1

2

Sandy CarterVP, SOA & WebSphere Marketing, Strategy, and Channels

Building a Smarter Planet in a Complex World

3

The world is Smaller.

Because it can.

Because it must.

Because we want it to.The world is getting Smarter.

The world isFlatter.

“Every human being, company, organization, city, nation, natural system, and man-made system is becoming

interconnected, instrumented, and intelligent. This is leading to new savings and efficiency—but perhaps as important,

new possibilities for progress.

Something Meaningful is Happening…

4

Insightful Smart Efficient

For us to make sense of this new world, we mustconsider how we become . . .

Responsive

5

IBM Software…

Providing a next-generation open integration platform

Building a smarter planet in a complex world

built on a Service Oriented Architecture (SOA)

customized for your industry

6

6% Share

Microsoft $21.7B

IBM $2.3BEMC $1.2B

Operating Systems

$40B 3% CGR

Middleware

$109B5% CGR

IBM $15.5

Oracle / BEA$11.3B

Microsoft $8.4B

EMC $4.1B

17%Share

Enterprise Applications

$101B4% CGR

SAP $9.0B

Oracle $5.7B

IBM (PLM) $1.1B 1% Share

Today we are #1 in middleware…2007 Software Revenue

Microsoft $1.2B

Source: (1) Only top share leaders listed; IBM share includes software revenue from IGS transactions (2) IBM GMV2H08, IBM CSV 7/08; Middleware excludes operational security; CGR is ’07– ‘12

Sun $0.6B

7

Gold Coast

Sydney

Canberra

Singapore

Perth

Yamato

India

Bangalore

Pune

Hyderabad

Gurgaon

China

Beijing, Shanghai

Taiwan

Cairo

Dublin

Haifa

Canada

Rome

Paris

StainesHursley

Boeblinge

nKrakowUnited States

California

Massachusett

s

Minnesota

New York

North Carolina

Texas

Leveraging IBM’s Globally Integrated Team

Major R&D Locations

350,000 + IBM Employees Worldwide

30,000 + Developers

100,000 + Sales, Support & Marketing

50,000+ SW Employees

Worldwide

26,000+ Developers

17,000+ Sales & Technical Sales

5,000+ Support Staff

plus … over 30,000 SW Partners

Brazil

Malaysia

8

A network of partners Building a rich and diverse ecosystem that integrates employees, clients, partners and suppliers is central to

driving share gains in high growth areas and is a key source of a competitive advantage for IBM.

At the heart of this ecosystem is our relationship with approximately 100,000 Business Partners, including consultants, integrators, software vendors, value-added resellers and distributors.

• 40,000 ISVs Worldwide

• 50,000 Reseller Partners

• 29,000 System Integrators

• 950+ Local IBM GlobalTechnology Specialists

• 13,000 Service Providers

• 190 Mid-market Alliances

• 218 Enterprise Alliances

• 500+ IBM Business Solution Profesionals

9

How we target the high-value opportunities

Invest in high-growth markets Leverage IBM’s global reach

Geographic presence Deep technical skills Industry expertise Extensive client relationships

Strengthen our hand through acquisitions Capitalize on IBM’s unique ability to deliver SOA,

Information on Demand, Web 2.0 Social Software for Business, Managed Services and Application Development solutions.

Building our software on the highest performing servers in the market, with System z at the forefront

Tap new types of clients, such as the medium business arena

Incubate new emerging, high-growth businesses

10

Information On Demand to unlock the business value of information for competitive advantage and establish Information agenda for smarter business outcomes

Next Generation Collaborationto unlock the value in the passion and expertise

of people to drive efficiency, deepen relationships, embrace change, and foster

innovation.

Service Managementto enable innovation by reducing

operational labor, improving asset productivity and quality

of service

Software Lifecycle Managementto better govern the business process of software and systems delivery, enabling innovation at lower cost

Business Process Flexibilityto develop and rapidly deploy innovative business models with flexible, optimized

processes

An open IT architectural foundation built on SOA

Providing a Next-Generation Open IntegrationPlatform

… delivering proven value to solve real business problems

11

#1Software Configuration Mgmt

#1Rational

#2Security Management

#2Tivoli

#2Collaboration

#2Lotus

#1Information Integration (incl MDM)

#1Enterprise Content Management

#2Information Management

#1Portal Server

#1Integration Server

#1WebSphere

IBM Share

PositionKey Product Segments

Sources: IBM Finance, IBM Market Analysis, Company Reports, IDC Software Tracker

Leveraging Our Portfolio to Deliver Solutionsfor a Smarter Planet

TivoliTivoli

WebSphereWebSphere

RationalRational

Information ManagementInformation

Management

Lotus

TivoliTivoli

WebSphereWebSphere

RationalRational

Information ManagementInformation

Management

Lotus

Information Platform

Data Management

Content Management

Security Mgmt

Systems Mgmt

Storage Mgmt

Transaction Processing

ApplicationServers

Business Integration

e-mail, MessagingChange and Release Mgmt

Process and Portfolio Mgmt

Business Intelligence & Performance Management

Portal

Social Software Architecture Mgmt

InformationOn Demand

( IOD )

Service Oriented Architecture

( SOA )

Next Generation

Collaboration

Service Management

IT Lifecycle Management & Governance

12

IBM has recognized the changes in the market place and are addressing it through its Smarter Planet initiative focusing on 4 themes namely “New Intelligence”, “Smart Work”, “Dynamic Infrastructure” and “Green & Beyond”

SmartWorkSmartWork

Green & Beyond Green & Beyond

New Intelligence

New Intelligence

How can we work smarter supported

by flexible and dynamic

processes modeled for the new way people buy, live & work?

How can we take advantage of the

wealth of information

available in real time from a multitude of

sources to make more intelligent

choices?

“Data is exploding and it’s in silos”

“New business & process demands ”

“Our resources are limited”

I Need InsightI Need Insight I Need to Work Smart

I Need to Work Smart

I Need Efficiency

I Need Efficiency

Dynamic Infrastructure

Dynamic Infrastructure

How do we create an infrastructure that drives down cost, is intelligent and secure, and is just as dynamic as today’s business

climate ?

“My infrastructure is inflexible and costly”

I need to respond quickly

I need to respond quickly

How do we drive greater efficiencies,

compete more effectively, and

respond more quickly by taking action now

on energy, the environment, and

sustainability?

13

Business in the emerging markets in the last 5 years was very strong for most companies. But times have changed. Emerging stock markets have fallen more quickly and more steeply than anytime in history; the price of commodities on which many emerging markets depend have fallen more quickly and more steeply that any time in history. Credit is tightening in many markets and it is becoming little consolation that consumers may have some residual buying power if distributors cannot finance purchases - Economist

14

The economic slow down in global economies have impacted the software market opportunity growth in all regions but with the growth markets showing more resilience. Globally information management continues to provide the biggest opportunity

-5.00

0.00

5.00

10.00

15.00

20.00

2006 2007 2008 2009 2010

North America IOT North East Europe IOT South West Europe IOT

Japan Asia Pacific IOT Latin America IOT

CEEMEA IOT Global

Software Market Opportunity Growth Global by Region

15%

39%8%

24%

9% 5%

Transactions & Applications

Information Management

Collaboration ManagementSystems Infrastructure Management

Application Development & Life Cycle Management

Product Life Cycle Managrement

Software Global Market Opportunity by brand 2009

15

2008 the Economist

Sub – Saharan Africa Market

SA Top Sheet

EGYPTLIBYAALGERIA

MOROCCO

NIGERMAURITANIA

WESTERNSAHARA

MALI

CHADSUDAN

ZAIRE

ANGOLA

NAMIBIA

SOUTHAFRICA

BOTSWANA

ETHIOPIA

SOMALIA

NIGERIAGUINEA

ERITREA

CENTRALAFRICAN REPUBLIC

MADAGASCAR

TANZANIA

GABON

BURKINA

GHANA

COTED'IVOIRE

ZAMBIA

ZIMBABWE

CAMEROON

TOGO

BENIN

UGANDA

KENYA

MOZAMBIQUE

LESOTHO

SWAZILAND

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

EQUATORIAL GUINEA

ANGOLA

RWANDA

BURUNDI

MALAWI

DJIBOUTI

SoaTome

Cape Verde

EGYPTLIBYAALGERIA

MOROCCO

NIGERMAURITANIA

WESTERNSAHARA

MALI

CHADSUDAN

DRC

ANGOLA

NAMIBIA

SOUTHAFRICA

BOTSWANA

ETHIOPIA

SOMALIA

NIGERIAGUINEA

TUNISIA

ERITREA

CENTRALAFRICAN REPUBLIC

MADAGASCAR

TANZANIA

GABON

BURKINA

GHANA

COTED'IVOIRE

ZAMBIA

ZIMBABWE

CAMEROON

TOGO

BENIN

UGANDA

KENYA

MOZAMBIQUE

LESOTHO

SWAZILAND

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

GUINEA

ANGOLA

RWANDA

BURUNDI

MALAWI

DJIBOUTI

SoaTome

Verde

SACA

MENA

Mauritius

• Sub-Saharan Africa has 782m people now, and will grow to 1.2bn by 2025…and 1.7bn by 2050.

• But the region is poor and fragmented into 48 markets;• South Africa makes up a third of the region’s GDP .• Along with Nigeria, they make up half of total GDP.• The remaining 46 countries have an official economy

the size of Austria or Iran.• 27 countries have less than 10m people.• 47% of the population live on <$1 a day, but this

should fall to 30% by 2015, less than China today.• Key markets: SA, Nigeria, Angola, Ghana, Kenya

Sub Sahara Africa

No of Countries 48

Population Size 782M

GDP Growth (2007 – 2011) 5.0%

IT Market Growth 3.8%

Countries with multi-party elections

40/48

EGYPTLIBYAALGERIA

MOROCCO

NIGERMAURITANIA

WESTERNSAHARA

MALI

CHADSUDAN

ZAIRE

ANGOLA

NAMIBIA

SOUTHAFRICA

BOTSWANA

ETHIOPIANIGERIAGUINEA

ERITREA

CENTRALAFRICAN REPUBLIC

MADAGASCAR

TANZANIA

GABON

BURKINA

GHANA

COTED'IVOIRE

ZAMBIA

ZIMBABWE

CAMEROON

TOGO

BENIN

UGANDA

KENYA

MOZAMBIQUE

LESOTHO

SWAZILAND

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

EQUATORIAL GUINEA

ANGOLA

RWANDA

BURUNDI

MALAWI

Tome

Cape Verde

EGYPTLIBYAALGERIA

MOROCCO

NIGERMAURITANIA

WESTERNSAHARA

MALI

CHADSUDAN

DRC

ANGOLA

NAMIBIA

SOUTHAFRICA

BOTSWANA

ETHIOPIA

SOMALIA

NIGERIAGUINEA

TUNISIA

ERITREA

CENTRALAFRICAN REPUBLIC

MADAGASCAR

TANZANIA

GABON

BURKINA

GHANA

COTED'IVOIRE

ZAMBIA

ZIMBABWE

CAMEROON

TOGO

BENIN

UGANDA

KENYA

MOZAMBIQUE

LESOTHO

SWAZILAND

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

GUINEA

ANGOLA

RWANDA

BURUNDI

MALAWI

SaoTome Mauritius

DJIBOUTI

Southern Africa

Seychelles Mayotte

East Africa

ETHIOPIA

ERITREA

TANZANIA

UGANDA

KENYA

RWANDA

BURUNDI

ETHIOPIA

SOMALIA

ERITREA

TANZANIA

UGANDA

KENYA

RWANDA

BURUNDI

DJIBOUTI

East Africa

ETHIOPIA

ERITREA

TANZANIA

UGANDA

KENYA

RWANDA

BURUNDI

ETHIOPIA

SOMALIA

ERITREA

TANZANIA

UGANDA

KENYA

RWANDA

BURUNDI

DJIBOUTI

Central Africa

ZAIRE

ANGOLA

NAMIBIA BOTSWANA

MADAGASCAR

ZAMBIA

ZIMBABWEMOZAMBIQUE

ANGOLA

MALAWI

DRC

ANGOLA

NAMIBIA BOTSWANA

MADAGASCAR

ZAMBIA

ZIMBABWEMOZAMBIQUE

ANGOLA

MALAWI

Mauritius

Seychelles Mayotte

TomeSaoTome

Cape Verde

West Africa

SOUTHAFRICA

LESOTHO

SWAZILAND

SOUTHAFRICA

LESOTHO

SWAZILAND

NIGERMAURITANIA MALI

CHAD

NIGERIAGUINEA

CENTRALAFRICAN REPUBLIC

GABON

BURKINA

GHANA

COTED'IVOIRE

CAMEROON

TOGO

BENIN

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

EQUATORIAL GUINEA

NIGERMAURITANIA MALI

CHAD

NIGERIAGUINEA

CENTRALAFRICAN REPUBLIC

GABON

BURKINA

GHANA

COTED'IVOIRE

CAMEROON

TOGO

BENIN

CONGO

SENEGAL

THE GAMBIA

GUINEA- BISSAU

SIERRA- LEONE

LIBERIA

GUINEA

SA GMR is split into 4 Regions, within these regions a number of Tier 1 countries which act as a “beach head” for these regions

16

Although significant dip in GDP forecasts for the region, an average GDP growth of 3.1% expected

Source: IBM GMV Jan 09 Economic Forecast and Economist

-2

0

2

4

6

8

10

SA GMR South Africa Nigeria Kenya Rest of SA GMR

Recession Zone

08/07 GDP Growth

09/08 GDP Growth

GD

P G

row

th (

%)

The restoration of confidence should start emerging by 2010, however, some positive impact on business might have to wait the end of 2010 or early 2011 Source: The Economist Intelligence Unit

SubSA GMR - Real GDP, Atlas-Based - Growth by Quarter

0%

2%

4%

6%

8%

10%

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

4Q08 QMV 1Q09 QMV

SA GMR

Rea

l GD

P G

row

th p

er Q

uar

ter

We are here

Economic Impact Market Impact

2008 SubSA AGR =7.2%

SA GMR: Countries - Brand: Total End-User (GMV Compare) - Industry: Total

South Africa

Rest of SA GMR

0%

2%

4%

6%

8%

10%

-1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0Market Size ($B)

Ma

rke

t G

row

th (

%) 6%

7%

South AfricaRest of SA GMR

2009 SubSA AGR =3.8%

3.2%

3.9%

9.1%

7.0%

2008

2009

17

SA GMR Economic Forecast – Indications of significant downturn but not all doom and gloom

Topic Summary Outlook

Growth Economic growth set to slow, notably in Southern and West Africa

Inflation Set to ease after the oil and food price declines

Currency Rand led the charge, now the regional currencies are under pressure

Politics Kenya and Ghana election uncertainties are behind us. Only South Africa, Namibia and Botswana to hold elections this year

Country Summary Outlook

Botswana Stagnation as diamond exports suffer

Ghana Inflation, currency and budget problems but the economy keeps moving

Kenya Political improvement, an economy that's holding up, but a worsening current account

Mauritius Exports and tourism suffering

Namibia Miners hit, but interest rates set to ease

Nigeria Adjusting to a halving in oil prices

South Africa Cyclical downturn, rate cuts and ongoing fears over the rand

Tanzania Will donor aid keep flowing in?

Uganda Hurt by commodities, and will weather hold up?

Macro Economic Snapshot

Source: RMB Research; Jan 09

18

Economic conditions translates to a significant slow down in the IT market but still an average growth rate of 3.8% expected for 09/08. Growth rate for hardware to remain flat but software and services shows positive growth between 2% and 7%.

* South Africa = Plan Rate; Rest of SA GNR Constant Rate

Sector Overview - Region: Sub-Saharan Africa IMT -Brand: Total End-User (GMV Compare)

FSS

COM

IND

GB (<1000)

CSI

PUBDIS

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5FY09 Market Size ($B)

FY

09 M

arke

t G

row

th (%

)

SA GMR AGR =3,8%

Brand

Sector/Industry

Source: IBM GMV 4Q08, industrialization

SubbrandOverview - Region: Sub-Saharan Africa IMT - Industry: Total

Servers

Storage

Appl. Outs.

SO

ITSMiddleware

Applications

Consulting

BPO

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-0.5 0.0 0.5 1.0 1.5 2.0 2.5-1%

-2%

-3%

SA GMR AGR =3.8% *

SubbrandOverview - Region: Sub-Saharan Africa IMT - Industry: Total

Servers

Storage

Appl. Outs.

SO

ITSMiddleware

Applications

Consulting

BPO

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-0.5 0.0 0.5 1.0 1.5 2.0 2.5

FY09 Market Size ($B)

FY

09 M

arke

t G

row

th (%

)

-1%

-2%

-3%

SA GMR AGR =3.8% *

Outsourcing

Hardware

SubbrandOverview - Region: Sub-Saharan Africa IMT - Industry: Total

Servers

Storage

Appl. Outs.

SO

ITSMiddleware

Applications

Consulting

BPO

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-0.5 0.0 0.5 1.0 1.5 2.0 2.5-1%

-2%

-3%

SA GMR AGR =3.8% *

SubbrandOverview - Region: Sub-Saharan Africa IMT - Industry: Total

Servers

Storage

Appl. Outs.

SO

ITSMiddleware

Applications

Consulting

BPO

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-0.5 0.0 0.5 1.0 1.5 2.0 2.5

FY09 Market Size ($B)

FY

09 M

arke

t G

row

th (%

)

-1%

-2%

-3%

SA GMR AGR =3.8% *

Outsourcing

Hardware

19

In IBM’s Central Europe, Middle East and Africa Region, South Africa provides the 3rd largest software market opportunity

Source: GMV Jan07

Market Opportunity (USD$M)

CEEMEA IOT: Countries - Brand: Software Group (incl. PLM) - Industry: Total

Russia

Egypt

Poland

Czech Republic South Africa

Other CIS

Turkey

Hungary

Baltic States

SlovakiaUkraineOther ME

North Africa

CroatiaSlovenia

Bulgaria

Central Africa

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

2009 Market Size ($B)

Mar

ket

CA

GR

09/

07 (

%)

Bubble size = 2007-2009 incremental market size ($M) Market Opportunity (USD$M)

CEEMEA IOT: Countries - Brand: Software Group (incl. PLM) - Industry: Total

Russia

Egypt

Poland

Czech Republic South Africa

Other CIS

Turkey

Hungary

Baltic States

SlovakiaUkraineOther ME

North Africa

CroatiaSlovenia

Bulgaria

Central Africa

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

2009 Market Size ($B)

Mar

ket

CA

GR

09/

07 (

%)

Bubble size = 2007-2009 incremental market size ($M)

20

Market 2009 - SWG - Region: South Africa - Industry: Total

AIM14%

IM42%Lotus

7%

Tivoli21%

Rational8%

PLM8%

South Africa Software Market Forecast 2009, indicates biggest opportunity related to IM, with estimated market opportunity of $336m, 42% of total software market opportunity, total market growth decelerated from 10.4% in 2008 to 5.1% in 2009

Mark

et

Op

port

un

ity S

plit

Source: QMV Jan 09

CSI2%

FSS24%

COMMS17%

DISTR9%

INDUSTR18%

PUBLIC30% South Africa Sectors Split

by Total Software Contribution (Large

Enterprises): 2009 indicates biggest market

opportunities in Public Sector and Financial

Services

CSI5%

FSS21%

COMMS9%

DISTR37%

INDUSTR23%

PUBLIC5%

South Africa Sectors Split by Total Software Contribution

(SMB): 2009 indicates biggest market opportunities in

Distribution and Industrial Sectors

21

According to Gartner, there are four emerging disruptive trends in the Software Industry.  These trends are reshaping software as we know it and will likely cause major disruptions to vendors, especially in how vendors go about distributing their software

• Rise in New Technologies and Convergence of Existing Technologies

• Change in Software User and Support Demographics

• Revolutionary Changes in Software and How it is Consumed. 

• Software Market Moves to Mega vendors Supporting Large Ecosystems. 

Source: Gartner, Oct 2008

22

Current changes in economic environment affect all global markets…

Dis

rup

tive

Unprecedented constraints on access to credit and capital

Falling demand, increased price sensitivity

Disruption in supply chains

Tra

nsf

orm

ativ

e

Restructuring of industries

New regulatory regimes

Stress on global inter-dependencies

Urgency for real change is a plus: people want it

Month-to-month cost management is not

enough

Firms must examine on-going business and

IT efficiency

23

Bring down on-going costs in nine months or less

1. Gain real-time insight into all your cost structures

2. Squeeze cost out of your assets

3. Reduce your infrastructure costs• Cut 30-50% of your data storage management costs

• Get 50% more of your existing storage capacity

• Spend less on keeping your IT apps in sync

• Spend less on keeping your Web sites secure

• Cut up to 50% of your travel and phone expenses

4. Reduce the cost of doing business• Eliminate the costs of handling and storing paper docs

• Reduce operational costs by automating forms handling

• Cut your product management costs

• Reduce your time to revenue

- Cognos FPM

- Tivoli EAM

- IBM Optim

- SVC

- WS ESB / Datapower

- AppScan

- Sametime

- FileNet

- eForms

- Focal Point

- Biz Events

Payback time is typically 1 – 9 months based on exact project scope.Cost reduction numbers are indicative and may vary.

24

• IBM Africa Innovation Centre, an enablement facility for crucial ICT skills with capabilities for Software Solutions development, Cloud Computing, Banking Centre of Excellence, and will critically advance the creation of new quality jobs.  

• Integrated Delivery Centre facility which has created 1500 direct and thousands more indirect jobs since its launch in 2006.  

• A $15 million Business Continuity and Recovery Services facility.  • Skills development initiatives that have produced more than 250 specialist IT professionals

from mainly previously unemployed Black graduates over the last three years • The Makocha Minds mentorship programme benefiting African university students by

matching them up with 250 IBM's Distinguished Engineers and senior leaders worldwide.  • Finance grid and small business toolkit - both aimed at provide tools and online

infrastructural support to boost small businesses.  • The $1.5 million Blue Gene supercomputer donation to the  Centre for High Performance

Computing, to benefit academic and social research projects including in Bio Informatics, Climate Change, and Mineral Beneficiation.

• IBM will implement Africa Innovation Centre's concepts at the University of Nairobi, setting up a laboratory there by early 2009, and possibly in one or two other African countries, such as Nigeria, later in the year.

IBM's commitment to the Sub Saharan Africa region's economic growth and development is best demonstrated by its $300 million investment over the last five years.  This investment has gone into strengthening existing and establishing new IT services delivery capabilities as well as into building a sustainable skills base for the benefit of IBM's clients such as MTN, the industry and economy at large.

25