Microsoft turns against the people of Kerala again

ANIVAR Aravind, who led friendly protests in favour of Free software in India, told us last night that "Kerala is moving to Non Free Way again [...] 2 major supporters for Free Software in Govt is Removed by The Govt. (Leaded by Communist Party of India (Marxist)."

Anybody visited the www.keralataxes.in[1] for VAT e-filing ? From 1st of Jan 2009 onwards e-filing of VAT returns is compulsory for all the dealers in Kerala. Please go through the site and see the documentation and procedures for e-flining.. Site is developed for and by the Microsoft Community. Govt has arranged e-filing from Akshaya Centers for dealers who have no internet facility at "Free Of Cost" (Thanks to "Microsoft Unlimited Potential Programme")

From: David Driftmier Sent: Tuesday, August 06, 2002 2:46 PM To: Anna Aubry; Candace Grisdale Cc: Christine Bomstead; Kurt Kolb Subject: RE: "EDGI" Marketing funds Importance: High

EDGI is a customer-focused program that is for circumstances (like the one you reference) where an education and/or government customer is going to purchase naked PC'S or PC'S w/Linux. IF we do everything possible it still comes down to price differential between the Windows PC’s and Linux PC’s, then we can invest some/all of the royalty revenue from the deal back to the customer in the form of training, services, or even rebates. For more detail see that attached and let me know if you want to chat before your call. Note: This is not a partner program and is MS-internal only.

[...]

.... Original Message .... From: Candace Grisdale Sent: Tuesday, August 06, 2002 11:20 AM To: Anna Aubry; Christine Bomstead Subject: "EDGI" Marketing funds Importance: High

Okay I have a strange request...There is a situation in Indonesia where one of our OEMs is planning to ship Linux into the channel on some desktops. Do you know about the EDGI program (I think that’s how you spell it) and if an initiative like this one (likely to be government and education accounts receiving the offer)? Sorry if this is totally random but we’ve got an urgency at the executive level within the company about pulling together a Windows marketing program offer. NOTE: there’s a call at 3:30 today so I need to get to the right folks by 2pm today. Any advice I’d welcome.

[...]

From: David Driftmier Sent: Thursday, August 01,2002 4:27 PM To: Mark East; Yasushi Iwao; Rafael Perez-Colon; Prasanna Meduri; George Kyriakis Cc: EDGI HQ Team; Tit Meng Ang; Kurt Kolb; Ed Marcheselli; Sherri Bealkowski; David Driftmier Subject: EDGI Importance: High Attachments: *Microsoft Confidential* : Education and Government Incentives program

Shortly before MGB, Orlando sent a mail to the GM’s to let them know about an exciting new program to equip the field with a new tool to ensure that we never lose to Linux - the Education and Government Incentives [EDGI] program. We now need to make sure our people in the field understand how and when to leverage this program. Please use the attachments included in the original Orlando email and the into below to communicate with the education people in your region. I am sending this to the regional leads instead of to the broader alias so that you may modify with any regional processes as necessary. Please distribute as quickly as possible, though.

Below is a quick Q&A:

What is EDGI? EDGI (pronounced 'edgy') is both a process for responding to large competitive threats and a large source of funding to level the playing field between Windows and Linux when a deal involves the purchase of new PC's.

Did you say ’funding’?! How much? EDGI does not have a set limit for funding, but is instead limited on a per-deal basis. The maximum amount of funding that can be approved for an individual deal is the total amount of OEM revenue that Microsoft will recognize from the OEM/COEM from which new legal Windows PC’s are purchased.

From: Peter Wise Sent: Monday, October 07, 2002 9:43 AM To: Server Platform Leadership Team Subject: CompHot Escalation Team Summary - Month of September 2002

CompHot Escalation Team Summary - Month of September 2002

Microsoft Confidential

[...]

Observations and Issues

* Linux infestations are being uncovered in many of our large accounts as part of the escalation engagements. People on the escalation team have gone into AXA, Ford, WalMart, the US Army, and other large enterprises, where they've helped block one Linux threat, only to have it pop up in other parts of the businesses. At General Electric alone, at least five major pilots have been identified, as well as a new "Center of Excellence for Linux" at GE Capitol.

* Linux on the mainframe continues to be the most common escalation scenario largely because the mainframe is unfamiliar to most of our sales team. Paul Morse of CATM has had a success at AXA, PNC Financial, the State of Pennsylvania and elsewhere in blocking this threat.

[...]

* We have a couple of questions about the 100 $50,000 prizes that will be awarded as part of the MGB Linux contest.

Appendix: Comes vs. Microsoft - exhibit px09685, as text

 





From: Melody O’Tierney 
Sent: Tuesday, August 06, 2002 5:15 PM 
To: Ken Goetsch’s Direct Reports; Melody O’Tiemey’s Direct Reports 
Subject: FW: "EDGI" Marketing funds 





Attachments: EDGI 





We had a presentation on Edgi (aka Wedgi) at MGB, but this document actually takes you through what it entails.
Brian had mentioned a school district that this might be an excellent candidate for -- are there others? Let’s make 
sure we use this new tool in our tool box if we can make it make sense. 





.... Original Message .... 
From: Candace Grisdale 
Sent: Tuesday, August 06, 2002 4:40 PM 
To: Melody O’Tierney; Ken Goetsch 
Subject: FW: "EDGI" Marketing funds 





All you ever wanted to know about EDGI....might be helpful data.... 





.... Original Message .... 
From: David Driftmier 
Sent: Tuesday, August 06, 2002 2:46 PM 
To: Anna Aubry; Candace Grisdale 
Cc: Christine Bomstead; Kurt Kolb 
Subject: RE: "EDGI" Marketing funds 
Importance: High 





EDGI is a customer-focused program that is for circumstances (like the 
one you reference) where an education and/or government customer is 
going to purchase naked PC'S or PC'S w/Linux. IF we do everything 
possible it still comes down to price differential between the Windows 
PC’s and Linux PC’s, then we can invest some/all of the royalty 
revenue from the deal back to the customer in the form of training, 
services, or even rebates. For more detail see that attached and 
let me know if you want to chat before your call. Note: This is not 
a partner program and is MS-internal only.





royalty revenue from the deal back to the customer in the form of training, services, or 
even rebates. For more detail see that attached and let me know if you want to chat 
before your call. Note: This is not a partner program and is MS-internal only. 





D 





.... Original Message .... 
From: Anna Aubry 
Sent: Tuesday, August 06, 2002 1:40 PM 
To: Candace Grisdale; David Driftmier 
Cc: Christine Bomstead 
Subject: RE: "EDGI" Marketing funds 
Importance: High 





Hi Candace-
Sorry for the slow response - been in meetings. I’m not familiar with EDGI. David is our Dir of 
International Operations; maybe he can help? 
Thanks, 
Anna 





MS-CC-RN 000001381445 
HIGHLY CONFIDENTIAL 

.... Original Message .... 
From: Candace Grisdale
Sent: Tuesday, August 06, 2002 11:20 AM
To: Anna Aubry; Christine Bomstead
Subject: "EDGI" Marketing funds
Importance: High





Okay I have a strange request...There is a situation in Indonesia where one of 
our OEMs is planning to ship Linux into the channel on some desktops. Do 
you know about the EDGI program (I think that’s how you spell it) and if an 
initiative like this one (likely to be government and education accounts
 receiving the offer)? Sorry if this is totally random but we’ve got an urgency 
at the executive level within the company about pulling together a Windows 
marketing program offer. NOTE: there’s a call at 3:30 today so I need to get 
to the right folks by 2pm today. Any advice I’d welcome.





8/25/2005 





MS-CC-RN 000001381446 
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Page 1 of 3





From: David Driftmier
Sent: Thursday, August 01,2002 4:27 PM
To: Mark East; Yasushi Iwao; Rafael Perez-Colon; Prasanna Meduri; George Kyriakis
Cc: EDGI HQ Team; Tit Meng Ang; Kurt Kolb; Ed Marcheselli; Sherri Bealkowski; David Driftmier
Subject: EDGI
Importance: High
Attachments: *Microsoft Confidential* : Education and Government Incentives program





Shortly before MGB, Orlando sent a mail to the GM’s to let them know about an 
exciting new program to equip the field with a new tool to ensure that we never 
lose to Linux - the Education and Government Incentives [EDGI] program. We 
now need to make sure our people in the field understand how and when to leverage 
this program. Please use the attachments included in the original Orlando email and 
the into below to communicate with the education people in your region. I am sending 
this to the regional leads instead of to the broader alias so that you may modify with 
any regional processes as necessary. Please distribute as quickly as possible, though.





Below is a quick Q&A:





What is EDGI? EDGI (pronounced 'edgy') is both a process for responding to 
large competitive threats and a large source of funding to level the  playing field 
between Windows and Linux when a deal involves the purchase of new PC's.





Did you say ’funding’?! How much? EDGI does not have a set limit for funding, 
but is instead limited on a per-deal basis. The maximum amount of funding that can be 
approved for an individual deal is the total amount of OEM revenue that Microsoft will 
recognize from the OEM/COEM from which new legal Windows PC’s are purchased.





So this is only for deals where new Windows PC’s are purchased from OEM’s or COEM’s? Yes. 





When should I request funding under the EDGI program? EDGI should only be used when 
every other attempt to close the business has been exhausted and the customer will be 
buying naked PC’s with Linux. 





So how does EDGI level the paying field when it comes to price? Won’t the customer still have 
to pay for Windows as part of purchasing a Windows-based PC? Yes, the customer will stay 
pay for Windows as part of the purchase price of the new PC. We can however, use EDGI to 
re-invest in the customer in the form of training, services, or, in extreme cases, even rebates so 
that the total cost of the project is the same as if the bought PC’s with Linux and then had to 
pay for the training and/or services, etc. 





So I have an account I think may need this program. What do I do? Assuming you have 
exhausted all tools available to you in your subsidiary, escalate to the regional Education 
director for your region. They will the work with you to determine how best to win and can 
bring additional resources to bean as well as the experience of how these deals have been 
won in other subsidiaries in the region. The regional teams will then escalate to the 
competitive team in Redmond via the CompHot alias. The CompHot team will immediately 





8/25/2005 





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Page 2 of 3 





involve EdSG and the Windows product group on any EDGI deals. We will then provide 





funding information II/O codes, etc.) so that money can be transferred or checks cut by local 
operations centers. This will also provide for a central point of reporting and tracking of these 
competitive deals. (For those subs who don’t have a regional education lead yet, escalate 
directly to comphot) 





Who ultimately approves EDGI funds? The WW Area VP’s (Kevin Johnson, Jean-Philippe 
Courtois, Michael Rawding). Before EdSG approves the funding, we will make sure VP 
approval has been obtained. 





How does this impact the subsidiary financially? What about my quota? We are still working 
out reporting and accounting issues. At a minimum you can expect the following: 






Review at MYR to ensure the deals ended up being net positive for Microsoft 




Subsidiary (and sales team) should only expect revenue credit for the net impact of the 
deal. i.e. If we do a deal that generates $500k in COEM Windows Revenue and $500k in 
MS Office revenue, but we had to invest $250k back into the customer, then the sub 
would only see $750k total revenue credit. Also the rep responsible for the account 
should only expect to receive credit for net revenue after the investment. 
In other words, we still have to meet our revenue targets, so we should only use this if it 
means that we would not normally have seen the revenue as it would have been lost to 
Linux or another low-cost competitor. 





Can I use this money to fund pilots, or other pre-sales activities? EDGI funds are only 
disbursed after the OEM revenue is recognized. This is not to be used to support pro-sales 
activities. Pro-sales activities such as pilots, architecture assessments, etc. should be 
funded through BIF. EDGI is neither a replacement nor an extension of BIF. 





I cover government accounts, also. Can I use EDGI for those accounts? While it is 
expected that the majority of EDGI deals will be government-driven education deals, 
EDGI can be used for government-only deals if appropriate. 





Is EDGI just for developing countries? What about developed countries? While it is 
expected that this is a larger issues in countries that have extremely limited resources 
available, EDGI can be used in both developed as well as developing countries. 





Should I educate my partners on this? Due to our reluctance to compete with Linux or 
any other competitor solely on price, this should be treated as Microsoft-internal only. 





OK, what do I do now? Read the attached email and attachments thoroughly. IF you 
have an opportunity in the pipeline that you fear will be lost to Linux or other low-
cost/no-cost competitor, then escalate appropriately, provided that you have already 
exhausted every means at your disposal to win the account. IF you have further 
questions, contact your regional education lead or daviddri. 





Thanks all, 





Dave 





David Driftmier 





Director, International Operations 











8/25/2005 





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Page 3 of 3





Microsoft Education Solutions Group 
+1 425-705-4113 





8/25/2005 





MS-CC-RN 000001381449 
HIGHLY CONFIDENTIAL 

From: Orlando Ayala 
Sent:  Tuesday, July 16, 2002 8:17 AM 
To: SMSG Leadership Team; Pat Fox; Kurt Kolb; Sherri Bealkowski; Rogers Weed; Asia Pacific 
General Managers; EMEA General Managers; HUSK:icon general managers; Gerri Elliott; 
Linda Testa (LCA); Pamela Passman (LCA); Peter Wise 
Cc:  Steve Ballmer; David Driftmier; Rafael Perez-Colon; Mark East; Jeff Raikes; Jim AIIchin; Chris 
Jones (WINDOWS) 
Subject: *Microsoft Confidential* : Education and Government Incentives program 
Importance: High 
Attachments: Final EDGI Slide.ppt; Program Document - Winning Government and Education.doc 





As many of you know, the Education Solutions Group [EdSG], and the Windows Client group 
team have been leading a cross-group effort involving LCA, OEM, WW Licensing and Pricing, 
and SMSG. 





The goal of this project is to provide a mechanism for emerging markets to build a rich, active, 
legal ecosystem around PC computing, and at the same time, make computers with Microsoft 
Windows preinstalled more affordable, especially in the education segment. 





We recognize the critical importance of helping emerging markets build healthy and legal PC 
ecosystems and clearly the answer is having Windows be a core component. But in today’s 
difficult economic environment it is clear that some institutions and countries are making 
decisions based on short-term price, rather than long-term cost and benefits of their IT 
investments. If is clear that Windows offers far more benefits to an emerging economy and to 
the immediate use of customers, we have to do more in emerging markets to help foster a 
Windows ecosystem. 





Until all the details of the program have been developed, it is important that we have a way 
to address large PC purchases that involve low-cost/no-cost competitors in the education 
(and government) sectors, especially in emerging markets. Effective immediately, we 
are significantly enhancing empowerment by the GM to provide services and, where 
necessary’, even dollars back to the customer to offset the cost of buying new OEM PC’s with 
*legal* Windows preinstalled instead of naked PC’s with Linux and/or other low-cost/no-cost 
software. 





Example scenario: 





The government of "X" is advocating using open source for all government-funded computers 
in order to keep "X" dollars inside the country and save the taxpayers millions of dollars. They 
are therefore looking at rolling out 50,000 PC’s with Linux to all their K-I 2 schools and run 
StarOffice for free or a locally-produced package that they can purchase for $5/desktop. 





After extensive selling by the local MS account team, including the country GM, to convince 
them of the higher value, lower TCO, and overall advantages of the Windows-based ecosystem 
in their country, the government still maintains that while there might be some premium 
attached to our software, it’s not enough fo justify the investment and they will stick with their 
plan to go open source across all schools. 





8/25/2005 





MS-CC-RN 000001381450 
HIGHLY CONFIDENTIAL 

In order to compete more effectively against Linux and other providers on these deals, we 
can now leverage the Education and Government Incentive [EDGI] program to help tip the 
scales to MS in the deal. After engaging the regional team, the region may use funds to 
provide services and/or rebates to the customer with the following limitation: 
Not to exceed the estimated Windows royalties recognized by MS from the OEM selling the 
PC’s to the customer (in the example, 50,000 PC’s at approx. $100/PC for OEM Windows XP 
Professional would result in a maximum of $5M for the individual deal). 





An outline of the sales process is included in the attached program document. 





While this program is available for both developed and developing countries, initial focus is 
being given to those areas where economic conditions often dictate low-cost/no-cost 
software as the only solution. This would include LATAM, 
Africa, Middle East, South Asia including India and PRC. 





Ideally, this will still result in a net positive on the Executive P&L as the OEM revenues would not 
have been realized if the deals had been lost. It is essential, therefore, that we use this in only 
in deals we would lose otherwise. Initially, we will track each deal, then reevaluate in 
aggregate at the end of Q1 and again at MYR to validate effectiveness. 





IF an opportunity meets the criteria in the attached sales process and normal sales process has 
not been sufficient to close the deal then the GM should ensure that the following takes place: 





  1) Engage regional team in sales opportunity 
  2} Escalate to the "comphot" alias for review by the competitive team, EdSG, and the 
Windows Client group. 
  3) EdSG will work with Windows Client Group and SMSG WW controller to ensure that 
funds are tracked and managed appropriately 
  4) Until appropriate OEM tracking systems are in place, it may be necessary for local 
account teams to validate appropriate Windows purchases by OEM’s in order to ensure funds 
invested in customer do not exceed funds actually realized through the channel. 





Action required: 





  1) RVP’s should ensure local response teams are designated as per the attached sales 
process. It is critical that we are really present and actively working in this accounts way 
before it is too late. We don’t want to be surprised by being "out of the game:" 
  2) RVP’s should establish an approval process or empowerment guideline for their region 
  3) GM’s to communicate program to appropriate sales teams in the subs 
  4) GM’s to ensure regional response teams are engaged on any EDGI opportunities once 
teams are formed 
  5) EdSG (daviddri) to track and communicate EDGI account pipeline, work with Windows 
Client Group (patfox) to validate requests, and report back to results to RVP’s. 
  6) Bottom line do our best to show the great value of our software to these customers and 
ensure we get opaid for it under NO circumstances lose against Llnux before ensuring we 
have used this program actively and in a smart way. We believe for those customers to stay 
with Windows is in their best long term interest to protect and expand the great value in their 
investment and also for our long term relationship with this critical segments in your markets. 
Use this actively as an opportunity to also build great relationships and recognition for 
our honest desire to partner with them because that is the true intention of the program. 





As detailed processes are implemented, new, detailed guidance will be published. There will 





8/25/2005 





MS-CC-RN 000001381451 
HIGHLY CONFIDENTIAL 

also be additional guidance provided at MGB. Questions may be sent to edgihq. As always, 
thanks for your efforts in continuing the fight to help countries realize their potential through 
truly great software! 





8/25/2005 





MS-CC-RN 000001381452 
HIGHLY CONFIDENTIAL 

EDGI definition 





- What EDGI is: 





- A tool that supports the MS strategy for winning against low-cost/no-cost 
competitors in the government and government-driven education  space 





- A framework for responding to large (state/country-wide) deals, involving a 
designated regional team to support the subsidiary, using consistent processes 





- An effort that is integrated into the overall sales process, utilizing the 
same tools (e.g. Siebel) and processes. 





- What EDGI is not: 





- A tool to help win commercial  (non-government accounts) 
- A complete competitive  strategy 
- A tool for small/breadth opportunities 
- A new selling methodology 
- A bottomless source of funding for account managers to close deals! 





MS-CC-RN 000001381453 
HIGHLY CONFIDENTIAL 

I Next Steps 





€¯ 
-Financial processes to be finalized 
  - Financial accounts have been created 
  - Creation of GM and Subsidiary measurements underway 





-RVP’s to designate Regional Response Teams 
-EDGI HQ team to field top issues while regional teams are ramped up 
-EdSG team to provide pipeline management and reporting of top competitive 
accounts (Gov’t group will coordinate non-edcuation government deals). This 
process will be harmonized with the overall competitive deals reporting engine 
(Peter Wise) 
- Investment will be reviewed by SLT at end of Q1 and MYR 





MS-CC-RN 000001381454 
HIGHLY CONFIDENTIAL 

Winning Government and 
Education 





"EDGI" (Education & Government Incentive) Program 





MS-CC-RN 000001381455 
HIGHLY CONFIDENTIAL 

Executive Summary





In order to more effectively win in the large education/government deals where we 
compete against low/no-cost offerings, Microsoft will introduce a predictable and 
replicable process to engage in and win these deals. A common current scenario is one 
where a government wants to provide for a common technology platform across all 
schools in the country/province/state. They are either seriously considering open source 
due to cost and political pressures or are using Linux and StarOffice or other low/no-cost 
software as levers to negotiate price with Microsoft. This scenario is closely tied to, but 
not limited to, the challenges seen in developing countries where economic pressures 
often force governments to seek low-cost/no-cost solutions (see Appendix for recent 
examples.) 





Just as we are focused on delivering end-to-end solutions to our commercial customers, 
we will endeavor to approach these deals with an end-to-end approach at addressing the 
underlying needs of the community and/or educational institution. 





Goals





There are two major goals of the Education and Government Incentive program: 





- Ensure government and education customers can experience the value of
Windows, Office and other Microsoft products 





€¯ Address affordability, application compatibility, teacher training and curriculum, 
additional software needs 





It is important to note that there are two major issues that need to be solved: 





1. How to best help developing countries jumpstart the establishment of an effective 
educational infrastructure that can leverage the benefits of technology 
2.  How to meet competition and effectively win against the no-cost/low-cost 
competitor in large government deals. 





This proposal is squarely aimed at the second issue, although there is considerable 
overlap between the two. There are deals (primarily large government deals in developed 
countries) that fall outside of the first issue but are still included in the second. However, 
the majority of instances where Microsoft finds itself addressing the first issue, it will be 
addressing the second at the same time. Consequently, providing assistance to 
developing subs is a subset of the larger problem of responding to the large deals.





Assumptions





This proposal is shaped by some underlying assumptions about the business environment: 





- A completely ’free’ model for education is not desirable for the following 
reasons: 





MS-CC-RN 000001381456 
HIGHLY CONFIDENTIAL 

    o Approx. $1B annual revenue stream currently being realized through sales 
    to academic institutions 
    o The current pricing (deeply discounted) helps ensure that a healthy ecosystem 
    exists where MS and its partners continue to innovate and deploy a 
    sales force to work with customers to define and realize the full value of 
    the software. 
- Customer concessions cannot impact OEM royalties or rely on an OEM 
delivering "naked" PCs without an OS (i.e. no reduced price full OS offering in 
academic space) 
- Many subs do not have sufficient dedicated resources to drive the fully-integrated 
vertical ISS sales process needed to re-engineer the large customers’ vision of 
needs 
- We cannot and will not compete with Linux/StarOffice and other open source 
providers solely on price, however the price allure of ’free’ must be addressed as 
part of competitive response, including where necessary matching competitive 
offers. 
- Scenarios are not limited to Linux/StarOffice, nor are they limited to developing 
subs, although these are our current primary areas of urgency 
- We do not want to develop a standard ’offering’ as this becomes not only our new 
price point, but also invites large customers to create new tenders which we may 
not be competitive with on price 





Plan 





Taxonomy





In order to better analyze the opportunity, the following taxonomy is proposed: 
- Developed country (e.g. US, Japan, Belgium) These countries typically have per 
capita GDP’s greater than USD$3,500. 
- Developing country [Large, High Potential] (e.g. Brazil, India, China, Russia) 
These countries typically have lower GDP’s (< $3,500 per capita), large 
populations with the potential to support a considerable IT infrastructure in the 
next 3-5 years 
- Developing country [Large, Low Potential] (e.g. Indonesia, Bangladesh). Same 
as above but with little potential for real IT infrastructure in the near term. 
- Developing country [Small and Medium] (e.g. Eastern Caribbean, Philippines, 
Ecuador) Countries with low GDP and potential that is limited by their size. 





Note: A revenue report is attached in the Appendix that shows countries currently 
generating revenue and their status according to the taxonomy above.





Funding





Since these opportunities are largely tied to specific competitive opportunities, 
investments will be funded using OEM revenue. 





MS-CC-RN 000001381457 
HIGHLY CONFIDENTIAL 

It is also important to note that in many countries, there exist untapped funding sources, 
especially in developing regions. Close cooperation between business groups and LCA 
will be needed to identify initiatives and programs from sources such as the World Bank, 
IDB, IMP, etc that can potentially be used to help fund the community development 
portion of large government deals. 





Response 





A process will be put in place whereby the following occurs: 





1) EdSG will work with LCA to produce a consolidated view of all Microsoft’s efforts in 
the academic space to ensure that customers understand the value of what we have 
already provided and can provide in the future. This would include initiatives by EdSG, 
LCA, MSR University Relations, Recruiting, CDDG, Developer Evangelism, Product 
Marketing Group, etc. 





2) Empowerment guidelines for subsidiary and regional pricing in education will be put 
in place, similar to those in force in the Enterprise segment 





3) When local management determines that local empowerment will not provide the 
flexibility needed to win a deal, they will escalate to a regional response team. An 
example of potential members of the regional response team: 





   - Regional Education Director (or Government Director in the case of a non-
Education deal) 





   - Regional Linux Competitive lead / Product Management 





   - Regional WWLP resource 





   - Regional LCA 





4) The regional response team will engage with the local account team and the customer 
to provide a full-integrated solutions sales effort, in order to re-engineer what the 
customer sees as their needs so that they can understand how the MS platform will 
uniquely address their needs. 





4) If necessary, the regional response team will escalate to the corporate competitive team 
via the comphot alias. The competitive team will involve the EDGI HQ team in any 
deals that fit within the parameters of the EDGI program. 





6) If needed, the EDGI HQ team will work with the regional team to provide additional 
value-add services and/or products in order to balance the investment the customer is 
making in the software (when obtained through OEM PC’ s) with RVP approval. When 
offering the customer services or training, you should give the customer the choice of 
Microsoft services or training or Microsoft will pay for equivalent services or training 
from another vendor. 
   Services and products may include: 





   - Integration services 
   - Application Migration 





MS-CC-RN 000001381458 
HIGHLY CONFIDENTIAL 

   - Training 
   - Curriculum content 
   - ...
7) New PC sales will be made as usual from OEMs to entity, though we may add some 
requirements on the OEMs as pre-requisite for participation in the program (i.e., meet 
certain system specs for education, or meet education specific training or channel needs) 
8) Below is a flow-chart of the competitive selling process in the education vertical, using 
the empowerment guidelines and this process. The Give List represents customer 
offerings that Microsoft can bring to the table in closing a deal. The following is a 
prioritized list of ’gives’ beyond our normal discounted licensing programs: 
   - Training/Skills Development 
       o Innovative Teachers 
       o IT Academy’ 
       o Project Access 
   - Services Offerings 
       o MCS and Partners 
       o Premier 
       o University support model 
   - Additional solutions: 
       o Blackboard 
       o Microsoft Class Server 
   - Financial 
       o Creative funding models (e. g. foundation model) 
       o Software donations 
       o Discounts 
       o Direct customer investment 





MS-CC-RN 000001381459 
HIGHLY CONFIDENTIAL 

There are several benefits to this program. First and foremost, it will enable more 
customers to obtain the benefit of using our technology. Additionally, the following are 
expected benefits of the proposal: 





    - Increase our win percentage against competition 
    - Improve our partnership with governments 
    - Improve Microsoft image 
    - Protect our product price points by removing discounts below empowerment 
guidelines 
    - Have a process that is reactive, but predictable and controllable 
    - Ensure optimum use of resources (current one-off negotiations resource-intensive 
and painful) 
    - 
Centrally track use of resources enabling us to match both with business value 
received, instead of suffering hard-to-track revenue erosion due to one-off 
discounts. 





Donations 





It is recognized that there will still be a significant portion of these deals where software 
donations may be appropriate as part of the overall offering. The intention is not to limit 
a subsidiary’s ability to do this, but to work cooperatively with LCA to insure the 
customer and Microsoft both receive the full benefit of the donation and that the donation 





MS-CC-RN 000001381460 
HIGHLY CONFIDENTIAL 

is part of a larger partnership with the customer and partners to create a self-sustaining 
infrastructure. This will also help us track and recognize the investment we are making 
world-wide. 





Community Affairs 





Community Affairs will continue to play a key role in large education and government 
deals, especially in the developing countries. LCA has committed to working with the 
business to define a set of offerings that will provide end-to-end community development 
approaches and are responsible for the related economic development issues. These 
offerings may be tactical in nature and can be used as a component in a large negotiation, 
or may be a proactive and comprehensive plan that we offer to those countries in greatest 
need. 





It is important that we recognize the role of timing in providing community affairs 
leadership. Presenting community development initiatives at the same time as a response 
to a large deal can often be viewed negatively by our customers. It is critical!, therefore, 
that GM’s ensure that long-range community affairs approaches are synchronized with 
the business needs in the sub. This may also mean that we make community 
development offers that are not contingent upon the customer making related purchase 
commitments. An exception would be deals where we decide to donate a portion of the 
licenses being purchased in lieu of discounting the overall price, thereby preserving our 
unit price point and delivering the same overall cost to the customer. 





The proposed investment funds are therefore not targeted at community development, but 
at ensuring that we can address and if necessary match a lower competing offer from 
low-cost/no-cost competitors. If there are needs for broader free programs, these should 
still be identified by the sub leadership and addressed with their LCA teams. 





MS-CC-RN 000001381461 
HIGHLY CONFIDENTIAL 

Appendix 





Recent Deals 





- BRIC Project - China education PCs 
- Czech (School Internet Project) - 25,000 PCs 
- Saudi Arabia (King Abdul Aziz Univ) - 4,500 PCs 
- Saudi Arabia (President’s Girls School) - 25,000 PCs 
- South Africa (Learning Bridge - education) - country-wide; EMEA proposal for 
all low-GDP countries 
- Pakistan - 50,000 PCs 
- Other MENA (academic, east med) - 64,000 (?) PCs
- US K-12 Access Device - up to 1MM laptops 
- Michigan (K-12) - $10MM state program funded 
- Colombia government - 200K PCs over 3 years 





Anatomy of a Deal 





Name: Girls Schools in Saudi Arabia 
Desktops: 20,000 (1200+ servers) 
Revenue: $4MM (50% OEM) 
Competitor Linux/StarOffice 
Product Mix: Windows2000 Server, Windows 2000/XP Pro, Office XP Pro, Front Page 
2002, VB 6.0 
Microsoft Investments to win: 
   - Create special package including media and guidance 
   - Highlight customer accomplishments (shared PR) 
   - Commitment to invest in E-Ministry ($450,000) 
      o SE and two admin for a year (Contingent Staff) 
      o Train 220 FTE’s on Office Tools 
      o Initial implementation services 
      o Minimal application development 





Story: The local team created a special 3 CD kit that included CD’s for Tools, Teachers, 
and Students with appropriate content and products They also agreed to fund a special 
ministry of education training pilot. This investment ($450k) was funded through the 
additional margin on the per desktop price. 





Name: Hungary Higher Education 
Desktops: 235,000 students, 18,000 teachers 
Revenue: $2.2M over 3 years 
Competitor: Linux/IBM 
Product Mix: Windows XP, Office XP, Front Page, Visual Studio, BackOffice CAL 





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Microsoft Investments to win: 
66% discount = $4.4MM off of normal Campus Agreement pricing 
Story: In this deal, the total amount of the deal represented the maximum amount of 
money that the customer had to spend. If we did not do the deal for this price, then IBM 
was ready to execute. As a higher ed customer, there was requisite technical knowledge 
to support a successful implementation, so additional services were not imperative. The 
sub also had a successful evangelism and knowledge transfer program in place with the 
technical universities. 





MS-CC-RN 000001381463 
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Linux Account Wins/Threats/Losses 





Account Country Date No. of PCs Industry Linux Ddvers Reasons: Win/Loss 
Wins 
Proven better TCO vs 
Vassa Finland Gov’t Finland 11/1/2001 ? Pubhc Sector 
I 
! TCO, Standard=zat~on 
current environment 
and L~nux. 
Proven better TCO vs 
Lappeenranta Finland 
Gov’t Finland 11/1/2001 ? Public Sector TCO, Standardization 
current environment 
and Linux. 
Losses 
Account Name Country Customer No. of PCs Industry Reasons for Loss Other reasons for 
Segment Loss 
Corporate Express Australia MORG 400 Services Cost 
Dept of Education Northern 
Territory Austraha Academic 10,000 Public Sector Cost 
Beijing Local Govt. China Major 2,000 Public Sector Govt Endorsement 
Central Excise & 
Customs India Major 900 Public Sector Cost 
Tata Institute of 
Fundamental Research India Academic 300 Education Anti-MS 
Govemment 
Procurement Agency 
Korea Corporate 1,000 Public Sector Govt Endorsement 
Department of General 
Education Thailand MORG 1,500 Public Sector Cost 
University Systems Thailand Major 1,000 Public Sector Performance 
Department of Local 
Administration Thailand MORG 3,000 Public Sector Govt Endorsement 
Columbia Sportswear US MORG 182 Public Sector Cost 





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HIGHLY CONFIDENTIAL 

Advantage Sales & 





8,000 Pubhc Sector Cost MS- D~sastisfaction





Marketing US 
~astertrade New Zealand MORG 400 Manufacturing Cost 
HNVVendor





Kachingo New Zealand MORG 800 Retail & Hospitality 





Recommend 
Southern Cross New Zealand Corporate 300 Health Care Cost 
Coffee Bean & Tea 





Singapore SORG 20 Retail & Hospitality Cost





Leaf 
Total: 29,802 





Threats 





Customer Other reasons for





Account Name Country No of PCs Vertical Industry Reasons for threat





Segment Threat 
Department of Defence Australia Corporate 40,000 Public Sector Cost 
Department of 





Australia Academic 52,000 Education Cost Lmux/StarOffice





Education of WA 
Department of Health 





Australia Corporate 11,000 Public Sector Cost StarOffice





WA 
Catholic Education 





Australia Academic 2,265 Education Cost Linux / StarOffice





Office of WA 
Association of 
Independent Schools of Australm Academic 2,460 Educabon Cost StarOftice 
WA 
Sun offeringDept of Education 





Australia Academic 45,000 Education Other (Please specify) partnership with the





Western Australia dept to develop their 
vision 
29 of 39 Universities in 





Australia Academic 60,000 Education Cost





Australia 





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HIGHLY CONFIDENTIAL 

Political statement that 
says the dept will





Dept of Education - 
supply every student





Australia 
25,000 Education Govt Endorsement





South Aust 
with a SSNVord 
Processor and 
database. 





Belgian Ministry of 





Pubhc Sector





Finance Belgium Major 28,000 
Cost 





Brazil Gov’t Brazil Major 220,000 Public Sector Cost 





Alcadia Mayor Venezuela 
38,000 Education Cost 





ANEP - K12 Uruguay 
11,000 Education Cost 





BED Columbia 
8,500 Education Cost 





Ministry of Education Chile 100,000 Education Cost 
Think corn 
Linux and Redoffice(
StarOffice China





Govt of He Nan China Other 10,000 Public Sector Other (Please specify) 





Partner) will offer 
source code to them 





all China gov in 





China BORG 1,000,000 Public Sector Govt Endorsement





provices 
Lower Saxony-Choose from 





Major 13,500 Public Sector Cost





Germany List 
They are testing out toStock Exchange Hong Kong Major 1,300 Public Sector Other (Please specify) use Linux as the dumb 
terminal 
Hong Kong 





Hong Kong Strategic 80,000 Pubhc Sector Govt Endorsement





Government 
Pdmary and Secondary 





Hong Kong Academic Education





Schools 3,600 Cost 
PicoWodd Hong Kong MORG 200 Public Sector Cost 
Ministry of Urban 





India Corporate 400 Pubhc Sector





Development 





Govt. of Goa India Academic 800 Education Cost 
MIT India Major 6,000 Public Sector Cost 
Haryana Govt. India Academic 2,000 Education Cost 





MS-CC-RN 000001381466 
HIGHLY CONFIDENTIAL 

Ministry of Surface 





India Pubhc Sector





Transport 
Ministry of Finance India Major 4,000 Public Sector 





Ministry of HRD India Major 8,000 Public Sector 
Govt. of TN India Major 1,000 Pubhc Sector 
Govt. of Maharashtra India Academic 10,000 Education 





Govt. of Karnataka India Academic 10,000 Education Other (Please specify) Staroffice (AE) 
Govt. of Kerala India Academic 4,500 Education Other (Please specify) Staroffice (AF_)
Govt. of Gujarat India Academic 5,000 Education 





Govt. of West Bengal India Academic 5,000 Education 
Govt. ofUtl.ar Pradesh India Academic 5,000 Education 
Govt. of Dehli India Academic 5,000 Education 





Govt. of Tamilnadu India Academic 30,000 Education 
Punjab India Academic 200 Education 
Rajasthan India Academic 1,000 Education 
Uttaranchal India Academic 2,000 Education 
Andhra Pradesh India Academic 10,000 Education 
Madhya Pradesh India Academic 2,500 Education 
Chattisgarh India Academic 5,000 F,ducation 
Ministry of Defence India Other 500 Unknown Security Linux / Sta~Office 
iFlex India Corporate 500 Financial Services Cost StarOffice 
Planetasla India Corporate 200 Services Cost StarOffice 
IDBI Bank India Corporate 500 Financial Services Cost Linux/StarOffice 
Adani Group India Corporate 200 Manufac{udng Cost Linux/StaK:)ffice 
Hiranandani Group India Corporate 300 Unknown Cost Linux/StarOffice 
Zandu Pharma India MORG 150 Health Care Cost Linux/StarOffice 
Nimbus 





India MORG 150 Services Cost StarOffice





Communications 
Ace Hardware Indonesia Corporate 1,000 Retail & Hospitality Cost 
Department of Finance Indonesia Major 1,000 Public Sector Cost 
Department of Internal Indonesia 





Major 2,000 Public Sector Cost





Affair 





MS-CC-RN 000001381467 
HIGHLY CONFIDENTIAL 

Department of 
Transportation indonesia 1,500 Public Sector Cost 
Bank of Ireland Ireland MORG 10,000 Public Sector Cost 
Ministry of Education 
and 8,500 schools Malaysm Academic 120,000 Education Govt Endorsement 
Ministry of Finance Treasury 
Malaysia Corporate 600 Public Sector Govt Endorsement 
Hgng Leong Finance Malaysia Corporate 800 Financial Services Other (Please Specify) 
ISPF Destop Financing 
Scheme Malaysia Other Public Sector Cost 
Holland Railconsult Netherlands Major Public Sector Cost 
NZ Government 
(G2000 ’all of govt’ 
agreement) 
New Zealand Corporate 20,000 
Public Sector Cost StarOffice 
Urban Redevelopment 
Autority Singapore Corporate 600 Publ~cSector Govt Endorsement 
National Library Board Singapore Corporate 900 Public Sector Govt Endorsement 
SMRT Singapore Corporate 3,000 Public Sector Govt Endorsement 
MINDEF Singapore Major 22,000 Public Sector Govt Endorsement 
iDA- HQ Singapore Corporate 40,000 Public Sector Govt Endorsement 
Singtel S~ngapore Corporate 15,000 Telecommunications Govt Endorsement 
ITRI Taiwan Major 6,000 Public Sector Cost 
Bangkok Metropolitan 
Administration Thailand Major 7,000 Public Sector Cost 
Electricity Generating 
Authority of Thailand Thailand Major 3,000 Public Sector 
Strong EnterpriseOther (Please specify) Training 
MIMOS Thailand Corporate 600 Public Sector Other (Please specify) 
closing digital divide 
positioning 
Bank of Ayudhaya Thailand Corporate 400 Financial Services Cost 
Safeway US LORG 23,000 Public Sector Cost 
Advant~st Healthcare US MORG 50,000 Public Sector Cost 
Goldman Sachs US MORG 1,000 Pubtic Sector Cost 
Eckerd US MORG 24,000 Public Sector Cost 
MS-CC-RN 000001381468 
HIGHLY CONFIDENTIAL 

CSKAuto US 12,650 Public Sector Cost 





General Motors US LORG 15,000 Public Sector Cost 





CVS US MORG 12,300 Public Sector Anti-MS 





Southern Methodist 





Education





Univ. US Academic 200 Cost Anti-MS StarOffice deplo~/ed 
She[win-Williams US MORG 7,500 Retail & Hospitality Cost Unix Migration 





BMC SOlhNare US Other 8,500 Services Other (Please specify) Think L~nux is cool 





Dallas School Distdct US Academic 4,000 Education Cost SlarOf~ce deployed 
Total: 2,285,275 





MS-CC-RN 000001381469 
HIGHLY CONFIDENTIAL 

WW Education Revenue Report - Revenue Shown in As Billed View 





YTD J 
~ =: % of Total 
WW Sales ~: Growth Edu % of Total 
Region Location Y-rD Apr 01 YTD Apr 02 % Revenue Sub Revenue 
Japan Japan 81,749,088 97,143,650 19% 12.1% 6% 
Japan 
Total 81,749,088 97,143,660 t9% 12.1% 6% 
Asia 
Pacific Australia 15,106,731 21,204,6!3 40% 2.6% 9% 
Hong Kong 10,527,979 8,267,253 -21% 1.0% 10% 
Korea 14,238,717 16,372,635 15% 2.0% 10% 
Taiwan 8,502,050 7,571,206 -11% 0.9% 9% 
China y y y 1,217,014 2,416,230 99% 0.3% 3% 
New Zealand 3,341,284 4,346,072 30% 0.5% 10% 
India SC y y y 4,329,125 3,853,311 -11% 0.5% 4% 
Malaysia y 4,728,483 3,334,464 -29% 0.4% 8% 
Philippines y y 1,088,315 1,729,083 69% 0.2% 10% 
Singapore 5,039,823 5,734,554 14% 0.7% 11% 
Thailand y y 382,519 524,414 37% 0.1% 2% 
Indonesia y y 126,715 177,300 40% 0.0% 1% 
Vietnam y y 22,013 46,631 tt2% 0.0% 1% 
Asia Pacific Total 68,650,769 75,577,766 10% 9.4% 8% 
EMEA United Kingdom 66,054,918 76,142,986 15% 9.5% 8% 
Germany 23,965,508 30,600,645 28% 3.8% 4% 
France 23,247,045 22,970,375 -1% 2.9% 5% 
Italy 10,470,680 10,466,659 0% 1.3% 4% 
Sweden 9,042,520 9,167,473 1% 1.1 % 5% 
Spa~n 7,518,684 7,591,318 1% 0.9% 6% 
Denmark 6,387,096 6,670,505 4% 0.8% 5% 
Belgium 5,845,661 4,620,865 -21% 0.6% 4% 
Finland 5,821,034 6,659,865 14% 0.8% 8% 
Norway 4,080,113 5,049,246 24% 0.6% 6% 
Russia y y y 1,608,526 5,755,319 258% 0.7% 14% 
Poland y 4,929,483 2,456,965 -50% 0.3% 3% 





MS-CC-RN 000001381470 
HIGHLY CONFIDENTIAL 

Switzerland 3,772,464 4,634,758 23% 0.6% 2% 
Israel 3,312,443 2,956,033 -1 t % 0.4% 5% 
Turkey y y 2,266,102 3,261,813 44% 0.4% 6% 
South Africa y 2,238,501 2,629,929 17% 0.3% 3% 
Ireland 2,207,607 3,579,558 62% 0.4% 9% 
Portugal 2,241,635 3,209,184 43% 0.4% 6% 
Austria 2,548,052 3,954,086 55% 0.5% 3% 
Saudi Arabia 1,541,516 3,028,268 96% 0.4% 10% 
Greece 2,510,254 3,343,376 ;33% 0.4% 13% 
Netherlands 2,668,312 7,420,838 178% 0.9% 3% 
Czech Republic 1,686,670 2,119,862 26% 0.3% 5% 
Egypt y y t ,300,962 1,653,856 27% 0.2% 9% 
Lebanon y 2,610,719 704,729 -73% 0.1% 4% 
Hungary y 1,442,131 3,975,372 176% 0.5% 11 
Morocco y 857,446 1,676,623 96% 0.2% 14% 
UAE ? 947,867 1,286,666 ;36% 0 2% 7% 
Baltics y 816,027 721 ,I 70 -12% 0.1% 6% 
Kuwait 837,731 1,187,363 42% 0.1% 8% 
Indian Ocean 
Islands y 382,296 408,958 7% 0.1% 9% 
Romania y 282,830 577,173 104% 0.1% 5% 
Oman ? 252,142 385,674 53% 0.0% 4% 
Slovakia y 115,896 287,282 148% 0.0% 3% 
Ivory Coast y 196,234 118,970 -39% 0.0% 3% 
Croatia y 194,339 85,053 -56 % 0.0% 1% 
Tunisia y 240,338 227,192 -5 % 0.0% 16% 
Namib~a y 133,899 84,614 -52% 0.0% 2% 
Slovenia 111,060 190,060 71% 0.0% 1 
Kenya y 50,990 277,228 444% 0.0% 9% 
Bulgaria y 37,504 24,051 -36% 0.0% 1% 
Zimbabwe y 63,692 121,242 90% 0.0% 4% 
EMEA 
Nigeda y y 2,046 16,909 726% 0.0% 0% 
Total 206,1]40,97t 242,280,t10 17% 30.2% 
Americas United States HQ 259,9~,023 328,841,591 27% 41.0% 6% 
Canada 17,782,467 22,137,247 24% 2.8% 5% 
Mexico y y y 11,763,053 13,089,464 11% 1.6% 11 





MS-CC-RN 000001381471 
HIGHLY CONFIDENTIAL 

Brazil y y y 8,099,938 8,414,211 4% 1.0% 
Colombia y 3,209,920 3,406,378 6% 0.4% 11% 
Caribbean y 3,677,975 3,170,374 -14% 0.4% 7% 
Chile y 1,1 41,984 907,500 -21% 0.1% 5% 
Central America y 1,468,5I 8 1,979,634 36% 0.2% 6% 
Peru y 1,227,054 1,249,111 2% 0.2% 10% 
Uruguay y 556,675 791,212 42% 0.1% 7% 
Argentina y 1,463,612 892,338 -39% 0 1% 3% 
Venezuela y 791,735 992,855 26% 0.1% 4% 
Ecuador 
Caribbean & CA 
HQ 
y 240,186 513,335 114% 
N/A 
0 1% 
0.0% 
8% 
0% 
Americas Total 
Grand 
Total 
Updated 5/2/2002 
311,369,141 386,385,266 
668,609,969 801,386,795 
Small Developing Subs 
Large Developing Subs (low) 
Large Developing Subs (high) 
Total from Developing Subs 
24% 
20% 
48.2% 
100.0% 
3.9% 
0.9% 
4.2% 
9.1% 
6% 





MS-CC-RN 000001381472 
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