1. Strategy to improve revenue growth at GSG Prepared by RSM Consultants Radeshkumar Baboelal Sunil Patil Manuel Pineros Gurkeerat Singh Virk

2. For revenue growth, target new segments and expand existing 2 market through value addition to product offerings Acquisitions enhance Newly acquired companies work in product and service conjunction with partners and ISVs portfolio to provide better service New Repackage and modify GSG Improved relations with Partners and ISVs Partners and ISVs products to meet changing partners and ISVs customer needs Small businesses provide an Develop sales strategy Repositioning to directly cater to untapped source of future through small businesses growth. marketing 170.00 378.39 31% 69% Small & medium Segment Enterprise US SB Market spending ($ billion) Re v e nue (in $ millio n)Better products andcustomer services lead tocustomer delight $14,000.00 $12,000.00 $10,000.00 $8,000.00 $6,000.00 $4,000.00 $2,000.00 $0.00 New brand image, satisfied 2005 Q4 2006 2007 2008 2009 Time line customer and higher revenue Happy customers = Higher revenues growth leads to growth in shareholder value

3. Low revenue growth due to industry slowdown and strategy issues. 3Turnaround will require re-defining markets and business processes Problems Solutions Slowdown in the US market due to Internet Improve revenue generation from the US bubble burst, growth emerging from overseas market, sustain growth momentum in overseas markets markets Reduction in IT spending by the enterprise Identify gaps in the market and provide segment due to saturation solutions to consolidate market leadership Customer requirements for solution and Integrate customer feedback to provide servicing support are not addressed adequately solutions relevant to the business. Move from by product driven strategy product focus to more solution support Sales approach focused on license pushing, More responsibility sharing with channel lack of support for channel partners partners, combined with system of incentives Industry expertise limited to few verticals, Optimize customer support through partner limited partner support relationship management Lack of identification and development of new Segment and penetrate the small business market segments market with a spillover on mid size markets Focus on growth through solution oriented sales and by targeting small businessesKey Issues

4. Organic growth through value added product offerings to existing 4 customer segments and inorganic growth through development of small business segment Based on strengths of GSG, two distinct dimensions are identified as providing maximum growth potential opportunities Growth dimension 2: Provide value added products Enterprise Mid-market Growth dimension 1: Target untapped small Small business business segment The mid-market segment is best The mid-market segment is best addressed through mix of best practice addressed through mix of best practice strategies employed for both enterprise strategies employed for both enterprise and small business market segments and small business market segments Revenue growth will determine shareholder value growthKey Issues

5. Exploiting small business segment will require focus on specific 5 industry verticals and development of new channels Small business segment has attractive potential: - High aggregate demand Enterprise Small business (SB) segment accounts for 31% of total US business IT expenditure US SB segment spent $170 billion on IT in 2004 US SB segment is expected to spend more than $215 Mid-market billion on IT products, services and personnel by 2008 - Not targeted by other players in the market Small business The challenges in the segment are Too wide spread due to Lack of expertise in selling to extremely large number of this segment, traditionally the businesses domain of channel partners Identify high potential industry verticals for Demarcation of firms to be targeted by GSG sales effective targeting representatives and channel partners Develop channels to promote products directly to Promote products directly to small business small business segment to increase distribution segment to decrease leakage of margins to reach channel partners Targeting specific industry verticals leads to focused approach and expertise development Demarcation of size of firms to target, prevents direct involvement in selling to small firms and avoids conflict with channel partners Small businessKey Issues segment

6. Six high potential industry verticals identified for phased targeting in 6 small business segment to cope with segment complexity and develop expertise Estimated average Estimated average No. of businesses No. of employees Estimated IT spend IT spend perIndustry categories no. of employees (thousands) (millions) (billion $USD) business firm per business firm (USD)Agriculture and resources 967 3.2 1.1 3.3 1138Manufacturing 483 8 7.3 16.6 15114Construction 1040 3.6 1.8 3.5 1731Transportation 460 3.3 3 7.2 6522Telecom and utilities 69 2.4 3.3 34.8 47826Distribution (Wholesale) 612 2.5 5.1 4.1 8333Distri (Retail) 1119 4.9 5.9 4.4 5273Financial services (Finance & Insurance) 566 2.5 6.9 4.4 12191Financial services (Real estate, etc) 460 0.8 1.5 1.7 3261Business services 1538 6.3 7.6 4.1 4941Food and accomodation 414 3.5 3.3 8.5 7971Other services 737 3.5 1.8 4.7 2442Government 39 0.8 0.5 20.5 12821Education 69 1.4 0.6 20.3 8696Healthcare 428 4.3 3.8 10.0 8879Total small business segment 9000 51 53.5 5.7 5944 High potential industry verticals identified based on average IT spend and average size of firms Targeting specific industry verticals dilutes risk of unfocused sales approach Phased development of products to target specific industry verticals is recommended to build industry expertise GSG sales representatives solely responsible for small businesses with more than 10 employees or with an annual turnover of more than 10million USD Industry focused approach in small business segment mitigates risks emanating from, (a) large number of firms and (b) diversity of industries and functions Small businessKey Issues segment

7. Change sales channel strategy to take products directly to small 7 business customers GSG has to improve visibility and increase channels through which prospective customers can procure products directly, minimizing leakage of margins to channel partners Considering size and spread of small business market and heavy trade margins for channel partners, there is incentive to promote products directly to small business customers Develop new sales channels to target small business customers. Support these channels through promotional campaigns and customer incentives Clear definition of roles of various channels and partners to safeguard against future conflict of interests Sales channels Promotional campaigns Customer Incentives - Use advertising to Websites: Create sites capable of - Offer higher discounts on increase awareness of selling software products, direct orders from website GSGs redefined approach providing support and receiving or by phone, than through and new channel strategy customer feedback channel partners - Leverage brand equity in Independent Software Vendors - Offer discounts on buying enterprise segments to sell (ISVs): Increase sales network more than one product per products in small business transaction through new contracts with segment industry specific ISVs - Links on other websites and non-competing Phone: Provide sales and support companies Google, Yahoo, through 1-800 phone numbers MSN, etc Retail: Undertake contracts with retailers like CompUsa, Best Buy, Media Mart, Circuit City, etc. Contributes to more visibility in eyes of shareholders, affecting increase in market cap Small business SalesKey Issues segment channels

8. Change marketing strategy for existing market segments, move 8 towards providing solutions and value added product offerings Enterprise segment Focus on providing Set-up dedicated is the source of the enterprise account teams with Enterprise largest chunk of customers with expertise along revenues, in spite of value addition in industry verticals to low growth terms of superior service enterprise potential customer service customers Mid-market Small business The challenges in the segment are Saturated market segment Lack of integration and with undifferentiated customization of products to products match customer requirements Value added services are critical to Simplicity in integrating GSG products with differentiate product offerings customer business environment is crucial to generate dependencies Acquire or set up joint ventures with smaller companies to enhance servicing capabilities Leverage existing strengths in enterprise industry verticals such as financial services, to Identify gaps in market for future product penetrate other segments of the enterprise development industry Focus on moving away from product oriented approach to add value to differentiate product offers Small business Sales EnterpriseKey Issues segment channels segment

9. Leverage market leadership to further penetrate business solutions 9 segment, while restructuring existing market standard products Evaluate threats from industry entrants to maintain product leadership position in generic products and identify opportunities in solutions market Research customer needs to identify trends and develop functionality accordingly Generic products Solution suites Develop stripped versions of products, Develop industry specific solution suites to coupled with optional modules in order to target small business segment meeting meet price/functionality requirements of overall company requirements divers customer segments Provide out-of-the-box solutions to reduce Evaluate existing product portfolio to implementation and integration costs identify complementarities and create Bundling allows to sell at reduced prices to product bundles small customers Enhanced features, redesigned product structure and customer driven development secure current market participation and allow penetration of the small business segment Small business Sales EnterpriseKey Issues Products segment channels segment

10. Realign company structure to expand market coverage and capture 10 growing business solutions market GSG Partners Create matrix structure with industry verticals Align with industry specific partners that and product horizontals to match customer target small and midsize businesses needs and solutions provided Partners complement GSGs market coverage Acquire specialized services firms to increase by targeting businesses with under 10 in-house industry specific knowledge employees Create a Professional Services group within Create an incentives program to improve the organization to develop and support partner relations relationship alignment by industry segment - Incentives for prioritizing GSG products - Reward partners for customer support Develop new business solutions through joint ventures with partners to drive value of product offering, improve partners knowledge of GSG products and build long-term relationships Small business Sales Enterprise CompanyKey Issues segment channels segment Structure

11. Increased industry specific knowledge and matrix based support 11 structure help resolve customer and partner problems reducing time and effort required to deliver solutions Develop new Professional Services (PS) teams with industry specific knowledge to GSG implement and integrate business solutions PS Enterprise Enterprise Divide PS teams along customer segments complementing sales efforts PS Medium PS teams work hand in hand with and Small account teams. Business PS specialized in customer segments coupled with Mid-market attain increased knowledge reducing acquired resolution time businesses Specialized partners that have knowledge and experience in specific industries Partners Small business PS specialized along industry verticals Acquisition of industry specific service companies contributes resources, business knowledge, and sales and marketing network Small business Sales Enterprise CompanyKey Issues Support segment channels segment Structure

12. Capturing only 1% of the $215bn small segment IT market in 4 years12 leads to an annual revenue growth rate of 16% 7000 70006000 60005000 50004000 40003000 Small and 3000 Consumer2000 Mid-Market 2000 PP UDS1000 Enterprise 1000 BSS BIS 0 0 FY2004 FY2009 FY2004 FY2009 Projected Revenue Growth Projected Revenue Growth by Customer Segments ($MM) by Product Group ($MM) Revenue growth from untapped market segments will reduce dependency on enterprise segment and reshuffle contribution from product groups New added value provided to clients via customized solutions helps GSG neutralize threats from potential competitors, secure market leadership and increase capital investment in product development Small business Sales Enterprise CompanyKey Issues Support Financials segment channels segment Structure

13. A more aggressive strategy will allow GSG to capture a market 13 share of 4%, resulting in CAGR of 37% Comparitive Growth With Respect to market share in Small segment $14,000 $12,000US Revenue in $m $10,000 CAGR 37% $8,000 $6,000 $4,000 $2,000 $0 1 2 3 4 5 Time Frame (in years) Current Situation 1% Market Share 4% Market Share Estimated net cash flow based on annual net investment of $500 millions and 20% profit margins Total revenue represents projected growth in products $3,000 and solutions segments, across all customer segments. $2,500 US $ millions $2,000 $1,500 $1,000 $500 $0 2005 Q4 2006 2007 2008 2009 Time Investment Profits Net Cash Flow Steady revenue growth will positively impact stock price. Small business Sales Enterprise CompanyKey Issues Support Financials segment channels segment Structure

14. The new strategy requires detailed implementation - GSG needs a 14 schedule that allows a progressive penetration of new segments 2006 2007 2008 2005 - Q4 1st half 2nd half 1st half 2nd half 1st half 2nd half Identify profitable small and medium business market segments CUSTOMER Target Financial, Manufacturing and Telecom industry segments SEGMENTS Target Government, Education and Healthcare industry segments Target small businesses with less than 10 employees through partners Analyze product portfolio, identify redundancies Develop prepackaged industry specific suites and keep updating the packages PRODUCTS Repackage and bundle products, create stripped down versions to target small and medium businesses Sales and marketing team focus on industry and market segments and provide feedback to products management about customer and industry needs SALES, Set-up Professional Services Group MARKETING AND SUPPORT Professional Services Enterprise (PSE) teams support industry specific customers Professional Services Small and Medium (PSSM) teams support industry specific customers Identify potential acquisition targets to gain access to new markets PARTNERS Acquire services companies AND CHANNELS Identify new channel partners and ISVs to improve sales Create alliances with new channel partners and ISVs COMPANY Educate employees about shift in focus from product to solutions CULTURE Small business Sales Enterprise CompanyKey Issues Support Financials Schedule segment channels segment Structure

15. Success of the proposed strategy is dependent on careful 15 consideration of a few critical issues Threats Solutions Sales channel partners may not provide Introduce a system of regular feedback from expected support end customers and share it with channel partners Implement another system of two way feedback with channel partners to prevent problems Acquisition and subsequent integration of other Acquisitions should focus on complementing companies may take longer than expected market knowledge and skill set instead of size and revenue Competitors may copy strategy to target the High visibility advertising campaign to build small and medium businesses brand awareness and incentive programs to foster customer loyalty can pre-empt competitive pressure Diversity in small business firms within an Thorough research should be undertaken to industry vertical may result in products not develop products addressing wide range of aligned to customer expectations requirements within target industry verticals Possible internal resistance against move Top management within organization has to towards a solutions focused strategy due to reach consensus and act strongly to implement strong product driven culture business strategy requirements Small business Sales Enterprise Company ThreatKey Issues Support Financials Schedule segment channels segment Structure Analysis