The document discusses IBM's Smarter Cities solutions portfolio. It provides an overview of IBM's solutions for making cities smarter by leveraging information to improve decision making, coordinating resources to operate effectively, and anticipating problems proactively. The solutions focus on industries like transportation, energy, healthcare, water, government, and education. It also highlights some key Smarter Cities projects from 2011 and discusses where IBM is heading with its Smarter Cities engagements and growth markets.

1. Smarter Cities
Bruno Di Leo
Senior Vice President, Sales and Distribution

2. Smarter Cities: Delivering improved citizen services
Solutions Industries Clients
Government and Agency Urban
Leveraging information Administration Planning
to make better decisions
Planning and Mayor Chief of Police
Public Environmental
Safety Management
Coordinating resources
to operate effectively
Chief of Chief Water /
Human Infrastructure Transportation Utilities Officer
Social Energy
Anticipating problems to and Health and Water
resolve them proactively Chief of Head of Social
Operations Programs
Education Transportation
© 2012 International Business Machines Corporation

3. Smarter Cities solutions portfolio is expanding
Prioritized Industries
Public Safety Government Transportation Energy Healthcare Water
Solutions
Planning and Management Infrastructure Human
 Operations Insight  Transportation Management  Social Program Management
 Law Enforcement and Public Safety  Water Management  Educational Outcomes
 Building Management  Utility Network Management  Citizen Health and Safety
 Asset Management
© 2012 International Business Machines Corporation

4. Key Smarter Cities projects – 2011
Government and
Major Markets: ~ 1900 Growth Markets: ~ 500
Agency Administration 38 of top 50 cities 38 of top 50 cities
Urban Planning
78% of fastest growing cities 62% of fastest growing cities
Environmental
Energy and Water
Transportation
Education
Social and Health
Public Safety
© 2012 International Business Machines Corporation ** Source IBM analysis and McKinsey Global Institute, March 2011

5. Smarter Cities engagements
Intelligent Transportation Renewable Energy Intelligent Operations Center
Companhia Paulista de Trens Elektrizitätswerke des Miami’s Sun Life Stadium
Metropolitanos (CPTM) Kantons Zürich (EKZ)
 Generates key system insights  Shifts up to 50% of electric vehicle  Provides real time data into all
by uncovering subtle correlations charging time to low peak hours stadium operations
 Achieved a 99% improvement in  Increases owner control over a  Ability to predict and adjust, and
short-term needs analysis vehicles’ carbon footprint, while deliver improved fan experience
reducing operating costs
© 2012 International Business Machines Corporation

6. Smarter Cities: Where we are heading
 $10M - $50M+ average value  EKZ - Zurich, SUI
Large transformational  Services led, with cross-IBM support  WorkCoverSA, AUS
solutions
 High-impact functional improvements  Transport for London, GBR
 $1M - $5M average value  Zhenjiang, PRC
Midsize repeatable
 Applies assets from similar engagements  MVV Energie AG, GER
solutions
 Advanced capabilities through services  Bucheon City, ROK
 $50K – $250K average value  Miami Sun Life Stadium, USA
Scalable
 Software-based offerings  Geneva Cantonal Police, SUI
solutions
 Rapid deployment and time to value  City of Lancaster, USA
Flexible Deployment Options
Cloud, SaaS, Shared Services and On Premise
© 2012 International Business Machines Corporation

7. Growth Markets
Bruno Di Leo
Senior Vice President, Sales and Distribution
D.C. Chien
General Manager, Greater China
Takreem El-Tahomy
General Manager, Middle East and Africa

8. IBM Growth Markets performance in 2011
Country / Market Selection 2015 Roadmap Objectives 2011 Performance
Market Expansion 2010–2015 ~ $17B incremental revenue Revenue grew +11% @ CC
Grow faster than market Gained market share,
IT Infrastructure nearly 40 countries grew double digits
Development Outpace Major Markets growth > 8 points
Outpaced Major Markets by 10 points
Approach 30% of IBM geographic revenue 22% of IBM geographic revenue
Industry Leadership
Drive margin expansion 47% of IBM gross profit growth
© 2012 International Business Machines Corporation

9. Market Expansion 2000-2011: IBM branch openings
92 new branches in 2011
31 face-to-face 61 virtual
Branch Office Acceleration
Branch Office Plan
31 face-to-face branches
Balikpappan, Ind. Trivandrum, India
Kuantan, Malaysia Vizag, India
Kuching, Malaysia Rosario, Argentina
Davao, Philippines Aracaju, Brazil
Chonburi, Thailand Bauru, Brazil
Izmir, Turkey Cuiaba, Brazil
2010 2011 2012 2013 2014 2015 Dneptopetrovsk, Ukr. Manaus, Brazil
Dalian, China Passa Fundo, Brazil
Gui Yang, China Puebla, Mexico
Hu He Hao Te, China Querétaro, Mexico
Coimbatore, India Tijuana, Mexico
Guwahati, India Toluca, Mexico
Indor, India Luanda, Angola
Ludhiana, India Dakar, Senegal
Nagpur, India Dar es Salaam, Tanz.
Raipur, India
© 2012 International Business Machines Corporation

10. Market Expansion 2012-2015: IBM branch acceleration
76 new branches in Q1 2012
33 face-to-face, 43 virtual
Branch Office Acceleration
Branch Office Plan
33 face-to-face branches
Bandung, Indonesia Kanpur, India
Ipoh, Malaysia Nasik, India
Malacca, Malaysia Patna, India
Wroclaw, Poland Ranchi, India
Ufa, Russia Surat, India
Kabharovsk, Russia Dong Nai, Vietnam
2010 2011 2012 2013 2014 2015 Voronezh, Russia Changwon, Korea
Dong Guan, China Cheonan/Asan, Korea
Hai Kou, China GyeongGi, Korea
Acceleration Incheon, Korea
Jia Xing, China
Faster launches Luo Yang, China Jeju, Korea
Wider footprint Mian Yang, China Jeonju, Korea
Brasilia, Brazil
Deeper capabilities Wen Zhou, China
Yin Chuan, China Sao Luis, Brazil
Xu Zhou, China Vale do Paraiba, Brazil
Goa, India Doha, Qatar
Jamshedpur, India
© 2012 International Business Machines Corporation

11. Market Expansion 2012-2015: IBM branch acceleration
Wroclaw, Poland
Dnipropetrovsk, Ukraine Dalian, China
Querétaro, Mexico
Doha, Qatar
San Isidro, Peru
Porto Alegre, Brazil Vizag, India
14 April 2011
Makassar, Indonesia
Dakar, Senegal
Luanda, Angola
© 2012 International Business Machines Corporation

12. IT Infrastructure
Development
IT infrastructure in support of economic growth
IBM in Growth Markets
#1 High-end Systems
UNIX Servers
#1 Services Cloud computing
#1 Software Served IT
Automate operations Mobile business
E-commerce Smart Retail
Smarter Computing
Business Analytics
Intelligent infrastructure
Technology services
Office productivity
© 2012 International Business Machines Corporation Market share source: IBM MI assessment based on IDC and Gartner data

13. Industry
Leadership
Drive transformation and growth - Natural Resources
EBX: operates in Brazil, Chile, Colombia Why IBM
 5 companies focused on oil and gas, energy, logistics,  Industry solutions & best practice
mining, and offshore services and equipment
 Market access
 Investing estimated $15.5B between 2011 and 2012
 Technology leadership & global skills
 World-class partner to build and manage industry solutions
 IBM worldwide R&D
© 2012 International Business Machines Corporation

14. IBM Growth Markets delivering on commitments
2015 Roadmap Objectives
Country / Market Selection 2010 – 2015 ~ $17B incremental revenue
Market Expansion Grow faster than market
Outpace Major Markets revenue growth > 8 points
IT Infrastructure Approach 30% of IBM geographic revenue
Development
Drive margin expansion
Industry Leadership Greater China
Africa
© 2012 International Business Machines Corporation

15. IBM China outperforming the market
IBM China Revenue Growth
CAGR 2007 - 2011
China GDP 9%
IT Market 15%
IBM 17%
2007 2008 2009 2010 2011
© 2012 International Business Machines Corporation Source: IBM Market Intelligence

16. IBM China investing to serve a growing market
Karamay
2 Research Labs
Urumqi Harbin
Changchun
6 Innovation Centers
Shenyang
Hohhot
4 Software Beijing Tangshan
Development Labs IBM China Branches Dalian
Yinchuan Tianjin
Taiyuan Shijiazhuang Yantai
2004 2011 2012
Xining Zhengzhou Jinan
3 Systems & Luoyang
Qingdao
Technology Labs 13 31 82 Lanzhou Xuzhou
Xian Nanjing
Hefei Wuxi Suzhou
Shanghai
5 Global Delivery Lhasa MianYang
Chengdu
Wuhan Jiaxing
Centers Chongqing Changsha Hangzhou Ningbo
Guiyang Nanchang
Wenzhou
Liuzhou
Research Lab Fuzhou
Software & Hardware Lab Kunming DongGuan
Guangzhou
Xiamen
Innovation Center Foshan Shenzhen
Nanning
Global Delivery Center
Haikou
© 2012 International Business Machines Corporation

17. IBM is uniquely positioned to support China’s 12th 5-year plan
China’s economic development
Urbanization Industry Transformation Emerging Industries
Market coverage Scale services
Partner to innovation
and expansion to transform clients
IBM’s uniqueness
© 2012 International Business Machines Corporation

18. Accelerating China market expansion
Faster Wider Deeper
 Accelerate branch openings  Extend coverage to over  13 Smart Planet references
from 31 – 82 in 2012 50% of China’s cities 2011, target 20 in 2012
 20% workforce growth 2012  Acquire 1000+ new clients  6 Intelligent Operations Center
 Increase local university  Expand IBM brand to remote wins 2011, target 20 in 2012
internships, hiring locations  Improved Software – Services
 Faster on-boarding, training  Grow business partner mix 10 points 2007 - 2011
ecosystem to 2500+
© 2012 International Business Machines Corporation

19. High value business transformation in China
Urbanization Industry Transformation Emerging Industries
IBM unique
capabilities
Smarter Cities Business Analytics Cloud Smarter Commerce
© 2012 International Business Machines Corporation

20. IBM is becoming an essential company in China
 IT is a critical enabler in China’s development
 Leverage geographic reach to lead business transformation
 Be innovation partner for China’s smarter growth
© 2012 International Business Machines Corporation

21. Africa: a long-term growth opportunity for IBM
GDP 2015 $2.5T growth Growing middle class
> 10% for several countries By 2015 87M households
South Africa 19% of Africa in middle income group
Foreign direct investment Critical mass in cities
2010 $554B 16.1% CAGR 52 cities of over 1M people
2002-2009 (India $198B) (more than Europe)
Large companies Largest working age population
More than 75 companies with By 2040 to exceed 1.1B
revenue over $3B (> China or India)
© 2012 International Business Machines Corporation

22. Market Expansion Building momentum in Africa - branches
IBM Africa 2009
Tunisia Egypt
Morocco Morocco
Egypt South Africa
Dubai Tunisia
Middle East & Africa HQ
© 2012 International Business Machines Corporation
South Africa

23. Market Expansion Building momentum in Africa - branches
IBM Africa 2012
Morocco Tunisia Algeria Mauritius
Angola Morocco
Algeria Egypt Burkina Faso Niger
Dubai Chad Nigeria
Middle East & Africa HQ Congo Senegal
Niger DRC Seychelles
Chad
Senegal Egypt Sierra Leone
Burkina
Gabon South Africa
Faso Nigeria
Ghana Tanzania
Sierra Leone
Ghana Uganda Kenya Tunisia
Kenya Madagascar Uganda
Gabon Dep Rep
Congo Congo Malawi Zambia
Tanzania Seychelles
Global Delivery Center
Software & Hardware Lab Angola Malawi
Zambia
Innovation Center
Madagascar
Cloud Computing Center
Mauritius
Regional GM Office
South Africa
© 2012 International Business Machines Corporation

24. IT Infrastructure Building momentum in Africa - infrastructure
Development
Morocco Disaster Recovery
for Core Banking
Egypt TE Data
Core network upgrade
Senegal Ports Authority
Real-Time Customs Information
Cameroon Finance Ministry
Modernize payroll processes
Tanzania Microfinancing
IBM in Africa Bank IT Development
#1 High-end Systems
UNIX Servers Air Mauritius Business
#1 Software Served IT Intelligence
© 2012 International Business Machines Corporation Market share source: IBM MI assessment based on IDC and Gartner data

25. Industry
Leadership
Building momentum in Africa - industry
Bharti-Airtel
16 Countries
Ethiopia Banking
Modernization
Kenya Refineries
Asset Management
Nigeria Banking
Transformation Smarter Cities
Nairobi
Kenya Banking
Innovation
Namibia FNB Localize Core
Banking Systems
South Africa Insurance
Fraud Detection
© 2012 International Business Machines Corporation

26. IBM is becoming an essential company in Africa
 Leverage broader IBM solutions and capabilities
 Build and develop local talent and agile organization model
 Develop innovation and IT skills on the continent IBM is back in Angola, Sept 2011
Dakar, Senegal, May 2011 Dar es Salaam, Tanzania, June 2011
© 2012 International Business Machines Corporation

27. IBM differentiation through investments
New in 2011
13 Countries & 92 branches
3 Centers of Excellence
Global Delivery Center Cloud - Singapore
Software & Hardware Lab Natural Resources - Russia
Research Lab Retail - Mexico
Poland Russia
Innovation Center 2 Global Delivery Centers
Czech Republic Slovakia China
Cloud Computing Center Argentina, Costa Rica
Romania Hungary
Shared Services
Turkey
Natural Resources South Korea
Morocco Egypt
Telecoms UAE Vietnam
India
Rail Mexico Philippines
Health Malaysia
Energy Brazil
Singapore
Finance
South Africa
Retail Australia
Government Argentina
© 2012 International Business Machines Corporation

28. IBM Growth Markets
Country / Market Selection 2015 Roadmap
Market Expansion 2010–2015 ~ $17B incremental revenue
Grow faster than market
IT Infrastructure
Development Outpace Major Markets growth > 8 points
Approach 30% of IBM geographic revenue
Industry Leadership
Drive margin expansion
© 2012 International Business Machines Corporation

29. Certain comments made in the presentation may be characterized as forward looking under the Private
Securities Litigation Reform Act of 1995. Those statements involve a number of factors that could cause
actual results to differ materially. Additional information concerning these factors is contained in the
Company's filings with the SEC. Copies are available from the SEC, from the IBM web site, or from IBM
Investor Relations. Any forward-looking statement made during this event or in these presentation
materials speaks only as of the date on which it is made. The Company assumes no obligation to update
or revise any forward-looking statements. These charts and the associated remarks and comments are
integrally related, and they are intended to be presented and understood together.
In an effort to provide additional and useful information regarding the Company’s financial results and
other financial information as determined by generally accepted accounting principles (GAAP), certain
materials presented during this event include non-GAAP information. The rationale for management’s use
of this non-GAAP information, the reconciliation of that information to GAAP, and other related information
is included in supplemental materials entitled “Non-GAAP Supplemental Materials” that are posted on the
Company’s investor relations web site at http://www.ibm.com/investor/events/investor0512. The Non-
GAAP Supplemental Materials are also included as Attachment II to the Company’s Form 8-K dated
May 9, 2012.
© 2012 International Business Machines Corporation

30. © 2012 International Business Machines Corporation