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Monetizing the Cloud

© 2010 Oracle 2

The following is intended to outline our general

product direction. It is intended for information

purposes only, and may not be incorporated into any

contract. It is not a commitment to deliver any

material, code, or functionality, and should not be

relied upon in making purchasing decisions.

The development, release, and timing of any

features or functionality described for Oracle’s

products remain at the sole discretion of Oracle.

© 2010 Oracle 3

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Agenda

• Cloud Computing Trends and Analysis

• Learning from Other Business Models

• Succeeding in the Cloud

• Customer Case Studies

• Oracle’s Defining Value

© 2010 Oracle 4

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Cloud Computing Trends

and Analysis

© 2010 Oracle 5

Early markets

We Were

Here

Where are we now?

“the Chasm”

Mainstreammarkets

Latemarket

We Were

Here

We Are

Here

© 2010 Oracle 6

Worldwide IT Revenue* by Consumption Model2009, 2013 ($B)

Source: IDC, March 2010

45

17

2009 2013

Wo

rld

wid

e IT

Re

ve

nu

e (

$ b

illi

on

)

359

416

Public IT Cloud Services

45170

100

200

300

400

500

600

Traditional IT Products

CAGR

26%

4%359

416

5%10%

0

10

20

30

40

50

60

45

17

Public IT Cloud Services Forecast

CAGR

26%

© 2010 Oracle 7

Maturing User Attitudes

(Scale: 1 = Not at all important 5 = Very Important)

Q: Rate the benefits commonly ascribed to the 'cloud'/on-demand model

Source: IDC Enterprise Panel, 3Q09, n = 263

54.0%

63.9%

64.6%

67.0%

68.5%

75.3%

77.7%

77.9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Seems like the way of the future

Sharing systems with partners simpler

Always offers latest functionality

Requires less in-house IT staff, costs

Encourages standard systems

Monthly payments

Easy/fast to deploy to end-users

Pay only for what you use

% rating 3, 4 or 5

© 2010 Oracle 8

Source: IDC Enterprise Panel, 3Q09, n = 263

72.9%

78.3%

79.2%

81.0%

82.1%

84.5%

86.0%

87.8%

88.6%

91.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Have local presence, can come to my offices

Are a technology and business model innovator

Offer both on-premise and public cloud services

Support many of my IT needs

Allow managing on-premise & cloud together

Understand my business and industry

Provide a complete solution

Option to move 'cloud' offerings back on premise

Offer Service Level Agreements (SLAs)

Offer competitive pricing

% rating 3, 4 or 5

(Scale: 1 = Not at all important 5 = Very Important)

Q: How important is it that cloud service providers…

Maturing User Attitudes

© 2010 Oracle 9

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Learnings from other

Business Models

© 2010 Oracle 10

All you can eat is easy but risky…

© 2010 Oracle 11

For all industries, the right business model is critical

© 2010 Oracle 12

Shifting Back to Usage Based Pricing Resulting in churn, lawsuits and stock price hit

• Service Providers implement tiered price

• 2009 Time Warner Cable implemented tiered pricing – Abandoned program due to customer backlash

• June 2010, ATT implemented tiered pricing for iPhone/iPad – Class action lawsuit pending

• January 2010: ATT, Verizon and other drop unlimited calling plans to $59.99

• Stock prices for both companies immediately dropped 3-5%

© 2010 Oracle 13

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Succeeding in the Cloud

© 2010 Oracle 14

Drive Efficiency

How do you

Private Cloud?

With a

© 2010 Oracle 15

Enabling Cost Allocation in the Private CloudTypical Technology Characteristics

User facingSelf-service

Back office

Provisioning, metering,

chargeback

Infrastructure

IP Network, Hardware, servers,

storage, DB

IaaS

PaaS

SaaSINTERNET

Private Cloud

Users

INTERNET

© 2010 Oracle 16

Metering, Billing, and Chargeback Leveraging Internal Cost Allocation to Drive Efficiency

• Track/meter resource consumption (available today)

- CPU

- Memory

- Storage

- Network Bandwidth

- Service

- Application

- And more

• Chargeback and Billing- Multi-level chargeback rollup using LDAP

Enterprise hierarchy

- Integration with Oracle Billing and Revenue Management for full chargeback capabilities

IT

Users

© 2010 Oracle 17

Self Service Engine

Billing & Revenue Management

Customer

Management

Service

Management

Resource

ManagementEnterprise Manager

Secure Internet

Billing Updates for “IT” & “Network” based Services

Oracle Applications for Cost EfficiencyPrivate Cloud Management and Usage Chargeback

CGBU Software Assets

Non-CGBU Software Assets

Oracle Hardware

Cloud Infrastructure Resources

Oracle VM

Oracle Solaris & Linux

Oracle Database

Oracle Fusion Middleware

© 2010 Oracle 18

Make money

How do you

Public Cloud?

With a

© 2010 Oracle 19

Enabling Order to Cash in the Public CloudTypical Technology Characteristics

Public Cloud

INTERNET

SaaS

IaaS

PaaS

Customer facing

Back Office

Infrastructure

Self-service, customer care,

CRM

Service ordering/provisioning

metering/billing, invoicing

Computing HW, applications, storage, DB,

security, QoS, SLA management,

analytics

© 2010 Oracle 20

Client Layer

•Mobile devices

•Laptops

•PCs

•Games, music

•Web-conferencing

•Online or downloadable apps

•APIs for CRM, Retail

•Tools to develop new apps

•Collaboration infrastructure

•Infrastructure for apps

•Storage, Collocation

•General purpose computing

The Three Monetizable Cloud Layers

Application Layer (SaaS)

Platform Layer (PaaS)

Infrastructure Layer (IaaS)

© 2010 Oracle 21

• Per Application User

• Per Transaction

• Per Program/Activity

• Per Hour

• Per Input/Output

• Per Message

• Per GB used

• Per Named Host

• Per GB

• Per Server/Blade/VM

• Per CPU per hour

Example Billing Metrics

Public Cloud OfferingsPricing Design Based on Usage Models

Public Cloud

I

N

T

E

R

N

E

T

SaaS

IaaS

PaaS

Software offerings

Platform offerings

Infrastructure

offerings

© 2010 Oracle 22

Siebel CRMCustomer

Management

Service

Management

Resource

Management

Comms Network

Order and Service

Management

Enterprise Manager

Unified Inventory

Management

Service Activation

Network Resource Management

Virtualized and Physical IT

InfrastructureComms Network (L1-4+) and Service Infrastructure

Billing Updates for “IT” & “Network” based Services

Oracle Applications for Revenue EnablementPublic Cloud Service Design, Delivery and Monetization

CGBU Assets

Non- CGBU Assets

Non-Oracle assets

Billing & Revenue Management

© 2010 Oracle 23

Physical & VirtualSystems Management

Cloud Management

Oracle Enterprise Manager

Configuration Mgmt

Lifecycle Management

Application PerformanceManagement

Application QualityManagement

Ops Center

Cloud Monetization

Pricing/Charging Flexibility

Customer Management

Complete Billing Operations

Value Chain Management

Business Intelligence

Oracle Billing and Revenue Management

Metered Usage

Usage data

collection

Provisioning

Bill/Invoice generation

and delivery

Integrated Metering and Billing at the Core Complete Resource Management and Monetization Capabilities

CloudServices

Middleware

Database

OS

Virtualization

Applications

Balance Control

Deactivation

© 2010 Oracle 24

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Customer Case Studies

© 2010 Oracle 25

BT Enterprise VDC DeploymentPrivate Cloud XaaS Offerings

Project Overview

9 major VDC centers in UK and Europe, plus others

around the world

VDC is key to BT’s overall cloud strategy – includes servers,

storage, security, connectivity

Other BT Cloud initiatives include UC, Communications as a Service, SaaS for SMEs

BT now rolling up all initiatives under one program – Oracle OSS is being positioned to take

on a broader role

Key Requirements

• Fast TTM through configuration vs coding and leveraging re-usable components

• Reduce costs through systems consolidation and automation

• Support any number of XaaS product types - flexible and future proof

• Dramatically improve customer experience

- Right First Time (RFT)

- Reduce Cycle Time (RCT)

• Flexible support for multivendor environment to avoid vendor lock-in

• TMF standards alignment

© 2010 Oracle 26

Colt Public Cloud IaaS Offerings

• Profile

- Offers voice, data, managed services, wholesale services to 35,000 customers (business, government)

- Operates large pan-European network, 19 Colt data centers

• Project Details

- Oracle (Siebel, Product Hub, OSM, UIM and ASAP) to support IaaS and strategic BSS/OSS architecture

- Phase 1 to be delivered Fall 2010; Phase 2 January 2011

• Key Requirements

• Enable Colt’s IaaS business model (lean provisioning model, real-time self-service)

• Aggressive deployment schedule – configurable platform with market leading OOB functionality key to enabling

fast low, risk deployment

- Strong support for component re-usability – i.e. support different markets (small, medium and large

businesses) from common base of components

- TMF standards alignment to simplify integrations and reduce risk

• Results to Date

• New Wave Transformations: Focused Projects, Fast Execution and High Impact

• Successfully delivering Cloud Services: Innovative Business Strategies

© 2010 Oracle 27

COMPANY OVERVIEW

• Intuit is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals

• Industry: Software • Segment: Accounting• Employees: over 8000• Revenue: over USD 3.1B

CHALLENGES/OPPORTUNITIES

• Consolidation of multiple IT and billing systems• Cross-product and cross-business line offers• Product/Offer Standardization• Real-time balance management• Regulatory compliance• Time to market for new offers

SOLUTIONS

• Project delivery by Oracle Consulting• Oracle BRM integrated with Siebel CRM and

Oracle E-Business Suite,

ANTICIPATED RESULTS

• Single global process supported by a

single global instance

• Subscription and billing tightly

integrated with accounting

(compliance & operational efficiency)

• Reduction/simplification of

application infrastructure

• E2E solution that offers an integrated

Shop, Buy, Use experience

IntuitPackaged Software & SaaS Offerings

© 2010 Oracle 28

COMPANY OVERVIEW

• WebEx is a leading provider of online meeting applications with 7M users per month and 35,000 customers

• Industry: SaaS-based conferencing• Employees: over 3500• Revenue: US $ 0.5B

CHALLENGES/OPPORTUNITIES

• Consolidate of multiple IT and billing systems• Ensure flexible support for B2B pricing & charging

models• Support high-volume transaction processing• Enable intuitive offer configuration• Support settlements with channel partners

SOLUTIONS

• Oracle BRM to manage customers, accounts, pricing, rating, billing, invoicing, A/R, collections, payments, and financials

• Project delivery by Oracle Consulting

ANTICIPATED RESULTS

• Oracle Communications BRM

processes millions of transactions

per day

• Provides real-time balance

management

• Processes partner settlements

• Handles complex corporate account

hierarchies

• Supports custom pricing for

corporate customers

• Supports multiple lines of business

in multiple countries

Cisco WebExSaaS Offerings

© 2010 Oracle 29

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Oracle’s Defining Value

© 2010 Oracle 30

Complete Oracle Stack for Cloud

1. Expand and accelerate -- dramatically – deliver highly

optimized and integrated hardware-software systems

2. Provide complete, standards-based Oracle IT stack that

delivers sufficient openness to avoid vendor lock-in, but

also superior performance compared with heterogeneous

combinations

3. Lower the costs of assembling, setting up, testing, tuning,

managing, integrating, trouble-shooting, fixing,

upgrading, and running 1 and 2

4. Complete that infrastructure with ultra-modern Fusion

applications that can run with existing enterprise apps,

from Oracle or anyone else.

5. Complement broad horizontal apps with deep

industry knowledge and functionality

© 2010 Oracle 31

Oracle’s Design Time Value Enable a Lean, Flexible Factory Assembly Model for

Cloud-based Services

Design Time Capabilities Business Value

Integrated provisioning of

connectivity and IT systems

Able to offer innovative and

market differentiating

XaaS mashups

Open, service-agnostic and

SID-based fulfillment

platform

Low-cost factory service

assembly model for ever-

changing XaaS offers

Single, configurable Order to

Cash platform

Minimize customization,

hours to days to launch

new XaaS offers

Flexible Pricing Engine Rapid development of

XaaS service pricing

models, real-time

discounting, revenue

recognition

© 2010 Oracle 32

Oracle’s Run-Time Value: Enable Fast, Efficient, Customer-Driven Service

Delivery and Monetization of Cloud-based Services

Run-Time Capabilities Business Value

Converged network and

XaaS platform

On-demand and low-

cost service delivery

model

End-to-end service views

and order statistics

Able to offer market

differentiating self-care

(BoD) and order

fulfillment SLAs

Integration of Ordering,

Provisioning and Billing

Faster time to market for

new service launches

Single platform with

dynamic order change

management

Customer-responsive

service delivery

Flexible pricing engine for

monetization

Any service, any price

point,

© 2010 Oracle 33

Q&A

© 2010 Oracle 34