Innovation Conference Cloud based intelligent future services an IBM perspective

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1 Innovation Conference Cloud based intelligent future services an IBM perspective Veszprém, March 30th Pongrácz, Ferenc COO, IBM Magyarország

2 IT Industry growth is recovering with high growth areas appearing % Growth 25% 20% 15% 10% Total IT at Constant Currency Target high growth/high value opportunities (09-15 CGR) Growth Markets (9%) vs. Mature Markets (3%) Analytics (6%) vs. Applications (4%) Solutions (6%) vs. Point Products (2%) Cloud (25%) vs. Traditional (3%) Growth Markets CGR 9.0% 5% 0% -5% Major Markets '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 4.4% 3.1% -10% Major Mkts Growth Mkts Total Source: IBM Market Insights analysis, using GMV2H10 (July 2010) and QMV4Q10 (October 2010)

3 IBM s strategy and growth initiatives are expanding our opportunities New IBM s Growth Landscape Focus on open technologies and high- value solutions Deliver integration and innovation to clients Become the premier Globally Integrated Enterprise Markets/Buyers Traditional Growth Markets Industry Frameworks, Smarter Computing Traditional Cloud Computing Offerings Smarter Planet Business Analytics New 3

4 Smarter Planet solutions are having an impact around the world Smarter Planet Stockholm, Sweden Smart Transportation Congestion charging has reduced traffic by 25% with a 4 year payback on a $120M investment New York, NY - Smart Cities Coordinated Building Inspection and Data Analysis System, Implementing business intelligence technologies including predictive modeling and advanced data analytics, to anticipate fire exposures, analyze possible impacts, and collect and disseminate data on building inspection, permits and violations Rotterdam, Netherlands Smart Energy, Utility and Environment Designing and testing a monitoring and forecasting system for smarter water and energy management Exploring with the City additional opportunity areas such as carbon management in logistics processes Dublin, Ireland Smart Public Transport Implementing an integrated IBM back-office system (ticket and smart card management, central reconciliation and settlement services) to all public transport providers Galway Bay, Ireland Smart Bay Deployed a new maritime monitoring solution that collects and disseminates environmental information in near real time to institute staff, researchers, businesses and the public Deployed sensor platforms to monitor environmental conditions (e.g., wave height, tidal flow and phytoplankton levels), pollution levels and local marine life throughout the bay Valetta, Malta A Smart Grid Island Replacing all 250,000 analog electricity meters with new smart meters Integrating water meters and advanced IT applications to enable remote monitoring, management and meter readings Enabling residents to track energy use online and change consumption habits 4

5 Business Analytics and Optimization represents the next major evolution of business change and client investment Business Analytics 2X Client Investment in Business Analytics and Optimization Projects is growing over twice as fast as Business Automation Business Business Analytics and Optimization Business Automation $566B 3% CGR $125B 6% CGR Business Analytics and Optimization GBS BAO Business Intelligence GTS Outsourcing Support Business Analytics STG ISAS POWER7 System x Storage Resource Planning Business Automation SWG / IM Base Info Mgmt ILOG SWG / BA Cognos SPSS 5

6 IBM is well positioned to capitalize on this trend Business Analytics Making Investments to Meet Demand $11B investment acquiring 18 companies since 2005 Over 8,000 dedicated consultants Optimized hardware and software offerings Largest math department in private industry Business Analytics & Optimization Solutions Financial Services Public Distribution Industrial Communications Financial Performance Management Human Capital Management Performance Management and Analysis Cross Industry Business Analytics & Optimization Platform Predictive Analysis Trusted Information Platform Information Integration & Master Data Management Data Warehousing Supply Chain Management Customer Relationship Management Process Optimization Enterprise Content Management Data Management Workload Optimized Systems & Services 6

7 Cloud is a small slice of total market, but growing rapidly Cloud & Next Gen Data Center Cloud Computing Worldwide % CAGR IT Spend ($B) 800 Cloud Computing Traditional IT Traditional IT % CAGR 200 Source: IBM GMV 2H10, IDC, IBM (MI) % 15% Cloud spend as % of total served IT 7

8 Cloud computing is the provisioning of dynamically scalable and often virtualized resources as a service over the internet (public cloud) or intranet (private cloud). Business Perspective IT Perspective A user experience & business model Standardized, self service offerings Rapidly provisioned services Flexibly priced An infrastructure management and services delivery method Virtualized resources Managed as a single large resource Delivered services with elastic scaling 8

9 Consolidation and Virtualization provide the technology basis for Cloud enabled solutions Manage physical and virtual worlds from one place. Manage the lifecycle of virtual systems and images. Automate to assure quality and reduce costs. Service Management Server Virtualization Reduce costs & complexity. Eliminate sprawl helping to reduce operating costs and increase asset utilization. Help enable rapid provisioning of your server. Virtualize for more dynamic deployment. Storage Virtualization Dynamically adapt. Unify your storage into a single reservoir of capacity. Change storage and move data without interrupting applications. Manage storage in a consistent manner from a central point. Application Virtualization Improve service delivery. Dynamically deliver resources where needed most. Help increase application availability and improve application performance. Easily deploy applications as software appliances. Networking for Virtualization Client Virtualization Centralize client management. Centrally manage client images to lower support costs and improve security. Deploy thin client devices to lower acquisition costs. Consolidate desktop images to reduce storage. Get anywhere, anytime access. Cloud Computing

10 Standardization is the disruptive force that will enable the industrialization of IT Learning COMPANY TECHNOLOGY BENCHMARK WHAT BECHTEL LEARNED COM PANY Reference BECHTEL Company Wide-Area Network $10-$15 per megabit $500 per megabit Data Centers located where there is already a lot of bandwidth lowers cost and bring data to the network Servers 1 System Administrator per 20,000 servers 1 System Administrator per 100 servers Built whatever, whenever, wherever business wanted. Google standardized server infrastructure Virtualization Storage costs 15 cents per gigabyte per month Storage costs $3.75 per gigabyte per month Storage was 'cheap' because storage was virtualized and more highly utilized Applications 1 Application for 1 million users. Upgraded 4 times per year 230 Applications up to 5 versions each; Upgrades and training were constant Converting 50 most heavily used applications into single instance software as a service apps run from a Google like portal

11 Business Architecture Alignment Information Systems Architecture Metadata Data Model Information Transformation Information Placement & Structure Provide a baseline of agreement by educating all stakeholders on the fundamentals of Enterprise Architecture Assess the existing IS Architecture for a selected set of LOBs Develop metadata technical strategy Define the information integration architecture Extend the Information Integration Architecture for placement & structure optimization Document business directions and IT s alignment with them, across the enterprise Establish a cross-functional Information Architecture (Data Administration) team Develop an overall IS enterprise architecture framework to guide the enterprise Pilot Metadata integration with key tools and applications Extend the information integration architecture across the organization & technologies Optimize data & content placement and structure across all LOBs & technology silos Develop and implement enterprise-wide business architecture initiatives Establish data entity naming standards Develop and execute an IS Architecture roadmap across the enterprise Integrate information transformation with common metadata and data cleansing services Document business glossary into metadata repository for some LOBs Integrate data placement with the Information Lifecycle Management implementation Define and document common semantics (business glossary) across LOBs for some subject areas We believe there are 6 steps to developing a Cloud infrastructure strategy 1 Understand Strategic Direction 2 3 Analyze Workload Determine Delivery Models High IT Provider Relationship Profile Provider researches, recommends and implements Enabler technology to enable quantum leap in business capability Benefit Provider works with others to develop a Partner service and provide resources/skills necessary to support the service Provider of a quality service at a cost equal to or Utility lower than the competition , Collaboration Test and Pre- Production Software Development Data Intensive Processing Enterprise Trad IT Private Public Commodity Provider of an adequate service at a cost lower than the competition Database ERP Hybrid Cost High Analyze Infrastructure Gaps Determine ROI Build Roadmap 01. IT Host Resources 03. IT Storage Resources Enterprise Architecture 04. IT Network Resources 02. IT Distributed Resources Master Data Management Assess current state Enterprise Exploratory Departmental Exclusive Open Integration Scope of services Identify required Develop roadmaps Determine future state capabilities and initiatives Information Integration Phase 1 Phase 1 Phase 2 Phase 2 Phase 3 Phase 3 Phase 4 Phase 4

12 An architectural model that includes standards based interfaces is key Business Requirements drive Service Offering Patterns Customers using cloud computing to supplement traditional IT Need consistent capability to monitor and control heterogeneous components across traditional IT and cloud Loosely coupled workloads emerging Analytics, app. dev, collab/ are among the largest workloads Technical Requirements drive IT Management Patterns Trust, security, availability, SLAs top adoption factors for cloud Internal/external cloud interoperability a major concern for enterprises Self service paradigm to manage clouds using a portal requires robust and easy to use service management solution Traditional IT infrastructures 1 User Interface Service Delivery Portal Common Cloud Service Platform API Cloud Service Offerings Common Cloud Platform API BSS Business Support Services Metering Loosely Coupled Workloads OSS Operational Support Services Service Provider Portal Analytics Workloads Storage/Data Integration Workloads Transactional Workloads PaaS Tooling Integrated Developer and Admin Tools BSS plugin PaaS specific user roles OSS plugin Service Templates, Mgmt Plans Reporting & Analytics Service Development Portal Service Business Manager Service Operations Manager Security & Resiliency Virtualized Infrastructure Server, Storage, Network Most enterprises will have hybrid environments Licensing and security will need to span traditional IT, private and public clouds 2 Portal is key to access catalog of services and to manage security/ access services 3 Workloads based framework to define cloud service offerings Identify workloads to optimize through pilots to evaluate for business value and differentiation 2 HW, SW and Services to set up virtualized infrastructures a component supply opportunity

13 IBM Cloud service provider platform CREATE Rapidly Launch Partner Enabled Apps/Services Infuse Creativity Into the Service Portfolio Market White Labeled IBM Cloud Services MANAGE Exploit Advanced Automation Rely on Carrier Grade Performance and Unmatched Scalability Deliver Highly Secure, Quality Assured Services MONETIZE Maximize Effectiveness of Sales Channels Leverage Intelligence for Differentiation Optimize Self-Service Web Portals Ignite Innovation and Differentiate the Service Portfolio Leverage Integrated Service Management Energize Cloud Sales & Optimize the Customer Experience

14 Becoming a Cloud Service Provider Getting Started Invest time in developing a cloud services business strategy Leverage your corporate strengths Align your cloud and traditional service offers Choose partners that can help you grow Invest in an integrated cloud services management platform Build in appropriate security and performance specifications Establish automated partner processes Support on-demand customer self care Rely on business analytics to anticipate the future Enable your sales force

15 IBM s strategy and growth initiatives are expanding our opportunities New IBM s Growth Landscape Focus on open technologies and high- value solutions Deliver integration and innovation to clients Become the premier Globally Integrated Enterprise Markets/Buyers Traditional Growth Markets Industry Frameworks, Smarter Computing Traditional Cloud Computing Offerings Smarter Planet Business Analytics New 15

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