Cloud @ Philips – Vision and Reality

1. Cloud @ Philips – Vision and Reality October 24, 2011

2. An introduction to Philips A well-respected, blue-chip company for 120 years Who we are Our mission Our businesses Founded in 1891Headquartered in Amsterdam, Netherlands Sales of €22.3 billion in 20101 Growth Markets32% of 2010 sales generated in growth markets Globally recognized brand (world top 50)Our brand value doubled to $8.7bn since 20042 117,000 employeesSales and service outlets in over 100 countries €1.5 billion investment in R&D, 7% of sales “…a global company of leading businesses creating value with meaningful innovations that improve people’s health and well-being.” 2010 Healthcare Lighting Consumer Lifestyle 1Note - All figures from the year 2010 onwards exclude Television as it is treated as discontinued operation 2Source: Interbrand

3. Unique leadership positions in many marketsCurrent NPS leadership positions1 Healthcare Global Cardiovascular X-ray Global Patient Monitoring Regional Cardiac resuscitation Global Ultrasound Regional (USA) Home Monitoring Consumer Lifestyle Global Male electric shaving & grooming Global Mother and Child Care Global Oral Healthcare Regional (Latam, China) Beauty and Skin Regional (Latam, China) Kitchen appliances Lighting Global Automotive Lighting Global Professional Luminaires Global Lumileds Global High Power LEDs Global Professional Lamps

4. Creating meaningful innovationsImproving lives in new ways Gain deep insights into people’s needs and aspirationsby following a process requiring end-user input at every stage Transform insights into innovationsby combining the diverse perspectives of different disciplines “Learn fast, fail cheap” by applying a rigorous process to assess value potential early Lead in open innovationby working closely together with partners in a spirit of open innovation

5. Do we have a cloud Strategy? • We know we want to use cloud services • Do we know why? • The usual: cost, speed, opex, reach • We know our business wants to use cloud services • Do we know why? • The usual: speed, easy to bypass IT (lowcost carrier strategy, swipe your credit card model) We rather have a cloud tactic: adopt where usefull

6. Our Journey, a classic journey Discovery Structuring Adoption Integration IT: what is the cloud? Business: just buy and expense it Partners meeting Seminars buzz Proof of Concepts Pilots Architecture Principles and Guidelines Defined space in the architecture Systematically looking for cloud alternatives BPM ESB Make cloud and non cloud work together

7. Our Journey, a classic journey Discovery Structuring Adoption Integration IT: what is the cloud? Business: just buy and expense it Partners meeting Seminars buzz Proof of Concepts Pilots Architecture Principles and Guidelines Defined space in the architecture Systematically looking for cloud alternatives BPM ESB Make cloud and non cloud work together

8. Massive discussion Ease Speed SaaS Flexibility PaaS IaaS Social Definition Compliance Control Risk Integration Roadmap Migration IP Exit Scenario

9. Our Journey, a classic journey Discovery IT Jan 2010 – private cloud with T-Systems Massive HR Landscape (careers, talent, performance, training,…) Our Business iSite PACS

10. Structuring – why? • Give your teams (architects, project managers, SRC officers, …) an easily readable map to • Detect opportunities • Understand the risks • Prepare for solution analysis • Prepare for decision support • Give examples: we already use some cloud applications

11. Structuring – seize the opportunity Explore SaaS solutions as a preference Potential risks, assess and compare to on premise applications High risk, full assessment required to consider as a solution

12. Structuring– set the principles Governance • SaaS selection, approval and implementation process must follow the ‘normal’ procedure including EAB approval. • SaaS solutions must always be taken into account in software selection processes. • SaaS vendor dependency must be well managed, especially in case of very business specific ‘niche’ applications, provided by only a few niche vendors Process Information Application Technology • Prime SaaS candidates: • Outsourced bus. processes • Stand-alone & standard business processes • No preclusion of SaaS solution candidates based on business process area • Business Process Architect must assess risks & approve in all other cases. • BIA (Business Impact Assessment) required; (segregation in multi-tenant offerings; Identity management federation) • Prime SaaS candidates: • Loosely coupled applications (decision by the architects) • No solution planned (8Q RM). • SaaS candidates to be tightly integrated with other IT building blocks (both SaaS and non-SaaS) must be checked on: • No short term alternative • ‘Decoupling hub’ at Philips side taken into account • BIA Assessment required • Application architects must assess risk and approve • Prime SaaS candidates: • Commodity IT-Solutions • Via existing providers. • SaaS candidates based on differentiating techno-logy solutions need to be assessed on: • Integration & compatibility between Philips and SaaS Technology Infrastructure. • Integration with Philips security and identity & access management Infrastructure: • SSO & User mgt. federation is key requirement • Technology architect must assess risk & approve. • Prime SaaS candidates: • Limited information exchange with SaaS domain; (to be evaluated from a business process perspective). • SaaS candidates dealing with sensitive/ privacy information must be checked against internal and external regulations (Philips Classification, SOX, HIIPA, etc.) : • PIA (Privacy Impact Assessment) required • Information architect must approve.

13. Structuring – manage the risk • You already have the controls! • Look at what you do when you do outsourcing (or BPO) • Leverage your weight to adapt the cloud contract • Balance • Adapt your principles and checks to catch the risks early • Setup the golden rules to equip your IT and business with the quick filter to detect potential catch points

14. Adopting – where is cloud going to help? Build in agile and far reaching environments Scale with business success Co Creator Empower users Deploy services in the field Adapt fast Enabler Maintain the state of the company Manage the integrity of the state Foundation

15. Adopting – where is cloud going to help? Cloud ++ Co Creator Cloud + Enabler Cloud - Foundation

16. Transforming accident in success ? • From adoption everywhere to clear use • Consolidated business plans (!) • Replace user facing solutions with • Flexible • Fast • Modern Our CRM?

17. How? • Integral business case • Exit scenario • Involve the cloud vendor in your project, qualify with prototyping • Extend with the right partners (integration, functional) Our CRM?

18. Structural adoption and integration – cloud style • Large cloud landscape means large integration with cloud services and your in house systems (doh!) • Where we are: is an ESB sufficient, do we need accelerators like ironcast, how does SAP PI resist • You are the glue -> pushing your masterdata model out is less of an option, so you get to build the Rosetta Stone • Large SaaS drives UI specialization but also UI diversity across a user journey • Unless… you go for one specific ecosystem (Salesforce +…)

19. SaaS solutions driving agility: The Technovision perspective SAVO Stepstone INNT Technovision for PHILIPS Sharepoint 2010 (BPOS) SocialCast (Connect Us) Vovici Agility Collaboration CollaborationHubs (eg. REACH) HC Service Mgt. (based on Force.com) Lighting: CityTouch SalesForce.com Concur ADP Payrol Ariba Zycus Lighting: CityTouch Scalability & Efficency Foundational Business Solutions Force.com Paymetric • MS Azure AOK soft tokens Amazon EC2/ EC3 Open Standards & Service Orientation