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IBM Software Group

Workplace, Portal & Collaboration Market overviewChristina Mavromatis

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Agenda

The Portfolio

Market opportunity

Our positioning

Market trends

North Region priorities

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The Portfolio

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Product Families

IBM Workplace products

The new bridge between people and business processes with integrated

collaborative products

IBM Lotus Notes/Domino

Time tested, market leading collaborative application environment for developing

people-driven applications

IBM WebSphere Portal

Allows integrated access to the information, applications and business processes

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Marketplace Assessment

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Lotus Region North 2005 Market OpportunitySector $K

Communications 29,252

Distribution 59,073

Industrial 56,045

Public Health 15,418

Financial 65,053

CSI 26,703

 Total 251,544

Addressable Lotus Region North Opportunity ($M) by Employee Size

152,706

61,665

37,173

Large 1000+

500-999

100-499

Excludes Non-business and Small Companies (1-99 employees)

Addressable Lotus Region North Opportunity by Segment

12%

23%

22%6%

26%

11%Communications

Distribution

Industrial

Public Health

Financial

CSI

Implications:

Distribution, Industrial and Financial opportunity will be addressed through PP Programme and will be priority industry segments

Plan to work with partners to develop campaigns into these industry segments

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2005 EMEA Region North Market Opportunity for Lotus

Total Lotus Oppty is $251M (excluding 1 – 99 and Non Business)

Implications of Market Opportunity

1. Continue to harvest profit from Notes/Domino segment, while targeting growth in Workplace and Portal.

2. Grow revenue in Workplace & Portal by up-selling to Notes/Domino base and via new customer acquisition.

3. Aggressively drive new license revenue in the SMB market, with “express” Workplace offerings.

 2004 Mkt Opportunity $K

2005 Mkt Opportunity $K

% Growth

Large 1000+ 146.4 152.7 4%

500 - 999 35.3 37.2 5%

100 - 499 57.7 61.7 6%

  239.4 251.6 5%

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Our positioning

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IBM Market Leadership78 of the Fortune 100 use IBM collaboration

IBM Products Highlights CompetitionIBM Lotus Position

#1 in ICE @ 46% share (Gartner)Over 114 million seatsDomino.Doc in 40 of Fortune 100Team Workplace Leader(Gartner)IM & WC #1 in Business InstantMessaging – used by 60 out ofGlobal Fortune 100 (Gartner)

Microsoft:-Exchange-Live Communication Server

#1

WebEx Microsoft -Live Meeting-SharePoint Service

DocumentumOpen Text MicrosoftVignetteInterwoven

#1

IBM Workplacecombined revenue

(IDC) for portal, standalone email,

team collaboration, conferencing,

content mgmt & other collaboration is larger than any

other vendor.

IBM Lotus and DB2 Content Manager family of products combined are #1 in CM/DM

WebSphere Portal listed as the "Leader"

in Gartner MQ and IDC

SAPPlumtreeMicrosoft

#1

> 2000 engagements in 55countries Global LMS deploymentsVisionary (Gartner MQ)

SumTotal Intellinex (E&Y)Pathlore

Source: IBM Analysis based on Industry Reports/Market Research

Notes & Domino

Team CollaborationWorkplace BuilderWeb Conferencing

Web Content ManagerWorkplace DocumentsBusiness Controls & ReportingRecords ManagerCommonstore

Workflow, Discovery, Extended Search, Domino.Doc

WebSphere Portal

Workplace Messaging

IBM Learning ServicesLearning Management

Domino Base

(ICE)

Web Content Mgmt.

Compliance

Portal

Standalone Messaging

Team Collaboration

LearningManagement

SunOracle

LWM “makes sense for many companies” (Aberdeen)

IM & WCTeam WorkplaceLearningspace

Saba

IBM offers better WCM, BPM, and complementary services according to Gartner, among Smart Enterprise Suite vendors.

Workplace

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Lotus Region North SWOT

•Leveraging IBM & ValueNet to drive open standards based solutions against .NET (eg.Linux & J2EE)•Combining with other IBM offerings into unique solutions •Moving competitor customers to Lotus•Establishing leadership in H2 fragmented market•IT spending set to rise in 2005•Lotus workplace adoption

•Deferral of IT spending overall•.NET battle against J2EE •SAP portal strategy

•Large install base •Established community of Domino partners•Ability to offer complete solutions•Established technology leader across all our market segments•Growing IBM sales force to leverage

•Price pressure by "Good Enough" offerings•Workplace maturity•Customer confusion around the Lotus Workplace offerings•Go to market execution with partners for portal•Marketing programs to support channel community

Strengths Weakness

Opportunities Threats

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Market Trends

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Market Trends – Collaboration & Portal Software

• Applications increasingly drive purchase of middleware.

•Developers are a strong influencer of platform choice & are looking to leverage existing skills (VB, Domino etc.) and move into enterprise app dev (.NET or J2EE). App dev on MS.Net is growing faster than JAVA/J2EE.

• Customers are seeking integrated collaborative, portal, and content mgmt solutions from a single vendor for lower integration costs & lower TCO than best-of-breed solutions.

• On-demand pricing models are still in infancy, but IDC expects these models will be driven by large customers. Web-based conf has been in forefront; portals & live virtual classroom may be emerging opportunities.

Technology Trends

• Collab (e-mail, IM, Web conf) & Communications (phone, video conf, VoIP, etc) are converging into solutions that will change the way info workers interact & perform. In 2005, Web conf will explode as VoIP telephony reduces phone charges.

• “Future portals will demand support for a wide variety of client devices, rich client access and offline support… After 2006, the rich client may surpass the portal as the chief consumer of Web services.” (Gartner)

• Vendors are launching e-forms & other active documents that have business processes embedded and that interact with data. This market is growing to $1B by 2005.

• e-Forms, BPM, regulation and price pressure in the classic WCM space are bringing services and a vertical orientation to the forefront in doc mgmt market.

Buyer Behavior Trends

Source: Multiple analyst reports synthesized by the Lotus Market Intelligence team

• IT now commands 25-50% share of total business spending. After 2 sluggish years, analysts expect economic recovery to generate about 6% growth in SW spending in 2004.

• Compliance has surpassed ROI as the number one driver for IT investments.

• Compliance requirements will drive 50% of content management spending beginning in 2004.

• Less than half (46%) of large firms indicate their SOX compliance efforts are integrated with other compliance efforts. (HIPAA, Basel II, etc).

Business Trends

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Improve Operational Efficiency

Improve Employee Productivity

Improve Employee Access to Info

Reduce Admin Costs

Get Closer to Customer

Improve Customer Retention

Reduce Production Costs

Protect Privacy

Capture Customer Data

Reduce Time to Market

Reduce Sales/Marketing Costs

Manage Risks

Comply w/ Regulations

Integrate Supply Chain

Distribution Through Mult. Channels

Promote Customer Self-Svc

Other

Customers: What do they buy?

70%

64%

48%

53%

36%

54%

41%

18%

34%

33%

29%

38%

24%

18%

14%

28%6%

71%

44%

41%

39%

20%

22%

55%

19%

31%

18%

35%

18%

22%

24%

11%

25%

3%

89%

84%

72%

70%

58%

54%

49%

49%

49%

47%

44%

42%

36%

32%

29%

20%

3%

UK France Germany

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Customer pain points

Top 2 customer pains which are driving collaboration purchases

Improving Operational efficiency

Improving employee productivity

Single theme with several key messages

Make better informed decisions faster through B2E, B2C and B2B portals that provide integrated access to information and business applications. It is a single, secure point of access personalized to users roles.

Build better connected teams with team collaboration software that connects people together regardless of location or time zone to accelerate business processes. It’s how people communicate and collaborate with each other to work on projects or develop and share documents.

Improve responsiveness to customer needs and changes in the marketplace by connecting people to business processes, information and expertise anywhere, anytime, from any device.

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Customers : How do they buy?Reaching an SMB customer requires an ecosystems of partners, a communication targeting both IT and LOB and using different media

SIMPLE

PCsPeripherals Low end servers

COMPLEX

SolutionsMiddlewareHigh end Unix servers

Decision maker Vendor selection criteria

Influencers Channels Researching/ Evaluating

IT ReliabilityTCOCompatibility with installed systemService & Support

VARSResellersFriends/ Colleagues

MW: Teleweb, SIs, F2F Vendors sales repServers: VARS, ResellersWeb as complement of telephone/ fax

Web or teleweb

MultipleIT LOB

Industry knowledgeReputationUnderstanding of business problem Post implementation supportPriceSolutions reliabilityROI

IT consultantsSIsISVs

SIsISVsIT consultants

SolutionsISVs and SIs preferred

F2F interaction preferred, Solutionsuse of industry trade fairs and eventsUse of magazines and web

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North Region Priorities

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Lotus Region North – 2005 priorities

Increase awareness, interest and desire in the marketplace for IBM Workplace solutions

Target compliance opportunity with WPBCR

Establish Workplace as a Platform

Advance Lotus in SMB

Grow Domino Portfolio business

Maintain Portal market share and leadership

Take advantage of largest Market opportunity in SMB, particularly with WSE

Continue capturing the remaining Exchange 5.5. EOL opportunity

Version to Version opportunities Continue competitive take out actions Extend core Notes/Domino install base with add on

collaborative offerings Protect renewals business

Grow Partner adoption Competitive take out against key vendors Maintain leadership position in portal

marketplaceThe Key Risks to planBrand awareness, Brand Image and Purchase consideration and preference relative to Microsoft.

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Brand Plan

Key product priorities Workplace

Portal

Domino

Growth opportunities/focus areas Crush Microsoft

Workplace

Workplace Services Express

SMB

Key enablers of success Awareness & Enablement

……..so what is Marketing doing??

Demand Gen is critical

….but so is enablement & creating awareness!

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Thank you!