1. Financing Your Lifecycle Management
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GIVEN TO: First level of customer contact, usually the Cisco AM existing contact is the technical decision maker (TDM) within an account. It could also be a low level business decision maker (BDM). Most likely the Cisco AM does not know the finance decision maker (FDM) which could be one of a few different people in a large enterprise account depending on total sales amount (BU Controller, CFO, etc.)
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Presenter Name
Date 1

2. Agenda The Cisco Capital Difference Equipment Lifespan
Equipment Lifecycle Management
Financing and Cisco Capital Improve Lifecycle Management
Summary

3. The Cisco Capital Difference
Wholly-owned Cisco subsidiary since 1996
The captive and leader in Cisco end-to-end financial services
Integrated with the Cisco business strategy
Aligned with Cisco technology innovation
Shared sense of urgency, flexibility
Alignment of economic objectives
Our Vision
To enable Cisco customers to acquire, deploy, protect and refresh technology investments with creative and competitive financing solutions that help maximise cash flow and profitability.
Who We are and Why we are Here.
$4.1B WW Lease Volume
$13B WW Channel Financing (based on customer)
$100M WW Remarketed Equipment

4. Market Trend Lifespan of Networking Equipment
The industry standard lifespan of network equipment is years – Yankee Group
Forrester poll of 441 organisations with 100+ employees:
87% refreshed performance network equipment between years
76% replaced transport equipment in that same time span
Organisations that established 3-year lifecycles and dynamic management models realised lower average deployment and retirement costs – IDC
Gartner modelling suggests optimal refresh lies between 3½ - 4½ years, versus the average years, to maximise depreciation, price erosion and functionality
Shorter IT equipment lifecycles combined with disciplined technology management practices can reduce IT operating expenses by 20.5% – IDC
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© 2008 Cisco Systems, Inc. All rights reserved.
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5. Optimal refresh is most likely between three to four years
Factors Affecting Equipment Purchase
Changing business dynamics require more functionality Markets, customer needs, competition
Replace existing equipment Age, reliability, interoperability, costly to maintain
Optimal refresh is most likely between three to four years
Year 8
Year 7
Year 6
Optimal Refresh Point
Year 5
Timing of Optimal Refresh
Year 4
How often does your organisation usually replace or upgrade the following: (Check one for each item)
Every 3 years or less Every 5 years Every 7 years Every 10 years or more
Phone systems 8% 28% 29% 3 4%
Network equipment 43% 48% 7% 1%
Servers 60% 35% 3% 1%
Desktops 67% 31% 1% 0%
Management software 43% 41% 9% 7%
Storage devices 55% 38% 5% 2%
Year 3
Year 2
Depreciation
Period (Yrs)
3 Yrs
4 Yrs
5 Yrs
Baseline Price Erosion and Conservative (Zero) Functionality Impact
Aggressive Price Erosion and Aggressive Functionality Impact
Modeling by Cisco Capital

6. Equipment Lifecycle Continuous Cycle Required to Meet Business Needs
Mandatory upgrades increase with deployment lengths and business needs continue or change
Complexity of decommissioning with disposal compliant to environment and privacy regulations
Getting your new solution up and running
Acquiring technology to meet business needs and stay innovative
Managing and servicing equipment…

7. Leading analysts confirm:
Shorter Lifecycles & Proactive Management Lowers Costs and Improves Productivity
Leading analysts confirm:
“Organisations that established 3-year lifecycles…realised lower average deployment and retirement costs.”
“A tightly managed IT environment with consistent life-cycle analysis that supports a disciplined equipment renewal process will produce better and more consistent IT functionality at lower total cost across multiple generations of IT equipment.”
“IT leaders strive to balance the ‘capital / labour’ dilemma and risk a ‘buy once, fix forever’ model that wastes skills and resources that could be applied to higher-return initiatives.”
“Shorter IT equipment lifecycles combined with disciplined technology management practices can reduce IT operating expenses by 20.5%.”

8. Adopting the Latest Technology can Lower Capital Expenses (CAPEX)
Overlay Appliances
Integrated Services Router
Router v
Switch
Wireless LAN
WAN/App Optimisation
Cisco ISR 3845 with integrated Security, Voice, Wireless, Video, WAN Optimisation and Switch
Security Appliance
Voice Appliance
CAPEX savings between %
→ Buying individual projects drives up initial outlays by 5-30%
→ Multiple deployment costs for additional technology
→ Lengthy recertification for new products
$10k
$20k
$30k
Integrated
Appliance
$50k
$40k
CISCO 3845
NM-ESW
IOS FW CME
NM-WLC
NM-WAAS
Device 1
Device 2
Device 3
Device 4
Device 5
Device 6
Device 7
The integrated approach of the ISR helps drive down the TCO. Buying individual products can drive up the CAPEX costs in the range of 5 to 30 percent more compared to an integrated approach. Similarly the cost of deployment also rises with individual devices.
The 3800 platforms in the ISR portfolio can maximise the reduction in TCO by integrating the largest density of services into a single platform for the small and medium sized offices as well as larger enterprise branches.
$500
$1000
$1500
Integrated
Appliance
ISR
Deployment
Installation
One
Two
Three
Four

9. Impact of Ongoing Maintenance & Ops Costs for Equipment
Total Cost of Ownership (TCO) analysis on previous ISR scenario $0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Cisco Integrated Services Router
Competitive Overlay Appliances
Revenue Loss
Employee Productivity
Unplanned Downtime Losses
Planned Downtime Losses
Maintenance Contracts
Facilities (Space, Power, Cooling)
Implementation Costs
NMS Costs
Direct & Indirect Costs
Over 70%
OPEX
Reduction!
In total, the overall benefit of integration leads to over 70 % reduction in TCO as amortised over three years. This model is conservative—it does not take into account the corporate revenue gained from the increased network availability. Additional refinement of the model taking into account the number of revenue-generating employees that are affected by network downtime would further demonstrate the dramatic benefits of an integrated solution.
For modern IT platforms 30% of total cost is acquiring the equipment, 70% is for labour and services to configure, maintain, upgrade, reconfigure and, ultimately, decommission - IDC
Chart Source: Cisco

10. 4 out of 5 US companies use financing to acquire equipment. – ELFA
Market Trend Use of Financing to Acquire and Manage Technology Lifecycles
The most important consideration in evaluating leasing and financing options is that they provide flexibility in establishing a lifecycle management plan. – IDC
Financing is used to achieve a 3-4 year equipment refresh lifecycle instead of being locked into a 5-year depreciation schedule that is longer than the equipment’s useful life. – IDC
4 out of 5 US companies use financing to acquire equipment. – ELFA
Financing provides options for funding equipment acquisition and as a means to systematically renew technology assets and maintain predictable budgets. – IDC
By not integrating operational cost/ performance data with lifecycle replacement planning and lease-v-buy capital analysis, organisations may be incurring 20.5% higher annual costs than necessary to acquire, manage and decommission their IT equipment. – IDC
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© 2008 Cisco Systems, Inc. All rights reserved.
Cisco Confidential 10

11. Financing Technology Can Alleviate Many CxO Concerns
Align IT priorities with business initiatives
Maximise constrained budgets
Assure the success of IT projects
Allow for operating flexibility and technology refresh
Proactively manage equipment lifecycles
Effectively acquire technology and
support business goals

12. Financing With Cisco Capital Can Make a Difference
Improve and proactively manage equipment lifecycles
Customise for best economics and useful life scenario
End-to-end financing
Flexible terms and options
Aligned with Cisco innovation and technology lifecycle
Lower the total solution cost
The decision is not only what to buy,
but how to buy.

13. Financing with Cisco Capital Improves Management of Equipment Lifecycles
-Align cost with useful equipment life
-Payment options to maximise business benefits (deferral, seasonal, etc.)
-Maximise budgets
-Conserve cash
-Preserve credit lines
-Meet business needs now
-Combine services and equipment into one lease
-Lock in pricing for multiple years
Proper disposal
Save costs of decommission
Reduction of landfills
Simplicity of return
-Flexible refresh and upgrade options
-Adapt as needs change

14. Cisco Hardware/ Software Professional Services
Total Solution For One Low, Predictable Payment
Cisco Capital combines product, maintenance, professional services and complimentary third party products into one lease.
Cisco Hardware/ Software
3-5 Year Lease
Cisco Maintenance
(HW, SW)
All Cisco HW/ SW
Single Lease
Payment
3-yrs of Maintenance
Professional Service
Professional Services
(via VAR)
Third Party Products

15. The smarter way to acquire your technology solution
Finance your Cisco solution and benefit from:
Finance with Cisco Capital and benefit from:
Cash flow conservation Spread costs over time, preserve credit and avoid the need for cash investment
Business focus Remove the burden of equipment ownership and disposal
One solution, predictable payments Combine hardware, software and services into one financial framework.
Lower costs Take advantage of competitive rates and residual values which reduce total cost of ownership
Equipment lifecycle management Gain from flexible upgrade and migration options and easy equipment disposal
Maximum flexibility Choose payment terms, lengths and End of Lease options including return or outright purchase.
Find out how Cisco Capital can help you maximise the benefits of your financing solution, visit our website:
More Cisco expertise. More competitive financing.
*Usual Cisco Terms and Conditions apply, subject to credit approval, not available in all countries.

16. Summary Thank you Optimal refresh = shorter lifespan
Proactive lifecycle management reduces total cost of ownership and OPEX
Successful lifecycle management keeps technology current and can reduce CAPEX
Financing can better balance capital and expense budgets
Financing provides flexibility required to establish a successful lifecycle management process
Cisco Capital offers the most competitive financing for Cisco solutions
Thank you

17. More Cisco expertise. More competitive financing.
To find out how Cisco Capital can help you maximise the benefits of your financing solution, visit our website:
More Cisco expertise. More competitive financing.