IBM Americas SMB IT Optimization: Getting more out of your IT with help from IBM SMB Americas Infrastructure Solutions Marketing © 2007 IBM Corporation IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 1
IBM Americas SMBs seek less complex, lower cost and easier to manage infrastructure Complexity Up to 40% of today’s outages result from operator errors New applications get delayed by maintenance of diverse existing systems Productivity Cost 25 -50% of time is spent on problem determination and resolution Poorly documented legacy applications make it expensive and time consuming to diagnose and resolve complex crossproduct problems Nearly 80% of IT expenses are spent on operations, maintenance, and minor enhancements Take Away: We need to assist our clients with reducing operational costs and improving the IT capability of their infrastructure IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 2
IBM Americas SMB IT Optimization Opportunity & Trends for 2007 In Americas mid-market, ITO represents a $1. 8 B opportunity with a AGR of 16% IT Optimization spend categories rank high among the top priorities for 2007 Recent research has identified key areas of focus for IT Optimization spending: • Infrastructure replacements/upgrades were indicated as the top IT department priority by medium size businesses. (Source: IDC US Market Watch Survey 2 Q 06) • Two-thirds of the companies plan to invest in Storage or Server Consolidation over the next 18 months and upgrades (67%) comprise most of the investments. • Nearly half of the companies plan to invest in Server or Storage Virtualization over the next 18 months and nearly 30% of the investment will be first time purchases • In 2007, customers are planning upgrades to some solutions that have already been implemented, especially in storage and server consolidation. Source: IBM Infrastructure Solutions Research Worldwide Report for IT Optimization Program, November 2006 IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 3
IBM Americas SMB Why is IT optimization important? Complexity is growing: • Existing computing capacity is highly underutilized • Gartner predicts that enterprises that don't leverage virtualization technologies will spend as much as 25 percent more for their x 86 servers Cost of People vs. Spending on new systems Spending (USB$) $200 Installed Base (M Units) 35 $180 Improving operational efficiencies: • Agility has been made a high priority across the organization. . . [however] only 13 percent of the CEOs rate their organization’s ability to respond to changing business conditions as very responsive ** • Reducing time spent on problem determination and resolution to maximize the capacity of IT resources Fuel growth & innovation by managing costs: • 80% of CEO’s view growth as a key focus area Operational costs far exceed the budgets for new hardware, they are growing at approximately 2 ½ times the compound annual growth rate* $160 30 $140 25 $120 20 $100 $80 15 $60 10 $40 5 $20 $0 1996 ’ 97 ’ 98 ’ 99 2000 ’ 01 ’ 02 ’ 03 ’ 04 ’ 05 ’ 06 ’ 07 ’ 08 New server spending (USM$) 3% CAGR Cost of mgmt. & admin. 10% CAGR An optimized IT environment maximizes the performance of current and future assets, technologies, applications and services, reducing costs and making the entire environment easier to manage in order to support the growth objectives of the company. *IDC, 2004 **CEO Study of 456 WW CEOs IBM Corporation, 2 -04; Graphic: IDC Directions 4 -7 -04 Customer Adoption of On-Demand Enterprises. IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 4
IBM Americas SMB IT Optimization: The Benefits Business Value Performance & Availability Flexibility & Scalability § Server & Storage Utilization § Server Redundancy § Storage Redundancy/Tiered § Provisioning § Orchestration § Server Virtualization § Storage Virtualization § Tiered Storage § Provisioning Cost Reduction (typical) § Server Consolidation (4 to 1) § Storage Consolidation (25%) § Network Consolidation § Support Automation (30%) § Software Ability to Dynamically Respond IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 5
IBM Americas SMB Mid-market Value Proposition for IT Optimization IBM and IBM Business Partners deliver solutions specifically designed for mid-size companies built on open standards that are flexible, proven, and safeguard current investments to improve performance, reduce costs and make the entire environment easier to manage to support the business and growth objectives of the company. IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 6
IBM Americas SMB Managing costs through better utilization Selling situations § My client needs to consolidate their infrastructure to lower IT management costs (Simplification) § My client is looking to eliminate the inefficient and overbuilt IT infrastructure without losing the ability to ramp up server and storage capacity (Virtualization) § My client wants to improve network performance but has an IT staff that doesn’t have the time or skills to devote to performance improvements (Automation) Take Away: Clients can improve utilization by simplifying, virtualizing, and automating their IT infrastructure IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 7
IBM Americas SMB Virtualization Gaining Attention and Moving into the Mid-market • “Most important, it makes computing cheaper since fewer servers are required to do the same work. It makes things simpler, too, since fewer machines mean less maintenance. ” • “Although the concept isn't new, it's rapidly morphing into a big deal. ” • “Call it the Virtual Revolution. Rather than being some exotic new technology that's hard to explain, this will be the normal way computing gets done. ” By Steve Hamm, June 10, 2005 Take Away: Virtualization is rapidly moving into SMB IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 8
IBM Americas SMB What is Virtualization? • Virtualization allows users to maximize their IT investment in hardware, middleware and applications that are not limited by their physical location • 22% of servers virtualized today with 45% of all planned server deployments seen as potential virtualization candidates (IDC, June 2005) “… virtualization plus workload management and partitioning will enable platform utilization to more than double during the next five years …” - Dan Vogel, Key IT Operational Process Trends: 2005, META Group, January 2005 Take Away: Virtualization is not new anymore, and its value lies in simplifying infrastructure thus saving our clients $ IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 9
IBM Americas SMB Benefits of hardware virtualization § Simplification – Servers as a single managed entity – Networking and storage consolidation – § Cost reduction – Lower hardware acquisition cost – Higher utilization – Power savings – Lower ongoing management expenses § Flexibility in your IT environment – Ease of use and serviceability – Improved overall manageability Mid-market § IBM System p 5 Express Family with Advanced Power Virtualization §Grid and Growth § IBM Express Implementation Services for storage consolidation § IBM Managed Hosting - Virtual Server Services SMB LE § Infrastructure Services Readiness Engagements § IT Infrastructure Implementation § Infrastructure Services Architecture and Design § IBM Accelerator for IT Service Management for orchestration and provisioning § IBM Accelerator for Infrastructure Services § Managed Hosting Services – Virtual Server Services Take Away: Most likely IT contacts in your accounts have heard of virtualization but may feel it’s too advanced and lack the internal capability to manage IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 10
IBM Americas SMB Savings that result from optimizing IT can help justify investments in other IT initiatives More business value Savings reinvested More IT value IT Optimization Take Away: Successful IT Optimization leads to cross-selling and can further feed our pipeline IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 11
IBM Americas SMB Thank You! For more information on IBM products and services: IBM Concierge: 1 -877 -IBM-ACCESS (426 -2223) UNITED STATES - ibm. com/expressadvantage CANADA - ibm. com/expressadvantage/ca IBM Americas SMB Infrastructure Solutions Marketing 2007 © 2007 IBM Corporation 12
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