Topics

2. Topics • Importance of software development improvement • Recent IBM Rational Acquisitions • Build Forge • Watch fire • Telelogic • First wave of Jazz offerings

3. Business and product innovation today will require a significant investment in software • For businesses and institutions everywhere,there have never been so many new possibilities • Imagine the amount of software necessary to: • Deliver a green world • Take advantage of information base explosion • Communicate with a trillion devices • Drive on-going product differentiation • To seize new global market opportunities • Leaders everywhere are deploying increasinglyintelligent software, systems and products • Accelerating innovation and enabling effective change is highly dependent on our ability to manage effective software delivery

4. A Number of Industries have already seen an increasing dependence on software “So there is an obvious evolution towards more software development in these sectors in the future, meaning that software development is a key and increasingly strategic factor for industry competitiveness overall.”

5. Top issues for CEOsResponse in July 2008 then again in October 2008 Global Top 10*: Changes Due to Financial Crisis * The Global Top 10 List is weighted by regional representation in global GDP (Asia, 21.2 percent; Europe, 35.0 percent;the United States, 27.5 percent, and other, 16.3 percent) according to GDP data from the International Monetary Fund, World Economics Outlook Database, 2006. Source: Conference Board CEO Survey 2008 Financial Crisis Edition

6. Product Development Teams Wrestle with Risk and Complexity “Electronics software contributed approximately 4% to the development costs of an automobile in 2003. That number is expected to grow to 15% by 2015 — forcing product development teams to quickly build, manage, and control costs of a critical capability historically absent or understated in the organization.” – Forrester, September 5, 2008“Bridging The Embedded Software Development Gap” CEOs are demanding that their teams reduce cost, manage risk and compliance and become more agile Changing the Cost Structure of IT Will Become a Business Imperative “The message for IT is clear; business needs and expects greater agility from IT. The current approaches to project prioritization, resourcing, agility and governance are clearly not satisfying customer needs. A new approach to IT delivery models and sourcing options is required that allows IT organizations to be more responsive to the needs of the business.” – Gartner, October 14, 2008 “Changing the Cost Structure of IT Will Become a Business Imperative for Most CIOs”

7. Driving business differentiation in challenging economic times with agility and confidence Analyze business opportunity and the impact of changeand effectively manage organizational transformation by better aligning business and development priorities Deliver quality solutions and improve efficiency through real-time team collaboration, automation and reporting and leveraging proven best practices Build consensus through business and development collaboration making good decisions based on real-time and accurate information across all stakeholders

8. Act quickly to seize business opportunitiesStrategize, execute and manage the impact of change Customer Speak! “Our global insurance company saved $10.5M in the first year by better aligning IT resources to business processes”

9. “30% of project costs are associatedwith rework. Requirements errors account for up to 70% of that cost! We need to improve team effective-ness by automating workflows.” Achieve precision in desired business outcomes Improve collaboration between business and development experts Customer Speak!

10. Execute with reduced risk and costDeliver quality solutions and improve development efficiency Customer Speak! “We use a comprehensive solution that serves as an industrial-strength assessment tool for our corporate information securitythat helps us reduce costs and increase efficiencies.”

11. “Only 34% of software projects are deemed successful costing over $300B annually” “Only 37% are satisfied with the speed of software development” “50% of outsourced projects are expected to under perform” “Only 42% of users are satisfied with project quality” We been challenged in effective delivery of softwareA history of cost overruns, schedule slips and quality issues “62% of projects failed to meet their schedules ” “49% of projects suffered budget overruns” “41 percent of projects fail to deliver the expected business value and ROI”

12. How can I get to more effective software delivery from where I am today? How can I enable collaboration throughout the software delivery process? How do I automate software delivery within my organization? How can I unobtrusively gather measurements to ensure progress towards desired business outcomes? How do I make incremental, iterative progress towards more effective software delivery?

13. Software delivery is a business process that can be continuously improved Implementation Deployment Requirements Verification Design CIO's top priority over last three years: “Improving Business Processes” Source: Gartner, “Making the Difference: The 2008 CIO Agenda,” Jan. 2008

14. IBM Rational Acquires Enterprise Lifecycle Management for Software through Systems IBM Rational Acquires Application Security and Compliance Management IBM Rational Acquires Software Delivery Process Automation & Compliance First Wave of Jazz Offerings Real Time, In-Context Team Collaboration and Requirements Definition IBM Acquires SOA Lifecycle Management New SOA quality, architecture & asset management solutions Enterprise Modernization System i & z Tools Integrated into Rational Standardization Driving Greater Value from Software Investments Accelerating Global Software Delivery Governing the Business Process of Software Delivery Software Development Platform & Processes Practitioner Flexibility & Productivity Visibility & Collaboration in Software Delivery 2002 2004 2006 2008 The IBM Rational Transformation in Value Softwareinvestment managementaligned withbusiness priorities Business Value Organizational governance and asset utilization driving greater predictability Control& Flexibility BUSINESS FOCUS AND IMPACT Global teameffectiveness & collaboration lowering costs Individual productivity through automation Efficiency Improved management of software “supply chains” S C O P E

15. IBM Rational Acquires Enterprise Lifecycle Management for Software through Systems IBM Rational Acquires Application Security and Compliance Management IBM Rational Acquires Software Delivery Process Automation & Compliance First Wave of Jazz Offerings Real Time, In-Context Team Collaboration and Requirements Definition SOA Lifecycle Management New SOA quality, architecture & asset management solutions Enterprise Modernization System i & z Tools Integrated into Rational Standardization Driving Greater Value from Software Investments Accelerating Global Software Delivery Governing the Business Process of Software Delivery Software Development Platform & Processes Practitioner Flexibility & Productivity Visibility & Collaboration in Software Delivery 2002 2004 2006 2008 Build Forge IBM Acquires

16. Challenges for quality, control and agility • Organizations need to build better software, faster and smarter • Solve integration issues faster • Deliver software in more frequent iterations • Improve quality of software with ongoing testing • Capture audit trail records for governance and compliance ……..all while minimizing administrative overhead

17. Continuous Integration has become a development imperative • Principles • Build must be automated and fully reproducible • Automatic testing must be included • Builds must be run many times a day • Build results and products must be made available ASAP to the development team

18. Now integrated with Synergy for a seamless build and release process Introducing IBM Rational Build ForgeProcess execution framework to manage software application assembly • Allowing you to automatesoftware production • Providing repeatable and consistent processes for improved efficiency • Capturing self-documenting data/audit trail • Connecting team members with self-service access to pre-configured processes

19. SOFTWARE DELIVERY AUTOMATION FRAMEWORK Process Automation & Continuous Integration Automated, Repeatable Application Development Lifecycle Business Requirements Production Analyze Source Test Source Control Product Build Deploy Dev Package Product Lifecycle Automation with Build Forge Management Console Centralized Web-based, Collaborative Distributed Access, Role-Based Security IDE Plug-Ins Developer Self-Service, Role-Based Security Scripting Python, VBscript, Batch, Perl, KSH Source Control Source Analysis Build Tools Package Tools Release Test Tools Languages Rational Software Analyzer, Logiscope, etc. Simple deploy or Interaction with Tivoli, etc. Wise, Install Shield, RPM, JAR, WAR, etc. Test Manager, Robot, Functional, etc. Continuous Integration and Interaction with Synergy ObjectMake, ClearMake, Ant, Maven, etc. Java, C, C++, C#, etc.

20. Automating Software Delivery Measurable Business Benefits* Hurwitz & Associates’ research reveals that many organizations have significantly benefited from using Build Forge products to improve their development automation and organizational effectiveness. *Source: Hurwitz & Associates (2007) The Evolution of Build and Release Management for Effective Software Delivery

21. IBM Rational Acquires Enterprise Lifecycle Management for Software through Systems IBM Rational Acquires Application Security and Compliance Management IBM Rational Acquires Software Delivery Process Automation & Compliance First Wave of Jazz Offerings Real Time, In-Context Team Collaboration and Requirements Definition SOA Lifecycle Management New SOA quality, architecture & asset management solutions Enterprise Modernization System i & z Tools Integrated into Rational Standardization Driving Greater Value from Software Investments Accelerating Global Software Delivery Governing the Business Process of Software Delivery Software Development Platform & Processes Practitioner Flexibility & Productivity Visibility & Collaboration in Software Delivery 2002 2004 2006 2008 Watchfire IBM Acquires

22. Security and compliance risks Security and compliance integrity risks have serious adverse impacts on a company’s identity, customer relations and business results. • 75% of the cyber attacks today are at the application level with only 10% of security spend1 • 80% of organizations will experience an application security incident by 2012 • Internal security attacks cost US business $400 Billion per³ • 64% of CIOs feel that the most significant challenge facing IT organizations is Security, Compliance and Data Protection4. • 1,2 Watchfire analysis with analysts support • 3 CSI/FBI Survey 2005 • 4IBM Service Management Market Needs Study, March 2006

23. The Reality: security and spending are unbalanced Security Spending % of Attacks % of Dollars 10% Web Applications 75% 90% Network Server 25% of all attacks on Information Securityare directed to the Web Application Layer 75% 2/3 of all Web Applications are vulnerable Sources: Gartner, Watchfire

24. 1 2 3 Scan Analyze Report Detailed, Actionable Information Introducing IBM Rational AppScanEnhancing Web application security • Centralized control of Web application security scanning across the enterprise • Intelligent fix recommendations to ease the process of remediation once security vulnerabilities have been identified and validated • Over 40 out-of-the box security compliance reports including PCI Data Security Standard, ISO 17799 and ISO 27001, HIPAA, GLBA and Basel II

25. Building security & compliance into the SDLC SDLC Coding Build QA Security Production Enable Security to effectively drive remediation into development Developers Developers Ensure vulnerabilities are addressed before applications are put into production Developers Provides Developers and Testers with expertise on detection and remediation ability

26. IBM Rational Acquires Enterprise Lifecycle Management for Software through Systems IBM Rational Acquires Application Security and Compliance Management IBM Rational Acquires Software Delivery Process Automation & Compliance First Wave of Jazz Offerings Real Time, In-Context Team Collaboration and Requirements Definition SOA Lifecycle Management New SOA quality, architecture & asset management solutions Enterprise Modernization System i & z Tools Integrated into Rational Standardization Driving Greater Value from Software Investments Accelerating Global Software Delivery Governing the Business Process of Software Delivery Software Development Platform & Processes Practitioner Flexibility & Productivity Visibility & Collaboration in Software Delivery 2002 2004 2006 2008 Telelogic IBM Acquires

27. In-vehicle electronics and software value will continue its rapid increase. Innovation and differentiation is based on electronics – most of which is based on embedded software. Powertrain Engine Transmission Climate and Comfort Networks Steering Lighting Automotive Brakes and Stability Safety The need for product differentiation, rapid time to market, and the continued advances in electronics is driving ever increasing amount of software into products ElectronicsIncludes Telecom Increasing complexity of systems, cost reductions and increased innovation through growth in the use of an extensive set of design partners crossing multiple legal, technology and security boundaries Aerospace and defense Business Challenges Faced by Our Customers

28. Complexity of electronic systems leads to problems with quality, project delays and warranty costs A significant amount of warranty costs are related to electronic and embedded software Powertrain Engine Transmission Climate and Comfort Networks Steering Lighting Automotive Brakes and Stability Safety Delays and cost overruns when manufacturer finds errors during electronics and software integration testing. Skyrocketing warranty costs if errors are found after-market. ElectronicsIncludes Telecom Increased level of manpower and time to understand the impact of changes and to coordinate them across the development team leads to cost over-runs, delays and quality problems. Aerospace and defense The Business Challenges are Impacting the Bottom Line

29. Supply Chain Mfg Systems Logistics Customer Support IT and Systems Domain Characteristics IT Domain Systems Domain • Provides support for the business operations and end-user • Development hands-off to operations • Creates a tangible product delivered to customer (combination of electronics, mechanical and software) or a complex system design • Development hands-off to manufacturing, provisioning Each domain has unique characteristics standards & technology skills & culture project scale & duration development process constraints

30. Our Vision for Systems and SoftwareBuilding Innovative Systems and Products that Rely on Software IT / back office environments Collaboration, governance, and SOA lifecycle management solutions to enable effective software delivery Systems engineering& architectural frameworks Enterprise & industry architectures Product lifecycle management Integrating software, mechanical and electronics - D E V E L O P M E N T - SoftwareSystems through Software Delivery Platform MechanicalMCADtool vendors ElectronicEDAtool vendors

31. Automotive Example – Onstar Isolated system

32. Automotive Example – Onstar Source: http://faculty.darden.virginia.edu/GBUS885-00/Documents/OnStar_rev0907a.pdf GPSTechnology XML Database CellularNetwork User Personal Calling VirtualAdvisor Advisors System Integrated with IT

33. Introducing Telelogic Mission: Help each customer succeed the first time by aligning and optimizing product, systems and software development lifecycles with business objectives and customer needs to dramatically improve quality and predictability, while significantly reducing time-to-market and overall costs • Founded in 1983 • More than 1,100 employees worldwide • More than 8,000 customers worldwide • Worldwide direct sales and partner ecosystem • Headquartered in Malmo, Sweden with US headquarters in Irvine, CA

34. Rational and Telelogic Customer Value Equation • Strength is Systems Development • Strength is IT Development • Leading products: • Requirements Management • Enterprise Architecture • Systems and embedded software tools • Industry specific solutions including: • Aerospace & Defense • Automotive • Telecomm • Leading products • Vertical industry penetration • Investment power • Global leadership in Research & Development • Organizational transformation expertise • Geographical reach and organizational access

35. Key Telelogic products added to solution lifecycle  Telelogic Rhapsody Rational Software Architect Rational Systems Developer  Telelogic System Architect Enterprise Architecture/ Architectural Frameworks Analysis & Design  Telelogic DOORS Rational Application Developer Rational Systems Developer Rational RequisitePro  Telelogic Focal Point RequirementsDefinition &Management Construction Product Portfolio Management Configuration & Change Mgmt Rational ClearQuest Rational ClearCase Release Management  Telelogic Synergy Telelogic Change Measurement &Reporting Asset Management & Reuse Rational Build Forge Rational dashboards Quality Management  Telelogic Dashboard Rational Asset Manager Production Rational Functional Tester Rational Performance Tester Rational AppScan Rational Test RealTime System Lifecycle Process Management Note: Not every Telelogic product is listed

36. Behavior (UML Support) Matrix Views Network Topology App Models Org Charts Process Models Data Models Goals Objectives Class Diagrams Enterprise Architecture and Business ProcessTelelogic System Architect Capabilities • Out-of-the-box multiple method support with industry proven frameworks and standards • Superior analysis and reporting • Web enablement for the extended team Benefits • Create an IT organization in line with business strategies and processes • Clear picture of the entire organization for corporate leaders • Understand the impact of change before significant resource & expenditure are incurred

37. Government Agency Achieving Greater Business Agility with Telelogic System Architect Business Challenge Customer Success • Need an Enterprise Architecture (EA) platform to supportin-house business and technical frameworks • Gain control over the relationships and governance of business requirements • Adopt and share best practices in business processes and systems • Specify and design a solution in weeks instead of months • Enabled governance of business and technical deliverables • Established a body of knowledge in a central repository • Enabled an “Enterprise Connected View” to make decisions more effectively Strengthened organizational agility Improved communication Streamlined specification and design

38. Product Portfolio ManagementTelelogic Focal Point Capabilities • Subjective and objective prioritization of product requirements & features • What-if analysis enables understanding of impacts resulting from various scenarios on value metrics • Configurable visualizations of product pipeline information, including costs, benefits & headcount. Benefits • Clear visibility of the product portfolio to facilitate better, faster decision-making • Improved understanding of product portfolio performance • Increased customer satisfaction with product releases which equates to increased revenue

39. Global leader in power and automation technologies Increasing Product Success with Telelogic Focal Point Business Challenge Customer Success • Too time consuming to track and trace requirements and to prioritize them for diverse market segments • Need to improve the multidimensional analysis of the customers‘ requirements • Improve processes and tools to support the workflow they want to adopt. • Enhanced decision-making for choosing the products and features that deliver the greatest customer and business value. • Improved productivity and reduced costs by developing the right products that match market needs • More structured process and improved communication Enhanced decision making Improved communication Improved productivity

40. Test Requirements Technical Requirements User Requirements Systems Engineering and Business-Critical ITTelelogic DOORS Capabilities • Combined document and spreadsheet views • Lifecycle impact and coverage analysis via a single view • Dynamic views to focus on the relevant information in context Benefits • Centralized requirements capture, refinement, and traceability • Improve information visibility and collaboration between team members • Ensure conformance to customer needs and compliance with relevant industry or government regulations

41. Configuration and Change ManagementTelelogic Change and Synergy Capabilities • Task-Based Configuration Management • Top-Down & Bottom-Up Traceability • Re-use & Component-based Development • Distributed Team Support • Out-of-the-box configurable change process workflows Benefits • Accelerate Release Cycles • Maximize productivity - regardless of team size or location • Increase responsiveness to requests for change and needs of the customer • Increase team agility • Better control & demonstrate compliance

42. Telelogic Change Requests and Suggestions DOORS Requirements Definition and Management Telelogic Change Lifecycle Management Synergy Software Development, Configuration, and Build Management Requirements Driven Development Requirement Traceability Report

43. Wireless Service Provider Managing Rapid Service Growth and Complexity with Telelogic DOORS and Synergy Business Challenge Customer Success • Increased employees and services over the last four years by more than 100 percent • A single repository for all project and product information that is both traceable and accessible • The team is now able to function as a cohesive unit within the development lifecycle • Maintain its leadership position • Increase time to market for new products and services • Prevent missed requirements • Lacked a properly managed systems development lifecycle Prove compliance to requirements Manage growth and complexity Improved time-to-market

44. Model-Driven Development for Embedded SystemsTelelogic Rhapsody Capabilities • Systems design and software development with UML 2.0, SysML, DoDAF and AUTOSAR • Validate and verify designs with model based simulation and test throughout the process • Produce complete C, C++, Java and Ada applications; developing in either the code or model while ensuring the two remain in sync Benefits • Optimized communication and collaboration ensures the right product is built • Eliminate defects early and increase quality by iteratively testing the design as it is built • Reduce development time by automatically generating applications and documentation

45. A leading embedded software development company Improve Productivity and Lower Development Costs with Telelogic Rhapsody Business Challenge Customer Success • Need a new object-oriented process for global development in response to an avionics customer’s request • Inability to reuse requirements on multiple projects with similar components • Reduce the cost of offshore development for customer • 40% increase in productivity • 75% reduction in defects • Lower development costs for the customer • Achieved six-week Agile time-boxed development process while maintaining CMMI level five • Established a concurrent engineering environment Achieved Agile processes and CMMI level 5 Reuse of architectures and components Improved communication

46. IBM Rational Acquires Enterprise Lifecycle Management for Software through Systems IBM Rational Acquires Application Security and Compliance Management IBM Rational Acquires Software Delivery Process Automation & Compliance First Wave of Jazz Offerings Real Time, In-Context Team Collaboration and Requirements Definition SOA Lifecycle Management New SOA quality, architecture & asset management solutions Enterprise Modernization System i & z Tools Integrated into Rational Standardization Driving Greater Value from Software Investments Accelerating Global Software Delivery Governing the Business Process of Software Delivery Software Development Platform & Processes Practitioner Flexibility & Productivity Visibility & Collaboration in Software Delivery 2002 2004 2006 2008 First wave of Jazz offerings IBM Acquires

47. Envisioning a platform that can transform software delivery • Robust, extensible and scaleable • Globally distributed, fluid and dynamic • Community-based and open at Jazz.net An open technology initiative to transform how people work together to deliver greater value and performance from their software investments Collaborate in Context Right-sizeGovernance Day OneProductivity • Dynamic provisioning of projects and teams • Real-time iteration planning and workload balancing • Unify teams with tools choice • Enable team transparencyof “who, what, when, why” • Build team cohesion and presence • Automate hand-offs – so nothing falls through the cracks • Automate team workflow improving productivity • Automate data collection eliminating administrative overhead • Real time reporting and alerts reduces project risk Open Services for Lifecycle Collaboration

48. Packaged applications Systems & products In-house software Outsource vendors Deliver Enduring Quality Accelerate Change & Delivery Manage Evolving Requirements Manage Architecture Improve Project Success Deploy Process & Governance Best Practices Collaborative Application Lifecycle Management Platform Collaborative Application Lifecycle Platform Solutions to assist customers in achieving greater value and performance from their investments in software • IT • Systems • Enterprise Modernization

49. c offering offering offering offering offering offering offering Best Practice Processes Search and Query Security In context collaboration Dashboards Events notification Team awareness JAZZ TEAM SERVER Jazz Integration Architecture Client Integrations Eclipse Web 2.0 Visual Studio (4Q) An evolution of value in collaborative ALM bringing forward existing investments and delivering new innovative capabilities Existing Telelogic and Rational Offerings New IBMOfferings Business PartnerOfferings Server Integrations Existing Telelogic and Rational offerings Business Partner offerings Open source offerings Powered by

50. Team Concert Innovation Through Collaboration Quality Manager Requirements Composer Unify by “thinking & working” in unison with real-time project heath Collaborative Business-driven Quality Business Expert Collaboration Coordinate quality assurance plans, processes and resources Elicit, capture, elaborate, discuss and review requirements Powered by Asset Manager Build Forge Requisite Pro Introducing the first wave of new Jazz offerings Rational Requirements Composer Rational Quality Manager Rational Team Concert Business Partner Jazz Offerings Best Practice Processes Search and Query Security collaboration Dashboards Team awareness Events notification JAZZ TEAM SERVER Jazz Integration Architecture DOORS Synergy