entitlements are derived from their per chip licensing.

  12. XXXXXXXXXXXXXXXX X X X X X X 3 7 11 15 2 6 10 14 4 8 12 16 1 5 9 13 . . . And gets even more complex over time “. . . [this Licensing approach is] tactical, not strategic or visionary… this model will not scale to address 16 core environments that will be commonplace…by 2010” (Source: Gartner Group, “Oracle Announces New Multicore Pricing and Licensing” 2/06) Future Server • 1 Chip • 16 Cores ?? Entitlements Required And Customers Want Licensing Granularity RISC Server Demand ability to license to the processor core – or below • 2 Chips • 4 Cores Appl Appl Appl DB2 1 DB2 License Required

  13. License requirements are only part of the effective price Price per Processor = License quantity x Product price per License Customer Focus Should be on the Total Effective Price * Suggested Retail Price

  14. Marketplace Needs a New Licensing Structure Objectives of Processor Value Unit Licensing • Industry licensing leadership with sustainable structure • Balance simplicity with granularity • Simple structure and conversion • No price changes for software on existing processors • Maintain license scalability and transferability • Minimum change, keep new license & maintenance renewal structure • More granular and avoid fractional core licensing • More flexible pricing to address disparate core performance • Particularly for multi-core chips • Enable sub-capacity processor licensing to the core • Continue to deliver software price performance • Clarity in licensing structure

  15. Introducing Processor Value Unit Licensing • Middleware will be licensed in processor value units • Each processor core assigned a specific number of processor value units • Acquire the appropriate number of value units for each processor core • Each middleware program has a unique price per value unit • Processor value units are transferable among systems by product within the enterprise * Power PC 970 and Power 5 QCM dual-core chips require 50 Value Units ** T1 entitlements per processor adjusted with the elimination of fractional licenses.

  16. T1 T1 T1 T1 T1 T1 T1 T1 Processor Value Unit Licensing has simple conversion…… Current per Processor Entitlements x 100 = New Value Unit Entitlements …..And Avoids Fractions With the new structure, customers will acquire the required number of processor value units for each processor core Server • 1 Octi-core Chip • 8 processor cores 30 x 8 = 240 value units

  17. Additionally, Simple Migration of Existing Entitlements • Existing Maintenance Processor Entitlements converted to Processor Value Unit Entitlements • Current Per Processor Entitlements x 100 = Processor Value Units • Same conversion factor for all processor types *

  18. Current per Processor Price /100 = New Processor Value Unit Price With No Price Changes for our Middleware for Existing Processors* • Consistent conversion factor to create product prices • Both New Licenses and Maintenance Renewals • Customer price = # entitlements X price per entitlement . . . UNCHANGED!* * There may be slight changes due to rounding with the implementation of processor value units in some countries

  19. Software price performance improvements will range over time depending upon a number of factors including market conditions Price Performance Processor core performance levels will vary between chip vendors • Processor Value Units relative to core performance Processor Core Performance # of Processor Value Units Time Processor Value Units Provide Flexibility Through Granularity • Value Unit Licensing at the processor core level • Capability to enable sub-capacity licensing • Granularity to address changing technology • Flexibility to create new processor value unit levels • Deliver software price performance improvements

  20. Increased Clarity as New Processors Will Be Assigned Processor Value Units • Deliver software price performance improvement • Over time, new processors will be differentiated based on relative performance, among other factors • Overall framework balances precision and simplicity

  21. Quote and Order Tools • Processor “Value Unit Calculator” is available • Contains a “table” which indicates number of processor value units required for each processor core of all available vendor chips • Calculates number of processor value units required for every hardware environment • Used to calculate price (number of value units X price per value unit) • “Value Unit Calculator” will be inserted in SWG supported tools • Distributed Software Price Book • BP eOrder • PA Online • Value Unit Table is downloadable from Lotus Notes Pricing Data Base for use with: • User developed tools • VADS who do not use BP eOrder

  22. New Tools to Determine Processor Value Unit License Quantities • Processor Value Unit Calculator Helps Determine License Quantities • Passport Advantage Online contains a link to the processor Value Unit Calculator • Calculates number of processor value units required for every hardware environment • Used to calculate price (number of value units X price per value unit)

  23. Benefits Of The New Structure Customer • Provides granularity balanced with simplicity • Simple structure with easy conversion • Maintains license scalability and transferability • Enables sub-capacity processor licensing to the core • More flexible pricing to address disparate core performance • Delivers clarity and predictability • No price changes for software on existing processors • Continue to deliver software price performance improvements • Over time, new processors will be differentiated based on relative performance • Sustainable licensing structure • Addresses key marketplace needs with flexible structure Sales • Provides an opportunity to capture additional revenue as customers migrate licenses to more powerful processors • Software price performance improvements is managed • Leverage flexibility and granularity to sell value with less discounting

  24. Processor Value Unit Part Numbers and Pricing Implementation

  25. Processor Value Unit Part Numbers and Pricing Implementation • Established Processor Value Unit Part Numbers • Replacing 1300+ Per Processor Part Numbers • Each Per Processor Part Number is replaced by a Processor Value Unit Part Number • License plus 12 months Maintenance, Maintenance Renewal, etc. • Price and Passport Advantage Point Rounding • U.S. Dollars and Passport Advantage points were rounded to nearest two decimals • Some prices may be impacted +/- 1% by currency or country rounding • Passport Advantage point rounding should not impact customer band level • Created packs of 10 Processor Value Units as the minimum order quantity for programs where: • Per Processor License Plus Maintenance Price was less than US$1,250.00 • Maintenance was less than US$250 • Simplicity was needed for billing and administration • For example, US$100/100 = US$1.00 and when discounted would be below $1.00

  26. New Part Numbers, but No change to Part Number Structure • Part number structure unchanged • License + 12 months of Maintenance • Maintenance Renewal • Maintenance Reinstatement Part Number Structure Unchanged WAS ND Value Units WAS ND Processor Note: Example above assumes processor value unit assignment = 100 (eg. single-core chip type)

  27. Next Steps Processor Value Unit Licensing sales kit (includes): • Scripted customer presentation • English audio of this presentation (mp3 file) • Announcement letters • FAQs • Processor Value Unit table • Key terminology • Sales scenarios • Replacement part number file • Customer deliverables • Overview presentation (no script) • English audio of this presentation (mp3 file) • Brochure • FAQ

  28. Reference Material • See the Processor Value Unit Licensing Announcement for Passport Advantage Middleware effective July 25, 2006 for more details. This, and other education material, will be available on the Passport Advantage web site • Questions should be directed through the normal software support structure. If they are unable to answer a question, they will have access to the Processor Value Unit Licensing project office.

  29. IBM Business Partner Channel Sales Enablement Processor Value Unit Licensing Michael Ryan, IBM Software Group Business Partner Enablement meryan@us.ibm.com

  30. URL: http://news.yahoo.com/s/gizmodo/20060710/tc_gizmodo/intelplans32coreprocessorby20092010;_ylt=Aqw8rgw0RBX.icu3VMJVZiEjtBAF;_ylu=X3oDMTA0cDJlYmhvBHNlYwM-

  31. IBM Business Partner Sales Enablement Announce July 25 IBM Business Partner Processor Value Unit Sales Skills Training Aug 2nd IBM Think!Thursday Sales Series Kickoff July 27th July August October November Legacy Passport Advantage P/N overlap and availability

  32. Processor Value Unit Sales Skills Training • Sales skills enablement • Processor Value Unit technology education • Sales scenarios • Sales tools • Value Unit calculator • Conference call schedule • AP Geography: • Date: August 2nd, 2006 at 12:00 PM [(GMT+08:00) Kuala Lumpur, Singapore] • Conference call details link • Americas and Europe: • Date: August 2nd, 2006 at 11:00 AM [(GMT-05:00) Eastern Time (US & Canada)] • Conference call details link

  33. Software Sales Deliverables • Processor Value Unit Resources for Business Partners • Announcement Letter • July 27th Processor Value Unit Licensing for Middleware Kickoff • audio replay available 3 days after event • August 2nd Processor Value Unit Sales Skills Training • audio replay available 3 days after event • Processor Value Unit License Structure Overview • Sales Scenarios • FAQs • Customer Resources • Processor Value Unit Calculator • Passport Advantage Online for Resellers • IBM ID and password required

  34. Call to Action • Attend the July 27th IBM Think!Thursday Processor Value Unit Licensing for Middleware Kickoff • Attend the August 2nd IBM Business Partner Processor Value Unit Sales Skills Training conference call • Review the software sales deliverables available at the Processor Value Unit Resources for Business Partners website • Contact your IBM Software Distributor , Techline, or IBM Business Partner sales representative for additional details and questions

  35. Polling Questions • The content for this web conference was at the appropriate level. • Excellent (*1) Good (*2) Fair (*3) Poor (*4) • Overall web conference rating • Excellent (*1) Good (*2) Fair (*3) Poor (*4)

  36. Press *1 Please be sure your phone’s mute function is turned off when asking your questions!

  37. Hindi Korean Traditional Chinese Gracias Russian Spanish Thank You Obrigado English Brazilian Portuguese Arabic Danke German Grazie Merci Italian French Simplified Chinese Tamil Japanese Thai

  38. IBM Think!Thursday ScheduleIBM Software Think!Thursday Aug 24th (11 AM ET) Title To Be Announced DateTitle • Aug 3rd IBM Tivoli Think!Thursday (11 AM ET) • Tivoli Mid-market Solutions: Update on the Express (SMB) Portfolio • IBM WebSphere Think!Thursday (1 PM ET) • The Benefits, the Value and Achieving SOA Certification Status Aug 10th IBM Rational Think!Thursday (9 AM ET) • Automated Software Quality • IBM Information Management Think!Thursday (11 AM ET) • Title To Be Announced • Aug 17thIBM Lotus Think!Thursday (11 AM ET) • Web Content Management

  39. IBM Software Think!Thursday replays available on the VIC (Virtual Innovation Center) June 22ndAutonomic Problem Determination May 25thPassport Advantage Changes in the Distribution of Renewal Quotes April 27thIBM’s Software Acquisition Strategy March 23rdIBM Software Group’s Business Partner Software Value Incentive Program Feb 23rdHow & When to Access Pre- and Post-Sales Business Partner Support Jan 26th2006 Business Partner Channel Strategy

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