John Chen Chairman, CEO, and President

Opposing Forces Client/Server Explorer COM Distributed C Clusters Mainframe Netscape CORBA Centralized Java MPP

Dynamic and Complex Environment Complex Simple StableDynamic Organization Environment Today’s Environment

Fortune 2000 Environment 52 applications Multiple DBMS systems Heterogeneous hardware and networking Globally operating in six countries 5000 employees Source: MetaGroup

Fundamentals To Win  Foundation is fundamental  ROI is achieved through adaptability and integration

Essential Building Blocks "Today, the e-Business Platform has become the foundation for a complete Internet infrastructure that will adapt to handle applications as services to the platform" Steve Garone, IDC Integration Enterprise Web Sites 305M CARG 107% Personalization and Services Enterprise Portals 2.3B CARG 57% Analytic and B2B Applications Self-Service CRM, B2B 2.4B CARG 80% Foundation Departmental Web Sites 705M CARG 100% Source: IDC IT Spending Y2000 “Always Available” Enterprise Self-Service 1.0B

Two Opposing Choices to Reduce Complexity  Make everything work together  Make everything the same

SyBuild: Sample Fortune 2000 Company

Respond to change quickly Reduced latency Leveraged ERP investments Reach all your touch points of the enterprise Increased collaborative interaction Liquidity ROI Value Points

Solution 1: Make Everything Work Together

Advantages Re-use existing applications that work Use of best-of-breed applications Reduce latency Lower overall cost Faster to deploy Advantages Disadvantages Need to challenge people to learn to be more aware Cost Model Adapter Software $600,000 EAI software Includes (6) adapters at 100K each. $250,000 EAI Hardware costs $75,000 Professional Services $4.250M 5x cost of software $5,452,500 Source: MetaGroup 1st year maintenance $127,500 15% of software Training$150,000 Assume 10 classes

Use of Standards and Integration EAI open frameworks –Adapters to applications –Adapters to messaging infrastructure Use emerging standards –XML, J2EE, Web Services Graphical process modeling and generation Reusable components

Extensible Open Platform

Solution 2: Make Everything the Same www Planning & Forecasting Order Processing Customer Service Manufacturing Marketing Documentation Suite of applications from single vendor Integrated through the use of a single database

Advantages/Disadvantages Simplified management Simplified buying Easier upgrade cycles Risks No best of breed Higher costs Political tensions Hard to adapt Still need to integrate Cost Model Advantages Disadvantages e-Business Suite Software $2M Application configuration cost ERM software license Prof and staff services, configuration training $2.650M Infrastructure Implementation Costs $2M Server, desktop hardware, server utility software 1st year maintenance $99715% $8,717,500 Source: MetaGroup

Speed==Profit Speed (soft costs) –Delivery of services to the customer –Option1: shorter time to deploy as well –Re-use of existing applications –Do not have to re-train all your employees –No re-organization around new applications Cost versus speed –Speed drives: –Customer attraction, customer retention and customer satisfaction

Summary Only ONE choice: –Everything works better when everything works together Use all the attributes of the World Wide Web Embrace standards and complexity Re-use your existing assets both systems and people Use an extensible open foundation