1. NEW BUSINESS MODEL FOR DESIGN AND ENGINEERING SOFTWARE Simon Floyd Director, Technology Strategy, Enterprise Solutions Microsoft

2. THE NEXT 5 MINUTES 5 x Observations 1 x Prediction 1 x Proposal Slide 2

3. 5 X OBSERVATIONS Slide 3

4. TRADITIONAL BUSINESS MODELS ARE UNDER THREAT OR NOW INVALID Slide 4 S&P 500 from 1957 to 1997: 74 members of the Class of ’57 were alive in ’97 12 outperformed the market Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87 2 outperformed the market Reducing average time in the S&P 500 1958 = 57 years 1983 = 30 years 2008 = 18 years 2011 = ? SOURCE: DICK FOSTER & SARAH KAPLAN, CREATIVE DESTRUCTION: WHY COMPANIES THAT ARE BUILT TO LAST UNDERPERFORM THE MARKET 1

5. SOFTWARE COST IS INVERSE TO CAPABILITY 5 SYNCHRONOUS DESIGN → ← 2D DRAFTING ← 2.5D/3D WIREFRAME CAPABILITIES 1962 ← 3D CONSTRUCTIVE SOLIDS ← 3D SURFACES ← 3D PARAMETRIC (HISTORY) DESIGN 19801981198219891997 ← 3D HYBRID MODELING 2000 MIXED HISTORY → 20101970 ← BÉZIER CURVE Cost/seat ? Fastest growing applications are <$15 or free 2011+ 2

6. COMPUTE CAPACITY EXCEEDS CURRENT SOFTWARE CAPABILITIES Slide 6 CAPABILITY/TIME mHz + Cores x n Synchronous tasks faster Cloud compute Asynchronous tasksScalable tasks What practically will be the next big value facilitator? VALUE ? 3

7. INFORMATION AS A SERVICE IS DRIVING NEW REVENUE STREAMS Public DomainPremium 4

8. BIG DATA OFFERS UNTAPPED OPPORTUNITIES FOR NEW INSIGHTS Slide 8 5

9. 1 X PREDICTION Slide 9

10. THE FUTURE OF ENGINEERING SOFTWARE Fastest growing software is $<15 or free Cloud compute power is massive, accessible and cheap Internet is everywhere, on all devices Big data > information: its value added knowledge Slide 10 Ability to deliver value added information, insights and knowledge, on-demand, via services and apps to any device at a low cost.

11. 1 X PROPOSAL Slide 11

12. Data Client Service PhonePC TabletTV Apps INTELLECTUAL PROPERTY MARKETPLACE FOR BUYING AND SELLING KNOWLEDGE Slide 12 SOCIAL PROCESS INSIGHTS BUSINESS Pay/use Sell Pay/use CAx Application Compute x n Storage x n Services Memory x n

13. THANK YOU! Slide 13 NEW BUSINESS MODEL FOR DESIGN AND ENGINEERING SOFTWARE, IN 5 MINUTES