Top 5 Reasons Your Business Needs the Cloud

Top 5 Reasons Your Business Needs the Cloud Featuring: Michael Goeke, Epicor Eric Smith, Modern Distribution Management Sponsored by: May 24, 2016

Agenda Introduction Business priorities for distributors Top reasons to move to the cloud Real-world results How to get to the cloud Q&A

Speakers Michael Goeke Product Marketing Manager Epicor Software Corp. Eric Smith Associate Editor Modern Distribution Management

Top 5 Reasons Your Business Needs the Cloud Michael Goeke, Epicor Software Corporation

Agenda for Today s Discussion 1. Introduction Why are we here? - or, The Cost of Doing Nothing has Gone Up. Top Business Priorities for Distributors 2. Top 5 Reasons Companies Move to the Cloud 3. The Results are In 4. Getting to the Cloud 5. Questions and Answers

Introduction

Safe Harbor Statement FORWARD-LOOKING STATEMENTS. Some of the information in this presentation constitutes forward-looking information, including with respect to future product strategies, financial condition, results of operations, continued profitability and activities of Epicor. While these forward-looking statements represent our current judgment, these statements are based on assumptions that are subject to a wide range of risks and our actual results could differ materially. Epicor undertakes no obligation to revise or update publicly any forward-looking statements.

Introduction & Definitions Some Basics: The Cloud means web-based applications, like Gmail, Salesforce.com The Cloud has many forms - single-tenant, multi-tenant, hybrid You don t see the hardware/ software, nor maintain it Payment is usually a monthly service fee (includes support) Configuration & data differs between Cloud clients Your system is likely being used today by other customers Today, half of all new ERP deployments are in the cloud.

Why we are here... The Cost (and Pain) of Doing Nothing has Gone Up. New competitors enter the market, with new advantages New customer expectations, changes are needed Visible ecommerce price competition on the web Difficulty hiring and keeping good workers Costs and revenue are converging margins are tight Customer wallet-share is falling... and we need alternatives.

Top Business Priorities for Distributors Primary Challenges for Distributors Revenue growth more product, more sales, more accts Increased profitability efficient processes, productivity Employee training faster to skills, higher proficiency Customer retention more loyalty, higher value Better inventory management Reduce business costs Better visibility into performance Better transportation/ freight/ logistics management Reduce paperwork, data entry & redundant processes Improve supply chain communication "The 2015 Distribution Industry Outlook", presentation, Modern Distribution Management, January 15, 2015

Top Reasons to Move to the Cloud

Top Reasons Companies move to Cloud The Top Reasons 500 Epicor clients chose Cloud Deployment Compelling Cloud Economics Time has passed and the proof is clear Faster time-to-value With more being done in the cloud, everything gets faster Better use of resources (IT and others) Resources do more valuable work for customers Better system security Professionals do the work, systems are more secure Mobility, collaboration and alignment Built-in mobility, only one version of the truth for all

Reason #1: Compelling Cloud Economics A very conservative financial assessment: just the software On-Premises Deployment A $35,000 Software purchase. 20% annual Maintenance ($7k) 5-Year TCO - Non-Discounted = $70,000 @ Y=5% = $63,640 Cloud Deployment About $1,800/month Includes Maintenance 5-Year TCO: Non-Discounted = $108,000 @ Y=5% = $93,516 Conclusion: Cost is 32% lower for an on-premises solution.

Which is the Better Deal... and, at what Cost? 400000 350000 Looking at JUST the software costs break-even is about 4 ½ years. 300000 250000 200000 Cloud Sum Legacy Sum 150000 100000 50000 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Which is the Better Deal... and, at what Cost? 400000 350000 300000 250000 200000 150000 100000 50000 Cloud Sum Legacy Sum Looking at JUST the software costs break-even is about 4 ½ years. What about everything else? Cost of capital IT resources CapEx vs OpExadjustments Mobile access value Cost of installation and upgrades IT staff support costs Cost of being locked-in (?) 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 That s why cloud deployment has become the new norm for enterprise applications.

Thoughtfully Consider the Full TCO

Reason #2: Faster Time-to-value Think of all the things that you won t have to do. No more server hardware purchases/ expansions No more software patches No more back-ups (or back-up verification) No system upgrade installations No anti-virus/ malware/ firewall Re-using existing, proven hardware, software and support system. New subscription configure, load data and train the users. Some vendors will let you move to the Cloud and back again. Conclusion: Improved responsiveness and customer service.

Reason #3: Better use of Resources What are your IT experts doing? Installing Service Packs Dealing with version control Checking backups (hopefully) Disaster mitigation Endless classes to keep up-to-date on technology What should they be doing? Building dashboards Pushing information and services out to your customers Getting tech to the field team and the shop floor Focusing tech on the evolving business needs

Reason #4: Better System Security We ve finally retired the myth that on-premises is more secure. Cloud Vendors invest MUCH more in Physical Security Electronic Security Intrusion Detection Backup & Disaster Recovery Data Management Policies Business Continuity, Uptime & Reliability Would you like to compare IT service level metrics?

Reason #5: Mobility, Collaboration and Alignment Our world is now full of mobile professionals Need fast access from a mobile device to do short/ critical tasks Service teams that need access to accounts, ordering, labor, service orders, material status With Cloud, everyone gets mobile access Coordination of employees, contract personnel and customers All in real-time and with the same data

Other Reasons: Obsolescence of legacy on-premises systems Maturing workforce departs with tribal knowledge Younger members not familiar with old systems techniques Easiest to train new employees on a Cloud system New employees are comfortable with no infrastructure Fast, easy updates in the Cloud to stay current Modern systems are more data friendly to integrate other information - supplier updates, pricing, specifications, etc.

The Results are In

Anticipated versus Realized Benefits of Cloud In the end, it would appear that, yes, SaaS has lived up to it s promises. If you are on the fence consider this: Even with all the hype savings and benefits have been understated, not overblown. The sooner you move, the sooner you will be able to realize those benefits yourself

A Parting Thought: It s not all about the Money IMPROVED BUSINESS AGILITY 75% SPEED OF IMPLEMENTATION AND DEPLOYMENT 72% FASTER DELIVERY OF NEW FEATURES AND FUNCTIONS 71% Agility & Speed SUPPORT BUSINESS INNOVATION WITH NEW CAPABILITIES 69% ALLOWS US TO FOCUS RESOURCES ON MORE IMPORTANT PROJECTS 69% LOWER OVERALL COSTS SUBSTITUTE UPFRONT COSTS WITH REGULAR MONTHLY PAYMENTS 53% 68% Cost Forrester, May 2014 Application Adoption Trends: The Rise Of SaaS

Getting to the Cloud

The Cloud is a Continuum of Learning... Advanced, Collaborative, Integrated Workloads Productivity Stand-alone Workloads Document Sharing

Recommendations for Moving Up The Cloud is a deployment method - not functionality. Compare vendors based on the value created for your business and your customers not on just cost savings. Find vendors that can help you move through an incremental cloud adoption process to gather experience. Consider if vendors give you freedom to move back onpremises Think about where to invest that money to grow. The Cloud is about small compromises and Big Advantages. Its not right for everyone, but it is right for almost everyone.

Take-aways: Top 5 Reasons Your Business Needs the Cloud Compelling Cloud Economics Faster time-to-value Better use of resources (IT and others) Proven system security Better mobility, collaboration and alignment (Your Customers and Competitors)

Questions and Answers

Questions? Top 5 Reasons Your Business Needs the Cloud Sponsored by: May 24, 2016