2. Medium Business – The Growth Engine Tony Ward-Director Mid Market tonyward@microsoft.com tonyward@microsoft.com

3. Agenda Mid-Market Customer Trends & Opportunity Analysis What Are We Doing To Stimulate Demand? How Can You Capitalise On This? Q & A Appendix –NZ Snapshot

4. Mid-Market Customer Trends & Opportunity Analysis

5. Midsize 29k 25-499 PCs 50-999 employees 440k Characteristics # AUS Entities <25 PCs 1-49 employees Small Busines 1k 500-1,000 PCs 1,000 -5,000 employees CorporateEnterprise >1,000 PCs >5,000 employees 200 Most Businesses Are Small Or Midsize

6. Medium Business Spending Forecasts Through 2006, we expect MB IT spending to increase over 2005 levels as follows: Lower Mid Market+10% Core Mid Market +5% Upper Mid Market+4% Total Spend in Medium Business $500m in software $2B in services Source: IDC

7. Top Technology Priorities for Midsize CIOs – 2006 Gartner EXP Survey Source: Gartner EXP 2006 CIO Survey Collaboration technologies Customer sales and service Networking, voice and data communications Virtualization Legacy application modernization Service-oriented architecture (SOA) Security technologies Mobile workforce applications Business intelligence applications Workflow management 1 2 3 4 5 6 7 8 9 10 Disaster recovery 11

8. Is your organization consolidating IT suppliers? Why? Leverage volume discounts Reduce vendor management complexity Reduce integration costs Source: Gartner SMB Inquiry Survey/100 respondents/Summer 2005 Increased IT cost and purchasing scrutiny by CFOs IT commoditization and standardization Simplify support requirements and reduce costs Are you willing to sacrifice best of breed functionality to consolidate? No Yes SMB Preference Is To Minimize The Number Of Vendors IT Has To Deal With Percent 57 45 63 75 2525 65 3535 No Yes

9. Top Upcoming Priorities by Industry Type-Australia WholesaleGeneralManufacturingFinance/Services Retailinsurance n=19n=19n=55n=33n=48 %%% Security2223161112 Ensuring stability/reliability150191 Upgrading MS desktop operating system1321020 Upgrading MS server software110726 Upgrade/developing software110032 Developing web based systems/web page110000 Consolidation/integration/standardisation303138 Connecting information, people and devices20295 Nothing, just maintaining101899 Accounting and financial systems020000 Electronic linkage with suppliers/ distributors018200 Upgrading MS application software015322 Upgrade hardware/infrastructure/PCs0812211 Enterprise Resource Planning (ERP)03700 Imaging and document management solutions000171 Keeping up to date/developing new products000110 HIGHLIGHTED AREAS = >10%

10. Australian Customer Needs – Key Takeaways Security is key in terms of –Upcoming IT initiatives –Requirement for more information (proactively) Upgrading of Servers increasing in importance Messaging around connecting information, people and Devices will resonate

11. What Are We Doing To Stimulate Demand?

13. Mid-Market Customer Campaigns Core Infrastructure Optimisation (CIO) –Drive demand for more secure, well managed, dynamic core IT Infrastructure that reduces IT costs, moving IT to a strategic asset Business Productivity Infrastructure Optimisation (BPIO) –Focuses on how new technologies can overcome the growing challenges facing businesses and their Information Workers Application Platform Infrastructure Optimisation (APIO) –Focuses on the capabilities that drive infrastructure to support the application & process organisations build and deploy to run their business

14. Priorities & Customer Campaigns Source: Gartner EXP 2006 CIO Survey Collaboration technologies Customer sales and service Networking, voice and data communications Virtualization Legacy application modernization Service-oriented architecture (SOA) Security technologies Mobile workforce applications Business intelligence applications Workflow management 1 2 3 4 5 6 7 8 9 10 Disaster recovery 11 Customer Campaign APIO-Q3 BPIO-Q2 CIO-Q1 APIO-Q3 CIO-Q1 Dynamics-Q1-Q4 APIO-Q3 CIO-Q1 BPIO-Q2

15. Executing Customer Campaigns In MM Create Offer & Messaging Train Telesales Teams Sales Engagement with Partners Close Sale Identify Opportunities & Data Mining

16. How Can You Capitalise On This?

17. Call To Action Work with your MS Partner Account Manager in terms of building your business plan to align with Customer Campaigns Determine which vertical(s) you are strong in and look for competencies that resonate with this vertical Look for other verticals that you are not strong in at the moment but they have demand for your competencies Attend to CIO, APIO & BPIO Customer Campaign sessions (This room): $500+M in s/w….2B+ in services Get Ready for Vista and Office 2007-install and train your staff-MCP certification, TechEd, MFP Checkout www.microsoftio.comwww.microsoftio.com

18. Q & A

19. Appendix

20. NZ-Snapshot

21. NZ Mid-Market FY07 Priorities: MM is the fastest growing segment in MSFT NZ : FY07 plan 19% growth  Depth Customer for Life (400 customers)  Build customer relationships and trust by delivering targeted messages and value propositions at the right time  2 x Inside Sales become FTE. Territory size 1:200  Work with partners to drive consolidated approach to customer  Leverage MS tools to identify target growth opportunities  CPE focus to assist customer getting the best out of their technology investment.  Breadth Customers (3000 customers)  Expand reach and provide greater experiences to Breadth business via marketing engine  Grow internal infrastructure (data, web) to provide strong marketing relationship  Excel with Partners  Focus on our Partnerships to drive best possible customer experience and results  Marketing Excellence  Adoption of Customer Campaigns to align and leverage activity as executed through partners  Increased sales and marketing relevance to customers (eg via industry specialization, data analysis, profiling).  MBS Velocity  Drive Dynamics pipeline through strong execution of Customer Campaigns, and cross group marketing excellence  Drive New Areas of Growth

22. Mid-Market NZ Team Elizabeth KirbyMM Business Manager –ekirby@microsoft.com Rebecca HendersonMM Marketing Manager Joy SnookMM Business Development Matt GrantMM Business Development Natasha ErshovaMM Inside Account Manager William StaplesMM Inside Account Manager Hilary DavyMM Information Worker Specialist TBAMM Marketing Manager (Breadth) TBAMM Infrastructure Specialist