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The deal economics comparison is critical for you to gain a perspective of the business transformation
requirements that are specific to your organization. In some cases, the revenue and associated margin
my be lower initially for cloud deals, but could generate higher revenue and potentially higher margins
over a period of time.

Illustrative HCS Deal Economics …understanding the realities of the revenue and
margin impacts WILL help you understand the
Partner Revenue On Premise HCS Opportunity potential gaps in your business plan….
Partner Margin over 3 years over 3 years
…in some case the total revenue for Cloud deals
$146,072 $258,422 may EXCEED the revenue for on-premise
Solutions…
$21,624 (15%) $47,772 (18%)
…in these cases, your transformation may be more
Assumptions: Assumptions: related to your ability sell on total value vs. product
10% HW & 15% Maint margins 20% on HCS Cloud Services resale…
30% Gross margins on services 30% Gross margins on services
No BIC margins associated …adding professional services or additional
recurring revenue services will improve BIC type
The breakeven in many HCS deals can be 6-9 months… margins…

Source: Cisco
The numbers above are illustrative only based on information provided by Cisco that outlines functionally similar opportunities Assumes deal of 250 users

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