IBM Global Technology Services: Partnering for Better Business Outcomes

2. IBM Global Technology Services: Partnering for Better Business Outcomes Four forces converge to drive promising opportunities, higher expectations and new challenges Analytics Cloud Social Mobile 2012 IBM Global CEO Study: CEOs now say technology is the top driver of change External forces impacting organizations Technology factors People skills Market factors Macro-economic factors Regulatory concerns Globalization 2 Sources: 2012 IBM Global CEO Study © 2013 IBM Corporation

3. IBM Global Technology Services: Partnering for Better Business Outcomes It is clear that cloud is changing the boundaries, access and economics of business and IT ~50% of IT budgets will be allocated to operationalizing around cloud technology within 2 years. Source: IDC, CloudTrack 2012 Summer Survey, Part 1: Costs Savings in the Cloud, doc #237693, November 2012 ~80% Finance & Supply Chain Admin Management of U.S. buyers indicate that they will have transformed 50% of their internal application/infrastructure environment to mimic a cloud delivery model in 5 years. Source: IDC, 2012 U.S. Buyer Requirements for Outsourced Cloud Services Part 1: Road Map of Transformation, doc #234737, May 2012 ~80% of survey respondents currently use or plan to implement (by year-end 2013) cloud services for Applications; 45% for Business Processes. Source: Gartner G00229304 (Figure 2) 3 Research & Marketing Development Automation ~7% Growth rate of all external services in 2016 (better than GDP), and driven largely by cloud adoption, at >13% in 2016. Source: IBM © 2013 IBM Corporation

4. IBM Global Technology Services: Partnering for Better Business Outcomes Increasingly, leaders are pursuing partnerships to succeed CEOs CMOs CIOs 69% partner extensively (up from 55% in 2008) 53%are partnering for innovation 1 1 92% will increase use of external partnerships for customer and data analytics2 61% will increase use of external partnerships for IT skills 2 65% of growth-focused CIOs are partnering extensively to change the mix of skills, expertise and capabilities3 48% feel unprepared to face the complexity of increasingly interconnected economies, enterprises and societies3 CxOs 4 70% plan to outsource for strategic business value beyond efficiency and operating effectiveness4 Sources: 12012 IBM Global CEO Study, 22011 IBM Global CMO Study, 32011 IBM Global CIO Study, 4 “Pushing the limits of outsourcing: Innovators reinvent services relationships”, © 2013 IBM Corporation

5. IBM Global Technology Services: Partnering for Better Business Outcomes IBM market research identified new partnering strategies with substantive business benefits When we looked at both sourcing motivations and the extent of outsourcing, four partnering strategies emerged… Innovation SOURCING MOTIVATION Efficiency and effectiveness 19% 34 27 Focused Innovators Focused Optimizers Narrow 5 % Enterprise Innovators 3 Year CAGR%: FY 2011 3.9% 9.4% 4.5% Gross profit growth by partnering strategy % 3 Year CAGR%: FY 2011 Enterprise Optimizers EXTENT OF OUTSOURCING Revenue growth by partnering strategy 1.9% Respondent distribution by partnering strategy 20% Enterprise Innovators outperform all other segments… 2.5% Broad "Why partnering strategies matter" − an IBM Center for Applied Insights global study based on input from 1,351 sourcing decision makers. For more info, visit: ibm.com/ibmcai/sourcing 10.9% 1.6% 2.9% © 2013 IBM Corporation

6. IBM Global Technology Services: Partnering for Better Business Outcomes IBM has the skills and capabilities to deliver on your fundamental needs and drive innovation and business value for your organization Deepen Engagement and Deliver Enterprise Mobility • Enable end-user environments for social business • Support bring your own device, applications, and processes • Enable a flexible workplace Turn Information into Insights • Manage “big data” volume, variety and velocity • Apply performance analytics to IT infrastructure • Monitor and mange information based on value and priority Manage Risk, Security and Compliance Optimize Infrastructure • Deploy an optimized, virtualized, rationalized infrastructure across network, server, storage, & data center • Meet unpredictable demands with cloud • Enable flexibility with scalable modular data centers Transform Strategy & Business Operations • Secure your infrastructure inside and outside the data center • Maintain continuous business operations • Meet regulatory compliance requirements • Manage enterprise risk • Drive business value by leveraging a mix of delivery models including cloud, managed services, IT outsourcing, business process outsourcing, and traditional IT • Integrate management and governance of IT and business services across the lifecycle 6 © 2013 IBM Corporation

7. IBM Global Technology Services: Partnering for Better Business Outcomes The most forward-thinking organizations are developing partnerships to address these needs Railway company Restaurant chain & retailer Boosts mobile productivity across 6,000 end-user devices and supports a BYOD strategy Increases customer satisfaction and profitability with data analytics, while decreasing report generation times by 99% Sunlife Stadium – Miami Dolphins Karviná City Enhances the fan experience and improves operational efficiencies by 90% with SmartCloud 7 La Caixa Bank Built a culture of innovation while saving an expected €400M over 10 years Manages risk and automates identity management, providing 100% improvement to employee activation © 2013 IBM Corporation

8. IBM Global Technology Services: Partnering for Better Business Outcomes Those organizations are partnering with IBM on a business and IT services model that is premised on business value and enabled by cloud SmartCloud Services Consulting “Analyze and advise”     8 ProjectBased Services “Help me with some tasks” Managed Services “Monitor my servers” “Manage my applications” “Host my servers” “Manage my servers” Strategic Outsourcing Application Outsourcing Global Process Services “Be my strategic IT provider” “Manage my application services” “Run and innovate my processes” Client-centric approach built on a highly flexible, modular delivery platform Vertical integration across all delivery models Committed to delivering business value and continual innovation Providing access to the breadth and depth of IBM capabilities and expertise © 2013 IBM Corporation

9. IBM Global Technology Services: Partnering for Better Business Outcomes These services are based on proven methodologies that apply technical, financial, and industry lenses to accelerate business value Collaborate with industry experts to capitalize on leading technologies in your industry. Develop an infrastructure roadmap & plan to support existing and future business models. Define a robust and intelligent business and IT architecture for optimal responsiveness, flexibility and scalability. Enhance the speed and reliability of solution deployments with analyticsdriven approaches. IBM was named a leader in the IDC MarketScape: Worldwide Datacenter Transformation Consulting 2012 Vendor Analysis 9 “IBM has one of the most comprehensive Cloud portfolios, with cloud integrated throughout its many lines of business” -- Datamation Gartner Inc. has positioned IBM as a Leader in the Magic Quadrant for Comprehensive Finance and Accounting BPO and the Magic Quadrant for Customer Management Contact Center, BPO Source: 1) IDC, MarketScape: Worldwide Datacenter Transformation Consulting 2012 Vendor Analysis Doc #233919, March 2012. 2) Datamation: Cloud Computing Leaders: Ten to Watch -- http://www.datamation.com/netsys/article.php/3887691/Cloud-Computing-Leaders-Ten-to-Watch.htm 3) Gartner Research Note: Magic Quadrant for Comprehensive Finance and Accounting BPO, Cathy Tornbohm, May 30, 2012 ID: G00228611; Gartner Research Note: “Magic Quadrant for Customer Management Contact Center BPO, Worldwide” – TJ Singh, Dec 24, 2012, G00231732 © 2013 IBM Corporation

10. IBM Global Technology Services: Partnering for Better Business Outcomes We’ve seen these services deliver impactful results for our clients Sample Outcomes Deepen Engagement and Deliver Enterprise Mobility • Increase in sales of $6.8M over 3 years • Increased employee productivity – more than $68M over 3 years • 108% ROI over three years with IBM managed mobility services Turn Information into • Insights 100% increase in storage utilization • 50+% reduction in annual storage costs • 90% reduction in execution hours through automation Manage Risk, Security and Compliance Optimize Infrastructure • 50% lower virtualization transformation costs • 50% reduction in operational expense by rationalizing your data center • 40 – 50% of capital and operating expense deferred Transform Strategy & Business • Operations 90% faster cloud workload analysis • 95% of events handled without human intervention • 55% lower total cost of ownership and management complexity of security • 100% recovery for IBM clients that have declared a disaster • 50% reduction in IT labor costs with cloud • 9.4% revenue growth and 10.9% gross profit growth with outsourcing 10 © 2013 IBM Corporation

11. IBM Global Technology Services: Partnering for Better Business Outcomes IBM has the expertise and credibility to help you succeed Deepen Engagement and Deliver Enterprise Mobility • Broad range of devices supported including: iPhone, iPad, Android, Blackberry, Symbian, Psion, Motorola • Experience managing 2.5M desktops and 4.6M help desk calls Optimize Infrastructure • More than 35 years of data center management experience • Over 430 client and IBM data centers under management • Thousands of server environments virtualized, providing 30 – 70% total Transform Strategy & Business Operations cost of ownership savings • Extensive industry, technology, and process expertise around the world • Investment in cloud R&D with $3B in key cloud acquisitions 11 Turn Information into • Insights 250 petabytes of More than storage under management • Experience analyzing more than 100B of commerce transactions a year in the cloud Manage Risk, Security and Compliance • Over 150 resiliency centers across 44 countries • More than 200 IBM researchers working on breakthroughs in cloud security and privacy • Experience managing over 13B events for over 4,000 clients per day © 2013 IBM Corporation

12. IBM Global Technology Services: Partnering for Better Business Outcomes IBM’s service delivery platform offers global reach and an unmatched base of experience IBM’s Worldwide Delivery Capabilities Global Delivery Centre Global Command Centre IBM SmartCloud Centres IBM Cloud Labs IBM BCRS 12 • 4,000 architects and 20,000 IT • ~400 Delivery Data Centers specialists worldwide with expertise • 7.5M square feet of space across cloud, security, networking, • 150 resiliency centers in 50 storage and all technical domains countries • Largest global network of security • Cloud delivery capabilities in every continent operations centers • Over 90 Distinguished Engineers, 40 Master Inventors, 100 members of IBM’s Academy of Technology, and 300 IBM Researchers • Continued expansion and investment in growth markets © 2013 IBM Corporation

13. IBM Global Technology Services: Partnering for Better Business Outcomes Consider a partnering strategy to deliver better business outcomes for your organization  Is your organization achieving the levels of innovation required to compete in today’s environment?  Are your infrastructure and business processes able to meet the changing needs of your organization?  Are you developing internal capabilities that would be better handled by others? Partner with IBM Global Technology Services to address your needs ibm.com/services 13 © 2013 IBM Corporation

IBM Global Technology Services: Partnering for Better Business Outcomes

IBM Services

IBM Global Technology Services: Partnering for Better Business Outcomes