CIO Forum Maximize the value of IT in today s economy

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1 CIO Forum Maximize the value of IT in today s economy Laura Scott, Vice President Service Product Line Sales Global Technology Services

2 IT infrastructure is reaching a breaking point. 85% idle In distributed computing environments, up to 85% of computing capacity sits idle. 1.5x 70 per $1 Explosion of information driving 54% growth in storage shipments every year. 70% on average is spent on maintaining current IT infrastructures versus adding new capabilities. $40 billion Consumer product and retail industries lose about $40 billion annually, or 3.5 percent of their sales, due to supply chain inefficiencies. 33% 33% of consumers notified of a security breach will terminate their relationship with the company they perceive as responsible.

3 As the world gets smarter, demands on IT will grow. Smart traffic systems Intelligent oil field technologies Smart food systems Smart healthcare Smart energy grids Smart retail Smart water management Smart supply chains Smart countries Smart weather Smart regions Smart cities

4 By 2011, the world will be 10 times more instrumented then it was in Internet connected devices will leap from 500M to 1 Trillion. Exabytes 1,800 1,600 1,400 1,200 1, x growth in five years RFID, Digital TV, MP3 players, Digital cameras, Camera phones, VoIP, Medical imaging, Laptops, smart meters, multi-player games, Satellite images, GPS, ATMs, Scanners, Sensors, Digital radio, DLP theaters, Telematics, Peer-to-peer, , Instant messaging, Videoconferencing, CAD/CAM, Toys, Industrial machines, Security systems, Appliances Approximately 70% of the digital universe is created by individuals, but enterprises are responsible for 85% of the security, privacy, reliability, and compliance.

5 Infrastructure needs to become more dynamic Mobility Infrastructure Facilities Infrastructure Production Infrastructure Technology Infrastructure Communications Infrastructure to bring together business and IT to create new possibilities.

6 We need to start thinking differently about infrastructure. We need a Dynamic Infrastructure. to free budget for new investment and speed deployment of new capabilities. Cost Flexibility

7 What we re hearing from clients around the world We need to cut costs We need to conserve capital We must improve employee productivity We need to do more with our existing IT We must realize ROI in less than one year

8 GTS ITS portfolio 10 Service Product Lines IT Strategy and Architecture Services Middleware Services End User Services Maintenance and Technical Support Services Integrated Communications Services Storage and Data Services Our Clients Business Continuity and Resiliency Services Server Services Site and Facilities Services Security and Privacy Services

9 Global Technology Services are designed to help Reduce costs, achieve greater IT value and improve productivity Cut costs Get more from existing infrastructure Increase productivity Defer capital expenditures Ease staffing pressures Provide immediate savings and near-term return on investment

10 Services that help clients... Cut costs IT Optimization Planning Server Consolidation Services Data Center Energy Efficiency Assessment Cloud Computing Offerings NEW!

11 What is Cloud Computing? Some use the word Cloud to describe new consumption and delivery models. Regardless of terminology, it is clear that these new models are emerging for the enterprise even if they were first inspired by consumer Internet services. Self-service, economies-of-scale, and flexible sourcing options new choices of deployment define these new models.

12 Cloud computing is about the end user. A user experience and a business model Standardized offerings Rapidly provisioned Flexibly priced Ease of access An infrastructure management and services delivery method Virtualized resources Managed as a single large resource Delivering services with elastic scaling Similar to Banking ATMs and Retail Point of Sale, Cloud is Driven by: Self-Service Economies of Scale Technology Advancement Banking Retail IT 12 IBM Confidential

13 Self-service plus standardization drives lower costs and unlocks productivity. SELF-SERVE PORTAL SERVICE REQUEST SERVICE PROVISIONING DYNAMIC INFRASTRUCTURE

14 New consumption and delivery models drive new sourcing options and business flexibility. Private Public Client owned managed by client or services provider. Access defined by client. Cloud Services Cloud Computing Model Considerations Speed & flexibility. Standardization. Security, privacy, resiliency. Standardized services on the provider s cloud. Access by subscription. GOVERNANCE

15 IBM has introduced 3 new choices to deploy workloads with greater efficiency, productivity and control. Smart Business Services cloud services delivered. 1. Standardized services on the IBM cloud. 2. Private cloud services, behind your firewall, built and/or run by IBM. Smart Business Systems purpose-built infrastructure. 3. Integrated Service Delivery Platform Analytics Collaboration Development and Test Desktop and Devices Infrastructure Business Services

16 IBM Smart Business Test Cloud A secure, private cloud environment clients can use to test applications before sending them to production Creates a more efficient test environment that improves productivity and reduces costs Includes an operating system, middleware, storage, network and virtual images, along with pre-integrated set of services, from planning through implementation Clients can leverage their existing systems or IBM s new CloudBurst Test Environments In the Cloud Customer Benefits: Reduce IT labor cost by 50% + - reduce labor for configuration, operations, management and monitoring of the test environment 75% + Capital utlization improvement; Significant license cost reduction Reduce Test Provisioning cycle times from weeks to minutes Reduce risk and improve Quality- eliminate 30% + of all defects that come from faulty configurations.

17 IBM Smart Business Desktop Cloud Characterized by thin clients, with higher levels of security and resilience, improved backup and recovery and reduced cost and complexity associated with managing the desktop/laptop environment Integrating hardware, software and services in an innovative solution Allows clients to create a private cloud that enables internetbased PCs and other devices to access applications and data through a centrally managed computing environment Maintains highest levels of quality and security in accessing critical information remotely, from any device, anywhere Helps clients quickly scale their IT infrastructures to address business demands, while reducing cost and complexity Helps clients use up to 73 percent less power than traditional desktops and laptops Customer Benefits Reduce deskside support costs by 85-90% Reduce help desk calls by 20-40% Reduce OS and application update costs Easily ensure desktop security and resiliency Use up to 73% less power over traditional fat client deployments Available as two different offerings: Implementation only services Implementation and Managed services

18 Desktop Cloud delivers significant client savings Value Proposition Deskside Support Desktop Engineering Security & User Administration Power Savings Help Desk Support Software Distribution Staff Forecast (Analyst / IBM) 90% 75% 75% 70% 50% 50% Bank n/a 75% 50% 40% 50% Retailer 85% 75% 60%-70% 30% 20%-40% 70% Desktop virtualization will replace PC replacement. Enterprises should use the budget set aside for a PC refresh to fund virtual desktop initiatives. Security Engineering Network Engineering & Support 50% 50% 80% 60%-70% -The Yankee Group

19 New deployment choices. Analytics Collaboration Development and Test Desktop and Devices Infrastructure (compute / storage) Business Services Smart Business on the IBM Cloud Standardized services on the IBM Cloud Lotus Live Smart Business Development & Test on the IBM Cloud Smart Business Desktop on the IBM Cloud Information Protection Services; Computing on Demand Smart Business Cloud Private cloud services, behind your firewall, built and/or managed by IBM Analytics Smart Business Test Cloud Smart Business Desktop Cloud Scale out File Services Smart Business Systems Pre-integrated, workload optimized systems Analytics IBM CloudBurst IBM CloudBurst Smart Business for SMB (backed by the IBM cloud) Available Future

20 Clients have achieved significant benefits Reduce IT labor cost by 50% in configuration, operations, management and monitoring. Improve capital utilization by 75%, significantly reducing license costs. Reduce provisioning cycle times from weeks to minutes. Improve quality, eliminating 30% of software defects. Reduce end user IT support costs by up to 40%.

21 Services that help clients... Get more from existing infrastructure Server Virtualization Services Storage Optimization and Virtualization Network Optimization Business of IT Executive Workshop IBM Business Resilience Planning IBM Internet Security Services

22 Server management costs impact client budgets Increased need to better leverage existing assets IDC reports that IT operational labor spend is growing at 10% CAGR % of IT budget goes toward operational overhead 85-95% of server capacity is excess nearly $140B in over expenditure IT energy costs have been rising 15% per year over the last 5 years Spending (US$B) $300 $150 Power and cooling costs X8 Server mgmt. and admin. Costs X4 New server spending 70 Logical server installed base (millions) Virtualization management gap Physical server installed base (millions) 35 Each dollar of new servers cost $0.52 to power and cool expected to increase to $0.71 in next four years $ Source: IDC, Preparing for Change: Architecture and Infrastructure Considerations for the Data Center of the Future, Doc # DCFW2008_02, April 2008

23 Storage and optimization services help clients Create a more efficient infrastructure Optimized and Resilient Increase utilization from 10%-30% up to 80% Typical TCO savings 30-70% Available 24 x 7 x 365 Reduce costs Hardware and software Maintenance Heating and cooling Managed Storage Service

24 Leading global financial services firm Improved storage utilization and increased transparency Financial Services Company Client Challenge Increase visibility across entire global storage environment Improve storage utilization Reduce over provisioning to meet dynamic business and compliance requirements in mixed vendor environment Solution IBM worked with the customer to achieve optimal levels of utilization, provisioning and transparency in the client s storage environment Client benefits Identified $12M in reclaimable assets Improved storage management with a unified architecture Aggregated reporting and analytics standardized processes Helped client avoid a planned $25M capital expense for additional storage hardware that was no longer needed due to the more efficient and productive environment

25 Services that help clients... Increase productivity Service Management Strategy & Planning Remote Managed Infrastructure IBM Managed Security Services Telecom Expense Management Converged Communications Services

26 Optimize your IT for growth IBM Converged Communications Services Quicker time to value Improved project success rate Collaborative system that is more easily supported End-to-end project implementation More competitive business models Improved customer service Improved effectiveness and productivity Business Applications Industry solutions IP Contact Center Real Time Collaboration Unified Messaging Lower TCO, increased flexibility and resiliency Video Communication IP telephony Network convergence IPTV & Triple Play Infrastructure

27 A summary view of typical savings and payback periods Savings impact 50% 40% High savings, Rapid payback Information Protection Services Up to 40%, 1-12 mo Managed Security Services Up to 55%,, First year savings Server consolidation and virtualization 30-70%, 8-24 mo IP telephony 20-40%, 12 mo Data Center Design and Consolidation 50%, mo 30% Storage Optimization 30% or more, 3-12 mo Telepresence 30%, 12 mo VIA, VIA Managed Services 15-40%, 8-18 mo Business of IT Workshop 15-30%, 12 mo 20% 10% IT Lifecycle Mgmt and Governance 15-30%, 3-18mo TEM 15%, 3-9 mo Network Optimization 10-30%, 4-12 mo IT Optimization Strategy and Planning Remote Managed 20-40%, 3-18 mo Infrastructure Services 20%, mo Low savings, longer payback Payback Period

28 This is how we can help Providing unique insight into today s interconnected, instrumented and intelligent world Providing the experience, expertise and know-how to help clients: Lower costs Achieve greater IT value Increase productivity Providing the solutions businesses need

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