Microsoft | EMEA Channel Partner Conference 2014 Let’s Break New Ground Together.

Microsoft | EMEA Channel Partner Conference 2014 Last year: Beyond the Disti Warehouse

Microsoft | EMEA Channel Partner Conference 2014 YTD VL/FPP Cloud Revenue YTD VL/FPP O365 Reach M/M Reach Growth 23% YTD Disti SPLA New Hosters Tremendous Progress in H1 YTD Disti SPLA Revenue On-Premises YTD SMB Open YoY Growth 13.87% Non-managed Reseller Revenue Growth YoY 14.74% WW ORR Rate 91%+ YTD VL/FPP O365 Seats Sold 1.2K Growth in Net-New Hosters 18% 43% M/M Rev Growth M/M Seats Sold Growth 52% 51% Cloud

Microsoft | EMEA Channel Partner Conference 2014 July 2013 December 2013 Advisor Direct Open FPP

Microsoft | EMEA Channel Partner Conference 2014 A tremendous partnership

Microsoft | EMEA Channel Partner Conference 2014 Thank you!

Microsoft | EMEA Channel Partner Conference 2014 Decisively accelerate the move by our channel to sell Services. Our Objective in 2H & Beyond Continue to meet the overall sales & marketing targets that we have set out for our SMB business. “The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster, and continue to transform." — Satya Nadella

Microsoft | EMEA Channel Partner Conference 2014 In 3 years, more than 50% of incentives will be focused on Cloud Services, Devices and Solutions Partner Incentives Roadmap

Microsoft | EMEA Channel Partner Conference 2014 Worldwide Technology Trends 75M SMALL BUSINESSES worldwide $700B on IT in 2013 $75B on cloud services $133B by 2017 SPEND MARKET Support a Mobile Workforce 1 MOBILITY 54%54% 62% SMARTPHONE 21% TABLET 1 Statistic from AMI-Partners 2014 ICT & Cloud Study and is an 8 country roll-up summary (includes: US, CA, FR, GE, UK, RU, CH, and IN). GROWTH 325K NEW SMALL BUSINESSES by 2017 PENETRATION 820K MEDIUM BUSINESSES worldwide $300B on IT in 2013 $49B on cloud services $78B by 2017 Support a Mobile Workforce 1 87% 86% SMARTPHONE 43% TABLET 15K NEW MEDIUM BUSINESSES by 2017 PENETRATION

Microsoft | EMEA Channel Partner Conference 2014 Activate & Enable The Channel Capacity Gaps filled with active partners selling services Drive Demand & Sell Resellers meeting high demand for Microsoft Services Retain, Renew and Upsell Resellers deliver the services and support SMBs depend on Accelerating rate of technology change Expanding services and sales models Demand for customer productivity Competition Our DistributorsDominant Market Forces

Microsoft | EMEA Channel Partner Conference 2014 Disti sells solution workloads through Resellers DISTI attains Eligible Competency by Dec Evolving Disti Solution Accelerator (DSA) DISTI receives DSA incentive (10% of invoice value for eligible products) 50/50 Rebate/Coop 1 DISTI is enrolled in DSA in FY14 H Distis 42 Subs 204 Competencies Volume Transactional Reseller (break/fix) Client/Office Value Solution Offerings Value Added Resellers/Sis Data Center/SQL/CRM Services Service Offerings SI/Hoster/MSP Cloud services/Marketplace

Microsoft | EMEA Channel Partner Conference 2014 How Partners are Making Money with Office 365 Office 365 Licensing Revenue Deployment & Migration Services Managed Services and Packaged IP BaselineGoodBetterBest $ / seat$ / seat$50-80 / seat Tier 1 / Tier 2 support) New user set-up Updates End-user training SharePoint Templates Windows Intune Desktop Management Policy/Patch Management Software Asset Management Assessment / planning Migration of data Establishment of service Recurring Add-on Projects and Solutions $40+ / seat Expansion Customization LOB integration IT infrastructure design IT planning IT training Managed Services/ IP Margins 50%+ Billable Services Margins 35-42%

Microsoft | EMEA Channel Partner Conference 2014 Annuity Model Generates More Revenue and Margin Year 1 Year 2 Year 3 Year 4 Year 5Year 6 $369 $180 Six Year Impact w/ RefreshOffice Std.Office 365 Cumulative Revenue: One User$738$1,080 Cumulative Revenue: 100 Users$73,800$108,000 Channel Incentive (Margin)2.9%8% Cumulative Margin – 100 Users$2,140$8,640 46% more revenue 4X as much margin

Microsoft | EMEA Channel Partner Conference 2014 Coming “Wave” of SMB Cloud Subscription Expirations Open L&SA – renew every 2 years OV/OVS – renew every 3 years Anniversary Net Unit Add Map Renewal Value Volume of Renewals

Microsoft | EMEA Channel Partner Conference 2014 Distributor As A Market Maker Channel capacity Capitalize on the value distribution opportunity Business intelligence and systems Grow new models for Disti profitability Integrated products and solutions Realize the Device + Services opportunity Applied market insights Grow and retain end customers

Microsoft | EMEA Channel Partner Conference 2014 Things We MUST get Distribution 1. You Are 100% Cloud Ready 2. Cloud Economic Model Every level of the Disti % Disti Sales Teams fluent in Cloud 4. Disti sales Compensated in every level 5. Capacity gaps filled with 100K active service sellers by FY16 6. Partner enablement driven daily by waves of training 7. Partner readiness measured to 100% conversion to transaction 8. Campaigns and promotions are “ Always On” and utilized 100% 9. Preparing acquiring and retaining 8M customers by FY Every day is a QBR

Microsoft | EMEA Channel Partner Conference 2014 Decisively accelerate the move by our Distributors and their resellers to sell Services. Continue to meet the overall sales & marketing targets that we have set out for Distributors Flawless Sure Step Plan Distribution