Workplace, Portal & Collaboration Market overview

1. Workplace, Portal & Collaboration Market overview Christina Mavromatis

2. Agenda • The Portfolio • Market opportunity • Our positioning • Market trends • North Region priorities

3. The Portfolio

4. Product Families IBM Workplace products The new bridge between people and business processes with integrated collaborative products IBM Lotus Notes/Domino Time tested, market leading collaborative application environment for developing people-driven applications IBM WebSphere Portal Allows integrated access to the information, applications and business processes

5. Marketplace Assessment

6. Lotus Region North 2005 Market Opportunity Excludes Non-business and Small Companies (1-99 employees) Implications: Distribution, Industrial and Financial opportunity will be addressed through PP Programme and will be priority industry segments Plan to work with partners to develop campaigns into these industry segments

7. 2005 EMEA Region North Market Opportunity for Lotus Total Lotus Oppty is $251M (excluding 1 – 99 and Non Business) Implications of Market Opportunity Continue to harvest profit from Notes/Domino segment, while targeting growth in Workplace and Portal. Grow revenue in Workplace & Portal by up-selling to Notes/Domino base and via new customer acquisition. Aggressively drive new license revenuein the SMB market, with “express” Workplace offerings.

8. Our positioning

9. IBM Market Leadership78 of the Fortune 100 use IBM collaboration IBM Lotus IBM Products Highlights Competition Position Microsoft: • Exchange • Live Communication Server #1 in ICE @ 46% share (Gartner) • Over 114 million seats • Domino.Doc in 40 of Fortune 100 • Team Workplace Leader(Gartner) IM & WC #1 in Business Instant Messaging – used by 60 out of Global Fortune 100 (Gartner) Domino Base (ICE) Notes & Domino #1 Workflow, Discovery, Extended Search, Domino.Doc IM & WC Team Workplace Learningspace Web Content Manager Workplace Documents Business Controls & Reporting Records Manager Commonstore Documentum Open Text Microsoft Vignette Interwoven Workplace IBM Lotus and DB2 Content Managerfamily of products combined are #1 in CM/DM #1 IBM Workplace combined revenue (IDC) for portal, standalone email, team collaboration, conferencing, content mgmt & other collaboration is larger than any other vendor. Web Content Mgmt.Compliance LWM “makes sense for many companies” (Aberdeen) Sun Oracle Workplace Messaging Standalone Messaging IBM offers better WCM, BPM, and complementary services according to Gartner, among Smart Enterprise Suite vendors. Team Collaboration WebEx Microsoft • Live Meeting -SharePoint Service Team Collaboration Workplace Builder Web Conferencing SumTotal Intellinex (E&Y) > 2000 engagements in 55 countries Global LMS deployments Visionary (Gartner MQ) IBM Learning Services LearningManagement Learning Management Pathlore Saba SAP WebSphere Portal WebSphere Portal listed as the Plumtree Microsoft Portal #1 "Leader" in Gartner MQ and IDC Source: IBM Analysis based on Industry Reports/Market Research

10. Lotus Region North SWOT Strengths Weakness • Price pressure by "Good Enough" offerings • Workplace maturity • Customer confusion around the Lotus Workplace offerings • Go to market execution with partners for portal • Marketing programs to support channel community • Large install base • Established community of Domino partners • Ability to offer complete solutions • Established technology leader across all our market segments • Growing IBM sales force to leverage Opportunities Threats • Leveraging IBM & ValueNet to drive open standards based solutions against .NET (eg.Linux & J2EE) • Combining with other IBM offerings into unique solutions • Moving competitor customers to Lotus • Establishing leadership in H2 fragmented market • IT spending set to rise in 2005 • Lotus workplace adoption • Deferral of IT spending overall • .NET battle against J2EE • SAP portal strategy

11. Market Trends

12. Market Trends – Collaboration & Portal Software Business Trends Buyer Behavior Trends Technology Trends • Collab (e-mail, IM, Web conf) & Communications (phone, video conf, VoIP, etc) are converging into solutions that will change the way info workers interact & perform. In 2005, Web conf will explode as VoIP telephony reduces phone charges. • “Future portalswill demandsupport for awide variety of client devices, rich client access and offline support… After 2006, the rich client may surpass the portal as the chief consumer of Web services.” (Gartner) • Vendors are launching e-forms & other active documents that have business processes embedded and that interact with data. This market is growing to $1B by 2005. • e-Forms, BPM, regulation and price pressure in the classic WCM space are bringing services and a vertical orientation to the forefront in doc mgmt market. • IT now commands 25-50% share of total business spending. After 2 sluggish years, analysts expect economic recovery to generate about 6% growth in SW spending in 2004. • Compliance has surpassed ROI as the number one driver for IT investments. • Compliance requirements will drive 50% of content management spending beginning in 2004. • Less than half (46%) of large firms indicate their SOX compliance efforts are integrated with other compliance efforts. (HIPAA, Basel II, etc). • Applications increasingly drive purchase of middleware. • Developers are a strong influencer of platform choice & are looking to leverage existing skills (VB, Domino etc.) and move into enterprise app dev (.NET or J2EE). App dev on MS.Net is growing faster than JAVA/J2EE. • Customers are seeking integrated collaborative, portal, and content mgmt solutions from a single vendor for lower integration costs & lower TCO than best-of-breed solutions. • On-demand pricingmodels are still in infancy, but IDC expects these models will be driven by large customers. Web-based conf has been in forefront; portals & live virtual classroom may be emerging opportunities. Source: Multiple analyst reports synthesized by the Lotus Market Intelligence team

13. Customers: What do they buy? UK France Germany Improve Operational Efficiency Improve Employee Productivity Improve Employee Access to Info Reduce Admin Costs Get Closer to Customer Improve Customer Retention Reduce Production Costs Protect Privacy Capture Customer Data Reduce Time to Market Reduce Sales/Marketing Costs Manage Risks Comply w/ Regulations Integrate Supply Chain Distribution Through Mult. Channels Promote Customer Self-Svc Other

14. Customer pain points • Top 2 customer pains which are driving collaboration purchases • Improving Operational efficiency • Improving employee productivity Single theme with several key messages Make better informed decisions fasterthrough B2E, B2C and B2B portals that provide integrated access to information and business applications. It is a single, secure point of access personalized to users roles. Build better connected teamswith team collaboration software that connects people together regardless of location or time zone to accelerate business processes. It’s how people communicate and collaborate with each other to work on projects or develop and share documents. Improve responsiveness to customer needs and changes in the marketplace by connecting people to business processes, information and expertise anywhere, anytime, from any device.

15. Customers : How do they buy?Reaching an SMB customer requires an ecosystems of partners, a communication targeting both IT and LOB and using different media SIMPLE PCs Peripherals Low end servers COMPLEX Solutions Middleware High end Unix servers

16. North Region Priorities

17. Lotus Region North – 2005 priorities • Increase awareness, interest and desire in the marketplace for IBM Workplace solutions • Target compliance opportunity with WPBCR Establish Workplace as a Platform Advance Lotus in SMB Grow Domino Portfolio business Maintain Portal market share and leadership • Take advantage of largest Market opportunity in SMB, particularly with WSE • Continue capturing the remaining Exchange 5.5. EOL opportunity • Version to Version opportunities • Continue competitive take out actions • Extend core Notes/Domino install base with add on collaborative offerings • Protect renewals business • Grow Partner adoption • Competitive take out against key vendors • Maintain leadership position in portal marketplace The Key Risks to plan Brand awareness, Brand Image and Purchase consideration and preference relative to Microsoft.

18. Brand Plan • Key product priorities • Workplace • Portal • Domino • Growth opportunities/focus areas • Crush Microsoft • Workplace • Workplace Services Express • SMB • Key enablers of success • Awareness & Enablement • ……..so what is Marketing doing?? • Demand Gen is critical • ….but so is enablement & creating awareness!

19. Thank you!