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Effective 10th April 2017

IBM Software Channels Incentive Simplification

An Arrow Guide

Name Changes

• GB Instant Rebate CVR – SW Commercial & Enterprise Focus

• SVI ID & Sell

• SVI Sell Only CVR – SW Sales

• VAP for Gov CVR – SW Sales Assist

• SVP Small Deal Rewards

• SVP Rewards for New or Reactivated Cust CVR – SW New Client

• VAP CVR – Solutions (VAP)

• Industry Authorisation CVR – Solutions (Industry)

• Capability Authorisation CVR – Solutions (Capability)

• RVI CVR – Software Renewals

2CVR – Channel Value Rewards

Benefits

CVR – Sales, Sales Assist and New Client• Single registration process including GE end user opps

• IBM confirm at point of registration if it is GE or non GE and reconfirm at time of transaction

• No need to re register or apply if opportunity converts from resell to assist

• 6 months validation from registration approval - can only be re registered once, so a maximum of 12 months validity (exceptions can be made with a valid business case.)

CVR – Sales – Non GE• Automated claim process – Arrow adds opp # to order, no other action

needed

• BP chooses frequency of fee payments – weekly, monthly or quarterly

• Elimination of sales documentation requirement

CVR – Sales – GE and Sales Assist• No change in current documentation process 3

Points to be Aware of

• Existing opportunities registered prior to 10th April remain valid and retain their current expiry date.

• Partners can no longer claim both Sales and Sales Assist – Partner can register in the first instance for CVR Sales, this remains valid for 6 months. If during that time you envisage losing the sale you can change the registration to Sales Assist with no additional documentation required to do so.

• If original partner claims Sales Assist the second partner who closes the sale can not claim CVR Sales. ONLY ONE PAYMENT PER DEAL. If original partner does not provide adequate documentation the second partner may claim retrospectively for Sales Assist. This is not an automatic process but is instigated by the partner following close of deal.

• CVR Sales for GE End Users – upfront enhanced discount granted but sales documentation is not scrutinised until sale closed.

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Additional Updates

• IBM Opportunities – previously, when registering an opportunity, if it had been loaded by IBM it would be classed as a duplicate opportunity and rejected – this is no longer the case. The only duplication will be if the opp has already been registered by another partner.

• Partners now choose the frequency of rebate payments – weekly, monthly, quarterly – this is a choice made within PartnerWorld.

• Multiple opp numbers can be used on one order, against different brand families, once a brand family has been invoiced against, the opp number will be closed and cannot be re used. Likewise one opp number can be used across multiple orders in the same way – but once a brand family has been invoiced against the opp number will be closed for that brand.

• There can be multiple registrations for CVR-Sales against a GE end user, but obviously only the partner who closes the sale will receive the rebate.

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Rebate and Discount Structure

CVR-Sales and Sales Assist Percentages

Industry – 5%Enterprise – 15%Commercial – 25%

CVR – Software New Client

10% - back end rebate paid direct to BP by IBM – for Enterprise and Commercial accounts only – GE and Industry accounts do not qualify for CVR – Software New Client

Software as a Service

15% - but only eligible for Sales Assist – Partners selling SaaS do not qualify for CVR –Sales. CVR Sales Assist only payable on SaaS when order is fulfilled by the IBM direct sales team, orders transacted through a BP do not qualify.

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Margin Stacks- New Licence

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2017 New License (Early April) Industry/ELA

%Enterprise % Commercial %

Channel Value Rewards - Software Commercial & Enterprise Focus

5 10 20

Channel Value Rewards - Software Sales, Software Sales Assist

5 15 25

Channel Value Rewards - Solutions 10 15 15

Margin Stacks- S&S

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2017 Renewal (Early April) Industry/ELA

%Enterprise % Commercial %

Channel Value Rewards - Software Commercial & Enterprise Focus

2 6 12

Channel Value Rewards – Software Renewals 6 15 26

CVR – Sales Eligibility

• PA/ PAX/ Support Provider orders

• New License and Monthly Licenses, including selected appliances

• No minimum $ amount, no cap

• No renewals, reinstatements, SaaS, Subsequent Fixed term

• Business Partner must be currently approved/authorized in the

Product Group(s)

• All contract variants, including ELAs, apply

• Shrink-wrap is excluded

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Sales Process – CVR SalesBP Submits Opp

GE Check by IBM

GE End UserBP requests pricing from Arrow

Identifies approved new license

Arrow provides pricing incl CVR discount

(% is at Arrow’s discretion)

BP places order – identifying approved

new licenses and RECONFIRMS OPP #

Arrow puts approved opp # on EACH LINE ITEM

System does checks, order bills, BP provides

sales docs to IBM

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Non GE End UserBP requests pricing from ArrowARROW DOES NOT provide CVR Sales

discount in priceBP places order identifying new

approved licenses and RECONFIRMS OPP #

Arrow puts approved opp # on EACH LINE ITEM

System does checks, order billsIBM calculates fee and ‘deposits’ for the

BPPayment then released as per the BP’s

requested payment frequency.Approved Opps are valid for 180 days

Sales Process – CVR Sales AssistBP Submits Opp

GE Check by IBM

GE End User

Not eligible for Sales Assist

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Non GE End User Duplicate check performed by IBM Notification to BP on eligibility – valid

for 180 days BP closes Opp Order bills BP attaches sales docs in GPP (mySA) BP claims CVR Sales Assist in GPP

(mySA) IBM matches sales to claim IBM calculates fee and ‘deposits’

payment for the BP on their requested frequency

Payment Frequency

• To change the Payment Frequency for CVR – Sales/Sales Assist fees, the Business Partner should do the following:

• Sign in to PartnerWorld – select PartnerWorld membership administration –Get Started

• Select Relationship Management from the left navigation pane.

• On the Relationship Management page, click the "Apply and Manage Relationships" link

• Click the Software relationship type link which you wish to update.

• Scroll down the page past the Product Groups to the "Payment Frequency" menu. Select the new payment frequency (Quarterly, Monthly, Weekly) from the drop-down menu, and then click on the "Next" button to proceed.

• Click "Next" button until you reach the page with "Submit". Click "Submit" button to send the application to IBM CVR – Sales/Sales Assist team for processing.

• Make note of the confirmation number for tracking purposes.

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https://www-356.ibm.com/partnerworld/wps/servlet/mem/ContentHandler/channel-value-rewards

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One Stop Information Page Within IBM PartnerWorld

IBM Back Up Charts

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© 2017 IBM Corporation IBM Confidential 15

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Key Dates; Before and After – Value Advantage Plus for Government

Before CVR Availability- Value Advantage Plus for Gov’t

On or After Channel Value Rewards Availability

Enrollment Last day to enroll March 31st . Non SVI VAP-G partners should start enrolling in SVI.

BP Action Required ! VAP-G Partners need to apply to CVR-Sales and Sales Assist

Opportunities Last day to submit a VAP-G opportunity is April 5 No BP Action Required ! Active VAP-G opportunities migrated by IBM under “SVI” in GPP. New CVR opportunities can be entered for GOEs

Order Fulfillment Priced by VADRequires a Solution ID.Last day to submit order with Solution ID is April 5

Priced by VADRequires an Oppty #.BPs provide Oppty # for each new license approved for CVR to VADs to place an order to IBM

Discount At Distributor’s discretion: Prior to April 10th, discount percentages for VAP-G sales orders are effective and after April 10th the discount percentages on sales orders for new CVR – Sales are effective.

Documentation Documentation required for each sales transaction

© 2017 IBM Corporation IBM Confidential 16

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Before CVR Availability– Software Value Incentive, SVP Small Deals

On or After Channel Value Rewards Availability

Existing Opportunities Existing “SVI “ opportunities are included in CVR automatically. No BP Action Required !

New Opportunities If submitted before April 10th, first to register basedon first BP among BPs and compared against IBMopptys

If submitted on or after April 10th, first to register basedon first BP among BPs

Order Fulfillment SVI is fulfillment agnostic.SVP Small Deals: Last day to submit orders is April 5th

When reselling, provide Oppty # to VADs VAD provides pricing up front for GOE orders

Claims SVI uses claims exclusively BP Option – Sell or Assist When claims used by BP, claims will have the same search window (60/30). Sales order date will determine the percentage paid.

Fee Percentage If sales order date precedes CVR availability, earns SVI rates.

For CVR-Sales, Fee percentage is based on new rates. For CVR-Sales Assist: If sales order date is on or after CVR, earn 5, 15 and 25%. SaaS earns 15%.

Before and After – SVI and CVR-Sales and Sales Assist Value

© 2017 IBM Corporation© 2017 IBM Corporation IBM Confidential 17

Additional Resourceso For additional information and continued updates, visit the IBM PartnerWorld website at

www.ibm.com/partnerworld/svp. Bookmark this site and check back often for updates.

o A Frequently Asked Questions (FAQs) companion reference is posted to the above site and will be updated periodically (targeting complete new version by mid-March)

o Reach out to your local IBM contacts or IBM Software Channel Representative with questions.

o If you have a question that is not covered by the resources above forward that question to IBMSWBP@us.ibm.com

Errors – CVR-Sales Discount will not trigger automatically

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• BP is not authorized to sell Product Group (may be fixed by STS)

• Invalid Opportunity # (may be fixed by STS)

• BP is not approved for the brand family

• Ineligible Brand Family Status

• Reseller on Sales Order is not equal to BP on opportunity

• Ineligible Revenue Stream Code

• Ineligible Channel Code

• Ineligible Line of Business (PA,PX, Support Provider)

• Brand Family is fully paid

• Brand Family Forecast is zero

• Entitled End User Price is zero

• BP is equal to End User

• Country on Sales Order is not equal to Country on opportunity (some exceptions apply)

• Sales Order + Line # already paid

• Opportunity must precede Sales Order Date

• No renewals (Monthly Licensing/SaaS)

• BP Preferred Distributor is not equal to Distributor on the Order Brand Family Mismatch

• Sales Order Date must be on or before opportunity expiry date

• Opportunity is not approved in GPP

© 2017 IBM Corporation IBM Confidential 19

Example of Eligibility Decision Letter Sent to BP - GOE

Dear Business Partner:

Your opportunity #_____, registered for Channel Value Rewards -Sales/Sales Assist for (customer name) is approved for eligibility as a “Government Owned Entity”.

You must provide to your Distributor your approved Opportunity Number that IBM provides to you. The Preferred Distributor must include the Opportunity Number with each order for Eligible Products that are approved.

This approval is only applicable to products in the following Brand Families, in the following Product Groups.

(Put a table here with the Brand families and Product Groups based on the GPP registration)

Opportunity Number

Providing the Opportunity Number to your Preferred Distributor is very important. We recommend that you forward this e-mail to your primary contact at your preferred Distributor so that they will be aware that this

opportunity has been approved for eligibility. Without the correct Opportunity Number, the discount will not be issued.

If all Eligible Transaction requirements are not met as stated in the Operations Guide within the required timeframe for GOE End User transactions, and therefore the discount cannot be provided at the time of the order, then the discount cannot be provided at all.

Documentation

In order to retain the Channel Value Rewards - Sales discount, Business Partners must attach their best and final supporting sales documentation to the opportunity in GPP. They can be attached now or no later than 30

days after the sales order date. Please don't forget to check the 'Release to IBM' check box so the documents are visible to us. Please see the Channel Value Rewards – Sales Operations Guide for a description of

acceptable documentation.

If the documentation is insufficient, then the Channel Value Rewards- Sales discount will need to be paid back.

If you have any questions after reviewing this letter please do not hesitate to contact the IBM BPSO.

EMEA/NA/LA - SVIPRM@uk.ibm.com

AP / GCG - svidisdl@cn.ibm.com

JP - EBA4517@jp.ibm.com

© 2017 IBM Corporation IBM Confidential 20

CVR and CVR-Renewals

CVR- Software Renewals; Order earns CRV-Sales on New license and Out years Renewals earn CVR-R• GOE Transactions, where new license ordered with CVR and out years renewals ordered at same time

• Both CVR and RVI will be issued as rebates at the time of sale

• Non GOE Transactions, where new license ordered with CVR and out years renewals ordered at same time

• CVR will not be paid as an instant rebate

• RVI will be issued as instant rebate (in today’s RVI, neither the new license nor the renewal will trigger rebate

• VAD asked to pass the rebate to the BP

• If CVR- Sales fee not paid (i.e. fee fails because CVR-Sales rules not met) to BP then IBM will request the BP to return the

unearned RVI rebate

• Will require the order to be rebilled without the RVI

• Fix scheduled after April release