The CFO Perspective

Richard PaikFinancial Controller Microsoft New Zealand

Part 1 - The Microsoft CFO ViewWhere is the economy goingThe role of technology investmentsOptimising costs, productivity, profitability

Comparison to Previous Bears0%

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Current Bear

Crash of 1929

Tech Crash

1 33Months after crash

Realities of the “New Normal”

Adjusted Growth Rate

RESET

23

“NEW NORMAL”1

HISTORIC GROWTH RATE

time

Economicgrowth

New Normal and Our Industry

Driving Growth in the New Normal1 Focus on Cash

Streamline the Cost Structure2

Invest in Innovation5

Drive Operational Excellence3

Compete and Grow Market Share4

Driving Growth in the New Normal1 Focus on Cash

Streamline the Cost Structure2

Invest in Innovation5

Drive Operational Excellence3

Compete and Grow Market Share4

Driving Growth in the New Normal1 Focus on Cash

Streamline the Cost Structure2

Invest in Innovation5

Drive Operational Excellence3

Compete and Grow Market Share4

Driving Growth in the New Normal1 Focus on Cash

Streamline the Cost Structure2

Invest in Innovation5

Drive Operational Excellence3

Compete and Grow Market Share4

Market Share in a New Normal

Market Share in a New Normal

Smaller Pie, Higher Share, Bigger Growth

Leaders Take Market Share

Leaders

Driving Growth in the New Normal1 Focus on Cash

Streamline the Cost Structure2

Invest in Innovation5

Drive Operational Excellence3

Compete and Grow Market Share4

Long-Term Approach to Innovation

SOURCE: 10K & 20K SEC Filings 12/31/08 Except Oracle 5/31/09, RIM, Sony and Nintendo 3/31/09

SonyOracleGoogleApple IBMCiscoRIMNintendo

$1.1B$2.8B $2.8B

$4.9B $5.2B$6.3B

$.7B$.4B

TOTAL FY09 R&D INVESTMENTFY09: $9.1B

Microsoft

FY10: $9.5B

Strength of Product Portfolio

BPOS

Why Partner with Microsoft?

Microsoft is a Great Partner in the Short Term

Microsoft is a Great Partner in the Long Term

Part 2 – The CFOIT Investments within the companyPlanningGovernanceResults

My guidelines to IT1. Business and IT aligned

PrioritiesDirectionFundamentals

2. Investment to realise gains across the business3. Cost savings on the bottom-line always good4. Predictable, budget-able5. Deliver the IT Strategy/Vision6. Total Picture – financial, costs, cashflow, tax,

capabilities7. Balance short term & longer term