1. Haga clic para modificar el estilo de título del patrón Bruce Stuart President ChannelCorp Management

2. Haga clic para modificar el estilo de título del patrón Channelcorp 2013…transition, transform and grow. Bruce Stuart

3. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Bruce R. Stuart, President Global management consulting firm-www.channelcorp.com Specializes in business model transitions and increasing the profitability and value of resellers and solution providers Assists IT vendors improve the quality of their channels Past 5 years – focused on the role of reseller CEOs in building the value of their businesses by transforming classically oriented product-centric businesses into vertically oriented service-centric and cloud centric businesses Insights have helped many reseller CEOs around the world increase the profitability and long term value of their organizations 500 articles/13 books/40 countries3

4. Haga clic para modificar el estilo de título del patrón Module structure. Module 1 Is it structural or transitory? Module 2 What is your game plan? Module 3 What are your strategic options? Module 4 What really has to happen?

5. Haga clic para modificar el estilo de título del patrón Modulo 1

6. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Module 1 1.1Transitions on three dimensions 1.2Cash on cash investments 1.3Cash flow/profit impact 1.4The third dimension – business model transition 1.5Module summary Is it structural or transitory?

7. Haga clic para modificar el estilo de título del patrón Module 1 Is it structural or transitory? 1.1 Transitions on three dimensions existing clients new clients new markets classic focus transition focus transformation focus installed base new categories of technologies new technologies existing technologies

8. Haga clic para modificar el estilo de título del patrón Module 1 Is it structural or transitory? 1.2 Cash on cash investments existing accounts 15¢/$ 60¢/$30¢/$ 120¢/$60¢/$ 240¢/$120¢/$60¢/$ new accounts new markets existing products new products new technologies

9. Haga clic para modificar el estilo de título del patrón Module 1 Is it structural or transitory? 1.3 Cash flow/profit impact existing accounts + profit + CF ø profit – CF + profit ø CF – profit – CF ø profit – CF – profit – CF ø profit – CF new accounts new markets existing products new products new technologies

10. Haga clic para modificar el estilo de título del patrón Module 1 Is it structural or transitory? 1.4 The third dimension – business model transition transformation Centric(R/t) transition Centric(T/r) classic centric(T)

11. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 1.5 module summary-so what Module 1 Is it structural or transitory? What is really going on is deeper than the current economic situation-the move to new markets and a recurring revenue model is a structural change Transitions and transformations are being forced by the market, the technology and vendors’ strategies…not doing anything may be a slow liquidation strategy for a partner So what…because of the valuations -transition focused resellers-2 to 3 times the value of the classic -transformation focused resellers-2 to 4 times the value of the classic

12. Haga clic para modificar el estilo de título del patrón Modulo 2

13. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Module 2 2.1Defensive strategy 2.2Offensive strategy 2.3Success models 2.4module summary What is your game plan?

14. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 2.1 Defensive strategy Module 2 What is your game plan? 90% report engagement 50%+making it up as they go 35% have no business road map or partial business road map for their “non classical” investments and strategy Lost sale analysis-are you losing deals because you don’t have a legitimate offering in a relevant hot cluster? We are seeing incumbent solution providers not being considered because their clients don’t know or believe they have the capability Systematic erosion of the base has a negative impact on the value of your business Do you need to make Mid Market, BYOD, applications, recurring revenue model/hot cluster investments to continue to be CONSIDERED by both existing and new clients? Are these “non classic investments” the new “table stakes” in your markets?

15. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 2.2 Offensive strategy Module 2 What is your game plan? Good news: 50% making it up 35% no plan 67% no one dedicated to marketing 50% technically insolvent 40% financially challenged Growth centric transitional and transformational resellers are using vertically oriented hot cluster,Mid Market, BYOD, video and applications capabilities to generate new business from new clients and new business from existing clients-50% growth No CONSIDERATION, no proposal, no sale Clear movement to offensive business plan with appropriate investment in infrastructure and skills, properly executed Game plan-defend and expand the installed base For these organizations the move to non classical investments, a recurring revenue model and the exploitation of hot clusters is a growth story

16. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 2.3 Success models Module 2 What is your game plan? What really has to happen…what has been happening inside the success models? Organizational structures-specialized vs generalist Marketing capabilities-more prospects Sales capabilities-focus on customer acquisition cost, comp plans Technical capabilities-set plays vs huge custom assignments Financial capabilities-more smaller vs fewer bigger Cash flow impacts-bigger AR portfolio, leasing as option

17. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 2.4 module summary Module 2 What is your game plan? It is really tough to change the spots on a leopard. What do you want to do, or what are you doing? How do non classical or hot cluster investments fit in with your overall investment strategy? Lost sale analysis tells the “truth” Defensive strategy maintains or slows the reduction in business value, but unlikely to drive growth Offensive strategy presents a chance to build business value

18. Haga clic para modificar el estilo de título del patrón Modulo 3

19. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Module 3 3.1The options 3.2Born classic partner-stay 3.3Born classic partner-complement 3.4Born classic partner-transform 3.5Born vertical-stay vertical What are your strategic options? 3.6 Born vertical-complement 3.7 Do nothing 3.8 module summary

20. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.1 The options Module 3 What are your strategic options? It is really tough to change the spots on a leopard. Adaptation precludes adaptability Corporate heritage Business skills of senior management Characteristics of service/support/training/consulting business Sales and marketing talent base of the organization Financial strength of the organization Characteristics of installed base Net new opportunities in the market-density of opportunities

21. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.2 Born classic partner…stay classic partner Module 3 What are your strategic options? Purposive strategy to continue to expand historic business In 12-24 months BYOD, cloud, hot cluster, apps will likely be the new normal Slow liquidation strategy unless you are the best or least expensive product centric reseller in your market Could be successful if appropriate ecosystems or partner to partner alliances built Must garner increased share of potentially diminishing market(non vertical market) Worry about client retention and reductions in “consideration rate” for new opportunities if “non classic” and hot cluster capability becomes table stakes in the market

22. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.3 Born classic…complement with transition strategy Module 3 What are your strategic options? Numerous business building options exist Option depends on what your business is good at This is not a risk free strategy! The devil is in the compensation Inline with market trends-could produce a winning strategy based on a historically classic partner business model Starts as a defensive client retention strategy that can provide the basis for a strategic transition to an offensive client acquisition strategy…it begins with increased consideration Grow new business from your existing business-look for NEW BUSINESSES not new business in your base-then move out Spin out your mid market, vertical or cloud business and grow it separate from the core-viable option Acquire a company that has already transitioned

23. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.4 Born classic partner…full transformation strategy Module 3 What are your strategic options? This strategy allows an “all the wood behind the arrow” approach Could be a good fit for owners with an “all in” personality and style of business You may leave some people behind with this strategy Dramatic business model transition executed over 24-36 month period-ROIC/valuation driven-NEEDS MARKET DENSITY Plan to de-emphasize classic product centric business over time to align all resources behind mid market, BYOD, apps, video, vertical and recurring revenue future Capital to build out/acquire new vertical businesses could come from the sale or milking of historic business At the extreme this strategy may require partner to partner selling alliances to service classic product requests from existing and new clients

24. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.5Born transformed …stay transformed Module 3 What are your strategic options? Purpose built startups created by well financed tech savvy serial entrepreneurs and backed by strong vendor or distributor relationships with will be tough for incumbents to beat Green fields recurring revenue startup has benefit of no incumbent cost structure, organization structure or “unsuitable” personnel Pure startup- no customers- require 24X to 36X monthly burn rate Two versions-free standing or corporate division Excellent way to create something of value for next generation (family), or equity opportunity for long term employees without diluting ownership of the “mother ship” Opportunity for “50 something” owners to re invent business in the next five years that will increase the value of the business on resale-part of a retirement exit strategy

25. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.6 Born transformed…complement with classic Module 3 What are your strategic options? This strategy needs a broad range of capabilities that could dilute the required focus Provides full coverage for clients regardless of how the client wishes to acquire their solutions Likely realistic end game for all born transformed businesses Product could come from partner to partner or third party independent alliances, intra company alliances or out of inventory Problem of mixing business models is created again-problematic for the sales force compensation model especially

26. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico 3.7 Do nothing Module 3 What are your strategic options? Do an operations review around willingness and ability to be profitable in vertical before you decide not to do anything Always hungry never starving existence unlikely to improve going forward No decision is a decision Slow, maybe fast, liquidation strategy depending on how fast your customers are lost to the competitive vertical offerings of others in your market May be a good time to get out to minimize your maximum loss

27. Haga clic para modificar el estilo de título del patrón Modulo 4

28. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Module 4 4. Action plan What really has to happen?

29. Haga clic para modificar el estilo de título del patrón 14 - 16 November 2012 | Cancun, Mexico Action plan Module 4 What really has to happen? Take a good hard look at your existing business Go to school on your base Can you afford to do nothing-LOST SALE ANALYSIS Does it look like you may need to transition or transform your business model? What are the key drivers of the investment decisions you need to make? Which option or collection of options are likely to be the most successful given the current state of your company and your aspirations for it? What do you require from Avaya to make the changes?