Business of acquisitions

Zoran HrusticDirector of SalesIBM Software Group CEEMEA

Business of acquisitions

• IBM Strategy and why do we do acquisitions• What does it mean to our clients globally from

overall solution perspective• What relevance this strategy has to South

African Market• Why should you feel good about it

2009 – A Year of Challenge & Opportunity

“IBM has also adjusted its M&A strategy to follow suit. Its biggest acquisitions of late – Cognos, FileNet, and PricewaterhouseCoopers – have all added to the technology giant’s already formidable data acquisition, analysis, and consulting capabilities.”

IBM SWG Acquisitions

“….we reach a point where we cannot create certain things. Sometimes there are things that are a little bit outside of our core competency and we leverage acquisitions as a way to bring that competency into IBM, expand the footprint of inventiveness that we have and then thereby increase the portfolio …

…clearly we are bringing in a lot of deep technical skills that in their own rights bring strong, inventive characteristics to the table.”Steve Mills, Senior VP and Group Executive, SWG

Internal IBM Software TalkApril 2008

IBM SWG has made 52 software acquisitions since 2000, including 8 in the first 4 months of 2008.

IBM’s Strategy

Focus on open technologies and high-value solutions

Deliver integration and innovation to clients

Become the premier Globally Integrated Enterprise

Invest in high growth market segments

Leverage IBM’s global reach• Geographic presence• Deep technical skills• Extensive client relationships• Accelerate business through Value Partners

Capitalize on IBM’s unique ability to deliver SOA, Information on Demand, Web 2.0, Management Services, and Application Development

Selectively acquire software companies to extend the product portfolio

IBM Software Revenue Growth Strategy

Evolution Towards Middleware

SoftwareDevelopment

Servers Storage

Linux Unix Windows OS/400 z/OS

SystemsManagement

& Security

Transactions,Messaging &Integration

HumanInteraction &Collaboration

BusinessProcesses

Applications

Systems

MiddlewareInformation

Management

Software Solutions Portfolio

Tivoli

WebSphere

Rational

Information Management

Lotus

Information Platform

Data Management

Content Management

Security Mgmt

Systems Mgmt

Storage Mgmt

Transaction Processing

Application Servers

Business Integration

Change and Release MgmtProcess and Portfolio Mgmt

Business Intelligence

Architecture Mgmt

InformationOn Demand

( IOD )

Service Oriented Architecture

( SOA )

Next Generation Collaboration

IT Service

Management

IT Lifecycle Management &

Governance

Content ManagementContent ManagementSocial ComputingSocial Computing

Messaging & CollaborationMessaging & CollaborationUnified CommunicationsUnified Communications

Situational Applications & Integration Situational Applications & Integration

Major Reasons for IBM Software Group Acquisitions

• Strategic• Target high-value, high-growth market segments • Extend portfolio into adjacent market segments• Market consolidation

• Technology• Accelerate delivery of capabilities we lack

• Skills• Infusion of innovative talent

High profile entry

Highly complementary technology buys

Gain time to market

Companies with significant revenue streams

Retain customers and leverage install base

Achieve cost and expense synergies

+ ++ Buy market

leaders in growth segments

Strong ecosystems

Large customer install bases

Usually command premium valuations

Bold Market Bold Market EntryEntry

Complementary Complementary (Point) Products(Point) Products

Opportunistic Opportunistic ConsolidationsConsolidations

Market Market LeadershipLeadership

Augmenting organic growth with strategic acquisitions

Expanding Our Platform Through AcquisitionsEmpowering People

Pathware (1999) Web based e-LearningAptrix (2003) Web Content MgmtPureEdge (2005) Secure xml e-FormsBowStreet (2005) Development Tools for

Portals

WebDialogs (2007) Online meeting &

collaborationNet Integration Tech

(2008) Small business server-

solutions

Lotus (1995) Collaboration &

ProductivityDatabeam (1998) Realtime & Distance

LearningUbique (1998) Instant Messaging &

ChatONEstone (1999) Workflow

Service ManagementRembo (2006) Automatically install or

upgrade OS on multiple systems

MRO (2006) Asset & Service MgmtISS (2006) Internet Security

Systems SW & ServicesDORANA (2006) SW Asset MgmtVallent (2006) Network Performance

Monitoring & Service Mgmt for Wireless

Consul (2006) Compliance & Security

AuditEncentuate (2008)Identity & access

management software

KnowledgeX (1998) Complex Data MiningIW Manager (1998) Query ManagerInformix (2001) Distributed Unix DBsTarian (2002) Record ManagementCrossAccess (2003) Info access to Mainframe

DBsGreen Pasture (2003) Compound Document

Mgmt

DataMirror (2007) Real-time data

integration & data protection

Princeton Softech (2007)

Database archiving & test data management

Cognos (2008) BI & Performance Mgmt

PlatformSolid Information

Tech (2008) Real-time, all-the-time

info access

DWL (2005) Customer Data

Integration & MgmtiPhrase (2005) Adaptive info delivery &

discoveryLAS (2006) Mult-cultural name

recognitionUnicorn (2006) Enterprise Metadata

MgmtFileNet (2006) Business process &

Content Mgmt

Think Dynamics (2003)

Automated server provisioning (orchestration)

Candle Corp (2004) Systems Mgmt &

MonitoringCyanea (2004) Web Performance Mgmt &

MonitoringIsogon (2005) IT Asset MgmtCollation (2005) App centric views of cross-

tier IT infrastructureMicromuse (2005) Network MgmtCIMs Labs (2006) Track usage of resources

across virtualized technology environments

Tivoli (1996) Centralized Systems

MgmtUnison (1997) Job SchedulingDBMX (1997) Distributed DB MgmtDascom (1999) Security Access ControlSANergy (1999) Storage MgmtAccessible Software (2000)

Mainframe Systems Mgmt

Metamerge (2002) Directory IntegrationTrelliSoft (2002) Storage MgmtAccess360 (2002) Identity Mgmt

Information on DemandTrigo (2004) Product Info MgmtAlphablox (2004) BI Analytics & AlertsVenetica (2004) Access/Integrate

unstructured info through SQL query

SRD (2005) Identity resolution Ascential (2005) Enterprise Data

Integration

Software Lifecycle Management

Rational (2002) Team-based end to

end development tools

Information Lab (2003)

Development tool technology

Systemcorp (2004)

Project Portfolio Mgmt

BuildForge (2006) Product development

teams document what was created, developed & deployed

Watchfire (2007) Security & compliance

testingTelelogic (2007) Development SW for

complex embedded systems

Object Tech. (1996) Object TechnologyOpenOrders (2000) Order ManagementCrossWorlds (2002)

Business Process Integration

Holosofx (2002) Business Process

Modeling & MonitoringGluecode (2006) Open source Java

DataPower (2005) Secure application-level

messaging & xml processing

Webify (2006) Industry-specific SOA SWAptsoft (2008) Business-event

processingILOG (2008)

Business rules and cross industry solutions

Business Process Flexibility

Application Infrastructure

Storage

Linux OS/400

Growth through acquisitions

Processes

SystemsEnvironment

Applications

MiddlewareEnvironment

Metamerge MicromuseRembo VallentDORANA (Ubiquity) ConsulEncentuate TrellisoftAccess360 Think DynamicsCandle CyaneaIsogon TivoliCollation MROCIMS Lab FilesX

CrossWorldsHolosofxGluecodeDataPowerWebify SolutionsAptSoftInfoDyneILOG

z/OS

RationalInformation LabsSystemCorpBuildForgeWatchfireTelelogic AB

InformationManagement

SoftwareDevelopment

SystemsManagement

& Security

Transactions,Messaging &Integration Collaboration

UbiqueONEstonePathwareNet ObjectsLotusAptrixBowstreetPureEdgeWebDialogsNet Integration

Servers

Unix Windowsz/OS

Informix SRD Tarian DWLTrigo iPhraseCrossAccess FileNetAlphablox Venetica DataMirror Green PasturesUnicorn Software AscentialPrinceton Softech Cognos Language Analysis Solid

Note: Acquisitions since Jan 2001

Information Integration

Trusted Information

Performance Management

Business Intelligence

Business Optimization

Structured Data

ESB

SOA

Business Spaces

Dynamic Processes

Enterprise Rules

Transactions

Protected Storage

TSM/HSM

Tiered Storage

Information Infrastructure

Office Productivity

Collaboration

Mashups

FormsWCMLeveraging IBM SWG

Information Management

• Filenet– 1 sales person– 0 engineers– 1 business partner – Very few customers/1200

users

• IBM/Filenet 2009– 8 sales specialists– 4 engineers, 5 IT architects– 4 business partners– Dozens of

customers/18000 users

Information Management

• Cognos– 5 sales person– 6 engineers– 7 certified partners– 1400 customers

• IBM/Cognos 2009– 7 sales specialists– 11 engineers

6 IT architects– 8 certified partners– About 2000 customers

Information Management

• Princeton Softech 2007– 0 sales person– 0 engineers– 2 certified partners– Handful of customers

• IBM/Optim 2009– 2 sales specialists– 2 engineers

6 IT architects– 3 certified partners– Dozen customers

Tivoli

• Micromuse– 0 sales people– 0 engineers– 1 partner– 3 customers

• IBM/Netcool 2009– 4 sales specialists– 3 engineers

5 IT architects– 3 certified partners– 12 major customers

Tivoli

• MRO– 0 sales people– 0 engineers– 1 partner– 3 customers

• IBM/Maximo 2009– 1 sales specialists– 1 engineers

2 IT architects– 1 certified partner– 8 customers in SSA

IBM Software Acquisitions: Partners for Growth

Zoran Hrustic

zoran@ae.ibm.com