2. Rodney Foreman Cloud & Smarter Infrastructure Director, Worldwide Channels Sales

3. #ibmpulse Caution on forward looking statements IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice at IBM’s sole discretion. Information regarding potential future products is intended to outline our general product direction and it should not be relied on in making a purchasing decision. The information mentioned regarding potential future products is not a commitment, promise, or legal obligation to deliver any material, code or functionality. Information about potential future products may not be incorporated into any contract. The development, release, and timing of any future features or functionality described for our products remains at our sole discretion.

4. #ibmpulse “Business Partners are vital to IBM’s success “IBM’s software business is not limited in opportunity. Partners can help us reach our goals." Steve Mills, Senior IBM VP, SWG

5. #ibmpulse 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

6. #ibmpulse What is driving the move to SaaS? Market dynamics and disruptive technologies are driving the shift to SaaS consumptions 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

7. #ibmpulse …and the decision making process is changing 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 *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

8. #ibmpulse How can SaaS help? Improved TCO due to lower infrastructure costs Flexible subscription pricing Minimal upfront investment Continuous delivery of new capabilities allows rapid innovation and access to immediate code fixes Lower risk with try and buy approach Accelerates evaluations and decision making

9. #ibmpulse What is the Total Cost of Ownership? 30 VMs 300 VMs 1650 VMs Software Subscription or License costs Support and Maintenance Infrastructure Costs Hardware Storage Management and Operations Deploy App Support Training App Tuning App Support Software Maintenance (e.g upgrades) On-premise vs. Saas

10. #ibmpulse What is the competition doing? While the Old Lions fight, the Hyenas are stealing the food C&SI on April TT Study IT Operations wants To manage on-premise, Cloud, and hybrid environments VMware CommVault SolarWinds ServiceNow Splunk MobileIron New Relic Hyenas … HP Symantec CA BMC C&SI (2012-13) C&SI (2014-15) Old Lions …

11. #ibmpulse Why are Customers buying SaaS? Customers that want to shift from Capital Expenses (On-premise) to Operating Expenses (SaaS) to fund software purchases 18% Customers who want to quickly gain access to new capabilities that they cannot obtain by purchasing existing software products and services 50% Customers that wish to replace existing licensed and/or client/server applications with SaaS applications 15% Other 17% *Source: Gartner, Softletter, Forrester, GigaOM

12. #ibmpulse A New Way to experience and acquire our on-premise and SaaS solutions How is IBM delivering this? IBM Service Engage

13. #ibmpulse IBM Service Exchange – Digital Presence Readily available Continuous delivered Scaling to needs Immediate Feedback Support Learn Explore Try Use / Buy Extend

14. #ibmpulse Why is this important to YOU? Service Engage faster time to value for your clients POC in days not weeks / months with 30 day evals Earn quick wins, close more often, earn more money Expand your footprint in your accounts using a land and expand strategy Displace competitors, on flexibility, broad capabilities, lack of comparable offer Service engage puts you and your clients in the driver’s seat. Take a drive today! https://www.ibmserviceengage.com/

15. #ibmpulse Application Performance Management What SaaS Offerings can you sell NOW? IBM Application Performance Management Entry (SaaS) $25/month per Average Managed Virtual Server (aMVS) IBM SmartCloud Control Desk (SaaS) $99/month per Authorized User IBM Workload Automation (SaaS) Starts at $70 per 1,000 executed jobs per month $297/month per Concurrent User h From 251k to 1,000k, each pack of 1k is priced at $35/month From 26k to 250k, each pack of 1k is priced at $56/month From 1k to 25k monthly executed jobs, each pack of 1k is priced at $70/month >1000k jobs, each 1K job pack is priced at $21 per month Workload Automation IT Service and Asset Management

16. #ibmpulse 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 PriceKey CompetitorsQuestions to ask APM Entry: $25/month per Average Managed Virtual Server (aMVS) APM Diagnostics: $120/ month per Average Managed Virtual Server (aMVS) New Relic - Customer Analytics performance benchmarks, plug and play in API marketplace, Open platform for community to contribute, wide coverage of languages AppDynamics - Automated Remediation, Automated service tickets with ServiceNow, auto provisioning with Chef & Puppet scripts, open platform, API marketplace presence Compuware, Quest – Customer behavior analytics, Click streams, conversion rates, page load times, Competitive Differentiators: 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?

17. #ibmpulse 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 PriceCompetitorsQuestions to ask New Customers  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 Existing Customers  1k - 25k jobs  each 1k job pack is priced at $56/mth  25k - 250k jobs  each 1k job pack is priced at $35/mth  250k – 1,000k jobs  each 1k job pack is priced at $21/mth  > 1,000k jobs  each 1k job pack is priced at $21/mth (*existing customers continue to pay S&S) Traditional vendors (BMC, CA, ASG) Specific Solution vendors (e.g. RunMyJobs, Flux, Network Automation, Advanced Systems Concepts) Competitive Differentiators: 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. 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 money building and managing your infrastructure? LOB owner: Is it taking too much time to automate your processes, and monitor them through simple interfaces ?

18. #ibmpulse 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 PriceCompetitorsCompetitive DifferentiatorsQuestions to ask $99/month per Authorized User $297/month per Concurrent User Legacy IT vendors (e.g. BMC, HP, CA) are digging deep to re- work existing ITSM solutions for SaaS delivery or create brand-new ITSM offerings that compete with and confuse their existing solutions Emerging vendors (e.g. ServiceNow) are offering 1) Light- weight “no-install” SaaS offerings, 2) “good enough” – cheap, quick, easy, 3) Very easy to use, little training needed, 4) Focused on social media interactions, 5) Often pushing PaaA solutions to build their IT infrastructure Know Weaknesses No concurrent user pricing; weak in change mgt, analysis and planning; charges extra for run book functionality; No on-premise solution SCCD Strengths 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? Into configuration, Change, asset 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

19. #ibmpulse Application Specific Licensing (ASL, xSP) BP’s solution bundled with IBM perpetual software IBM SaaS Referral Incentive Leverage IBM SaaS Offerings to enhance solutions IBM SaaS Solution Provider (SSP) BP’s expertise with IBM SaaS BP delivered SaaS IBM delivered SaaS BP sell, invoice, deliver IBM Sales Rep incented Earn 25% on subscription parts, for life of contract (single-user) Earn up to 35% off tier price for life of contract (multi-customer) Level 1 support provided by partner Tier one contractual relationship between IBM and BP BP prices independently BP identify Opportunity, Co-Sell with IBM Earn 15% fees on first contract subscription Level 1 & 2 support provided by IBM IBM handles pricing Autonomous selling Level 1 & 2 Support provided by the partner Restricted-Use License; License held by partner Known price to BP for the IBM SW for the duration of contract Monthly parts available on selected products IBM Software Value Plus (SVP) Leverage standard two tier distribution channel BP resells, invoice, deliver IBM Sales Rep is incented Authorized Partners only Standard VAD/ VAR incentive model IBM provides Level 1 & 2 Partner Guided Selling tool used to quote and sell What are the Business Partner SaaS Programs? Re-Marketers BP Storefront Referral

20. #ibmpulse The SaaS & Service Engage Center of Competency serves as a war room, providing a resource for sellers to get help closing a SaaS deals.SaaS & Service Engage Center of Competency The CoC web site provides information on the following: Overviews FAQs Terms & Conditions Privacy SaaS vs on-premise Competition Pricing ELAs & SaaS DSR / ISR scripts Typical sales cycle Links to SaaS Offering info Sellers can use the CoC: For self-service To submit a question to the community To request help Where can I get help with a SaaS deal? Partners - http://www.ibm.com/csicenter/partners/*http://www.ibm.com/csicenter/partners/*

21. #ibmpulse How do I maintain my leads? BP provides their unique IBM Service Engage url to client SaaS ISR SaaS ISR informs BP that client has started trial BP Client SaaS Inside Sales Rep receives client response associated with BP and matches to trial list Client registers Client receives free trial 1 2 3 4 6 Trial list SaaS Inside Sales Rep qualifies client (Optional) 5 Support Learn Explore Try Use / Buy Extend

22. #ibmpulse 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. #ibmpulse 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 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. Get them to Service Engage todayService Engage  Make a SaaS proposal.

24. #ibmpulse Sales Kits:  SaaS sales kit in PartnerWorldPartnerWorld  At Go Live see the SaaS updates to these sales kits: IBM Application Performance Management sales kit in PartnerWorld PartnerWorld IBM Workload Automation sales kit in PartnerWorldPartnerWorld IBM SmartCloud Control Desk sales kit in PartnerWorldPartnerWorld Important web sites  Center of Competency Center of Competency  Service Engage Service Engage To learn more about the technologies:  Cloud, Cloud computing CloudCloud computing  SaaS: WWW, YouTubeWWWYouTube Where can I learn more?

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