IBM Software: SMB Strategy in 2005

1. 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

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

3. 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

4. On Demand Operating Environment Business Processes Business Transformation 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. LOB Solutions ENTRY IT Solutions ENTRY 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 and accelerate their On Demand Operating Environment.

5. 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

6. OpenGrid / OnDemand computing Open Development Integration Platform Open Application Integration Open Application Server (incl. Cloudscape/Derby) Open Operating System IBM defined OnDEmand computing and leads in Grid technology IBM donated $40M of initial technology IBM led or co-led creation of SOAP, WSDL, UDDI, WS-Security, BP EL4WS IBM contributed significant technology to J2EE & helped form the Apache Software Foundation IBM is the #1 commercial supporter Open Platform Approach OnDemand Computing Environment Eclipse WebServicea J2EE and Apache Choice Includes Linux

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

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

9. New, Simplified PartnerWorld Program Engage • Aligned to Business Partner business models instead of IBM product groups • Integrated with go-to-market strategies and priorities • Single Web experience • Business Partners recognized for their total IBM contribution • Provides visibility and removes barriers to full breadth of IBM support and enablement offerings Premier Advanced Member Common Infrastructure

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

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

12. 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/

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

14. 2005 co Marketing Programs (BP Demand Generation) Engage 2004 Marketing 2005 Marketing Co-Funded Invitation Only Co-Marketing VAP Agency Activation Registered list of Partners Marketing Center execution Agency Activation Fully Funded Same as 2004 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

15. Agency Activation in 2005 Engage • 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

16. Premier Advanced Member Partner Rewards Reward PartnerWorld • Benefits commensurate with level of investment & commitment to IBM • Optional Value Package ($2K) provides value between $100K - $400K • Marketing & sales support • Skills development & enablement • Access to: • Selling Resources • Marketing Resources • Products & Technologies • Technical resources & support • Training & certification • Events & conferences • News & Newsletters Membership levels demonstrate: • 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

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

18. 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

19. IBM offering for SMB • Express product portfolio • Business Partner solutions • Lead generation campaigns

20. Business Value Insurance Retail CPG Finance Banking WebSphere Infrastructure Value DB2 Technical Assets Tivoli Lotus Specific and Cross Industry Starting Points Rational Wholesale IBM SMB Portfolio ISV Advantage Industry and Cross Industry Applications ISV Applications SMB Business Foundation Integrated Platform Express (Cross IBM Brand Offerings ) IBM Solutions Builder Express Portfolio(Cross SWG Brands) IBM Express Product Offerings Marketing & Technical Assets SMB Advantage Marketing Assets Multiple RTM, Sales & Marketing Support Multiple RTM, Sales & Marketing Support PartnerWorld Virtual Innovation Center Runtime & Tooling Automotive Electronics

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

22. 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 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 Express: Founded on a patented design process Key attributes of the patented IBM Express Architecture • 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 Win2000, iSeries 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

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

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

25. What is the “Foundation”? Architecture and Best Practices Express Runtime and Components Tools • 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 • Open Standards based middleware components Partners can leverage within their solutions • Pre-integrated andpre-configured middleware • DB2 UDB Express • WebSphere 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 • 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

26. + = 1. Solution Overview • JSP programming • Networking • SQL • …. Solution concepts and business value Solution architecture Recommended software, hardware, tools 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 Medium Business GTM ApproachHelping partners sell more solutions more often to the midmarket Express Portfolio Business Partners What mid-sized firms want, at an affordable price Solutions Builder Express

27. Close Sales Primary Colors Secondary Colors Light Orange242 / 156 / 2 Green76 / 118 / 97 Dark Red144 / 38 / 73 Dark Orange 244 / 116 / 0 Blue 70 / 105 / 175 SWG Brand Colors Purple 133 / 90 / 160 Green0 / 153 / 51 Red255 / 0 / 0 Yellow 255 / 204 / 0 Blue 0 / 178 / 204 ODOE Red Red 204 / 0 / 0 IBM Solutions Builder ExpressProvides 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. IBM Solutions Builder ExpressToolkit for Business Partners • Customer presentations • Technology demos • Solution architectures • Implementation checklists • Sample code Sell more Close sales Reach new markets

28. 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 • ISV enablement to develop solutions for mid-market • Business Intelligence combined with Portal (DB2 and WebSphere winning combinations)! • Opened doors and closed new business using Solution Builder Express sales and technical assets!

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

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

31. Partners use Solution Starting Points from sales to deployment Solution Overview Solution Task list Solution Architech-ture Use Cases Demo Toolkit Implemen-tation Samples Custom-ization Info Starting Point Installer Consultant Tool • Engage customer       • Translate customer needs        • Propose Solution      • Up-sell / Cross-sell     • Close sale      • Implement 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 "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

32. IBM Solutions Builder Express PortfolioSolution Starting Points available now Portal/Workplace Express Solutions Content Management Express Solutions Business Integration Express Solutions • B2B Connectivity • B2B Process integration • Process Integration • B2B Portal • Integration of Diverse Applications and Data Express Solution Starting Point • Item Management and Synchronization with UCCnet Express Solution Starting Point e-commerce Express Solutions • Easy Creation of Website for Retail Express Solution Starting Point • B2B 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 • 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 iSeries Express Solution Starting Point • Collaborative Document Management • Managing Content within Business Processes Express Solution Starting Point • Managing Content for Insurance Claims Processing Express Solution Starting Point • Document Management in a Banking Loan Application Process Express Solution Starting Point Business Intelligence Express Solutions • B2B e-commerce Analytics • Customer Insight for Retail • Information Transformation for Analysis

33. 2004 SBE Awareness and References 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 for last 4 months Starting Point downloads by brand, cumulative Apr through Sept Starting Point downloads by GEO’s

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

35. Built on Express

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

37. BPs – routes to Technical Support

38. IBM is here and . . . ^

39. Thank You p.sobczak@at.ibm.com

40. p.sobczak@at.ibm.com