Learn how smarter computing can provide you with strategies to transform it to deliver break through economics and value.

1. Steve Mills
Senior Vice President and Group Executive
IBM Software and Systems

3. Smarter Planet Solutions Increasing Demands on IT
Business transactions / day
over the Internet by 2020
Wearable (wireless) health
monitors by 2014 from 12M in 2012
Worldwide sensor market
in 2011, forecasted to grow to
$240B in 2016
Wireless sensors over 10 km2
for Shell oil exploration project
E-mails sent daily from
a total of 3.4B e-mail accounts;
volume growing to in 2015
Internet users worldwide,
growing to in 2017
Social networking
accounts, projected to grow
to in 2015
Mobile phones worldwide

4. Increased Demands on IT
Data centers have their
energy use in the past five years
 increase in data center
energy costs projected
servers worldwide
 idle computer capacity
 of servers run 24/7 without
being actively used on a daily basis
Between 2000 and 2010
 servers grew
 storage grew
Virtual machines growing
Internet connected devices
to 1 Trillion devices by 2017

5. An Explosion of Data
Google processes
>
of data in a single day
Hadron Collider at CERN
generates
of usable data / day
Facebook processes
of data daily
Twitter processes
of data daily
AT&T transfers about
of data
through its network daily
For every session, NY Stock
Exchange captures
of trade information
By 2016, annual Internet traffic
will reach
global size of
“Big Data” in Healthcare, growing
between 1.2 and 2.4 EX / year

6. Volume
Variety
Velocity
Data Overload… but Lacking Insight
2009
2020
as much Data and Content
Over Coming Decade
2012
Business leaders make
decisions based on information
they don’t trust, or don’t have
say they feel overwhelmed
by the amount of data their
company manages
say they need to do a better job
capturing and understanding
information rapidly
cited “BI & Analytics” as part
of their visionary plans to
enhance competitiveness

7. IT Operating Costs
Source: IDC, 2012
Power and cooling costs
63%
8%
29%
1996
43%
11%
46%
2001
33%
16%
51%
2006
21%
12%
67%
2012
New Server spending
Worldwide Spending on Servers, Power, Cooling & Management Administration
Server management and admin costs

8. Sprawl Drives Cost

9. IT Must Break through Budget and Resource Barriers
Getting Up and Running
 2-3 months to specify and procure
 2-3 months to integrate, configure
and deploy
Development Operations
 3-6 months to go from
development to production
Ongoing Effort
 1-3 months to troubleshoot and tune
 Ongoing effort and downtime to
maintain, scale and upgrade
IT Reality
Business Goals
 Driving business innovation
 Make new markets
 Respond to competitive threats
 Enhance the customer
experience
Grow top and bottom
line by
Typical Results
 23% of new IT projects (worldwide) deploy late
 55% experience application downtime for major
infrastructure upgrades once deployed
Source: A commissioned study conducted by Forrester Consulting on behalf of IBM

10. Clients Struggle to Overcome Barriers of Time, Cost & Risk
Top Causes of Project Delays
Hardware
Troubleshooting and tuning
production environment
Integration, configuration and
testing of the infrastructure
Installation, cabling and network
access for the environment
Software
Integration, configuration and
testing of applications
Integration, configuration and
testing of middleware
Configuration, build and
deployment of applications
Phase Time (days) Budget
Specify/design 73 - 96 14% - 16%
Procure 57 - 112 19% - 21%
Implement 74 – 93 12%
Configure/test 74 – 80 10% - 11%
Cluster & HA 66 – 104 11% - 12%
Backup 44 – 108 10%
Tune 89 – 98 9% - 10%
Management 67 – 110 9 – 10%
Typical IT Project Time and Budget
Source: A commissioned study conducted by Forrester Consulting on behalf of IBM
of new IT projects (US) deploy late

11. Only 1 in 5 Can Allocate More than Half Their IT Budget to Innovation
Maintaining
existing
infrastructure
New
projects
Maintaining
existing
infrastructure
New
projects
Most Efficient IT Organizations
More effective use of technology
first and fast technology adoption
move virtual machines to meet desired outcomes
use storage virtualization
use a storage service catalog (tiered storage)
Less effective use of technology
first and fast technology adoption
move virtual machines to meet desired outcomes
use storage virtualization
use a storage service catalog (tiered storage)
Less Efficient IT Organizations

12. IT Security Is Critical
average cost per data
breach in 2011
security incidents in 2011,
compromising records
consumer cybercrime victims
in 2011, or 18 adults became
a victim every second
cost of losing customer loyalty
(lost business) following a
data breach
| Hearthland Payment Systems
134M credit cards compromised
| TJX Companies
94M credit cards exposed
| Epsilon
Millions of names and e-mails exposed
| RSA Security
40M employee records stolen
| Stuxnet
Template for real-world intrusion disruptions
| US Department of Veterans Affairs
27M names and Social Security numbers stolen
| Sony’s PlayStation Network
77M PlayStation accounts hacked
| ESTsoft
Personal info of 35M South Koreans exposed
| Gawker Media
1.3M e-mail addresses & passwords exposed
| Google/other Silicon Valley companies
Stolen intellectual property

13. of victims were targets of opportunity
of attacks were not highly difficult
of data compromised involved servers
of breaches took weeks+ to discover
utilized some form of hacking
incorporated malware
involved physical attacks
employed social tactics
resulted from privilege misuse
What We Know about Security Breaches
stemmed from external agents
implicated internal employees
committed by business partner
of all data theft tied to activist group
of incidents discovered by 3rd party
of breaches were avoidable through
simple or intermediate controls
of victims subject to PCI DSS had
not achieved compliance

14. 2011 | “The Year of the Targeted Attack”
Marketing
Services
Online
Gaming
Online
Gaming
Online
Gaming
Online
Gaming
Central
Government
Gaming
Gaming
Internet
Services
Online
Gaming
Online
Gaming
Online
Services
Online
Gaming
IT
Security
Banking
IT
Security
Government
Consulting
IT
Security
Telecom-
munications
Entertain-
ment
Consumer
Electronics
Apparel
Insurance
Consulting
Consumer
Electronics
Internet
Services
Central
Govt
Central
Govt
Central
Govt
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Entertainment
Defense
Defense
Defense
Consumer
Electronics
Central
Government
Central
Government
Central
Government
Central
Government
Central
Government
Central
Government
Central
Government
Consumer
Electronics
National
Police
National
Police
State
Police
State
Police
Police
Gaming
Financial
Market
Online
Services
Defense
Heavy
Industry
Entertainment
Banking
2011 Sampling of Security Incidents by Attack Type, Time and Impact
Attack Type
SQL Injection
URL Tampering
Spear Phishing
3rd Party Software
DDoS
SecureID
Trojan Software
Unknown
Consulting
Size of circle estimates relative impact of
breach in terms of cost to business
Agriculture

15. Strategies to Transform
IT to Deliver Breakthrough
Economics and Value
Leading clients are
already addressing this IT
conundrum through
Meeting These Challenges

16. Key Investment Areas
Design Matters in the
New Era of Computing
Transforming
Computing
Making & Leading
New Markets
Expert Integrated
Systems
Optimized Workloads Smarter Analytics
Growth Markets Big Data Analytics Smarter Commerce
Cloud Cloud Smarter Cities
Analytics Security Intelligence Social Business
Cognitive Computing Mobile Enterprise Watson Solutions

17. Turning Opportunities into Outcomes
| Enabling Growth with Enterprise Systems
| Transforming IT with Smarter Storage
| Reinvent IT with Cloud Computing
| Changing the Economics of IT with IBM PureSystems
| Defending Against Cyber-Threats with Security Intelligence
| Transforming Critical Business Processes
| Unlocking Opportunities with Smarter Analytics and Big Data
| Creating Exceptional Experiences with Social Business and Commerce
| Extending Reach Securely with Mobile Enterprise
| Gaining Competitive Advantage Through Software Innovation