EMEA PAB March 2 nd 2010

2. EMEA PAB March 2nd 2010 ISVs and Oracle

3. Agenda EMEA PAB, Dubai2nd March 2010

4. Dinner at the Palm – Atlantis hotel – Levantine Departure from the Park Hyatt at 18:00 LEVANTINE restaurant – Middle Eastern concept infused with an explosion of colours and Arabian inlfuences

5. Oracle Partner Advisory BoardPartnering “Partnering requires all Partners to transform their businesses in terms of relationships, behaviours, processes, communications and leadership. Neither participant can succeed without the other.”

6. Outcome of the pab session

7. Oracle and ISV engagementOutcome of meeting • ISV and Oracle share of the customer wallet does not seem equitable • Pricing of EE • Flexible licensing model / Commercial proposal for ISVs • Revenue Recognition • License certificate • There is a lack of recognition for ISVs for the Oracle license sales they ‘enable’ • Promotion of big wins and snow ball effect • Competition with Oracle sales • Support issues • No value to sell for ISVs past Year 1 • Pre-payment • Share Support revenue w/ ISV

8. Oracle and ISV engagementOutcome of meeting • Oracle vertical acquisition strategy can provide unfair competition • Complex organization - Contact person • Exclusivity for ISV for a period of time • Migration tool • Insight program for partners – Scalability? • Knowledge transfer of new technology • No issue – All is well • Lack of visibility and promotion of ISV products available by sales team • ISVs are Competition • Internal & External Communication of ISV • Oracle branding for ISVs

9. Oracle and ISV engagementOutcome of meeting • Impact of Oracle specialized programme on ISVs • Vertical specialization – Industry specialization • Upgrade paths on new products • Commercial “change of plumbing” • PTS • SUN • Next PAB topic • VMWare • Roadmap for Oracle VM • Taskforce on Virtualization

10. Feedback from local pabS

11. Local PAB Feedback – UK (1) • Agree with observations from pre-meeting • Discussed at UK PAB and validated with Oracle UK SIG • Arnaud Lagarde UC4, Fiona Martin IBM, Faisal Khan 3i Infotech • Escalating locally • Mike Thompson presented at UK PAB • On-going discussions with Mike Thompson • Planned executive round table

12. Local PAB Feedback – UK (2) • Oracle’s strategy for ISVs needs clarification • Focus on larger partners only? • In UK managed out of ’Tech’ team as leverage database, but more affinity with ’Apps’ • Does it vary by geography or vertical? • Specialized programe needs more focus on ISVs • Perceived not as well thought through for ISVs (what were design goals?) • ISVs not have coverage in every country to be specialized in each • ISV measured by quality of solution for industry not by skills • How does Validated and AIA fit in with Specialized?

13. Local PAB Feedback – UK (3) • Communication • Difficulty in communicating with different sizes of ISVs • Administrator often contact • CXO round table planned for 18th March • Ensure attendance and Oracle open discussion • Incentivise ISVs to leverage more Oracle add-ons • Oracle competitors perceived to be more ISV friendly • Perceived cultural issue around promoting ISVs • Are ISVs a technology influencer of channel partner? • BM have technology teams for technology enablement and industry interlock • Who has MBO around ISV satifaction? • ISVs important as many Oracle acquisitions used to be ISVs

14. Local PAB Feedback – UK (4) • How does success of ISV get measured in OMM • Improve customer satisfaction with Oracle and thus renew • Is value of ISV sale tracked? • ISVs don’t get same discount as ’direct’ • So influence not as apparent • SUN programme for ISV perceived as good • What is planned?

15. Oracle and ISV engagementUK PAB Top 5 Key Priorities • Review of ’specialised’ design goals in respect of ISVs • Review use of AIA, Validated and other programmes • Communication – how are right people reached in ISVs. Good programmes not being effective • Better understanding of what is Oracle strategy for ISVs • Improve culture of lack of interest/ appreciation of ISVs by Oracle

16. Local PAB Feedback - Russia • ISVs in Russia agree that almost all the issues raised do exist and some of them are quite significant for the local market.. • In other cases the ISVs see these issues as part of the sales process and do not see the need to escalate them further.

17. Oracle and ISV engagementRussia - PAB Top 5 Key Priorities • Support issues – requirement of the revenue 12 months in advance does not abide by the Russian law when the service is to be delivered first and then paid for. Payment on at least a quarterly basis is preferable. • Licencing mechanisms like software as a service are very interesting. But there are no examples of such practice in Russia so it is not clear if it abides by the Russian law. • Product upgade determination – it would be fair if Oracle could provide some compensation scheme for ISVs in those cases (upgrade paths). • Oracle vertical acquisition strategy can result in unfair competition. • Lack of visibility and promotion of ISV products available by sales team.

18. Local PAB Feedback – Turkey (1) • ISV and Oracle share of the customer wallet does not seem equitable • This is particularly critical in the lower end of the market. • Proposal: Special discount programs for certain verticals/segments which are strategic to Oracle, particularly on a local level. • Proposal: Special ASFU icensing scheme where license is defined as percentage of ISV license, in effect, royalty. • There is a lack of recognition for ISVs for the Oracle license sales they ‘enable’ • We are hopeful this will improve with new OPN. However, a solution is still needed for named accounts. • Support issues • This is critical and has to be solved. This is costing Oracle revenue, as partners have no incentive to encourage customers to take on support following initial year.

19. Local PAB Feedback – Turkey (2) • Licensing mechanisms like ‘software as a service’ are either not available or difficult to agree with Oracle.  • Current pricing unrealistically expensive. • Proposal: Pricing should be proportional to ISV service fees, not Oracle license prices. • Oracle vertical acquisition strategy can provide unfair competition • Proposal: The situation may be improved by establishing industry based specialization. Such specialized ISV’s may then be given priority in partnering with new product lines. • Knowledge transfer of new technology • There is an incubation program for partners, which should be extended and made available to wider audience. • Proposal: Early adopter partners should be rewarded by giving them priority in sales, perhaps time based exclusivity.

20. Local PAB Feedback – Turkey (3) • Lack of visibility and promotion of ISV products available by sales team • Proposal: Local roadmaps for industry verticals, including ISV solutions. • Proposal: Trainings for Oracle sales force on key verticals and ISV’s. • Impact of Oracle specialized programme on ISVs • Proposal: Certification for ISV products, perhaps based on category: “Oracle Security Certified, Oracle SOA certified....” Microsoft model may be a starting point. • Proposal: Reference based certification, ie ISV or product is certified based on number of successful customer project completions. Customers confirm reference on web. • Proposal: Oracle Apps certified products (extensions). Eg Oracle e-Business suite certified Payroll application, etc.

21. Local PAB Feedback – Turkey (4) • Upgrade paths on new products • Major issue. • Proposal: “n days of planning and migration consulting free at certain OPN partnership level.” (see Microsoft model) • Extend Oracle PTS team. Same team can also do ISV and product certification.

22. Oracle and ISV engagementTurkey - PAB Top 5 Key Priorities (in no particularorder) • ISV and Oracle share of the customer wallet does not seem equitable • Support issues • Lack of visibility and promotion of ISV products available by sales team • Impact of Oracle specialized programme on ISVs • Upgrade paths on new products

23. Local PAB Feedback – MEA (1) • At large local ISV face similar issue in addition to some specific issues that relate to ME such as : • Issues related to ASFU licensing model • Oracle sales team offers a lower price for full use that impact the Partner business • Oracle sales team some times introduce a fulfillment partner that accept orders at very low margin. • Customers Require License Certificate ( not provided by Oracle) • in a joint activity deals, Oracle Sales team in many cases send proposals to the customer without informing the partner.

24. Local PAB Feedback – MEA (2) • We are not seen as a partner by Oracle Sales but as a competitor • Customer Engagement Program ( local ME Program) create major issues with the customers. • Oracle Support becoming a liability rather than benefit to the partner • Oracle sales Team may provide unneeded discount to meet quarterly commitment, Partner lose their margin. • No efforts from Oracle to publish partners’ success stories • Oracle Sales team sometimes interpret the license policy to increase Technology Revenue but kill the sale • Pricing of Disaster Recovery License

25. Local PAB Feedback – MEA (3) • Lack of coordnation between Oracle and newly acquired sloutions partners create problems for SI and the customer • Oracle acquired SPL more than 2 years ago but still customers see two diffrent entities. • Engagment Model with Oracle Counsulting • Oracle insist on Time and Material & customer insist on Fixed cost Partner is being squeezed in the middel • Deploying New Releases of Oracle put the Partner sometimes in finacial difficulty • The spped of fixcing bugs and respond to supprot calls cause delay in Partner colleting his finacial dues from the customers.

26. Oracle and ISV engagementMEA - PAB Top 5 Key Priorities • Partners are not getting the excepted financial Return from Oracle Relationship. • Sales Team interest conflicts with The partner Interest • Oracle global policy need to consider local issues • Oracle Support Model Highlights • Partners highly trust Oracle local management • Respond Quickly to issues raised by partners • Local Oracle management is Accessible

27. Local PAB Feedback – Benelux (1) • ISV and Oracle share of the customer wallet does not seem equitable • GB pricing of Oracle Enterprise Edition too high • Is this perception fed by competition? • ISVs see opportunity with Embedded model as it is not supported by Oracle TSR/SSR • Cost of licenses, VMware policy is threatning business and partnership • There is a lack of recognition for ISVs for the Oracle license sales they ‘enable’ • ISVs currently selling Full Use licenses, however they are looking to move to SAAS, ASFU/ESL model due to pricing • Oracle license sales not willing to support SAAS, Hosting • Eg. Hosting licenses for Local Gov with Centric

28. Local PAB Feedback – Benelux (2) • Support issues • ISVs want to receive part of the support revenue (as in the past) • End Users expect support from ISV and not have different support contracts • Licensing mechanisms like ‘software as a service’ are either not available or difficult to agree with Oracle.  • SAAS license structure not supported by Oracle sales – difficult model • Oracle vertical acquisition strategy can provide unfair competition • GBUs seen as a threat/challenge as local Oracle management has no control on aligning the activities with GBUs • Knowledge transfer of new technology • Great support from Oraacle pre-sales, training and PTS

29. Local PAB Feedback – Benelux (3) • Lack of visibility and promotion of ISV products available by sales team • Specific Industry Branding, such as ”Retail partner”, local government partner” would help ISVs • Lack of vertical/market specialization is not helping ISVs business • ISVs cannot reach Platinium although they used to be CAP partners – Felt as lack of recognition • Impact of Oracle specialized programme on ISVs • Lack of vertical/market specialization is not helping ISVs business • ISVs cannot reach Platinium although they used to be CAP partners – Felt as lack of recognition • Upgrade paths on new products • Large ISVs carry out upsell with their install base and are not interested with free upgrade path • Free upgrade would help smaller ISVs to expand coverage in GB