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IBM Tivoli Service Management Center for System z Creating and Managing Value Leonardo Ferri, IBM Tivoli Service Management Center for System z Creating and Managing Value Leonardo Ferri, Director Tivoli Southwest Europe Valencia, April 9 th 2008 © 2008 IBM Corporation

Agenda § Market and Business Challenges § Tivoli Strategic Directions § Tivoli Service Management Agenda § Market and Business Challenges § Tivoli Strategic Directions § Tivoli Service Management Center for System z § The Power of Green 2 Software Group - © 2008 IBM Corporation

IT Trends and Issues Impacting Europe “ 81 per cent of European consumers are IT Trends and Issues Impacting Europe “ 81 per cent of European consumers are concerned about the risk of others accessing and misusing their personal information. In particular, 78 per cent of Germans cite this as a significant worry …” -- Unisys European Security Index, 2007 “By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status. ” -- Gartner, Jan. 31, 2008 “Virtualization will continue to make headlines in 2008. It’s expanding into just about every nook and cranny of the data center, and is proving to be a very useful tool for a wider array of situations. ” -- Information. Week, Jan. 29, 2008 “One-third of IT spending now occurs outside of North America, Western Europe, and Japan. This development will create new innovation in IT, new competitors, new usage patterns, and continued cost improvement benefits for users. ” -- Gartner, Oct. 27, 2007 3 Software Group - © 2008 IBM Corporation

CIO’s Top Priorities Are to Deliver Business Agility and Innovation While Retaining a Resilient CIO’s Top Priorities Are to Deliver Business Agility and Innovation While Retaining a Resilient Business Complexity Distributed application topologies have created enormous complexity Compliance Changing regulatory environment requires security, privacy and ongoing audit capabilities Change Rate of change and risk of change affecting service delivery 4 Software Group - Rising Cost of Operations 350 300 250 200 150 100 50 0 2005 2006 2007 2008 The cost of operations continues to increase at 10% CAGR … twice the rate of the IT budget Inability to Innovate 350 300 250 200 150 100 50 0 2005 2006 2007 2008 Increased focus on development project spend due to higher % of costs going to keeping the lights on … creates a dual focus of doing the right thing and doing things well © 2008 IBM Corporation

IT Organizations Face Many Operational Challenges Rising costs of systems and networking operations Costs IT Organizations Face Many Operational Challenges Rising costs of systems and networking operations Costs & Service Delivery Management of data and information requirements “Enterprises report that IT operational Difficulty in deploying new applications and servicesbudget overhead = up to 70% of IT and growing. . . leaving precious few Security of your assets & your clients’ information Business Resiliency & Security resources for new initiatives. ” Landslide of compliance requirements Systems and applications need to be available Rising energy costs & rising energy demand Green Forrester, 2007 Power & thermal issues inhibit operations Environmental compliance & governance mandates 5 Software Group - © 2008 IBM Corporation

Tivoli’s Service Management strategic direction and organic development Business Service Visualization v 5 Labs Tivoli’s Service Management strategic direction and organic development Business Service Visualization v 5 Labs in Europe more than 1. 000 Developers Italy, UK, Neth. , Poland, Ireland v 22 Software Company acquired 7 since 2006 $1. 6+ billion invested How does this relate to the business service? Event Management - Process Automation v Solution Areas : Business Automation, Performance Automation, Storage, Security, Storage, Asset Management v Multiplatform, use of international standards, ITIL v Virtualization and optimization of IT assets : ‘’ Project big green ‘ What’s happening with the infrastructure? 6 Software Group - What actions do we take to correct the problems? © 2008 IBM Corporation

Enabling Business and Technology Integration Business Objectives Growth & Competitive Edge Compliance & Risk Enabling Business and Technology Integration Business Objectives Growth & Competitive Edge Compliance & Risk Mitigation Capital & Operational Expense Control IBM Service Management Provides the integrated visibility, control & automation across business and technology assets needed to achieve business objectives. Visibility Business processes Business Assets 7 Software Group - Control Information Automation People Business & Technology Assets Information Technology IT Processes © 2008 IBM Corporation

Visibility: See Your Business Industry, Lo. B, & Executive Dashboards Challenge: § Business and Visibility: See Your Business Industry, Lo. B, & Executive Dashboards Challenge: § Business and operational audiences lack the visibility to directly support and deliver against business objectives Solution: Targeted real-time dashboards § Integrated Business, Compliance, and Operational dashboards leverage existing assets and provide the real-time visibility needed to manage against business objectives. Risk, Security, & Compliance Dashboards ROI Examples: § A global consumer products company cut IT operational costs by 10%, despite a 15% increase in workload § A major insurance provider reduced network events by a factor of 10, saving hundreds of thousands of Euros and improving customer service Any data. Anywhere. For any audience. In real-time. 8 Software Group - Operational, Service, Customer, & IT Dashboards © 2008 IBM Corporation

Control: Manage Risk & Compliance Challenge: § Inability to detect and mitigate network security Control: Manage Risk & Compliance Challenge: § Inability to detect and mitigate network security violations in a timely manner due to a highly complex infrastructure with high volume of events. Solution: Threat & Vulnerability Management • “Ahead of the Threat” managed service offerings provide automated correlation and real-time monitoring of over 750 network security devices and 60, 000 desktops and servers globally. ROI Examples: § Major U. S. wireless and telco provider enjoys 75% reduction in security incidents that negatively affect business operations and a 98% reduction in time to mitigate incidents Mitigate risks and stay in compliance 9 Software Group - “Cyber espionage is getting renewed attention as fresh evidence emerges of online break-ins at U. S. research labs and targeted phishing against corporations and government agencies here and abroad. ” -- Network World, Jan. 17, 2008 © 2008 IBM Corporation

Control Success Story: Oberfinanzdirektion Karlsruhe Client Challenge: § Oberfinanzdirektion Karlsruhe lacked a clear picture Control Success Story: Oberfinanzdirektion Karlsruhe Client Challenge: § Oberfinanzdirektion Karlsruhe lacked a clear picture of overall IT performance across its diverse infrastructure § It wanted a single view and single point of control for all platforms to improve availability while reducing costs Solution: § A new monitoring infrastructure based on an IBM e. Server z. Series 990 and several IBM Tivoli software products, including Tivoli Monitoring and Tivoli OMEGAMON Benefits: § A single point of control for monitoring all applications, which has streamlined the office’s monitoring processes. § Can see potential problems sooner - and address them as soon as possible - which helps to avoid system downtime. § System z server provides a robust platform for the client's mission-critical CICS solution and batch processing jobs, which has improved the client's system stability. 10 Software Group - Industry: Government Profile: Oberfinanzdirektion Karlsruhe is the regional finance and tax office for the German state of Baden-Wurttemberg. It employs more than 23, 000 people. © 2008 IBM Corporation

Automation: Build Agility into Your Operations Challenge: § The operational processes that directly support Automation: Build Agility into Your Operations Challenge: § The operational processes that directly support delivery of revenue generating business services and processes are not automated or integrated. Solution: ‘Operational’ Automation § Automates and integrates the operational processes and tools that directly support the delivery of critical business services and processes – to help maximize productivity and reduce new labor expense, while improving service assurance. ROI Examples: § Retail firm cut recovery times by 50% § Financial services firm increased the ratio of auto-closed events by 59% Automating operations for greater business agility. 11 Software Group - “The more we can simplify, streamline and automate processes, the better we can manage the growing complexity … we must handle business growth with our existing resources. IBM technology helps us achieve greater levels of efficiency at a lower cost. ” Erwin Schaefer, Swiss Reinsurance © 2008 IBM Corporation

Automation success story: ING actively secure data and services worldwide Value Drivers Facing a Automation success story: ING actively secure data and services worldwide Value Drivers Facing a growing number of industry regulations and increasing sophistication of its business services, ING needed to reduce the time and cost of managing employee access to information while ensuring staff could quickly respond to business change. Solution Working with IBM Global Services, ING launched an innovative Entitlement Program powered by IBM Tivoli, Web. Sphere and System technology that will help reduce costs, improve staff productivity and enhance security, Value Realization § Total projected savings of € 15 million (US$20 million) a year § Projected 50% reduction in the number of administrators assigned to support identity management processes within 18 months § Anticipated 25% savings in help-desk administrative costs; § Ability to reduce time and cost associated with regulatory reporting § Ability to reduce turn-on time for new users from 10 days to less than 24 hours 12 Software Group - “Effective identity management helps us maintain our reputation for excellence, protect the security of sensitive, private information and enable our employees to deliver the fast service customers expect. . “ — Dion Kotteman Program Manager Global Information Risk Management ING © 2008 IBM Corporation

A Service Oriented Data Center has Far-Reaching Benefits § Triple asset utilization § Provision A Service Oriented Data Center has Far-Reaching Benefits § Triple asset utilization § Provision new resources in minutes § Eliminate 80% of outages § 40%+ more energy efficient § Reduce floor space by 80% § Reduce disaster recovery time by 85% - reallocating resources from operations to innovation 13 Software Group - © 2008 IBM Corporation

Announcing: IBM Tivoli Service Management Center for System z Enabling clients to visualize their Announcing: IBM Tivoli Service Management Center for System z Enabling clients to visualize their System z as a hub for the efficient management of enterprisewide business and IT services § Secure, scalable and highly available Providing Service Automation within System z Extend System z operations automation with process automation and service management through IBM Tivoli Service Management Center for System z Providing a single service automation solution across all systems Exploit System z advantages by driving mainframe-level process automation and service management across the enterprise 14 Software Group - © 2008 IBM Corporation

Yet IT Organizations are Hampered by Operational and Platform Silos System z is often Yet IT Organizations are Hampered by Operational and Platform Silos System z is often managed as a silo – apart from Distributed systems Desktop Experts and Tools Automate Business & IT interactions Govern the way processes are executed Automate tasks across domains J 2 EE App Experts and Tools Database Experts and Tools Mainframe Experts and Tools Network Experts and Tools Storage Experts and Tools www Automate tasks within domains Web SAP Service Processes Invocation 15 SAP Experts and Tools Labor Cost Spectrum of operational processes Operational and Platform Silos Software Group - DB 2 SQLs CICS Evaluate Processes Time © 2008 IBM Corporation

Spectrum of operational processes Efficient Service Management Spans all Platforms, all Processes Automate Business Spectrum of operational processes Efficient Service Management Spans all Platforms, all Processes Automate Business & IT interactions Govern the way processes are executed Automate tasks across domains Automate tasks within domains System z Distributed Systems “IBM’s goal is to truly manage the IT service, with the focus on providing the company with a strategic advantage and using its supporting technology to do just that. “ - Evelyn Hubbert, Forrester Research, IT as Just Yet Another Shared Service, January 7, 2008 16 Software Group - © 2008 IBM Corporation

IBM Tivoli Service Management Center for System z Enabling clients to visualize their System IBM Tivoli Service Management Center for System z Enabling clients to visualize their System z as an integrated, enterprise-wide highly available, scalable and secure hub for end-toend alignment and efficient management of business and IT services Providing Service Automation within System z § Extend System z operations automation with process automation and service management through IBM Tivoli Service Management Center for System z Providing a single Service Automation solution across all systems § Exploit System z advantages by driving mainframe-level process automation and service management across the enterprise, providing a choice to customers for managing services end-to-end 17 Software Group - © 2008 IBM Corporation

IBM Tivoli Service Management Center for System z Enabling clients to strategically use their IBM Tivoli Service Management Center for System z Enabling clients to strategically use their System z as an integrated, enterprisewide, hub for the efficient management of business and IT services IBM Tivoli Service Management Center for System z Best Practices and Services Incident & Problem Change & Release Management Business Service Management Process Management Service Management Platform Discovery & Relationship Mapping Federated Configuration Archive Process Automation Engine Operational Management Optimized Infrastructure Monitoring Operations & Production Control Financial Management Security Optimize your Data Center for All Platforms, All Processes 18 Software Group - © 2008 IBM Corporation

Introducing IBM Tivoli Service Management Center for System z Enabling clients to strategically use Introducing IBM Tivoli Service Management Center for System z Enabling clients to strategically use their System z as an integrated, enterprisewide, hub for the efficient management of business and IT services IBM Tivoli Service Management Center for System z Best Practices and Services IBM Tivoli Service Request Manager IBM Tivoli Change & Release Management IBM Tivoli Business Service Manager Process Management Service Management Platform IBM Tivoli Application Dependency Discovery Manager (TADDM) IBM Tivoli Change and Configuration Management Database (CCMDB) IBM Tivoli Service Request Manager Operational Management Optimized Infrastructure IBM Tivoli Netview for z/OS, OMEGAMON, IBM Tivoli Composite Application Manager IBM Tivoli System Automation & IBM Tivoli Workload Automation IBM Tivoli Accounting & Usage Manager IBM Tivoli Identify Manager, IBM Tivoli Access Manager and z. Secure Optimize your Data Center for All Platforms, All Processes 19 Software Group - © 2008 IBM Corporation

Completing System z and Completing Your Enterprise NEW Tivoli Business Service Manager § Improve Completing System z and Completing Your Enterprise NEW Tivoli Business Service Manager § Improve the alignment of IT objectives and business objectives NEW Tivoli Application Discovery & Dependency Manager § Improve operational visibility NEW Tivoli Service Request Manager § Improve end user satisfaction and control over incidents NEW Tivoli Change & Configuration Management Database § Improve business control NEW Tivoli Business Continuity Process Manager § Improve business resilience NEW Tivoli Security Management § Improve business integrity 20 Software Group - © 2008 IBM Corporation

IBM Tivoli Service Management Center for System z Process automation and business service management IBM Tivoli Service Management Center for System z Process automation and business service management for your Mainframe and your enterprise NEW Tivoli Service Management Center for System z Service Management: TBSM & TADDM Process Automation: CCMDB, TSRM & Process Managers Management & Monitoring OMEGAMON ITCAM PD & Admin Tools Operations & Production Control OMNIbus SA TWS Net. View Financial Management TAM for IT TLCMz TUAM TDSz Security Management z. Secure RACF TCIM TFIM/TIM Extend System z operations and production automation with process automation and service management through IBM Tivoli Service Management Center for System z 21 Software Group - © 2008 IBM Corporation

IBM Provides Flexible Ways to Implement Service Management § Traditional silo-ed management implementation: Operations IBM Provides Flexible Ways to Implement Service Management § Traditional silo-ed management implementation: Operations and Production Management Security Management Financial Management Integration Process Automation Service Automation Operations and Production Management Security Management Financial Management Hosted on Distributed Systems Hosted on System z § IBM Service Management implementation: Choice of Platforms Process Automation Service Automation Operations and Production Management Security Management Financial Management System z 22 Software Group - Distributed Systems © 2008 IBM Corporation

IBM’s Project Big Green 23 Software Group - © 2008 IBM Corporation IBM’s Project Big Green 23 Software Group - © 2008 IBM Corporation

Customer Challenges § Lack of Sufficient Electrical Power – The University at Buffalo installed Customer Challenges § Lack of Sufficient Electrical Power – The University at Buffalo installed a $2. 3 million Dell supercomputer – Upon delivery, officials discovered there was only enough power for 2/3 of the system. – A $20, 000 electrical-system upgrade was required § Escalating Energy Costs Eroding Profits – International Data Corporation (IDC - Doc #204904, Dec 2006) – "Between 1996 and 2010, server spending is will remain flat, but energy costs are expected to increase 8 X § Lack of Sufficient Data Center Cooling – – Pomona Valley Medical Center is a California hospital whose data center grew from 30 to 70 servers. The heat generated overwhelmed the A/C system, temperatures reached 92 o, and machines behaved erratically. In 2003, an air-conditioning unit broke down, sending the temperature over 100 degrees. The event caused a shutdown of systems serving the hospital's laboratory, $40, 000 in damage to servers and hard drives, and prompted a $500, 000 retrofitting of the cooling system. § Government Regulations Driving Greater Energy Efficiency in Data Centers – The US Environmental Protection Agency (EPA) – The EPA was directed by federal legislation (H. R. Bill 5646, now public law 109 -431) to study and promote the use of energy efficient computer servers in data centers. – Energy Conservation Center of Japan (ECCJ) – Passed similar legislation to that of the EPA. 24 Software Group - © 2008 IBM Corporation

IBM Green Data Center Solution Solves Customer Challenges §Servers are more energy-efficient and use IBM Green Data Center Solution Solves Customer Challenges §Servers are more energy-efficient and use less power –Monitors servers and shows past, present, and future (forecasted) utilization rates –Add workload to existing servers and avoid installation of additional ones – Saves MONEY, energy and space §Achieves Service Level Agreements (SLAs) while using less electricity –Adjusts application response times to use less power while still meeting SLAs §Holds Users Accountable for IT resources used –Tracks cost of power consumed –Provides reports showing who was responsible for power consumption §Improves Asset Management for Greater Energy Efficiency -When to replace systems with newer, more energy efficient-ones §Facilities Management –Map and visualize data center facilities –Air conditioning, water pipes, power outlets, power distribution units –Obtain information on power, cooling, temperature, layout, hot spots 25 Software Group - © 2008 IBM Corporation

Tracking Energy Consumption within the Infrastructure § z 10 EC offers a 15% improvement Tracking Energy Consumption within the Infrastructure § z 10 EC offers a 15% improvement in performance per k. Wh over z 9 EC § Resource. Link™ provides tools to estimates server energy requirements before you purchase a new system or an upgrade § Z 10 has energy efficiency monitoring tool – Introduced on IBM System z 9 platform in April 2007 – Power and thermal information displayed via the System Activity Display (SAD) § New IBM Systems Director Active Energy Manager (AEM) for Linux on System z V 3. 1 – Offers a single view of actual energy usage across multiple heterogeneous IBM platforms within the infrastructure – AEM V 3. 1 energy management data can be exploited by Tivoli® enterprise solutions such as IBM Tivoli Monitoring, IBM Tivoli Usage and Accounting Manager, and IBM Tivoli OMEGAMON® XE on z/OS – AEM V 3. 1 is a key component of IBM’s Cool Blue™ portfolio within Project Big Green 26 Software Group - © 2008 IBM Corporation

Tivoli Solutions Help Address Energy Management §IBM Tivoli Monitoring §IBM Tivoli OMEGAMON §IBM Tivoli Tivoli Solutions Help Address Energy Management §IBM Tivoli Monitoring §IBM Tivoli OMEGAMON §IBM Tivoli Composite Application Manager §IBM Tivoli Change and Configuration Management Database Monitor § Consumption § Take action-alerts § Application vitality • IBM Tivoli Provisioning Mgr • IBM Tivoli Intelligent Orchestrater • IBM Tivoli Total. Storage Productivity Center Reduce Consumption § Consolidate resources § Standby resources § Eliminate resources Reduce Expenses § IBM Tivoli Workload Scheduler Maximize Efficiency § Job scheduling during off-peak hours § Maintain assets for efficient operations § IBM Tivoli Maximo Automate Utility Management § Apply IT like management to utility grids § IBM Tivoli Netcool 27 Software Group - © 2008 IBM Corporation

Delivering Energy Efficiency and Reducing Environmental Impact • Applying Tivoli’s event health, performance and Delivering Energy Efficiency and Reducing Environmental Impact • Applying Tivoli’s event health, performance and automation capabilities to optimize resource consumption and minimize power requirements while maintaining service levels and workload throughput. • Working with partners to deliver comprehensive green datacenter implementations to customers including dynamic workload management and carbon footprint assessment and reporting. Virtualization and workload mgmt. Impact and footprint assessment and reporting Visualization, trending and analysis 28 Software Group - © 2008 IBM Corporation

IBM Pulse: The Premier Service Management Event § A new global mega-event for Tivoli, IBM Pulse: The Premier Service Management Event § A new global mega-event for Tivoli, § Showcasing the full scope of IBM Service Management solutions § More than 4, 000 attendees from around the world § Featuring the leading thinkers, analysts and visionaries in the service management industry § More than 350 IBM technical experts onsite 29 Software Group - May 18 -22, 2008 Orlando, FL, USA www. ibm. com/software/tivoli/pulse 08 © 2008 IBM Corporation

IBM Service Management Center for System z Provides a competitive differentiator for End-to-End z IBM Service Management Center for System z Provides a competitive differentiator for End-to-End z Inclusive Service Management Visibility Control Automation Respond faster and make better decisions Improve quality and reduce risk Lower costs and build agility #1 in System Management Software - IDC #1 in Worldwide IT Operations Management - Gartner (6 th consecutive year) Highest Rated, Ovum. Summit ITSM Vendor Report Card Leader, Datamonitor Vendor Comparisons for ITSM and Desktop Management 30 Software Group - © 2008 IBM Corporation

31 Software Group - © 2008 IBM Corporation 31 Software Group - © 2008 IBM Corporation

System z Growth Transformation Requires a New Approach § The changing role of the System z Growth Transformation Requires a New Approach § The changing role of the mainframe is a catalyst for disruption – In addition to the classic strengths, the mainframe addresses today’s business challenges: • Security • TCO • Energy efficiency – Extending management and control capabilities across heterogeneous platforms • Enterprise security • Enterprise resiliency / Back up • Enterprise workload management • Data and SOA § New management requirements are needed to accommodate the new role – The need for management simplification to leverage new skills on System z – Transformation from legacy platform management to managing z as a hub for mixed enterprise workloads, server virtualization and end to end services – Evolution from systems to service management • Align IT with business • Bridge organizational gaps • Eliminate operational inefficiencies § IBM Tivoli is uniquely positioned to help customers meet these challenges 32 Software Group - © 2008 IBM Corporation

What does z. Service Management Center enable? z. Service Management Center solutions provide the What does z. Service Management Center enable? z. Service Management Center solutions provide the required visibility, control and automation across the service, technical support, operations, security and financial domains and enable the transformation from a z resource management focus to a centralized z service management model § Visibility z. Service Management Center solutions provide the enterprise wide visibility to ensure reliable service delivery and efficient management of business and IT services § Control z. Service Management Center solutions help to gain control of the assets, security, resource utilization and costs of service delivery § Automation z. Service Management Center solutions help you to automate operational tasks and processes across the enterprise reducing manual errors, complexity and cost 33 Software Group - © 2008 IBM Corporation

What makes SMCz better than Competition? Visualization § UI integration strategy that unifies ETE What makes SMCz better than Competition? Visualization § UI integration strategy that unifies ETE business services, IT operations and process automation – – – CA, BMC and HP have multiple UI with limit process integration creating system management silos BMC has no consolidated System z and distributed Operation Dashboard HP has no z management capabilities Control § A federated configuration management system for data integration with automated discovery and application mapping of System z relationships – CA CMDB is on Windows & Unix only with weak reconciliation, federation & change analytics – BMC has multiple discovery products, complex configuration and requires a Rip and Replace migration – HP has multiple CMDBs with weak dependency visualization with no z relationship mapping § Consolidate Enterprise & IT Asset Management – BMC, CA & HP do not have EAM capabilities Automation § Exploit System z advantages by driving mainframe process automation and service management across the enterprise – – None of the competitors have cross-platform high availability and disaster Recovery – 34 CA has no notion of automation with system management products for both Distributed and System z HP has no automation for z/OS Only SMCz enable customers to use their System z as a enterprise high availability, scalable hub for ETE Service Management Software Group - © 2008 IBM Corporation

Case Study: Green Data Center Reduces Power Expenses Business Challenge Understand Manage Energy Usage Case Study: Green Data Center Reduces Power Expenses Business Challenge Understand Manage Energy Usage § Integrate power and thermal metrics with IT workload § Understand energy usage and control power § Reporting and analysis for potential energy credit § Automated energy policies § Extension to equipment ecosystem ITM Green Energy Manager Tivoli Maximo Spatial IBM Director Active Energy Manager Tivoli Usage and Accounting Manager IBM Solution Tivoli Green Data Center § Power & thermal correlation in a single pane of glass § Manual and automated power policies § Realtime & historical trending with asset data § Business analysis & holistic view for data center planning. Business Benefits Understanding and Control of Energy § Improved understanding of energy usage § Proactive energy efficiency and conservation § Prioritized needs and business objectives. § Improved ROI on capital via better utilization/planning “We consulted several vendors, and it was clear that IBM had the edge in terms of innovative ideas. ” – Art Gloster, Bryant University CIO 35 Software Group - © 2008 IBM Corporation