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You Are Making A Difference

World Finance: Companies Cope with Declining Dollar Feb 13 th, 2008 Australia Braces For Rate Increases To Curb Inflation Feb 12 th, 2008 Sub-prime losses could hit $444bn: G7 Feb 11th, 2008 Business Is Competitive Economies Are Changing Microsoft Continues To Respond Important New Releases Strategic Transaction Channel Activities Q&A Today’s discussion…

OPERATING SYSTEMS OPERATING SYSTEMS SECURITY IT OPERATIONS COLLABORATION ENTERTAINMENT & DEVICES ENTERTAINMENT & DEVICES BUSINESS PLATFORM BUSINESS PLATFORM APPLICATION PLATFORM APPLICATION PLATFORM

Customer Segment Teams Marketing Strategic & Operational Alignment Product Groups Business Leadership & Execution StrategyPolicyExecution Worldwide Partner Group Worldwide Licensing & Pricing Operations WW VL Channel strategy Channel incentives strategy Community Leadership CUSTOMERs CHANNEL PARTNERS

DistributionDistributionVAR/LAR/ESAVAR/LAR/ESA Channel Incentives Mid-market annuity penetration Category solution sales Software + Services integration Value selling skills – increase channel capability Grow annuity sales Revenue Grow net new EA customers Deliver SAM services Drive Deployment Incentive alignment across models Investment in new models /high growth areas Ongoing evolution and refinement throughout

Align Invest Evolve Deliver Business Goals 1.Build incentives investment 2.Develop high performing, strategic investment & incentive programs 3.Align transaction and incentive model with S+S 4.Optimize ROI 5.Evolve IT and operations Design Principles 1.Increase Pay for Performance 2.Provide worldwide consistency and predictability 3.Build around defined goals and KPI’s 4.Apply as much focus to operations & systems as we apply to strategy 5.Maintain a level of financial predictability 6.Consider Sales Models across segments

Vision: drive long-term revenue growth for Microsoft through industry- leading licensing and a seamless customer & partner experience Mission: WWLP is accountable for leading and orchestrating innovative licensing business models, in collaboration with the business groups, segments and areas to make it easy for customers to acquire, use, and manage our software

Discover, catalog and categorize all offers Build point solutions and policies Extend the SA business model Expand IT and operational capabilities Recruit and retain the right people Separate programs into offers, transactions, contracts and provisioning Reduce each mechanism into component parts Reduce redundancy Establish guiding principles for each mechanism Group mechanisms into platforms with clear functions and interoperability standards Validate Platforms with Customers, Partners & Field Build Platforms using Incremental Releases 2.Modularization 3.Platform Construction 1.Licensing Simplicity Contract Offer Infrastructure VL Program A Contract Offer Infrastructure VL Program B Contract Offer Infrastructure VL Program C Today, customers purchase under multiple agreements to meet their solution needs. Customer: 120+ entries; 900+ agreements Offer AOffer B Offer COffer X Offer YOffer Z One Agreement One Infrastructure Future, a simple and flexible customer-centric transaction platform that supports one perpetual relationship with the customer

Subscription based software can be naturally supplemented with partner owned subscription services Migration and Integration Project Based Business Process consulting, SharePoint workflow design, Intranet customization RepeatRepeat Resell/HostResell/HostTransactionalTransactional Desktop Management and optimization, end-user support RecurrentRecurrent Resell/Host Managed Services Integrate Customize Consulting

Infrastructure/ Security BI and Search Business Productivity Online Business Apps (CRM) Digital Marketing (Ad Center) Productivity & Security Messaging/Collab (Office Live) Search Business Apps (CRM) Digital Marketing Ad Center Support and Training Consulting (Marketing & Technical) Advertise Refer Resell Co-brand Design & Dev Customize & Integrate Microsoft Online Services Microsoft Live Services

© 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.