Mcafee Demonstrative Regression on Oracle Incremental Percentage Discounts

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GOVERNMENT EXHIBIT P4023-A

Regression on Oracle's
Incremental Percentage Discounts

Effect on incremental discount
- ebiz discount removed from base price
- Effect of competitors
- Customer annual revenues
- eBusiness Suite
- Oracle applications user
Source of Data
- Oracle discount approval forms and sales representative surveys

Incremental Percentage Discount Regression

Oracle Price Discount Regressions
Dependant variable: (Total Discount minus ebiz Discount) 1 - ebiz Discount)

(1)
(2)

PeopleSoft
0.076
(0.042)
[.071]
0.136
(0.059)
[.026]

JD Edwards
0.011
(0.061)
[.861]
0.055
(0.091 )
[.553]

SAP
0.106
(0.061)
[.088]
0.164
(0.076)
[.037]

Siebel
0.050
(0.060)
[.406]
0.048
(0.084)
[.568]

Niche
-0.011
(0.039)
[.776]
0.022
(0.066)
[.734|

Net License Revenue
6.47E-8
(2.04E 8)
[.002]
4.79E-8
(2.30E 8)
[.045]

Customer's Annual Revenue
3.01E-5
(1.40E-5)
[.034]
2.49E-5
(2.02E- 5)
[.226]

EBS
0.012
(0.040)
[.769]
0.073
0.059
[.225]

Previous Apps Customer
0.025
(0.046)
[.589]
0.040
(0.064)
[.532]

Constant
0.268
(0.051)
[<.001]
0.245
(0.090)
[.010]

R²
0.234
0.344

N
122
47

Peoplesoft 0.076 0.136

The presence of PeopleSoft causes Oracle to offer additional discounts of approximately 8 to 14 percentage points
Two regressions translate into 13% and 25% price decreases, respectively

Table One

Oracle Price Discount Regressions
Dependent variable: (Total Discount minus ebiz Discclunt) / (I - ebiz

(1)
(2)

PeopleSoft
0.076
(0.042)
[071]

0.136
(0.059)
[.026]

JD Edwards
0.011
(0.061)
[.861]
0.055
(0.091)
[.553]

SAP
0.106
(0.061)
[.088]
0.164
(0.076)
[.037]

Siebel
0.050
(0.060)
[.406]
-0.048
(0.084)
[.568]

Niche
-0.011
(0.039)
[-776]
0.022
(0.066)
[.734]

Net License Revenue
6.47E-8
(2.04E-8)
[.002]
4.79E-8
(2.30E-8)
[045]

Customer's Annual Revenue
3.01E-5
(1.40E-5)
[.034]
2.49E-5
(2.02E-5)
[.226]

EBS
0.012
(0.040)
[.769]
0.073
0.059
[.225]

Previous Apps Customer
0.025
(0.046)
[.589]
0.040
(0.064)
[.532]

Constant
0.268
(0.051)
[<.001]
0.245
(0.090)
[.010]

R²
0.234
0.344

N
122
47

Notes: Data are from Oracle discount approval forms and Oracle 2002 and 2003 Fiscal Year, North American Sales Representative Surveys. Standard errors are in parentheses; p-values are in brackets.