2. Reseller Live “ Selling IP Applications Alone Will Not Guarantee Success ” C. Don Gant VP Channel Marketing/Business Development

3. 1.What are the end-user benefits of IP? 2.How can resellers make the TDM-transition? Short Agenda

4. $2.98B Fortune 500 2004 Corporate America Communications Spending TOTAL 2004 = $31.51B Large Enterprises 500 – 1000 employees 250 – 499 employees 100 - 249 employees 50 - 99 employees 5 - 49 employees $6.67B $7.38B $7.04B $3.39B $2.52B $1.53B CAGR 2005 - 2007 4.5% 5% 6% 7.5% 11% 9.5% 9% Source: 2004 Enterprise Market Sizing

5. Lines Installed All Technologies Lines Source: InfoTech 2Q05 Report

6. What Does IP Convergence Provide the End-user?

7. Greenfield VoIP Install = Cost Effective Opportunity  Cost to deploy VOIP shared with start up expense  Shared data and communications cabling could reduce cost Blank Slate

8. The Big Question  VoIP makes sense for Greenfield deployments but what about replacing an existing solution?  Maybe…it depends on the additional benefits

9. VOIP Upgrade…Does the End Justify the Means? Applications $$$$$$$

10. Killer Applications????  Reduced communications costs  Corporate decentralization  IP Networking  International VoIP calling  Reduced office space  Remote employees  “hoteling”

11. Killer Applications???  Next generation business applications  Contact centers  E-business  Reduce cost to manage infrastructure  # of moves/year x cost/move  Data resources versus telecom recourses  Reduced Infrastructure cost  Telco and data share cabling  Reduce telco personnel

12. APPLICATIONS + BENEFITS = Success

13. Lower cost of ownership  Consolidation of voice and data  Lower long distance  Reduce admin cost Typical benefit statement does not provide enough information to make an informed decision.

14. VOIP Upgrade…Does the End Justify the Means? Applications $$$$$$$ Must associate $ value to the benefit to show a positive ROI

15. Two Types of Benefits 1.Direct Benefit  Quantifiable cost saving or revenue increases 2.Indirect Benefits  Returns not clearly observable, but effects can be measured

16. Direct Benefits  Reduce personnel  Reduce communication cost  Avoid regulatory fines  Reduced accounts receivable  Reduced travel cost

17. Indirect Benefits  Reduce time to manage MAC  Call center increased customer satisfaction  Reduced time to do “x”  Increase quality of “x”  Improved technology management

18. Benefit Believability Index  Direct observation – pilot site  Corporate history  Surveys  Case studies  Educated guess  Uneducated guess  Psychic  Vendor supplied estimates  Vendor ROI sales calculator Good Bad

19. Benefit Believability Believability Benefit Direct Saving -Reduction in cost Semi-direct Saving -Expected reduction in cost Indirect Saving -Increase worker productivity Very Indirect Saving -Increase manager productivity 10 8 6 4 2 0

20. How Does The Reseller Make the TDM to IP Transition?

21. Educate, Educate, Educate  Educate on the technology  IP versus TDM  Data resellers versus Telecom resellers  Educate on the Selling Process  Consultant approach  Applications driven  Educate on the ROI model  Direct versus indirect saving  End-user buy in of ROI methodology

22. Making the transition….  Embrace the technology  In-house systems  Day to day operations  Vendors must help  Professional services  Network assessments  Vertical market strategy  Sales assistance

23. Value Pie Profitability/ Expense Reduction Competitive Advantage Client Relations Employee Efficiencies Management Tools Company Image

24. Summary  IP Market Growing – out pacing TDM  Applications are Important  Benefits are even more important  Gain end- user acceptance of your ROI methodology  Educate your self  Expect your vendor to help you with the transition

25. Thank You! www.iwatsu.com