Microsoft Global Procurement Group

1. Microsoft Global Procurement Group Creating Value to Accelerate Growth Eric O’Connell Microsoft Ireland Procurement Lead

2. Agenda • Microsoft Ireland & GPG Overview • Primary capabilities, design, and breadth of influence to enable impact • Industry Insights • Evolution of procurement industry and GPG increases strategic contribution GPG Mission and Vision How GPG generates business value for Microsoft, its employees, partners and shareholders Engaging GPGHow and when to engage GPG for maximized value to the business Open Discussion

3. Microsoft Ireland – Who we are Microsoft Ireland Governance Team 1x European Development Centre EMEA Operations Centre Ireland Sales & Marketing EMEA Data Centre Product Development, Localisation & International Engineering Agreement to Cash Customer Support Services Advertising & Online Sales & Marketing Cloud Infrastructure Supporting the Microsoft suite of products through the entire lifecycle Site WHI = 80% Attrition = 7.5% Average length of service = 7.5 years Average Age = 35 years Rich diversity of talent & perspectives 64% male / 36% female 24% from 40 countries MS Ireland culture, attracting & retaining talent Critical mass of talent 1,067 FTEs (+700 Vendors) EOC 560 / EDC 400 / Sub 107

4. GPG Primary Capabilities Create Value at Microsoft Category Management Business Partnership Procurement Operations Planning & Programs Creates multi-dimensional value for Microsoft by managing enterprise-wide category analysis, strategy and sourcing of key areas of spend for Microsoft Generates impact through partnering with stakeholders to support business priorities using category strategies, programs and processes Ensures a high performing, diverse and reliable supplier community for Microsoft through programmatically managing performance and risk Drives efficiency and effectiveness in end-to-end procurement processes by creating simple and intuitive solutions and technology for Microsoft employees KEY PARTNERS: KEY OPERATIONS:SmartBuy MyOrder Purchase to Pay Category Data Management KEY PROGRAMS:Supplier Diversity Preferred Suppliers Supplier Due Diligence Procurement Citizenship Data Security and Privacy KEY CATEGORIES:Technology Marketing Professional Services Technical ServicesEmployee Experience Bing MOD

5. Evolution of Procurement Industry Increases Strategic Contribution Multi-Dimensional Value “Primary role by 2016: Sourcing as sustainable competitive advantage, deliver profits,contribute to business strategies, SRM and innovation” ~ Procurement Leaders Network 2012 “Procurement must refocus their efforts to include other value-added services to the business besides simply reducing purchasing costs” ~ KPMG 2012 “Continued success of Procurement requires us to transform again, and add a supplier-centric approach to our established category-centric sourcing” ~ A.T. Kearney 2012

6. GPG Brings a Comprehensive Toolkit to Create Value Cost Management Innovation Brand Value Revenue Growth Market Agility Reduced Risk Drive process efficiency and effectiveness Anticipate business requirements through deep engagement Create and deploy agile sourcing strategies Streamline supplier engagement Foster supplier innovation to create competitive advantage Bring technology and practices advancement into Microsoft Anticipate market trends Drive adoption of new supply strategy and partnership models Strategically apply all cost optimization levers Seek out mutual cost reductions with strategic suppliers Drive improvements in productivity Negotiate based on total value Proactively managed demand Position Microsoft as the customer of choice globally Ensure suppliers adhere to Microsoft’s citizenship expectations Promote and include a diverse supplier base Showcase Microsoft at industry events Manage mutually profitable supplier relationships Leverage Supplier Diversity program to increase government sales Support sales to strategic customers Train sales team how to sell to Procurement Programmatically mitigate supplier privacy, data security and corruption risk Enable process clarity, consistency and repeatability through strong policy education and governance Protect Microsoft’s best interests through robust contracting standards

7. Example: Cost Management Strategic Sourcing 20% Standard Sourcing • Perform supply market analysis using insights to strengthen strategy • Drive process efficiency and effectiveness • Apply all cost optimization levers • Risk/benefit analysis • Value chain focus Post Award Negotiations 15% • Requirements definition • RFP development • Negotiations strategy • Supplier evaluations • References check • Terms & conditions • Negotiations Savings • Narrow negotiations, • leverage & competition • Supplier terms & conditions • Limited process improvements • Price focused 10% 5% 20% + 5- 20% 0 - 5% • Assess /Plan • Source • Contract Sourcing Process

8. Creating Value Requires Strong Partnership GPG Supplier Engage GPG early and deep Appreciate and follow the Procurement Process i.e. RFP, RFQ or direct negotiation +€150k per annum = Strategic Position supplier internally as a strategic partner to the business i.e. SDM or Key Account Manager Provide market expertise to tailor industry solutions to the needs of the business Build and execute a supply strategy to tie business needs with supplier capabilities Implement simple and intuitive processes so the business can get what they need faster