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Financing business innovation Data Centre and Virtualisation Architecture

Financing business innovation Data Centre and Virtualisation Architecture. [Name] [Title]. Every organisation needs financing. Protection from tech obsolescence equipment lifecycle management. Total solution financing. Matching benefits with costs. Alternative source of capital.

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Financing business innovation Data Centre and Virtualisation Architecture

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  1. Financing business innovationData Centre and Virtualisation Architecture [Name] [Title]

  2. Every organisation needs financing... Protection from tech obsolescence equipment lifecycle management Total solution financing Matchingbenefits with costs Alternative source ofcapital Cash preservation/ minimise upfront investment Flexibility to upgrade to more green technologies

  3. The ‘new normal’…has become the ‘new reality’… • Ongoing disconnect – ‘do more for less’ while the need for agility and growth • Companies using financing to improve working capital and balance sheet positions • Technology trends driving IT to replace CapEx approach with more flexible OpEx-based models • De-capitalisation of IT projects is an essential business case enabler

  4. Market realities are driving IT to adopt variable capital management These trends are driving organisations to look for more flexibility Software as a Service Cloud Computing IT Leasing Manifestations of a broader theme: The need to de-capitalise IT IT Outsourcing Virtualisation Managed Services Capacity on Demand

  5. Lower IT investment budgets • Just-in-time IT spending • Different acquisition models IT de-capitalisation • IT Equipment • Stretch lifecycles • Improve utilisation • Used equipment • IT Software • Highly selective buys • One-year payback • New service management tools • IT Services • Maintain reliability • Improve efficiency • Even more outsourcing Equipment leasing Software financing Cloud economics Lifecycle analysis IT financial mgmt IT is maturing

  6. Technology issues • Management costs • Energy costs • Legacy costs • Time to implementation • Time to benefits • KPIs/ metric alignment

  7. Financial issues • Cost of technology increases over time • Technology is often used beyond its true economic life • Operating costs outweigh acquisition costs • Cost of asset disposal • Large upfront acquisition costs • Difficult to scale and cost on a per user basis • Latency of investment and refresh cycles • Benefits timing versus costs • Balance sheet constraints

  8. Why organisations use vendor financing OpEx predictability Short-term OpEx availability CapEx preservation Vendor accountability Purchasing simplification Diversification of lending The decision is not only what technology to acquire, how to acquire the right technology is just as critical

  9. Financial flexibility • Business and technology alignment • Synchronicity of business and technology change • Financial Architecture • All stages of your technology lifecycle • Driving greater alignment and responsiveness • Technology change • New projects/ initiatives • Technology updates/ end of useful life

  10. Financing business innovation Capital optimisation Tailoredfinancialsolutions Expenses matched with arrival of benefits Flexible end-of-lease options Optimisedlifecycle management Attractive migration choices Lower cost of acquisition Maximisedshareholder value Less financial and operational risk

  11. Financing data centre innovation ‘Better way of using our working capital’ ‘Pay as you go’ ‘Stretched out cost to match revenue coming in’ Obsolescence protected ‘Scale out’ capabilities De-riskedswapping Partner and blades ‘Makes Cisco affordable’ Maximised budget ‘…and speeds up ROI’

  12. DCV Financing Solutions

  13. Greater business flexibility

  14. Pay less in the early stages of the Cisco Data Center implementation and ‘step up’ payments over time. Allows better alignment of costs to business benefits. Step Financing Customer Payments to Cisco 15 60 30 45 Time (Months) Committed Payments

  15. Forgo the upfront purchase of server capacity that is not immediately required, and have the flexibility to refresh blades more frequently over time. Accelerate the time to break-even on the data center investment. Multi-Term Financing Customer Payments to Cisco 0 6 12 18 24 30 36..................................................................60 Time (Months) Committed Payments

  16. Ready-to-use, continuous replenishment, on-site inventory with payment deferral, payments financed • Base capacity Pay As You Grow Deferred invoice in arrears $ Buffer capacity $ demand $ $ Customer Payments to Cisco $ 0 6 12 18 24 30 36..................................................................60 Time (Months) Committed Payments

  17. A shared-risk consumption model for Cisco Unified Computing System with payments based on usage Flexible Demand • Variable payments • billed monthly as used usage • Fixed payment • locked into • a lease/ loan Customer’s Payments to Cisco Baseline capacity Time (Duration of Contract)

  18. Flexible Demand for Cisco Unified Computing System I N T E R N A L

  19. Sky Bet primarily offer an online sports betting service • Sky Poker is one of the UK's leading online poker rooms • Sky Vegas is where you can find all the best games all in one place • Sky Bingo lets you play bingo online and connect with a great community of bingo players Customer Challenge • Sky Bet needed a flexible solution to assist with their seasonal business • Sky Bet wanted a partner to share the risk of capacity utilisation • Sky Bet needed a flexible technical solution that delivered consolidation, efficiencies and ease of operational use

  20. Competition • HP incumbent for over 24 months • Procurement resistant to change and driving a pricing discussion Strategy & Execution • Cisco moved the goal posts to focus the discussion on architecture, efficiencies and total cost of ownership • Initiated a move to Nexus technology from Catalyst 6K, which set Sky on the path to a Unified Fabric architecture across their business • Strategic UCS insertion gave the team the opportunity to demonstrate the benefits across the corporate estate • Sky visited San Jose to meet experts - adopted UCS almost immediately • Sky's CFO calling for £50m per annum savings allowed Cisco Capital to be positioned for the very first time into Sky • Flexible Demand was proposed to map against the seasonal nature of Sky Bet business. Sky pay for additional computing power when they need it, spinning up the UCS devices during peak traffic and switching them off during the quieter periods

  21. Flexible Demand • 100% equipment deployed day one for maximum capacity • 75% initial base commitment (x blades) • 25% variable capacity (flexible demand) (x blades) • Initial commitment charged quarterly in advance – $ / blade / month • Monthly report to measure active blade usage on UCS • Flexible demand blades charged quarterly in arrears – $ / blade / month Payments to Cisco Initial commitment aligned to baseline capacity requirements Time $5m+ UCS revenue over the next 5 years

  22. Gaming Cisco Capital Flexible Demand provides Cisco with first UCS pay-per-use model "Breaking ground with new business models is always challenging but Cisco Capital gave us real differentiation and was one of the major factors in successfully displacing HP from the data centre.“ Elliott HandworkerCisco Account Manager Customer Scenario HP server infrastructure struggling to cope with demand spikes from large sporting events and in-play betting markets Big sales challenges: technical team resistant to change; while procurement wanted to drive a pricing discussion Solution Cisco UCS and Nexus solution acquired using new Flexible Demand model from Cisco Capital, a first for Cisco worldwide Enables Sky Bet to rapidly spin up UCS blades when demand for compute power peaks and turn them down during quieter periods Cisco Capital Significance For the customer:True capacity on demand (customer pays 75% baseline commitment with 25% buffer); costs closely aligned with income; further savings from operational efficiencies For the Cisco account team: Displaced HP from the account; opportunity to position Cisco Intelligent Automation for Cloud and sell through to other Sky businesses; global first and replicable pay-per-use model Find more examples of how our customers are using financing from Cisco Capital

  23. Let’s start working together • We can create a robust business case that supports the business and IT strategy • Projects must be proven to provide faster payback, with less operational risks in order to be considered for approval • This is further compounded by traditional funding models being unable to satisfy standard key financial metrics such as cost of capital, ROI, PPU • These factors are driving a stronger three-way partnership between the CEO, CFO and CIO. This team is collectively responsible for combining IT investment with both business strategy and financial decisions • Cisco Capital is your enabler.

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