1. www.idc.com Dynamic IT for the Dynamic Enterprise Creating the Next Generation of Business-Responsive IT Frank Gens SVP Research IDC

2. Business Executives See IT as a Key to Success Q: Importance of IT to Strategy Execution? Q: Should Use IT More/Less Aggressively? Source: IDC’s LOB Executive Survey, January 2004

3. Business Priorities Are Driving IT Investment Retail/ Distribution Manu- facturing Healthcare Financial Innovation/PLM Sourcing Production Supply Chain Marketing Sales Store/Branch Operations Customer Care Performance Management Human Capital Government Derived from IDC’s European VM Survey, January 2004 and IDC’s U.S. LOB Executive Survey, January 2004. Q: What are your company’s biggest focus areas for IT investment in 2004? Low IT priority Not applicable Medium IT priority Hot IT priority

4. Email Retail Manf. ERP CRM Servers Storage Database Trans. proc. Web host. File/print Infrastructure/Mgmt./ Security Payroll BUT IT is Messy, Expensive and Slow to Change Business Processes

5. The Negative Impact of IT Complexity & Rigidity Average % of IT Budget Spent on Innovation Versus Ongoing Operations and Infrastructure Management US Europe Source: IDC’s Enterprise Technology Trends IT Decision Monitor, 2004

6. Dynamic Enterprises Needs Dynamic IT Dynamic IT Capability Human Capital Customer Care Store/Branch Ops Performance Management Sales & Marketing Supply Chain Innovation/PLM Production

7. Describing a “vision” for the next generation of IT, and businesses’ use of IT  IT that better supports business’ need for speed, flexibility, efficiency Everyone’s trying to explain “what’s next?”

8. IT Operations Automation & Management Operational Efficiency Business Strategy Automation & Execution Responsiveness to Market Two Focus Areas for Dynamic IT Transformation End-to-End, Dynamic Management Business Monitoring & Analytics Business Process & Application Automation Information and Data Services Integration, Event & Deployment Services Collaboration & Communication Services Access & Interface Services Service Level Management & Automation Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Platform Management & Monitoring

9. Building Blocks for Dynamic Business Execution Business Monitoring & Analytics Business Process & Application Automation Information and Data Services Integration, Event & Deployment Services Collaboration & Communication Services Access & Interface Services Measure business performance to trigger market-responsive change Provide access to all relevant information as needed Support human interaction in the business process How Dynamic IT Can Improve Business’ Market Responsiveness Quickly configure (and re-configure) applications and business rules to support the business Support dynamic, high-performance integration of business-critical IT resources Provide navigation and interactive experience inside and outside the enterprise

10. Business Strategy Automation & Execution IT Operations Automation & Management End-to-End Design & Management Components, Standards-Based Flexible Operating Cost Model Flexible Sourcing Model Service-Oriented Architecture Virtualized Resources Model End-to-End, Dynamic Management What’s Different About Dynamic IT? 6 “Dynamic” Principles

11. What’s Different About Dynamic IT? 2 business principles Flexible Sourcing Model Flexible Operating-Cost Model Service-Oriented Architecture Simplified resource sharing Components, Standards-Based Virtualized Resource Model Low costs, Faster integration Efficient utilization, integration End-to-End Design & Management “Business- aware” view 4 technology principles

12. Business Strategy Automation & Execution Responsiveness to Market Vendors Innovating Around Dynamic Business Execution

13. Service Level Management & Automation Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Resource Management & Monitoring Platform Management & Monitoring Building Blocks for Dynamic IT Operations Trigger deployment and redeployment of IT resources in response to business need Measure and charge for IT resources by actual business usage How Dynamic IT Can Improve IT Operational Performance & Efficiency Protect the entire IT environment - applications, application components, data, and IT infrastructure Enable rapid and consistent deployment of IT infrastructure Enable system monitoring, inventory, alerting, group management, and capacity management Creating efficient, virtual pools of server, storage, and network services

14. What’s Different About Dynamic IT? 2 business principles Flexible Sourcing Model Flexible Operating-Cost Model Service-Oriented Architecture Simplified resource sharing Components, Standards-Based Virtualized Resource Model Low costs, Faster integration Efficient utilization, integration End-to-End Design & Management “Business- aware” view 4 technology principles

15. IT Operations Automation & Management Vendors Innovating Around Dynamic IT Operations Operational Efficiency (Sun) (Veritas) Novadigm (HP) (IBM) (Sun) (EMC)

16. Business Monitoring & Analytics Business Process & Application Automation Information and Data Services Integration, Event & Deployment Services Collaboration & Communication Services Access & Interface Services Service Level Management & Automation Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Platform Management & Monitoring The Shift to Dynamic IT Is Driving Product Portfolio, M&A Strategies

17. “The Network” Business Monitoring & Analytics Business Process & Application Automation Information and Data Services Integration, Event & Deployment Services Collaboration & Communication Services Access & Interface Services Service Level Management & Automation Metering, Measurement & Charge-back Security Infrastructure Virtualization Infrastructure Provisioning Resource Management & Monitoring Platform Management & Monitoring Customer Management IT Operations/Processes IT Management/Leadership IT Governance Dynamic IT Requires Change Beyond Core IT Technical Capabilities Physical Infrastructure Sourcing (in-house vs. service providers)

18. Goal: Untangle the IT Mess, Increase IT’s Business-Responsiveness & Efficiency Retail Manf. ERP CRM Servers Storage Business Processes Database Trans. proc. Web host. File/print Infrastructure/Mgmt./ Security Payroll Integration, Event & Deployment Federated Data & Information Collaboration/Messaging Virtualized Storage Virtualized Processing Virtualized Infrastructure Service Level & Resource Management Business Processes Business Monitoring, Analysis & Decision-Making Security Management Interface & Access In-house, 3 rd party compon -ents Packaged Apps - ERP CRM HR Custom Apps, Business Rules Business Rules & Functionality

19. Where to Start? – Business Execs’ Priorities for Dynamic IT Source: IDC’s LOB Executive Survey, June 2004 Q: Most important IT improvements to better support business? ¥£ € $

20. Dynamic IT Is Already In Motion

21. The Shift to Dynamic IT Is Driving Major Change in Today’s Market Who the key IT players are…  New wave of IT supplier startups, acquisitions & mergers  LOB executives joining the CIO on the customer side What major players’ offerings and strategies are…  Re-architecting products to be more “dynamic”  Expanding offerings into related dynamic IT segments  Driving new business models  Driving reassessment of channels, alliances, “ecosystems” How Enterprises are evolving their IT capabilities…  Flexibility, reuse of SOA as a driving architectural principle  End-to-end linkage to business process, performance  Extensive use of automation to improve operating efficiency  Variable-cost agreements with suppliers

22. For further information… Complimentary Report available on idc.com* * http://www.idc.com/ Search for Document #31371; registration (free) required http://www.idc.com/