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Initial Purchase – Sales Led Process (SPF) – Finance Data FlowsFinance Services FlowFinanceEBSSAP BRIMFinance Services LayerPayment Services LayerCommit SubscriptionEBS OM OrderCreate ProviderOrderBookings 2.0Oracle AR /VertexRevStream 5xCreate ArrangementCreate a bookingValidate IPR and createtransactionSuccessAllocate RevenueClean / EnrichSubscription ng CompleteCreate dCreate BillingdocumentConfidential 2020 VMware, Inc.Trigger RevRecCreate InvoiceCreate Deferrals31

SPF ScenarioWF - Direct SPF : Initial Order for US CustomerPrepaid Term Subscription for Qty 8000 – 12 Month SKU with 10% SPF discountConfidential 2020 VMware, Inc.32

SAP Subscription ContractConfidential 2020 VMware, Inc.33

SAP CI ScreenConfidential 2020 VMware, Inc.34

EBS AR TransactionQuote # Q-E00131020;EBS SO #: 13318344;Subscription ID:M445104920Invoicing document:10000803850Confidential 2020 VMware, Inc.35

AR Additional Attributes1. Attribute Details2. Attribute Billing Start Dateand End Date3. SPF Discount Amount123Confidential 2020 VMware, Inc.36

AR InvoicePricing date Quote creation date 30 days (PO Turn inallowance date) Customer can turn inthe PO early or late, butthe provisioning willhappen only after theorder gets booked. Invoice value iscalculated based on thepricing dateConfidential 2020 VMware, Inc.37

Introduction to Volume TieringOverview and BenefitsConfidential 2021 VMware, Inc.38

Volume Adjusted List Pricing StandardVolume pricing improves deal velocity by providing a programmatic incentiveSingle Unit MSRPVolume tiering pricing offers pricing benefits ascustomer consumes greater units of that service. (Buy more,save more)Structure: Volume (Qty) bands defined per service group Volume Adjusted List Prices defined for individual offers All list price tiers are published Stair-Step function All units get same price Mid-Term expansions benefit from tier change At Renewal, all units align to new tier price /unit For services with overage charges, each quantity band has aunique overage priceVolume Aggregation: Qty added up on a customer subscription (SID) Aggregation Level: Offer line item E.g. no aggregation across WSO Std and WSO AdvQuantityConfidential 2020 VMware, Inc.39

WF Volume tier pricingWaveFront Subscriptions & Overage – Volume tier setupVTPG DefinitionVolume TierProduct GroupWFDescriptionConsider SIDWaveFront groupYVolume TierBandWF-1WF-2WF-3WF-4WF-5DescriptionMin1K-10K PPS11K-35K PPS36K-95K PPS96K-150K PPS150K 51,000999,000VTdiscount10%15%30%40%VTPG AssignmentSAP SKUSKU DescriptionTNZ WF TSTNZ WF OVTanzu Observability Subscription (by Wavefront)Tanzu Observability OverageHosting TypeMetricVTPGN/AN/AN/AN/AWFWF WF has a single SAP SKU for Term SubscriptionsVTPG Pricing FactorsSAP SKUTNZ WF TSTNZ WF TSTNZ WF TSTNZ WF TSTNZ WF TSVolume TierWF-1WF-2WF-3WF-4WF-5List Price With 5 volume tiers defined (see VT bands and discounts)VT discount 17.88 16.09 15.20 12.52 10.73Confidential 2020 VMware, Inc.10%15%30%40%Overage List Price 1.84 1.68 1.59 1.30 1.15 Volume tiers apply also to the related overage Overage does not have its own tier bands that would be assessed eachmonth Instead, it simply inherits the volume tier of the latest Term subscriptionpurchase40

Add-on Purchase (Short Co-term) – Quote to Order ViewRepeat as Needed if the Customer’s Entitlement/Request Quantity changesCreate QuotePull PurchaseHistory based onSID Configure Increase quantity /add additionalfeatureFetch list price &Display embeddeddiscountAD & ChannelMargin applied asrequiredDiscretionaryDiscounting usingDiscount GuidanceDeal ScoringNoSID UpdatedServiceProvisioningOrder BookedPO CreatedAR InvoiceGenerationStart Rev-RecBilling DocumentGenerationDeferralsConfidential 2020 VMware, Inc.ELA orderYesBookingsRevenueArrangementAccepted?Release QuoteDeal ApprovalCommissionsKEY CALLOUTS: Will use the “Basecamp” defined parameters for account definition (e.g.Account Name, Domain, Country, SID) and retrieve Purchase History41

Volume Tier Example – Direct ELADirect ELA WF Addon SCT order for UK CustomerWF Initial order – Qty 98K – 60 Month SKU – UKWF Addon – Qty 60K – Short Co-term with Initial orderVolume Tier change from T4 - T5 post addonOverage Bill – T5 volume Tier for usages post addon purchase (SAP - FSL – AR)Initial OrderConfidential 2020 VMware, Inc.42

EBS AR Invoice TransactionEBS Order: 24743554SID: M228467682AR: 776358095Volume Tier 4Qty 98000Duration 60 MonthsConfidential 2020 VMware, Inc.43

Tier 4 Order SAPSAP Contract Details1. Contract Start Date 9/15/2021Contract End Date 9/14/20262. Service Start Date 9/15/2021Service End Date 9/14/202612Confidential 2020 VMware, Inc.44

Tier 4 Order - SAPSAP Contract DetailsRCD Start Date 9/12/2021RCD End Date 9/11/2026RCD Percentage 35%Confidential 2020 VMware, Inc.45

Tier 4 Order - SAPSAP Contract DetailsFalls under T4 Volume TierdiscountConfidential 2020 VMware, Inc.46

Initial ELA Invoice - Tier 4Tier 4 – 60 Month SKU ELAinvoice for Initial order(Detailed Invoice)Confidential 2020 VMware, Inc.47

Quantity Add on – 60K – SCT with Initial orderConfidential 2020 VMware, Inc.48

EBS AR Invoice TransactionEBS Order: 24743867;SID: M228467682;AR: 776358455Volume Tier 5Qty 60000Duration SCT to Initial ELAorderConfidential 2020 VMware, Inc.49

Tier 5 Transaction SwitchConfidential 2020 VMware, Inc.50

Add on ELA Invoice – Tier 5Tier 5 – 60 Month SKUELA invoice for Add on(Detailed Invoice)Short Co-term to9/14/2026Confidential 2020 VMware, Inc.51

Overage Transaction - Post Add onOverage Invoice: 9800004042SID: M228467682Invoice Document #010001400364Confidential 2020 VMware, Inc.52

Additional Attributes - Tier 5 Overage1. Attribute Details2. Attribute Start Date andEnd Date13. ELA Discount Amount11Confidential 2020 VMware, Inc.53

AR Invoice DetailsELA Discount and Tier 5discount is applied tocalculate the overageamount for the billing period15-Sep-2021 to 14-Oct-2021Confidential 2020 VMware, Inc.54

Payment MethodConfidential 2020 VMware, Inc.55

Different Payment Methods usedCredit CardPayment can be made Via Credit Card incase there is no limitation to pay in theparticular countryFundsPayment can be made using the fundsin the VMware Entitlement Accountassociated with VMware Cloud servicesand in the same currency that is used byOrganizationConfidential 2020 VMware, Inc.Pay By Invoice (PBI)Restricted PBIPayment Can be made using Pay byInvoice Method. This is an offlinemethod which requires offline paymentusing invoice approval processIf a sales order for a new service isassociated with a Pay by Invoice (PBI)account, it appears as a paymentmethod during service onboarding. Inthis case, the PBI payment method isrestricted and can be applied only tothe subscriptions included in the salesorder but cannot be added as a defaultpayment method to the organization56

PBI Types – Restricted/Un-Restricted If a sales order for a new service is associated with a Pay by Invoice (PBI) account, it appears as a payment methodduring service onboarding. In this case, the PBI payment method is restricted and can be applied only to thesubscriptions included in the sales order but cannot be added as a default payment method to the organization. If you want to use a PBI account as the default payment method to cover any purchases, resources and overagesaccrued by your organization, you must enable unrestricted PBI for payment authorization for all services in yourorganization. Enabling unrestricted PBI involves an offline approval process that you initiate by submitting a supportrequest. Restricted PBI – Service/Subscription level specific to the SID Un-Restricted PBI (ORG level PBI) – Default payment method for the entire CSP org for specific customer. Applies to all theServices/Subscriptions under that orgConfidential 2020 VMware, Inc.57

Customer Experience – Restricted PBI1. In new organization page, firstlycreate profile of new org withfollowing details: Org Name Address (can choose fromexisting in drop-down listor add new)2. Next section below shows DefaultPayment Methods. PBI isrestricted to be used at org level,hence customer can’t choose thatdespite being available. The validand selected method will bechosen as org default paymentmethod. (In case of ‘commit only’billing model, CSP will not askcustomer to provide otherpayment method)3. Customer selects the checkbox ofTerms of Services giving theiragreement.123Confidential 2020 VMware, Inc.58

Recurring BillingConfidential 2020 VMware, Inc.59

Recurring Billing Key CalloutsFor VMware Subscription ServicesBilling PeriodRecurring charge will be generated in thebeginning of the recurring period.Payment Flexibility for CustomersAllow customers to opt commit contracts with an upfrontpayment (Prepaid) or Recurring (Monthly and Yearlypayments)It is immediately billable without taking the leadtime of 2 days which is currently the case for ondemand billingAnniversary Billing Date (ABD)The ABD is same for recurring and on-demand billingBillingA separate bill will be created for recurringcharges and a separate bill will be createdfor on-demand overagesThere will be an immediate billing for the period fromcontract start date to subsequent ABD irrespective of thenumber days.Based on the billing cycle the recurring period will bedetermined.Confidential 2020 VMware, Inc.60

Initial Purchase – Sales Led Process (SPF) – Recurring/Overage Billing for PartnerFinance Data FlowsFinance Services FlowFinanceEBSSAP BRIMFinance Services LayerPayment Services LayerCommit SubscriptionBookings 2.0CPNOracle AR/VertexRevStream 5xCreate a bookingCreate ArrangementEBS OM OrderCreate ProviderOrderValidate IPR and createtransactionSuccessClean / EnrichSubscription ng CompleteCreate ProviderContractAllocate RevenueProvisioningAcknowledgementreceivedTrigger Revenue RecognitionTrigger RevRecCreate InvoiceCreate BillingdocumentConfidential 2020 VMware, Inc.Trigger Billing Document generationProforma FileCreate DeferralsBilling Order61

Recurring Billing OrderWave Front Monthly Billing with Add on Initial order – Qty 80K - 12 months SKU Add on order – Qty 30 K (SCT with initial order) (VT moves from T3 – T4) Overage billing with T4 post Add on Recurring monthly billing with initial and Add-on lines in one single invoice with different VTInitial order Term - 12 MonthsQty 80000Confidential 2020 VMware, Inc.62

1st and 2nd Month Recurring InvoicesInitial OrderConfidential 2020 VMware, Inc.63

Add on and Overage invoicesVolume Tier moves from T3 - T4Addon Invoice sampleConfidential 2020 VMware, Inc.Overage Invoice sample64

Future Recurring InvoiceInitial and Addon in one invoice with different TiersConfidential 2020 VMware, Inc.65

AR Regression ReportConfidential 2020 VMware, Inc.66

AR Regression ReportsAR Reports in system ScreenshotConfidential 2020 VMware, Inc.67

AR Regression Reports Examples1. VM Consolidated AR Aging Report – 5 & 7 Bucket reportRegression testing – ARReports2. VM Transaction Register Report3. Customer Billing History reportNo new report added as partof SSC wave 14. VM SaaS Transaction report – summary/detailed5. Credit memo reconciliation reportVMware Aging 5& 7 Bucket ReportConfidential 2020 VMware, Inc.VM SaaS TransactiVMwareVM Transactionons Report.xlsCustomer Billing History ReportRegister Report68

SSC Wave 1 –Open BugsAR Critical bug: Price MismatchRounding off issue across various systems – CPQ/EBS/SAP Currently being tested as part of SSC wave 2 - Dec 17th releaseIssue: Variance in quote vs PO value and hence in PO vs AR Invoice value PO value lower than Quote value PO value higher than Quote value PO value is the same as Quote valueCross-functional team bugs: Order TCV not matching to the monthly value multiplied Credit memo mismatch in Revenue post partial cancellation of recurring order OnDemand Overage Proforma discrepancy Fx issue between SPP token and provisioning event in different periods SSCP redemption adjustment resulting in negative revenue CSP and CPN notifications for partial cancellations/offer level cancellationsConfidential 2020 VMware, Inc.69

SSC Wave 2 Dec ReleaseUAT - 30th Nov – 17th Dec Enabling Initial Flexi Sales led transactions for Green field customer for both Direct and Channel RTM Enabling purchase of Addon (Quantity and Feature) with Flexi term (FCT–Flexi) based in initial purchase Internal operation validation for additional scenarios on cancelation/termination, renewal preference, Grace period and POnumber update Consolidated Statement validation from CSP UI (SST) and from EBS AR module (AR) Service line Grouping Automation in CPQ (Sales and DMT) and corresponding validation in EBS (OM) CPQ Config rules and Quantity field validation in configurator Revenue Reports – (Actual vs. PDH Lead Time Report, Provisioning Status report, Scheduled billings for revenue forecast) Wave 1 Defect retest – (Price Mismatch, Order TCV not matching, Credit memo mismatch in Revenue, OnDemand OverageProforma discrepancy ) CPQ Standalone – Subscription Bundle, Edition Upgrade (Full) – (Sales and DMT)Confidential 2020 VMware, Inc.70

Q&AConfidential 2020 VMware, Inc.71

Thank YouConfidential 2020 VMware, Inc.72

AppendixConfidential 2020 VMware, Inc.73

SaaS & Subscription Commerce TransformationCustomerexperience in CSPConfigure, Price & Quotein CPQ SSC is a next gen platform aimed to build an end-to-end Offer-to-Cash SaaSand Subscription commerce experience.Partnerexperience in CPNSubscription & Billing in SAPBRIMTo cover this large scope, multiple components and focus areas must fit intogether like pieces in a jigsaw puzzle. There are 7 puzzle pieces which havebeen put together to reach SSC objectives.Supply Chainin SAP SDData services in Unified Data ProgramBusiness standards in SummitConfidential 2021 VMware, Inc.74

Persona Impacted by SSCExternalPartner (Distributor, Reseller)InternalInternalInternal(Backoffice Operations)(Finance Operations)(Business Groups)Pricing OpsAccountsModern Apps & ManagementBookingsCloud InfrastructureRevenueNetworking & Advanced SecurityTaxService Provider & EdgeCommissionEnd User ComputingSales OpsChannel End CustomerDirect CustomerDMTOrder ManagementCustomer SupportManaged Service Provider (MSP)Customer SuccessMSP TenantPartner & Disti OperationsIB ServicesOrder FulfilmentConfidential 2021 VMware, Inc.75

SSCP Wave 1 Capabilities Manage attribute-based offer and pricing instead of thousands of proliferated SKUs Have the ability to manage unified access to Cloud services BU portals for customers with a single set of login credentials Have the ability to manage single unified access to Cloud services self-service purchase experience Track all commerce interactions with customers/partners with streamlined CSP APIs Listen to all commerce events (renewals, cancelations, etc.) & make necessary provisioning changesBU/Service owner Have a single interface to interact with all of SSC commerce via CSP APIs (provisioning, event notifications, etc.) Flexibility to send service-specific notifications with custom messages to customers Manage all SaaS, Subscription and hybrid offers in one integrated E2E commerce (Q2C) infrastructure Manage attribute-based offer and pricing instead of thousands of proliferated SKUs Have an attribute-based configurator to manage Sales-led purchases for customers & partners Have access to purchase history to track existing entitlements for a customerBiz Ops Have the ability to proactively monitor and measure business performance – transaction cycle time, exceptions, errors etc. Read-only CSP access to view active customer entitlements and invoices for billing issue resolution Fiori UI/SAP Admin Portal to view active customer subscriptions, billable items, billing documents, and manage clarification casesConfidential 2021 VMware, Inc.76

SSCP Wave 1 Capabilities Purchase SaaS services that are purely commit-based, or commit-based with overage charges Onboard a single unified portal (CSP) for all of VMWare SaaS Cloud services experience Expand SaaS service portfolio by purchasing incremental quantity or related add-on services with co-term (Short/Forward) Have a standardized discounting framework volume tiers enablementCustomer Renew services via Sales-led or auto-renewal option, change renewal preferences on CSP Request cancelation of service, wherever applicable per VMW policy Have flexibility to be billed for committed services on a prepaid or recurring basis, and for overage Purchase SaaS services for a customer Expand SaaS services portfolio for the customer Renew services via Sales-led process Onboard CPN to view end customers, and their orders and active subscriptions Have flexibility to be billed for committed services on a prepaid or recurring basis, and for overagePartner No more proforma invoices for prepaid scenarios No more “quote value does not match invoice” pain points Ability to have exact value of any purchases, add-ons for the prorated duration of serviceConfidential 2021 VMware, Inc.77

Summit DecisionsCustomer Journey - CapabilityTopicBusiness Context / Problem StatementApproved DecisionsMarketplacesOperational process for new RTMDefine the operational E2E process and key decisions for enablingVMWare to sell products on AWS Marketpla

SaaS service(s) 2. VMW Sales Rep Opportunity Management 10. Customer reviews quote & submits PO 12. OM Book Order 13. BO Subscription IDs created in Pending Prov status for services purchased, Provider Orders created in SAP BRIM 14. Order info sent to CSP, CSP initiates provisioning request to 1 or more BUs 20. Billing for services purchased