Sandy Carter

2. Building a Smarter Planet in a Complex World Sandy Carter VP, SOA & WebSphere Marketing, Strategy, and Channels

3. Something Meaningful is Happening… “ Every human being, company, organization, city, nation, natural system, and man-made system is becoming interconnected, instrumented, and intelligent. This is leading to new savings and efficiency—but perhaps as important, new possibilities for progress. The world is Flatter. Because it can. The world is Because it must. Smaller. Because we want it to. The world is getting Smarter.

4. For us to make sense of this new world, we must consider how we become . . . Responsive Insightful Smart Efficient

5. IBM Software… Building a smarter planet in a complex world Providing a next-generation open integration platform built on a Service Oriented Architecture (SOA) customized for your industry

6. Today we are #1 in middleware… 2007 Software Revenue 17% IBM Share $15.5 SAP $9.0B Oracle / BEA Microsoft $11.3B $21.7B Oracle $5.7B Microsoft $8.4B IBM $2.3B 6% Share Microsoft $1.2B EMC $1.2B EMC $4.1B IBM (PLM) $1.1B 1% Share Sun $0.6B Operating Systems Middleware Enterprise Applications $40B $109B $101B 3% CGR 5% CGR 4% CGR Source: (1) Only top share leaders listed; IBM share includes software revenue from IGS transactions (2) IBM GMV2H08, IBM CSV 7/08; Middleware excludes operational security; CGR is ’07– ‘12

7. Leveraging IBM’s Globally Integrated Team 50,000+ SW Employees Worldwide 26,000+ Developers Major R&D Locations 17,000+ Sales & Technical Sales 5,000+ Support Staff Dublin plus … over 30,000 SW Partners Staines Hursley Canada China Boeblinge Beijing, Shanghai n Paris Krakow United States Yamato Haifa California Taiwan Massachusett Rome Cairo s Minnesota India Malaysia New York Bangalore North Carolina Pune Singapore Texas Hyderabad Brazil Gurgaon 350,000 + IBM Employees Worldwide Gold Coast Perth 30,000 + Developers Sydney Canberra 100,000 + Sales, Support & Marketing

8. A network of partners • Building a rich and diverse ecosystem that integrates employees, clients, partners and suppliers is central to driving share gains in high growth areas and is a key source of a competitive advantage for IBM. • At the heart of this ecosystem is our relationship with approximately 100,000 Business Partners, including consultants, integrators, software vendors, value-added resellers and distributors. • 40,000 ISVs Worldwide • 13,000 Service Providers • 50,000 Reseller Partners • 190 Mid-market Alliances • 29,000 System Integrators • 218 Enterprise Alliances • 950+ Local IBM Global • Technology Specialists • 500+ IBM Business Solution • Profesionals

9. How we target the high-value opportunities • Invest in high-growth markets • Leverage IBM’s global reach • Geographic presence • Deep technical skills • Industry expertise • Extensive client relationships • Strengthen our hand through acquisitions • Capitalize on IBM’s unique ability to deliver SOA, Information on Demand, Web 2.0 Social Software for Business, Managed Services and Application Development solutions. • Building our software on the highest performing servers in the market, with System z at the forefront • Tap new types of clients, such as the medium business arena • Incubate new emerging, high-growth businesses

10. Providing a Next-Generation Open Integration Platform … delivering proven value to solve real business problems Next Generation Collaboration Information On Demand to unlock the value in the passion and expertise to unlock the business value of of people to drive efficiency, deepen information for competitive relationships, embrace change, and foster advantage and establish innovation. Information agenda for smarter business outcomes Service Management Software Lifecycle Management to enable innovation by reducing An open IT architectural operational labor, improving to better govern the business foundation built on SOA asset productivity and quality process of software and systems of service delivery, enabling innovation at lower cost Business Process Flexibility to develop and rapidly deploy innovative business models with flexible, optimized processes

11. Leveraging Our Portfolio to Deliver Solutions for a Smarter Planet IBM Share Key Product Segments Position Social Software Architecture Mgmt Portal Change and Release Mgmt WebSphere #1 e - mail, Messaging Process and Portfolio Mgmt Lotus Lotus Rational Rational Rational Rational #1 Integration Server Data Management Systems Mgmt Information Information Information Information #1 Portal Server Content Management Tivoli Tivoli Management Management Tivoli Tivoli Management Management Storage Mgmt Information Management #2 WebSphere WebSphere WebSphere WebSphere Information Platform Security Mgmt Business Intelligence & #1 Enterprise Content Management Performance Management Business Application Transaction Integration Servers #1 Information Integration (incl MDM) Processing Lotus #2 Collaboration Next IT Lifecycle #2 Service Oriented Information Service Generation Management & Architecture On Demand Management Tivoli #2 Collaboration Governance ( SOA ) ( IOD ) #2 Security Management Rational #1 #1 Software Configuration Mgmt Sources: IBM Finance, IBM Market Analysis, Company Reports, IDC Software Tracker

12. IBM has recognized the changes in the market place and are addressing it through its Smarter Planet initiative focusing on 4 themes namely “New Intelligence”, “Smart Work”, “Dynamic Infrastructure” and “Green & Beyond” “Data is exploding and it’s in silos” “New business & process demands ” “Our resources are limited” “My infrastructure is inflexible and costly” I Need Insight I Need to Work Smart I need to respond quickly I Need Efficiency How can we take advantage of the wealth of information available in real time from a multitude of sources to make more intelligent choices? How can we work smarter supported by flexible and dynamic processes modeled for the new way people buy, live & work? How do we drive greater efficiencies, compete more effectively, and respond more quickly by taking action now on energy, the environment, and sustainability? How do we create an infrastructure that drives down cost, is intelligent and secure, and is just as dynamic as today’s business climate ? New Intelligence Smart Work Green & Beyond Dynamic Infrastructure

13. Business in the emerging markets in the last 5 years was very strong for most companies. But times have changed. Emerging stock markets have fallen more quickly and more steeply than anytime in history; the price of commodities on which many emerging markets depend have fallen more quickly and more steeply that any time in history. Credit is tightening in many markets and it is becoming little consolation that consumers may have some residual buying power if distributors cannot finance purchases - Economist

14. The economic slow down in global economies have impacted the software market opportunity growth in all regions but with the growth markets showing more resilience. Globally information management continues to provide the biggest opportunity Software Market Opportunity Growth Global by Region Software Global Market Opportunity by brand 2009

15. Sub – Saharan Africa Market • Sub-Saharan Africa has 782m people now, and will grow to 1.2bn by 2025…and 1.7bn by 2050. • But the region is poor and fragmented into 48 markets; • South Africa makes up a third of the region’s GDP . • Along with Nigeria, they make up half of total GDP. • The remaining 46 countries have an official economy the size of Austria or Iran. • 27 countries have less than 10m people. • 47% of the population live on <$1 a day, but this should fall to 30% by 2015, less than China today. • Key markets: SA, Nigeria, Angola, Ghana, Kenya SA GMR is split into 4 Regions, within these regions a number of Tier 1 countries which act as a “beach head” for these regions SA Top Sheet 2008 the Economist

16. 7% SA GMR: Countries - Brand: Total End - User (GMV Compare) - Industry: Total 6% 2008 10% 9.1% Rest of SA GMR South Africa 8% Market Growth (%) 2008 SubSA AGR = 7.2 % 7.0% 6% South Africa 2009 SubSA AGR = 3.8 % 4% 3.9% Rest of SA GMR 3.2% 2% 2009 0% - 1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 Market Size ($B) Although significant dip in GDP forecasts for the region, an average GDP growth of 3.1% expected Economic Impact Market Impact • The restoration of confidence should start emerging by 2010, however, some positive impact on business might have to wait the end of 2010 or early 2011Source: The Economist Intelligence Unit SA GMR We are here Real GDP Growth per Quarter Source: IBM GMV Jan 09 Economic Forecast and Economist

17. Topic Summary Outlook Growth Economic growth set to slow, notably in Southern and West Africa Inflation Set to ease after the oil and food price declines Currency Rand led the charge, now the regional currencies are under pressure Politics Kenya and Ghana election uncertainties are behind us. Only South Africa, Namibia and Botswana to hold elections this year SA GMR Economic Forecast – Indications of significant downturn but not all doom and gloom Country Summary Outlook Botswana Stagnation as diamond exports suffer Ghana Inflation, currency and budget problems but the economy keeps moving Kenya Political improvement, an economy that's holding up, but a worsening current account Mauritius Exports and tourism suffering Namibia Miners hit, but interest rates set to ease Nigeria Adjusting to a halving in oil prices South Africa Cyclical downturn, rate cuts and ongoing fears over the rand Tanzania Will donor aid keep flowing in? Uganda Hurt by commodities, and will weather hold up? Macro Economic Snapshot Source: RMB Research; Jan 09

18. Economic conditions translates to a significant slow down in the IT market but still an average growth rate of 3.8% expected for 09/08. Growth rate for hardware to remain flat but software and services shows positive growth between 2% and 7%. Brand Sector/Industry Source: IBM GMV 4Q08, industrialization * South Africa = Plan Rate; Rest of SA GNR Constant Rate

19. In IBM’s Central Europe, Middle East and Africa Region, South Africa provides the 3rd largest software market opportunity Source: GMV Jan07

20. South Africa Software Market Forecast 2009, indicates biggest opportunity related to IM, with estimated market opportunity of $336m, 42% of total software market opportunity, total market growth decelerated from 10.4% in 2008 to 5.1% in 2009 South Africa Sectors Split by Total Software Contribution (Large Enterprises): 2009 indicates biggest market opportunities in Public Sector and Financial Services Market Opportunity Split South Africa Sectors Split by Total Software Contribution (SMB): 2009 indicates biggest market opportunities in Distribution and Industrial Sectors Source: QMV Jan 09

21. According to Gartner, there are four emerging disruptive trends in the Software Industry.  These trends are reshaping software as we know it and will likely cause major disruptions to vendors, especially in how vendors go about distributing their software • Rise in New Technologies and Convergence of Existing Technologies • Change in Software User and Support Demographics • Revolutionary Changes in Software and How it is Consumed. • Software Market Moves to Mega vendors Supporting Large Ecosystems. Source: Gartner, Oct 2008

22. Month-to-month cost management is not enough Firms must examine on-going business and IT efficiency Current changes in economic environment affect all global markets… • Unprecedented constraints on access to credit and capital • Falling demand, increased price sensitivity • Disruption in supply chains Disruptive • Restructuring of industries • New regulatory regimes • Stress on global inter-dependencies Transformative Urgency for real change is a plus: people want it

23. Bring down on-going costs in nine months or less - Cognos FPM - Tivoli EAM - IBM Optim - SVC - WS ESB / Datapower - AppScan - Sametime - FileNet - eForms - Focal Point - Biz Events • Gain real-time insight into all your cost structures • Squeeze cost out of your assets • Reduce your infrastructure costs • Cut 30-50% of your data storage management costs • Get 50% more of your existing storage capacity • Spend less on keeping your IT apps in sync • Spend less on keeping your Web sites secure • Cut up to 50% of your travel and phone expenses • Reduce the cost of doing business • Eliminate the costs of handling and storing paper docs • Reduce operational costs by automating forms handling • Cut your product management costs • Reduce your time to revenue Payback time is typically 1 – 9 months based on exact project scope.Cost reduction numbers are indicative and may vary.

24. IBM's commitment to the Sub Saharan Africa region's economic growth and development is best demonstrated by its $300 million investment over the last five years.  This investment has gone into strengthening existing and establishing new IT services delivery capabilities as well as into building a sustainable skills base for the benefit of IBM's clients such as MTN, the industry and economy at large. • IBM Africa Innovation Centre, an enablement facility for crucial ICT skills with capabilities for Software Solutions development, Cloud Computing, Banking Centre of Excellence, and will critically advance the creation of new quality jobs.   • Integrated Delivery Centrefacility which has created 1500 direct and thousands more indirect jobs since its launch in 2006.   • A $15 millionBusiness Continuity and Recovery Servicesfacility.   • Skills development initiativesthat have produced more than 250 specialist IT professionals from mainly previously unemployed Black graduates over the last three years  • The Makocha Minds mentorship programmebenefiting African university students by matching them up with 250 IBM's Distinguished Engineers and senior leaders worldwide.   • Finance grid and small business toolkit - both aimed at provide tools and online infrastructural support to boost small businesses.   • The $1.5 millionBlue Gene supercomputer donation to the  Centre for High Performance Computing, to benefit academic and social research projects including in Bio Informatics, Climate Change, and Mineral Beneficiation. • IBM will implement Africa Innovation Centre's concepts at the University of Nairobi, setting up a laboratory there by early 2009, and possibly in one or two other African countries, such as Nigeria, later in the year.