Financial Analyst / Investor Track

Financial Analyst / Investor Track SUSECON 2017 Nils Brauckmann CEO, SUSE nils.brauckmann@suse.com

Agenda Business Overview and Introduction Nils Brauckmann, CEO SUSE Market Growth & SUSE Products Thomas di Giacomo, CTO SUSE SUSE Partners & Alliances Michael Miller, President Strategy, Alliances & Marketing - SUSE Go-To-Market and Customer Overview Ronald de Jong, President Global Sales SUSE Recap and Q&A

SUSE at a Glance 20,000+ Certifications 25+ Years of Open Source Innovation for Enterprises 1st Enterprise Linux & Open Stack Distribution 1st Enterprise Open Stack Distributio Positive Brand Reputation Enterprise Grade Global Reach Large Customer Base 5000+ Global Partners 2/3 of the Fortune Global 100 use SUSE Linux Enterprise 3

SUSE in Micro Focus International Micro Focus is one company with two product portfolios balancing focus with leverage of scale. Micro Focus International CEO & Board Go To Market Go To Market NA, EMEA, APJ, LATAM North America International (EMEA, LATAM) APJ Renewal Sales Services Channel, Systems Integrators & OEM Channel, Systems Integrators & Independent Software Vendors Field Marketing Field Marketing Product Group Product Management Product Management Product Development Product Development Customer Care Shared Marketing Services, Sales Operations Corporate Operations Finance IT HR Legal Business Operations & PMO 4

SUSE Charter Within Micro Focus International PLC (Group) Achieve sustainable, profitable revenue growth Operate with the mindset of an independent business within the group in alignment and in support of group strategies, policies, processes and systems. Deviation from group standards in areas where it is required to effectively fulfil on our charter to grow revenue. Leverage Group scale, strength and capabilities 5

The SUSE Executive Team Nils Brauckmann Chief Executive Officer Ralf Flaxa President of Engineering Ronald de Jong President of Sales Michael Miller President of Strategy, Alliances & Marketing Thomas Di Giacomo Chief Technology Officer Sri Rasiah Vice President of Finance Steve Gilliver Vice President of HR 6

Why Open Source? 7

Open Source Business Model It s not about selling intellectual property Source code is freely available Technology is developed by the community Open source vendors: Participate and contribute to community Influence and create upstream innovation Turn upstream technologies into reliable solutions Provide enterprise services and support 8

Open Source Advantages Mass collaboration of developers within open, diverse communities leads to rapid innovation Reduced time-to-market and cost-to-market Full transparency of development efforts Source code freely available to be utilized Interoperability, flexibility and choice Reduced vendor lock in Faster access to the latest innovations with the safety and freedom of open standards 9

Subscription Business Model A packaging and pricing model Can apply to open source or proprietary products Subscriptions include: Access to installable binaries Security patches and upgrades Product fixes and technical support Commercial implications: Revenue is recognised over subscription lifetime Renewal transaction is the same as initial purchase Different metrics: TCV, ACV, ACD 10

Market Landscape 11

APP Portability STORAGE NEEDS Exploding IT AGILITY Required SECURITY with Availability Market Pressures & Customer Demands SERVICES Must be Available Everywhere Customers Expectations IoT MORE DATA, LARGER DATA, Growing Faster MOBILE Access COMPETITION Innovating Faster 12

Open Source Infrastructure Technologies For Digital Transformation Platform as a Service (PaaS) Application Delivery Management Ops, Monitor & Patch Containers & Orchestration (CaaS) Enterprise Private Cloud (IaaS) Public Cloud Deployment Software Defined Everything CROWBAR Virtualization Storage Networking SALT Orchestration HEAT Operating System Physical Infrastructure: Server, Switches, Storage 13

Why SUSE? 14

SUSE Mission and Strategy Mission To provide and support enterprise-grade open source solutions, from software-defined infrastructure to application platforms, with exceptional service, value and flexibility. Strategy With partners and communities, we innovate, adapt and deliver secure open source technologies to create solutions for mixed enterprise IT environments. SUSE solutions are hardened and resilient suitable for the most demanding, mission-critical, high-performance situations. 15

How SUSE Adds Value SUSE is ideally positioned to help Enterprise IT to master the challenges of digital transformation by increasing the agility and adaptability of IT infrastructure and business application delivery from a foundation of 25+ years in open source, positive brand reputation, established customer base and adjacent technology experience. Expertise in creating open source innovation upstream Hardening open source innovation into enterprise-grade technology and products High-quality support and services with ecosystem of partners Open Source Community Results Increased agility through rapid innovation Affordable mission-critical performance reduces cost Open, optimized for mixed IT Reduced Risk 16

SUSE The Open, Open Source Vendor Collaboration and partnership beyond improving time and cost-to-market Open to support wish for choices and enterprise IT realities Optimized and open for mixed-it, heterogeneous environments and embracing proprietary products Open to build best-of-breed solution stacks including competitive products 17

Where SUSE Leads 15+ Mainframe Linux Over 15 years of mainframe Linux market share leadership 4/5 Linux in Finance 4 out of 5 of the world s largest banks use SUSE Linux Enterprise 70% SAP on Linux 70% of all SAP applications running on Linux run on SUSE 80% Linux in Large Enterprise Over 80% of the Fortune Global 50 are active SUSE Customers 9/10 Linux in Aerospace 9 out of 10 of the largest aerospace companies rely on SUSE x10 Linux in Telecom 10 of the largest telecommunications carriers rely on SUSE 7/10 Linux in Pharma 7 out of 10 of the largest pharmaceutical companies use SUSE Linux Enterprise 7/10 Linux in Retail 7 out of 10 of the largest retailers in the U.S. are active SUSE customers x10 Linux in Automotive 10 of the largest global automobile mfgs. are active SUSE customers 50% Linux in HPC Half of the world s 20 largest super computers run on SUSE 7/10 Linux in Manufacturing 7 out of 10 world s largest manufacturers use SUSE Linux Enterprise 18

Market Growth & SUSE Products Thomas Di Giacomo CTO, SUSE Michael Miller President of Strategy, Alliances & Marketing, SUSE 19

SUSE Multi-Purpose Operating System Platform as a Service (PaaS) Application Delivery Management Ops, Monitor & Patch Containers & Orchestration (CaaS) Enterprise Private Cloud (IaaS) Public Cloud Deployment Software Defined Everything CROWBAR Virtualization Storage Networking SALT Orchestration HEAT Operating System Operating System SUSE Linux Enterprise Server Physical Infrastructure: Server, Switches, Storage Physical Infrastructure: Server, Switches, Storage 21

SUSE Infrastructure as a Service and Storage Platform as a Service (PaaS) Application Delivery Management Ops, Monitor & Patch Containers & Orchestration (CaaS) Enterprise Private Cloud (IaaS) Private Cloud / IaaS SUSE OpenStack Cloud Public Cloud Deployment CROWBAR SALT Orchestration HEAT Software Defined Infrastructure Virtualization Virtualization Storage KVM, Xen, VMware, SUSE Enterprise Hyper-V and z/vm Storage Operating System Operating System SUSE Linux Enterprise Server Networking Networking SDN and NFV Physical Infrastructure: Server, Switches, Storage Physical Infrastructure: Server, Switches, Storage 22

SUSE Application Delivery and Containers Application Delivery Platform as a Service SUSE Cloud Application Platform Management Ops, Monitor & Patch Container Management SUSE CaaS Platform Enterprise Private Cloud (IaaS) Private Cloud / IaaS SUSE OpenStack Cloud Public Cloud Deployment CROWBAR SALT Orchestration HEAT Software Defined Infrastructure Virtualization Virtualization Storage KVM, Xen, VMware, SUSE Enterprise Hyper-V and z/vm Storage Operating System Operating System SUSE Linux Enterprise Server Networking Networking SDN and NFV Physical Infrastructure: Server, Switches, Storage Physical Infrastructure: Server, Switches, Storage 23

SUSE Management and Public Cloud An Open, Flexible Infrastructure Approach Application Delivery Operations, Monitor and Patch SUSE Manager Management SUSE OpenStack Cloud Monitoring openattic Cluster Deployment Crowbar Salt Management Orchestration Heat Kubernetes Container Management SUSE CaaS Platform Software Defined Infrastructure Virtualization Virtualization Storage KVM, Xen, VMware, SUSE Enterprise Hyper-V and z/vm Storage Operating System Platform as a Service SUSE Cloud Application Platform Operating System SUSE Linux Enterprise Server Physical Infrastructure: Server, Switches, Storage Physical Infrastructure: Server, Switches, Storage Enterprise Private Cloud (IaaS) Private Cloud / IaaS SUSE OpenStack Cloud Networking Networking SDN and NFV Public Cloud SUSE Cloud Service Provider Program 24

SUSE Software-Defined Infrastructure An Open, Flexible Infrastructure Approach Application Delivery Management Platform as a Service SUSE Cloud Application Platform Operations, Monitor and Patch SUSE Manager SUSE OpenStack Cloud Monitoring openattic Cluster Deployment Crowbar Salt Orchestration Heat Kubernetes Container Management SUSE CaaS Platform Virtualization KVM, Xen, VMware, Hyper-V and z/vm Software Defined Infrastructure Storage SUSE Enterprise Storage Operating System SUSE Linux Enterprise Server Private Cloud / IaaS SUSE OpenStack Cloud Physical Infrastructure: Server, Switches, Storage Networking SDN and NFV Public Cloud SUSE Cloud Service Provider Program 25

Market Opportunity: Enterprise Linux OS Worldwide Linux Server Operating System Paid Subscriptions Revenue $M 2016-2019 (with YoY Growth) 3,500 3,000 2,500 2,000 13.9% 13.6% 13.1% 1,500 1,000 500-2016 2017 2018 2019 The Paid Linux server OS market is expected to grow from $1.97B in 2016 to $2.88B by 2019, at an estimated CAGR of 13.5% Source: Gillen, A. Bespoke Data. IDC, April 2016 26

SUSE Linux Enterprise Server Power your physical, virtual and cloud-based, mission-critical workloads with a world-class, high performance, secure open source server OS. 99.999% Mission-critical Availability 80% Savings in Server Management 80% Cost Reduction Differentiation Enterprise-grade OS for the most data and compute intensive workloads across all industries Broadest support for multi-architectures, multi-hypervisors, IHVs and ISVs Innovative OS with HA for SAP HANA, live patching, optimized for containers Foundational for software-defined infrastructure and application delivery platform www.suse.com/products/server 27

Market Opportunity: OpenStack Cloud 1,200 SUSE Addressable Market Opportunity for OpenStack Cloud Revenue $M 2016-2020 (with YoY Growth) 1,000 35.1% 800 25.1% 600 29.7% 400 53.2% 200 0 2016 2017 2018 2019 2020 The SUSE addressable OpenStack Cloud market opportunity is expected to grow from $325M in 2016 to $1.09B by 2020, at an estimated CAGR of 35.4%. Source: Sadowski A. 451 Research, October 2016 28

SUSE OpenStack Cloud Deliver the agility, faster time-to-market and the innovation needed to quickly respond to today s ever-changing businesscritical demands. Differentiation Fast / Easy Build Entire Clouds in Hours. Deploy Servers in Minutes 100% Software-defined infrastructure (SDI) 72% Choose OpenStack Cloud for Cost Savings Enterprise-grade innovative IaaS/SDI (HA, scalability, containers) for both private clouds and service providers. Industry leading ease of installation, rolling upgrades and automated management Unmatched range of hyper-visor support, guest OS agnostic for best-of breed mixed-it environments Strong and growing ISV and IHV ecosystems for hybrid clouds, NFV, appliances, etc. www.suse.com/products/suse-cloud 29

Market Opportunity: Software-defined Storage 1,600 Market Opportunity for Software Defined Storage Revenue $M 2016-2019 (with YoY Growth) 1,400 1,200 1,000 800 19.8% 16.1% 16.7% Hyperconverged File Storage 600 400 Block Storage Object Storage 200 Source: see note - 2016 2017 2018 2019 The SDS market opportunity is expected to grow from $859M in 2016 to $1.39B by 2019, at an estimated CAGR of 17.5%. SUSE Addressable Market: Gartner predicts open-source storage will account for 20% market share in 2018 (up from <1% in 2013) 30 3 0

SUSE Enterprise Storage Enable IT to deliver highly scalable and resilient storage designed to scale from terabytes to petabytes. Reduce Capital expenditures Cut Operational expenditures Adapt Quickly to changing market conditions Differentiation Enterprise-grade visualization and manageability with openattic technology + easy integration with OpenStack Uniquely provides unified object, block and file storage with distributed, self-distributing and healing architecture Ideal replacement for expensive proprietary/traditional storage (for tier 3 and 4 needs: archiving and back up) Consistently first to market with key customer-driven innovations (e.g. performance, multi-os clients) www.suse.com/products/suse-enterprise-storage 31

Market Opportunity: Containers 4,000 Worldwide Market Opportunity for Container Revenue $M 2016-2021 (with YoY Growth) 3,500 3,000 27.0% 2,500 31.2% 2,000 1,500 1,000 500 45.8% 39.0% 34.4% - 2016 2017 2018 2019 2020 2021 The Container Market is expected to grow from $759M in 2016 to $3.4B by 2021, at an estimated CAGR of 35.3% over the period Source: 451 Research, Market Monitor Overview Review: Cloud Enabling Technologies Containers Market Highlights, March 2017 32

SUSE CaaS Platform Enable IT and DevOps professionals to more easily deploy, manage, and scale container-based applications and services. Differentiation 1 Complete package for faster time to market 3 Public clouds offer predefined deployment configurations 71% Enterprise running or planning to run container workloads in the next year Light weight scaling platform, on premise or public cloud, for quick implementation of enterprise-grade Dev/Ops Unique combination of the orchestration power of Kubernetes with SUSE Linux OS optimized for containers Integration of secured and enterprise grade container lifecycle within SUSE Manager and Build capabilities Rapid semi-continuous release cycle for development of incremental differentiation https://www.suse.com/products/caas-platform/ 33

Market Opportunity: Private PaaS 3,000 Worldwide Market Opportunity for Private PaaS Revenue $M 2016-2021 (with YoY Growth) 2,500 2,000 1,500 28.5% 26.0% 23.5% 1,000 500 35.5% 30.8% - 2016 2017 2018 2019 2020 2021 The Private PaaS Market is expected to grow from $691.7M in 2016 to $2.4B by 2021, at an estimated CAGR of 28.8% over the period Source: 451 Research, Market Monitor Overview Review: Cloud Enabling Technologies Private PaaS Highlights p.48, March 2017 34

SUSE Cloud Application Platform Speed delivery and streamline lifecycle management of traditional and cloud-native applications with a modern application delivery platform. 100% Open Source and enterprise-ready 1 Platform that brings together Cloud Foundry and Kubernetes Reduce Installation and management complexity with containerized distribution Differentiation Enterprise hardened and supported distribution of the industry leading Cloud Foundry PaaS technology Delivers lower cost of ownership and higher flexibility than traditional application platforms (independent of services) Comprehensive user interface for management and orchestration Deployable on SUSE CaaS Platform or other Kubernetes including Public Clouds (for existing and new projects) www.suse.com/products/suse-cloud-application-platform 35

SUSE Partners & Alliances Michael Miller President of Strategy, Alliances & Marketing, SUSE 36

Partner Ecosystem Hardware Vendors Cloud Services Providers Software Vendors SUSE System Integrators Resellers Distributors 37

A Broad Ecosystem 5000+ Partner Ecosystem members 13,500+ Certified Hardware Configurations 7000+ Certified Applications 3200 Solution Providers & System Integrators 1800 Technology Partners 600 Training Partners 38

Independent Software Examples 39

ISV Alliance Examples SUSE OpenStack Cloud as preferred Infrastructure as a Service layer Bundles SUSE technologies in integrated systems offering Provids joint customers with a hybrid cloud management solution Certified on SUSE Linux Enterprise Server SUSE CaaS Platform integrates with MapR persistent data services Optimized with SUSE OS to provide best in class performance amongst Hadoop vendors SUSE OpenStack and Storage powering SAP Cloud Platform Industry s perferred OS for SAP Applications Upstream collaboration on OpenStack and Cloud Foundry 40

Cloud Service Provider Examples 41

Cloud Service Provider Examples Leading optimized Linux platform for SAP HANA Multiple consumption models (on-demand, BYOS, reserved instances) New customer case studies: Fitch Ratings and Pacific Drilling SUSE Linux Enterprise Server for SAP Applications on Microsoft Azure SQL Server 2017 and Microsoft Azure Stack powered by SLES Multiple SUSE offerings for Microsoft WSL available in the Windows Store OpenStack Infrastructure for SAP Cloud Platform Software-defined storage for SAP Cloud Platform Upstream collaboration on OpenStack and Cloud Foundry SUSE Linux Enterprise Server for SAP Applications Available on Google Cloud Platform 42

Independent Hardware Vendor Examples 43

IHV Alliances Examples Acquisition of OpenStack and Cloud Foundry talent and technology assets from HPE SUSE Linux Enterprise certified and supported on entire HPE server and storage line #1 partner for SAP HANA sales IBM z14 avalable with certified SUSE Linux Enterprise Server 12 First and leading Linux on Power platform for SAP HANA Expansion of HW partnership into Cloud with Bluemix 25 years of engineering excellence enabling enterprise data centers Seamless one stop shop supports for Intel HPC Orchestrator and SLES for HPC Support of Intel Cloud Builders, Intel Fabric Builders and Intel Storage Builders Preferred OS platform for KunLun Continued collaboration as exclusive OS for teclo appliances Preferred OS platform for SAP HANA 44

IHV Alliances Examples SUSE Linux Enterprise Server is a Dell Tier 1 operating system Embedded use of SUSE technologies across multiple Dell platforms Virtustream Enterprise Cloud supports SLES for mission-critical applications Lenovo delivers broad support for SUSE s Linux, OpenStack, Storage and HPC offerings Lenovo Storage Solution for SAP HANA powered by SUSE Enterprise Storage Lenovo Converged Analytics Platform for SAP Vora with MapR and SUSE Introduction of unique Mission Critical SAP HANA offering (UCS + SUSE) Deep integration with Cisco ACI for software-defined networking with SUSE OpenStack Cloud as a preferred configuration SUSE-powered Business Critical Linux support service tailored for Japanese Market Joint collaboration for new SUSE OpenStack Cloud Monitoring product Lauched PrimeFLEX for SUSE OpenStack Cloud offering 45

Go-to-Market and Customer Overview Ronald de Jong President of Sales, SUSE 46

Sales Go-to-Market Strategy Globally aligned strategy and organization with consistent execution in support of SUSE s business objectives and growth plan. Scale direct sales organization with growth Maintain continuous focus on core business while diversifying portfolio Maximize opportunities to cross-sell new products to existing account base Invest to attract and win new logo accounts Leverage major alliances with differentiated joint offerings Align direct sales organization with channel/alliance partners Development and growth of new products - Develop customer base for private cloud infrastructure - Enter neighboring storage market related to data-center and cloud infrastructure - Capitalize on growing enterprise use of public cloud - Engage in emerging container, orchestration and microservice markets 47

Routes to Market Purchasing Programs Partner Programs SUSE VLA Distribution Distribution Resellers SI Distribution IHVs IHV Embedded MLA VLA Direct Cloud Education Shop (Online) Embedded CSP Education Resellers End Users 48

Sales Organization Structure is designed to support and to maximize the revenue potential of the various inter-connected routes to market Region North America EMEA Two sales regions America and Canada Roles: Partner and Alliance Sales Executives Direct Representatives ISRs Sales Engineers Country based organization Roles: ISRs Partner and Alliance Sales Executives Direct Representatives Sales Engineers Description - Consultants - Premium Support Engineers - Consultants - Premium Support Engineers AsiaPac Latin America Global Country based organization Direct Representatives, partner executives, sales engineers, consultants and premium support engineers Largely an emerging territory for SUSE Global Alliance & OEM sales team Global Web shop Manager Embedded team Support engineers Renewal team 49

SUSE Customers by Geo 9,000 8,000 Total # of Unique Customers Over a 3-year Period (FY15-FY17) 7,951 7,000 6,000 5,000 4,000 4,250 3,000 2,000 1,000 2,031 805 0 NA EMEA APJ LATAM 50

Bookings Breakdown by Industry 4% 3% 3% Manufacturing 7% 31% 8% Retail Finance High Tech Government 11% Transportation Academic 16% 17% Healthcare Other Confidential Information: Provided Under Non-Disclosure 51

Customer Case Studies 52

SUSE Enterprise Storage Example Economically scalable storage solution for continuously growing business critical data Running 2 Petabytes of customer critical data on enterprise-grade Ceph storage solution from SUSE Need for Enterprise Support 24/7, patches, updates Migration to SUSE Enterprise Storage done with without any downtime for the users 53

SUSE Enterprise Linux Server Example Reducing costs by standardizing and optimizing technology across data-center and point of sales devices Enabled migration of 1,200 info terminals within 14 weeks Provided a faster, more reliable platform for Java and web apps Increased standardization by running SUSE Linux Enterprise on both servers and info terminals in the shops 54

SUSE OpenStack Cloud Example Self-service IaaS simplifies management and speeds development and deployment of cloudnative applications Optimized for cloud native development, automated installation and configuration Demand for continuous integration for dynamic in-car applications and big data analytics. Simplifies management and maintenance of infrastructure resources, reducing maintenance effort and costs. 55

Recap and Q&A

SUSE Key Messages SUSE is well established and ideally positioned to be the open source partner for Enterprises - 25 years of relevant open source experience - Positive brand reputation, established enterprise customer base and adjacent, relevant technology experience Backed by the capabilities and strength of Micro Focus International, the 7 th largest software company in the world SUSE has a clear vision and strategy aligned with Enterprise IT requirements for agile and adaptable software defined infrastructure to master the challenges of digital transformation SUSE operates in innovative growth market segments that require continuous investment 57

Q & A 58

Appendix 59

Open Source Engagement YaS T 60

Reference Examples by Industry 61

Manufacturing Customers And more 62

Financial Customers And more 63

Government Customers And more 64

Retail Customers And more 65

Healthcare Customers And more 66

Education Customers And more 67

Technology Customers And more 68

Reference Examples by Solution 69

Enterprise Linux 70

Enterprise Linux 71

Enterprise Linux 72 7 2

OpenStack Cloud I Layer 73 7 3

Enterprise Storage 74 7 4

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