1. © 2014 IBM Corporation Cloud & Smarter Infrastructure SaaS 101 - Introduction to Software as a Service (SaaS) for Partners

2. © 2014 IBM Corporation 2 What is Software as a Service (SaaS)?  Software as a Service (SaaS) is a software delivery model in which software and associated data are centrally hosted in the cloud. SaaS is typically accessed via a web browser. Payment for the service is through a subscription model.  You are using SaaS today if you access applications like Facebook, Twitter, or gmail. See the last page in this deck for additional resources on SaaS, Cloud, and utility-based computing

3. © 2014 IBM Corporation 3 What is driving the move to SaaS? Market dynamics and disruptive technologies are driving the shift to SaaS consumption models Developers want Lines of Business want CxOs want Low touch, easy to consume, continuously updated software Social Mobile Embedded Intelligence Cloud Big Data Predictability Lower costs Quicker business value Access from anywhere To create new offerings by composing services from multiple providers IT Operations wants To manage on-premise, Cloud, and hybrid environments

4. © 2014 IBM Corporation 4 Decision making power is shifting from the traditional IT buyer to a new audience - the Line of Business owner & practitioner  By 2016, 80% of new investments will directly involve LOB execs with LOB leading decisions in more than 50% of those investments  48% discover brands they are not aware of while searching, 24% decide which brand to purchase solely from their self directed digital research  60% of the IT purchase process decision is completed before the prospect engages a vendor … and the decision making process is changing *Source: Google & Compete B2B Customer Study, June 2012 Users Recommenders Influencers Economic Buyers Decision Makers Practitioners CIO CTOs IT Managers IT Operations Manager Data Center Manager Developers Technical Leaders System Administrators IT Operations Data Scientists

5. © 2014 IBM Corporation 5 How can SaaS help? Improved TCO due to lower infrastructure cost Flexible subscription pricing Minimal upfront investment Continuous delivery of new capabilities allows rapid innovation and access to immediate code fixes Lower risk with try & buy approach Accelerates evaluations and decision making

6. © 2014 IBM Corporation 6 Remember these? The speed of destructive innovation is accelerating SaaS has already changed the game Don’t be a footnote in the history of computing.

7. © 2014 IBM Corporation 7 7 New Vendors Double Digit Growth Traditional Vendors Single Digit, Flat, Negative Growth Fiberlink New Relic ServiceNow Splunk SolarWinds Commvault VMWare CA HP BMC Symmatec EMC IBM C&SI BMC Revenue ($B) YTY Growth (‘11-’12) Total revenue 1.3B (without VMWare) Traditional competitors have high revenue, but are losing share to a new breed of competitors.. the Digital Engagers “While the Old Lions fight, the Hyenas are stealing the food” C&SI on the April 2014 TT Study

8. © 2014 IBM Corporation 8 Market Demands Ability to progressively add capabilities Leverage existing and new IT investments Pay per use predictability Visibility across the entire “IT Supply Chain” ✖ Niche-level capabilities ✖ Narrow delivery model – SaaS only ✖ Limited out of the box integrations ✖ Limited end-to-end visibility Competition Delivers Broad portfolio of capabilities Support for On-Premise, SaaS, or hybrid Seamless integration across multiple offerings Visibility across entire enterprise C&SI Delivers

9. © 2014 IBM Corporation 9 What is IBM Service Engage? A New Way to experience and acquire our on-premise and SaaS solutions for engaging clients and partner via live guided demos available 24x7 to POC your clients … start a POC in 30 minutes, anytime, anywhere your client wants to extend what your clients are already buying at lower total cost via Software as a Service to accelerate the close IBM Service Engage Learn Explore Try Use (Buy) Extend Support New way…. IBM Service Engage

10. © 2014 IBM Corporation 10 Welcome to IBM Service Engage Cumulative Data since 2/23/14: 14,877: Number of total visitors to Service Engage website 8,132: Number of unique visitors to Service Engage website 4378: Number of demos run across all payloads starting from Pulse Number of Trials Currently Active on 3/16/14 406: Number of Trials currently provisioned across all payloads Number of Customer Purchases Passport Advantage SCCD: 5 eCommerce None 10 www.ibmserviceengage.com

11. © 2014 IBM Corporation 11 IBM Performance Management for Applications and Infrastructure solutions increases your end user satisfaction with complete visibility and control of your application environment. Pain pointsHow this offering helpsUser scenariosTypical buyers Increasing maintenance costs No end-to-end view of app health Missed SLAs Find the root cause of application problems 90% faster Improve the availability of critical applications by 60- 90% with integrated analytics Reduce the length of outages and slowdowns by 50% Quickly identify and resolve a bottleneck Ensure SLA and KPI compliance Manage all types of workloads Prevent outages IT Ops Managers - reduce infrastructure costs LOB Owner - accelerate delivery of new services App Developers - monitor their apps List PriceCompetitive DifferentiatorsQuestions to ask IBM Monitoring (SaaS): $25/month per Average Managed Virtual Server (aMVS) IBM Application Diagnostics (SaaS): $120/ month per Average Managed Virtual Server (aMVS) Flexible delivery options allow for SaaS, on prem, and hybrid environments Integrated analytics for faster root cause analysis and problem resolution Broad application coverage from new cloud based languages to traditional enterprise workloads Do you have apps moving to – or already in – the Cloud, with connections to your data center? Are your app teams decentralizing and gaining independence? Are your app lines of business moving to an OpEx model?

12. © 2014 IBM Corporation 12 IBM Workload Automation (SaaS) drives the execution of Business Processes with the lowest TCO across all environments, servers and applications. It offers speed of automation, power to business and precise governance. Pain pointsHow this offering helpsUser scenariosTypical buyers Need to reduce expenses No resources to build an automation infrastructure Lack of technical know-how hinders automation 30% reduction in execution time of business workloads, resulting in millions of $$$ in savings 90% reduction in labor costs and total control of business SLAs 35% savings in operation costs and improved staff productivity to support additional workloads Get time back by automating your processes - Automate BI & ERP processes in minutes Manage your business SLA’s - Run and monitor workloads wherever you are IT Ops managers - wants to move to a service-centric delivery organization LOB owner – wants low cost solution with immediate benefits, ease of use and scalability to grow with evolving needs. List PriceCompetitive DifferentiatorsQuestions to ask Starts at $70 per 1,000 executed jobs per month Price decrease for larger volumes of jobs  1k - 25k jobs  each 1k job pack is priced at $70/mth  25k - 250k jobs  each 1k job pack is priced at $56/mth  250k – 1,000k jobs  each 1k job pack is priced at $35/mth  > 1,000k jobs  each 1k job pack is priced at $21/mth Get started with ZERO investment. Competitors force you to make an upfront commitment. Faster TTV with a ready-to-use application catalog. Competitors need your to reach out to business partners to get started. Powerful and Proven solution : Industry leading technology which offer robust optimization mechanisms to support changing business needs while still maintaining SLAs. IBM’s strong commitment to Open Standards - With OSLC, workload automation is easily integrated with other OSLC-enabled applications like monitoring, ticketing, etc. IT Ops manager: Are you spending too much time & money, building and managing your workload management infrastructure? LOB owner: Is it taking too much time to automate your processes, and monitor them for critical SLAs?

13. © 2014 IBM Corporation 13 SmartCloud Control Desk (SaaS) delivers a unified service management solution to simplify business processes, maximize asset efficiency, and improve the end user experience Pain pointsHow this offering helpsUser scenariosTypical buyers Fragmented service management processes are causing inefficiency No visibility of assets across the enterprise Hard to manage multiple apps on different platforms Reduce IT change related outages by 70% Improve first call resolution rate by 25% Reduce request response times by 60% Lower help desk calls by 80% through end user empowerment and service request automation Combine processes controls with runbooks Synch data across unified domains Get a working environment up and running in hours, not weeks LOB owner: Low cost, quick TTV, ease of use and scalability to grow with evolving needs. IT Manager: Reduce infrastrasture costs List PriceCompetitive differentiatorsQuestions to ask $99/month per Authorized User $297/month per Concurrent User Consistency – Single offering for both Enterprise & SMB, and SaaS and On-Premise Capability –Provide deeper functionality than competition Integration - With a wide range of IB/3rd party products to satisfy any clients needs Do you want a complete, integrated service management solution that includes configuration, change, asset, and/or license management? Is IT infrastructure support a core competency or an ongoing headache? Are your lines of business moving to a SaaS and/or OpEx model? Entitlement Price $49/month per Authorized User In addition to avg S&S cost of $26//month per Authorized User

14. © 2014 IBM Corporation 14 Maximo Asset Management (SaaS) reduces the complexity and cost of managing and maintaining enterprise assets, while increasing efficiency in work scheduling and inventory levels Pain pointsHow this offering helps User scenariosTypical buyers  Lack of visibility and control over critical assets that affect compliance and business performance  Inefficient allocation of work resources  Costly asset failures causing increased asset downtime  Improve workforce utilization by 10% or more  Reduce inventory carrying costs by 20% or more  Increase Asset Utilitization by 3% - 5%  Consolidated asset and work management system  Robust planning and scheduling of work based on criticality of job task and availability of resources  Detailed inventory planning to react quickly to changing demand patterns  VP of Engineering, CIO, Maintenance Directors, Asset Reliability Officers List PriceCompetitive differentiatorsQuestions to ask  $159/month per Authorized User  Scheduler add- on: $40/month for Authorized User license only  $477/month per Concurrent User  Market leading capabilities in a SaaS model, You no longer have to settle for ‘good enough’  Scheduling & Mobility as integral part of Maximo EAM solution  Support all your enterprise assets, including operational technology  Ability to transition to 'on premise' if business requirements change  Do you want a complete, integrated asset management solution that includes configuration, change, asset, and/or license management?  Is IT infrastructure support a core competency or an ongoing headache?  Are your lines of business moving to a SaaS and/or OpEx model?  Do you want the flexibility of being able to move from SaaS to on-premise (or the other way)?

15. © 2014 IBM Corporation 15 Maximo Inventory Insight (SaaS) – Pre-configured inventory decision support system delivered as a service. Pain pointsHow this offering helpsUser scenariosTypical buyers  Inventory over- and under-stock conditions increase expenses and risk.  Inventory management ties up many resources.  Reduces inventory holding costs by 15-20% in first year.  Increases asset availability and utilization by avoiding parts outages  Automatically generates optimal stock replenishment plan.  Increase asset utilization and productivity  Predict over-stock and out-of-stock conditions to generate optimal reorder management.  Identify stagnant inventory  Asset / maintenance / inventory managers List PriceDifferentiatorsQuestions to ask  Based on inventory size # # users Inventory value:  Up to $100M - $3500/month  $100M-$500M - $7500/month  Over $500M - $15K/month Users  $100 per authorized user per month  Business: Pre-configured, EAM-integrated SaaS- delivered  Technical: Multiple analytics, small data collector, pure add-on  Do you know how much excess inventory your organization has?  How many dollars is your organization tying up in inventory?  Do you know the risk in asset downtime due to potential out-of- stock conditions?  How many people are involved in inventory management?

16. © 2014 IBM Corporation 16 Maximo Inventory Insight (SaaS) – Pre-configured inventory decision support system delivered as a service. Pain pointsHow this offering helpsUser scenariosTypical buyers  Inventory over- and under-stock conditions increase expenses and risk.  Inventory management ties up many resources.  Reduces inventory holding costs by 15-20% in first year.  Increases asset availability and utilization by avoiding parts outages  Automatically generates optimal stock replenishment plan.  Increase asset utilization and productivity  Automatically update Reorder Points in Maximo, at users discretion  Predict over-stock and out-of-stock conditions to generate optimal reorder management.  Identify stagnant inventory  Asset / maintenance / inventory managers List PriceDifferentiatorsQuestions to ask  Based on BOTH inventory value AND # users Inventory value:  Up to $100M - $3500/month  $100M-$500M - $7500/month  Over $500M - $15K/month # Users  $100 per authorized user per month  Business: Pre- configured, EAM- integrated SaaS-delivered  Technical: Multiple analytics, small data collector, pure add-on  Do you know how much excess inventory your organization has?  How many dollars is your organization tying up in inventory?  Do you know the risk in asset downtime due to potential out-of- stock conditions?  How many people are involved in inventory management?

17. © 2014 IBM Corporation 17 Why is this important to YOU? S ervice Engage faster time to value for your clients P OC in days not weeks / months with 30 day evals E arn quick wins, close more often, earn more money via 2x ACV (PCO1 & PCO2) E xpand your footprint in your accounts using a land and expand strategy D isplace competitors, on flexibility, broad capabilities, lack of comparable offer Service Engage puts you and your clients in the drivers seat. Take a drive today! https://www.ibmserviceengage.com/

18. © 2014 IBM Corporation 18 What is the SaaS Sales Cycle? LEARN Your Client’s Business Problem and/or Objective EXPLORE SaaS capability to deliver “best practice” process & capability TRY Client trials SaaS offering, delivering business process & capability BUY Close the deal Service Engage 30 day evaluation removes the POC dependency, and shortens the sales cycle from weeks/months to days 18 Understand Explore Develop Implement Confirm & Repeat Sold into LOB business  Focus on Business Objectives  Time to Market  Return on Investment  Speed of Deployment IBM Service Engage IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions Digital & Practitioner Marketing Tactics Organic & Paid Search Re-targeting Content Syndication Social Media Advertising 3 rd Party Practitioner Events Social Casts IBM Service Engage Sold into LOB business  Focus on Business Objectives  Time to Market  Return on Investment  Speed of Deployment IBM Service Engage IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions IBM Service Engage IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions Sold into LOB business  Focus on Business Objectives  Time to Market  Return on Investment  Speed of Deployment IBM Service Engage IBM Service Engage is enabling new routes to market that make it easier and faster to experience and acquire our on-premise and SaaS solutions EXPLORE

19. © 2014 IBM Corporation 19 Tremendous opportunities to up-sell and cross-sell It is a huge differentiator that other vendors cannot match! If your customer has thisSell them thisScenario SmartCloud Control Desk (SaaS)IBM Monitoring (SaaS)Detect an issue, automatically open a ticket Netcool OMNIbusGenerate alerts when monitored KPI exceeded Business Service ManagementImprove MTTR for monitored business processes SmartCloud AnalyticsPredict and prevent problems with insight into patterns and trends present in log files Workload AutomationQuickly and easily identify system and application problems that are impacting your workload Cognos, Datastage, Informatica, Netezza, WebSphere MQ, Platform LSF, Sterling Connect Direct Workload Automation (SaaS) Integrate scheduling needs of business applications like Cognos, Datastage, Netezza,etc. Netcool OMNIbusCreate alerts for workload problems SmartCloud Control Desk (SaaS)Open incidents for workload failures IBM Endpoint ManagerSmartCloud Control Desk (SaaS) Trigger automatic provisioning of a desktop Netcool OmnibusGenerate tickets based on selected events Tivoli Application Dependency Discovery Manager (TADDM) Use Configuration Information (CI) and relationship data to manage unplanned change Note that all of the offerings in the middle column have on-premise versions Choice is something only IBM can offer.

20. © 2014 IBM Corporation 20 Tremendous opportunities to up-sell and cross-sell – part 2 If your customer has thisSell them thisScenario Netcool OmnibusMaximo Asset Management (SaaS) Generate tickets based on selected events Maximo Inventory InsightsOptimized inventory levels through analytics Smarter CitiesLink assets to municipal operations Maximo Asset ManagementMaximo Inventory Insights (SaaS) Leverage Pre-configured inventory decision support system to generate optimal reorder management and obtain insight on “stagnant” inventory

21. © 2014 IBM Corporation 21 Where are the C&SI SaaS solutions hosted? Active Data Centers - SoftLayer Singapore Dallas Amsterdam  All C&SI SaaS offerings are currently hosted in SoftLayer data centers.  In 2014, additional data centers will be provided (SoftLayer or partner), based on business needs.

22. © 2014 IBM Corporation 22 What do I need to know about Data Privacy? Personal data generally includes information relating to an individual -think business card (e.g. names, email addresses, home address) In some countries, also includes information about identified partnerships, associations, or corporations. IBM is a data processor, entity that processes personal data on behalf of the data controller, who would be the client responsible for entering the data. In most cases, Passport Advantage agreement covers data privacy for personal data. EU and Switzerland have additional data privacy regulations but have established the ability to create a framework with the U.S for accessing personal data. C&SI SaaS is in the process of obtaining EU Safe Harbor certification. This requires a risk assessment after we Go Live. In the meantime, we have security measures in place to restrict access to EU client data and for IBM non-U.S. employee access to Amsterdam hosting center in order to comply.EU Safe Harbor IBM has an Online Privacy Statement which is another EU Safe Harbor requirementOnline Privacy Statement See the SaaS Center of Competency web site for further details on country-unique privacy requirements

23. © 2014 IBM Corporation 23 Service Engage Sales Center of Competency The Center of Competency (CoC) serves as a war room to provide resources for sellers to help close SaaS deals. The CoC web site provides the following general information:  Overviews  FAQs  Terms & Conditions  Privacy  SaaS vs on-premise  Competition  Pricing  ELAs & SaaS  Sample User Scenarios  Typical sales cycle for a SaaS deal  Links to payload info The CoC web site provides the following information for each SaaS payload:  Offering Capabilities  Scalability & Security issues  References  FAQs  SaaS versus On-premise  Dealing with competition  Typical Sales Cycle for this payload  Pricing, entitlements, trade-ups  Terms & Conditions  TCO calculators  Integrations & Extensions  Doing evaluations For IBM Sellers: https://ibm.biz/salescoc https://ibm.biz/salescoc For Partners: www.ibm.com/csicenter/partnerswww.ibm.com/csicenter/partners

24. © 2014 IBM Corporation 24 What should I do next?  Go to Service Engage, learn about it, provide feedbackService Engage  Learn about SaaS and C&SI’s 1H 2014 SaaS offerings.  Approach your top 5 customers with these questions:  Does the overwhelming cost of maintaining their infrastructure hinder developing new services that could bring in additional revenue?  Do they need to gain access to new capabilities quicker to innovate faster and stay ahead of their competitors?  Do they want to lower their Total Cost of Ownership (TCO) ?  Determine where your customer wants to be, and how they should get there.  Encourage them to test drive Service Engage todayService Engage  Look for opportunities to up / cross-sell  Make a SaaS proposal. C&SI Strengths:  Customer choice: On- premise, SaaS, integrated experience  Integration with broader Service Management capabilities  Accelerate sales velocity with Service Engage  Unsurpassed breath of capabilities

25. © 2014 IBM Corporation 25 Sales Kits:  SaaS sales kit SSW, PartnerWorldSSWPartnerWorld  See the SaaS updates to these sales kits:  Performance Management sales kit IBM, PartnerWorldPartnerWorld  SmartCloud Control Desk sales kit IBM, PartnerWorldPartnerWorld  IBM Workload Automation sales kit IBM, PartnerWorldPartnerWorld Important web sites  Center of Competency – for IBM sellers Center of Competency  Center of Competency – for partners Center of Competency  IBM Service Engage IBM Service Engage  Software Sellers Workplace (SSW) Software Sellers Workplace (SSW) To learn more about the technologies:  Cloud, Cloud computing CloudCloud computing  SaaS: WWW, YouTubeWWWYouTube Where can I learn more? Working on Q2 enablement schedule