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® IBM Software Group Software strategy and SMB focus in 2005 Pawel Sobczak Manager ® IBM Software Group Software strategy and SMB focus in 2005 Pawel Sobczak Manager of Software Channels, SMB and Telesales Central and Eastern Europe. Middle East and Africa Borovetz, March 2005 © 2005 IBM Corporation

IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § Express offering for Midmarket § Solution Builder Express § Built on Express 2

IBM Software Group Strategy statement IBM delivers value through an innovative, standards-based, flexible IT IBM Software Group Strategy statement IBM delivers value through an innovative, standards-based, flexible IT infrastructure that supports dynamic business processes. IBM executes its software strategy by: § Adopting an open computing strategy § Evolving and enhancing its current portfolio and focus on an integrated architecture § Componentizing for reuse of software assets § Optimizing organizational productivity § Delivering the solutions needed to evolve to an on demand enterprise 3

IBM Software Group IBM Software Strategy Provide a complete and specialized portfolio of best-in-industry IBM Software Group IBM Software Strategy Provide a complete and specialized portfolio of best-in-industry middleware to accelerate the execution of business strategy and the delivery of business value. ess sin Bu On Demand Operating Environment ENTRY LOB Solutions es ess c Pro Business Transformation ENTRY IT Solutions Provide targeted entry point Middleware Solutions delivered by subject matter experts ready to engage in customer Business or IT led solution projects. Solutions that by design will help customers extend accelerate their On Demand Operating Environment. 4

IBM Software Group Strategy § Grow with and through Business Partners § Increase focus IBM Software Group Strategy § Grow with and through Business Partners § Increase focus on influencers § Extend reach to small and medium businesses § Leverage cross-brand (HW/SW) offering § Drive Linux as platform offering freedom of choice 5

IBM Software Group Open Platform Approach § Open. Grid / On. Demand computing § IBM Software Group Open Platform Approach § Open. Grid / On. Demand computing § Open Development Integration Platform § Open Application Integration § Open Application Server (incl. Cloudscape/Derby) § Open Operating System On. Demand Computing Environment § IBM defined On. DEmand computing and leads in Grid technology Eclipse § IBM donated $40 M of initial technology Web. Servicea § IBM led or co-led creation of SOAP, WSDL, UDDI, WSSecurity, BP EL 4 WS J 2 EE and Apache Choice Includes Linux § IBM contributed significant technology to J 2 EE & helped form the Apache Software Foundation § IBM is the #1 commercial supporter 6

IBM Software Group IBM Value Proposition - It’s About Business & Economic Value IBM IBM Software Group IBM Value Proposition - It’s About Business & Economic Value IBM will Not Compete in the Application Market A Strong Market Position & Go-to-Market The Right Architecture for Today & Tomorrow Leadership in Industry Solutions & Sales Application Open App Platform Bus. Integration Platform Windows Linux UNIX OS/400 z/OS 7

IBM Software Group Marketing Investment Shifts 2004 to 2005 (Correlated With Tenets) 40% Recruit IBM Software Group Marketing Investment Shifts 2004 to 2005 (Correlated With Tenets) 40% Recruit 24% Enable 14% 9% § 2005 Demand Generation Activities supporting Program Marketing Targets 16% 18% Engage 24% 25% Reward 5% 6% 9% 2004 7% 2005 8

IBM Software Group New, Simplified Partner. World Program Engage üAligned to Business Partner business IBM Software Group New, Simplified Partner. World Program Engage üAligned to Business Partner business models instead of IBM product groups üIntegrated with go-to-market strategies and priorities Premier Advanced üSingle Web experience üBusiness Partners recognized Member for their total IBM contribution üProvides visibility and removes barriers to full breadth of IBM support and enablement offerings Common Infrastructure 9

IBM Software Group IBM Enablement for Partners Enablement § Enablement is a key value IBM Software Group IBM Enablement for Partners Enablement § Enablement is a key value we provide our partners 4 Selling Resources 4 Marketing Resources 4 Product, Technology Info 4 Tech Support 4 Training and Certification 4 Value Added Packages § Education cost reimbursement available through IBM ‘We Pay’ Program § Designed 4 Face to Face, On Line, Self Paced, Innovation Centers http: //www-1. ibm. com/partnerworld/pwhome. nsf/weblook/pub_benefits. html 10

IBM Software Group Business Partner - Innovation Centers IBM Endorsed and Branded § Goal: IBM Software Group Business Partner - Innovation Centers IBM Endorsed and Branded § Goal: Provide a platform to accelerate the sales & deployment cycle of the VIC BP’s solutions/services & IBM software Business Partner Innovation Centers 35 Worldwide Software Centers § Typical Services include: 4 Marketing & technical briefings 4 Introduction for new SW products, offering and technologies 4 GTM activities for Tier 2 BPs 4 Demand generation events 4 Design reviews 4 Product installation / implementation assistance 4 Client training / customized workshops 4 Post sales non-defect support Marketing • Recruit • Demand Generation Education and Enablement • Demo’s • Test Support • Proof of Technology Advanced Technical Environment Client Meeting Place 11

IBM Software Group ISVs and Developers - Developer Works External Site § Specific Links IBM Software Group ISVs and Developers - Developer Works External Site § Specific Links to SWG Brands or Key Technologies § Hot Topics and Current Interest Articles § Downloads, Training, Key Tech Events and Blogs http: //www-130. ibm. com/developerworks/ 12

IBM Software Group Business Partner Marketing § 2005 Business Partner Program Guide ü Marketing IBM Software Group Business Partner Marketing § 2005 Business Partner Program Guide ü Marketing Programs Engage ü Support ü Software Offerings ü Marketing Resources ü Business Partner Programs ü IGF Drive new business opportunities ! Get your personal copy: www. ibm. com/partnerworld/2005 swprogramguide 13

IBM Software Group 2005 co Marketing Programs (BP Demand Generation) Engage 2004 Marketing Co-Marketing IBM Software Group 2005 co Marketing Programs (BP Demand Generation) Engage 2004 Marketing Co-Marketing 2005 Marketing Co-Funded Invitation Only Registered list of Partners Marketing Center execution VAP Agency Activation Fully Funded Same as 2004 Agency Activation All of the above will use the improved process !! § § Simplified process for all Business Partners New, web-based one-page system Interface Marketing Centers & Agency Activation automatically capturing & reporting Leads Marketing Centers eliminating claim and proof of performance documentation 14

IBM Software Group Agency Activation in 2005 Engage Intent Agency § Activation Criteria Coverage IBM Software Group Agency Activation in 2005 Engage Intent Agency § Activation Criteria Coverage Process Perform fully-funded marketing on behalf of a Business Partner Growth, Strategic, Competitive, Exceptions Brands, Programs, Geos One-touch, feeds into Marketing Center engagement Behind-the-Scenes tool, 100% fully funded and tracked There will be no change from the 2004 execution process Should be viewed and used as Marketing leverage to direct BPOI One-Time event, then will be invited to execute a Marketing Center engagement Agency Activation execution with a Business Partner is typically a 6 -8 week engagement § § Strategic Partners, or as reward to Top Partners Starting Model for competitive partners Top Program or Brand partners VAD or other nominations or Special Interest groups Agency Activation will take full advantage of the new Marketing forms & processes 15

IBM Software Group Partner Rewards Reward Partner. World § Benefits commensurate with level of IBM Software Group Partner Rewards Reward Partner. World § Benefits commensurate with level of investment & commitment to IBM Membership levels demonstrate: 4 Optional Value Package ($2 K) provides value between $100 K - $400 K 4 Marketing & sales support 4 Skills development & enablement Premier § Access to: 4 Selling Resources 4 Marketing Resources Advanced 4 Products & Technologies 4 Technical resources & support 4 Training & certification 4 Events & conferences Member – – Significant investment 6 skills incl. 2 sales, 2 technical Revenue attainment Customer satisfaction – – Strong commitment 2 technical, 1 sales skill Revenue attainment Customer satisfaction – Minimal commitment – Open to all – On line registration 4 News & Newsletters 16

IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § Express offering for Midmarket § Solution Builder Express § Built on Express 17

IBM Software Group SMB Market § Very fast growing business opportunity § Customers expecting IBM Software Group SMB Market § Very fast growing business opportunity § Customers expecting packaged solutions (fixed price & fixed time) § Limited initial investment – price sensitivity § Start small, grow fast - flexibility § Limited IT resources – solution provider plays role of IT department § Decision often based on references and success stories – detailed assessment of solution costs time, effort, and money 18

IBM Software Group IBM offering for SMB § Express product portfolio § Business Partner IBM Software Group IBM offering for SMB § Express product portfolio § Business Partner solutions § Lead generation campaigns 19

IBM Software Group IBM SMB Portfolio ISV Applications Business Value ISV Advantage Industry and IBM Software Group IBM SMB Portfolio ISV Applications Business Value ISV Advantage Industry and Cross Industry Applications SMB Business Foundation IBM Express Product Offerings Web. Spher e DB 2 Infrastructure Value IBM Solutions Builder Express Portfolio Marketing & Technical Assets Tivol i Lotus Rational Runtime & Tooling (Cross SWG Brands) Marketing Assets Technical Assets Multiple RTM, Sales & Marketing Sales & Support Marketing Support Specific and Cross Industry Starting Points Banking Insurance Automotive Integrated Platform Express (Cross IBM Brand Offerings ) SMB Advantage Partner. World Virtual Innovation Center Finance Retail Wholesale Electronics CPG 20

IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § Express offering for Midmarket § Solution Builder Express § Built on Express 21

IBM Software Group Express: Founded on a patented design process Key attributes of the IBM Software Group Express: Founded on a patented design process Key attributes of the patented IBM Express Architecture Easy to Evaluate, Purchase and Support § High quality evaluation and implementation support materials § Web-based support § Resources help ensure adequate skills Easy to Install § Single-server installation takes minutes, not hours § Guided, non-disruptive installation and setup § OEM-ready with silent install/uninstall Easy to Learn and Use § Simple, intuitive user interface § Samples and tools facilitate quick, successful first-use § Accessible, useful documentation Easy to Integrate § Coexists and works well with other Express products § Supports important mid-market components and applications § Exploits key platform services that reduce total cost of ownership (TCO) Demonstrates Good ROI § Complete Integrated Solution § Only required features provided § § § Competitive Features Secure by default Well-documented features Consistent function Quick and easy problem determination § Right Technology § Proven technology to ensure reliable operations and minimize downtime § Extensible and Flexible § Available on all key mid-market platforms with priority for Win 2000, i. Series and Linux § Modular, easy to customize and extend § Priced to Market § Price linked to usage, based on number of users or processors § TCO attractive to SMBs § Resource usage that is competitive Easy to Manage § Self-configuring for reduced administrative skill and interaction needs § Supported by reasonable defaults, application templates and wizards § Routine tasks are automated and self-optimizing 22

IBM Software Group SWG SMB Portfolio Strategy Customer #1 understand customer business and technology IBM Software Group SWG SMB Portfolio Strategy Customer #1 understand customer business and technology needs from customers & BPs Business Partners #3 BPs leverage solution building blocks, partner applications and services to satisfy customer needs Solution Building Blocks #2 Create solution building blocks around customer needs Express offerings Non-Express offerings 23

IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § Express offering for Midmarket § Solution Builder Express § Built on Express 24

IBM Software Group What is the “Foundation”? Express Runtime and Components § Open Standards IBM Software Group What is the “Foundation”? Express Runtime and Components § Open Standards based middleware components Partners can leverage within their solutions § Pre-integrated and pre-configured middleware • DB 2 UDB Express • Web. Sphere Application Server • HTTP Web Server § Single Admin Console § One product, one license, one contract and one support structure § Aggressive, flexible pricing § Enables partners to develop and deploy their application Architecture and Best Practices § A consistent, market driven approach to development of mid-market appropriate products. § Offerings built on common components that delivers value add integration and consistency as the products are used in concert to deliver mid-market solutions. § Best practices and design patterns with a prescriptive approach that results in predictable, repeatable solutions Tools § Open, Java Based Application Development • Rational tools for professional developers and architects § Line of Business Sophisticated Users • Workplace tools for sophisticated LOB user and integration partners § Solutions Builder Express • Wizard Based Consulting Tool for high quality solution architectures • Solution Starting Points for Industry Verticals & Horizontals based on Express Foundation IBM Confidential 25

IBM Software Group Medium Business GTM Approach Helping partners sell more solutions more often IBM Software Group Medium Business GTM Approach Helping partners sell more solutions more often to the midmarket Express Portfolio Business Partners What mid-sized firms want, at an affordable price 1. Solution Overview ü ü Solution concepts and business value Solutions Builder Express Solution architecture Recommended software, hardware, tools JSP programming Networking SQL …. Skills required to implement the solution Task descriptions and time estimates to plan services engagement 2. Demo Toolkit Customizable presentation: Solution Benefits and Overview Video clips of the solution How-to document to assist with using and customizing the assets 3. Implementation Guide Implementation checklist Instructions, tips, techniques for solution installation and use Customization information Use cases (guided tour) that can be used as part of demo or education Sample code, data, scripts, configurations to get up and running quickly 26

IBM Software Group IBM Solutions Builder Express Provides Business Partners the tools to sell IBM Software Group IBM Solutions Builder Express Provides Business Partners the tools to sell to mid-market customers What is Solutions Builder Express? § Set of tools that enables Partners to sell, design and deploy solutions on IBM Express middleware using sales materials, technical tools and implementation guides. § Developed with Business Partners for Business Partners designed to support partners every step of the way. § All the tools and resources are free. How does it benefit Business Partners? § Partners can build repeatable SMB solutions leveraging IBM Express products faster and easier. § Partners can up-sell their own value-added products and services—increasing ROI and repeat business. Sell more IBM Solutions Builder Express Toolkit for Business Partners § § § Close sales Customer presentations Technology demos Solution architectures Implementation checklists Sample code Reach new markets 27

IBM Software Group Advantage: Speed Time to Value, Sales Effectiveness and Return on Investment IBM Software Group Advantage: Speed Time to Value, Sales Effectiveness and Return on Investment § Installation time cut from 7 days to less than 1! § Development of new Portal Solutions in less than half the time! § Design patterns provided for a repeatable, predictable solution! § Exceeded customers expectations! § Expanded opportunity with new market segments and solution areas 4 ISV enablement to develop solutions for mid-market 4 Business Intelligence combined with Portal (DB 2 and Web. Sphere winning combinations)! § Opened doors and closed new business using Solution Builder Express sales and technical assets! 28

IBM Software Group Build and deploy vertical solutions using IBM Solutions Builder Express SMB IBM Software Group Build and deploy vertical solutions using IBM Solutions Builder Express SMB Customer Needs Customers For the following industries: Electronics Banking Business Partners provide customers with solutions customized to their business needs Business Partner customization and services IBM Solutions Builder Express provides Business Partners with deployment and implementation assets IBM Solutions Builder Express Portfolio Cross and Industry-specific Solution Starting Points Retail Finance Automotive Insurance Wholesale Consumer products Healthcare/Life Sciences Fabrication and Assembly Market requirements drive development of Solution Starting Points 29

IBM Software Group Technical components of Solution Starting Points Solution Overview Solution concepts and IBM Software Group Technical components of Solution Starting Points Solution Overview Solution concepts and business value Recommended software, hardware, tools Solution Architecture Demo Toolkit Customizable presentation: Solution Benefits and Overview Video clips of the solution How-to document to assist with using and customizing the assets Planning Guide üJSP programming üNetworking üSQL Spreadsheet of time estimates to plan services engagement Skills required to implement the solution Task descriptions and best practices Implementation Guide Implementation checklist Instructions, tips, techniques for solution installation Customization information Sample code, data, scripts, Use cases that can be used as part of demo or education configurations to get started quickly 30

IBM Software Group Partners use Solution Starting Points from sales to deployment Solution Overview IBM Software Group Partners use Solution Starting Points from sales to deployment Solution Overview 1. Engage customer 2. Translat e customer needs 3. Propose Solution Task list Use Cases Demo Toolkit Implementation Samples Solution Architech-ture 4. Up-sell / Cross-sell 5. Close sale 6. Impleme nt Deploy, & support solution “The solutions provided in Solutions Builder Express with valuable resources like templates, task lists, sample scripts and test data help reduce our risks and exposure when delivering our solutions to the customer. ” — Leonardo de Pinho Sepulcri, Wasys Technology, Brazil Customization Info Starting Point Installer Consultant Tool "The [materials in the Solutions] are a good introduction for technical oriented persons and are a good base for proposals. “ — Monica Ahuna, Avinci The Know-How Company, Germany 31

IBM Software Group IBM Solutions Builder Express Portfolio Solution Starting Points available now Portal/Workplace IBM Software Group IBM Solutions Builder Express Portfolio Solution Starting Points available now Portal/Workplace Express Solutions § Collaborative Portal § Portal Access for the Mobile Workforce Express Solution Starting Point § Mobile e-business Express Solution Starting Point § Collaborative Community Portal Express Solution Starting Point § Employee Portal Express Solution Starting Point § Collaborative Employee Portal for Retail Express Solution Starting Point § Employee Portal for i. Series Express Solution Starting Point Business Integration Express Solutions § § § B 2 B Connectivity B 2 B Process integration Process Integration B 2 B Portal Integration of Diverse Applications and Data Express Solution Starting Point Content Management Express Solutions § Collaborative Document Management § Managing Content within Business Processes Express Solution Starting Point § Item Management and Synchronization with UCCnet Express Solution Starting Point § Managing Content for Insurance Claims Processing Express Solution Starting Point e-commerce Express Solutions § Document Management in a Banking Loan Application Process Express Solution Starting Point § Easy Creation of Website for Retail Express Solution Starting Point § B 2 B e-commerce Express Solution Starting Point Infrastructure Express Solutions § Secured External Access to Company Resources Express Solution Starting Point § Rapid Foundation for e-business Express Solution Starting Point § Mobile e-business Express Solution Starting Point § Portal Access for the Mobile Workforce Express Solution Starting Point § Infrastructure Consolidation on Linux Starting Point Business Intelligence Express Solutions § B 2 B e-commerce Analytics § Customer Insight for Retail § Information Transformation for Analysis 32

IBM Software Group 2004 SBE Awareness and References Starting Point downloads for last 4 IBM Software Group 2004 SBE Awareness and References Starting Point downloads for last 4 months Highlights • Over 450 different Business Partners have downloaded assets through Nov 2004 • Around 3000 downloads of Starting Points since launch at PW (Mar 2004) • 14 BP quotes and 3 BP references (2 in process, 6 more in pipeline) • 50+ press articles • * Partial data for November due to PW site migration Starting Point downloads by GEO’s Starting Point downloads by brand, cumulative Apr through Sept 33

IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § IBM Software Group Agenda § IBM Software Group strategy § SMB market opportunity § Express offering for Midmarket § Solution Builder Express § Built on Express 34

IBM Software Group Built on Express 35 IBM Software Group Built on Express 35

IBM Software Group Channels Technical Sales Missions in 2005 § Channels Technical Sales Team IBM Software Group Channels Technical Sales Missions in 2005 § Channels Technical Sales Team Missions (the SWITs) are unchanged in 2005 : 4 Pool of IT Specialists from all SW Brands and SW IT Architects 4 Provide SW Technical Sales support for Business Partners 4 Provided support : § Enable to Sell – in the context of an Enablement Plan § Sell with support – opportunity pre-sales support § Implementation support – first time implementation 4 Highly skilled out-bound resources engaged by EMEA Channel Sales teams 4 Will leverage other Technical Support organizations for other activities : IDR, IICs, Techline, TECs, VIC… 36

IBM Software Group BPs – routes to Technical Support Services Awareness, Recruit Enablement Tech IBM Software Group BPs – routes to Technical Support Services Awareness, Recruit Enablement Tech Sales Supp ort Implem ent atio n Post. Sales Supp ort developer. Works DB 2 z * * n/a n/a Virtual Innovation Center (VIC) * * * Product Introduction Center (PIC) n/a *4 n/a n/a Global Technical Sales Support(GTSS) n/a * n/a n/a Techline (Sales Q&A for IBMers) n/a * n/a Partnerline (Sales Q&A for partners) n/a * n/a IBM Innovation Center for Business Partners (was Solution Partnership Center) n/a * n/a n/a Passport Advantage 1 aaa ( internal, BP with PA membership, customer with license n/a $ $ IBM IT Education Services n/a $ n/a n/a 37

IBM Software Group IBM is here and. . . ^ 38 IBM Software Group IBM is here and. . . ^ 38

IBM Software Group Thank You p. sobczak@at. ibm. com 39 IBM Software Group Thank You p. sobczak@at. ibm. com 39

IBM Software Group p. sobczak@at. ibm. com 40 IBM Software Group p. sobczak@at. ibm. com 40