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Hosted SharePoint Opportunity

July 18, 2005

Prepared bySam Washburn, Bob KazarianSamWashburn@edgestrategies.comBKazarian@edgestrategies.com

Version 1.5

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Hosted SharePoint Opportunity analyzed using a funnel methodology

Total US companies:under 500 employees including non-profits.

(6.7m companies – 100%)

Overall Opportunity:Companies with interest in adopting

SharePoint Solutions, plus firms with high needs profile

(2.2m companies – 33%)

Broad Opportunity:Companies with interest in adopting SharePoint Solutions (Best Candidates +

Other Candidates)(1.6m companies – 24%)

Best Candidate Opportunity: Willing to pay $30+ per month, adopt

within 12 months, enabling factors present:

(362k companies – 5.4%)

Government sources to determine number of firms

Opportunity progressively refined based on weighted

primary research within BellSouth customer base

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10%

19%

5%

66%

Opportunity within US SMB Population

Companies were assigned to one of four opportunity groups:

Best Candidate Opportunity: (362k companies;) Willing to pay $30+ and would consider adopting within 12 months. Enabling factors present: Broadband, IT expertise, Desktop web access.

Additional Potential Opportunity: (636k companies): Did not express interest in adopting, but have needs on at least 4 SharePoint Solution dimensions, are willing to outsource, and have enabling factors present:: Broadband, IT expertise, Desktop web access.

Other Candidates Opportunity: (1.25m companies) Interested in adopting Hosted SharePoint solutions, but do not meet Best Candidate criteria.

Non-Candidates (4.5m companies) Did not indicate a willingness to adopt, and have a low Needs Segmentation score.

Adopters: 24% of SMB Companies expressed an interest in adopting Hosted SharePoint solutions. (1.6m companies)

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Sample size: 381

The Hosted SharePoint opportunity shown here is

approximately 50% - 70% smaller than the opportunity for Hosted Messaging and Collaboration

found in the Hosted Exchange research in EMEA and the USA.

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4%

21%

75%

Hosted SharePoint: Opportunity within French SMB Population

Companies were assigned to one of three opportunity groups:

Best Candidate Opportunity: (52k companies;) Willing to pay 20€ or more per month, and find Hosted SharePoint solutions very useful for multiple purposes.

Other Candidates Opportunity: (288k companies) Interested in adopting Hosted SharePoint solutions, but do not meet Best Candidate criteria.

Non-Candidates (1.1m companies) Did not indicate a willingness to adopt.

Adopters: 24% of SMB Companies expressed an interest in adopting Hosted SharePoint solutions. (341k companies)

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Sample size: 346

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Adopter distribution and concentration by company size

Adopters by Size Segment

36%

34%

22%

8%

49%

25%

11%

15%

0% 10% 20% 30% 40% 50% 60%

0-4 emp

5-9 emp

10-19 emp

20+ emp

Best Candidates Other Candidates

Adopters Concentration within Size Segment

4%

10%

11%

3%

17%

19%

15%

15%

0% 10% 20% 30% 40% 50%

0-4 emp

5-9 emp

10-19 emp

20+ emp

Best Candidates Other Candidates

Sample size: 381

* see footnote

* see footnote

*20+ segment Best Candidate percents are derived from an analysis of the Hosted Exchange research data set because of the small sample size in this segment of the SharePoint data.

20+ segment concentrations may be

higher based on analysis of results from July 2005

research in France. (See next slide)

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Adopter distribution and concentration by Industry

Adopters by Industry

11%

20%

16%

16%

7%

11%

4%

4%

8%

5%

17%

17%

8%

7%

11%

9%

15%

8%

3%

7%

0% 10% 20% 30%

Other

Prof Services

FIRE

Construction

Healthcare

Bus Services

Non-Profit

Retail

Consumer Servs

Manufacturing

Best Candidates Other Candidates

4%

7%

15%

10%

4%

7%

2%

1%

6%

5%

22%

19%

22%

13%

21%

21%

24%

9%

6%

19%

0% 10% 20% 30% 40% 50%

Other

Prof Services

FIRE

Construction

Healthcare

Bus Services

Non-Profit

Retail

Consumer Servs

Manufacturing

Best Candidates Other Candidates

Adopters Concentration within Industries

Sample size: 381

Concentrations are spread broadly, but

FIRE, Business Services, and

Construction stand out.

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Hosted SharePoint: Cross selling opportunity (France)

Hosted Exchange Best Candidates: (199k companies)

SharePoint Adopters: (341k companies)

HE Best Candidates interested in adopting Hosted SharePoint: (113k companies)

A Significant cross selling opportunity exists between Hosted Exchange Messaging candidates and Hosted SharePoint Candidates. 57% of HE Best Candidates are potential adopters of Hosted SharePoint. 12% are Best Candidates for Hosted SharePoint.

HE Best Candidates that are also Hosted SharePoint Best Candidates: (23k companies)

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34% 31% 30% 29% 25%

38%

29% 27% 28%22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Project Management Centralize Official listsand procedures

(documentmanagement)

Problem Resolutionand follow-up

Departmental Portals(Mobile workers &

CRM)

Shared ResourceScheduling

Moderate Value High Value

Relative Value of individual Needs Dimensions (among adopters)

Please indicate How Valuable each of the features listed below would be to your organization?

Sample size: 87 Adopters

Project Management is the priority solution for those

interested in adopting. Although other solutions are

still important.