Steve
Mills
IBM Senior VP & Group Executive
IBM Software

Innovation for a
Smarter Planet

The World is Changing

The Reality of Living in a Globally Integrated World
Increase in global water Idle computer
usage since the 1900s, capacity
twice the rate of human
population growth The losses of electrical energy due
to inefficiency - around the world
Spent on
Worth of produce is wasted in India because IT maintenance
of outdated post-harvest infrastructure Lost annually in the US due
to healthcare fraud
Annual consumer product and retail
sales lost in United States due to
of total port supply chain inefficiencies Annual
volume in North impact of
America is empty congested
containers roadways

Building a Smarter Planet
Thinking and Acting in New Ways to Make Our Systems
More Efficient, Productive and Responsive
“Data is “Our resources
exploding and New Green and are limited”
it’s in silos” Intelligence Beyond I Need
I Need Insight Efficiency
“New business “My infrastructure
and process Dynamic is inflexible and
demands” Smart Work costly”
Infrastructure
I Need to I Need to
Work Smart Respond Quickly

Smart Planet …….
Our world is becoming
INSTRUMENTED By 2010, 30 billion RFID tags will be embedded
into our world and across entire ecosystems
Our world is becoming
An estimated 2 billion people will be on the Web
INTERCONNECTED by 2011 …. and a trillion connected objects –
cars, appliances, camera, roadways, pipelines –
comprising the “Internet of Things”
All things becoming
INTELLIGENT Every day, 15 petabytes of new information are
being generated. This is 8x more than the
information in all U.S. libraries

What Does It Mean to Become Smarter?
Sensors and Metering
Data collection
New Data
Event Processing + Real Data Integration
Time Data Integration
Comparison of historical data,
New Insights Real Time + Historical
with newly collected data
Data
Data Modeling & Analytics Data modeling and analytics to
create insights from data to feed
decision support and actions
Process Visualization & Leading businesses today are benefiting from
Innovation Decisions new sensor data when combined with IBM’s
business process management, event processing
New and Optimized
and business optimization capabilities
Business Processes

Innovative Solutions for a Smarter Planet
Smarter Smarter Smarter Smarter Smarter Smarter
Roads Oil & Gas Food Healthcare Utilities Retail
Smarter Smarter Smarter Smarter Smarter Smarter Smarter
Telco Supply Chains Public Safety Money Transportation Cities Products

Creating Smarter Manufacturing
Significant reduction in parts delivery errors
Reduced inventory levels through better visibility
Highly
instrumented
supply chain
using AutoID
and RFID

SOA-based Control Center
Smarter Manufacturing WebSphere Premise Server
WebSphere Business Monitor
16 Manufacturing Sites WebSphere Process Server
WBI Adapter for SAP
IBM Sensor and Actuator Solutions
RFID Tivoli Monitoring
Rational ClearCase, ClearQuest
Final
RFID Assembly
Large parts
transportation operation
RFID
Final assembly line operation
Tracks parts and goods from the
moment the RFID is detected to the
moment the ERP system is updated Toulouse, France

Creating Smarter Energy Grid
25-50% reduction in outages
Up to 90% capital savings
Real-time
instrumentation
and intelligent
analytics

Smarter Energy Grid SOA-based Control Center
WebSphere Application Server
WebSphere Message Broker
WebSphere MQ
Generating IBM ILOG Software
Plant Rational Software Architect
Problem Detection
Response
Optical Current Sensors Residence
Traditional IT Support
Intelligent Management of Physical Assets
Smart Devices

Products are Getting Smarter to Meet More Demanding
Requirements
Demand for more customizable products
unique to the needs of individual people
or businesses
Leverage of information and
environmental conditions to achieve
desired outcomes
Improved use of scarce resources
such as time, energy and money

A Smarter Planet Requires Smarter Products ….
…. Which are Intelligent, Interconnected and Instrumented
Vehicle Services Traffic Services
Vehicle monitoring
Police/emergency Personal Services
Traffic congestion News
Roadside assistance
Weather Entertainment
Advanced diagnostics
Concierge Banking
Software fault analytics
Insurance Government
Service and warranty data “pay as you drive” Utilities
Dealer
Vehicle to
Vehicle
Electric
Vehicle/
Toll Vehicle to Hybrid
Collection GPS Roadside Charging

Complex Systems for Automotive
What’s Smart
First prepackaged airbag assembly within a
steering wheel
Teams in 35 countries collaborating on
parallel releases using shared requirements
Smarter Business Outcomes
2008 introduction of prepackaged
airbag/steering wheel in the Smart Fortwo
vehicle made by Daimler
How Rational Enables Smarter Products
Requirements sharing across globally
“Rational DOORS has helped Delphi distributed teams and projects
improve development team communication,
resulting in meeting customer requirements Component reuse enabled by automated
faster and more accurately.” requirements management

Mobile Access to Medical Images
Merge Healthcare What’s Smart
Provides medical professionals access to
complex medical images on mobile devices
Smarter Business Outcomes
Reduced hospital operations costs
Reliable, secure, scalable delivery of medical
images and reports
How Rational Enables Smarter Products
Collaboration across globally distributed
“We rely on Rational Synergy and Change to development teams
manage the complexity of the software and to
ensure that our global development teams Change management across the end-to-end
operate as one, for the best result to our software lifecycle
customers. This software from IBM is part of
our livelihood; it's our DNA.”

Smarter Planet Requires a Significant Investment in Software
Software is increasingly viewed as a strategic
business asset
Imagine the amount of software necessary to:
• Deliver a more energy efficient world
• Take advantage of information base explosion
• Communicate with a trillion devices
• Drive on-going product differentiation
• Serve new global markets
Leaders everywhere are deploying increasingly intelligent
software, systems and products
Accelerating innovation and enabling effective change is highly
dependent on their ability to manage effective software delivery

Software as a Strategic Business Asset
$ 4.5T Cumulative Value
Annual Expenditures of Software Investments
and
In-house developed
Cumulative Value of Investments
$ 3.3T Work for Hire
$ 2.3T
Purchased
$ 2.6T
$ 0.6T
Annual Software
$ 1.5T Expenditures
$ 690B
$ 550B
$ 480B $ 290B In-house developed
$ 380B $ 1.6T
$ 80B Work for Hire
$ 320B Purchased
1995 2000 2005 2010

System and Software Lifecycle Processes
Optimizing Value From Investments Across the Software “Supply Chain”
Business Capabilities Development Capabilities
Enterprise Architecture / Analysis & Design
Architecture Frameworks
Requirements
Product Portfolio Definition and Construction
Management Management
Configuration and
Change Management
Measurement and
Reporting Release
Management Operations
Tivoli
Production / Asset and Service
Operations Quality
Management Management