IBM Americas SMB © 2007 IBM Corporation

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IBM Americas SMB

© 2007 IBM Corporation IBM Americas SMB Infrastructure Solutions Marketing 2007

IT Optimization: Getting more out of your IT with help from IBM

IBM Americas SMB

© 2007 IBM Corporation

SMB Americas Infrastructure Solutions Marketing

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IBM Americas SMB


Poorly documented legacy applications make it expensive and time consuming to diagnose and resolve complex cross-product problems

25-50% of time is spent on problem determination and resolution

Up to 40% of today’s outages result from operator errors New applications

get delayed by maintenance of diverse existing systems

Nearly 80% of IT expenses are spent on operations, maintenance, and minor enhancements

SMBs seek less complex, lower cost and easier to manage infrastructure

Productivity

Cost

Complexity

Take Away: We need to assist our clients with reducing operational costs and improving the IT capability of their infrastructure

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IBM Americas SMB


IT Optimization Opportunity & Trends for 2007

Recent research has identified key areas of focus for IT Optimization spending:

• Infrastructure replacements/upgrades were indicated as the top IT department priority by medium size businesses. (Source: IDC US Market Watch Survey 2Q06)

• Two-thirds of the companies plan to invest in Storage or Server Consolidation over the next 18 months and upgrades (67%) comprise most of the investments.

• Nearly half of the companies plan to invest in Server or Storage Virtualization over the next 18 months and nearly 30% of the investment will be first time purchases

• In 2007, customers are planning upgrades to some solutions that have already been implemented, especially in storage and server consolidation.

Source: IBM Infrastructure Solutions Research Worldwide Report for IT Optimization Program, November 2006

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Mid-Market AG ITO Opportunity

HW SW SVCS

IT Optimization spend categories rank high among the top priorities for 2007

In Americas mid-market, ITO represents a $1.8B opportunity with a AGR of 16%

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IBM Americas SMB


Why is IT optimization important?

An optimized IT environment maximizes the performance of current and future assets, technologies, applications and services, reducing costs and making the entire

environment easier to manage in order to support the growth objectives of the company.

Cost of mgmt. & admin. 10% CAGR

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New server spending (USM$) 3% CAGR

Spending (USB$)

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Cost of People vs. Spending on new systemsComplexity is growing:• Existing computing capacity is highly underutilized• Gartner predicts that enterprises that don't leverage

virtualization technologies will spend as much as 25 percent more for their x86 servers

Improving operational efficiencies: • Agility has been made a high priority across the

organization . . .[however] only 13 percent of the CEOs rate their organization’s ability to respond to changing business conditions as very responsive **

• Reducing time spent on problem determination and resolution to maximize the capacity of IT resources

Fuel growth & innovation by managing costs:• 80% of CEO’s view growth as a key focus area

Operational costs far exceed the budgets for new hardware, they are growing at approximately 2 ½ times the compound annual growth rate*

*IDC, 2004 **CEO Study of 456 WW CEOs IBM Corporation, 2-04; Graphic: IDC Directions 4-7-04 Customer Adoption of On-Demand Enterprises.

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IBM Americas SMB


IT Optimization: The Benefits

Cost Reduction (typical)

Server Consolidation (4 to 1) Storage Consolidation (25%) Network Consolidation Support Automation (30%) Software

Flexibility & Scalability

Server Virtualization Storage Virtualization Tiered Storage Provisioning

Performance & Availability Server & Storage Utilization Server Redundancy Storage Redundancy/Tiered Provisioning Orchestration

Bu

sin

ess

Val

ue

Ability to Dynamically Respond

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IBM Americas SMB


Mid-market Value Proposition for IT Optimization

IBM and IBM Business Partners deliver solutions specifically

designed for mid-size companies built on open standards that are

flexible, proven, and safeguard current investments to improve

performance, reduce costs and make the entire environment

easier to manage to support the business and growth objectives of

the company.

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IBM Americas SMB


Selling situations

My client needs to consolidate their infrastructure to lower IT management costs (Simplification)

My client is looking to eliminate the inefficient and overbuilt IT infrastructure without losing the ability to ramp up server and storage capacity (Virtualization)

My client wants to improve network performance but has an IT staff that doesn’t have the time or skills to devote to performance improvements (Automation)

Managing costs through better utilization

Take Away: Clients can improve utilization by simplifying, virtualizing, and automating their IT infrastructure

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IBM Americas SMB


• “Most important, it makes computing cheaper since fewer servers are required to do the same work. It makes things simpler, too, since fewer machines mean less maintenance.”

• “Although the concept isn't new, it's rapidly morphing into a big deal.”

• “Call it the Virtual Revolution. Rather than being some exotic new technology that's hard to explain, this will be the normal way computing gets done.”

Virtualization Gaining Attention and Moving into the Mid-market

By Steve Hamm, June 10, 2005

Take Away: Virtualization is rapidly moving into SMB

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IBM Americas SMB


• Virtualization allows users to maximize their IT investment in hardware, middleware and applications that are not limited by their physical location

• 22% of servers virtualized today with 45% of all planned server deployments seen as potential virtualization candidates (IDC, June 2005)

What is Virtualization?

Take Away: Virtualization is not new anymore, and its value lies in simplifying infrastructure thus saving our clients $

“… virtualization plus workload management and partitioning will enable platform utilization to more than double during the next five years …”

- Dan Vogel, Key IT Operational Process Trends: 2005, META Group, January 2005

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IBM Americas SMB


Benefits of hardware virtualization

Simplification– Servers as a single managed entity

– Networking and storage consolidation

– Cost reduction

– Lower hardware acquisition cost– Higher utilization– Power savings– Lower ongoing management expenses

Flexibility in your IT environment– Ease of use and serviceability– Improved overall manageability

Take Away: Most likely IT contacts in your accounts have heard of virtualization but may feel it’s too advanced and lack the internal capability to manage

IBM System p5 Express Family with Advanced Power Virtualization

Grid and Growth

IBM Express Implementation Services for storage consolidation

IBM Managed Hosting - Virtual Server Services

Mid-market

Infrastructure Services Readiness Engagements IT Infrastructure Implementation

Infrastructure Services Architecture and Design IBM Accelerator for IT Service Management for

orchestration and provisioning IBM Accelerator for Infrastructure Services

Managed Hosting Services – Virtual Server Services

Infrastructure Services Readiness Engagements IT Infrastructure Implementation

Infrastructure Services Architecture and Design IBM Accelerator for IT Service Management for

orchestration and provisioning IBM Accelerator for Infrastructure Services

Managed Hosting Services – Virtual Server Services

SMB LE

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IBM Americas SMB


More businessvalue

More IT value

Savings reinvested

Savings reinvested

IT Optimization

Savings that result from optimizing IT can help justify investments in other IT initiatives

Take Away: Successful IT Optimization leads to cross-selling and can further feed our pipeline

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IBM Americas SMB


Thank You!For more information on IBM products and services:

IBM Concierge: 1-877-IBM-ACCESS (426-2223)

UNITED STATES - ibm.com/expressadvantage

CANADA - ibm.com/expressadvantage/ca

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IBM Americas SMB © 2007 IBM Corporation