Cloud Smarter Infrastructure Saa S 201 —

Cloud & Smarter Infrastructure Saa. S 201 - for Partners © 2014 IBM Corporation

Agenda • Saa. S Refresher • What is Saa. S • How does Saa. S help? • Saa. S Sales Process • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • Tools and other resources 2 © 2014 IBM Corporation

What is Software as a Service (Saa. S)? • Software as a Service (Saa. S) is a software delivery model in which software and associated data are centrally hosted in the cloud. Saa. S is typically accessed via a web browser. Payment for the service is through a subscription model. • You are using Saa. S today if you access applications like Facebook, Twitter, or gmail. See the last page in this deck for additional resources on Saa. S, Cloud, and utility-based computing 3 © 2014 IBM Corporation

How can Saa. S help? ü Improved TCO due to lower infrastructure cost ü Flexible subscription pricing ü Minimal upfront investment ü Continuous delivery of new capabilities allows rapid innovation and access to immediate code fixes ü Lower risk with try & buy approach ü Accelerates evaluations and decision making 4 © 2014 IBM Corporation

Agenda • Saa. S Refresher • Saa. S Sales Process – see the Channel Saa. S Program Tool guide on the Saa. S Co. C • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • Tools and other resources 5 © 2014 IBM Corporation

Agenda • Saa. S Refresher • Saa. S Sales Process • Partner Programs • Software Value Plus - SVP • Saa. S Referral • Saa. S Service Provider – SSP • Generate a partner URL to track leads • Using credit cards with Service Engage • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • Tools and other resources 6 © 2014 IBM Corporation

Solutions for different types of Saa. S Business Models I resell hardware or software I want to resell access to IBM hosted Saa. S. I sell solutions, manage accounts & provide support I want to sell access to IBM hosted Saa. S with my solutions and own the customer relationship I consult, refer, and resell software I want to refer IBM hosted Saa. S IBM Software Value Plus (SVP) Saa. S IBM Software as a Service Solution Provider IBM Referral Incentive for Saa. S and Software Note: General guidelines. One size does not fit all. Could be a blended use. 7 © 2014 IBM Corporation

Business Partner role in Saa. S Business Model - SVP MSP ASP VAD VAR GSI delivered Saa. S Partner Resellers sell Saa. S § Business Relationship: − IBM hosts, supports (L 1, L 2) Saa. S solution, bill VAD − VAD takes the order and bills BP − VAR takes order from customer, takes invoice, and resells customer − Customer is end user of solution § Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Ready-to-Execute materials, PW Plays & collaterals, IBM demand gen § Sales Tool: VAD uses Partner Guided Selling Tool to quote and sell § Financial Incentive: − Standard VAD/ VAR model -> VAR is interface to client − Channel and Direct IBM reps are incented Config Contract IBM Help. Desk Data 8 VAD IBM VAR Client End Users IBM Software Value Plus (SVP) Resell Leverage standard two tier distribution channel VADs sell an product in the IBM price book Criteria for VARs: 1. Join PW program 2. Create partner plan 3. Enroll in VAP or SVI (product and sales certifications in SVI) 4. Apply for IBM reseller authorization and © 2014 IBM Corporation select a VAD

Operational Model on Engage: IBM Software Value Plus Program IT Practitioner Accesses Live Demo Trial Environment Partner Specific URL to Trial Access Request to purchase through Business Partner Paid Standard VAD/ VAR model Lead$ Business Partner Requests support through Engage IBM’s Partner Guided Selling Tool Forum, L 1, L 2, L 3 IBM Hosted Trial Environment Sandbox Leads APM WA SCCD MAM Unica 9 © 2014 IBM Corporation

Business Partner role in Saa. S Business Model – Saa. S Referral MSP ASP VAD VAR IBM GSI delivered Partners Referring Saa. S § Business Relationship: −IBM provides support, invoice, billing, hosted solution −BP identifies opportunity, Co-Sell with IBM −Customer is end user of the solution § Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Ready-to-Execute materials, PW Plays & collaterals, IBM demand gen § Sales Tool: Partner uses Saa. S Referral Incentive Portal § Financial Incentive: −BP earn 15% fees on Annual Contract Value −Multi-year contracts are payable each year of service −With active BP engagement, BP earns 5% fee for renewals; 15% on any extended cost of contract Config Contract IBM 10 Data Help Desk Client End Users Saa. S IBM Saa. S Referral Incentive Leverage IBM Saa. S Offerings to enhance solutions Get Started: § Partner has sales mastery in Product Group § Complete Referral Incentive BP Profile § Accept Saa. S Referral agreement § www. saasincentive. com § Register opportunities § Claim when sale is done © 2014 IBM Corporation

Operational Model on Engage: IBM Saa. S Referral Incentive Program IT Practitioner Accesses Live Demo Trial Environment Partner Specific URL to Trial Access Request to purchase through Engage Paid 15% of Annual Contract Value Lead$ Business Partner Requests support through Engage Forum, L 1, L 2, L 3 Deliver IBM Hosted Trial Environment Sandbox Leads APM WA SCCD MAM Unica 11 © 2014 IBM Corporation

Business Partner role in Saa. S Business Model - SSP MSP ASP VAD VAR GSI Partners as a Saa. S Service Provider § Business Relationship: − IBM hosts, provides partner L 2 and L 3, invoice and deliver solution to partner − SSP sells, invoice, delivers solution, L 1 support to customer, single interface to the customer, provides value add services or code § Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Readyto-Execute materials, PW Plays & collaterals, IBM demand gen § Sales Tool: IBM Rep uses SQO to get quote and sell to SSP − SSP prices solution independently Earn 25% on subscription parts, for life of contract (singlecustomer) − Earn up to 35% off tier price point for life of contract (multi-customer) Contract IBM 12 delivered Saa. S Multi-User SSP BP Storefront Client SP Data Help Desk End Users User IBM Saa. S Solution Provider (SSP) Customer BP’s expertise with IBM Saa. S § Financial Incentives: Config IBM C&SI is doing Single customer as 1 st phase Customer Single-Customer Criteria: § Demonstrate required Sales, Technical, and Support Criteria § Complete Support Plan Template § Accept Reseller Agreement § Provide Support Desk © 2014 IBM Corporation § Demonstrated Saa. S Value

Operational Model on Engage: IBM Saa. S Solution Provider Program IT Practitioner Accesses Live Demo Trial Environment Request to Requests support purchase through partner portal Partner Specific URL to Trial Access Lead$ Business Partner Portal Earn 25% on subscription IBM’s Software Quote and Order Tool Deliver Partner Value add Code IBM Hosted Trial Environment Sandbox Leads Unica 13 APM WA SCCD MAM © 2014 IBM Corporation

How do I maintain my leads? 5 4 Trial list BP Saa. S DSR qualifies the client & informs BP that client has started trial Client Saa. S DSR Saa. S Direct Sales Rep receives client response associated with BP and matches to trial list 1 BP provides their unique IBM Service Engage url to client Client receives free trial Client registers 3 2 Learn 14 Explore Try Use / Buy Extend Support © 2014 IBM Corporation

Country DSW e. Commerce Default e-Commerce Support in 26 countries & Passport Advantage Code T&C Languages Currency AUS English AUD AUT Austria German EUR BEL Belgium French, Dutch, English EUR BRN Brunei English USD CAN Canada English, Fr Canadian CAD DNK Denmark Danish DKK FIN Finland Finnish EUR FRA France French EUR DEU DE Germany EUR HKG Hong Kong English USD IRL Ireland English EUR LUX Luxembourg French, English EUR MYS Malaysia English USD NLD Netherlands Dutch EUR NZL New Zealand English NZD NOR Norway Norwegian NOK PAK Pakistan English USD PHL Philippines English USD PRT Portugal Portuguese EUR ZAF South Africa English ZAR ESP Spain Spanish EUR SWE Sweden Swedish SEK CHE Switzerland French, German, English, Italian CHF GBR United Kingdom English GBP USA 15 Australia United States English USD VIR Virgin Island English © 2014 IBM Corporation USD

Agenda • Saa. S Refresher • Saa. S Sales Process • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • Tools and other resources 16 © 2014 IBM Corporation

How is Revenue realized with Saa. S? • ACV – Annual Contract Value of the Subscription Agreement • TCV – Total Contract Value of a Multi-year Subscription Agreement • Bookings – The Total dollar value of all new contracts signed. Usually Billings are an annualized number even for different contract durations. Billings are not always helpful in understanding the state of Saa. S business. • MRR – Monthly Recurring Revenue at the end of each month (like rent). MRR is the sum of the prior contracts + new contracts signed this month – expired contracts. • Churning MRR – Lost MRR from lost customers • Margin – the total discount off list price Business Partner can expect to receive 17 © 2014 IBM Corporation

Saa. S Subscription Examples Margins Scenario Term Quantity Metric (months) Scenario 1: Subscription signed for 1 year covering 40 VMs Scenario 2: Subscription signed for 3 years covering 100 users Scenario 3: 50 new users added to scenario 2 in Year 2 18 12 36 36 24 Monthly TCV ACV SVP 1 Subscription 40 100 Yr 1: 100 Yr 2: 150 Yr 3: 150 Virtual servers Auth users $25 each $12, 000 $99 each $12, 000 $118, 800 $356, 400 All 3 yrs All 3 years $99 each Contract 1: $356, 400 Contract 1: $118, 800 All 3 years Contract 2: $118, 800 Contract 2: $59, 400 Saa. S Referral $1200 - $2400/yr --$120$240/mo $11880 - $23760/yr --$990$1980/mo All 3 yrs $1800/ yr $17820/yr Claimed All 3 yrs $11880 - $23760/yr $990$1980/mo All 3 yrs --plus-$5940 – $11800/yr $594 - $990/mo Yrs 2 & 3 Note that for Scenario 3, the total TCV and ACV would be the sum of Contracts 1 & 2 $17820/yr Claimed All 3 yrs --plus— $8910/yr Yrs 2 & 3 SSP $3000/ yr --$300/mon $29700/yr --$2475/mo All 3 yrs --plus— $14850/yr $1237/mo Yrs 2 & 3 © 2014 IBM Corporation

On-premise to Saa. S Conversion Example – SCCD Acme Co. has 100 Smart. Cloud Control Desk on-premise 100 authorized user licenses. Acme wants to move 40 users to Saa. S so they subscribe to 40 Smart. Cloud Control Desk (Saa. S) authorized users. Acme wants to protect their investment and reserve the option to move back to on-premise if needed. The chart below shows the Acme current yearly costs for on-premise licenses/S&S and then compares the cost between using the Conversion program vs No conversion (Saa. S at list). 6% annual savings* over no conversion cost *Savings does not reflect infrastructure and labor costs transferred to IBM 19 © 2014 IBM Corporation

Agenda • Saa. S Refresher • Saa. S Sales Process • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • What C&SI Saa. S offerings can you sell now? • Land & Expand • Tools and other resources 20 © 2014 IBM Corporation

What Saa. S Offerings can you sell NOW? IBM Monitoring (Saa. S) $25/month per Average Managed Virtual Server (a. MVS) IBM Application Diagnostics (Saa. S) $120/month per Average Managed Virtual Server (a. MVS) IBM Smart. Cloud Control Desk (Saa. S) $99/month per Authorized User $297/month per Concurrent User IBM Workload Automation (Saa. S) Starts at $70 per 1000 executed jobs per month Maximo Asset Management (Saa. S) $159/month per Authorized User $477/month per Concurrent User >1000 k jobs, each 1 K job pack is priced at $21 per month From 251 k to 1, 000 k, each pack of 1 k is priced at $35/month From 26 k to 250 k, each pack of 1 k is priced at $56/month From 1 k to 25 k monthly executed jobs, each pack of 1 k is priced at $70/month h Maximo Asset Management (Saa. S) Scheduler (prereq Maximo AM (Saa. S) $40/month per Authorized User 21 © 2014 IBM Corporation

Tremendous opportunities to up-sell and cross-sell It is a huge differentiator that other vendors cannot match! If your customer has this Sell them this Scenario Smart. Cloud Control Desk (Saa. S) IBM Monitoring (Saa. S) Detect an issue, automatically open a ticket Netcool OMNIbus Generate alerts when monitored KPI exceeded Business Service Management Improve MTTR for monitored business processes Smart. Cloud Analytics Predict and prevent problems with insight into patterns and trends present in log files Workload Automation Quickly and easily identify system and application problems that are impacting your workload Cognos, Datastage, Informatica, Netezza, Web. Sphere MQ, Platform LSF, Sterling Connect Direct Workload Automation (Saa. S) Integrate scheduling needs of business applications like Cognos, Datastage, Netezza, etc. Netcool OMNIbus Create alerts for workload problems Smart. Cloud Control Desk (Saa. S) Open incidents for workload failures IBM Endpoint Manager Smart. Cloud Control Desk (Saa. S) Netcool Omnibus Tivoli Application Dependency Discovery Manager (TADDM) Trigger automatic provisioning of a desktop Generate tickets based on selected events Use Configuration Information (CI) and relationship data to manage unplanned change Note that all of the offerings in the middle column have on-premise versions Choice is something only IBM can offer. 22 © 2014 IBM Corporation

Tremendous opportunities to up-sell and cross-sell – part 2 If your customer has this Sell them this Scenario Netcool Omnibus Maximo Asset Management (Saa. S) Generate tickets based on selected events Maximo Inventory Insights Smarter Cities Maximo Asset Management 23 Optimized inventory levels through analytics Link assets to municipal operations Maximo Inventory Insights (Saa. S) Leverage Pre-configured inventory decision support system to generate optimal reorder management and obtain insight on “stagnant” inventory © 2014 IBM Corporation

Steve – page is being reworked per 3/10 call How to Farm Saa. S Deals – IBM Monitoring (Saa. S) • Starting point: The customer bought a small installation of IBM Monitoring (Saa. S) for applications and infrastructure • Grow the existing footprint to other users • Who has a similar job to yours? Will you introduce me to them, or to someone who makes tool decisions for you and your peers? Grow use of IBM Monitoring • Grow the existing footprint by adding additional applications • What other applications are considered critical by your company, and need to be monitored? • Since you were successful with this application, can we explore the next one? Who owns that application? What happens to your company if it goes down or is slow? Grow use of IBM Monitoring • Grow the existing footprint by adding analytics* • APM customers can use their dashboard to search log files on servers configured for access by log analytics, speeding the time it takes to find out what’s really causing a problem. Expand with Smart. Cloud Log Analytics • Grow the existing footprint by adding network or storage management* • Now that you have an idea of your application performance would you like to grow your insight into your network and/or storage use? Expand with Tivoli Network Manager and Tivoli Storage Manager • Grow the existing foot print by adding event management* • So APM is working well and you have other tools monitoring your IT infrastructure, we often find customer's struggle understanding the holistic view of their environment, and frequently invest resources in chasing and correcting the symptom rather than root cause. When issues occur that span tools, could you use a tool to help eliminate symptoms and to quickly identify the root cause of the problem? Expand with Netcool OMNIbus • Leverage this Saa. S experience to sell an expanded on-premises deployment • The Saa. S offering helped you understand the technology and see the benefit of monitoring, but your organization prefers an on-premises deployment for security, performance or other reasons. Get full-spectrum on-premises infrastructure and application monitoring with Smart. Cloud APM • Grow the existing footprint by Control Desk* • APM customers can have their solution integrated with a help desk to speed and organize the process of tracking and resolving problems in their environment. Expand with Smart. Cloud Control Desk *Solution integrations are being developed and tested continuously. Initially, the Saa. S offering will be integrated with on-premise deployments of complementary products, with a Saa. S-to-Saa. S offering when both products are available. 24 © 2014 IBM Corporation The Extend tab on Service Engage will provide you with the latest information on the available integrations

Steve – page is being reworked per 3/10 call How to Farm Saa. S Deals – IBM Workload Automation (Saa. S) • Starting point: The customer bought a small installation of IBM WA (Saa. S) • Grow the existing footprint with additional packs of jobs • Are you ready to react to unexpected conditions and keep the actions in sequence and still optimized ? • Would you like to control your heterogeneous workloads from a single point, and with a single skill-set ? • Grow use of IBM Workload Automation • Grow the existing footprint by integrating new business workloads • Is it important to your business to have a predictable long-term vision of your plans and business objectives ? • Are missing SLA costly to your organization? • Have you consider integrating your ERP & BI workloads to lower the costs of non-integrated solutions and eliminates causes of human errors ? • Grow by integration with Cognos, Datastage, Informatica, Netezza, Web. Sphere MQ, Platform LSF, Sterling Connect Direct • Grow the existing footprint by adding additional solutions • Netcool Omnibus can provides a single central consolidated view of all events across multiple products and solutions. Integrate the events from the workload automation solution into the event management system Expand with Netcool Omnibus. • The workload automation customers can have their solution integrated with a help desk to speed and organize the process of tracking and resolving problems in their environment Expand with Smart. Cloud Control Desk. 25 © 2014 IBM Corporation

Steve – page is being reworked per 3/10 call How to Farm Saa. S Deals – IBM Smart. Cloud Control Desk (Saa. S) • Starting point: the customer is doing a trial or pilot of Control Desk (Saa. S) • • • Grow the existing footprint to other processes and user groups • • • Background: If the client starts use of Control Desk with base processes like incident and service request, they will usually naturally look to expand into areas like problem and knowledge management, service catalog, change management, and IT asset management as they mature. Alternatively, if they start use of Control Desk with change management for instance, IBM can look to displace the service desk operation (incident, service request) Message: “If you consolidate on Control Desk, it will save you training, support costs, and provide better service. ” “If you add integrated change management through Control Desk, you can reduce incidents and outages related to change by 70%. ” Grow the existing footprint by adding additional applications: 1. 2. 3. 26 Background: Most customers will already have a service desk, but it will often be backlevel, missing needed function (e. g. service catalog, IT Asset Management), they lack skills to manage the system, and they face a potentially expensive upgrade if they need to improve function Message: “Control Desk (Saa. S) will provide the modern function you need, have low up front costs, reduce your skill and support costs and requirements, and provide a low, flat, predictable cost structure. It is the best way out of the situation you are in. ” Expand with IBM OMNIbus: • Background: Event storms can overwhelm service desk support staff and drive up costs • Message: “If you integrate Omnibus, your support team can focus on the common cause of issues and tickets and use automation to fix frequent, recurring problems” Expand with IBM Endpoint Manager • Background: Many organizations suffer from having disconnected, time-consuming, error-prone processes to request, deploy and manage software assets • Message: “You can integrate with IEM to provide an online app store to customers and then automate the accounting, approval, and deployment, saving time and reducing errors. ” Expand with IBM TADDM • Background: without automated tools, discovery is time consuming, and chronically inaccurate, impacting cost and service • Message: “TADDM can save time and money though automating discovery. It provides a near real time view of your infrastructure and services so your IT group can see and manage the configurations that impact services. This can help proactively avoid issues and greatly reduce time to problem resolution. ” © 2014 IBM Corporation

Steve – need MAM How to Farm Saa. S Deals – Maximo Asset Management (Saa. S) 27 © 2014 IBM Corporation

Agenda • Saa. S Refresher • Saa. S Sales Process • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Legal – Compliance Overview, Key Terms • Data Privacy – What you need to know, EU Safe Harbor, Solution Hosting • Security – Security Practices • Where to Start • Tools and other resources 28 © 2014 IBM Corporation

Legal - Compliance Overview Compliance = Softlayer Compliance + C&SI Saa. S Compliance Unless both are compliant we can’t claim compliance. • Payment Card Industry Data Security Standard (PCI DSS) - Compliant • Set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. • C&SI processes credit card information through IBM Payment Systems which is PCI compliant • Federal Risk and Authorization Management Program (Fed. RAMP) - Not Compliant (in progress) • Government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. • One of the key requirements is Federal Information Security Management Act of 2002 (FISMA) • EU Safe Harbor (See EU Safe Harbor section) – Certification in process 29 © 2014 IBM Corporation

Legal - C&SI Saa. S Contract Options • IBM International Passport Advantage Agreement (IPAA) – includes Saa. S terms regarding ownership, customer’s right to use, subscription to Saa. S, Saa. S technical support, content and termination of Saa. S • Passport Advantage customers using direct or e-Commerce to purchase • Terms of Use (TOU) B – standard terms of use for IBM Saa. S offerings. This is in addition to IBM or IBM IPPA Express Agreement • TOU A – terms of use specific to a Saa. S offering (e. g charge metrics, renewal) • Service Level Agreement (SLA) – specific to a Saa. S offering Note: A Saa. S Solution Provider may require additional agreements for approval 30 © 2014 IBM Corporation

Legal - Key Terms • Automatic renewal – contract is automatically renewed unless customer cancels. • Example: Customer purchases a 12 month term with monthly billing and on month 15 decides they no longer need the service they DO NOT have the option to terminate and will be responsible for the remaining 9 months of coverage (the full 12 month term). • Indemnity - Customer agrees to hold IBM harmless against any third party claim arising out of or relating to: 1) violation of the IBM Acceptable Use Policy by Customer or any of Customer’s IBM Saa. S Users; or 2) Content made available to the IBM Saa. S. • Non-disclosure of Customer Content – TOU B indicates that IBM will not use client data for any reason but to operate Saa. S and will be kept confidential Applies to IBM Software Value Plus 31 © 2014 IBM Corporation

Legal - Service Level Agreements One per CSI Saa. S Offering (no charge) Availability during a Contracted Month Availability Credit (% of Monthly Subscription Fee for Contracted Month which is the subject of a Claim) Less than 99. 8% 2% Less than 98. 8% 5% Less than 95. 0% Terms found in TOU A or Cloud Services Agreement Services Description 10% § “Availability” percentage is calculated as: (a) the total number of minutes in a Contracted Month, minus (b) the total number of minutes of Downtime in a Contracted Month, divided by (c) the total number of minutes in a Contracted Month, with the resulting fraction expressed as a percentage. § Example: 432 minutes total Downtime during Contracted Month 43, 200 total minutes in a 30 day Contracted Month - 432 minutes Downtime = 42, 768 minutes ____________ = 2% Availability Credit for 99. 0% availability during the Contracted Month 43, 200 total minutes in a 30 day Contracted Month 32 © 2014 IBM Corporation

Data Privacy - What you need to know Personal data generally includes information relating to an individual -think business card (e. g. names, email addresses, home address) In some countries, also includes information about identified partnerships, associations, or corporations. IBM is a data processor, entity that processes personal data on behalf of the data controller, who would be the client responsible for entering the data. In most cases, Passport Advantage agreement covers data privacy for personal data. EU and Switzerland have additional data privacy regulations but have established the ability to create a framework with the U. S for accessing personal data. C&SI Saa. S is in the process of obtaining EU Safe Harbor certification. This requires a risk assessment after we Go Live. In the meantime, we have security measures in place to restrict access to EU client data and for IBM non-U. S. employee access to Amsterdam hosting center in order to comply. IBM has an Online Privacy Statement which is another EU Safe Harbor requirement 33 © 2014 IBM Corporation

Data Privacy - EU Safe Harbor Certification EU and Switzerland have specific data privacy regulations and have established the ability to create a framework with the U. S for accessing personal data called EU Safe Harbor. to prevent accidental information disclosure or loss C&SI Saa. S is in the process of obtaining EU Safe Harbor certification Benefits: § Ability to assert Safe Harbor to clients and prospects. § Facilitates selling in the EU and Switzerland. § Makes us competitive in selling situations. 34 © 2014 IBM Corporation

Where are the C&SI Saa. S solutions hosted? Active Data Centers - Soft. Layer Amsterdam Dallas Singapore § All C&SI Saa. S offerings are currently hosted in Soft. Layer data centers. § In 2014, additional data centers will be provided (Soft. Layer or partner), based on business needs. 35 © 2014 IBM Corporation

Security - C&SI Saa. S Security Practices • Data Security – each offering has a Security Practices document • Security Policy – states that IBM has published privacy and security policies and that employees are trained in security • Access Control • Only authorized employees can access client data • Support staff for the Cloud Offering use multi-factor authentication and encrypted channels when accessing client data • Data transfers are logged • Service Integrity & Availability • Change Management process governs changes to O/S, application s/w and firewall • Data center resources are monitored 24 x 7 • Internal and external vulnerability scanning and malware detection • Information delivery protocols for transmission of data over public networks (e. g HTTPS, VPN) • Physical Security • Designed to restrict unauthorized physical access to data center resources. • Entry and removal of equipment is logged • Compliance • Assessments and audits are conducted regularly by IBM’s team to confirm compliance with its information security policies. • Conduct workforce security education and awareness training • Note: The Security Practices are also included in the Cloud Service Agreement Service Description for each offering. 36 © 2014 IBM Corporation

Security – ITCS 104 & Industry Standards Certifications C&SI Saa. S offerings adhere to the rigorous standards of ITCS 104 security There are many industry standards that require certification. C&SI is evaluating the priority order based on client demand • Health Insurance Portability and Accountability Act (HIPAA) – Not Certified • Requires certification through HIPAA Program Office (HPO) • Data Centers do not get certified in HIPPA – Soft. Layer Internal HIPPA whitepaper • • 37 SSAE 16 - Not Certified SOC 2 Type II Compliance - Not Certified Cloud Security Alliance STAR Self Assessment - Not Certified EU Safe Harbor (See EU Safe Harbor section) – Certification in process © 2014 IBM Corporation

Agenda • Saa. S Refresher • Saa. S Sales Process • Partner Programs • Compensation & Measurements • Legal, Data Privacy, and Security • Where to Start • Tools and other resources • Center of Competency • Resources & Tools 38 © 2014 IBM Corporation

Service Engage Sales Center of Competency The Center of Competency (Co. C) serves as a war room to provide resources for sellers to help close Saa. S deals. The Co. C web site provides the following general information: Overviews FAQs Terms & Conditions Privacy Saa. S vs on-premise Competition Pricing ELAs & Saa. S Sample User Scenarios Typical sales cycle for a Saa. S deal § Links to payload info § § § § § 39 The Co. C web site provides the following information for each Saa. S payload: § § § Offering Capabilities Scalability & Security issues References FAQs Saa. S versus On-premise Dealing with competition Typical Sales Cycle for this payload Pricing, entitlements, trade -ups Terms & Conditions TCO calculators Integrations & Extensions Doing evaluations For IBM Sellers: https: //ibm. biz/salescoc For Partners: www. ibm. com/csicenter/partners © 2014 IBM Corporation

Resources used by C&SI partners • Tools: • IBM Service Engage is the landing page for C&SI Saa. S offerings. Customers can learn, explore, demo, set up a trial, and purchase offerings. • Software Value Plus program uses Partner Guided Selling (PGS) Tool to process all Tier 2 Saa. S Offering Quotes by the VAD • Saa. S Solution Provider program uses Software Quote & Order (SQO) Tool for all Saa. S Solution Provider Quotes entered by an IBM Rep • Saa. S Referral Program uses Saa. SIncentive. com Tool to process Saa. S opportunities and claims entered by Business Partners • Other resources for sellers: • C&SI Saa. S Sales Kit & Center of Competence on Partner World • To learn more about the technologies: • Cloud, Cloud computing • Saa. S: WWW, You. Tube 40 © 2014 IBM Corporation

What should I do next? § Go to Service Engage, learn about it, provide feedback § Learn about Saa. S and C&SI’s 1 H 2014 Saa. S offerings. § Approach your top 5 customers with these questions: § Does the overwhelming cost of maintaining their infrastructure hinder developing new services that could bring in additional revenue? § Do they need to gain access to new capabilities quicker to innovate faster and stay ahead of their competitors? § Do they want to lower their Total Cost of Ownership C&SI Strengths: (TCO) ? § Customer choice: On§ Determine where your customer wants to be, and how premise, Saa. S, integrated they should get there. experience § Encourage them to test drive Service Engage today § Integration with broader § Look for opportunities to up / cross-sell Service Management capabilities § Make a Saa. S proposal. § Accelerate sales velocity with Service Engage § Unsurpassed breath of capabilities 41 © 2014 IBM Corporation