Microsoft EMEA Retail Partners Opportunity

1. Microsoft EMEA Retail Partners Opportunity Name Title

2. Agenda • Industry Dynamics • Smarter Retailing strategy • Microsoft strategy execution

3. Business Environment Improving supply chain efficiencies Employee recruitment and retention Industry consolidation Global expansion Achieving sales and market growth Developing a multi-channel strategy Maximizing inventory productivity Assortment planning (product mix) Shrinkage and loss prevention Improving customer service It Environment Retail and Hospitality IT spends 2% of sales versus industry average of 8% Home grown applications are more common than packaged solutions Legacy systems hinder adoption of new technology Aging store systems with proprietary technologies Centralized IT with distributed operations and limited store bandwidth Need highly integrated environments for real time responsiveness Fast ROI and strong TCO critical to justify investment Retail Industry Top-of-Mind Today Speed of Change is Imperative… …but the IT Infrastructure is a Business Impediment

4. The Wireless Store RFID and Sensing Infrastructure Web Services Location-Based Services Biometrics “Disruptive Technologies” Will Fundamentally Change The Way Retail Stores Operate Major Disruptive Technologies Emerging Innovative Solutions • Wireless creates asset and labor agility inside of the store. It will enable more efficient store layout and new models of checkout and in-store communication RFID will dramatically improve store efficiency in product receiving, inventory placement, out of stock management, shrink management, and labor optimization Web Services will enable unprecedented application integration within the store and fundamental breakthroughs in information sharing among trading partners LBS unlocks the ability to interact with consumers based on their physical location context as well as provide management with location-specific analytics on product sell-through performance Increased security levels for payment transactions at the Point of Sale

5. The IT Challenge Today’s IT Desired IT

6. New Innovations Will Occur At The Edge Of The Retail Enterprise… Store • ePOS • Self Checkout • Unattended Checkout • Electronic Signage • Digital Assistants • Smart Shelves • Cross-Channel integration • RFID Consumers Merchandise Supply Chain Core Operations • ERP • Merchandising Systems • Inventory Management • Promotions Management • Traditional Replenishment Systems • Human Resource Systems • Labor Management • Enterprise Data Warehousing • Multi-Channel Shopping (shop online/buy offline) • Assisted Shopping • Personal Digital Assistants • Mobile/Wireless-Enabled • Closed Loop Systems for Synchronizing Supply and Demand • Information Transparency Across Trading Partners • RFID 6

7. Success At The Edge Will Be Driven By Smarter Retailers Smarter Selling Smarter Shopping Smarter Operations • Sharper Salespeople • Customers as Individuals • Real-Time Retailing • Multiple Checkout Options • The Perfect Experience • Give them what they want, when they want it • In-Store Information • Enterprise Agility • Execution Excellence • Capital Efficiency • Stores without Wires 7

8. Microsoft Smarter Retailing InitiativeThe Vision, Strategy and Blueprint For Leveraging The Shift To The Edge Blueprint Strategy Smarter Shopping Vision We will facilitate integrated innovation at the edges of the retail enterprise and enable retail solutions that allow our customers to be agile in an ever-changing landscape Enable retailers to fundamentally change the rules of the game in the store environment through visionary technology leadership Smarter Selling Smarter Operations 8

9. Microsoft is the only company that provides consumer-centric, store-centric, and enterprise-centric retail solutions using a common integrated platform. Consumers Store Enterprise Microsoft’s core differentiator is in allowing retailers to integrate and collaborate with consumers through their mobile technology solutions. Microsoft will continually enhance this differentiation by injecting disruptive technologies into the platform that further enhances the consumer/retailer relationship.

10. SRI Benefits to the Retailer • Consumer loyalty • Revenue uplift • Store manager productivity • Employee productivity • Employee satisfaction • Inventory turnover, out-of-stock and gross margin improvement • Store IT capital and support cost takeout

11. Microsoft strategy • So…. How do we execute this

12. #4 Retail Hardened Windows XP Embedded BizTalk Server SQL Server #5 Driving Standards OPOS ARTS – IXRetail UCCnet RFID Deeper Relationships with Partners Job #1 Customer Satisfaction! #3 Solutions Framework LOB Focus Store Automation Core Retail BI SCM Job #2 Partner Satisfaction Global Focus & Dedicated Team Predictability Licensing Support Microsoft In Retail And Hospitality Our Top 5 Priorities

13. Product To Solution Paradigm shift in strategy Product Company Solutions Company

14. EMEA Customer Advisory Board Members

15. Benefits for Retailers • Focused Microsoft resources • Coordinated focus on industry leaders and industry standards bodies • Sales, Technical, Solutions, Services, Support • Executives • Industry expertise • Deep understanding of customer’s business • Focus on integrated business solutions (Partner Solution Offerings, Microsoft Solution Offerings) • Direct link into Redmond • Customer feedback is a major focus (e.g. XP Embedded) • Customer and Partner Advisory Council model • More relevant products/solutions

16. Executing On The Smarter Retailing Initiative System Integrators Consumers Integrated Innovation Retail Enterprise Stores Corporate ISV’s and OEM’s

17. Store Systems Inventory control Kiosk Labor scheduling Loss Prevention Pharmacy Point of Sale, Fuel, Self-checkout Shelf tags Store signage Wireless Retail Line Of Business Areas Marketing • Call Center – VRU • Coupon handling • CRM solutions • Customer Loyalty • EAI • Multi-Channel Retailing • Sales data warehouse Merchandising • Allocation and Forecasting • B2B (Supply Chain Collaboration) • EDI • Merchandise management • Pricing optimization • Replenishment • Retail Exchanges • Space and Floor Planning Business services • Business Scorecards • Finance • Human resources • Legal • Recruiting • Sarbanes Oxley • Six Sigma Logistics • Distribution • Fleet Management • RFID • Traffic • Warehouse Management E-Commerce • B2C • Content Management • Enterprise portal • E-Learning • Store Portal Central IT Application Development, e-mail, Enterprise Application Integration, Enterprise Project Management, IT Infrastructure, Office Productivity, Data Warehouse, Telephony, Unix-to-Windows Migration

18. Achieving Excellence in ExecutionPartner Management One Team Three Processes Five Major Activities Alignment of Account/Territory and Partner Business Plans Demand generation & Prospecting Partner Engagement Pipeline Management GTM & Industry Solution Planning

19. Retail Big Bets for FY05 • Smarter Selling • POS • Connected POS devices • Smarter Shopping • Mobility • Kiosks • Store as a Media • Smarter Operations • Supply chain ( JDA/Manhattan/Eqos) • BI/Dash-boards • GDS/RFID • Design wins

20. How we deliver the Big Bets • Evangelize SRI across the Industry • SRI EMEA EBC’s • SRI pilots and References • Broad reach marketing • Clear SI propositions • Partner Led Selling with ISV’s.

21. © 2004 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only.MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.