opportunities in challenging times - steve robinson

© 2009 IBM Corporation

Opportunities in Challenging Times

Steve RobinsonVice President

IBM Rational Software

IBM Rational Software Conference 2009

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What customers are saying…

Programmers Lines of Business

Corporate StrategyCFO

AuditorsProject Managers


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Tough times ahead

Sequoia Capital: “RIP: Good Times”Survival of Quickest: Cut Deep and Fast

Engineering: Decrease Headcount for Next Version

Product: What Features are Absolutely Necessary?

Spend Every Dollar As If It Were Your Last

Get Cash Flow Positive (Cash is King)

Focus on Quality

Lower Risk

The Recovery Will Be Long


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Survival of the quickest

This is what customers are expecting from IBM

“No one ever saved their way out of a downturn….it takes innovation...”Craig Barrett, CEO Intel Corporation


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Current Rational opportunity

*All numbers use Plan Rates


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The focus for solutions delivery has shifted

1. Reducing Labour Rates

2. Process Maturity and Consistency

3. Rigorous Governance and Management

4. Asset and Service Reuse

5. Increasing Levels of Automation

6. Flexible Sourcing – component level

7. Delivering Capabilities not resources

8. Software as a Service

Competitive Necessity Competitive Necessity

Competitive AdvantageCompetitive Advantage

Efficiency………Operational Stability………Innovation


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SwissRe


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SwissRe


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Services development model

DEPLOYMENT

Websphere Business Modeler

PROCESSDEVELOPMENT

PROCESSSIMULATION

PROCESS MODELLING AND USE CASE ANALYSIS

MODEL REPOSITORY

Websphere Integration Developer

Websphere Business Monitor

Rational Application Developer

WebsphereApplication Server

Rational Software Architect

IFWIFW in M1

Websphere Process Server

BUSINESS ANALYST

INTEGRATION DEVELOPER JAVA

DEVELOPER

SOLUTION ARCHITECT

MODELMANAGER

DEPLOYMENTENGINEER

SERVICEDESIGN(SOMA, BOM & IDM Customizations)

BOM, IDM as UML BOM, IDM as UML class diagramsclass diagrams

WSDL,WSDL,XSDXSD

WSDL,WSDL,XSDXSD

APMAPM

Custom bridge

BPEL, BPEL, SCASCA

UMLUMLDPMDPM

DPMDPM


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The shift from IDE to ALM

• Agile project methodologies

• Effective asset management and reuse

• Globally distributed development

• Legacy application modernization

• Requirements management

• Test automation

Longer TermBusiness Value

Realize savings < 18 months

Medium TermOperational Control

Realize savings < 9 months• Cost avoidance

• Build and release management

Short TermDevelopment Efficiency

Realize savings in <120 days


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Significant growth potential exists within our client base70% of our customers own less than 30% of our lifecycle portfolio

Strategic Core: BuildForge, CC, CQ, EGL Cobol, RAD, RQM,RFT, RPT,RAM, RRC, RSAR, RTC, RTLM, RSA, RSM, RSD, Tara, Test Mgr, Vega, Watchfire

$369M14,271Cross-sell one new deal per customer for all customers

Revenue Opportunity*# Customers

$165M6,384…Each customer with at least one** Strategic Core product

$33M1,277…20% of customers with at least one Strategic Core product

Revenue Opportunity*# CustomersCross-sell one new Strategic

Core offering to…

Upper-bound Cross-sell opportunity:

All Rational customers:

14,2717887 6384

Owns only Legacyproducts

Also owns one ormore Strategic Coreproducts

*Using average deal size - 4qt rolling average: $25.9k

Lower-bound Cross-sell opportunity:

*Using average deal size - 4qt rolling average: $25.9k

**Our largest/corporate account customers own 12+ Strategic Core products


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Business and product innovation today require a significant investment in software

For businesses and institutions everywhere,there have never been so many new possibilities

Imagine the amount of software necessary to:Deliver a green worldTake advantage of information base explosionCommunicate with a trillion devicesDrive on-going product differentiationSeize new global market opportunities

Leaders everywhere are deploying increasingly intelligent software, systems and products

Accelerating innovation and enabling effective change is highly dependent on the ability to manage effective software delivery


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Rational expands into smarter products

*All numbers use Plan Rates


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What’s Smart?Innovative technology for urban delivery trucks in stop-and-go trafficSmart software to optimize energy usage and reduce greenhouse gases

Smarter Business Outcomes60-70% increase in fuel economy, according to EPA40% reduction in CO2 emissions

How Rational Software Enables Smarter Products

Hydraulic hybrid delivery vehiclesEaton Corporation and UPS

Software modeling to optimize system performanceAutomatic generation of in-vehicle software code

“The suite of Rational tools, including Rhapsody, DOORS, ClearCase and ClearQuest, provides Eaton an integrated

software framework that allows us to deliver innovative products more

quickly and efficiently.”


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“We rely on Synergy and Change to manage the complexity of the

software and to ensure that our global development teams operate

as one, for the best result to our customers. This software from IBM is part of our livelihood; it's our DNA.”

Mobile access to medical imagesMerge Healthcare

What’s Smart?Provides medical professionals access to complex medical images on mobile devicesHelps facilitate prompt access to medical imaging data– anytime or anywhere*

Smarter Business OutcomesReduced hospital operations costsReliable, secure, scalable delivery of medical images and reports

How Rational Software Enables Smarter Products

Collaboration across globally distributed development teamsChange management across the end-to-end software lifecycle

**Product not yet released


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The innovation wave is going mainstream


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Selling in this new environment

Lessons Learned:

1. Current client relationships – our most valued asset

2. New buying behaviors emerging

3. Provocative value propositions essential

4. One-year cost savings mandatory

5. Approval and sign-off processes have changed

“Barn’s burnt down…now I can see the moon”

Mizuta Masahide


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© Copyright IBM Corporation 2009. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Rational, the Rational logo, Telelogic, the Telelogic logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others.

opportunities in challenging times - steve robinson

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