Global Sales and Distribution

Ginni Rometty Senior Vice President, Global Sales and Distribution Bruno Di Leo General Manager, Growth Markets Sales and Distribution

Objectives Key Growth Strategies

Drive Profitable Revenue Growth Smarter Planet in 170 Global Markets Identify and Target Strategic Growth Markets Growth Initiatives Build Industry’s Pre-eminent Business Analytics Sales Force Based on Industry Skills Cloud Computing Build Ecosystem of Partners, Influencers and Policy Makers

Enable Revenue Growth of at Least 5% in the 2015 Roadmap Through Key Growth Strategies

Investments Opportunity for Growth

Repeatable asset-based Accelerated Growth in Priority solutions Industries

Specialized industry skills –Client productivity –Client Growth Agendas Research Margin Growth via Repeatable Analytics centers Industry Frameworks

Workload-optimized Systems

Cloud Computing

Market Industry Productivity Growth CGR*

Healthcare 5.4% Administration Collaborative Care

Oil and Gas 4.2% Oil recovery rates Biofuels

Energy and Utilities 4.4% Outages Electric Vehicles

Transportation 3.9% Gridlock Dynamic Tolling

Telecommunications 4.6% Single Customer View Mobile Broadband

Retail 4.0% Food waste Farm-to-fork

Banking 4.3% Risk Management X-sell/Upsell

Government 4.0% Crime Management Smarter Cities

Electronics Development Cycle Embedded Electronics 3.5% Time

Industry Thought Leadership/Business Consulting

Cloud Coalition/ Computing Standards

Client Value Workload Optimized R&D Systems Industry Frameworks/ Analytics Software

Electronic Patient Records

Collaborative Analytics-Based Care Clinical Decision Support

60 GBS- GBS - Electronic Healthlink Medical Records MDs Medical Home ISS Data Security Services Policy for 10 Industry Thought healthcare networks Collaborative Care Cloud Leadership/Business Consulting Patient Centered Cloud EHR Services Primary Care Cloud Coalition/ Collaborative Public Health Cloud Computing Standards Medical Archive Healthcare Solutions Client Value Lab BlueBioU Workload IBM Health DNA Transistor Information Optimized R&D Exchange Systems Blue Gene Industry Lotus -Clinician/Patient Portal Frameworks/ Analytics Lab-on-a-chip

Health Integration Framework Software 600 Patents Medical ILOG- Patient Monitoring Cognos- Imaging Initiate Informatics Medical Systems Records Innovation Center © 2010 International Business Machines Corporation Analytics What Distinguishes IBM in Healthcare

4,000 Healthcare Industry Experts

Cloud EHR Industry Thought Policy Advisor to Services, Leadership/Business 10 US State Medical Image Medical Home Cloud Consulting Initiatives Cloud Coalition/ Computing Standards

Client Value Workload Optimized R&D Power7 for Systems 600 Medical Patents Analytics Industry Frameworks/ Analytics Software

Health Integration Framework

Patient/MedicalPatient/Medical RecordsRecords HealthHealth InformationInformation ExEx CollaborativeCollaborative CareCare

Electronic Data Clinician/ Medical Cloud Patient Medical Medical Security Patient Records EHR Monitoring Home Records Services Portal Analytics Services (ILOG) (GBS) (Initiate) (ISS) (Lotus) (Cognos)

Client Examples

Supply Chain Optimization

Web 2.0 Integration of Supply Retailing and Demand Systems

Corporate Brand and RFID & GBS-SCM Reputation Analysis Tracking Consulting Policy GBS/Cognos - Retail Single View of Customer Industry Thought The Supply Chain Council Leadership/Business ARTS Demand Driven Consulting Analytics on cloud Auto ID Coalition Cloud Coalition/ Governments GS1 engaged with Computing Standards food tracking 700 Patents

Security and Client Value Speech Compliance Recognition Management Workload Optimized R&D RFID Clipped Tag IBM Retail Data Technology Warehouse Systems Industry Customer Analytics & Retail Integration Framework Frameworks/ Analytics Market Basket Analysis SPSS - Market Basket Analysis Software Cognos-Merchandising Analytics Websphere-Web 2.0 Retail Store/ GBS / ILOG Multi-channel Distribution Websphere Workbench Center Multi-channel & Analytics © 2010 International Business Machines Corporation Order Mgmt. Optimization What Distinguishes IBM in Retail

1500 Retail Industry Experts Leader Industry Thought in Every Major Analytics Cloud Leadership/Business Standards Coalition Consulting from Barcode to RFID Cloud Coalition/ Computing Standards

Client Value Workload Optimized R&D Power7 for Systems 700 Retail Patents Analytics Industry Frameworks/ Analytics Software

Retail Integration Framework

IntegratedIntegrated SupplySupply ChainChain SmarterSmarter ShoppingShopping Demand/SupplyDemand/Supply OptimizationOptimization ExperienceExperience SystemsSystems

Distribution Market Single View Multi-channel SCM Merchandizing Web 2.0 Center Basket of Customers Order Mgmt. Retail Consulting Analytics Optimization Analysis (GBS, (GBS, (GBS) (Cognos) (Websphere) (ILOG) (SPSS) Cognos) Websphere)

Client Examples

Industry References Framework Partners

Product Development Electronics 34 Integration Framework

Banking 41 Banking Industry Framework Integrated Information Oil & Gas 7 Framework

Solution Architecture for Energy & Utilities 35 Energy & Utilities

Service Provider Delivery Telecommunications 18 Environment Network Centric Operations Government 65 Framework Government Industry Transportation 39 Framework Healthcare 57 Health Integration Framework Retail 30 Retail Integration Framework

© 2010 International Business Machines Corporation Stockholm Smarter Cities Engagements Dublin Singapore Brisbane New York Syracuse Santa Barbara Swedish Road St. Louis Chicago Administration Endesa S.A. Parma Controlar S.A. Albuquerque Southwest One Edmonton Public Malta Smart Sao Paulo Eindhoven Malta Safety Grid/Water Nettuno Traffic BH City Gemeente Rotterdam Austin Venice Eindhoven Shenyang MVV Energie AG NYC Department Edmonton Intelligent City New York City Of Homeless Shenyang Yantai Santos Estado de Jalisco Madrid Singapore LandTransport Authority Chicago Vagverket Sacramento Singapore Corpus Christi Albuquerque Queensland Motorways City Government

Sao Paulo Controlar

1. Mexico City 2. Mumbai 3. Shanghai 4. Kolkata 5. New Delhi

6. Beijing 7. Sao Paulo 8. Buenos Aires 9. Moscow 10. Seoul

11. Chongqing 12. Istanbul 13. Karachi 14. Jakarta 15. Guangzhou

3.Source:16. Beijing Tokyo United Nations, Wikipedia17. Wuhan6. Seoul 18. London 19. New York 12. Jakarta20. Bangkok

The number of people moving to urban cities 100 million every year, equivalent to 10 NYC's

5.9 billion 87% of the world's population Russia Real GDP growth 2009 to 2015 $6.3 trillion Over 55% of World GDP growth

Real GDP Growth ‘09-'15 Served IT Growth ‘09-'15 Served IT as % of Real GDP ‘09

5% 8% 2.4%

2% 3% 0.7%

Major Growth Major Growth Major Growth Markets Markets Markets Markets Markets Markets

© 2010 International Business Machines Corporation Source: Demographic Data, United Nations, GDP Data, IBM Finance, Chief Economist, 04/10, IT Market Data, IBM Market Insights Market View (04/10) at CC Global Sales and Distribution

Bruno Di Leo General Manager, Growth Markets IBM in Growth Markets: over 140 countries

Central & Eastern Europe

Russia

South Korea Greater China Group

ASEAN India / South Asia Latin America

Middle East & Africa Australia / New Zealand

Positioned for Growth

Revenue growth outpacing Major Markets by at least 8 pts

Growing faster than market

Increased at least 1 pt per year as a share of total IBM revenue

Significant investments that differentiate IBM

Significant investments in growth beyond BRIC’s

The Globally Integrated Enterprise

Global Delivery Center

Software & Hardware Lab Poland Research Lab Russia Czech Republic Slovakia Russia Innovation Center Romania Hungary Cloud Computing Center Turkey China South Korea Egypt Natural Resources Morocco India Mexico Telecommunications Vietnam Philippines Rail Malaysia Health Brazil Singapore Australia Energy

Finance South Africa Argentina Retail

Selection Criteria IT Market Size & Growth IT as a % of GDP Russia Macro-economic Business Environment Political Environment Human Capital Russia Physical Infrastructure Poland Economic Recovery Czech Republic

Government Effectiveness South Korea China Taiwan Mexico UAE Vietnam Saudi Arabia Philippines India Thailand Brazil Malaysia Singapore Australia Chile Indonesia South Africa

Prioritized 20 Countries Market Expansion Expanding beyond major cities Russia

High-end Systems IT Infrastructure Software solutions Development Large Services Projects

Investing in skills Industry Leadership Leading in key industries Creating new IT markets

2000 Population 1.3B 2010 3 Branch Offices 28 Branch Offices Real GDP (2009) $3.7T

Real GDP Growth 8.5% (2009-2015) Harbin

Served IT Market Changchu $19B Shengyang (2009) Urumqi Beijing Beijing Shijiazhuang Tianjin Served IT Growth Taiyuan Jinan 12.0% Xian ZhenZhou Jinan (2009 – 2015) Wuhan Shanghai Chengdu Shanghai Chongqing NanchangNingbo 2009 Served IT Kunming Fuzhou 80% spending outside Nanning Xiamen Guangzhou major cities Guangzhou Shenzhen

Expanding to 70 Branch Offices by 2015

© 2010 International Business Machines Corporation Source: GDP Data, IBM Finance, Chief Economist, 04/10, IT Market Data, IBM Market Insights Market View (04/10) at CC, IT City Data, IBM Market Insights City Opportunity (03/10) at CC Market Expansion India

2000 Population 1.1B 2010 3 Branch Offices 12 Branch Offices Real GDP (2009) $1.1T

Real GDP Growth 7.1% (2009-2015)

Served IT Market $7B Ludhiana / Chandigarh (2009) Delhi Delhi Lucknow Served IT Growth 13.6% Kolkata (2009 – 2015) Ahmedabad Pune Bhuvaneshwar Mumbai Mumbai 2009 Served IT Hyderabad 62% Bangalore spending outside major cities Bangalore Chennai Cochin

Expanding to 48 Branch Offices by 2015

2000 Population 192M 2010 9 Branch Offices 23 Branch Offices Real GDP (2009) $1.2T

Real GDP Growth 4.5% (2009-2015) Belem Served IT Market Fortaleza $15B Fortaleza (2009) Recife Recife Salvador Served IT Growth Salvador Brasilia 7.6% Brasilia (2009 – 2015) Uberlandia Goiania Sao Jose do Rio Preto Vitoria Belo Horizonte Ribeirao Preto Belo Horizonte Campinas Rio de Janeiro 2009 Served IT Rio de Janeiro Sao Paulo spending outside 60% Londrina Sao Paulo major cities Guarulhos Curitiba Barueri Curitiba Joinville Porto Alegre Porto Aegre ABC Caxias do Sul Florianopolis Expanding to 43 Branch Offices by 2015

2000 Population 589M 2010 6 Branch Offices 18 Branch Offices Real GDP (2009) 1.2T$

Real GDP Growth 5.3% (2009-2015) Hanoi Hanoi Chiang Mai Served IT Market Calamba Bangkok $9B Bangkok Manila (2009) Manila Danang Cebu Served IT Growth Ho Chi Minh Kuala Lumpur 6.5% Penang Kuala Lumpur (2009 – 2015) Singapore Medan Singapore Johor 2009 Served IT Kuching spending outside 55% Makassar major cities Surabaya Jakarta Jakarta

Expanding to 32 Branch Offices by 2015

2000 Population 1.3B 2010 10 Branch Offices 23 Branch Offices Real GDP (2009) $2.0T

Real GDP Growth Algiers Tunis Islamabad 3.3% Tripoli Islamabad Tunis (2009-2015) Cairo Lahore Rabat Cairo Lahore Karachi Casablanca Karachi Casablanca Served IT Market Doha $12B Abu Dhabi Dubai (2009) Riyadh Dubai Dakar Served IT Growth 7.4% Lagos (2009 – 2015) Accra Nairobi Dar Es Salaam 2009 Served IT Luanda spending outside 64% major cities Johannesburg Johannesburg

Cape Town Durban Cape Town Durban Expanding to 40 Branch Offices by 2015

IBM Market Share Brazil China Russia Optimization of IT High-end Systems 75% 65% infrastructure for freight & UNIX Servers 63% 45% passenger management Russia China First large services Slovenia project for gas Electronic patient distribution health & insurance records South Korea processing for 11 Brazil banks, 2.6M merchants, High-end systems and 40M cardholders software in support of Business Analytics

Namibia Thailand 1st mainframe in Namibia to Centralized, web- localize core banking for accessible health 400K customers information system

Banking

Country TransportationPrioritisation & Rail

Industry Leadership Energy & Utilities

Healthcare

Natural Resources

Market Opportunity Why IBM

85% of proven oil reserves IBM solutions for the Smarter Planet 92% of proven gas reserves 9Operations 7 of 8 top mining countries 9Asset Management 9Health & Safety & Environment Western Australia Chevron, Woodside and Inpex investing >$100B in LNG exploration Examples of client value delivered BHPB investing $3B in Iron Ore

Brazil Petrobras investing $45B in 2010 for exploration of its PreSalt reserves Vale investing $10B in mine expansion

Delivering Growth IBM Roadmap to 2015

Investments that differentiate IBM Revenue growth will continue to outpace Major Markets by at least 8pts Significant investments in growth strategies beyond BRICs Growth faster than market

Increase at least 1pt per year as a share Prioritized 20 countries Market of total IBM revenue Expansion Expanding beyond major cities Significant investments that differentiate IT High-end Systems IBM Infrastructure Software Solutions Development Large Services Projects Significant investments in growth beyond BRIC’s Investing in skills Industry Leading in Key Industries Leadership Creating new IT markets

9 Shanghai, June 2-3, 2010 9 500 C-level Clients, Influencers, Business Partners 9 25 Countries

Profitable Revenue Growth by Delivering New Client Value

Solution Sales Based on Repeatable Industry Frameworks

Growth Markets Expansion

Enable Revenue Growth of at Least 5% in the 2015 Roadmap Through Key Growth Strategies

© 2010 International Business Machines Corporation © 2010 International Business Machines Corporation Certain comments made in the presentation may be characterized as forward looking under the Private Securities Litigation Reform Act of 1995. Those statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in the Company's filings with the SEC. Copies are available from the SEC, from the IBM web site, or from IBM Investor Relations. Any forward-looking statement made during this event or in these presentation materials speaks only as of the date on which it is made. The Company assumes no obligation to update or revise any forward-looking statements.

These charts and the associated remarks and comments are integrally related, and are intended to be presented and understood together.

In an effort to provide additional and useful information regarding the Company’s financial results and other financial information as determined by generally accepted accounting principles (GAAP), certain materials presented during this event include non-GAAP information. The rationale for management’s use of this non-GAAP information, the reconciliation of that information to GAAP, and other related information is included in supplementary materials entitled “Non-GAAP Supplementary Materials” that are posted on the Company’s investor relations web site at http://www.ibm.com/investor/events/investor0510/. The Non-GAAP Supplementary Materials are also included as Attachment II to the Company’s Form 8-K dated May 12, 2010.