Lotus OEM Opportunities

1. Lotus OEM Opportunities Building Better Business Outcomes Glenn Newlove WW OEM Sales Lotus Software IBM Software Group Glenn_Newlove@US.IBM.com Byron Lawson Director CEEMEA Lotus Software IBM Software Group BLAWSON@ae.ibm.com

2. Agenda Lotus Strategy Overview Brief Lotus Channel Update Top Lotus ASL OEM Products OEM Customer Examples Summary Any Questions…..Any Time Q/A

3. Technology & Culture Are Evolving The Way We Work Virtualization Generational Impacts Situational Applications

4. Maximizing Organizational Potential Information Expertise Skills Collaboration in Context

6. Building The Digital Infrastructure Collaboration Foundation Web 2.0Enterprise 2.0 Beyond Office Digital Collaborative Infrastructure

7. People are accessing collaborative services in many ways Collaboration as an application Collaboration “Inside” Appliance Desktop Web Mobile Middleware Business Applications Collaboration as a Service Hosted SaaS

8. Delivering Collaborative Services eForms Notes/Domino Symphony Sametime / UC2 Quickr Shared Documents Electronic forms E-mail, Calendar, Contacts Documents, Presentations, Spreadsheets Instant Messaging, Web Conferencing Telephony, Video, VOIP Mashups / Expeditor Lotus Connections Lotus Connections WebSpherePortal Composite Applications Business Mashups Contact Information, Skills, Expertise Shared Bookmarking Communities, Discussions Blogs/Wikis Activities/ Project Management Scorecards, Business Intelligence

9. IBM Lotus Collaboration Strategy Content Feeds Task Specific Applications RichClients Browser Portal Mobile On Premise and/or Web As A Platform (SaaS) Interaction and client services (online or offline) Collaboration &Content Management Communications & Social Software Applications & Integration Business process Information

10. Lotus Channels and GB • Lotus Channels • BP Participation 68% • BP O/I Growth QTQ • BP O/O Growth QTQ • OEM Growth overall 18% YOY • Lotus OEM 4yrs of continued double digit growth • Lotus GB • BP GB Participation +90% • 9th Consecutive Qtr Growth • Outperformed I/A Segment

11. Connect Collaborate Innovate Messaging & Collaboration Enable people to share information and work more productively, all on open and efficient platforms • Email, calendaring and contacts • Collaborative applications • Office productivity tools

12. Other Enhancements • UI and Design Excellence • Leadership in App Dev • Innovation in Collaboration • Conversation threads, Collaboration history, Integration with Sametime, Connections • TCO and Time to Value • Simple upgrade, Same API’s, Same infrastructure Documents Presentations Spreadsheets

13. Office Standard 2007 Communicator Comm CAL Linux Synaptic SMS OpenOffice Firefox Firewall Multimedia ... Cost matters Lotus Notes 8 • Messaging & Calendaring • Instant Messaging • Lotus Symphony (Office)‏ • Quickr Personal Edition • Document Management • Web2 $ 369 $140 $ 31 $ 31 $ 29 Win CAL SMS CAL Exchange CAL $ 41 $ 67 $0 Vista Client, basic Open Collab Client $ 144 Windows Vista Business OEM Note: All prices are approximate RRP prices in US$ from MS public List Price based on Open Business prices, see chart and disclaimer before

14. IBM Lotus Symphony ODF-Compatible Editors in Beta Today! Introducing Be Free. Work Smart. • No charge with online support • Fee for full IBM support • Documents • Spreadsheets • Presentations www.ibm.com/software/lotus/symphony

15. Collaboration in an Appliance: IBM Lotus Foundations Start is an all-in-one software appliance for every small business • Email and collaboration • Choice of email clients: Notes, Webmail and support for MS Outlook • Office tools: spreadsheets, presentations, documents • Network infrastructure • File management • Firewall, VPN, secure remote access • Backup, Disaster Recovery • AntiVirus and AntiSpam • Complete operating system: Self-managing, self-healing and self-configuring

16. LotusLive Family eMail Collaboration Web Conferencing LotusLive Engage(Bluehouse) An integrated suite of Web collaboration and business networking solutions including:- LotusLive Notes (Lotus Notes Hosted Messaging) Full-featured, dedicated hosted Email service. (rich or Web client access) LotusLive Meetings (Sametime Unyte Meeting) Full-featured Web conferencing service includes polling, hand raising, record & playback. Available Today Available Today • Survey Forms • Charts • Profiles and Contacts • On line Meetings • Files • Instant Messaging • Activities Available Q2‘09 LotusLive Connections An integrated suite of Web collaboration and business networking solutions including:- LotusLive Events (Sametime Unyte Events) Internet-based event capabilities. Provides tools to create & manage webinars. LotusLive iNotes Web-based Email service with group calendar & shared contacts. Available Q3 ‘09 • Profiles and Contacts • Instant Messaging Available Today • Files • Activities Available Q2 ‘09 The information on the new products is intended to outline our general product direction and it should not be relied on in making a purchasing decision. The information on the new product is for informational purposes only and may not be incorporated into any contract. The information on the new product is not a commitment, promise, or legal obligation to deliver any material, ode or functionality. The development, release, and timing of any features or functionality described for our products remains at our sole discretion.

17. What's different about our SaaS Approach? • LotusLive is built from the ground up around a Web 2.0-based social computing paradigm. • The result is an integrated set of services with state-of-the-art collaboration • features for sharing ideas, contacts and data, meeting colleagues and partners, and building a network of connected businesses • Differentiators • LotusLive uniquely integrates with current and future investments through Open Standards • Familiar Web 2.0 user interface increases adoption for improved productivity with minimal training • Robust Capabilities with little to no start up time • No mining of customer data for advertising or other purposes • Security-rich infrastructure with Global Access and scalable, rapid deployment

18. Host Account    N/A N/A N/A N/A Application Sharing    Desktop Sharing    Polling    Web Conferencing Publish    chat    Audiocasting    Videocasting    Recording    LotusLive Account  N/A    N/A N/A Instant Messaging    Store & Share     Contacts     Collaboration Activities     Dashboard    Reader only Survey Forms   Charts    Storage (1Gig)    25-Meg Rich Client N/A N/A N/A N/A N/A  Browser-based email   Email Group calendar  Shared Contacts  Anti Virus, Anti-Spam  30 Days $39/mo $46/mo TBD No Charge TBD TBD LotusLive: Offering Capabilities and Pricing Guest Available w/paid Subscription Notes Paid Subscriber iNotes Paid Subscriber Trial No Charge Engage Paid Subscriber Connections Paid Subscriber Meetings Paid Subscriber Features LotusLive Meeting LotusLive Engage LotusLive Connections LotusLive Notes LotusLive iNotes Price (per subscriber) Note: Prices are reflective of 12-mo term paid-upfront

19. LotusLive - How Business Partners Make Money with SaaS Year 1 Year 2 Year 3 VAP - 5% - 15% VAP - 5% - 15% VAP - 5% - 15% Partner Incentives (apply to new licenses Only) SVI - 5% - 15% SVI - 5% - 15% SVI - 5% - 15% Standard Perpetual License Resell Fulfillment - 10% Fulfillment - 10% Fulfillment - 10% Partner Solutions Revenue Partner Solutions Revenue Partner Solutions Revenue Partner Revenues Renewal 10% Renewal 10% New Incr License Rev New Incr License Rev Revenue VAP - 5% - 15% VAP - 5% - 15% VAP - 5% - 15% Partner Incentives (apply to new licenses Only) SaaS Services Building an Annuity Stream of Revenues Plus Integration Services SVI - 5% - 15% SVI - 5% - 15% SVI - 5% - 15% Fulfillment - 10% Fulfillment - 10% Fulfillment - 10% Partner Solutions Revenue Partner Solutions Revenue SaaS Integration Services Partner Solutions Revenue SaaS Integration Services New Incr SaaS Revenue Partner Revenues SaaS Integration Services New Incr SaaS Rev Full Reocurring SaaS Rev Full Reocurring SaaS Rev Revenue

20. Inset is a small, venture-backed start up with only 16 employees Only 5 people are based in the same office in NJ, our field staff and investigators are spread across the US and our manufacturing is done outside Boston. With the bulk of people working in the field around the US, they needed an easy, web-based way to share information and collaborate on a whole host of office documents. • Needed centralized, web-based productivity tools • Clinical field staff were struggling to access the internal shared drive via VPN – in fact, most days they were unable to access it. Building our infrastructure in the cloud made complete sense. LotusLive had the answers they needed – easy online meetings, simple document upload and collaboration as well as sharing contacts • LotusLive gave us…. • …robust web meetings, contact sharing, file collaboration and chat configuration and deployment challenges.  • ….an easy intuitive web 2.0 interface that was simple enough for field folks with limited computer training to adopt and the multiple training modules help them to answer their own questions • …..the ability to share contacts and notes about contacts as they are so spread without any extraneous elements or extensive out and often speak with the same people.  Maureen Shaffer Vice President of Marketing

21. Connect Collaborate Innovate Help people connect and collaborate more effectively in real time Unified Communications • Instant messaging • Web conferencing • Telephony, voice and video

23. Sametime • Sametime 8.01 provides Unified Communication and Collaboration a secure, extensible platform for real-time collaboration • Uses presence, instant messaging and web conferencing to provide people with more effective and more cost-efficient ways of communicating and working together • A proven and successful solution with 17m corporate users- with 25 companies in excess of 100K users+ • Benefits to ISV’s: • Embedded presence awareness and conferencing within existing applications • ISV’s can use Sametime to automate helpdesks • Leverage open platform into the largest of applications and solutions • Ease of development with established open API’s • Access to a large pool of developer talent (Eclipse) • Benefits to ISV’s Customers: • Gartner estimates Instant Messaging can reduce long distance call by 30%, can reduce email usage by 40% and lead to 15% reduction in voicemail usage. • Pricing • For 100 users £3,886/ $5,675/ €5,756

24. Sametime

25. Web Content Management Connect Collaborate Innovate Unlock valuable information by making it easier for people to find, share, and create content Content Management • Team store and share • Electronic forms • Web content management

26. Forms • Helps organizations to rapidly reduce the time, costs, and problems inherent to paper based forms processes, by unleashing the information trapped in paper making • Information is instantly available to anyone at any time and anywhere - helping speed business transactions and increase responsiveness with intelligent easy to use dynamic forms that reduce or eliminate error at the point of entry. • Benefits to ISV’s • Increases the re-use of assets • Lowers the risk of projects and delivery time • Provides a better client platform coverage • Reduces skills acquisition costs • Pricing (based on customer size 500-1000): • IBM Workplace Forms Viewer, Server and Designer packages range in price from $10K up to $100K+ depending on the no. of forms and server licenses • Viewer- for 100 users £46K ($67K /€68K) • Server- for 100 PVU £27K ($40K/ €41K) • Designer- for 100 users £7.9K ($11.5K /€11.7K) • Benefits to ISV’s Customers • Improved employee productivity • Lower application deployment costs • Increased user acceptance • L

27. Waste Management Solution Problem: German Ministry Environment will replace all paper documents to digital for management of waste and transport in 2010. Solution: Lotus Forms Secure Performance Background Integration (40 Different Repositories) Integrated into FuM's eANVportal(registered) solution Strategic Partnership w/ Deutsche Post Com

28. Connect Collaborate Innovate Empower people to discover expertise, interact, and build relationships through communities. Social Computing • Contacts and communities • Blogs and wikis • Bookmarks • Activities

30. Connect Collaborate Innovate Situational Applications & Integration Allow people to quickly solve business problems through a rich, integrated user experience. • Role-based access • Accelerators • Application integration • Mashups • Dashboards • Client-side middleware • Dynamic development tools

31. Health Care Portal Solution Problem: Inability to have the right data at the right time in the right place destroys the vital link between physicians and information they need to make life-changing decisions—locked in applications that don't speak to one another, mired behind multiple logins, and presented in ways that aren't efficient, intuitive or effective. Solution: FusionFX integrated w/Portal Single sign in Collaboration of disparate information systems Customizable interfaces for individual needs CEO, CFO, Doctor, Compliance Officer, and Patient

32. Thank You

33. Day in the Life – Collaboration Profiles PresenceAwareness Management Structure Contact Information Experience Tabs Searchable Text Tags

34. Linux Market is (still) on Fire!Industry Linux Server Revenue Growth Continues to Outpace all Platforms 7 years of server revenue growth outpacing all other operating systems

35. iNotes 8.x browser based collaboration Lotus Notes 8.x Lotus Mobile Connect Lotus Domino 8.x Lotus Symphony docs, spreadsheets, presentations Lotus Foundations small medium business server Lotus portfolio on linux Lotus Expeditorclient middleware for app development Lotus Quickr via browser Websphere Portal Accelaerators Lotus Formsbrowser based Lotus ConnectionsProfilesActivitiesBlogsBookmarksCommunities suse linux enterprise desktop 10 redhat enterprise desktop 5 ubuntu 8.04

36. Potential OEM Candidates Deep Embed Lotus Sametime Lotus Foundations Lotus Sametime Unyte Lotus Bluehouse Examine Ancilliary OEM Business J9 JVM Lotus Expeditor/Components Possible Lotus Domino Utility Server Lotus Connections Lotus Forms Lotus Mashups

37. Potential ASL Candidates Lotus Sametime Lotus Foundations Lotus Sametime Unyte Lotus Live (Bluehouse) Lotus Connections Lotus Forms Lotus Notes/Domino

39. Expeditor • IBM Lotus Expeditor software is IBM's universal managed client software to extend composite application to laptops, desktops, kiosks and mobile devises. It can be used to extend your IBM Lotus and WebSphere software • An alternative to Microsoft .NE client software, Expeditor provides the flexibility that comes from service orientated architecture (SOA) and a standard-based programming model from the OSG /Alliance and Eclipse Foundation. • Benefits to ISV’s • Increases the re-use of assets • Lowers the risk of projects and delivery time • Provides a better client platform coverage • Reduces skills acquisition costs • Benefits to ISV’s Customers • Improved employee productivity • Lower application deployment costs • Increased user acceptance • Lower dependence on client technology • Pricing: • Average deal size Expeditor + Lotus Mobile connect= $100K (£65K/ €72K) • Sever for 100 PVUs £41K/ $60K (PVU) i.e. $60K/processor (or £411/ €609) • Starter Server $30 VPU (£20.54/ €30.43) • Client $98.75/authorised user (or £67.62/ €100)

40. Collaborative Capabilities: Where And When You Need Them Flexible Adaptable Open Intuitive Content Document Spreadsheets Presentations LOB Applications Contact Information Instant messaging Communities Activities Bookmarks

41. Market Buzz: Windows to Linux Windows in Collapsing says GartnerClient Alternatives: Market trends embracing Linux and open standards as alternatives to Microsoft desktops...April 10, 2008 (Computerworld) Calling the situation "untenable" and describing Windows as "collapsing," a pair of Gartner analysts yesterday said Microsoft Corp. must make radical changes to its operating system or risk becoming a has-been.In a presentation at a Gartner-sponsored conference in Las Vegas, analysts Michael Silver and Neil MacDonald said Microsoft has not responded to the market, is overburdened by nearly two decades of legacy code and decisions, and faces serious competition on a whole host of fronts that will make Windows moot unless the software developer acts. LINUX OPERATING SYSTEM Linux moves into the personal computing mainstream By Brian BergsteinASSOCIATED PRESSMonday, April 07, 2008 BOSTON — The free Linux operating system handles big tasks such as running supercomputers and ATMs. Now, Linux has a chance to loosen Microsoft Corp.'s hold on computing's most visible domain — mainstream PCs — because of the rise of innovative, inexpensive machines. Prognosticators perennially say Linux is on the verge. It gets high marks for security and stability and is widely used behind the scenes in corporate servers, making it a natural candidate to steal desktop thunder from Microsoft's dominant Windows system. Best Buy & Amazon are selling Ubuntu. Amazon also offers SuSE Linux Enterprise Desktop from Novell. All top Microsoft hardware partners are shipping Linux on the desktop for business customers... Microsoft reported in their SEC filings in July 2008:"Client faces strong competition from well-established companies with differing approaches to the PC market," according to the SEC filing. Listed competitors: Apple, Hewlett-Packard, IBM and Sun. As usual, Microsoft calls out Linux, which has "gained some acceptance as competitive pressures lead PC OEMs to reduce costs and new, lower price PC form factors gain adoption."

42. Why are Customers are looking for Microsoft free alternatives? • Innovation • Innovation thru Collaboration – Enterprise of the Future CEO study • Paradigm shift in collaboration: from document centric to community centric, services oriented • Enterprise adaptability • Leverage Open Source • Cost Reduction • Software, Support costs – Lower TCO • Move away from Microsoft Enterprise Agreements • Green benefits • Lower the cost of desktop refresh • Flexibility and Choice • Overcome Vista/Office challenges • Leverage Open Standards, ODF • Productivity Editors, Applications • Connected/disconnected, Virtual • Access Devices – rich/thin/mobile • Investment Protection • Integrate existing applications • Avoid Operating System downgrades • User segmentation driven migration strategies 42

43. Profiles in Microsoft Office