© 2009 IBM Corporation

Julie KINGJulie KING

IBM Software StrategyIBM Software Strategy

IBM Vice President & Distinguished Engineer

Agenda

� Quick overview of the key brand capabilitiesLotusInformation ManagementWebSphereTivoli Rational

� Putting it all together to address our clients' needs Industry Solutions Cloud ComputingSmarter Planet

� Q&A

Software Strategy & 2015 Roadmap

Information

Management

InformationInformation

ManagementManagementBusiness

Applications

BusinessBusiness

ApplicationsApplications

Universal AccessUniversal AccessUniversal Access

Open Standards ArchitectureOpen Standards ArchitectureOpen Standards Architecture

Messaging Communicating Connecting Integrating

Knowledge WorkerKnowledge Worker Informational Worker Informational Worker External PartnersExternal Partners

Lotus Notes Lotus Domino

Lotus SametimeLotus Sametime Unyte

Lotus QuickrLotus Connections

Lotus MashupsWebSphere Portal

Working Smarter & Dynamically Adaptive Collaboration

4

Connecting & Empowering People (Connect and Collaborate)

E-mail & Collaborative Applications

1995

Real-time Collaboration

Databeam1998 1998 2007

Social Media

Lotus Connections2007

New Delivery Models

2008 2009

Web Content Management

2003 2005 2005

Lotus SameTime

SameTime Unyte

WebSphere Portal

Lotus Web Content Management

Lotus Notes

LotusLiveLotus Foundations

LotusLive!

LotusLive MeetingsA full-featured, easy to use Web

conferencing service

LotusLive EventsProvides tools to create, manage

and conduct webinars for up to 999

attendees

LotusLive ConnectionsCombines your business

network with collaboration

services

LotusLive Notes IBM's flagship Lotus Notes

email, calendar, contact

management and instant

messaging

LotusLive EngageAn integrated suite of tools that

combines your business network

with collaboration and

conferencing services

Web ConferencingWeb Conferencing CollaborationCollaboration ee--MailMail

LotusLive iNotesWeb-based e-mail, personal

calendar and contact management

Mastering Information to Optimize Business ResultsA Flexible Platform for Managing, Integrating, Analyzing and Governing Information

Analyze

Integrate

Manage

Business Analytic Applications

External Information Sources

Cubes

Streams

Extreme Data

Master Data

Content

Data

StreamingInformation

Data Warehouses

GovernQuality

Security & Privacy

Lifecycle

Transactional& CollaborativeApplications

7

BIG DATA – Internet ScaleMoving Beyond the Traditional Warehouse

Streams

InternetScale

TraditionalWarehouse

In-Motion Analytics

Data Analytics, Data Operations & Model

Building

Results

Internet Scale

Database &Warehouse

At-Rest Data Analytics

Results

Ultra Low Latency Results

InfoSphereBigInsights

Traditional / Relational Data Sources

Non-Traditional / Non-Relational Data

Sources

Non-Traditional/Non-RelationalData Sources

Traditional/Relational Data Sources

IT Professionals Need Agility and Efficiency

• Efficiently manage hundreds of applications

• Safely manage terabytes of data

• Consolidate and simplify infrastructure to reduce costs

• Deliver new custom or COTS vertical applications

• Improve service levels of existing applications

• Stability simplifies efficient operations

Source: Surveys from IBM 's SOA Executive Summary

Business professionals have the business process expertise

Business Professional

IT professionals know how to implement and run applications

IT Professional

Business Professionals Need Agility and Efficiency

• Rapid innovation without replacing applications

• Control of the business model and business processes

• Integration of horizontal processes

• Visibility into technology-enabled business activities

• Flexible integration of people, processes, and information

IBM has evolved its strengths in IT software, targeted at the CIO, to maximize the combined value for IT and business professionals

8

9

Increasing Business Agility

Transaction

Processing

Web Portal

Web Application

Infrastructure

Business Process

Optimization

Connectivity

2005

2002 2005

2010 2010

2002 2008 2008

2010 2010

2010

CICS MQ

WS Message BrokerWS ESBWS Datapower

WS Partner GatewayWS Adapters

WS Process ServerWS Modeler/MonitorWS Business EventsWS Ilog BRMS

2010

Commerce

20051998

WS Application ServerWS Extreme ScaleWS Cloudburst

WS Portal

WebSphere Commerce

Smarter Products& Services

Aerospace and Defense

Automotive

Software is the key to differentiation in the new economy

Electronics

• Differentiated products based on consumer-driven innovation

• Leveraged customer insights in product development

• Increased throughput capacity• Improved portfolio profitability• Innovation within the enterprise as well as with partners and alliances

• Faster time to market and reduced manufacturing cycle time

• More efficient, lower cost, flexible designs

• Improved program management cost, schedule and quality

• Increased customer satisfaction and loyalty

• Total manufacturing cost reduction• Reduced warranty costs• Increased customer loyalty through higher product quality• Improved asset utilization• Flexibility to build various products on demand

• Enhanced plant lifecycle value with integrated information from plant design and construction

• Improved utility energy efficiency through near real-time visibility of consumer energy usage

• Improved efficiency and operational performance

Energy and Utilities

Software must be approached as a mission-critical

business process

Transforming Software & Systems Delivery Into An Outcome-Driven Business Process

Using Rational Team Concert To Improve Productivity

� Integrated RTC Build Services� Consolidates development platforms� Provides centralized source data management� Expanded Build metadata for comprehensive view

Use Rational Team Concert To Manage Projects

RTC Dashboards

� Provide real-time consolidated views of project progress for quick, easy consumption

� Tracked to individual RTC Users or Developers

� Multiple views with drill down capability to individual work items

�AAB orchestrated a shared fundingmodel for iRAM

amongst the shareholders to

fund the deployment

IBM's use of Rational Asset Manager:

Promoting One Common Asset Repository for Reusable Assets

4Q07• Identified team in

India for iRAM pilot

• AAB SC funded

Common Taxonomy And Metadata Standards

3Q07 & earlier� AAB Library design

� SOAR pilots

2Q08• 9 teams in production

• Over 3000 assets

iRAM becomesAn EnterpriseApplication

Fully hosted by ourCIO Team

Legacy Asset Transformation

workgroupenabled teams to go Into production

IRAM fully integratedIn the daily operations

4Q08• 68 communities

• Over 26,000 assets

• Over 1800 downloads/week

• Over 23,000 searches/week

4Q09• 109 communities• Over 55,000 assets• Downloads: over 4,300 /wk• Searches: over 40,000 /wk

4Q10• 137 communities• Over 72,000 assets• Downloads: over 7,000 /wk• Searches: over 29,000 /wk

15

Driving Operations Effectiveness and Efficiency

Mainframe

Systems

Management

Network Service

Management

2005

2006

2010

Storage Service

Management

SANergy

20021999 2008

Asset Management

2006Distributed Systems

Management

1996

2005

2003 2004

20062005

Security Service

Management2002

2006

2006

Dascom1999

2010

Tivoli MonitoringTivoli Workload SchedulerTivoli Composite Application ManagerIBM Cloudburst

Tivoli Storage ManagerTivoli Storage Productivity CenterSAN Volume Controller

Tivoli Asset Management

Tivoli NetViewTivoli Netcool

Tivoli Access ManagerTivoli Identity Manager

IBM zSecureOmegamon

2004

2008

Agenda

� Quick overview of the key brand capabilitiesLotusInformation ManagementWebSphereTivoli Rational

� Putting it all together to address our clients' needs Dynamic Infrastructure and Cloud ComputingIndustry Solutions Smarter Planet

� Q&A

Software Strategy & 2015 Roadmap

IT Transformation Roadmap → More dynamic infrastructure

Simplified

Shared

Dynamic

Consolidate

Virtualize

Automate

� Reduce infrastructure complexity

� Reduce staffing requirements

� Improve business resilience (manage fewer things better)

� Improve operational costs/reduce TCO

� Remove physical resource boundaries

� Increased hardware utilization

� Allocate less than physical boundary

� Reduce hardware costs

� Simplify deployments

� Standardized Services

� Dramatically reduce deployment cycles

� Granular service metering and billing

� Massively scalable

� Autonomic

� Flexible delivery enables new processes and services

17

Reducing infrastructure and labor costs through technology:the cloud economics

Virtualization of Hardware

Standardization of Workloads

Utilization of Infrastructure

Automation of Management

Virtualized environments only get benefits of scale if they

are highly utilized

Drives lower capital requirements

Fewer options = more automation possible = fewer

manual tasks

Take repeatable tasks and automate

Labor Leverage

Infrastructure Leverage

IBM Confidential19

Cloud Computing

Banking

Retail

IT

�Self-Service

�Economies of Scale

�Technology Advancement

A user experience and a business model

� Standardized offerings

� Rapidly provisioned

� Flexibly priced

An infrastructure management and services delivery method

� Virtualized resources

� Managed as a single large resource

� Delivering services with elastic scaling

Similar to Banking ATMs and Retail Point of Sale, Cloud is Driven by:

Enterprise

Today there are three primary delivery models that companies areimplementing for cloud

Public Cloud

IT activities/functions are provided “as a service,” over the Internet

� Key features:– Scalability

– Automatic/rapid provisioning

– Standardized offerings

– Consumption-based pricing.

– Multi-tenancy

Traditional Enterprise IT

Private Cloud

IT activities/functions are provided “as a service,” over an intranet, within the enterprise and behind the firewall

� Key features include:– Scalability

– Automatic/rapid provisioning

– Chargeback ability

– Widespread virtualization

Hybrid Cloud

Internal and external service delivery methods

are integrated, with activities/functions

allocated to based on security requirements,

criticality, architecture and other established policies.

Private CloudPublic Clouds

Hybrid Cloud

Source: IBM Market Insights, Cloud Computing Research, July 2009.

21

Image Management is Core to Managing a Virtualized Data Center & Clouds

Images Require Management - The New IT Challenge

� (Image Sprawl & Governance) Proliferation of virtual images in customer environments (just copy a file). Customer need a way or organizing, securing, managing deploying these images to the various virtualized platforms in a scalable manner.

� Customers need a way of managing the virtual images once they are deployed. This includes monitoring, updating, tracking changes, auditing etc.

� Dormant images need maintenance too. (E.g. security patches)

� Customers need to manage the virtual images created by them in addition to any vendor bought images.

� Customers needs to integrate their images that are deployed with their processes and management tools.

� Images fast becoming the core object for deployment in datacenters– bypasses installation problems, provides faster time to value, better availability, disaster recovery.

� Easy way to boot, store, distribute, copy software- OS & Applications

� Installation is as simple as a copy operation. (Configuration still needed)

� Fundamental mechanism for deploying cloud services (e.g. Amazon)

� Companies beginning to ship images to solve installation problems.

21

25 billionNumber of global trading systems that are under extreme stress, handling billions of marketplace data messages each day

40% to 70%Loss of electrical energy around the world because of inefficiency

1 trillionNumber of devices that will be connected to the Internet by 2011

US$4 trillionAverage daily volume in the world’s currency marketplaces

Need for Smarter PlanetAcross the globe we must confront a

crushing set of challenges 78%Percentage of CIOs who want to improve the way they use and manage their data

80%Percentage of digital data growth that is predicted to be unstructured and require significant effort to understand and analyze

10xAmount that digital data is projected to grow by 2011

By 2011, the world will be 10 times more instrumented then it was in 2006. Internet connected devices will leap from 500M to 1 Trillion.

2005 2006 2007 2008 2009 2010 2011

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Exabytes RFID,

Digital TV,

MP3 players,Digital cameras,

Camera phones, VoIP,

Medical imaging, Laptops,

smart meters, multi-player games,

Satellite images, GPS, ATMs, Scanners,Sensors, Digital radio, DLP theaters, Telematics ,

Peer -to-peer, Email, Instant messaging, Videoconferencing,

CAD/CAM, Toys, Industrial machines, Security systems, Appliances

10xgrowth infive years

Approximately 70% of the digital universe is created by individuals, but enterprises are responsible for 85% of the security, privacy, reliability, and compliance.

By 2010, 30 billion RFID tags will be embedded

into our world

An estimated 2 billion people will be on the Web by 2011... and a

trillion connected objects

Every day, 15 petabytesof new information are

being generated

Our world is becomingInstrumented

Our world is becomingInterconnected

All things becomingIntelligent

We can address those challenges by building a Smarter Planet

Leveraging the convergence of the physical and digital worlds

Indeed, almost anything – any person, any object, any process or any service, for any organization, large or small – can become digitally

aware and networked

Managing the World’s Infrastructure

Facilities Production

Equipment

Transportation

Assets

IT Hardware

& SoftwareTelco

Managing more complex assets through the entire lifecycle presents

new challenges and creates new opportunity.

Infrastructure consists of both IT and operating assets, but they are becoming less differentiated

• Operating assets are becoming more co-mingled with, and dependent, on IT assets

• Companies are making more use of IT in running and maintaining assets

What’s intelligent about infrastructure?

Centerpoint uses Smart Meters to reduce power consumption

through demand response.

A bridge has built-in sensors to monitor stress and indicate

potential failure.

Locomotives built by Bombardier have on-board computer systems

using telematics for real-time diagnostics.

A datacenter reduces energy consumption and optimizes service delivery

by collecting power, thermal and temperature inputs from IT equipment,

datacenter infrastructure and facilities.

Smart buildings use building automation systems to optimize

comfort, safety and energy consumption.

Stockholm lowers traffic by 20%,emissions by 40%

IBM is working with clients today on Smarter Planet initiatives

450+ Smarter Planet References

Smarter Healthcare

Metropolitan Transportation

Cardinal Health reduces diversion of controlled substances from the U.S. supply chain

Public Safety

NYPD Real Time Crime Center provides access to 120M+ criminal complaints, arrests and 911 records

Government Services

Alameda County improves delivery of social services while saving $24.7M annually

What Does It Mean to Be Smarter?

Leading businesses today are benefiting from new sensor data when combined with IBM’s business process management, event processing and business optimization

capabilities

� Data collection

� Data Integration

� Comparison of historical data, with newly collected data

� Data modeling and analytics to create insights from data to feed decision support and actions

Sensors and Metering

Event Processing + Real Time Data Integration

Real Time + Historical Data

Data Modeling & Analytics

Visualization & Collaborative Decision Making

New and Optimized Business Processes

New Insights

New Data

Process

Innovation

Industry Solutions

Software Solutions

So

ftw

are

an

d S

yst

em

s

BusinessAnalytics

CollaborationEnterprise

Content Management

IBM Industry Products

Commerce

Smarter Commerce

Software Middleware

Systems Technology

Portal

Our Mission To define and develop a new category of solutions software, leveraging IBM’s Middleware portfolio, to deliver an industry-oriented value proposition to line-of-business users

IBM Software Solutions Group

Selling & Fulfillment

Enterprise Market

Management

CLARITY SYSTEMS

IBM Software Technology

IBM Software Industry Solutions

Repeated patterns are integrated

into new products

IBM Software is evolving our delivery model to provide bigger puzzle pieces for client solutions with emphasis on line of business value

Consumable, Repeatable, ScalableOfferings with increased Asset Content

…are unique, integrated Products, addressing industry use cases andsolving specific customer problems

…delivered through Industry Frameworks for go-to-market context

…built on a common Platform of core IBM Software products for efficient delivery and reuse across industries

...leverage both organic and inorganicinvestments

...use client value delivery models, including cloud offerings

Travel and Transportation Increase revenue per seat or hotel room through reservation system modernization

Insurance Increased insurance underwriter productivity

Banking Renovate lending, mortgage, deposit and other core processing systems

Financial Markets Integrate support for front-, middle-, and back-office processes

Retail Increase accuracy of promotions by targeting offers to the right customers

Energy and Utilities Accelerate deployment of smart grids

Government Avoid social service overpayments through a single view of the citizen

Network Centric Operations Enables all service branches to share common applications

Service Provider Delivery Environment

Integrate new services with fulfillment, assurance, billing and care systems

Media Enterprise Improve management and distribution of digital assets

Health Integration Track assets, patients and staff to improve quality of care, and operations

Integrated Information Reduce exploration risk and cost – faster time-to-oil

Product and Service Reduce inventory, improve availability and delivery capacity

Industry frameworks deliver technology in an industry context,driving smarter outcomes

Leveraging capabilities from across IBM to build solutions

Industry specific challenges,market drivers, shifts and trends

(IBM Institute for Business Value, GBS, S&D)

Industry Solutions

Strategic Business Drivers

Industry Frameworks

Industry and subject matter expertiseApplications and tools

(GBS, GTS, IBM Research)

Servers, storage, communication networks and associated services

Solution platform specifically configured with IBM software, industry assets and best practices to address an industries unique

challenges(SWG, IBM Research)

Workload optimized systems(STG, GTS, IBM Research)

Agenda

� Quick overview of the key brand capabilitiesLotusInformation ManagementWebSphereTivoli Rational

� Putting it all together to address our clients' needs Industry Solutions Cloud ComputingSmarter Planet

� Q&A

Software Strategy & 2015 Roadmap