The document discusses how client consolidation (virtualization) can significantly reduce the total cost of ownership for PCs. It states that hardware and software costs make up less than 30% of total PC costs, while other non-hardware operation and support costs dominate. Client consolidation through virtualization can lower these total costs by reducing operational and end-user support expenses. Sample pricing information is provided for a virtual desktop infrastructure solution.

1. Client consolidation (virtualization) can reduce TCO Hardware and software make up less than 30% of PC total cost of ownership (Source: Gartner Research) Non-hardware costs dominate total costs of PC’s Client Consolidation can lower TCO by reducing cost of operations and end-user support (Source: Gartner Research) PC TCO End-user Costs Hardware / Software Costs Administration Operations $0 $1,000 $2,000 $3,000 $4,000 $5,000 Typically- Managed PC Consolidation Client Savings Costs and Savings TCO/YR

2. Desktop virtualization will redefine end-user computing Increasing user flexibility while reducing management costs Low High User flexibility Mobility and personalization IT efficiency Lower cost and more control Low High Traditional PC Microsoft Legacy virtualization VMware and Citrix Terminal services Citrix Mainframe IBM Gen 1 Gen 2

3. 5. Architecture Overview VDSB Architecture Overview VDSB cluster

4. Breaking down the costs Standard desktop versus IBM, VMware and Citrix: three-year TCO, 200 users * This chart is based on a theoretical example. Real cases may vary 3 Standard desktop IBM VMware Citrix Total cost of ownership (in 100,000s)* 2 4 6 8 10 12 14 16 18 Microsoft Windows Virtual Access software cost Virtual desktop infrastructure (VDI) software cost Storage hardware cost Server hardware cost Desktop management cost PC incremental hardware cost Desktop management User administration Hardware configuration Hardware deployment Operating system and software deployment Operating system and application management Backup, archive and recovery Service desk costs (Tier 0/1) Security management IT administration Type of user User split Connected; use desktop/tablet Connected; can use thin client Disconnected; use laptop Power user 20% 50% 50% Office user 40% 50% 50% Casual user 40% 50% 50%

5. IBM Virtual Desktop for Smart Business with VERDE – VDI components Gen 2 VDI Offline, Online, Branch Dynamic personal stateless sessions Optimization Open Architecture: Directory Storage KVM Linux Server Operating System Clustering Windows/ Linux Desktops IBM Foundation for Smart Business SLES 11 with KVM Integration Layer: Install, Configure, Admin. Virtual Desktop Infrastructure Casual Office Power Server Hardware Storage Hardware Components: TDI, Derbey Environment Mgr Connection Broker Profile Mgr Storage Optimizer Memory Optimizer Offline VDI Session Monitoring Load Balancing Branch VDI Directory Services Desktop Operating System (Windows, Linux) Applications Protocol

6. Supported Guest Virtual Desktop Platforms 32-bit and 64-bit Windows 64-bit (i386) Ubuntu Linux 32-bit and 64-bit Novell SUSE Linux 32-bit (i386) or 64-bit (x86_64) RHEL 32-bit (i386) or 64-bit (x86_64) CentOS 11. Gold Master Images

7. Powered by VERDE from Virtual Bridges Top 10 IT companies to watch in 2010 “ The Emergence of Virtual Bridges was the only significant development for the Desktop Virtualization market in 2009” - Robin Bloor, Lead Virtualization/IT Analyst Positive Surprise in the VDI shootout – Brian Madden Among Citrix, VMware, Virtual Bridges, Microsoft and Quest Top 10 Hot Emerging Companies (CRN) Top 10 Virtualization Companies – Serverwatch Top Five Vendors @ Synergy – Chris Wolf [Burton/Gartner] Funded by Austin Ventures

8. Why implement VDSB with System x and BladeCenter Lower Operating Costs Increased flexibility Versus Legacy Servers Reduce TCO and data center sprawl with 20:1 consolidation (1) Up to 50% reduction in operating expense, 3 month ROI (1) Leadership energy efficiency Large memory capacity Large storage capacity Flexible I/O High Quality Easy to Deploy, Manage & Service TBR #1 ranking for customer satisfaction IT leadership in Business Week and Interbrand Best in class reliability and availability Enhanced systems management Easy design Open architecture and common tools More Performance Versus Most Recent Generation Servers Up to 40% top bin-to-bin performance increase New Xeon processors deliver same performance at 30% less power 6Gb RAID for increased performance and throughput Quality Value Performance

9. Solution components: Virtual Enterprise Remote Desktop Environment (VERDE) from Virtual Bridges (now available within IBM Virtual Desktop for Smart Business) “ By managing our desktops from a central location, we’ve not only been able to reduce our CapEx spending, but we’ve also seen a significant decrease in Help Desk costs, operational downtime, new desktop deployment and administration. . ” Business Challenge: Easing Management of Branch and Mobile Workers As one of the largest Asset Management firms in the world, ACME FIRM sought a solution that would drive down the costs of desktop management, improve security and compliance and increase organization agility. Dispersed across multiple geographic regions, the Firm’s investment professionals require dependable access to their desktop at all times. Additionally, the organization must adhere to critical compliance regulations to ensure clients’ personal financial data is secure from every end point. Supporting this structure has created both financial and resource burdens for the IT team. The Solution: The Firm deployed VERDE, a virtualized infrastructure from Virtual Bridges ( now available within IBM Virtual Desktop for Smart Business) . The solution’s Gold Master Image provisioning streamlines the management of PCs significantly by reducing the total number of desktop images and deploying professional workspaces from a central location. The solution gives the Asset Management Firm flexibility, supporting both Windows and Linux applications and allowing users to access multiple desktop sessions from a single client. VERDE offers native malware resistance, secure remote access and disaster recovery. Additionally IT can quickly provision guest/remote access, new users or applications and provide access to desktops from any client (PC, Mac, PDA). Benefits: Significant CapEx and OpEx savings from reduction of PC refreshes and licensing investments as well as opportunity to transition to thin clients as needed. Eliminated organizational disruption during major technology upgrades, including Windows 7. Improved control and security with a single management console. Increased flexibility for investment professionals to access desktops regardless of location or device. Reduced Help Desk costs Use Case: Assets management Result: Firms sees strong returns with VDSB

10. “ While scattered across the world, o ur investment professionals need reliable access to client data, anytime anywhere. Virtual Bridges VERDE has allowed us to drastically reduce the TCO associated with desktops while providing an unmatched experience for our employees.” Business Challenge: Providing End User Flexibility Across Regions With 29,000 employees across more than 100 markets, a Global Bank sought a solution to lower desktop TCO and improve organizational agility, while providing a highly desirable user experience. The bank needed to manage desktops centrally and remove the burden from the branches. Additionally, with advisors that often travel to clients to deliver investment advice, the bank wanted to provide greater flexibility and availability to mobile users and technical teams that often require multiple desktops. The Solution: The Bank deployed VERDE, a virtualized infrastructure from Virtual Bridges ( now available within IBM Virtual Desktop for Smart Business) . With this software solution, the Bank was able to consolidate multiple tactical projects and create an environment where the desktops are running “closer” to the enterprise applications. The IT staff can now manage all devices centrally, eliminating the need to visit branch offices for provisioning, upgrades or security resolution. Investment professionals enjoy reliable access to their applications from any location (whether desk, home or traveling on the road) and any type of device to best meet the needs of their clients. Benefits: Significant CapEx and OpEx savings from reduction of PC refreshes and licensing investments as well as opportunity to transition to thin clients as needed. Reduced organizational disruption by rolling out Windows 7 to all employees with a single click. Enhanced efficiency and productivity of desktop management and administration. Improved control and security with a single management console by which to upgrade desktops as needed on a central server. Increased flexibility to allow investment professionals to access desktops regardless of location or device. Use Case: Assets management - Finance Result: Financial Institution enjoys strong dividends with VDSB

11. Business Challenge: Driving Down Desktop Support Costs With thousands of teachers and students across multiple campuses, B Independent School District, was caught in an annual cycle of replacing outdated PCs every summer to keep up with all the content-rich tools that enter classrooms each year. Demands for increased performance, security and management had created a tremendous strain on both financial and IT resources. B ISD sought a desktop virtualization solution that would improve IT efficiency, reduce labor costs, extend PC lifecycles and reduce security risks. The Solution: B ISD deployed VERDE, a virtualized infrastructure from Virtual Bridges ( now available within IBM Virtual Desktop for Smart Business) . They moved all of their user desktops over to a central server and are using Virtual Bridges to manage it, drastically enhancing efficiency and productivity for the organization. With VERDE the District eliminated the need to track, maintain, upgrade, provision, reimage, repair, etc. They also provided greater flexibility to students and teachers who can now access personal desktops from anywhere and seamlessly perform tasks such as transfer files, stream video, monitor tools and more. Benefits: Reduced total cost of ownership of desktops including by minimizing the frequency of PC refreshes, repurposing older PCs, transitioning to thin clients as needed, and lessening licensing investments. Improved organization agility by streamlining Windows 7 migration, improving deployment and reducing the management and administration time. Improved control and security with a single management console. Increased flexibility for students and teachers to access desktops regardless of location or device. Reduced Help Desk costs Solution components: Virtual Enterprise Remote Desktop Environment (VERDE) from Virtual Bridges (now available within IBM Virtual Desktop for Smart Business ) “ VERDE delivers incredible benefits to our district and is helping to create a dynamic, collaborative environment for our students to grow. Since we’ve deployed, we’ve cut both CapEx and OpEx spending significantly, which allows us to reallocate those dollars to other education priorities, a significant feat in this tough economic climate.. Use Case: Texas school district Result: Improved user experience and reduced cost with VDSB

12. Business Challenge: Centralizing Management and Removing Manual Tasks A regional Education Service Center faced growing financial burden due decades of manual and laborious management processes, including an annual desktop refresh cycle. This practice created costly inefficiencies throughout the organization that required intensive labor and computing resources. The organization sought to reduce the quantity of refreshes, repurpose older, well-functioning PCs, improve security and lessen the investment on licensing where applicable. At the same time, the Center wanted to reduce OpEx costs around deployment, provisioning, reimaging, support and ease upgrades to large-scale solutions such as Windows 7. The Center needed a new, more efficient way to manage the more than 600 desktops located across the organization. The Solution: The Education Service Center chose to deploy VERDE, a virtualized infrastructure from Virtual Bridges ( now available within IBM Virtual Desktop for Smart Business) . With this software technology, the Center was able to provide a consistent user experience to students and teachers while significantly streamlining labor costs, extending PC lifecycles and centralizing management. VERDE’s Gold Images allowed the Center to provision new desktops quickly and migrate users from Windows XP to Windows 7 with the click of a button. Benefits: Reduced total cost of ownership of desktops including time, manpower, and cost of management. Lowered hardware cost per desktop by having students/faculty share a single high powered server. Improved system control and security with a single management console by which to upgrade desktops as needed on a central server. Maximized technology investment by extending the life of PCs and moving to thin clients. Gained flexibility to allow students and faculty to access desktops regardless of location. “ Provisioning desktops used to take hours. Now it takes seconds. Virtual Bridges VERDE has removed the management burden , allowing our team to focus on high-quality advancements that are driving innovation . ” Solution components: Virtual Enterprise Remote Desktop Environment (VERDE) from Virtual Bridges (now available within IBM Virtual Desktop for Smart Business ) Use Case: Education Service Center Result: Reduced cost of PC ownership with VDSB

15. Neither VDI nor ‘pure’ offline VDI provide the complete flexibility for users and IT – need for “Integrated Offline VDI” Users: Works across PCs, Thin Clients, PDAs etc Works in both online/offline mode IT: Security, Cost and Manageability optimized for all use cases Users need to seamlessly move between VDI & Offline VDI sessions Need for a portable hypervisor between Server (VDI) & Clients allows the portability of virtual desktops between client PCs and VDI servers Need for seamless User Data Sync between VDI & Offline VDI allows for a consistent desktop experience between VDI and offline VDI sessions – ubiquitous desktop experience across all the user devices Integrated Offline VDI in Gen 2 overcomes barriers 13. Type 1 and Type 2 offline VDI

16. Smart Business Roles Roles: IT administrator, Business User (Casual, Office, Power) Access device: iPad, netbook, laptop, thin client, desktop, using an USB drive Directory Integration options include AD, LDAP Access options (online, offline, branch) based on network, type of applications – work from office/home, from a plane, in a remote branch Choice of using Virtual Windows/Linux desktops based on application dependencies and cost pressure 1 IT Administrator Role 1.1 Install VDSB 1.2 Configure VDSB: for online, remote branch, offline - network, security, cluster, etc. 1.3 Manage Users – directory integration (AD) 1.4 Create/maintain Gold Master Images - desktop policy - session settings - image management 1.5 General System Administration: backup, recovery, boot storm, green 1.6 Peripheral device management 1.7 Remote Management 2 Business User Role 2.1 Setup Access device 2.2 Work using remote branch VDI 2.3 Work using Online VDI – VPN/company loc. 2.4 Work using offline VDI: (a) using high speed USB drive (ex. SSD) on personal computer, (b) same as “a” but using some other computer, (c ) using primary Hard drive in your laptop, (d) using USB stick to bootup to a linux desktop and access virtual desktop online

17. Remote Display Protocols Bandwidth: 56Kbps/sec/user - 128Kbps/sec/user Latency: traditional: upto 80ms. SPICE: upto 200ms Protocols RDP for Windows virtual desktops Nx – No Machines for Linux virtual desktops SPICE – high-def protocol Supports Windows and Linux virtual desktops VoIP – Lip sync technology Latency friendly (upto 200MS) Multi media applications Access: Web Browser (RDP, Nx, SPICE) or rich client (SPICE) 8. Remote Display Protocols

18. Network and Latency Dependencies: User Segmentation, type of protocol, VDI strategy Trade offs: performance, cost, capacity LAN vs WAN Online, Offline, remote Branch VDI (vs WAN optimization) Latency: Depends on Protocol. Up to 200MS (with SPICE) 14. Network and Latency

19. USB Peripherals including Printers USB 2.0 Peripherals in online, branch office, offline VDI modes Backward compatible Supports Retail, Banking, Healthcare, etc. Ensure that this is included in your PoC/Pilot Serial Port devices in online, branch office VDI modes 10. Peripherals

20. Sample pricing assuming High availability solution for 400 users IBM X 3950 with SSD and traditional storage. 2 servers. Total price usd 55.000 (plan $) 400 concurrent users. Seat price usd 130. Total intial usd 52.000 Annual subscription on complete stack some 25 percent : usd 13.000 Linux licenses – free MS Windows – owned by customer Installation/Implementation - TBD - guess on pilot : 3 weeks - usd 20.000 Cost over per year over 3 years per seat: usd 138 excl MS and apps licenses and customer administration In general cost reductions compared to normal desktop : 30-50 pct