a l Dr terna only in EO SW

a l Dr terna only in EO SW Application Services Business Plan ft Software Engineering Operation Application Services Business Plan Fast Track Business Plan v. 2 May 18, 1998 This version includes the following revisions since the 4/29 Management review: • A revised segmentation model (same information) (pg. 9 -11) • Fine tuning of the service offerings (pg. 21 -23) • Adjustment on 3 Year Objectives (pg. 32) • New forecasting scenarios (pg. 36 -38) • New sales assumptions and guidelines (pg. 43) • Sales and marketing success tracking indicators (pg. 44) SWEO 5/4/98 1

ft Contents a l Dr terna only in EO SW Application Services Business Plan Customer Needs and Challenges. . . 3 -7 Segmentation. . . . . 8 -16 Offer & Services. . . . 17 -30 Goals, Financials & Resources. . . . 31 -40 Required Issues and Actions. . . 41 -48 Appendix of Misc. . Slides. . . . 49 -66 Contributors: Gary Gujral, Joe Martinez, Helmut Bentsche, Terry Ash, Donnie Foster, Matt O’Donnell, Michael Dautel, Mike Mc. Garry, Satish Varma (TCS) Business Plan written by : Jeri Crittenden, Consultant SWEO 5/4/98 2

ft a l Dr terna only in EO SW Application Services Business Plan Customer Needs & Challenges SWEO 5/4/98 3

% of Respondents ft F 1000 Top Service Initiatives - ‘ 97 a l Dr terna only in EO SW Application Services Business Plan Customer’s resources and skills are stretched across a wide range of initiatives, technologies, and implementation timelines. SWEO 5/4/98 Source: Dataquest end-user budget survey , 7/97 as quoted in Y 2 K Market Analysis 4

ft Client Needs and Application Services a l Dr terna only in EO SW Application Services Business Plan Key needs where customers look to application developers, systems integrators and outsources. Services Needs Achieve competitive advantage, accelerate TTM, increase profits, obtain new skills, accelerate BPR efforts Data warehouse and mining Business performance & customer needs analysis improvements Emerging & Internet technology Package Implementation Management Transitioning Year 2000 Services Retooling Integrate w/ current environments New development Change customer and supplier business models, accelerate TTM. Integrate with legacy environments. Integrate business functions, improve TTM& functionality. Conversions, migrations, re-hosting, transformation to new architectures for performance, capability or cost improvements Assess problem, obtain resources, convert or replace Teach staff new processes, technologies, methodologies Support Maintenance SWEO 5/4/98 Application help desk, 24 X 7 troubleshooting Fix bugs, reduce costs, improve operational performance or productivity, shift of internal resources to new development 5

a l Dr terna only in EO SW Application Services Business Plan ft IT Staffing Dilemma Finding & retaining skilled resources has become a major IT challenge Competition with providers for resources Service provider as a solution to resource shortage • Recruiting network • Skills database • Subcontractors • Offshore • Colleges • Retention • Interviews Skills Transfer • Skills tests & Assessment • Mentoring • Project knowledge transfer Service provider as a competitor for resources Staffing & Recruiting Training & Reskilling • Methodologies • Processes & tools • Service delivery model • Management training • Certification • Career paths Three most important elements of the staffing dilemma SWEO 5/4/98 Source: Gartner Group 1997 from Deloitte & Touche survey of 1400 CIO’s WW 6

Competitive Landscape ft a l Dr terna only in EO SW Application Services Business Plan Many Players Package Management New Development Andersen Consulting EDS Price Waterhouse CSC Andersen Consulting Gap Gemini Sogeti MCI Systemhouse Cambridge Technology Group EDS IBM Global Services CSC Perot Systems SAIC Unisys Staff Augmentation Offshore Computer Horizons Keane Computer Task Group Accustaff IMR CBSI HCL America Mastech Syntel Infosys Legacy Maintenance Keane Coopers & Lybrand Andersen Consulting Cap Gemini America IMR SWEO 5/4/98 Full Service Year 2000 Transitioning MCI Systemhouse Lockheed Martin Andersen Consulting GE Capital Entex Vanstar PKS Gap Gemini Ciber Inc. Cognizant Technology Solutions IBM Global Services Computer Horizons Compuware Data Dimensions Mastech IMR Keane Source: Gartner Group, 7/97 * IDC Top Providers, 1997 7

a l Dr terna only in EO SW Application Services Business Plan ft Segmentation SWEO 5/4/98 8

ft Application Services Segmentation Approach a l Dr terna only in EO SW Application Services Business Plan SWEO’s target segment for application services -- “Value Seekers” -enterprises aggressively applying technology for new or improved business capabilities - and are resource constrained. • Implement beta /emerging technologies • Proof of concept technology does what is promised Emerging technology “Value seekers” • Wants help to apply technology • Lower risk • TTM - Increase speed of implementation • New functionality for competitive advantage New Solutions Segment F Segment C “Cost conscious” • Focus on cost savings and improved operations • Free in-house IS to work on strategic initiatives Low or no Gap “Early adopter” Segment E Segment B High Gap Segment D Segment A Deployment Capability “The Gap” Routine/standardized Stage of Technology Integration in Marketplace SWEO 5/4/98 9

Focus: Which Needs? Which Services? ft Services for the Target Segment a l Dr terna only in EO SW Application Services Business Plan Where can SWEO “Early adopters” “Cost conscious” “Value seekers” • Wants help to apply technology • Lower risk • TTM - Increase speed of implementation • New functionality for competitive advantage New Solutions SWEO 5/4/98 - Add the most value to solving customer’s business problems - Earn profit (premium price) - Set direction for future growth - Leverage our strengths & experience - Establish credibility - Position w/ channel & competitors Possible Services to Meet Needs. . • New development • Data warehouse and mining • Emerging & internet technology integration • Package Implementation Management • Transitioning • Year 2000 Services • Retooling • Support • Maintenance 10

“Cost conscious” “Value seekers” • Help apply technology • Manage risk • TTM - Increase speed of implementation • New functionality for competitive advantage New Solutions SWEO 5/4/98 ft “Early adopters” Services Mapping to the Target Segment a l Dr terna only in EO SW Application Services Business Plan * SWEO Primary Application Services • Address urgent business needs • Add significant value for premium • Leverage India expertise • Differentiate on lowering risk and TTM • Align w/ ISBU role Key Customer Services to Meet Needs. . *Integrate with existing/legacy environments * New development * Emerging & internet technology integration Secondary Services Transitioning Year 2000 Services Retooling Support Maintenance 11

Legend: Provider Focus ft Competition: How Differentiate? a l Dr terna only in EO SW Application Services Business Plan Offshore Co. IT Outsourcers Provider Direction SWEO Target Vendor’s Value Propositions: Resources, skills at low cost Improve processing efficiencies, manage costs Mgmt Consultants SI’s/AC/ ISSC SWEO 5/4/98 Emerging technologies Integrate anything New /existing technology; know-how to use/ manage it Product Vendors Different value for services over time Management expertise moving into technology Help apply technology, increase speed of implementation Provide cost savings and to free in-house IS 12

a l Dr terna only in EO SW Application Services Business Plan ft SWEO Internet Focus Application Services helps drive HP emerging software into the. . Internet Solution Landscape Access Collaboration Transaction Internal publishing Collaboration, workflow Home pages Dynamic Web pages Internal & business. Business-to to-business apps. consumer apps. Intranet Internet ISBU Emerging Solutions SWEO 5/4/98 *Source: SWEO modified from International Data Corporation 1997 Use ISBU & SSG software for depth of integration with enterprise legacy operations, applications, and databases SWEO Target for Internet Solutions 13

ft a l Dr terna only in EO SW Application Services Business Plan SWEO’s Target Client “Our strategic business initiatives require more IS resources with the right skill set and experience than we have or can reasonably hire and train in the next 1 -2 years. ” • • • SWEO 5/4/98 IS has a significant delivery gap: they are lacking 50+ person years of development capability and are in pain. Gap may be due to numerous reasons: – Lacking IS resources and skills to manage business unit demands for applications to achieve strategic/competitive advantage – Backlog of application revisions for new capabilities or performance improvements – Year 2000 projects have consumed resources Organizations undergoing business initiatives to take advantage of emerging internet technologies - but concerned about implementation risk Concerned about loss of control through outsourcing 14

ft Target Opportunity - Checklist a l Dr terna only in EO SW Application Services Business Plan Primary Criteria • • Customers in SWEO targeted, named enterprise accounts – Focus on financial services market with FSBU & EAO Major delivery gap: 50+ man years of development Skills gap for emerging technologies IT methodologies and tools dated - struggling with move to new technologies Planning to use internet and open systems (UNIX) & NT technologies to improve business to business or business to consumer performance Better than 50% chance to evolve from a projects-to-alliance relationship Open to or exploring India resources SWEO is NOT Targeting • • SWEO 5/4/98 Stand alone Year 2000 projects Stand alone maintenance projects 15

a l Dr terna only in EO SW Application Services Business Plan Current Environment High degree of custom S/W development (COBOL; M/F’s) Target Account s Financial Services (‘ 98) Delivery Gap + 50 man years Skills Gap in newer technologies Using IT for competitive advantage Legislative or Industry pressure (deregulation) Primary Criteria Legacy to. . . • Internet/ • Emerging • UNIX • NT High probability for long-term S/W partnership ft Target Opportunity - Checklist Additional Qualifiers • HP relationship at IT & LOB • Open to or exploring India for resource • Possible to use SSG S/W products • Dated IT Infrastructure & Processes • No entrenched SI or Outsourcer - or not satisfied with current partners No Standalone Y 2 K or Maintenance projects SWEO 5/4/98 16

a l Dr terna only in EO SW Application Services Business Plan ft Offer & Services SWEO 5/4/98 17

a l Dr terna only in EO SW Application Services Business Plan ft SWEO Offer Our Application Services Alliance Program (ASAP), offers an approach to strategic application development that reduces risk and accelerates solutions deployment when compared to staff augmentation, project based contracts, or outsourcing alternatives. Partnership Knowledge Transfer Deep knowledge of HP’s technologies SWEO 5/4/98 ASAP HP-Quality Application Development Services Access to large pool of skilled resources 18

ft Key Differentiation a l Dr terna only in EO SW Application Services Business Plan ASAP is a collaborative approach that allows the client to maintain contol of strategic applications, provides access to large pool of skilled resources, and reduces per project start-up time and risks. Resource Augmentation • Requires Customer management oversight as the prime • High per project start -up time • Customer must find skilled resources • Increases on-site infrastrucutre costs • Ranges from bodies to SI projects SWEO • T&M to Fixed price 5/4/98 ASAP (IT Extension Approach) • Joint Project Office primes • Manage multiple project streams • Provides access to very large quantities of skilled resources • Global, off-site resource infrastructure • Consistent application of tools & methods • Deliverables based pricing IT Outsourcing • Vendor primes and contols • Long specification & bidding process for 5 -10 year outsource contract • Vendor buys assets • Continue on-site infrastructure costs • Fixed price with renegotiations 19

a l Dr terna only in EO SW Application Services Business Plan ft Services-to-Alliance Strategy What we’re after: Clients we can engage 2 -3 times and evolve to a multi-year “Alliance” Customer Business Drivers • Changing business models • Competitive advantage • Multiple strategic application projects SWEO 5/4/98 3 Project 1 2 Application Services Supporting Services : we do these in support of application development engagements Platform Transitions Code Conversions (Y 2 K) Application Support • $2 -4 M annual minimum per project to get started • 2 -3 projects that lead to alliance within 2 years Alliance • 3+ year relationship • Minimum 50 man years of resources annually • $10++ million annual revenue minimum 20

ft ASAP Services a l Dr terna only in EO SW Application Services Business Plan SWEO’s primary service focus is strategic application development. We provide three complementary services to support the delivery of the strategic application. For all four service areas, integrating internet and newer technologies into existing environments is a major focus and significant part of our value added. ASAP Methodology Strategic Application Development & Deployment Application & Platform Migrations Internet Enabled Legislative, Year 2000, Euro ‘ 02 Application Enhancements SWEO 5/4/98 21

ASAP Methodology Strategic Application Development & Deployment Internet Enabled Legislative, Application & Year 2000 Platform Migrations Application Enhancements ft ASAP Methodology a l Dr terna only in EO SW Application Services Business Plan • Establishes and manages joint Client-HP software development alliance and project office • Establishes a process to meet business priorities • Provides rigorous project management and processes to manage software engineering resources on multiple project streams simultaneously • Provides on-site design and large-scale (hundreds) off-site software engineering resource ramp and management • Establishes a distributed, physical environment for quality software development and support • Implements a communication & equipment infrastructure • Applies integrated process management (i. e. forecasting, production planning, quality, documentation, etc. ) • Applies client’s tools and methodologies as required - or HP’s • Implements appropriate practices (re-use, tools use) SWEO 5/4/98 • Provides for knowledge transfer 22

Strategic Application Development & Deployment Internet Enabled Legislative, Application & Platform Migrations Year 2000 Application Enhancements ft ASAP Methodology a l Dr terna only in EO SW Strategic Application Development & Related Services Application Services Business Plan ¤ Application Development Service - Application design, development and deployment for HP and NT platforms ¤ Application Transition Service - Application and platform migrations from any current mainframe or server environment ¤ Application Compliance Service - Assessment and code conversions for legislated situations like Year 2000 or Euro currency, during Application Development or Transition Services ¤ Application Enhancements Services - Continued support for developed or re-hosted applications SWEO 5/4/98 23

ft ASAP Methodologies & Tools a l Dr terna only in EO SW Application Services Business Plan . . . Form the foundation for quality application initiatives Methodologies –IT Extensions (ASAP) –Project Management (Focus PM) –Software Development (CPLC) –Migrations –Year 2000 –Application Enhancements –Quality Documenting each. . . SWEO 5/4/98 Tools –Project Management tools –Software estimation tools –Software defect tracking tools –ISO 9000 based software process definitions –SEI based process improvement methods –Knowledge management 24

Methodology Customer Site HP Site Tools Development/ Customization Pilot Migration Deliverables Activities • Application Analysis SWEO 5/4/98 • Tools Testing Specification • DB • Environment • Application Conversion Investigation Migration • Pilot • Alternatives Tools Migration Analysis • Data • Establishing Conversion Project Objectives Tools & Scope • Environment • Developing Project Estimates Conversion Tools & Plans • Migration Guide • Implementation Proposal ft Migration Example. . . Planning & Investigation a l Dr terna only in EO SW Application Services Business Plan • Tools • Migrated Pilot Application Customer Site Application Migration Acceptance • Program Conversion • Functional Verification • Unit Testing • Interface Development Testing • Integration Testing • System Testing • Documentation • Migrated Code • Data Migration Tools • Environment Migration Tools Implementation & Product Support • Installation • User Training • Maintenance Support • Stress Testing • Performance Tuning • Test Results • Final System 25

ft ASAP Expertise Deep technical expertise and critical resources to support strategic initiatives HP Emerging Technologies • Open Pix • Security • Future. . • Change Engine Platforms Languages • HP-UX • MPE/i. X • MVS/CICS • Windows NT & Windows 95 • • • Databases • • • SWEO 5/4/98 a l Dr terna only in EO SW Application Services Business Plan DB 2 Informix SQLServer Allbase IMS • Oracle • Sybase • Ingress • Image • IDMS COBOL • FORTRAN C++ • C Java • Oracle*Forms Basic • VB PASCAL • Power. Builder Proprietary languages Case Tools • Oracle • Paradigm. Plus Need to be able to describe depth. . . • IEW 26

ft HP/ SWEO Contributions Summary a l Dr terna only in EO SW Application Services Business Plan Partnership • Multi-year commitment • Account Team local presence & relations • Lower risk • Reliable partner Knowledge Transfer • For application of emerging technologies • Two-way for processes, tools, methodologies Deep knowledge of HP’s technologies • HP R& D Alliances • Broad & deep technology base SWEO 5/4/98 ASAP HP-Quality Application Development Services • Multi-vendor experience • Globally distributed S/W development methodologies • Global support Access to large pool of skilled resources • Software Competence Center • Rapid ramp of skilled resources • Global communications infrastructure 27

a l Dr terna only in EO SW Application Services Business Plan ft Market Positioning Perception and reality we are after. . • HP technologies competence • Large scale Project Management experience • Large pool skilled resources • Global distributed SW Eng’g SWEO ASAP TTM Ability High Integrator Med Offshore company Low High SWEO 5/4/98 Med Low Risk • Management systems • Global infrastructure • HP - reliability & experience 28

a l Dr terna only in EO SW Application Services Business Plan ft Customer Examples Need to find the optimum balance to premium price ‘Valueometer’ State Farm - Falcon M/F HP 3000 Claims Processing Migration • Deadline; 10 day close • Needed 130 COBOL developers in 2 -3 months • GM 33%, NOP 21. 9%; completed ahead of schedule Ability to ramp resources Technology competence Amadeus IBM TPF UNIX; Networking Reservation System Consortium • 200 K terminals through Europe; 2500 TPS • High cost of maintenance; 200 IS personnel • Used 40 Europe & India developers • $4 M to PSO (~$1, 304, 000 ESO costs); 18 months SWEO 5/4/98 Resource Technology ramp competence 29

Where we are. . SWEO 5/4/98 ft Projects Summary a l Dr terna only in EO SW Application Services Business Plan 30

ft a l Dr terna only in EO SW Application Services Business Plan Goals, Financials & Resources SWEO 5/4/98 31

ft Statement of Purpose a l Dr terna only in EO SW Application Services Business Plan • SWEO Purpose is to provide software engineering, enterprise infrastructure integration and custom support. We • SWEO Vision is to be a global, team with premier provider of strategic internet –the Internet Software Business Unit (ISBU) product and enterprise solutions enabled by HP operation groups to bring software products to market to help create a profitable software business for HP, and software products. –EAO organizations to help build a strategic presence in targeted enterprise accounts. • SWEO 5/4/98 The ASAP purpose is to help build HP’s strategic presence in our target accounts. We’ll do this by providing application services that support our client’s business needs for competitive advantage. We will focus on: – helping our clients achieve better time to market and functionality on new or redesigned enterprise applications, – reducing the risk of the transition to newer or emerging technologies – and integrating existing environments with emerging internet/e-business software and solutions. 32

1998 - 2000 Objectives • Build multi-year (3 year minimum) annuity revenue ‘application alliances’ with a portfolio of clients. • Become a preferred software engineering partner to targeted clients for integrating HP internet SW and emerging technologies into existing environments. Key Strategies • Focus on implementing ASAP and supporting methodologies. • Target Financial Services in 1998, and two additional industries by 2000. • Develop a team with competencies in delivering premium software engineering services (emerging technologies; TTM; functionality, re-use). • Leverage the India competency center for large scale, skilled resources. SWEO 5/4/98 ft Three Year Objectives a l Dr terna only in EO SW Application Services Business Plan Goals / Performance Tracking • Evolve application services delivery to 50% internet/emerging technology development and integration services by 2000. • Earn a “top three” position (HP, IBM, ? ) as a hardware vendor that provides internet integration and development services. • Build annuity revenue via 1 new client “alliance” in 1998, 2 in 1999 and 3 in 2000. • Continuously evolve our value added to be able to premium price services to achieve a minimum 40% overall profit margin annually 1998 -2000. • Achieve resource utilization rate of 85% in 1999. • Achieve Application Services ‘ 98 -’ 01 orders of US$ 20 M, 32 M, 58 M, 76 M revenue of US$ 15 M, 27 M, 52 M, 73 M. 33

a l Dr terna only in EO SW Application Services Business Plan ft May ‘ 98 REVENUE Forecast (US$000) ‘ 98 ‘ 99 ‘ 00 ‘ 01 Current Customers Americas -State Farm ICAT -All. Tel migration -Ford -Disa Europe Japan Subtotal 3, 000 150 750 1, 000? -05, 050 Funnel -State Farm Alliance* -All. Tel Alliance* 3, 000 5, 000 10, 000 15, 000 Subtotal 6, 000 10, 000 20, 000 30, 000 Total 11, 050 10, 000 20, 000 30, 000 *Americas SERC annual revenue forecast goal for SF & All. Ttel Alliances is $5 M, 12 M, 20 M respectively. The writer of the business plan is taking a more conservative view. SWEO 5/4/98 34

a l Dr terna only in EO SW Application Services Business Plan *Alliance = 3 years; 50 man years / year ft Project Size Scenarios “The Perfect World” Alliance* Annual Revenue $5. 5 M Medium $4. 0 M Small $2. 0 M Assessment $200 K (3 Mo. ) COGS @60% On-site Project Director Project Admin Clerical $3. 3 M $2. 4 M $1. 2 M $0. 18 1 1 (Proj Mgr) 1 1(Proj Mgr) 1 2 1 1 1 Off-shore Project Managers 2 Technical Leads 4 Programmers 38 2 3 26 1 1 10 Profit @ 40% Total H/C = $1. 6 M 36 $0. 8 M 16 On-site - From India Project Mgr 1 Technical Leads 2 Software Eng SWEO 5/4/98 $2. 2 50 1 2 1 $0. 12 4 35

• • • SWEO 5/4/98 ft ASAP Forecast Scenarios a l Dr terna only in EO SW Application Services Business Plan The following forecasts are provided as a way of opening the discussions with each SERC to determine what is possible. There are three forecast scenarios: – Aggressive – Stretch – % of SWEO SCALE The forecasts will be reviewed with each SERC Manager and goals will be set by the Management team. Each team will be asked to develop a bottom-up forecast using current sales leads in the sales cycle forecasting. Each team should consider and work towards validating: – What are the sales cycle phase time frames? – What are the percentages to be used for tracking between the phases? – What are the project sizes we are seeing in the regions? 36

SWEO 5/4/98 ft ASAP Forecast Scenarios a l Dr terna only in EO SW Application Services Business Plan 37

ft a l Dr terna only in EO SW Application Services Business Plan SWEO 5/4/98 38

Europe Germany/Austria/Switz UK France Scandinavia Italy Iberia Eastern Europe Benelux Japan ‘ 98 ‘ 99 Build Grow Opportunistically only ‘ 00 Grow ‘‘ 99 Country strategy should be determined by leverage of target accounts we have done projects in as well as the types of solutions. ‘‘ 99 add 1 country Build Grow ft Americas USA Canada Mexico Brazil ROA Global Deployment a l Dr terna only in EO SW Application Services Business Plan Grow ‘‘ 99 add 2 -3 countries Opportunistically only Build Grow AAA SWEO 5/4/98 39

a l Dr terna only in EO SW Application Services Business Plan ft Business Development Minimum Resource Considerations Americas ‘ 98 ‘ 99 Europe ‘ 98 ‘ 99 BD 2 +2 1 +1 Solutions Architect 3 +3 2 +2 1 +1 Project Managers 3 +3 2 +1 1 +1 India Technical Scope & Proposal Support* 4 6 4 4 2 2 Business Development Japan ‘ 98 ‘ 99 Program Marketing 1 for Global Projects Project Managers for each SERC on board in advance of project start dates. India* + US based Project Team per revenue targets 1998 = 194 SWEO 5/4/98 1999 = 370 Assumptions: 1 BD/SA for every 8 -10 Proposals (Not all qualified leads make it to proposal stage) Cupertino Marketing provides Program Marketing Director 1 PM for every 1 small and 1 medium projects 40

ft Example Business Development Data a l Dr terna only in EO SW Application Services Business Plan • Canada Government Y 2 K bid: • Approximately 270 hours of presales for proposal development • Cost about $24, 000 for SERC ($88 avg. HC hourly cost) • Assume about 3 X that cost for HP (field resources, proposal marketing team, etc. ) • State Farm Alliance effort: • January through March about 600 hours (Donnie, Terry, Darryl, Mike) • Will require about another 3 months of 3 FTE for 1500 hours • Total about 2100 hours to evolve to an Alliance over 6 months or +$185, 000 Assumptions • State Farm is a ‘mature’ HP client. This effort could double for accounts with no HP project oriented experience (to 4000 hours) • SWEO gains experience after 3 -5 Alliance proposals and reduces costs to 3 FTE for 3 months SWEO 5/4/98 41

ft a l Dr terna only in EO SW Application Services Business Plan Required Issues & Actions SWEO 5/4/98 42

ft Sales Assumptions & Guidelines a l Dr terna only in EO SW Application Services Business Plan Assumptions • Sales cycle for small and medium projects is 3 months from qualified lead through proposal acceptance to project start date. • Alliance pre-sales is 6 months. • Assume must complete at least 2 projects to pursue Alliance in order to establish credibility of performance, build relationship, and prove value. Guidelines • SERC SBM’s need to be able to find the balance on project sizes: • Only targeting small projects ($2 M range) won’t leverage India SW center. • Only targeting “killer” projects $6 M+ require a long sales cycle and higher risk if we fail to develop a project • Best target is to start with $2 -4 M project size starting points and continue to sell into the account for the follow-on projects. • If the account doesn’t have the ability to grow to “Alliance” status (50+ man years of resources/year; $10 M of revenue/year) in three years, don’t pursue. Note: The assumptions and guidelines need to be tested for each region. SWEO 5/4/98 43

• • SWEO 5/4/98 ft Sales & Marketing Success Tracking Indicators a l Dr terna only in EO SW Application Services Business Plan Qualified leads - ability to get field to sell SWEO capabilities and pull SWEO in. Orders -ability to consistently build annuity stream that meets or exceeds the SCALE forecast Revenue - ability to achieve SCALE revenue targets. Forecast assumptions: 25% of order in quarter booked; 50% in 2 nd quarter; 25% in 3 rd quarter. IP/Value - our value for creative solutions using internet and emerging technologies, ability to resource large development projects, ability to manage down risk of using offshore resources for TTM and implementing new technology. Our IP value for pricing purposes should be in the 20% range. Profit Margin - Target is 40% minimum, in addition to the IP value. Utilization rate - Target overall utilization rate for project resources is 85%. Sales Cycle percentage monitoring (see following page) - track how many contacts it takes to find qualified customers, propose, close, and conduct subsequent projects. See initial target percentages on following page. ) 44

ft Issue: Sales & Delivery Lifecycle a l Dr terna only in EO SW Application Services Business Plan • Leads - are everything. (EAO) • Closing high % is critical. (Right solution - SBMs & SAs) • Ruthlessly manage the timeframes down! (No slop) Know your segment Avg Time in Mo. Phase & target % phaseto-phase Targets C/F* 2 Offer value solutions Meet client need 1 Sales Contacts 100 1 Qualified Leads (75%) 10 50 1 9 -12+ Solution: Negotiate Proposal/SOW (75%) (50%) 4 38 Improve client’s business Build repeat business 3 19 Selection (90%) Delivery (100%) 1 15 . 75 14 14 New Projects (90%). 25 12 Q 1 Q 2 Q 3 Q 4 *C=current F=future SWEO 5/4/98 Funnel Management: • track numbers & percentages • types of projects (target segments/hit criteria? ) • size of projects • watch for trends 45

• Marketing and sales - focus to grow the lead pipeline in the target market. Shorten the sales cycle; achieve repeat business • Hiring, training and retention of skilled resources • Making the Global development approach work - every time • Increase HP knowledge content and value (knowledge retention; increase skills) • Leverage re-use • Developing synergies and smooth working relationships with other HP organizations to gain more of the services market • SWEO 5/4/98 TEST the strategy - with field and with customers. Are we positioned properly? Is this a credible offer? Do customer’s believe we can deliver? Will they buy from us? Is this the right way to meet customer’s needs? . . . etc. • ft Critical Success Factors a l Dr terna only in EO SW Application Services Business Plan Careful not to get positioned as a body shop/staff augmentation for maintenance!!!! Mantra. . . we must add value. 46

ft Critical & Follow-on Actions a l Dr terna only in EO SW Application Services Business Plan SERC’s Marketing • Recruitment of SAs, PMs • Assign & focus SBMs on ASAP selling • Become Proposal Guru’s: Ability to efficiently create an incredible, credible “marketing” document • Target account planning with EAO & FSBU (w/Marketing) • Systematic approach to begin reuse approaches • Assess how SERC’s can retain more revenue • Cost tracking of Business Development • Hire ASAP Program Manager • Work with FSBU and EAO to target the top 50 and next 50 - lead generation and account planning • Develop customer presentation • Plan & develop collateral/sales tools • Continue work on business plan: more detail around solutions opportunities and industries. Find the leverage points. • Teaming agreement with OSD India Competence Center • Fine tune & document methodologies & areas of expertise • Lead/train on technology assessments for internet and emerging applications • Lead on identifying systematic approach for reuse Office of Project Management SWEO 5/4/98 • Knowledge Management: Funnel, Proposal & Project Tracking Databases 47

a l Dr terna only in EO SW Application Services Business Plan FSBU Alignment YIKES!! Action Timeline EAO Alignment Phase 1: Go-To-Market Strategies • SERC’s assign resources & hiring process • Agree to target segments support ASAP • Teaming agreements • Target customers • Develop account plan • Plan sales training • Draft collateral May Phase 2: Field ‘Training’ Phase 3: TEST w/ 10 • 1 x 1 ‘training’ for target account reps • Provide customer presentation • Supporting sales tools • Sales contacts and qualification of first 10 accounts • Feedback on message, collateral, etc. June Roles Marketing/Ron Marketing SERC/BDE SWEO Marketing 5/4/98 ft SWEO Alignment Phase 4: Correct, launch • Program adjustments • Launch contacts with the next 40 accounts • Track program results July Marketing BDE Field BDE 48

a l Dr terna only in EO SW Application Services Business Plan ft Fit with other SWEO Services Use ASAP to form the foundation for targeted solutions Finance Phase 1 - 1998 Application Services Evolve to a solution focus? Primary target is : • Named target accounts - the “SWEO target 50 + 50”- with sales • Work strategy w/FSBU & EAO • Target clients: enterprise HP accounts with a 50+ man-year IT gap. • Opportunity has internet possibilities Phase 2 - 1999 CSD? ? ? (EBanking/Comm) • Leverage into: • Emerging internet opportunities • Customer Service Delivery Phase 3 - 1999 Supply Chain? ? ? • Leverage into: • Customer services via supply chain • Financial transactions SWEO 5/4/98 Telecom Other • TBD • Next 50 accounts • Telecom version of CSD • Customer & Vendor supply chain services Arrow direction indicates SWEO AD approach. Dotted arows are secondary. 49

ft a l Dr terna only in EO SW Application Services Business Plan Appendix of Additional, Miscellaneous Slides • • • SWEO 5/4/98 Customer Profiles WIP on SWEO capabilities Additional detail on ASAP services - customer presentation fodder. . 50

ft Current Capabilities a l Dr terna only in EO SW Application Services Business Plan Need India input • • • SWEO 5/4/98 Broad technical skill set in legacy and distributed systems environments Have in-depth knowledge of HP technology – HP R&D alliances – Access to source code Experience in managing large software development projects Ability to manage distributed development world-wide: on/off-site; India Tools & methodologies – For development, migration, Y 2 K – Can develop needed tools for the environment/situation Additional capabilities – Have a global communications infrastructure – Provide access to scalable resources (hundreds of programmers) 51

ft a l Dr terna only in EO SW Application Services Business Plan Amadeus Reservation System Consortium • • SWEO 5/4/98 Situation: – IBM Transaction Processing Facility environment (asssembly language high throughput operating system) Migration – 2500 TPS – 200, 000 terminals over Europe managed by 2 TPF switches protocol conversion connected to backend systems – 200 IS personnel for maintenance HP - used R&D extension team in India for Unix and Network solution Influenced R&D to make changes to meet customer requirements $4 M (loss); 18 months; completed project 52

ft State Farm a l Dr terna only in EO SW Application Services Business Plan Overview: • IT not able to meet LOB needs – TTM on products/services - Legislative issues – Y 2 K pressure - Rework-business updates/mainenance • 4000 IT employees; 7% turnover • Post LOB research found needed 1000 -1500 resources to meet needs • Tried project based work - found the start-up time too high • Chose 4 ‘partners’: IBM, HP, company in India, a local bodyshop Projects • Claims Processing Systems – Needed 130 COBOL SW developers for HP 3000 migration in 2 -3 months – Closed the deal in 10 days – Finished ahead of schedule- project ran 1996 through January 1997 – $10 M revenue? – Most profitable project to date for SWEO (50% PM) • ICAT – Contract not signed; interim order in place – GUI onto regional claims offices PCs – SF scrapping $6 M worth of development that didn’t work – $5 -10 M over 2 years? SWEO 5/4/98 53

• • • ft Sarasin Bank a l Dr terna only in EO SW Application Services Business Plan Tele-banking application? Use object base to build 3 tier client/server? Offered free development; thought we’d “make lots of dollars” 2 year project - still going $$? Environment? Banco Bamerindus do Brasil • • SWEO 5/4/98 Mainframe to client/server reengineering using OO technology No application development $30 M? Loss? Break-even? Project canceled when customer ran out of money; customer didn’t use change management practices. 54

• • SWEO 5/4/98 ft All. Tel Information Services a l Dr terna only in EO SW Application Services Business Plan Company sells a m/f version of the Virtuoso 2 (V 2) billing system for wireless services. Current environment is a IBM m/f; migrating to HP 9000 Goal is to sell a marketable billing system WW. Drivers are TTM, cost and business opportunity Phase 1) 300 K assessment complete 4/24 Phase 2) $3. 5 -4 M migration to be proposed on 4/24; start 5/15 -6/1 Will perform a Y 2 K impact analysis as part of the project Future strategy - propose a ‘global’ version (GPS); localization services for the billing system; toaster and maintenance. 55

Business Relationship >$10 M $6 M $300 K Investigative and Pilot Phase Migration SW Development Y 2 K Virtuoso II Competency Center >$20 M ft ALLTEL a l Dr terna only in EO SW Application Services Business Plan IT Alliance SW Development Support Maintenance Intl Localization R&D SW Development Support Maintenance Migration Analysis Orders and Revenue ($) HP CO and ALLTEL Strategic Alliance SWEO 5/4/98 56

ft Application Services Alliance Program (ASAP) a l Dr terna only in EO SW Application Services Business Plan Internet Integration Service Elements • Assessment of internet and related technology for internal, business-to-business and consumer-to-business applications • Integration of internet and current environments • Secure networks design Benefits • Risk management in the use of emerging technologies • Early review of emerging HP internet technologies • Access to resources trained in the technologies by the R&D organizations • Implementation teams that support continuing HP development on released products SWEO 5/4/98 57

ft Application Services Alliance Program (ASAP) a l Dr terna only in EO SW Application Services Business Plan Platform Migration Service Elements • Server consolidation • Re-hosting from mainframes • Applications redevelopment Benefits • Knowledge and experience to port numerous applications from multiple environments to HP platforms • Performance improvements via new technology • Improved operations SWEO 5/4/98 58

ft Application Services Alliance Program (ASAP) a l Dr terna only in EO SW Application Services Business Plan Application Enhancement Services • Software enhancements to address changing business needs and improve operations • Software enhancements to improve operations • Establish service level and reporting metrics Benefits • Quickly address business unit needs • Improve software operations management • Access to resources with knowledge and experience in all platform and environments SWEO 5/4/98 59

ft Application Services Alliance Program (ASAP) a l Dr terna only in EO SW Application Services Business Plan Year 2000 Services • • Strategy Development (fix, update, replace) Analysis Conversion & Pilot Tests Implementation & Compliance testing Benefits • Methodologies and tools specific to the Year 2000 problem • Ability to design tools for legacy environments or use a chosen vendor’s tools • Ramp resources to the project size • Access to large pool of COBOL resources SWEO 5/4/98 60

ft a l Dr terna only in EO SW Application Services Business Plan Application Services Alliance Program (ASAP) Accelerate (the client’s) benefits: • • • Transform information systems into a competitive advantage - take on major initiatives and implement strategic IS programs faster knowing you have the knowledge and resource depth needed Reduce the risk of integrating emerging technologies into existing environments Gain access to technology experts skilled in multiple platforms, the newest development tools, and software development quality programs Implement a development management process that will align and prioritize business units needs Tap into a virtually unlimited resource that is experienced and focused on your environment. ~ Go Forward Faster ~ SWEO 5/4/98 61

Customer Need • • • SWEO 5/4/98 ft Year 2000 a l Dr terna only in EO SW Application Services Business Plan Legacy systems were not designed for full 4 -digit year representation Systems may fail with the millennium date change Failures will be in: – Date arithmetic – Date comparisons – Sorting Areas affected will include: – File formats – User interfaces (screens and reports) – Program logic Examples – Order fulfillment systems may not accept orders beyond Y 2 K – Expiry date for a new credit card may set as 1900 vs. 2000, disallowing any transactions on the “expired” card 62

Customer Site Strategy Development • Existing applications & data • System Software HP Site ft Year 2000 Methodology a l Dr terna only in EO SW Application Services Business Plan Customer Site Analysis Conversion • Selected applications & data • Updated applications & data Implementation • Updated applications & data manual inputs Pre-analysis Toolkit & Services Analysis Toolkit & Services Conversion Toolkit & Services • Retrofit production changes • Change user interfaces • Implement • Compliance Test Repository SWEO 5/4/98 Risks to the business are assessed an enterprise-wide Y 2 K strategy is evolved and documented. Impact Analysis Report is generated and strategies for resolution are finalized Application software and other related items are changed and tested Updated application is made to function in a ‘live’ environment 63

Analysis • Scanners for languages; like COBOL, C • Repository Loader to load cross reference data - attributes and relationships between various objects • CASEPAC repository with extensions to support XREF information • Special reporting tools on CASEPAC for Year 20000 inpact analysis • Provision for storing into the repository, inputs regarding selection of date fields and identification of changes to be made • Analyzer to determine changes to user interface files • Load Modeule Analyzer to scan the load module and determine the language of each component program SWEO 5/4/98 ft Year 2000 Tools a l Dr terna only in EO SW Application Services Business Plan Conversions • Conversion Tool (filter) based on compiler technology for carrying out changes to date variables. Affected variables and the changes will be automatically picked up from the repository • Tools for generating file conversion programs • Date Translation Tools for generating test data for simulating runs in the next century • Date Simulation Tools for simulating system dates of the next century • Data Comparator Tools for comparing data in corresponding output and I-O files before and after conversion 64

Experience & Tools in HP Platform ft Year 2000 a l Dr terna only in EO SW Application Services Business Plan Experience • MPE/UNIX/IBM mainframes and AS 400 • COBOL or C languages • Over 1 million lines of code (6 -8 person years of effort minimum) • Strategic HP accounts – MPE/i. X operating systems – Databases (IMAGE, IMAGE/SQL, ALLBASE/SQL) – Networking products – Open. Vew client and WEB server products Tools • Tools are based on parser and repository technology which makes development of Y 2 K tools for any language or platform possible • Current tools handle standard languages such as COBOL and C with embedded SQL • Tools for HP 3000 and HP 9000 SWEO 5/4/98 65

ft Year 2000 Cababilities Summary • • Capability for over 5000 person-years and 1 billion lines of code Need HP projects vs. Proven methodology and processes TCS Support for any date strategy Tool-based migration: extensive tool set including HP 3000 and HP 9000 expertise Access to HP’s technology groups HP - WIN Project Factory approach for maximum efficiency • HP WW Orders, Shipments and Invoices • HP 9000; HP-UX Value additions: language conversions, • COBOL; ORACLE; SQL; C; PERL; enhancements, performance tuning HP - OASYS Project • Impact analysis and conversion • HP 3000; MPE; COBOL; VPLUS; IMAGE; BRW • 88 programs, 36 datasets • 165, 000 LOC SWEO 5/4/98 a l Dr terna only in EO SW Application Services Business Plan SHELL; PJCL • 2607 programs • 463 datasets and flatfiles • 550, 000 LOC Insurance Project • Impact analysis and conversion • IBM AS/400; ILE; DB 2/400; COBOL • 16 person years 66

HP Channel Alignment New development Transitioning/Migration SWEO & PSO Offshore capabilities SWEO Inter/Intra/Extranet SWEO & PSO Year 2000 Services SWEO limited Retooling SWEO limited, & PSO Support Partner Maintenance SWEO limited Data warehouse and mining PSO & SWEO Package Implementation & Management OSD Outsourcing - any & all above SWEO 5/4/98 ft Application Services a l Dr terna only in EO SW Application Services Business Plan OSD, SWEO supporting 67