P3254-R: CID - William Pollie (SAP), Deposition Transcript

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Government Exhibit P3254-R [Non-designated testimony redacted]

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3	VIDEOGRAPHER: The Court Reporter today is
4	Dawn M. Hart of LegaLink San Francisco. I will now
5	swear in the witness.
6	Thereupon ---
7	WILLIAM POLLIE
8	having been duly sworn, testified as follows:
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11	Q Good morning, Mr. Pollie.
12	A Good morning, Mr. Yates.
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18	Q And when you left Integral Systems in
19	approximately '91 or '92 where did you go?
20	A I went to a company called SAP.
21	Q And for how long were you with SAP?
22	A Through September 2001.
23	Q And what positions did you hold at SAP?
24	A Variety of positions in product management,
25	direct sales, global sales, strategic account

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1	management, and management positions; Vice-President
2	of Field Operations for SAP.
3	Q Your last position was Vice President of
4	Field Operations for SAP?
5	A Yes.
6	Q And what did you do as the Vice President of
7	Field Operations for SAP?
8	A I ran a particular industry sector for SAP
9	in the field and operation which had consulting,
10	presales, sales targeted at an industry sector that we
11	were growing.
12	Q And what sector was that?
13	A Financial services and insurance, brokerage.
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16	Q So in approximately September of 2001 SAP
17	did not have a fully developed CRM product; is that
18	your understanding?
19	A It was fairly new, yes.
20	Q And what about today, do you have an
21	understanding of SAP's CRM product offering today?
22	A Not in detail, no.
23	Q And you left SAP in approximately September
24	of 2001?
25	A Yes.

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1	Q And who did you join?
2	A Microsoft Business Solutions-Great Plains.
3	At the time it was called Microsoft Great Plains
4	Business Solutions.
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17	Q Sure. At or about the time you joined
18	Microsoft Business Solutions, did Microsoft Business
19	Solutions have a direct sales force?
20	A Not to my understanding, no.
21	Q What kind of sales force did it have?
22	A All of Microsoft Business Solutions
23	activities were delivered through a partner
24	organization.
25	Q But your title was U.S. Sale -- Vice

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1	President of U.S. Sales?
2	A Yes.
3	Q What were your duties and responsibilities
4	in or about September of 2001?
5	A To manage a, a group of Microsoft employees
6	that assisted our partners in providing software
7	services and product to, to customers.
8	Q And how would the Microsoft salespeople
9	assist the partners in that role?
10	A In a variety of ways, by providing them
11	assistance in pricing data and by providing them
12	assistance in access to Microsoft resources that might
13	provide them detailed product information that they
14	needed, to help them monitor and control their
15	pipeline and activities, to assist them in sales
16	techniques, sales training, product training.
17	Q So is it fair to say that the partners acted
18	as an extension of the Microsoft sales force?
19	A I think it's safe to say that the Microsoft
20	partners were the sales force and were not necessarily
21	an extension of, but the sales force for Microsoft
22	Business Solutions.
23	Q Did you meet with customers of Microsoft
24	Business Solutions in or about September of 2001?
25	A Yes.

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1	Q And did salespeople at Microsoft Business
2	Solutions working under you meet with customers in
3	approximately September of 2001?
4	A Microsoft Business Solution employees met
5	with customers. They weren't necessarily called
6	salespeople. They're called partner account managers,
7	they're called business development managers. So from
8	a clarification point of view, yes, my staff did meet
9	with customers, but they were not called salespeople.
10	Q And what position do you hold with Microsoft
11	Business Solutions today?
12	A I'm a General Manager within Microsoft
13	working in the enterprise business sector.
14	Q What is the enterprise business sector?
15	A The enterprise business sector are -- is
16	comprised of Microsoft's corporate account customers,
17	as well as some of the larger, more strategic
18	customers in Microsoft as well.
19	Q What are corporate account customers?
20	A Corporate account customers are, are
21	Microsoft -- is Microsoft's description of the way
22	they tier the number of accounts for coverage
23	purposes. So that these representatives in the
24	classic Microsoft point of view are provided certain
25	coverage models to make sure that these customers are,

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1	maintain a high level of satisfaction with their
2	partners and with the performance of the products.
3	Q And is there -- you said they're tiered in
4	some way. Is there any kind of threshold in terms of
5	numbers of PCs, or annual revenue, or number of
6	employees that's used in order to obtain a space
7	within the corporate account space within Microsoft?
8	A I know that there is a way for them to
9	determine the number of accounts and the coverage, but
10	I'm not intimate with the detail on the actual
11	specific requirements on what makes somebody a
12	corporate account and what makes someone -- I think it
13	does vary and there are some exceptions made based on
14	opportunity or high profile of accounts, level of,
15	level of business revenue, those kinds of things.
16	Q Can you give me some examples of exceptions
17	that have been made for high profile accounts?
18	A I think if there's a particular account
19	that's, has a very high PC count let's say, but isn't
20	necessarily a high revenue account, the customer may,
21	may require further service capabilities, in which
22	case they provide a higher coverage model for that
23	account. That could be one example.
24	Q And what kinds of companies are you involved
25	with within the enterprise business sector?

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1	A Just as clarification purpose, myself person
2	personally?
3	Q Yes.
4	A Accounts that are asking for executive
5	representation of Microsoft Business Solutions from a
6	strategic point of view, how Microsoft views their
7	acquisition of the Great Plains in the division
8	organizations, and how we, we provide services to our
9	partners and support to our partners to make them
10	successful.
11	Q Can you give me some examples of the kinds
12	of companies that you're involved with on that basis?
13	A Certainly. Companies like Ingersoll-Rand,
14	companies like Home Bank Corporation, United Missouri
15	Bank, Merial Corporation, Bound, Bound Global, Chanel,
16	as examples.
17	Q In -- what is, what -- what is your
18	involvement, for example, with Ingestible-Rand? What
19	do you do with them?
20	A What do I do with them?
21	Q Yes.
22	A I have a -- fairly regular communications
23	with their global CIO regarding their relationship
24	with Microsoft Business Solutions and the partners
25	that are servicing their accounts; work with them on

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1	putting programs together for executive briefings,
2	making sure they're aware of our current state of
3	product, as well as our investment in particular
4	product that could be of interest to them for the
5	future, keeping them up-to-date on relationships we're
6	forming with other partners and other products that
7	are out in the marketplace that they might find
8	interesting.
9	Q And has Ingestible-Rand purchased any
10	Microsoft Business Solutions software products?
11	A Yes.
12	Q What have they purchased?
13	A They've purchased a product called Navision.
14	Q And what is Navision?
15	A Navision is an accounting and core back
16	office accounting system that's being used, that's
17	available on a global basis.
18	Q And how is Ingestible-Rand using it to your
19	knowledge?
20	A Ingestible-Rand has a project by which
21	they're implementing the Navision product at their
22	bobcat dealers. So they're very small, five- to
23	six-user type of operations, but it's a way for them
24	to standardize the back office among the various
25	bobcat dealerships around the world.

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19	Q What about Bound Global, what's your
20	understanding of what products from -- they have
21	purchased from Microsoft Business Solutions?
22	A Bound Global has purchased our Axapta
23	product.
24	Q Do you know where that product has been
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1	A The implementation resides in the New York/
2	New Jersey area.
3	Q Is that Bound Global's headquarters?
4	A Bound Global is part of Bound. And for
5	Bound Global, yes, that is their headquarters.
6	Q What is Bound Global's business, if you
7	know?
8	A Bound Global's business is to provide
9	translation services. They are a Microsoft supplier
10	in that they do a lot of the translation services for
11	a number of Microsoft products around the world, and
12	provide those kinds of services to other companies as
13	well.
14	Q And you say that the Microsoft Axapta
15	product has been implemented in the New York/New
16	Jersey area by Bound Global?
17	A It resides there, yes.
18	Q Does it service other Bound Global locations
19	throughout the United States?
20	A Yes. I believe there's seven different
21	countries running on that instance today.
22	Q When you say there's seven countries running
23	on that instance, what do you mean?
24	A They're providing service, financial
25	accounting, application software functionality to, I

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1	believe it's six or more countries around the world
2	from their facility in New York covering approximately
3	35 to 40 users.
4	Q And how, how do the users in other countries
5	obtain access to the Axapta application?
6	A I believe through a dial-in network,
7	although I'm not sure.
8	Q What's your understanding of which countries
9	are being serviced by the Axapta application in the
10	New York/New Jersey area?
11	A I'm not sure of the details.
12	Q What is Axapta?
13	A Axapta is a - an application software
14	package that was acquired as part of the Microsoft
15	acquisition of Navision in Cope - out of Denmark, and
16	it is a, another application edition of products that
17	Microsoft Business Solution sells and markets through
18	its partner organizations.
19	Q What's the target market of Axapta if you
20	know?
21	A Axapta fits very well in markets where
22	customers have international requirements, and it is
23	also targeted at locations in the manufacturing sector
24	because of its functionality versus other editions of
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1	robust manufacturing functionality.
2	Q When you say it has a more robust
3	manufacturing functionality, what do you mean?
4	A The Axapta product, through the acquisition,
5	provided Microsoft Business Solutions a product which
6	has some of the functionality associated with
7	production planning, manufacturing, bill of material
8	management, inventory management, most of the discreet
9	type of manufacturing, very simple bill of material,
10	assembly-type of work that many companies require in
11	the market in the manufacturing sector.
12	Q And when you say that Axapta is -- fits
13	well, or has international capabilities, what do you
14	mean?
15	A Axapta is a product that is available and
16	supported in many countries around the world. And in
17	comparison to our Great Plains product --
18	(Interruption.)
19	A In comparison with our Great Plains or
20	Solomon products, it is a product that is offered in
21	far more countries than currently the Solomon and
22	Great Plains product are supported.
23	Q Do you know in how many countries -- let me
24	withdraw the question.
25	Do you have an understanding of the, whether

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1	Axapta has functionality in 30 or more countries?
2	A I have seen documentation that relates the
3	availability of Axapta, implementation of Axapta in
4	approximately that amount of countries, provided
5	either through localized support or through direct
6	Axapta support.
7	Q When you talk about localized support versus
8	direct Axapta support, what do you mean?
9	A There are some countries where partners have
10	taken the responsibility to localize and to provide
11	functionality for local regulatory requirements for
12	the Axapta product that is not Microsoft intellectual
13	property or owned -- or owned by Microsoft.
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19	Q And you also mentioned Chanel. What's your
20	understanding of what Microsoft Business Solutions
21	product has been sold the Chanel?
22	A Chanel is using the Axapta product in a very
23	decentralized approach, targeting a number of small
24	remote operations that they own on a worldwide basis.
25	Q Is Axapta used by Chanel in the United

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1	States?
2	A No.
3	Q Where is it used, to your knowledge?
4	A There is an implementation that's going on
5	today in Europe, and one that's being planned in the
6	Asia-Pacific region.
7	Q Do you know who is implementing Axapta for
8	Chanel?
9	A A partner of ours is doing most of the work,
10	a company by the name of Columbus IT.
11	Q And what is Columbus IT?
12	A Columbus IT is a certified Microsoft Axapta
13	business partner that has implementation resources, as
14	well as project people that implement Microsoft.
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5	Q Can you describe the financial management
6	modules that are provided with Axapta?
7	A The Axapta financial management system
8	consists much of the modules that you described;
9	general ledger, accounts payable, accounts receivable,
10	fixed assets, traditional accounting applications that
11	are required in most small, medium, and large
12	corporate account-type of structures.
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21	Q I've read in some publications that
22	Microsoft Business Solutions hopes to grow its annual
23	sales to approximately $10 billion a year by 2010. Is
24	that true?
25	A I really can't, can't state that for the

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1	record.
2	Q Have you seen a Business Week article in
3	which Jeff Rakes made a statement like that?
4	A Yes, I have.
5	Q And is it your understanding that, that
6	Microsoft has publicly stated that it plans to grow
7	the revenues of Microsoft Business Solutions to
8	approximately $10 billion a year by year 2010?
9	A I've read that article, yes.
10	Q Have you discussed those plans with anyone
11	within Microsoft?
12	A Yes.
13	Q With whom?
14	A With my direct management, my team.
15	Q Who is your direct management?
16	A I work for the General Manager in charge of
17	enterprise sales operations.
18	Q And who's that?
19	A Phil Sorgen.
20	Q And you mentioned your team. Who's on your
21	team?
22	A I have two direct -- or one direct report
23	and 17 members of a virtual team that are employed
24	throughout the United States.
25	Q Who -

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1	A And when I say my team, I should clarify
2	that to say my virtual team.
3	Q Your virtual team. Those are people in
4	various geographic locations throughout the United
5	States who report up to you?
6	A They don't report directly to me. They
7	report to the local geography.
8	Q And how -- how are they part of your team if
9	they report to the local geography?
10	A It's a virtual team that I helped build from
11	a community point of view; common objectives, common
12	goals, common job responsibilities around the
13	Microsoft Business Solutions products.
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14	Q Within the enterprise group, do you focus on
15	the GSM clients -- this is you personally -- or the
16	CAS, the corporate accounts-based clients?
17	A I don't focus on either. I help our
18	partners in specific situations where they require
19	some Microsoft leadership support based on who they're
20	talking to on the opportunity. I really don't focus
21	on either.
22	Q So it could vary. If a partner comes to
23	you --
24	A Could vary.
25	Q -- with a GSM prospect that they need you

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1	your assistance with, you'll help them on that?
2	A Correct.
3	Q And if it's a corporate accounts-based
4	prospect, you'll help them with that, too?
5	A Correct.
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11	Q Are you involved in selling anything other
12	than Microsoft Business Solution products to these
13	enterprise clients?
14	A No.
15	As a clarification --
16	Q Sure.
17	A -- when you say selling, I'm in -- I'd just
18	like to clarify that that means assisting -- in our
19	methodology, helping the partner sell to that account.
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19	Q And what's your involvement at Deloitte?
20	A I participated in an executive briefing with
21	their global CIO who has a number of our Navision
22	product installations in Europe for some of their very
23	small firms that are doing some back office accounting
24	work.
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12	Q Do you have any understanding concerning
13	whether there's any sort of relationship between
14	Deloitte and Microsoft for implementation of Microsoft
15	Business Solution products? Any sort of alliance or
16	anything like that?
17	A Can we clarify that; for the United States?
18	Q Yes.
19	A I'm not aware of any on Deloitte or on
20	Accenture.
21	Q How about Kapp, Gemini, Ernst & Young?
22	A We have begun working with Sogetti, which I
23	believe is part of CGEY. My understanding is they're
24	part of CGEY.
25	Q And how about Bearing Point?

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1	A I'm not aware of the details of that
2	relationship.
3	Q Do you have an understanding one way or the
4	other concerning whether there is a relationship
5	between Microsoft and Bearing Point concerning
6	Microsoft Business Solution products?
7	A My awareness is that we're pursuing a more
8	aggressive relationship with Bearing Point, but I
9	don't know the details of the relationship at this
10	point.
11	Q Do you know who is in charge of managing
12	that relationship?
13	A I believe it's being pursued by Carla
14	Heimbigner.
15	Q And who is she?
16	A She works in our partner recruiting area out
17	of Redmond.
18	Q Do you have interactions with Ms.
19	Heimbigner?
20	A On occasion, yes.
21	Q Have you learned anything from her about the
22	relationship between Microsoft and Bearing Point for
23	Microsoft Business Solution products?
24	A While it has come up in conversation, I'm
25	not aware of the details behind the relationship.

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1	Q What have you learned in conversation?
2	A That she was actively pursuing Bearing Point
3	to establish a practice around Microsoft Business
4	Solutions.
5	Q Did she say -- did you have an understanding
6	of why?
7	A Microsoft Business Solution is always
8	looking for partners that have very high reputations
9	in the market, that have familiarity with company
10	business needs, and are able to interpret those
11	business needs into business solutions through
12	application software.
13	Q Is it your understanding that Ms. Heimbigner
14	has met with Bearing Point about this relationship?
15	A Yes.
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4	Q And on a day-to-day basis, can you describe,
5	if you can generalize, you know, how often you are
6	actually meeting with clients or potential clients?
7	A On average, I probably talk to two to three
8	clients per week either via phone, conference call, or
9	face-to-face with a client. Probably meet with two to
10	three partners per week to help them review their
11	pipeline and their strategy around particular sales
12	efforts in the CAS space, and the rest education,
13	training.
14	Q And the -- your virtual team, are they -- do
15	they report up to you in some fashion?
16	A In a dotted-line basis, correct.
17	Q And do you receive reports from them about
18	whether they've met with potential clients?
19	A Yes.
20	Q And is it your understanding -- let me back
21	up for a second. This virtual team, are they
22	organized in any sort of vertical fashion or
23	geographical fashion? Why don't you tell me how
24	they're organized.
25	A Geographic fashion.

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1	Q Geographic. And are there various regions
2	throughout the country?
3	A Microsoft is organized by district, and
4	there are representatives in most, if not all,
5	districts that focus on MBS as a solution specialty
6	area.
7	Q And when you talk about MBS as a solution
8	specialty area, what do you mean?
9	A The role that the Microsoft Business
10	Solution people play are what's called solution sales
11	specialists. Within each district, there are solution
12	sales specialists that focus on Office, Windows, SQL
13	Server, and Microsoft Business Solutions has its own
14	solution specialists where an account manager will get
15	involved in an account and has ultimate ownership. A
16	solution specialist will help out with specific
17	opportunities around certain product lines.
18	Q And is there any sort of vertical focus of
19	the -- to the Microsoft sales force?
20	A No -- excuse me. Let me clarify that.
21	Microsoft Business Solutions sales force?
22	Q Yes.
23	A There is not.
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12	Q Sure. I'm trying to figure out if -- well,
13	let's back up for one second. It's your understanding
14	that there are, there are salespeople who focus on
15	selling what you call classic Microsoft products,
16	Windows, SQL Server, things like that. There are
17	salespeople who focus on particular industry
18	verticals?
19	A (Nods head.)
20	Q Is that correct?
21	A That's correct.
22	Q And what I'm trying to figure out is, do you
23	have an understanding one way or the other concerning
24	whether those salespeople also participate in efforts
25	to sell Microsoft Business Solutions products?

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1	A If there's an opportunity identified by the
2	Microsoft classic vertical sales representative, they
3	have the opportunity to call in the geographic sales
4	specialist for Microsoft Business Solution where that
5	account resides for assistance if they need help,
6	providing a Microsoft Business Solutions partner, or
7	helping them evaluate whether there's an opportunity
8	where Microsoft Business Solution has the opportunity
9	to fit.
10	Q Are these, these people who are, who are --
11	who focus on a particular industry vertical, are they
12	trained in any way concerning the Microsoft Business
13	Solutions product offerings?
14	A At a very high level, a 101-type of context
15	regarding Microsoft Business Solutions.
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22	Q How many people are there who focus on
23	assisting partners in selling Microsoft Business
24	Solution software products?
25	A In the enterprise sector?

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1	Q Yes.
2	A Seventeen.
3	Q And how many in the SMS&P sector?
4	A Don't know the exact head count.
5	Q Can you give me an estimate?
6	A The only estimate I have is last year, or
7	the year before the reorganization, there were
8	approximately 190 people that focused on assisting
9	partners in selling Microsoft Business Solutions in
10	the organization that I was responsible for.
11	Q This was prior to the July --
12	A Prior to the July.
13	Q -- reorganization?
14	A Yes.
15	Q And these 17 people report up to you?
16	A Dotted line.
17	Q And what about enterprise salespeople who
18	focus on the classic Microsoft products, are they
19	trained in the Microsoft Business Solutions products
20	in any way?
21	A Some better than others that have taken the
22	initiative. Most are at a level of a 101-type of
23	Microsoft Business Solution level.
24	Q When you say a 101-type of level, what do
25	you mean?

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1	A Core introduction to the products, where
2	they were acquired from, how they fit from a strategic
3	point of view, high level strategy documents, high
4	level functionality documents.
5	Q And have you ever received an inquiry from
6	any of the classic enterprise Microsoft sales force
7	concerning a potential opportunity and they've asked
8	you to come in as more of a specialist in the
9	Microsoft Business Solutions products?
10	A Yes, I've received requests like that.
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14	Q Now have you heard the term mid market?
15	A Yes.
16	Q What's your understanding of the meaning of
17	that term?
18	A It varies from, from everyone you talk to.
19	There is -- my understanding of mid market is there's
20	a large group of the center of the pyramid that makes
21	up most of the corporations in America that everyone
22	is going about discussing in terms of the underserved
23	requirements and the ability for those companies to
24	grow and start to now take upon themselves some of the
25	benefits that only the larger corporations were able

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1	to take on with some of these advanced techniques and
2	functionality that were provided only by the large
3	corporations in the past.
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2	Q Do you consider the corporate accounts space
3	to be mid market space at all?
4	A Do I personally?
5	Q Yes.
6	A The corporate account space has many of the
7	characteristics that are prevalent in many of the mid
8	market accounts, yes.
9	Q And were you working with any mid market
10	customers prior to July of last year?
11	A Yes.
12	Q And based upon that experience, do you have
13	a sense concerning whether mid market customers are
14	attempting to obtain the kinds of functionality that
15	you say only used to be available to the very largest
16	companies?
17	A I, I say -- I said there are some
18	functionality that the mid market companies are very
19	interested in adopting that were only available to
20	large companies before, and the answer to that is yes.
21	Q And what kind of functionality is that?
22	A Connections through the Internet to be able,
23	be able to bid and reply to bids from very large
24	contract and suppliers, the ability to communicate
25	electronically with your suppliers, the ability

00058
1	through EDI or other techniques, the ability to do
2	electronic banking and fund management -- funds of
3	management for being able to deal on a more
4	international basis. Those kinds of things are good
5	examples of functions that were only available for
6	large corporations that smaller companies now can take
7	advantage of.
8	Q And how about integrating the supply chain
9	with the financial aspects of the company, is that
10	something that the mid market companies are more and
11	more interested in?
12	A I think so, yes. I think that most of those
13	companies are single location, single organization,
14	and see some efficiencies in, in a software package
15	that allows for visibility across the entire chain of
16	order to cash.
17	Q And as the world economy becomes more
18	global, are companies in the mid market increasingly
19	interested in multilanguage, multicurrency
20	capabilities in their software?
21	A I -- I don't know if I'm qualified to answer
22	that. It would be my opinion that they would be, yes.
23	Q Have you seen that in your experience at
24	Microsoft Business Solutions?
25	A I think there is a greater -- what I've seen

00059
1	in my experience in Microsoft Business Solution is a
2	greater awareness from the mid marketplace that there
3	is a global economy out there that has potential for
4	their products and services, yes.
5	Q And in your experience, are there mid market
6	clients of Microsoft Business Solutions interested in
7	software that provides multilanguage, multicurrency
8	capabilities?
9	A More of the multicurrency situation, the
10	ability to transact with companies located in other
11	parts of the world, but rarely did we see
12	opportunities that necessitated a multilanguage-type
13	of functionality.
14	Q How about for instance Chanel, is that a mid
15	market company in your view?
16	A No, I think, I think it is classified as a
17	corporate account, a CAS-based account, and I think it
18	has the name recognition and the brand recognition
19	that entitles it to certain special treatments in
20	terms of customer sat. and some other things.
21	Q It's the perfume and the high-end clothing
22	manufacturer, that's the company we're talking about?
23	A Correct.
24	Q Were they interested in the multilanguage,
25	multicurrency capabilities of Axapta?

00060
1	A Yes.
2	Q Is that one of the reasons you understood
3	they purchased Axapta?
4	A Yes.
5	Q And Microsoft is selling Axapta globally,
6	correct?
7	A Yes.
8	Q How about Bound Global, they've implemented
9	Axapta here in the New York/New Jersey area of the
10	United States, correct?
11	A Uh-huh.
12	Q But it's my understanding from your
13	testimony that that implementation of Axapta is
14	supporting five, six, seven other countries; is that
15	correct?
16	A That's correct.
17	Q Were they interested to your knowledge in
18	the multilanguage/multicurrency capabilities of
19	Axapta?
20	A Yes.
21
22
23
24
25

00063
1
2
3
4
5	Q Was Microsoft Business Solutions successful
6	in selling through partners a product to Indianapolis
7	Motor Speedway?
8	A Yes.
9	Q Which product?
10	A Great Plains.
11	Q And what about sports teams? Philadelphia
12	Eagles, was the Microsoft successful in selling a
13	product to them through partners?
14	A Yes.
15	Q Which product?
16	A I'm not sure.
17	Q Any other sports teams that you're aware of
18	in which, which have bought Microsoft Business
19	Solution software products?
20	A Most of the NFL teams today use Microsoft
21	Business Solutions; Great Plains, Solomon, Division.
22
23
24
25

00064
1
2
3
4
5	Q What other -- are there any other high-
6	profile, larger opportunities that Mr. Malme was
7	responsible for other than the sports teams and the
8	Indianapolis Motor Speedway?
9	A His team was responsible for Esselte, his
10	team was responsible for the initial conversations at
11	Ingersoll-Rand, his team was responsible for the
12	Division work we did at a division of Bound, Bound
13	Global, a small division of Bound, his team was
14	responsible for engagements at the Phoenix Suns, some
15	of the other organizations out there.
16
17
18
19
20
21
22
23
24
25

00065
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16	Q Mr. Pollie, we've had marked as Exhibit 1449
17	a, I think a far more legible copy of the document
18	bearing Bates Nos. 4144 through 4153. The power
19	points are now normal sized. Do you see that?
20	A Yes.
21	Q Exhibit 1449, is that a document you
22	received on or about April 22, 2003?
23	A Yes.
24	Q And you received it from Mr. Malme?
25	A Yes.

00066
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25	Q What was the discussion within Microsoft

00067
1	Business Solutions concerning corporate sales
2	acceleration in or about April 2003?
3	A We were discussing the addition of head
4	count that might result in increased amounts of
5	revenue and positioning our products in the
6	divisional/departmental solutions in the enterprise
7	market.
8	Q When you're talking about positioning the
9	products in the divisional -- divisional solutions in
10	the enterprise market, what do you mean?
11	A The focus of our initiatives in the
12	enterprise market are targeted at very targeted spoke
13	type opportunities within a major corporation, much
14	like the situation at Bound or Chanel or others we've
15	been discussing. We are not serving as the core
16	enterprise system, but much of a remote location or a
17	departmental or a divisional solution where the needs
18	are very much akin to a very small mid market account
19	as an example.
20	Q Now, I understand that you've been involved
21	with a company called ?	REDACTED
22	A Yes.
23	Q That's an eight or $9 billion advertising
24	holding company?
25	A Yes.

00068
1	Q And I understand you've had discussions
2	concerning an Axapta implementation at one of their
3	subsidiaries called ?	REDACTED
4	A Yes.
5	Q And was the discussion concerning that	REDACTED
6	Axapta would be the business application software that
7	would be run at ?	REDACTED
8	A No.
9	Q What was it?
10	A We are presenting a solution in the
11	Microsoft Business Solutions offering by the name of
12	Solomon. Solomon is a product that's designed to
13	account for professional service needs. Many
14	organizations in the construction professional service
15	time and material billing environment use our Solomon
16	product.
17	Q Was -- have there been any discussions with
18	concerning the use of Axapta?	REDACTED
19	A In the past there have been some evaluations
20	of all the Microsoft Business Solution products,
21	including Axapta and including the Great Plains
22	product as well.
23	Q Is either Axapta or Great Plains, has either
24	one of those been implemented at any company?	REDACTED
25	A has implemented Great Plains at a	REDACTED

00069
1	few of their locations.
2	Q Do you know which ones?
3	A The corporate headquarters is using Great
4	Plains and one of their small divisions called DOS is
5	also in the midst of implementing Great Plains as
6	well.
7	Q What's the corporate headquarters of	REDACTED
8	using Great Plains for?
9	A Ten, fifteen users, just integrating core
10	financials just at a high level. As you mentioned,
11	they're a holding company so they have very limited
12	production or any other kind of capabilities. So
13	they're using it as a financial reporting system at
14	the corporate level to consolidate some data.
15
16
17
18
19
20
21
22
23
24
25	Q So Great Plains is the corporate accounting

00070
1	software that's in use at corporate	REDACTED
2	headquarters?
3	A It's in use at corporate	REDACTED
4	headquarters. I'm not aware of any others.
5	Q And where is corporate headquarters?	REDACTED
6	A In New York.
7	Q New York. Have you met with the Chief
8	Financial Officer of ?	REDACTED
9	A Yes.
10	Q Have you discussed the Great Plains product
11	with him?
12	A Yes.
13	Q Is he happy with it?
14	A Yes.
15	Just from a clarification point of view,
16	again, it's very small Great Plains implementation of
17	15, 20 users that is being supported through a
18	partner, and the partner has implemented that system
19	for a number of years in a very contained environment.
20	Q And who's the partner?
21	A A company by the name of Altara.
22	Q And Altara -- what is Altara?
23	A It's a Microsoft Business Solutions partner
24	based out of New Jersey, one of our leading partners
25	that is in charge of reselling the Microsoft Business

00071
1	Solution products and implementing those products to
2	customers all around the northeast. She has also
3	offices in Denver and a few other places as well.
4	Q And when's the last time you had a
5	discussion with the Chief Financial Officer of	REDACTED
6	concerning Great Plains software product?
7	A Within the past two months.
8	Q And what was your discussion about?
9	A The discussion was about Microsoft Business
10	Solutions playing a greater role in in terms	REDACTED
11	of a standard way for to roll out accounting,	REDACTED
12	core accounting software. And the way that they're
13	organized, they have 1400 independent agencies.
14	They're very small agencies with one to two to three
15	users. is very interested in using the	REDACTED
16	product, or evaluating the use of the product in those
17	agency and company roles where Microsoft Business
18	Solution could become the standard for across	REDACTED
19	the corporation.
20	Q And that would be across all of	REDACTED
21	subsidiaries?
22	A Potentially.
23	Q Has any decision been made to your
24	knowledge?
25	A No decision, no final decision has been

00072
1	made, no.
2	Q But there have been discussions with the CFO
3	of about having a Microsoft Business Solution	REDACTED
4	software product as the standard across all the
5	companies?	REDACTED
6	A Yes.
7	Q And what's your understanding of the size of
8	, in terms of revenue or employees?	REDACTED
9	A My internal briefing is much more
10	surrounding the total number of users that would be
11	involved in implementing a successful site at	REDACTED
12	which currently targets approximately two to 300 total
13	users of our product, our Solomon product for core
14	financial accounting systems as a spoke in the	REDACTED
15	wheel.
16
17
18
19
20
21
22
23
24
25

00074
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24	Q Now you talked about the use of Great Plains
25	in a distributed fashion. What do you mean by that?

00075
1	A The way we have consistently positioned
2	Microsoft Business Solutions in the market is as a, a
3	business solution for independent business units of
4	major corporations, very small divisions or one-off
5	business units that have a requirement for an
6	accounting back office application.
7	Q And can you explain what -- I'm not sure I
8	understood your answer. When you're talking about a
9	distribute implementation, are you talking about
10	various spoke implementations throughout a larger
11	enterprise?
12	A Many organizations today have a variety of
13	small business units that have a variety of systems in
14	place. It's not uncommon to talk to a large
15	corporation where they have 14 or 15 different general
16	ledgers implemented along with their core ERP system
17	which is provided by an Oracle, an SAP or a
18	PeopleSoft. In many cases our target in talking to
19	that account is finding a way for Microsoft Business
20	Solutions to be positioned as a solution for those
21	independent divisions or locations to provide back
22	office accounting functionality.
23
24
25

00076
1
2
3
4	Q Going back to Exhibit 1449, Mr. Pollie,
5	there's some bullet points under the power point. Do
6	you see that?
7	A Which page are you on?
8	Q Excuse me, 4146.
9	A Yes.
10	Q Same page we were on earlier.
11	The first bullet point says position MBS
12	solutions in GSM accounts when these solutions meet
13	customer's needs. Do you see that?
14	A Uh-huh.
15	Q Do you have an understanding of what that
16	means, sir?
17	A My understanding is that when a large
18	corporation is looking for a mid market solution to
19	service some of their remote locations and small
20	division subsidiary location needs, that we would
21	entertain the discussion with those GSM accounts in
22	order to provide our product demonstrations through
23	partners to have them evaluate it.
24
25

00079
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24	Q Did the Microsoft U.S. corporate accounts
25	space and GSM account managers have a quota for

00080
1	Microsoft Business Solution products in fiscal year
2	'04?
3	A No.
4	Q Do they currently?
5	A They were assigned a quota at a MS U.S. CAS
6	level, which was based on a team base quota for the
7	entire geography for CAS. No GSM quota was assigned.
8	Q What was the CAS quota if you recall?
9	A It -- it differed based on various
10	geographies and the amount of corporate accounts that
11	were present in, and as well as the existing accounts
12	that were generating some maintenance revenues and
13	some other factors.
14	Q What is a sales quota?
15	A It's an objective by which a salesperson is
16	measured by.
17	Q Is it fair to say that the Microsoft U.S.
18	CAS salespeople needed to sell a certain amount of
19	Microsoft Business Solution products in order to meet
20	their quota?
21	A The Microsoft CAS salespeople worked closely
22	with the SSP and the partners within the district that
23	they identified to generate opportunities and revenues
24	in MBS within the geographic district. It was a
25	team-based quota such that the total district was

00081
1	responsible for generating a specific team-based
2	number, of which the entire team participated in
3	evangelizing MBS to customers and to partners and to
4	just in general seminar participations and such that
5	Microsoft Business Solutions had these divisional-type
6	of spoke solutions for companies that were evaluating
7	that kind of opportunity.
8	Q So is it fair to say that each of the 17
9	geographies had a quota for Microsoft Business
10	Solution software products?
11	A Yes.
12	Q And the quota would vary depending upon how
13	many CAS accounts were within the particular region?
14	A Correct.
15	Q And the salespeople were measured by the
16	sales of Microsoft Business Solution products to the
17	CAS accounts within the region?
18	A CAS accounts and where appropriate, we would
19	provide coverage to certain industry accounts and GSM
20	accounts. As shareholders of the company, we wanted
21	to make sure those accounts, if there was a fit that
22	arose, that we were servicing those accounts from a
23	satisfaction point of view. But the quotas, the
24	focus, the marketing was all derived and dedicated at
25	the CAS space accounts.

00082
1
2
3
4
5
6	Q Sure. I'm trying to figure out, I believe
7	you said that if there was an appropriate fit within
8	the GSM, within the GSM space, if some vertical
9	specialist brought some sort of GSM opportunity that
10	people believed was appropriate, that that would be
11	pursued by the CAS salespeople?
12	A No. Let me clarify that. If as an example
13	Deloitte and Touche came in and said, we have a number
14	of Navision locations. We want to talk to Microsoft
15	about setting up an executive briefing. The Microsoft
16	Business Solution representative in the geography
17	where Deloitte and Touche resides would assist the
18	Microsoft GSM rep in setting up the appropriate
19	resources and presentations and partners that could
20	assist Deloitte in finding out the information they
21	were looking for.
22
23
24
25

00085
1
2
3
4
5
6
7
8
9
10	Q And Axapta, what's the target market of
11	Axapta?
12	A Axapta, as I mentioned earlier, is a product
13	that is targeted at manufacturing-based companies,
14	companies with manufacturing functionality, and some
15	of the international location from a spoke perspective
16	where a company needs international divisions or
17	locations that could be fulfilled by Axapta.
18	Q Is Axapta targeted at companies with up to a
19	billion dollars a year in annual revenue?
20	A That's possible, depending on the complexity
21	of the organization or the number of users or
22	employees, or it really depends on the complexity.
23	Q Is it targeted at corporate accounts-based
24	customers?
25	A If, if the requirements and the partners

00086
1	believe Axapta would be a strong fit, yes.
2	Q And you mentioned earlier a company called
3	Esselte?
4	A Yes.
5	Q Are you familiar with that company?
6	A Yes, a little bit.
7	Q And Axapta is being implemented in that
8	company, right?
9	A Yes.
10	Q And when did that implementation start?
11	A The licensing of the Axapta product to
12	Esselte took place in June of 2003.
13	Q And is Axapta currently been implemented at
14	Esselte?
15	A To my knowledge it is, yes.
16	Q And is it being implemented across the
17	world?
18	A To my knowledge there are international
19	locations. I don't know about around the world.
20	Q What international locations are you
21	familiar with at Esselte?
22	A I'm not particularly privy to any particular
23	ones.
24	Q Is Axapta being implemented in the United
25	States for Esselte?

00087
1	A I don't recall.
2	Q Do you know -- do you know how many
3	employees Esselte has?
4	A I know that Esselte is looking at rolling
5	out approximately 15 different locations, or we
6	licensed the product to accommodate for up to 15
7	locations of use of the Axapta product which could
8	accommodate as many 3,000 users. It also -- you know,
9	all across those 15 locations. It's really up to
10	Esselte how they're deploying it. I'm not privy to
11	how -- what the latest status is.
12	Q Can Axapta support up to over 3,000 users?
13	A Up to 15 locations I believe that there's a
14	good possibility that it can support those users.
15	Q You sold it Esselte based on the fact that
16	it could support that many users over that many
17	locations, correct?
18	A Correct.
19	Q And --
20	A But this is a situation where Esselte is
21	going to be, just as clarification point, we are not
22	looking at one 3,000-user system. We're looking at 15
23	systems with maybe 200 users at a maximum stretched
24	out over those 15 locations.
25

00088
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19	Q And it's your understanding Axapta is being
20	implemented at 15 different locations across Esselte?
21	A It's my understanding that the license
22	accommodated for Esselte to have the opportunity to
23	implement Axapta to up to 15 locations for 3,000
24	users.
25	Q And how many --

00089
1	A But I don't know how they're going to
2	actually deploy the product, or if they are currently
3	implementing all 15, or one at a time. I'm not privy
4	to that information.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

00091
1
2
3
4
5	Q Do you have a recollection or an
6	understanding of the amount of consulting revenue that
7	Microsoft expects to receive or has received from
8	Esselte?
9	A In the initial review, we were looking at
10	somewhere in excess of $ in consulting	REDACTED
11	revenue associated with billable services to Esselte,
12	but I have no information on what is actually billed
13	to the client or what is the current, current status
14	of that.
15	Q But the projections were for more than $	REDACTED
16	in consulting revenue?	REDACTED
17	A Associated with the project, that's correct.
18	Q Do you know whether Microsoft gave Esselte
19	any discount off any the list price for the Axapta
20	product?
21	A I believe that based on the commitments of
22	our larger clients, there are discount processes that
23	were set up to accommodate Esselte, which I believe
24	they did qualify for, yes.
25

00092
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18	Q I'd like you to take a look at what's
19	previously been marked as Exhibit 1420.
20	A (Reviewing.)
21	I'm familiar with this.
22	Q You've seen Exhibit 1420 before?
23	A Yes.
24	Q What is Exhibit 1420, sir?
25	A This Exhibit originally started out as a, as

00093
1	a partner request from -- for a press release. The
2	partner was asking us to provide just the approval to
3	allow them to tout what, at the time and still is, the
4	largest single Microsoft Business Solution sales
5	opportunity, and then we took this and posted it
6	actually on our web.
7	Q So Exhibit 1420 is posted on the Microsoft
8	web site?
9	A From what I can see here, it is the
10	Microsoft Business Solutions web site that's listed
11	here.
12	Q And Exhibit 1420 concerns the sale of
13	Microsoft Business Solutions Axapta to Esselte?
14	A Yes.
15	Q And it's titled Billion Dollar Manufacturer
16	To Deploy Microsoft Business Solution System Across
17	Four Continents. Do you see that?
18	A Yes.
19	Q And it refers to support -- Microsoft Axapta
20	supporting 3,000 concurrent users in their daily work.
21	Do you see that?
22	A Yes, I see that.
23	Q Is it your understanding that Microsoft
24	Axapta will support 3,000 concurrent users in their
25	daily work at Esselte?

00094
1	A It will not support 3,000 concurrent users
2	on a single implementation or system. The
3	clarification on the 3,000 concurrent users as we
4	discussed is that we licensed the product to run 3,000
5	users over 15 installation -- over 15 implementation
6	sites with the idea that we would not exceed two to
7	300 users at any particular one instance.
8	Q And do you have an understanding concerning
9	whether the statement that Esselte's a billion-dollar
10	manufacturer is accurate?
11	A I believe that's accurate.
12
13
14
15
16
17
18	Q And you are, you are quoted in Exhibit 1420,
19	correct?
20	A My name appears here as, under this quote,
21	that's correct. But I -- a partner wrote this on my
22	behalf. We reviewed it, sent it to our internal
23	public relations folks for draft. I did change the --
24	I wrote the first sentence which states, we're excited
25	to work with our partners to deliver a comprehensive

00095
1	solution that truly meets the needs of Esselte's
2	business. The second part of that question was not
3	something I wrote, but wound up sending through the
4	process for approval and it was published.
5	Q So you reviewed what the partner provided to
6	you?
7	A That's correct.
8	Q And you agreed with it and approved it?
9	A I don't agree with it in the way it's worded
10	here. I did pass it on for approval, but I think this
11	is an example of perhaps a little overzealous reaction
12	to the Esselte sale. And also, when the deal took
13	place in June and when this was published, the
14	organization had changed dramatically and people were
15	in completely different roles in September of 2003.
16	So that this one sort of got through the process
17	without maybe going through some of the review it
18	should have gone through. But there was a change in
19	our public relations department, there was a change in
20	my job, there was a change in the partner, you know,
21	sort of publishing this release for -- and then our
22	using it internally.
23	Q But you reviewed it and --
24	A I do recall reviewing this statement and
25	passing it on to public relations for their drafting.

00096
1	Q And the statement you're referring to is
2	this is a great example of how Microsoft Axapta can
3	scale to meet even the most complex requirements of
4	billion-dollar manufacturing businesses operating in
5	multiple countries around the world?
6	A I don't believe that is a -- that could be
7	interpreted as a misleading example of --
8	Q Have you asked that the Microsoft web site
9	be corrected to -- so that this, this customer example
10	is changed?
11	A No, I've not.
12	Q Are there any plans to change it?
13	A Yes.
14	Q When is it going to be changed?
15	A As soon as I can.
16	Q What's it going to say?
17	A I think this is a great example of how
18	Microsoft Axapta can meet complex requirements. I
19	mean this, this particular sentence gives the
20	impression that Microsoft Business Solutions is, is
21	meeting a very complex sort of large billion-dollar
22	manufacturing corporation, when in effect what we're
23	actually doing is licensing of a product to be used in
24	15 remote locations --
25	Q But that's --

00097
1	A -- 200 users, and using very valuable
2	partners to deliver on some of this complex
3	functionality.
4	Q So the functionality is complex in Axapta,
5	right?
6	A The complex -- the functionality that's
7	being delivered to, to the Esselte account could not
8	be delivered solely through Axapta.
9	Q Because partners are adding value from --
10	A Partners are adding specific products to the
11	customer, as well as third-party partners have -- it's
12	referenced here that Microsoft Axapta functionality
13	with lean manufacturing module offered by eBECS.
14	EBECS is a third party ISV product that the company is
15	going to use for a majority of their manufacturing. A
16	majority of their manufacturing in Esselte will not
17	even be done through Axapta, nor could it be done
18	through Axapta. But --
19	Q So there was a gap, and the partners are
20	filling the gap, right?
21	A There is a gap, and the customer has decided
22	to allow a -- to evaluate and allow a third-party
23	product to do manufacturing functionality that is not
24	currently present or planned to be present in the
25	Axapta product.

00098
1	Q And the Deloittes and the Bearing Points of
2	the would do gap analyses concerning SAP products,
3	right?
4	A I would assume so, sure.
5	Q And they have to figure out ways to get from
6	75 or 80 percent fulfilling the client's functional
7	needs to as much as the client wants, right?
8	A If they're contracted to do that. But in
9	this particular case, we have a client that's in the,
10	in the marketplace. Most customers would -- are
11	looking for -- very complex customers would not settle
12	for an Axapta product that didn't have all of the
13	functionality delivered in its entirety. In this
14	particular case, because we're rolling it out over 15
15	or 20 locations at a very small user level, the client
16	were willing and familiar to use a third-party product
17	to conduct a majority of its manufacturing
18	functionality.
19	Q So Esselte decided that because of its
20	business structure, it could meet its needs through
21	Axapta, right?
22	A Esselte determined that while Axapta -- that
23	Axapta would be a fit for the divisional locations for
24	the planned -- or the potential 15 rollout sites only
25	if it could supplement that product through a third-

00099
1	party decision that it determined it could make based
2	on its organizational structure.
3
4
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6
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12
13
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16
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20
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25

00100
1
2
3
4
5	Q If I can get you to turn back for a moment
6	to what's been marked as Exhibit 1449, and still on
7	Page 4151, the page we were looking at before lunch.
8	And the portion of that page which is the box entitled
9	MBS Positioning.
10	A Yes.
11	Q We talked about corporate, we spent a little
12	bit of time talking about the corporation portion of
13	that graph. And above is major, and above that is
14	global and strategic. Do you see that?
15	A Yes.
16	Q And then the bubble to the right of that
17	says Microsoft value delivered by hub and spoke
18	integrated and distributed solutions. Do you see
19	that?
20	A Yes.
21	Q Do you have an understanding of what an
22	integrated solution that Microsoft Business Solutions
23	might provide to the global, strategic, major space
24	might be?
25	A I don't have specific definitions involved

00101
1	with what an integrated solution is.
2	Q How about a distributed solution?
3	A Don't know what Mr. Malme was driving here
4	as well.
5	Q Is a distributed solution a situation like
6	Esselte in which Esselte is implementing, or the
7	client is implementing various versions of Axapta
8	around the world?
9	A It's my understanding Esselte is
10	implementing various implementations of Axapta in
11	individual locations around the world.
12	Q Okay. And is that a distributed solution?
13	A I don't know if it qualifies for what you
14	describe as distributed.
15	Q Do you have an understanding based upon your
16	years at SAP and at Microsoft concerning what a
17	distributed solution business application solution is?
18	A My understanding of a centralized versus a
19	distributed environment allow a customer to look at a
20	central location where all processing is achieved for
21	the total corporation versus one in which they may
22	install one or multiple different vendor solutions at
23	other locations around the world; the second one being
24	distributing the systems to other locations.
25	Q And based on your experience, do some

00102
1	corporations choose a distributed model as opposed to
2	a centralized model?
3	A Some corporations are organized in a fashion
4	that would accommodate a distributed solution,
5	although I've never met a client that organizes its
6	company or its software -- or organizes its company
7	around a software or a business solution.
8	Q But they -- the company may be set up in a
9	way that that can be addressed by a distributed
10	solution?
11	A I think the company is set up prior to any,
12	any solution being --
13	Q Sure.
14	A -- being brought to, to evaluate.
15	Q Absolutely. Absolutely. What I'm trying to
16	figure out is, the company -- you're talking about
17	companies which are organized in a certain way, and
18	those kind of companies, I think you your testimony
19	is, that a distributed solution might be appropriate
20	for those companies?
21	A A company which is organized in such a way
22	where they have small and medium size divisions,
23	organizations, independent business units that they
24	own and operate or are a controlling interest of in
25	many cases can use our products in that environment.

00104
1
2
3	A
4	Q What about a hub and spoke solution, what is
5	that?
6	A A hub and spoke solution is really the, the
7	focus that we've been describing where Microsoft
8	Business Solutions is positioned in all of these
9	sectors, corporate, major, strategic, global, as being
10	a spoke in an operation that traditionally would
11	communicate with a large Tier 1-type of solution at a
12	main headquarters or major manufacturing facility
13	where it's either not cost-effective or in certain
14	situations, not technically feasible to implement a
15	large complex solution in an organization which would
16	be overkill in a very small division or department.
17	So in looking at these spokes, traditionally
18	they're being maintained today by many different
19	general ledgers and financial accounting system, many
20	of those vendors being out of business for many years,
21	off support, and Microsoft Business Solution is really
22	looking to, to offer a standard operating solution for
23	those small spokes that are out surrounding the major
24	hub location for that company.
25	Q And in the corporate account space, can

00105
1	Microsoft Business Solutions Axapta, for instance,
2	serve as the hub ERP product?
3	A In the corporate accounts space, it is --
4	depends on the complexity of the account, the number
5	of users, the size of the business, the business
6	processes that they're looking to implement.
7	Q How many --
8	A Traditionally we don't target the hub
9	location as our business.
10	Q How many users can Axapta accommodate?
11	A I don't know the specifics on the
12	benchmarking on absolute, and it would depend again on
13	the particular business process that was being
14	implemented at the customer that would impact the
15	benchmarking of what it could and could not support.
16	Q Are you aware that Axapta has been
17	benchmarked at 3900 users?
18	A I've read materials based on one particular
19	business process that was, was benchmarked, although I
20	don't believe the statistics based in what I've seen
21	in real-life situations for some of the customers.
22	Q Are you aware of any Axapta users who have
23	more than, more than 1,000 concurrent users at the
24	moment?
25	A No, I'm not.

00106
1
2
3
4
5
6
7	Q Going back to Exhibit 1420, the piece from
8	the Microsoft web site entitled Billion Dollar
9	Manufacturer To Deploy Microsoft Business Solution
10	System Across Four Continents, and going back to your
11	quote at the bottom of the first page of Exhibit 1420.
12	A Yes.
13	Q Can Axapta scale to meet the most complex
14	requirements of billion-dollar manufacturing
15	companies?
16	A I don't believe that statement is accurate,
17	and I don't think that is neither the public, nor the
18	internal intent of our target markets or where we're
19	going after marketing for Axapta or supporting Axapta.
20	Q Well, I understand it may not be your target
21	market, but Axapta is -- was purchased by Esselte to
22	operate across four continents, right?
23	A Esselte licensed the product to operate in
24	up to 15 locations for 3,000 users. It was -- the
25	complexity of large manufacturing accounts extends

00107
1	beyond numbers of users or business process. We are
2	not really geared from a product functionality point
3	of view to handle tremendously complex manufacturing.
4	As I stated earlier for the record, this would not be
5	an account we could offer satisfaction to without
6	them, Esselte, making a decision consciously to do
7	most of their manufacturing through the third-party
8	product eBECS. So Axapta is not scalable to meet the
9	most complex business requirements.
10	Q But it is in conjunction with the eBECS
11	product, right?
12	A For the Esselte situation they believe that
13	it would provide the functionality that they're
14	willing to accept and implement to meet their
15	particular needs, which they believe are complex, the
16	partner believes are complex, but in general, I --
17	I -- again to answer your question, the Axapta product
18	as it stands is not geared to meet complex business
19	requirements of complex manufacturing.
20	Q There are a variety of independent software
21	vendors who sell products that are complimentary with
22	Axapta, right? Like the eBECS solution?
23	A Yes, there's a variety of ISVs that work
24	with our products, with Oracle, with SAP, with
25	PeopleSoft, correct.

00108
1	Q And the eBECS product, that works with
2	Axapta?
3	A The eBECS product is a niche manufacturing
4	for lean software that works in conjunction with our
5	Axapta product, yes.
6
7
8
9
10
11
12
13
14
15
16
17
18
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20
21
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25

00112
1
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8
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14
15
16
17
18
19
20
21
22	Q Now, can you tell me, what is Convergence?
23	A Convergence is Microsoft Business
24	Solutions's annual user conference held for the past
25	few years in Orlando, Florida. It's a session by

00113
1	which users can exchange ideas and set up networking
2	with each other. It's an educational session where
3	executives and leaders from Microsoft and Microsoft
4	Business Solutions present strategy, visioning,
5	individual meetings with customers to thank them for
6	business and to understand their strategy as a
7	business, see where Microsoft can help.
8	Q Now, is this a Microsoft conference or
9	Microsoft Business Solutions conference?
10	A It's traditionally been a Microsoft Business
11	Solution conference. This year there was more of a
12	presence of some of the Microsoft Technology, as well
13	as the Microsoft Business Solutions. It's targeted at
14	Microsoft Business Solution clients.
15	Q And it took place in this March in Orlando?
16	A March 2004 in Orlando.
17	Q And did you meet any corporate account space
18	or GSM customers at Convergence?
19	A Yes.
20	Q Do you recall who you -- with whom you met?
21	A I'm trying to think.
22	I met with which is a CAS	REDACTED
23	customer; I met with Bound Global, I met with Chanel,
24	I met with -- they're not a CAS customer, but
25	I think -- those are the ones I can recall offhand.	REDACTED

00118
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19	Q And you recall meeting with	REDACTED
20	Corporation at Convergence in March of this year?
21	A Yes. We had a dinner meeting where I had
22	the opportunity to interact with them and a brief
23	offline conversation for five or ten minutes with the
24	gentleman that attended.
25

00120
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18	Q Do you have an understanding that Miss
19	Tudela was attempting to sell Corporation	REDACTED
20	Axapta for use in Mexico, Australia and Honduras?
21	A There were, there were three separate
22	evaluations going on with two separate partners in
23	Honduras, Mexico and Australia, and the company asked
24	for us to get involved and tell us more about the
25	product offering because three of their divisions were

00121
1	reporting in that it was a very attractive product for
2	their independent business units. And those are the
3	three I believe Miss Tudela was really focusing on as
4	part of this visit by the client.
5	Q And is -- does Axapta have functionality to
6	support operations in Mexico, Australia and Honduras?
7	A We have partners in each of those areas
8	that, that are able -- that have the ability to
9	implement the Axapta product in those three locations,
10	that's correct.
11	Q And the -- either the Axapta product or
12	through partners has the localizations necessary for
13	Mexico, Australia and Honduras?
14	A I'm not positive how that's, how that's
15	attained.
16	Q Miss Tudela says that she's hoping to widen
17	the scope worldwide. Do you see that?
18	A Yes.
19	Q And then she says, this is the objective?
20	A Yes.
21	Q Do you have an understanding concerning
22	whether Miss Tudela wanted to sell Axapta to	REDACTED
23	Corporation on a worldwide basis?
24	A After the briefing document and
25	conversations with Miss Tudela, we discussed that

00122
1	there are many locations that have a common separation
2	that is exhibited in Honduras, Mexico and Australia
3	that would also be potential opportunities for the
4	future should we be successful in these other remote
5	locations. It was her intent to prove that through
6	successful implementations of those, that we could
7	have the opportunity to be evaluated for those other
8	locations as well.
9	Q What other locations was she referring to?
10	A I don't have specific knowledge of where,
11	where and how many there are.
12	Q Locations inside the United States?
13	A There are some locations in the United
14	States, yes.
15	Q And your understanding is	REDACTED
16	Corporation is headquartered in Alabama?
17	A Yes.
18	Q If you rum to Page 8748 of Exhibit 1450,
19	sir.
20	is a page entitled	REDACTED
21	Participant Profile, correct?
22	A Yes.
23	Q And it says current scope ERP Axapta
24	opportunity for Mexico, Australia and Honduras?
25	A Yes.

00123
1	Q That's consistent from your understanding
2	your discussions with Miss Tudela?
3	A Yes.
4	Q And also with Corporation?	REDACTED
5	A From conversations with Corporation,	REDACTED
6	that's correct, Mexico, Australia and Honduras
7	locations.
8	Q And potential scope includes ERP Axapta
9	worldwide to include U.S. subsidiaries?
10	A Potential scope is an optimistic
11	representation of what the total opportunity would be
12	on a worldwide, multilocation basis should	REDACTED
13	Corporation say, we want all of our remote locations
14	to install the Axapta product line.
15	Q And it's 2000 to 2500 users is the potential
16	scope?
17	A It appears that that's the estimate that's
18	currently in this document listed out over multiple --
19	five different divisions, and I'm unsure -- five
20	different lines of business, five different divisions,
21	and I'm not sure exactly how many locations that would
22	represent on a worldwide basis. There are five
23	separate business divisions that operate autonomously.
24	Q Inside ?	REDACTED
25	A Yes.

00124
1	Q So this is another company that's organized
2	in sort of a distributed fashion?
3	A It would be , the	REDACTED
4	ones that are listed here, ,	REDACTED
5	being the one that's probably the	REDACTED
6	most well-known.
7	Q And according to Miss Tudela's summary
8	report to you on in advance of Convergence,	REDACTED
9	has over a billion dollars in annual sales?	REDACTED
10	A That's what appears here.
11	Q And more than 15,000 employees worldwide?
12	A That's what appears here as well.
13	Q And did you have any discussions with
14	about -- Corporation about	REDACTED
15	implementing Axapta ERP on a worldwide basis?
16	A We certainly -- actually had brought	REDACTED
17	up to us that they would like to find a way to get
18	their other divisions up with a more standard sort of
19	solution offering potentially with Microsoft, but
20	they're also evaluating many different other vendors
21	as well.
22	Q What other vendors?
23	A They're looking at, I believe it's J.D.
24	Edwards, they're looking at -- other than J.D. Edwards
25	I'm not sure exactly all the different vendors they're

00125
1	looking at.
2	Q J.D. Edwards has been acquired by
3	PeopleSoft?
4	A That's right.
5	Q So they're looking at PeopleSoft; is that
6	fair?
7	A It's fair to say that, yes.
8
9
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25

00126
1
2
3
4
5
6
7
8	Q And do you have an understanding from your
9	conversations with where they were interested	REDACTED
10	in potentially implementing Axapta, Axapta in the long
11	term?
12	A We focused on Mexico, Australia and
13	Honduras.
14	Q Did you have any discussions about
15	implementing it worldwide, including the U.S.
16	subsidiaries?
17	A It was mentioned in their system overview of
18	their organization structure that there would be other
19	remote opportunities that are running older
20	Legacy-based systems that were not supported anymore.
21	Q When you say remote opportunities what do
22	you mean?
23	A Distributed divisions of one of these five
24	business units, independent operating sort of
25	remote -- more of the spoke examples we mentioned

00127
1	earlier where they have a plant or a factory in a
2	remote location that provides either strictly
3	manufacturing or strictly distribution or strictly
4	warehousing to service some of these particular
5	business units.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20	Q Now, the estimated value of the sale	REDACTED
21	to the MBS ecosystem is listed at to $	REDACTED
22	Axapta worldwide, right?
23	A That's what I read here, yes.
24
25

00132
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4
5
6
7
8
9
10
11
12
13
14
15
16
17
18	Q Did you have any discussions with	REDACTED
19	about deploying a hub and spoke system in which
20	everything was going to be Axapta?
21	A At the spoke level we have been having
22	conversations about having an Axapta spokes around a
23	centralized hub.
24	Q And did you have any discussions with
25	that -- concerning having Axapta as the	REDACTED

00133
1	centralized hub?
2	A No, we've not.
3
4
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6
7
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00134
1
2
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4
5
6
7
8
9
10
11
12
13	Q So at Indianapolis Motor Speedway they've
14	implemented Great Plains as the hub?
15	A They have one location, one operation, so --
16	there are no real spokes. So it's one implementation.
17
18
19
20
21
22
23
24	Q What did you tell Corporation about	REDACTED
25	the Axapta product when you met with them?

00135
1	A They were, they were interested in our
2	investment strategy around Axapta, where we were
3	positioning the Axapta product, how it was working in
4	the hub and spoke model, what divisions of
5	international companies had deployed Axapta
6	successfully in remote operations operating in a
7	spoke-type environment. We talked about partner
8	selection and how Microsoft supports its partners in
9	delivering those solutions, how we were working
10	closely with their two partners that they had been
11	engaged with so far.
12
13
14
15
16
17
18
19
20
21
22	Q Do you recall what sort of functionality
23	Corporation was interested in in Axapta?	REDACTED
24	A Core financial systems operating in Mexico,
25	Australia, and Honduras.

00136
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17	Q What do you recall about the business
18	processes at the various locations?
19	A Pretty straightforward single location
20	processes, core financial functionality added to some
21	basic inventory and storage-type requirements.
22	Q How was the information going to be
23	transmitted from Honduras, Australia and Mexico to
24	Alabama?
25	A I don't have specific knowledge of that.

00137
1	And just as a point of clarity, the hundred
2	users that were allocated for Honduras, Mexico and
3	Australia were split among those three locations.
4	Q So 33 users or so each?
5	A Approximately, yes, at the most.
6	And nothing has been finalized with	REDACTED
7	as a corporation, so they are not a current MBS user.
8	Q They're still a prospective client?
9	A Correct.
10	Q And what about the 2,000 to 2500 users
11	that's in the potential scope according to Miss
12	Tudela, how are those distributed, do you know?
13	A Don't know specifics.
14
15
16
17
18
19
20
21
22
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25

00142
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2
3
4
5
6
7
8
9
10
11	Q Do you have an understanding of why Mr.
12	Wagner wanted to brief you on the prospects that he
13	was entertaining at dinner at the Convergence
14	conference?
15	A Peter and I discussed using the Microsoft
16	Business Solution event at Convergence as a way by
17	which he can introduce some of his largest clients
18	within the region to what Microsoft Business Solutions
19	is, what the products are, what the strategies are,
20	chance to listen to keynote executives. In many cases
21	we bring key clients that have never heard of
22	Microsoft Business Solutions to these kind of events
23	for information purpose so they can gather data about
24	who we are and what we do. In this particular case,
25	I've not heard, met, or seen anything further about

00143
1	that I can recall since the original E-mail	REDACTED
2	came out.
3	Q Mr. Wagner's E-mail says that is a	REDACTED
4	global leading textile manufacturer with 15,000
5	employees, right?
6	A That's what it says yes.
7	Q Plus 1,000 consecutive user Axapta
8	opportunity?
9	A I believe that stands for concurrent.
10	Q So over 1,000 concurrent users Axapta
11	opportunities is what represents to Mr.	REDACTED
12	Wagner at least?
13	A I'm not specifically sure how many
14	locations, how many divisions, how many departments,
15	how many separate subsidiaries or independent business
16	units could be made up within , but he is	REDACTED
17	stating here from his estimating purposes that's the
18	kind of opportunity that he presents.
19	Q And you've never had any discussions with
20	Mr. Wagner about the opportunity?	REDACTED
21	A It has not risen to my attention as an
22	account that he has asked me to participate in
23	personally.
24
25

00145
1
2	Q How about , are you familiar	REDACTED
3	with them?
4	A I've, I've heard the name, and I've met them
5	in a previous meeting.
6	Q And where was this previous meeting?
7	A In Chicago, at a Microsoft Business Solution
8	event. It was a seminar that was held.
9	Q In January of 2003?
10	A It was at a particular event where Steve
11	Ballmer came into Chicago for meetings with some of
12	our key partners and key clients in the Chicago area.
13	If that's what you're referring to --
14	Q That is.
15	A -- that is the meeting, yes.
16	Q And Mr. Burgum was also there?
17	A Yes.
18	Q Did you meet with at that	REDACTED
19	meeting in Chicago?
20	A I met with them individually over coffee,
21	but did not have a formal meeting with	REDACTED
22	Q Did Mr. Ballmer meet with them?
23	A I don't recall.
24	Q What did you learn about	REDACTED
25	software needs at the meeting in Chicago?

00146
1	A , for the conversations I had,	REDACTED
2	was looking to find a way to simplify they business,
3	to reduce the number of business processes, to look at
4	ways by which they could standardized around an
5	easier-to-use, simpler system on some of their
6	locations and divisions around the United States and
7	around the world.
8	Q Now, now, I think, an eight or	REDACTED
9	$9 billion a year company?
10	A I think we were talking to a very -- a much
11	smaller piece of that that specialized in some of the
12	exhausts and brakes and some of the other things I
13	think that they do in aftermarket.
14	Q Is that ?	REDACTED
15	A It says that here, although I can't
16	specifically verify that.
17	Q You're referring to Exhibit 1451?
18	A Yes, I am.
19	Q And according to Exhibit 1451,	REDACTED
20	is a $1 billion division of ?	REDACTED
21	A That's what it says here as well.
22	Q And that's Mr. Wagner's report to you?
23	A Yes.
24	Q And do you know if has	REDACTED
25	bought Axapta for implementation at any locations?

00147
1	A I do not have a specific recollection that
2	it has.
3	Q Is an example of a spoke	REDACTED
4	in a hub and spoke situation?
5	A is an example of a division of	REDACTED
6	a large corporation which in itself is made up of
7	multiple, multiple business units which in turn have
8	multiple, multiple spokes on top of that, whereas we
9	get further down from the division level to the
10	subdivision level to the spoke level present
11	opportunities for a mid market solution that is easy
12	to implement and very simple for some of the remote
13	distribution and locations that they might have in
14	their organization structure.
15
16
17
18
19
20
21
22	Q But the target market of Axapta is up to a
23	billion dollars a year in annual revenue, correct?
24	MS. BLIZZARD: Objection. Misstates the
25	testimony.

00148
1	A Yeah, the target market for Axapta is based
2	on customer requirements and fit, not necessarily on
3	dollar values. I think we find that most of the --
4	Q Go ahead.
5	A -- most of the organizations can't be
6	recognized for complexity based on mere dollar values.
7	Q Why not?
8	A It -- my opinion, there could be a very,
9	very complex very small account, or very, very large
10	dollar volume account that could be very simple in
11	nature as well.
12	Q Tell me about the very small complex
13	account.
14	A There are some accounts that we're not a
15	good fit for and that require multiple solutions
16	outside of our core product for some unique business
17	requirements that they may choose to implement within
18	their organizations.
19	Q Give me some examples.
20	A A small community bank that is looking for a
21	system that does direct deposit accounting and complex
22	banking transactions or treasury transactions. Very
23	small dollar volume account that we could not service
24	because of the specific vertical function or banking
25	functions that they have that are not part of any of

00149
1	our products.
2	Q What software could serve them?
3	A I think there are, there are -- I can't
4	speculate to which ones that are prevalent, but there
5	are a lot of software packages that specialize in
6	banks.
7	Q What -- Name some.
8	A I don't know any specifically.
9	Q I'm not sure I understand the example, then.
10	If you can't tell me what would serve them, I just
11	don't understand how you could --
12	A I know that I don't -- I know that I don't
13	serve them. I'm not necessarily looking at the
14	companies that do.
15	Q How do you know you couldn't serve them if
16	you don't know what can serve them?
17	A My products don't do the functions that they
18	require.
19	Q And what's the dollar revenue of the kind of
20	examples you're thinking of?
21	A Could be $100 million regional bank.
22	Q So there are $100 million regional banks
23	that can't be served by Axapta or any Microsoft
24	Business Solution product?
25	A Correct.

00150
1	Q And are there $3 million companies with, as
2	you call it, simple processes that could be served by
3	Axapta?
4	A Three million dollar?
5	Q Three billion.
6	A Potentially could be, but I can't speculate
7	that dollar values are necessarily a symbol of
8	complexity.
9	Q What else is a symbol of complexity to you?
10	A The products we have are not designed to, to
11	allow for global visibility of inventory, or supply
12	chain, or as we discussed earlier, the ability to look
13	across an organization for factory optimization or
14	product optimization.
15	Q How about -- let's just focus -- you're
16	talking about supply chain and other things. Let's
17	talk about core financials. What in core financials
18	does Axapta not have in terms of complex
19	functionality?
20	A Treasury management, hedging, companies that
21	deal in multiple strategies regarding foreign
22	exchange, conversion rates and dealings with very
23	sophisticated treasury management functionality; cash
24	projections, investment strategies, things that large
25	corporate hubs traditionally require that are dealing

00151
1	with large volumes of money on a daily basis.
2
3
4
5
6
7
8
9
10
11
12
13	Q Do you recall seeing any documents stating
14	that the target market for Axapta is up to $1 billion?
15	A I've heard that number mentioned in
16	conversations, in briefings and conversations in the
17	past as being one of many characteristics that are,
18	that are being listed about a target market.
19	Q What are the other characteristics of the
20	target market for Axapta?
21	A Locations of large corporations that have
22	simplistic business needs that are accommodated by the
23	Axapta product, manufacturing locations that are
24	single location in nature, some of the international
25	remote divisions that we've discussed in our earlier

00152
1	testimony as being the targets.
2	Q And does Esselte fall outside of the target
3	market of Axapta?
4	A I can't speculate on whether it does.
5	Q Do you know whether or not it has simple or
6	complex needs for financial management software?
7	MS. BLIZZARD: Objection. Vague.
8	A Don't know specifically.
9	Q When you talk about simplistic needs, what
10	do you mean?
11	A Companies that don't require the, the large
12	scale manufacturing or supply chain or international
13	treasury or specific vertical functionality that's
14	associated with a lot of the larger Tier 1 solutions
15	that, that we typically refer those clients to.
16	Q Now, the vertical functionality, Microsoft
17	partners with ISVs who provide vertical functionality
18	as a bolt-on to its products, right.
19	A That's true, but in a situation in dealing
20	in large corporations, a large -- most of our partners
21	are very, very small partners with very, very limited
22	product depth and scope. Most large companies that
23	I've dealt with, getting back to your question about
24	complexity, do not want to deal with multiple points
25	of failure in dealing with multiple solutions,

00153
1	multiple partners, multiple vendors, especially in the
2	situations where large businesses do not want to rely
3	on very small ISV partners as part of an overall
4	corporate solution or a hub solution. They want the
5	support and product to be delivered by one publisher
6	in most cases.
7
8
9
10
11
12
13
14
15
16
17
18
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20
21
22
23
24
25

00156
1
2
3
4
5
6	Q Do you recall whether Mr. Ballmer met with
7	at the meeting in Chicago?	REDACTED
8	A Yes, he did.
9	Q If you look at specific outcomes that will
10	occur if the meeting is successful -- do you see that
11	heading?
12	A Yes, I do.
13	Q To the right it says, No. 1,	REDACTED
14	will make Axapta its ERP choice for its U.S.
15	locations. Do you see that?
16	A Yes, I do.
17	Q Did you have an understanding before the
18	meeting in Chicago that one of the goals of the
19	meeting was to have make Axapta its ERP	REDACTED
20	choice for its U.S. locations?
21	A I received this briefing document prior to
22	the meeting in Chicago so I recall reading the
23	document and understanding that that was the
24	conversation that we were hoping to lead	REDACTED
25	to.

00157
1	Q And you received Exhibit 1452 in advance of
2	the meeting on January 21, 2003?
3	A Yes.
4	Q And you read it at that time?
5	A Yes.
6	Q And is it fair to say that Microsoft
7	Business Solutions is still having discussions with
8	about Axapta product -- the Axapta	REDACTED
9	product?
10	A Not as formal, but yes, we are having
11	discussions with	REDACTED
12	Q So is it fair to say that the sales puree,
13	at least with , has been an extended one,	REDACTED
14	over a year's time?
15	A Yes. Not much has changed if anything since
16	this meeting and prior to today.
17	Q Do you have an understanding concerning
18	whether has bought any Axapta products	REDACTED
19	for any of its locations?
20	A Other than what I've read here, I have no
21	specific understanding of what they have done other
22	than a pilot location in Italy which is represented
23	here.
24	Q And Item 3 in specific outcomes that will
25	occur if the meeting is successful is	REDACTED

00158
1	will implement Axapta in its worldwide locations also
2	known as One World System. Do you see that?
3	A I see that, yes.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23	Q If I can ask you to turn briefly to Page
24	3640. There's a reference there to CDI Corporation.
25	Do you see that?

00159
1	A If I could have just a moment to review.
2	Q Certainly.
3	A (Reviewing.)
4	Okay.
5	Q All right. Have you ever met with any
6	representatives of CDI Corporation?
7	A Yes, I have.
8	Q On how many occasions?
9	A Six to eight different occasions.
10	Q Were you involved in the sale of Microsoft
11	Business Solutions software products to CDI
12	corporation?
13	A I was involved in supporting partner
14	meetings and presentations, as well as executive
15	presentations at CDI Corporation.
16	Q And based on those meetings, did you have an
17	understanding that CDI had, had attempted to implement
18	an SAP ERP system?
19	A Yes, I have.
20	Q And that they were unable to implement the
21	SAP ERP system?
22	A Yes.
23	Q And that instead they decided to purchase
24	Microsoft Great Plains?
25	A That's correct.

00160
1	Q And do you have an understanding one way or
2	the other concerning CDI's annual revenues?
3	A It states here that it's approximately $1.4
4	billion.
5	Q Do you know if that's correct?
6	A I don't know if specifically that's correct.
7	Q Do you know approximately how many employees
8	CDI has?
9	A Not specifically. Other than what I read
10	here.
11	Q And in Exhibit 1452 it says 24,000?
12	A That's correct.
13	Again, just from a point of clarification,
14	the SAP implementation was discontinued. The Great
15	Plains product was not replacing all of the locations
16	where SAP had, had focused its implementation efforts.
17	Great Plains was implemented in a small division of
18	CDI. The other divisions returned to the systems
19	prior to their -- that they used prior to attempting
20	to implement SAP.
21	Q Was Great Plains installed, or implemented
22	at CDI's corporate headquarters?
23	A I'm not sure.
24	Q Do you know where CDI is headquartered?
25	A Philadelphia.

00161
1	Q Do you know how CDI is organized in terms of
2	whether it has many subsidiaries or if it's a highly
3	centralized company?
4	A It's an organization with many different
5	business units focusing on different parts of the
6	staffing business; technical -- technical consulting
7	staffing, engineering, and construction staffing for
8	assistance in building cable towers and lines for
9	telecom communications companies; Management
10	Recruiters, which is a recruiting agency, and Today's
11	Staffing, which is a similar, we had mentioned one
12	earlier Kelly Services, a typical staffing company
13	for temporary help.
14	Q But this is a professional services staffing
15	company for, for engineers and people like that?
16	A They're different divisions that specialize
17	in -- one division would have technical consulting,
18	one would have very -- there's at least six different
19	business units that I'm aware of that are separate and
20	distinct parts of CDI Corporation.
21	Q And what's your understanding of where Great
22	Plains was implemented at CDI?
23	A We discussed the core financial applications
24	of CDI and how Great Plains could match with those
25	core back office financial systems.

00162
1	Q And was Great Plains installed as the core
2	back office financial software for CDI?
3	A For a small portion of CDI that
4	implementation was successful.
5	Q And was there an attempt to install Great
6	Plains more broadly?
7	Not that I'm aware of.
8	And it's your understanding -- do you have
9	an understanding concerning whether CDI is using Great
10	Plains as its core financial system for the entire
11	corporation?
12	A No, I do not have specific knowledge of
13	whether they're doing that.
14
15
16
17
18
19
20
21
22
23
24
25

00170
1	Q If you turn the page, Page 172 of Exhibit
2	1453, sir. Are you familiar with the implementation
3	of Microsoft-Great Plains at Six Flags?
4	A Not in detail, not in intimate detail, no.
5	Q What's your understanding?
6	A I have met with, with executives from Six
7	Flags that touted the implementation as being a very
8	successful use of the financial systems at, at Six
9	Flags.
10	Q And is it your understanding that Microsoft-
11	Great Plains is the core financial system in use at
12	Six Flags?
13	A I can't specifically state that.
14	Q Do you have an understanding concerning
15	where Microsoft-Great Plains is in use at Six Flags?
16	A No personal specific knowledge, no.
17	Q Who at Six Flags have you met with?
18	A One of the controllers who attended one of
19	our Microsoft briefings in Redmond as part of a summit
20	where we had a chance to have lunch.
21	Q Were you involved in any way in the, in the
22	sale, in the effort to help the partners sell the
23	Microsoft-Great Plains to Six Flags?
24	A No.
25

00172
1
2
3
4
5
6
7
8
9
10
11
12
13
14	Q Did you have any discussions with	REDACTED
15	about rolling out Microsoft Business Solutions
16	products on a worldwide basis?
17	A At any time?
18	Q Yes.
19	A Yes, I have.
20	Q And what has your discussion been, sir?
21	A Microsoft has met with regarding a	REDACTED
22	traditional hub and spoke-type environment in that
23	is made up in actuality 1400 different	REDACTED
24	agencies, very small in nature. as a	REDACTED
25	corporation is a holding company for the revenue

00173
1	streams associated with those . They	REDACTED
2	believe that the Microsoft Business Solutions products
3	in the nature of being a Tier 2-type of product line
4	would allow for them to roll these out in the various
5	divisions around, and locations around the country in
6	a very simple and easy-to-use way.
7	Q Would the plan as you understand it be to
8	use Microsoft Business Solution products at all of
9	various subsidiaries and agencies?	REDACTED
10	A has shared with us in meetings that	REDACTED
11	they would like to get as much standardization across
12	their various agencies and locations as possible, but
13	they have not stated any, or are they in a position in
14	many cases to offer a mandate to all of their
15	locations to implement.
16	Q There's a reference to a, or a corporate
17	communication within that the only ERP	REDACTED
18	solutions to be considered are Microsoft Business
19	Solution ERP solutions?
20	A Yes.
21	Q Are you aware that the CFO of or	REDACTED
22	someone else has sent out such a communication?
23	A I was aware that a communication was
24	discussed. I have no specific knowledge of that
25	communication itself.

00174
1	Q What did you learn about the communication?
2	A That the global CFO was endorsing the
3	Microsoft Business Solution product as a choice of the
4	corporation at the high level as a product that should
5	be evaluated by anyone considering a move to a
6	different back office financial accounting system.
7	Q And are you aware of discussions concerning
8	the potential use of a Microsoft Business Solution ERP
9	product at the -- at subsidiary called ?	REDACTED
10	A I am aware that discovery and presentations
11	are planned at through our tower.	REDACTED
12	Q And what's your, what's your understanding
13	of the progress of those discussions? Are they
14	preliminary or are they more advanced?
15	A I believe that will be evaluating	REDACTED
16	PeopleSoft, Oracle and Microsoft Business Solution in
17	a series of presentations that are due to occur in the
18	next 30 to 60 days.
19	Q And it's your understanding -- what's your
20	understanding concerning what Microsoft Business
21	Solutions software product will be evaluated by ?	REDACTED
22	A My understanding from conversations with the
23	partner is that Microsoft Business Solutions will be
24	representing its Solomon product for professional
25	services.

00176
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3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18	Q Have you learned anything from either of
19	those individuals about the number of locations over
20	which operates?	REDACTED
21	A No, I've not.
22	Q Do you have any understanding?
23	A I have a core understanding that the Solomon
24	product has been asked to support somewhere between
25	three to 400 total back office financial users for

00177
1	as part of this evaluation process.	REDACTED
2	Q And do you have an understanding concerning
3	whether the Solomon product can support between three
4	and 400 back office users?
5	A We have put the necessary MBS resources in
6	place to do the evaluation, and plan to let them know
7	whether or not we believe that that product can reach
8	the levels given the particular transactions that	REDACTED
9	plans to process with us.
10	Q And what kinds of transactions is it do you
11	understand wants to process?	REDACTED
12	A Core financial transactions and a variety of
13	time entry-type of transactions, hours charged to
14	specific creative projects and very, very simple sort
15	of three hours on this project, two hours on this
16	project, four hours on that project.
17
18
19
20
21
22
23
24
25

00178
1
2
3
4
5
6
7
8	Q To your understanding there's going to be no
9	discussion of, or potential use by of MBS	REDACTED
10	products on a corporate-wide basis for all 57,000
11	employees?
12	A Oh, no, no. The discussions are not around
13	57,000 Microsoft Business Solution users in any way,
14	shape or form. The discussions with , even in	REDACTED
15	high-level discussions on a worldwide basis have
16	estimates ranging from 2500 to 3,000 total users over
17	approximately 350 different locations; being the	REDACTED
18	largest single user of the product in a particular
19	location. And if you do some quick math of looking at
20	2500 to 3,000, subtracting two or 300, and then
21	spreading the rest over 350 locations, you get a sense
22	for the size of maybe ten users, five to ten users per
23	location based on the requirements for core
24	financials.
25	Q Is this an -- is another example of	REDACTED

00179
1	a distributed company that can be served by Microsoft
2	Business Solutions software products?
3	A I don't tend to like the term distributed.
4	I think is an example of a highly	REDACTED
5	decentralized organization that has run their business
6	with, with 1400 separate small companies, each of
7	which compete with each other in many cases for the
8	same piece of advertising business. They have set up
9	the organization in such a way that they track and
10	monitor each of the progress financially of 1400
11	agencies that roll up into 350 or so separate business
12	units, that roll up into six to seven major business
13	towers that they focus on as a business entity, and
14	have a very highly decentralized approach to running
15	their business.
16	Q Have you heard of a company called Helmeric
17	& Payne?
18	A Yes, I have.
19	Q And are they using a Microsoft Business
20	Solution software product?
21	A Yes, they are -- they have signed to license
22	the Axapta product line.
23
24
25

00181
1
2
3
4
5
6
7
8
9
10
11
12
13
14	Q And what is your understanding, if you have
15	one, of how Helmeric & Payne's business?
16	A In the opportunities I've had to meet with
17	personnel from Helmeric & Payne, we have an
18	organization that is a very remote oil rig operation
19	management task on their hands where they actually
20	have very remote oil rigs that are set up on various
21	oceans and seas of which they are running financial
22	and project software-type of requirements.
23	Q And where have you met with these people
24	from Helmeric & Payne?
25	A At Convergence, at a Customer Appreciation

00182
1	event in New Orleans, and most recently had the chance
2	to, to talk to one of the personnel at an initial
3	meeting of the Axapta user group meeting.
4	Q And do you have an understanding from those
5	interactions where they're using Axapta?
6	A Other than what I've shared with you in
7	terms of their business being this remote oil rig
8	drilling operations, very decentralized operations, I
9	have no specific knowledge of their implementation.
10	Q Do you have any knowledge concerning whether
11	they have implemented Axapta at their corporate
12	headquarters in Texas?
13	A No, I do not.
14	Q The E-mail from Mr. Bender that's on Pages
15	9339 over to 9340 talks about the relationship between
16	Microsoft and PeopleSoft. Do you see that?
17	A Yes, I do.
18	Q And are you aware of anyone at PeopleSoft
19	raising any issues in terms of competition between
20	PeopleSoft and Microsoft?
21	A No, I've not.
22	Q You never heard that PeopleSoft was upset
23	that Microsoft had taken business away from it at
24	Helmeric & Payne?
25	A I was not directly informed of any, any of

00183
1	that from PeopleSoft at all.
2	Q And there's a note, focus on anti Oracle.
3	Is there an anti Oracle focus at Microsoft Business
4	Solutions?
5	A No, there's not.
6	Q Would Microsoft Business Solutions prefer to
7	see a customer buy Microsoft SQL Server over Oracle's
8	database?
9	A As a shareholder, I think that each employee
10	would, would prefer to have Microsoft technologies be
11	the platform of choice by its clients.
12	Q There's a reference to, Mr. Bender says, we
13	were very honest about the fact that MBS would move
14	upstream. You see that?
15	A Yes, I do.
16	Q Have you heard anyone at Microsoft talk
17	about Microsoft Business Solutions moving upstream?
18	A Not in those words, no.
19	Q Have you heard it in other words?
20	A I've heard that Microsoft is providing
21	greater visibility to its corporate accounts, that
22	these products have a place, as most Tier 2 vendors
23	have a place in larger corporations that have remote
24	or decentralized organizations, whereby many of these
25	corporations had never heard of Great Plains or

00184
1	Microsoft Business Solutions in the past.
2	Q You refer to Tier 2 vendors. Who are you
3	talking about?
4	A Traditionally in the market Tier 1 vendors
5	and Tier 2 vendors, Tier 2 vendors specifically in
6	most of the analyst reports refer to Microsoft
7	Business Solutions, a J.D. Edwards, a Sage, a Mapics,
8	pPics-type of product line as being more of a Tier 2
9	solution.
10	Q And Tier 1?
11	A Being more to an SAP, Oracle, PeopleSoft,
12	Siebel.
13	Q I2?
14	A In the past, perhaps.
15	Q Manugistics?
16	A Probably not.
17
18
19
20
21
22
23
24
25

00186
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5
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7
8
9
10
11
12
13
14
15
16	Q Exhibit 1456 indicates that Esselte has
17	3,000 professional users?
18	A I see that, yes.
19	Q Is that consistent with your understanding?
20	A Yes, it is.
21	Q And has 15 instances of the application?
22	A I see that as well.
23	Q Is that consistent with your understanding?
24	A Yes, it is.
25	Q And has total net revenue before maintenance

00187
1	of support to Microsoft of $ .Do you see	REDACTED
2	that?
3	A I, I don't understand what that means, and
4	nor is it a number that I've seen in any kind of net
5	revenue numbers for Microsoft.
6	Q Do you have an understanding of the net
7	revenue to Microsoft from Esselte?
8	A Not specific.
9	Q Can you give me a ballpark?
10	A a little over a	REDACTED
11	dollars.	REDACTED
12	Q And that's just license revenue you're
13	talking about?
14	A Correct.
15	Q And there's also going to be support and
16	maintenance?
17	A Yes.
18	Q And what's the projection for those?
19	A Don't know specifically.
20	Q And we talked earlier about some
21	professional consulting fees?
22	A Yes. Microsoft is providing some assistance
23	to our partners there, yes.
24	Q And what's the projected amount of
25	professional consulting fees to Microsoft?

00188
1	A We discussed earlier on the record that we
2	were projecting in the early estimates somewhere
3	around $ over the course of the project.	REDACTED
4	Q And this notes that the Esselte deal is at
	an overall discount. Do you see that?	REDACTED
6	A Yes, I do see that.
7	Q Do you have an understanding one way or the
8	other whether that is accurate?
9	A No understanding whether it's accurate.
10	Q Do you have any understanding of --
11	concerning the discount that was given to Esselte?
12	A I understand that Microsoft pricing is from,
13	from pricing, in terms of a customer that's looking
14	for a broad-reaching agreement with Microsoft, is
15	primarily priced in a way that is very different than
16	the traditional marketplace prices by user.
17	Q What do you mean by that?
18	A Most ERP companies are pricing by users,
19	where Microsoft Business Solutions has a -- an
20	instance charge which tends to draw dramatic increases
21	in price for companies that are looking to install
22	more instances over their organization versus a
23	traditional single site implementation that we
24	traditionally deal with on a regular basis.
25

00191
1
2
3
4
5
6
7
8
9
10	Q Setting aside any conversations you may have
11	had with counsel for Microsoft, have you had any
12	communications with anyone else at Microsoft
13	concerning testimony given by Microsoft in the United
14	States versus Oracle case?
15	A No, I've not.
16	As a point of clarification, I have
17	responded to questions raised by the field in the
18	classic Microsoft organization, as well as our field
19	organization regarding a blurb in USA Today which
20	quoted Doug Burgum regarding this case.
21	Q And what did that say?
22	A I don't know the specifics as it -- to
23	paraphrase it was stating that Microsoft -- his
24	position was Microsoft was not entering the enterprise
25	space and did not see that as for a two- to

00192
1	three-year-type of window, I believe is what the
2	paraphrase was.
3	Q And what did you tell the field
4	organization?
5	A I told them that, that we should continue on
6	our track of approaching enterprises and CAS-based
7	accounts based on our strategy of providing spoke-
8	based solutions, to continue to evangelize the message
9	of Microsoft Business Solution having a role as a Tier
10	2 provider in most large corporations around the world
11	that have decentralized underserved locations, and
12	that that was really all we were at liberty to comment
13	on regarding the case. So it was business as usual,
14	basically.
15
16
17
18
19
20
21	Q Going back to Exhibit 1457, sir, this
22	appears to be a discussion about proposed marketing
23	messages because of concerns that Mr. Hemler has
24	had -- received from prospects with respect to
25	Microsoft's testimony that, quote, we aren't, we

00193
1	aren't going after large enterprises. Do you see
2	that?
3	A Yes, I see that.
4	Q And Miss Kloster's response to Mr. Hemler's
5	E-mail says, we've always positioned our target market
6	as being small mid market, as of a year ago started to
7	include the corporate account space. Do you see that?
8	A Yes, I do.
9	Q Was there a change in the marketing
10	philosophy of Microsoft in or about March of 2003 to
11	extend the target market to include the corporate
12	account space?
13	A I think in July of 2003 we made the
14	commitment to bring on board these 17 CAS solution
15	sales specialists to be located in the district to
16	provide that marketplace a greater understanding of
17	our products, our solutions and our strategy. But
18	prior to that time, there was no dedicated resources
19	that would allow those CAS-based customers access on a
20	regular basis to Microsoft presentations or dedicated
21	resources.
22
23
24
25

00194
1
2
3
4
5
6
7	Q And Ms. Kloster's E-mail is March 15, 6:03
8	p.m. Mr. Hemler responds to that E-mail, and in his
9	response he proposes a message which says, quote, our
10	recent sworn statement to the U.S. Justice Department
11	was intended to define our plans with respect to which
12	customer segments we will proactively market our ERP
13	solutions. It is not intended to say our products are
14	not suitable for larger enterprises. To the contrary,
15	Axapta had the flexibility and scalability needed to
16	address enterprise ERP demands such as those,
17	brackets, customer. Do you see that?
18	A Yes, I do.
19	Q Have you ever had any discussions with
20	Mr. Hemler about that?
21	A Not directly. But I don't agree with his --
22	I don't understand what his reference to sworn
23	statements or his comments regarding the flexibility
24	and scalability necessary to address enterprise scale
25	ERP demands. This is not something I would write or

00195
1	nor do I understand his references to any, any
2	testimony or sworn statements.
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00196
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3
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5
6
7
8
9
10
11	Q Have you ever heard any concerns expressed
12	by any Microsoft Business Solution customers or
13	prospective customers that, their concern that they
14	might be topping out with Axapta or other Microsoft
15	Business Solution product?
16	A Yes, I have.
17	Q And when have you heard those kind of
18	concerns?
19	A Usually in group discussions and seminars,
20	and one to many locations there's usually a question
21	that has to do with, I though Microsoft-Great Plains
22	was only for five-user organizations, I had thought
23	Axapta was only available in Europe. There's a lot of
24	people who have very, very limited knowledge of
25	Microsoft Business Solution and the role we can play

00197
1	in decentralized organizations.
2	Q What do you tell them?
3	A I talk to them a little bit about how we
4	have been able to successfully implement some of these
5	smaller decentralized hubs for organizations with
6	Great Plains, with Axapta, that with we have
7	successful implementations of 100, 200 users, and that
8	you know, depending on the size, complexity and scope
9	of the project, we'd be happy to talk to the client
10	about their particular needs.
11	Q Are you aware of any Axapta implementations
12	with four or 500 consecutive users?
13	A Yes, I am.
14	Q Where?
15	A A company called Old Castle.
16
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25

00198
1
2
3
4
5
6
7
8
9
10	Q Is Microsoft Business Solutions selling
11	through partners Axapta to organizations with up to $5
12	billion a year in annual revenue?
13	A I think we have examples of a Great Plains
14	implementation at where is a $6	REDACTED
15	billion company but we have a, one of the ad agencies
16	that's using Microsoft Business Solutions product. So
17	the answer to that is we are selling to and	REDACTED
18	they're $6 billion, but we're selling to them, from a
19	clarification point of view, at a very small agency
20	level, five to ten, fifteen users.
21	Q Well, it's not really the agency level, is
22	it? It's the headquarters level.
23	A No, we have other locations that are at the
24	agencies in addition to the corporate use of the Great
25	Plains product at the agency level.

00199
1	Q Do you think that Axapta has the flexibility
2	and scalability to address enterprise scale at ERP
3	demands?
4	A Sorry. Could you repeat the question?
5	Q Sure. I'm just essentially reading from Mr.
6	Hemler's proposed statement and I'm wondering if you
7	believe -- if you agree that Axapta has the
8	flexibility and scalability needed to address
9	enterprise scale ERP demands.
10	A Axapta -- it would depend again on the
11	customer's particular functional requirements, their
12	need for specific functionality, the complexity of
13	their organization and the number of users that they
14	are planning to implement. In the right cases, Axapta
15	is a great fit for a department or division of -- or
16	remote location of a decentralized company, but in no
17	way is it robust enough to service the complex
18	centralized locations of a large enterprise account.
19
20
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25

00201
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22
23	Q And what's the effort there, if you know?
24	A Pat is one individual in the Microsoft
25	Business Solution team that's, that had taken on the

00202
1	responsibility of working closely together, helping
2	our, our not-for-profit teams and state and local
3	Government teams identify partners that have been
4	successful in marketing to that marketplace in the
5	past for our -- we have a separate team in the
6	vertical team that focuses on not-for-profit, state
7	and local Government.
8	Q Are there other vertical teams within
9	Microsoft Business Solutions?
10	A Yes, they are.
11	Q And what are those?
12	A The ones I can recall include automotive,
13	financial services, health care, as examples.
14	Q Do you have an understanding of why there
15	are -- why there's a public sector vertical,
16	automotive vertical, health care vertical and other
17	ones you can't recall?
18	A Specifically no, no definitive direction on,
19	on -- maybe if you rephrase the question.
20	Q Sure. I'm just trying to figure out if you
21	understand what's the strategy behind having people
22	who are focused on particular segments of the market.
23	A Microsoft has set up these vertical accounts
24	to provide selected vertical accounts better ratioed
25	coverage with people that are understanding of their

00203
1	particular business needs and -- as it pertains to
2	Microsoft infrastructure, architecture, database and
3	classic Microsoft requirements that are necessary to
4	run their infrastructures.
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6
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25

00204
1
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10
11
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13
14
15	Q If you turn to Page 4 of the power point,
16	sir. It has a Bates No. 3312. There's a reference
17	this page appears to be entitled something next big
18	thing. Do you see that?
19	A Barely, I can read it out, yes.
20	Q And it contains excerpts from April 2003
21	Business Week article?
22	A That's what it says, yes.
23	Q And it talks about Mr. Rakes's quote that
24	Microsoft will bring 10 billion in revenue from this
25	emerging market by year 2010?

00205
1	A I see that.
2	Q Is that consistent with your recollection of
3	the public statements made by Mr. Rakes concerning the
4	growth potential for Microsoft Business Solutions?
5	A I've heard that statement before, yes.
6
7
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00216
1
2
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5
6
7
8
9
10
11
12
13	Q Let me ask a first question. The Microsoft
14	fiscal year runs from when to when?
15	A From July -- approximately July through
16	June.
17	Q Okay. So when you say there was a target
18	for fiscal '04 that would be from July '03 to the
19	following June'04?
20	A Correct.
21	Q So we're approaching the end of fiscal '04
22	at this time?
23	A Yes, we are.
24	Q And fiscal '05 would start approximately
25	July of this year?

00217
1	A Yes.
2	Q Okay. And I believe you testified that
3	there was a team-based sales quota for the CAS space
4	for fiscal year '04. Do you recall that testimony?
5	A Yes.
6	Q And I believe you also testified that there
7	was not a quota for the GSM area for MBS products?
8	A That's correct.
9	Q Okay. Why was that? Why was there a sales
10	quota for CAS and not for GSM?
11	A We anticipated a majority of our efforts to
12	be based in, in the corporate accounts segment where
13	there was teams in place that could sell along with us
14	side-by-side from a coverage point of view and the
15	partners were already engaged in those accounts. Our
16	experience in revenue from the prior year showed that
17	a majority of the revenue, once we did look at the
18	segmentation, was derived from that corporate accounts
19	space for Microsoft Business Solution products as a
20	primary factor.
21	Q And I think you also testified that your
22	targets for these CAS quotas, you were going to fall
23	short in fiscal '04. Do you recall that?
24	A Yes.
25	Q Do you remember what the revenue target was?

00218
1	A Approximately , a little over $	REDACTED
2.		REDACTED
3	Q And do you know what the current projected
4	revenue is for fiscal '04?
5	A We are targeting somewhere in the 43,
6	aggressively $ attainment in that space.	REDACTED
7	Q Why do you believe Microsoft didn't make the
8	CAS quota?
9	A I think, I think it was a very aggressive
10	growth rate associated with that, with that -- maybe
11	overestimated the market spend around our products in
12	that space. We also you underestimated the amount of
13	exposure and sales and marketing and confidence
14	building that we would create around our products in
15	those, in that space.
16	Q Could you pull out what was marked as
17	Defense 1449.
18	A Okay.
19	Q I think you testified, and please correct
20	me, that this was a planning document developed for
21	fiscal '04 planning in around April of 2003?
22	A Yes.
23	Q Was the plan that's in here formally
24	adopted?
25	A Not in specific terms, no.

00219
1	Q Okay.
2	A Some of this was used to ultimately
3	determine the reporting structures and some of the
4	high level resource planning around it. But this --
5	this was not formally adopted in its current state.
6	Q Was the primary purpose of this document,
7	then, for discussion?
8	A Yes.
9	Q Okay. Could you turn to Bates No. 4150.
10	At the chart at the top, do you see where it
11	says fiscal year '04 and revenue, and it appears to
12	say , do you see that?	REDACTED
13	A Yes.
14	Q Would that correspond to $ ?	REDACTED
15	A In this particular, yes, it would.
16	Q And I believe you just said that the actual
17	target that you ended up settling on for fiscal '04
18	was a little over $ ?	REDACTED
19	A Yes.
20	Q Going down that fiscal '04 column, the -- do
21	you see where it says 17 MBS BSMs?
22	A Yes.
23	Q What are those?
24	A They wound up being what we have been
25	discussing as solution sales specialists. Those are

00220
1	the people deployed within the geographic regions or
2	geographic districts within the Microsoft Enterprise
3	organization that instead of being called BSMs, they
4	are actually called solution sales specialist, SSPs.
5	Q And are those the 17 people on the virtual
6	team that have a dotted-line reporting to you that
7	we've been discussing?
8	A Yes.
9	Q The one below that MBS TSs, what are those?
10	A A TS within Microsoft is a technical
11	solution presales resource whereby if a partner or an
12	account needs some additional assistance in
13	understanding the particular detailed functionality
14	within a product, those resources are made available
15	in the Microsoft classic organization. There's TSs
16	for SQL, there's TSs for Windows, for Office. It was
17	originally planned to have resources dedicated in that
18	role in capacity for MBS in the enterprise space.
19	Q Was, was the number of 9 adopted as the plan
20	for fiscal'04?
21	A The number that was actually adopted in FY
22	'04 was zero.
23	Q The next line below that says Microsoft core
24	GTM. What's that?
25	A It was, the initial discussion was around a

00221
1	Microsoft Business Solution go to market leadership
2	team that wound up being myself and one other person
3	to help build the community and to oversee the hiring
4	and some of the training associated with the MBS
5	solution people in the field.
6	Q So was the fiscal '04 plan number there then
7	two, one person plus yourself?
8	A It was originally four from a head count
9	perspective. We redeployed one of those to become
10	another resource in the enterprise that would be
11	targeted at FY '05 technical solutions specialty, and
12	one open position still remains in that organization
13	structure that reports to me that hasn't been filled.
14	Q Okay. So -- and I want to make sure I'm not
15	double counting here. Is -- if I take this 17 plus
16	the two for Microsoft Corporate GTM and to get 19 ,
17	would that represent the total number of resources
18	deployed in fiscal '04 to help partners with the sales
19	in the enterprise area?
20	A The total number that was actually approved
21	was 21; 17plus the 4.
22	Q Okay. And of those 21, how many of those
23	positions were filled?
24	A Nineteen
25	Q Nineteen, okay. In terms of the revenue

00222
1	shortfall for fiscal '04, when did you first become
2	aware that the group was not going to meet its revenue
3	target?
4	A We probably knew fairly early in the fiscal
5	year. Probably midyear we knew for sure that, that
6	the revenue target was very aggressive and probably
7	not going to be attained.
8	Q What steps were taken when you realized you
9	weren't going to meet this target to potentially
10	correct the situation?
11	A We tried to increase the, the marketing
12	effort around hub and spoke targeting for cities,
13	doing some direct mail, working together closely with
14	partners to hold more seminars targeted at distributed
15	solutions, decentralized autonomous-based
16	organizations that were looking to, to replace their
17	outdated or off-maintenance solutions. We early on
18	were not at full strength from a head count
19	perspective so we did not achieve the full17 field
20	resources until the 6th of April from being at a full
21	staff point of view, and a majority of those
22	resources, probably 13 to 14, were with Microsoft or
23	in their current role for less than six months as a
24	total. So we had a very new team that was brought on
25	board to help us here.

00223
1	Q So if I was trying to get a sense of the
2	total number of resources deployed to help MBS
3	enterprise sales through partners, the, the 21
4	allocation would be very high then, because you're
5	saying not all those positions were filled until late
6	in the year?
7	A Yes, that's accurate.
8
9
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00227
1
2
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4
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6
7
8
9
10
11
12
13
14
15	Q In the first paragraph, about oh, six or
16	seven lines down, there's a sentence that says, I do
17	believe a real part of the problem today, is that
18	there are no boundaries, so everyone seems to believe
19	we should go for a lot of things, including geo
20	expansion in all big markets, multiples lines in more
21	countries than we can afford, et cetera, et cetera, et
22	cetera, et cetera, et cetera. Do you see that line?
23	A Yes, I do.
24	Q Do you agree with what Mr. Ayala says here,
25	that this is a problem today for MBS?

00228
1	MR. YATES: Objection. Lacks foundation.
2	A My opinion is that there are very -- since
3	Microsoft Business Solutions markets almost, or
4	markets exclusively through partner organizations,
5	there are various levels of competence within the
6	partners and a variety of approaches and strategies
7	that these partners take. I think that the partners
8	are very excited to have a broad range of products
9	that they can now resell to the marketplace. I think
10	many of them still have yet to uncover all of the
11	intricacies of the products in each particular country
12	that we have localized or through partner offerings
13	and I think that is, has caused some confusion in the
14	channel in terms of how far to go in terms of talking
15	to certain customers about where, where we can take
16	the products. So I would agree with the statement
17	that it would be very welcome in the channel and in
18	the MBS support team to have specific boundaries set
19	about the way we engage with customers.
20	Q What sort of confusion do you believe has
21	been generated in the channel?
22	A I think for some of our channel partners,
23	the CRM product line, the MBS product line in the
24	Axapta division are very new to them. They're
25	learning a lot of those products and functions as they

00229
1	go. For some, as they get a new customer, it's a case
2	of they don't know what they don't know and wind up
3	encountering certain functional issues or client
4	perceptions of the product that are not what they
5	expected during the implementation, and it resulted
6	really because it's the first time the partner has
7	implemented that particular product line in a live
8	situation.
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25

00235
1	Q What about Old Castle, have you heard of any
2	problems with scalability at Old Castle?
3	A In brief discussions with Old Castle, I was
4	informed that they were considering adding more users
5	to their existing Axapta implementations and were in
6	discussions regarding how the product would
7	accommodate additional users. I don't know if that
8	was concern or just conversations and evaluation.
9	Q Okay. I think you testified earlier, and
10	please correct me if I'm wrong, but what I wrote down
11	was concerning this benchmark that's come up several
12	times for Axapta of something like over 3,000 users.
13	I believe you said that you didn't believe the
14	statistic represented a real world situation. Do you
15	remember that testimony?
16	A Yes.
17	Q Okay. What do you mean by that?
18	A I don't believe I -- I believe what I stated
19	was that benchmarks would vary depending on the kinds
20	of transaction and the -- how the transaction was
21	used; a user that publishes strict financial
22	transactions on a debit and credit basis versus a user
23	that does very sophisticated business process order to
24	cash, some other processes. And I have not been privy
25	to the detail behind the benchmarking statistics, but

00236
1	I think I represented also that there's hardware
2	considerations, database considerations, network
3	considerations that would impact that as well. I -- I
4	don't see Axapta customers with 3900 users, nor do I
5	really believe that statistic for a real life
6	situation.
7	Q Do you believe that telling that statistic
8	to users is misleading?
9	A I think that in a real world situation it
10	could be determined as misleading if the -- there's
11	not full disclosure in terms of how the benchmark was
12	conducted, in what circumstances with what
13	transactions, and full disclosure in terms of the
14	details that were used to calculate that benchmark.
15	Q I want to give you something that was
16	previously marked as Government 169, and actually I'm
17	probably going to make reference to Defense 1457, if
18	you want to find that in your stack.
19	Let me state for the record that Government
20	169 is Bates labeled MSOP sub 8484. It's an E-mail
21	from Andrea Harrison dated March 17th, 2004, subject
22	MBS in press regarding Oracle, PeopleSoft-DOJ. It's
23	to Mr. Pollie among others, produced by Microsoft in
24	the course of this investigation.
25	A (Reviewing.)

00237
1	Okay.
2	Q Do you recall receiving this E-mail?
3	A Yes, I do.
4	Q And who's Andrea Harrison?
5	A Andrea Harrison is part of our business and
6	marketing organization out of Redmond.
7	Q So who does she report to?
8	A Andrea Harrison reports to -- I'm not
9	specifically sure who she reports to.
10	Q Give me a sense of what her job is.
11	A It's, as I understand it, it's a buffer
12	between the business field organization as a business
13	and marketing organization, and the business group,
14	which is represented by Doug Burgum and the -- or the
15	BG.
16	Q As you see in the first paragraph she has a
17	sentence there, we want to be clear that our target
18	market strategy has not changed. We remain committed
19	to delivering business applications to small mid
20	market and corporate businesses worldwide. Do you see
21	that?
22	A Yes, I do.
23	Q What is your understanding of that sentence?
24	A That we have a strategy that targets small,
25	medium and CAS-based accounts where there's a, a

00238
1	reasonable fit for our product lines from a product
2	functionality point of view. And I think she goes on
3	to say that it's really the -- targeted at the spokes
4	for highly decentralized, highly autonomous
5	organizations as being the primary goal of the
6	enterprise group.
7	Q And does she do that description -- in the
8	next paragraph down there's three bullets. There's a
9	bullet that says, divisions of large enterprises,
10	typically companies with 1,000 to 5,000 employees.
11	Think of this in terms of a hub and spoke model where
12	Microsoft is targeting the spoke and not the hub of an
13	organization. There are about 16,000 companies
14	worldwide in this category. Is that what you mean?
15	A Yes.
16	Q Do you agree with the statements in this
17	E-mail about the target markets for MBS products?
18	A I think it's very difficult to put a
19	particular either employee count or dollar value or,
20	or business, maybe, perhaps, description on -- in
21	describing what specifically are good fits for the
22	product. As I've testified earlier, it really is, in
23	this business for our products, a very case-by-case
24	basis to ensure that the client is a good fit for our
25	products. And I believe that employee size doesn't

00239
1	necessarily dictate whether or not the product would
2	be a fit. But I think from a marketing point of view,
3	I think establishing the total pool of accounts that
4	a, in some way from a marketing sense so that they can
5	do some analyzing of the markets and the revenue and
6	the size of the ERP spend and IT spend, it's probably,
7	you know, one way that a company could evaluate it.
8	Q It says at the top in bold, she's put to the
9	U.S. subsidiary field, field managers who can forward
10	this information to their teams per Legal and PR --
11	that's probably public relations. Do you see that?
12	A Yes.
13	Q Did you do anything with this E-mail such as
14	forwarding it?
15	A Yes. I forwarded it on to the 17 people in
16	the field as a follow-up to a phone conversation that
17	we had.
18	Q And what was discussed on that phone
19	conversation?
20	A As I testified earlier, we had just a
21	briefing regarding some of the press that had come out
22	regarding some statements that had been made in some
23	publications regarding our focus in the enterprise,
24	and reassured them that it was business as usual,
25	still the targets were large decentralized parts of

00240
1	larger corporations and that should be the message
2	that they could -- should continue to relate to the
3	clients.
4	Q And we were discussing Defense 1457. Was --
5	A And just as a point of clarity, I think it
6	was asked earlier if I produced any document to my
7	field team that I wrote and sent out to my team
8	regarding this issue.
9	Q Uh-huh.
10	A And I answered that question as no. But
11	just as a point of clarity, this was forwarded on, but
12	not written by me, to the field team.
13
14
15
16
17
18
19
20
21
22
23
24
25

00241
1	Q Okay. When we were discussing Defense 1457,
2	you were asked some questions about the sentence that
3	says -- it's in the middle paragraph, to the contrary
4	Axapta has the flexibility and scalability needed to
5	address enterprise scale ERP demands. Do you recall
6	those questions?
7	A Partially, yes.
8	Q Okay. And I believe you said in response --
9	please correct me if I'm wrong -- that in, in no way
10	is Axapta robust enough to serve a Fortune 50 account.
11	Do you recall that testimony?
12	A I believe just from a point of clarification
13	point of view, I was asked what I would define as a,
14	as the largest enterprise account and I believe my
15	response was from a -- at least I understood the
16	question, what was an example of the largest
17	enterprise account, and I believe I responded to sort
18	of a Fortune 50 account would be what I would consider
19	to be the largest. I -- I don't want for the record
20	to say that No. 51 is something that Microsoft
21	Business Solutions is targeting or can provide service
22	to. I think, again, it gets back to the specific
23	functionality that the company requires on whether or
24	not our product would be a good fit. And I don't
25	believe that, based on some of the functionality that

00242
1	I've experienced in the Tier 1 market that Microsoft
2	Business Solutions should either be targeted or is a
3	candidate for success at a hub location of a large
4	corporation.
5	Q When you say the Tier 1 market there, are
6	you thinking of any demarcation between that market
7	and the Tier 2 market in terms of the customer
8	characteristics?
9	A I'm thinking more in terms of the amount of
10	experience, infrastructure, partner training, system
11	integrator support, years in providing successful
12	solutions to very large corporations, and
13	functionality that they've incorporated in their
14	product that these large customers have worked with
15	them to produce over many, many years as more of the
16	demarcation. Not necessarily the size of the
17	customer, but --
18	Q And that list that you just went through,
19	are you saying that all of those things are things
20	that the Tier 1 players possess and that the Tier 2
21	players generally do not?
22	A I would say that's -- I could apply that
23	specific -- I can't speak for any other Tier 2, but I
24	can speak to these are things that MBS is years away,
25	perhaps, from, from having that these other companies

00243
1	have worked years to, to make part of their company's
2	business value proposition to large corporations.
3	Q Okay. There was some discussion about what
4	it meant for Microsoft to be the prime. Do you recall
5	those discussions?
6	A Some of those, yes.
7	Q Okay. Do you have a sense in the past year
8	of how often Microsoft has been the prime contractor
9	for a deal?
10	A It's been a very rare occurrence and one
11	that we discourage. Really just a handful of the
12	total new customers are, or customer adds have been
13	requested by clients as being a necessity for them to
14	continue doing business with Microsoft in the
15	conversations on, on the software solution. And it
16	usually is, just as a point of clarification, involves
17	a case where the customer specifically requests that
18	Microsoft step in and take a lead responsibility in
19	certain aspects of the project or in certain cases
20	where there's multiple partners. And in some cases
21	the partners that are involved have actually requested
22	that Microsoft come in and assist them in coordinating
23	the overall relationship between the multiple partners
24	that the client is dealing with and when to -- and
25	when I say partners, I mean resellers. I don't mean

00244
1	ISVs or third-party programs. I just mean the core of
2	Microsoft resellers. But very few.
3	Q Very few in the last year?
4	A Yes.
5	Q Do you have a sense of how many Microsoft
6	intends to do in the next year?
7	A We are trying to move entirely away from
8	doing any. Our going-in position based on some
9	guidelines and things that we've been evaluating and
10	looking into is really an offer of last resort, when
11	it means the difference between winning and losing the
12	business in the customer's mind, what -- will we
13	consider it.
14	Q Okay. If you can pull out 1420 which is the
15	Esselte printout, web page printout.
16	A Yeah, I've read that enough. I think I've
17	memorized that one.
18	Q Okay. I'm going to go to the sentence
19	you've probably memorized the most.
20	A Yeah, I think --
21	Q The sentence that says, this is a great
22	example of how Microsoft Axapta can scale to meet even
23	the most complex requirements of billion-dollar
24	manufacturing businesses operating in multiple
25	countries around the world. Do you recall that

00245
1	sentence?
2	A Yes, I do.
3	Q I believe your prior testimony was that you
4	felt that sentence could be misleading. Do you recall
5	that?
6	A Yeah, it -- it's something that slipped
7	through the cracks in terms of overall proofreading
8	and things that should have gone on around that
9	statement. I think it could be interpreted in ways
10	that it was not meant to be portrayed.
11	Q And what are those ways that it could be
12	interpreted that were not intended?
13	A And again, I -- I did not read this -- I did
14	not write this, this full statement. I wrote the
15	first sentence of the statement, and it was written by
16	one of our partners who was very excited about having
17	closed Esselte and wanted to get the word out to the
18	marketplace.
19	Again, your question specifically was which
20	part of it could be misinterpreted; is that correct?
21	Q Yes, or what would be misleading about it?
22	A I think the part that says this is a true
23	cooperative effort, I think that is, that speaks for
24	itself. That's fine. We're entities excited to work
25	with our partners to deliver a comprehensive solution

00246
1	that meets the unique need of Esselte business. I
2	think that's fine. I think the third part is, the
3	great example of how Microsoft-Axapta can scale to
4	meet the most complex requirements of billion-dollar
5	manufacturing businesses operating in multiple
6	countries around the world, particularly because it
7	could be misinterpreted because it doesn't reference
8	the fact that it's looking at 15 separate potential
9	implementation sites. It doesn't mention the fact
10	that a majority of the manufacturing function that we
11	reference here as being complex requirements are not
12	handled by the Axapta product itself. It's a decision
13	that the client made to, to actually do the majority
14	of its manufacturing, its complex manufacturing with
15	products that were not Microsoft. So I think that
16	that leads you to believe that it's all done by the
17	Axapta product when in fact it's -- it's not 3,000
18	users in one location, and it's not all the
19	manufacturing requirements of this account done
20	through the core Axapta product line.
21	Q Is it your understanding that Esselte has,
22	quote, the most complex requirements?
23	A I'm not privy to the specific requirements
24	within Esselte. I can say that in the marketplace
25	lean manufacturing is an advanced technique of

00247
1	controlling inventory and controlling manufacturing
2	that requires a very good support system underneath it
3	and lots of discipline executed internally to provide
4	that kind of technique of manufacturing.
5	Q And the lean manufacturing model module,
6	that's the piece that would be provided by eBECS?
7	A That's correct.
8	Q And does Microsoft have any control over
9	eBECS?
10	A No.
11	Q Does Microsoft own any of the intellectual
12	property, if you will, of the eBECS lean manufacturing
13	model?
14	Not to my understanding.
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20	Q So let's do it in terms of vendors. And I
21	believe the Tier 1 vendors for financials, who would
22	you say that the Tier 1 vendors are for financials?
23	A I would say that it's been described in
24	market terminology from research firms and analysts
25	that Tier 1 vendors traditionally are compiled of

00251
1	Oracle, PeopleSoft, SAP, Siebel are the ones most
2	commonly mentioned in that category.
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6	Q So if we were just looking for a financial
7	management product, the Tier 1 vendors would be
8	Oracle, PeopleSoft and SAP?
9	A That's the way it's described, yes.
10	Q Do you have an understanding of the lack of
11	functionality that Axapta -- that those Tier 1 vendors
12	have in the financial management area?
13	MR. YATES: Objection. Lacks foundation as
14	to any company other than SAP in light of the
15	witness's testimony.
16	A I can relate to some experience that I have
17	at SAP and from a competitive positioning when I was
18	competing for SAP in that marketplace. Axapta lacks a
19	lot of core, for lack of terminology, let's call it
20	hub functionality that a lot of those vendors would
21	provide for. I think I referenced items like treasury
22	management, core intercompany transactions between --
23	financial postings between different companies that an
24	organization may, may look to account for is not part
25	of the core Axapta product. It does not have a

00252
1	robust -- if you consider human resources as part of
2	your question in core financial management --
3	Q Let's -- I'll ask the human resources in a
4	minute. Just for financial you mentioned treasury
5	management and core financial trans -- intercompany
6	transaction. Are there any others that come to mind?
7	A Some sophisticated foreign trips, foreign
8	currency transactions, swap rates, transactions done
9	in multiple currencies, some of the more sophisticated
10	financially related transactions.
11	Q I believe I wrote down when you were
12	discussing this before something called cash
13	projections. Would that be an area that, additional
14	area that Axapta does not have, core hub
15	functionality?
16	A Yeah. I think I said cash flow projections
17	based on positions in various -- not just currencies,
18	but those kind of sophisticated financial transactions
19	that are typically handled at a corporate treasury
20	type of function is the best way to describe that
21	group of transactions where there's a corporate
22	treasury department within a corporation.
23	Q And now turning to the core HR functions
24	that Axapta lacks that would be required by these hub
25	enterprises as we've defined that term, what HR

00253
1	functionality do you think it lacks?
2	MR. YATES: Objection. Vague.
3	THE WITNESS: Pardon?
4	MR. YATES: You may answer if you
5	understand.
6	A Just from limited exposure in the U.S.
7	market, the product is not in full support compliance
8	in the areas such as EEO reporting, it does not have
9	an integrated payroll product as part of its offering
10	for the U.S. In terms of taxing and regulatory
11	support, it lacks a lot of U.S. regulatory HR
12	reporting that is traditionally supplied by other
13	vendors that have U.S.-based HR offerings.
14	Q Okay.
15	A And no payroll system, obviously.
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10	Q Mr. Pollie, I just a few follow-up questions
11	to Ms. Blizzard's examination. You were talking about
12	Esselte and I believe it's the eBECS, is that a supply
13	chain piece of software?
14	A I --
15	MS. BLIZZARD: (Inaudible.)
16	A I believe it's more specific to lean
17	manufacturing software requirements.
18	Q Is lean manufacturing part of a core
19	financial package in your definition?
20	A No.
21	Q It's something outside of that?
22	A It's part of what I would consider to be a
23	logistics offering.
24	Q And you were talking about in response to
25	some of Ms. Blizzard's questions about treasury

00255
1	manage -- management, intercompany transactions. Do
2	you recall that last question and the answers?
3	A Yes.
4	Q Are you aware of any independent software
5	vendors or partners that provide any treasury
6	management packages?
7	A I'm not aware of any that we've, we've come
8	across in our conversations with MBS.
9	Q And going back to Exhibit 1449, sir, and
10	specifically the Corporate Sales Acceleration page
11	which is Page 4150. Ms. Blizzard asked some questions
12	and she said there was some sort of a shortfall in
13	terms of meeting the projections and you answered that
14	there was. It's true, is it not, though, sir, that
15	Microsoft Business Solutions essentially doubled its
16	sales in the Cas base from to projected	REDACTED
17	to $ in fiscal year '04?	REDACTED
18	A The baseline that was calculated here was
19	not the ultimate baseline that was carried forward
20	into -- from a FY '03 total. The baseline that was
21	carried forward from an FY '03 total actually moved
22	from $ to closer to as the	REDACTED
23	established baseline.
24	Q When you say the established baseline, what
25	do you mean, sir?

00256
1	A In regards to your question about how
2	revenue would progress, it was based on a $	REDACTED
3	total to a projection of , rather than a $	REDACTED
4	total.	REDACTED
5	Q So fiscal year '03 CAS sales by Microsoft
6	Business Solutions were approximately ?	REDACTED
7	A Approximately .	REDACTED
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Pollie 05-26-04

Updated August 14, 2015