1) Kaiser considered multiple CRM options to address issues from disparate, outdated systems including long report wait times and lack of a single customer view. 2) An analysis found Salesforce to be 85% less expensive than an on-premise Siebel implementation over one year, costing $1.29M versus $8.73M for Siebel. 3) Other examples found Salesforce costs 46% lower over 5 years and enabled faster deployments and increased performance versus costly on-premise alternatives.

1. TCO Comparison Analysis
TCO Case Study for Saas
versus on premise software

2. Salesforce.com Confidential -- For Internal Use Only
Kaiser: “A Confederation of Feudal States”
 Massive organization
– 8.2 Million subscribers
– 1000 internal sales reps
 Distributed Model
– Separately managed divisions in 9 states + Washington D.C.
– Diverse selling audience: large commercial accounts, trade unions,
brokers
– National accounts subject to federal AND state regulations
 Disparate systems
– Access, Excel, ACT!, Goldmine, Onyx, homegrown systems, index cards
– Databases included Oracle, Microsoft and IBM DB2
– Platforms spanned Java, .NET and IBM Websphere

3. Salesforce.com Confidential -- For Internal Use Only
Business Problems: No Unified Processes
No Account
Intelligence
No
Performance
Insight
No Single
Customer
View
Cross-functional management lacked national oversight of critical data
Invoices due, division-level discounts, contract negotiation history
3-month wait to generate basic business reports
Sales had no understanding of key contacts or their engagement history
6+ sales reps would pursue a single customer
Inability to hold reps accountable for poor performance
Sales executives lacked insight into sales activities
No visibility of conversion rates
No understanding of reasons for deal loss

4. Salesforce.com Confidential -- For Internal Use Only
Solution: A Nationwide CRM System
 Considered multiple vendors
– Salesforce.com
– Siebel On-premise
– Siebel On-demand
 Gathered prioritized business requirements
 Conducted TCO analysis to make the right decision

5. Salesforce.com Confidential -- For Internal Use Only
Salesforce 85% Less Expensive
Cost Category Siebel On-Premise Salesforce.com
Development environment $1,112M
Testing & Pre-Production environment $1,340M
Production environment $1,340M
Disaster Recovery $1,650M
Documentation $6K
PC Upgrades $206K
Licenses (825 users) Waived $928K
Maintenance – 1 year contract $270K $21K
Customizations & Integration $2,800M $260K
Documentation $150
1 Year TCO estimate $8,732 M $1,290 M
…Siebel would have cost me $30 million to $40 million and taken a year to
deploy. With Salesforce.com, we did it in four months at less than $1 million“ ”— CIO Kaiser Permanente

6. Salesforce.com Confidential -- For Internal Use Only
Other Useful Examples

7. Salesforce.com Confidential -- For Internal Use Only
Morgan Stanley Research : 46% Lower TCO
Cumulative 5 Year TCO Siebel Salesforce.com
Number of Users 2,000 2,000
Total License/Subscription Cost $6,000,000 $11,250,000
Support/Upgrade Cost $1,000,000 $0
Implementation/Customization $10,000,000 $375,000
IT Infrastructure/Hardware $750,000 $0
IT Personnel $2,000,000 $0
Training $300,000 $150,000
Total $20,050,000 $11,775,000
Source: Morgan Stanley Equity Research. “Breaking Ground with On-Demand CRM.” August 2, 2004

8. Merrill Lynch Swaps Costly Siebel for Salesforce.com
Challenge
 Extremely costly Siebel
implementation
 Little to no user adoption (most users
paid for ACT instead of using Siebel)
 Slow performance across ML network
 Complex user interface
Solution Results
 Simple, Consolidated UI
 Demand driven rollout to end users
with end user demand increasing
everyday
 Created scalable conversion process
able to bring on 75 teams per week
(avg 5 people/team)
 Over 3,800 users live and growing
 Satisfied users with high user
adoption
 Salesforce.com now considered the
enterprise standard for over 25.000
users (full deployment expected by
end of 2007)

9. First American Credco Swaps Inflexible Siebel System
Challenge
 Poorly qualified & neglected leads
slowed revenue growth
 Ineffective outreach into installed
base
 No visibility of partner lead
generation performance
 Sales reps unaccountable for
sluggish performance
Solution Results
“
” Integrated Marketing and Salesforce
automation provides better lead to
close process
 Customized application to better fit
sales process
 Faster time to value
 50% increase in qualified leads
 Doubled lead conversion rates
 100% increase in opportunity
closures
 25% increase in sales calls
 Consolidated 9 databases
Other CRM companies made our business
conform to their applications. Salesforce.com is
the first solution that enabled us to map CRM
applications directly to our specific business needs.
”VP Corporate Development
First American Credco

10. Salesforce.com Confidential -- For Internal Use Only
Salesforce.com = Predictable TCO
Siebel On Premise Risks!
1. Large up front costs and
greater deployment risks
2. Unexpected cost overruns are
common as users are added
and systems need to scale
3. As you scale to thousands of
users, expenses become
completely unpredictable
4. Salesforce.com costs are
fixed and predictable