IBM Infosphere
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Software Steve Mills Senior Vice President and Group Executive Software Group Software Performance A Decade of Growth Revenue + $3.2B Grew revenue 1.7X and profit 2.9X + $5.6B expanding margins 13 points $18.2B$18.2B $21.4B$21.4B #1 Middleware Market Leader * $12.6B$12.6B Increased Key Branded Middleware 2000 2006 2009 from 38% to 59% of Software revenues Acquired 60+ companies Pre-Tax Income 34% Increased number of development labs Margin globally from 15 to 42 27% 7 pts Margin 2010 Roadmap Performance Segment PTI Growth Model 12% - 15% $8.1B$8.1B 21% 6 pts • Grew PTI to $8B at a 14% CGR Margin • Expanded PTI Margin by 7 points $5.5B$5.5B $2.8B$2.8B ’00–’06’00–’06 ’06–’09’06–’09 Launched high growth initiatives CGRCGR CGRCGR 12%12% 14%14% • Smarter Planet solutions 2000 2006 2009 • Business Analytics & Optimization GAAP View © 2010 International Business Machines Corporation * Source: IBM Market Insights 04/20/10 Software Will Help Deliver IBM’s 2015 Roadmap IBM Roadmap to 2015 Base Growth Future Operating Portfolio Revenue Acquisitions Leverage Mix Growth Initiatives Continue to drive growth and share gain Accelerate shift to higher value middleware Capitalize on market opportunity * business • Middleware opportunity growth of 5% CGR Invest for growth – High growth products growing 2X faster than rest of • Developer population = 33K middleware Extend Global Reach – Growth markets growing 2X faster than major markets • 42 global development labs with skills in 31 – BAO opportunity growth of 7% countries Acquisitions to extend capabilities and enhance portfolio • 1/3rd of middleware sales force in growth markets Align investments to higher growth areas Leverage broader IBM • 70% of investment directed to high growth products Operating pre-tax income long-term growth model: 12% to 15% Positioned to contribute 49% of IBM profit in 2015 © 2010 International Business Machines Corporation * Source: IBM Market Insights 04/20/10 IBM Software Strategy DECISIONDECISION MAKINGMAKING InformationInformation AgendaAgenda Real-timeReal-time AnalyticsAnalytics BUSINESSBUSINESS PROCESSPROCESS && SOASOA HUMANHUMAN CAPITALCAPITAL MGMTMGMT IntegrationIntegration CollaborationCollaboration OptimizationOptimization KnowledgeKnowledge CaptureCapture ServiceService ManagementManagement SoftwareSoftware && SystemsSystems LifecycleLifecycle ManagementManagement © 2010 International Business Machines Corporation Leveraging Our Portfolio to Deliver Solutions Portal Software and Systems Delivery Solutions Application Infrastructure Governance and Lifecycle Management Connectivity Integration Productivity and Automation Business Process Management WebSphere Service Management Rational Data Management Information Asset Management Tivoli Management Information Integration Content Management Security Management Lotus Cognos e-mail, Messaging Business Analytics & Optimization Social Software Financial Performance Management Collaboration Query, Reporting, Scorecards, Dashboards Service Oriented Information Business Next Service Software & Architecture On Demand Analytics & Generation Management Systems ( SOA ) ( IOD ) Optimization Collaboration Lifecycle Mgmt © 2010 International Business Machines Corporation Leveraging Our Acquisitions to Deliver Solutions Rational CrossWorlds AptSoft* Information Labs Holosofx InfoDyne* SystemCorp Rational WebSphere Gluecode ILOG* BuildForge DataPower Lombardi* Watchfire* Information Webify Cast Iron* Tivoli Management Telelogic AB* Ounce Labs* Lotus Cognos Informix Ascential Tarian DWL Metamerge Rembo CrossAccess iPhrase TrelliSoft Ubiquity Green Pastures LAS Access360 MRO Trigo Unicorn Aptrix Think Dynamics Vallent* Alphablox FileNet PureEdge Candle Consul* Venetica Data Mirror* Bowstreet Princeton* Cyanea Systems Encentuate* SRD WebDialogs* Guardium* Isogon FilesX* Solid* Net Integration Tech* Cognos* Initiate* Collation Intelliden* Outblaze Ltd.* Exeros* SPSS* CIMS Labs Micromuse Note: Acquisitions since Jan 2001 © 2010 International Business Machines Corporation *Acquisitions since Jan 2007 Increasing Investment in Higher Growth Segments 2010 Middleware Opportunity 70% of R&D budget invested $125B, CGR = 5%* in higher growth segments Higher Growth ’09 – ’15 Product Segments CGR Business Process Management 10% RestRest HigherHigher Information Integration 8% ofof GrowthGrowth MiddlewareMiddleware MiddlewareMiddleware Master Data Management 7% $$ 48B48B $$ 77B77B Business Analytics 7% Enterprise Content Management 6% 2%2% CGR*CGR* 6%6% CGR*CGR* Security Management 6% Application & Integration Server 5% Relational Database 5% Systems Management 5% © 2010 International Business Machines Corporation Source: IBM Market Insights 04/20/10; estimates @ cc; *CGR% = ’09 – ‘15 Enablers for Growth Smarter Planet Solutions Thinking and acting in new ways Growth Markets Aligning Investments to Match Opportunity Business Analytics and Optimization Leveraging Information for Smarter Business Outcomes Cloud Computing & Next Generation Data Center Efficient, scalable workload optimization & service delivery © 2010 International Business Machines Corporation Business Analytics and Optimization 2009 IT Market Opportunity $ 205B$ 205B 2009 – 2015 $ 910B, 4% CGR* CGR = 7% $ 116B$ 116B $ 140B$ 140B BusinessBusinessBusiness Analytics & $ 75B75B$ 7% CGR Optimization Rest of IT $ 140B 7% CGR * $ 770B $ 66B66B$ 4% CGR* 6% CGR $ 48B48B$ $ 17B$17B17B 5% CGRCG $ 23B$23B23B 2009 2015 Hardware Software Services IBM BAO revenue projected to grow from $9B in 2009 to $16B in 2015 © 2010 International Business Machines Corporation *Source: IBM Market Insights 4/20/2010 Making Investments to Meet Demand $11B investment acquiring 18 companies since 2005 Over 5,000 dedicated consultants today Optimized hardware and software offering – IBM Smarter Analytics System – System z versions, Power System, and System x. Largest math department in private industry © 2010 International Business Machines Corporation IBM Business Analytics and Optimization Offerings IBM Cognos Cross-Industry Solutions IBM BAO Consulting Services IBM Entity Analytic Solutions IBM BAO IT Services IBM SPSS IBM Cognos IBM iLog IBM Filenet BPM IBM iLog IBM InfoSphere Information Server IBM InfoSphere IBM DB2 MDM Server IBM solidDB IBM Optim IBM Industry Data & Process Models IBM InfoSphere Warehouse IBM InfoSphere IBM InfoSphere Streams Traceability Server IBM Filenet P8 ECM IBM InfoSphere Mashup IBM Content Manager Hub IBM eDiscovery IBM Smart IBM Records Management Analytics Systems © 2010 International Business Machines Corporation Business Analytics Solutions Alameda County Warabeya Nichiyo Co, Ltd Social Services Agency Consumer food products company engaged County data from six disparate state and IBM to implement a complete production county systems integrated into data planning and business management system warehouse within five months providing to give a clear picture of day-to-day real time client and family views. Reduced operations in all its factories. System enables investigators time for one case from Warabeya to compare daily operations 5 months to one minute. between factories strengthening efficiency and cost management. Solution Components Solution Components IBM Cognos 8 BI Cognos 8 BI InfoSphere Entity Analytics Solutions WebSphere Application Server DB2 Data Warehouse Edition Lotus Notes InfoSphere Balanced Warehouse Tivoli Storage Management System p, IBM Disk Storage IBM Global Services © 2010 International Business Machines Corporation Business Analytics Critical to Smarter Planet Solutions Business Analytics & Optimization 2015 Market Opportunity BusinessBusiness SmarterSmarter PlanetPlanet SolutionsSolutions AnalyticsAnalytics && DrivenDriven byby BusinessBusiness AnalyticsAnalytics Optimization Optimization New Intelligence Smart Work $$ 205B205B Green and Beyond ’09’09 -’15-’15 Dynamic Infrastructure CGRCGR == 7%*7%* Managing Risk Smarter Products © 2010 International Business Machines2015 Corporation *Source: IBM Market Insights 4/20/2010 Smarter Planet Solutions Smarter Public Safety Smarter Energy New York Police Department Endesa S.A. (Spain) By integrating its siloed crime data systems, Implemented an energy management system NYPD gets a more holistic view of information that enables consumers to better control enabling it to redeploy resources in response usage. Consumers will be able to establish to crime patterns and trends helping to resolve consumption protocols to minimize electricity crimes and apprehend criminals more quickly. use in peak periods. A 20% reduction in overall energy use is anticipated. Solution Components Solution Components Cognos 8 BI Cognos 8 BI IBM DB2 DB2, InfoSphere Warehouse IBM DB2 Warehouse Edition WebSphere Application Server WebSphere Application Server WebSphere Message Broker Tivoli Storage Management WebSphere Business Events System p Tivoli Netcool, Network Mgr IBM Global Services IBM BladeCenter © 2010 International Business Machines Corporation IBM Global Services Software - Leveraging Transformation for Growth Revenue + $3.2B + $5.6B Leverage $18.2B$18.2B $21.4B$21.4B $12.6B$12.6B Global Reach 2000 2006 2009 Acquisition Strategy Pre-Tax Income 71% Margin 34% Margin R&D Efficiency on Revenue Growth 39% Margin 27% 7 pts Branded Middleware on Revenue Margin Growth Growth Markets $8.1B$8.1B 21% 6 pts Margin Investing in High Growth Businesses $5.5B$5.5B $2.8B$2.8B ’00–’06’00–’06 ’06–’09’06–’09 CGRCGR CGRCGR Annuity Base 12%12% 14%14%