Implications of FASB Rule Changes 2017 IDC Special Study of IT and Finance Executives that Unveils Buying Impacts of FASB Susan Middleton, TFS

© IDC Visit us at IDC.com and follow us on Twitter: @IDC Executive Summary 3 Research Objectives 6 Key Analysis and Findings 7 Related Research 12 Contact Information 13 Appendix Methodology / Demographics 16 Font Calibri Quick concept to be related, but different from the MAP Agenda page. TBD how the hyperlinking would work, if it can be automated or if the analysts will do it and if not PS&T will be able to incorporate step into production process. © IDC Visit us at IDC.com and follow us on Twitter: @IDC

© IDC Visit us at IDC.com and follow us on Twitter: @IDC FASB Compliance Leads to Review of IT Buying Processes: 94% of Respondents Plan to Change Buying Behaviors FASB Compliance is Spurring Review of IT Acquisition Strategies by Deal Size, equipment types and financing options Most firms expect costs for compliance efforts with be over $50K Traditional IDC color palette Opportunity for new SaaS platforms to help with longer term compliance efforts; mix of new and existing partners © IDC Visit us at IDC.com and follow us on Twitter: @IDC  ToC

© IDC Visit us at IDC.com and follow us on Twitter: @IDC Both IT and Finance executives are leading the FASB compliance efforts. Most firms will hire an outside accounting firm to help with compliance. For organizations, the biggest compliance hurdles are accounting systems and changes to internal controls. Opportunities exist for firms to help compile lease documentation and support compliance efforts Traditional IDC color palette For US enterprises, the pending FASB rules are initiating a comprehensive review of future equipment acquisitions and will lead to an evaluation of other IT asset procurement options © IDC Visit us at IDC.com and follow us on Twitter: @IDC  ToC

This IDC survey reviews data from IDC’s 2017 FASB Special Study IDC’s Technology Financing Strategies and data center teams conducted a survey about the new FASB rules and the implications on customers future buying behaviors Survey respondents were 200 IT and Finance decision makers in medium to large enterprises in the US during January 2017. All participants were very knowledgeable or somewhat knowledgeable about the pending FASB rules and their firms plans for preparation. The goal of the survey was to assess customers views of the new FASB rules, firm readiness, and impact on future buying behaviors. Additional detail and data available via request © IDC Visit us at IDC.com and follow us on Twitter: @IDC  ToC

© IDC Visit us at IDC.com and follow us on Twitter: @IDC  ToC

Source: [FASB Survey IDC January 2017, N=200 = Respondents Use Procurement Mix of Leasing and Purchase; Majority Work with Vendor Captive Today, does your organization lease or purchase its IT assets? And your firms’ Finance Partner? Source: [FASB Survey IDC January 2017, N=200 =  ToC

Source:: [FASB Survey IDC January 2017, N=200 Majority of Deals Include Bundled Offerings of Equipment, Software, Services and Support Q. Do the leasing deals include software, service and support or IT equipment? Source:: [FASB Survey IDC January 2017, N=200  ToC

IT and Accounting Departments are Leading FASB Compliance Efforts Which teams within your company are preparing for the new FASB rules? Source:: [FASB Survey IDC January 2017, N=200  ToC

Source:: [FASB Survey IDC January 2017, N=200 Most Firms Want Help with FASB Preparation and Accounting and Consultants are Top Options Which type of companies are you working with to help your firm transition to compliance with the new FASB rules? Source:: [FASB Survey IDC January 2017, N=200

SaaS Platforms Play a Role in FASB Compliance Are you planning to acquire a SaaS platform to help with the FASB transition? Is this an existing or new platform? Source:: [FASB Survey IDC January 2017, N=200

Most firms expect to pay over $50,000 for FASB Compliance What are the cost projections for your firm to prepare for the transition to compliance with new FASB rules? Source:: [FASB Survey IDC January 2017, N=200

Source:: [FASB Survey IDC January 2017, N=200 Two Biggest Challenges Are Change to Accounting Systems and Internal Controls: Underscores Need for Outside Help Which aspects of the FASB compliance will be most challenging? Source:: [FASB Survey IDC January 2017, N=200

© Source:: [FASB Survey IDC January 2017, N=200 FASB Compliance Leads to Review of IT Buying Processes: 94% of Respondents Plan to Change Buying Behaviors When considering adding IT capacity in the future will the new FASB rules change your firms buying process? © Source:: [FASB Survey IDC January 2017, N=200

© Source:: [FASB Survey IDC January 2017, N=200 Most Expect Minimal Decrease to IT Acquisition Ratios: Will happen in 12 months By what percentage do you expect your IT asset acquisition ratio to decrease? © Source:: [FASB Survey IDC January 2017, N=200

© Source:: [FASB Survey IDC January 2017, N=200 FASB Compliance is Spurring Review of IT Acquisition Strategies by Deal Size When considering future IT asset acquisitions and the new FASB rules, will deal size impact your firm's decision about lease versus purchase? © Source:: [FASB Survey IDC January 2017, N=200

© Source:: [FASB Survey IDC January 2017, N=200 FASB Compliance is Spurring Review of IT Acquisition Strategies by IT Asset Will the pending FASB changes impact your firm's acquisition of other IT assets? © Source:: [FASB Survey IDC January 2017, N=200

Change in IT Asset Acquisition Strategy will Impact Certain Equipment Categories Which of the following IT assets will be impacted by the pending FASB changes? Respondents that said Yes to change in strategy © Source:: [FASB Survey IDC January 2017, N=200

© Source:: [FASB Survey IDC January 2017, N=200 Over 91% of Respondents want Bundled Offers- Underscores Previous Survey Findings Is your firm more likely to look for bundled offers that include hardware, software and services (including maintenance and support) as a results of pending FASB changes? © Source:: [FASB Survey IDC January 2017, N=200  ToC

Most Respondents Considering Other IT Infrastructure Alternatives Will the pending FASB changes cause your team to consider other IT infrastructure alternatives? © Source:: [FASB Survey IDC January 2017, N=200 n =  ToC

Private Cloud Is Top Consideration- Hosted and On-site Which of the following IT infrastructure alternatives will your team consider as a result of FASB changes? © Source:: [FASB Survey IDC January 2017, N=200

Pending FASB Rules May Cause Shifts in Funding Strategies Will the pending FASB changes cause your firm to reconsider their leasing strategy? Where will you get your funding for IT acquisitions? © Source:: [FASB Survey IDC January 2017, N=200

© IDC Visit us at IDC.com and follow us on Twitter: @IDC Essential Guidance Enterprises are preparing for new FASB compliance rules and seeking outside help from accounting firms or consultants Both Finance and IT leaders are leading internal FASB compliance efforts and will have an improved level of detail about costs related to IT procurement and leasing. This new knowledge will impact future IT asset buying behaviors. Majority of respondents expect to change IT procurement behaviors because of improved data about acquisition strategies IDC survey data reveals: The equipment types that are under increased scrutiny Which IT consumption models are most popular as alternatives to traditional acquisition behaviors © IDC Visit us at IDC.com and follow us on Twitter: @IDC

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Screener Requirements IDC’s Technology Financing Strategies and data center teams conducted a survey about the new FASB rules and their firms compliance efforts. Annual Revenue $100M-$500M Over $500 M US 37% 64% Field Time: January 2017 Method: Web Screener Requirements Must be involved in the decision about all IT procurement for their firms All respondents were knowledgeable or very knowledgeable about the new FASB rules and compliance efforts  ToC Source: [FASB Survey IDC January 2017, N=200

Source: [FASB Survey IDC January 2017, N=200  ToC