Open Pay Consumption Model Customer Presentation

April 2015

Cisco Capital

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Open Pay allows companies to receive equipment with more compute and/or storage capacity than is needed at the time of acquisition.

• The “fixed” components require a set minimum payment.

• The variable capacity is installed on premise and ready for use, but customers pay for variable capacity only when utilized.• Customers are charged only on days those buffer assets are

used and if any usage reading is positive. • Open Pay is the first model of its kind to charge based on

metered usage of both compute and storage.

• Intended for UCS, Vblock, and FlexPod to start and other storage in the future.

What is Open Pay?

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Open Pay – Consumption ModelOpen Pay allows companies to receive equipment with more compute and/or storage capacity than is needed at the time of acquisition.

• The “base” compute and storage components require a minimum payment. • The “variable” capacity is installed and ready for use, but customers pay

for variable capacity only when utilized.

Term -12 quarters

Re

ve

nu

e

Base CapacityFixed quarterly

payment

Variable UsageBilled quarterly

as used

consumption curve

Lease Revenue(Regardless of Consumption)

Fixed Payment Obligation Uncommitted Capacity

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The Cisco Capital EcosystemPAYG and Open Pay

Cash

Pure Utility (AWS)MMS

FCMXaaS

Open PayPAYGLeases

& Loans

Flexibility

0%100% Commitment

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Who would use Open Pay and Why?• Growth companies who need extra

capacity during the term.• Customers with seasonal, monthly or

quarterly fluctuations in demand• Allows companies to overcome the

common challenge of meeting uncertain demands quickly and efficiently with extra buffer capacity

• Addresses concerns around security, privacy, compliance, and control that the public cloud models do not address (off premise/shared resources)

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1. Subject to credit approval

2. UCS required

3. Deal size:1. $500K minimum for UCS only2. $1 million minimum for converged infrastructure (compute plus storage)3. $5 million maximum

4. Customer expecting significant growth with seasonal periods of peak usage, known spikes in usage over time, or need for short term rapid deployment.

5. Willing to allow metering of compute and storage usage

6. Subject to review of Qualifying Questionnaire with DCV Pursuit Team

Customer Eligibility Criteria

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Customer Benefits

• Flexibility

• Privacy advantages

• Cost effective alternative

• Minimizes upfront cost like in a lease

• Monthly base cost lower than a full lease on all of the equipment

• Pay for usage

• Match solution to operational and financial objectives

• Available for UCS, Vblock or FlexPod

• Measures compute and storage

• Flexible capacity easily converted to fixed capacity

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Open Pay: FAQsQ1: When will Open Pay be available?

A1: In the US on a limited basis in Q4 FY15. Wider availability expected for FY16 in the US with eventual expansion to EMEA, LATAM and APJC to follow.

Q2: What happens if there is very little variable usage each year?

A2: Minimum required buffer usage will vary based on the percentage of fixed/variable:• 70/30: 15% minimum buffer usage each year—standard offer• 60/40 20% minimum buffer usage each year ----Exception case

If the customer does not have actual buffer usage meeting required minimum, CSCC has option to convert entire buffer to fixed at prevailing market rates after each one year period.

Q3: What happens if there is excessive use by the customer in the first year?

A3: Cisco will allow the customer to convert buffer to FMV lease at any time. FPO is an option as well. CSC will be made whole on revised structure.

Q4: Can other Cisco hardware products be included in the compute portion of Open Pay?

A4 : Yes, a limited dollar amount of other Cisco products may be included in the economic division of the BOM. Software, Services, and other soft costs may be financed on a separate schedule.

Q5: Can I add more equipment to the Open Pay schedule after the lease starts. In what way can I add more equipment on?

A5: Yes, the customer can always add more equipment by adding to the fixed lease, or by adding in a proportion that is consistent with the original mix of Fixed and Variable.

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