IBM Software Group

© 2004 IBM Corporation

IBM Express is the right size for midsize businesses

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The on demand era

New on demand business

An on demand business is an enterprise

whose business processes—

integrated end-to-end across the

company and with key partners,

suppliers and customers—can respond

with speed to any customer demand,

market opportunity or external threat

— Sam Palmisano Oct. 03

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value proposition

Changing role of suppliers

Increased responsibility and need for design and development collaboration and integration

Shift toward fewer OEMs and fewer suppliers

Expectations of continuous improvement and cost cutting – the “squeeze model”

Strategic forces

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Pricing Pressures

Security Threats

Customer Expectations

Unbuoyant Economy

GovernancePressure

Productivity Pressure

Capital and Asset Utilization Pressures

Open Movement

Commoditization

Clusters

Grids

Autonomic Computing

Web Services

Blades

VirtualizationStandards

The emergence of on demand business

Business

Technology

Accelerating advances in technology

Deeper integration of IT with business

Why on demand? What’s in it for you?

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On demand business and IT

Flexible Financial & Delivery Options

ENTRY

ENTRYBusinessTransformation

On DemandOperating

Environment

Business P

rocesses

• Increasing flexibility is the key—business models, processes and infrastructure • Technology acts as an enabler instead of a barrier

You can start anywhere

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Flexible Financial & Delivery Options

On DemandOperating

Environment

Business P

rocesses

BusinessTransformation

• Leverages existing assets

• Enables integration

• Infrastructure design matches business design

Modular Built for change Standards-based

Optimizing your infrastructure

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Well-educated customers demand quality, selection and value

Are you under pressure to cut costs, streamline operations and be more efficient?

Suppliers can’t respond fast enough to changes in your inventory, let alone in the market

If customers cannot shop conveniently and receive personal service in the store, through the catalog, on the Internet or by phone, their loyalty is at risk

Competitors squeeze your margins

Micro pressure points

Do these challenges sound familiar to you?

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Your Title Here

“Add Business Partner Customer quote here.”

— Source

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Add Business Partner local trends

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# of local engagements

Quote from BP president?

Facts that qualify the BP as a vendor of choice

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Macro pressure points

“Retail industry could save $40B/year by eliminating supply chain information errors.”— A.T. Kearney, The eRed Zone, Oct 2002

“In 2004, the top emerging areas in which organizations plan to invest are enterprise application integration and wireless technology…”

— The IT Spending Report (2003-2004)AMR Research, August 2003

You are facing uncontrollable mandates

Economic volatility and globalization

Increasing consolidation

across industries

Increasing regulations and

industry standards

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42% of the almost 500 IT executives polled said their systems were more complex than necessary… and maintaining and managing that excess complexity cost them an average of 29% of their IT budgets.— CIO Insight, 02/2003

　　

Companies that linked business processes with trading partners show 70% higher profitability than those that do not. 　— Business Advisor Zone, 12/2/2002

Analysts see the pressures too

New technology alone won’t boost productivity. Productivity gains come from managerial innovation… Companies generate innovations, in fat years or lean, by deploying new technology along with improved processes and capabilities. — McKinsey & Company, Volume 2 - 2003

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Characteristics of on demand businesses

1The need for flexibility and innovation forces increased componentization of the overall business and its processes

Applications evolve on a parallel path— becoming increasingly modular

Simplification of the underlying IT infrastructure is required to support the changes in the business

2

3

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Make business processes flexibleMeet changing business and market requirements

Increase efficiency and lower the costs of running business processes Eliminate redundant tasks and facilitate self-service capabilities

Make transactions move faster and improve qualityLower costs, improved responsiveness and customer satisfaction

Connect internal systems with those of customers, suppliers and partnersIncreases efficiency, lowers costs and expands access to markets

Offerings that solve medium-size business challenges

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solutions.

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Express portfolio delivers what midsize businesses want, at a price you can afford

Midsize businesses are demanding more flexible, affordable, open alternatives to help you grow and reduce costs

Flexible and simple licensing terms and better finance options

“IBM’s increased focus on vertical markets reflects the changing needs of customers.”

— Analyst Stephen O'Grady, RedMonk, “IBM Thinks Vertical with Software Revamp,” CNET, December 1, 2003

“An enterprise that actively manages future risks should favor J2EE”

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Process Information

IBM WebSphere® Portal - Express

IBM WebSphere BusinessIntegration Connect - Express

IBM WebSphere Business Integration Express for Item Synchronization

IBM WebSphere MQ Express

IBM WebSphere Commerce - Express

IBM Lotus® Domino™

Collaboration Express

IBM Lotus Domino Utility Server Express

IBM Integrated Platform Express

for Employee Workplace

IBM Tivoli® Storage Resource Manager Express

IBM DB2 Universal Database Express

IBM DB2 Content Manager Express

IBM DB2 Everyplace® Express

IBM WebSphere Application Server - Express

IBM Integration Platform for e-business Express

Complete IBM Middleware Express Portfolio

People

SWG offerings

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Business Partner application or service goes hereExpand on the Business Partner local midsize business solutions or applications

XXXXXXXXXX

XXXXX

XXXXXXX

XXXXX

XXXXXXX

Business Partner application IBM and Business Partner components Placeholder

Placeholder

Placeholder

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Challenge

Solution

Jagged Peak needed a way to ensure the performance and availability of its hosted realtime demand execution management application or risk losing existing and potential customers.

Jagged Peak deployed IBM Business Partner Open Demand's solution OpenLoad, a scalable application-testing solution, powered by a robust information management system that allows the company to meet it’s customers’ service level agreements (SLAs) by promising 100% uptime.

Benefits Enhanced ability to meet and exceed SLAs Increased customer confidence Better responsiveness Increased application efficiency 100% availability record

Jagged Peak promises 100 percent uptime

“We are extremely impressed with DB2 UDB Express and WebSphere Application Server Express. They enable small and medium-sized businesses to benefit from the rich functionality, ease of use and speed of enterprise editions at an affordable price.”

—Donald Doane, President and CEO, OpenDemand Systems

Note to IBM Business Partners: IBM SMB references follow each solution area. You can use these or substitute your own.

The best reference is the business down the street. If you choose to use your own, you can use this format. See “Backup” section for a blank template.

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Sur La Table serves up an online wish listChallenge

Solution

Sur La Table wanted to create an online gift registry.

Using IBM Business Partner MarcCole’s solution called Gift RegistryWorks, Sur La Table customers are now able to access a wish list that’s accessible via the Web or in-store PC kiosks powered by IBM WebSphere Express.

Benefits

Convenient for a registrant to create and update their registry

Linux-based solution using open-standards can enable diverse retailers’ environments

“It’ll be more convenient for a registrant to create and update their registry. They’ll be able to just touch a screen and get an immediate printout of any changes made.”

—Michelle Haycox, In-Store Operations, Sur La Table

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Anaconda sales increase 30-40 percentChallenge

Solution

Anaconda, a midsize sports equipment dealer needed to maximize responsiveness to its online customers and minimize costs.

IBM WebSphere Commerce provided a full-featured e-commerce solution at a price that was below other offerings.

Linux-based solution leverages open standards

Key Business Benefits

“We made the switch from Microsoft 2000 Server to Linux, and are happy with the system change, particularly because of the cost avoidance that comes with moving from proprietary software to open source.”

—Rob Meyer, Director of Internet Services, Anaconda Sports

Increased sales 30-40% Reduced the time to process order to

seconds rather than days Reduced paperwork with automated order

entry system Open system got rid of licensing fees

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What’s in it for midsize businesses?

Priced to market Right function Competitive features Provide “best of breed” features

and functionality Enabled for growth Easy to evaluate and order Evaluation materials and ordering

information simplified

Easy to learn and use Easy to deploy and install Installation and implementation Easy to manage Tools are provided to simplify

complex tasks Easy to support

All components, tools and information needed for successful implementation are provided as a single package

Affordable midsize business solutions to specific industry challenges

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logo here

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Using IBM integrated runtime

LogicLibrary saves thousands in installation costs

Challenge

LogicLibrary needed to make its enterprise application development tool, Logidex, “channel-ready,” by simplifying the packaging and deployment into a turnkey installation.

Solution

Value

Implemented IBM’s Integrated Runtime components into Logidex, creating a simplified package for the SMB market and for deployment by channel partners

Significantly reduced time and skills required to install Logidex for small and medium business customers

Opened up new markets in geographies outside North America by using channel partnerships that require a “channel-ready” product

Saved $1800 per installation that can add up to hundreds of thousands of dollars annually

Professional services team is redeployed to higher-margin projects

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Challenge

Selling ZipLip solutions to small and medium-sized businesses and mid-market customers is extremely difficult. Standard software strategy is too complex, expensive to install, and costly to support.

Solution

Value

ZipLip deployed Integrated Runtime using market leading WebSphere Application Server, DB2 Universal Database Express, and IBM HTTP Server

Multiplatform (extends deployment options)Windows and Linux

Wider range of available bundles

One product, license, contract, upgrade and support structure

ZipLip customers include:

ZipLip now able to deliver solutions to customers quickly and cost-effectively

10x increase in market opportunity

Double list of channel-ready solutions

Reduce deployment costs by 75%

Installation times shorten by up to 87%

Complexity dropped by 80%

Easier support and development

ZipLip gets from code to revenue more quickly

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Streamlining global online operations using WebSphere Commerce Express

Challenge Value

Hosting contract expired. Safilo needed to modernize its online catalog and marketing infrastructure.

Safilo solution completed in four weeks

Increased efficiency and productivity with advanced e business capabilities

Provided customers with accurate, up-to-date information and services

Lowered the total cost of ownership by reducing site maintenance expenses

The whole solution allows accurate online communication between Safilo and the system's users: opticians, salesmen and distributors.

Solutions

“So, at the end of our hosting contract, here in the USA we decided that a port to Oracle 9iAS would be the proper move. We were wrong. After a demo and discussion with the local IBM experts in WebSphere Commerce, we decided to abandon our port to Oracle and move the site to the USA and upgrade to WebSphere Commerce Express V5. The entire project was completed in 4 weeks and the site is wonderful.”

– Jeff Wolfe, Safilo USA IT Director

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2002 Share* 2001-02 Growth%

IBM 23.3% 17.5%

BEA Systems 17.3% 9.6%

Oracle Corp. 9.5% 8.0%

Tibco Inc. 4.9% -19.4%

webMethods 4.3% 6.3%

Sources: • IDC, “Application Deployment Platform Software Market, 2000-2002, with Leading Suppliers” June 2003 , Dennis Byron, Vice President, Business Process and Deployment Software Research • Gartner First Take "IBM Has Top Share in All Application Integration, Middleware Markets", J. Correia, Y. Natis, M. Pezzini, R. Schulte, 7 May 2003.

* Based on license revenue and license-related service fees

IBM "continued its long time lead of this market,“ IDC says (June 2003)

Application Deployment Platform Software Market

Application ServersIntegration Broker Suites

PortalsMessage-Oriented Middleware

Application Platform Suites Composite MarketTransaction Processing Monitors

Total Market

21

N/A1211

2131211

1111111

2000 2001 2002Worldwide IBM Market Share Position Based on New License Revenue

“IBM Has Top Share in All Application Integration Middleware Markets” Gartner Dataquest, May 2003

2000 2001 200219990

100

200

300

Ap

plic

atio

n In

teg

rati

on

Lic

ense

Rev

enu

e

IBM

TibcoWebMethods

SeeBeyondMercatorVitria

2003** Estimate based on 1H03 actual growth rates

The gap widens

Source: Wintergreen Research

Leading industry analysts acknowledge IBM market share dominance

Market leadership

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Industry standards leadership

1998 / 1999Java, XML and ebXML

Co-founder and lead architect for RosettaNet

Author of XML4J Chair OMG XML

Metadata Interch. Format

Co-author W3C Document Object Model

FounderXML.org Elected to Board

of Directors in OASIS

2000Web Services

and UDDI Co-author of

SOAP 1.1 and submission to W3C

Cofounder of UDDI.org and author of original UDDI specification

Co-author of WSDL

IBM contributes SOAP4J to Apache

2001Web Services

and Tools Led submission of

WSDL to the W3C Co-chaired W3

Web Services Workshop

Founder of Eclipse.org

Co-author of W3C XML Schema standard

Chair of Web Services Interactive Applications TC

2002Web Services and Security

Founder and chair, Web Services Interoperability Organization

Co-author of web services bus process specification (BPEL, WS-TX, WS-TC)

Co-author for Web Services Security roadmap and specification

2003Web Services and Security

Submission of BPEL to OASIS Co-chair WSBPELTC in OASIS Submission of Common Base

Events to WSDM TC in OASIS Submission of WS-Manageability to

WSDM TC in OASIS Co-authored and published EPAL

specification to WC3 Co-chair WSDM TC in OASIS More than 1,000 developers

devoted to XML and more than 1,500 focused on Linux. Over 200 software products running on Linux

Led workgroup responsible for finalization of SOAP 1.2

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Award-winning software brands

IBM is the leader in business automation

— Aberdeen, September 2002

IBM is the leader in portal software in 2002

— Gartner, 2003

IBM have widened lead as the leading and most question-free vendor in commerce servers

— Giga, August 2003

IBM is the leader in application integration

— Gartner, October 2002

Technology leadership “Best in Enterprise Integration”

— Intelligent Enterprise Readers Choice award 2002

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Award-winning Business Partner Applications here

The more local the award the better

Any local civic clubs or organization?

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awards or industry mentions

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IBM is committed to midsize businesses

$1 billion annual investment in Engineering $5 billion annual investment in technology acquisition

– Modeling

– Process Integration

– Software Development

Over 7,000 developers

10,000 customer sites rely on WebSphere MQ 2,000 customers rely on WebSphere Business Integration 2,000+ customers reply on WebSphere Portal since year 2000 introduction WebSphere Commerce powers 6 of top 10 pharmaceuticals IBM offers 48 industry-tailored business integration solutions that span 11 industries IBM WebSphere customers include 91 of the top 100 global companies in 2003 450K+ companies rely on IBM DB2 Information Management solutions

“Express is proof that IBM is serious about the SMB market.”

– Wayne Scarano SGA Business Systems

Nobody invests more

Experience really counts

IBM Express is affordably

priced

IBM Express is affordably

priced

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IBM Business Partner

Who and what skill sets matter from the customer’s point-of-view.

Business Partner experience, local background, etc…..

“Business Partner tagline or local customer quote.”

– Mr. Source,

Business Partner Staff

Experience really counts

IBM Express is affordably priced

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messaging

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Businesses like yours need options and choices

“While we expected some apprehension about over-dependence on Microsoft, we were surprised at the extent of this concern throughout the SMB market. Whether a five-person pizza shop or a 400-employee manufacturing facility, SMBs reported similar anxiety about Microsoft.”

—Helen Chan, Senior Analyst, Small And Medium Business Strategies, The Yankee Group

IBM delivers. Others don’t

Express demonstrates commitment to midsize businesses

”Express has allowed us to open up to those markets that in the past really weren't interested in IBM from a cost and support standpoint.”

—Sam Fatigato, CEO of Ascendant Technology, January 21, 2004

NOTE:If you wish, merge content above with Business

Partner local SMB applications

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Committed to the midsize business marketplace

IBM Gets Serious About ExpressJanuary 21, 2004

Happy Together: IBM, Linux and Small Businesses May 30, 2003

IBM escalates SMB war with MicrosoftFebruary 25, 2004

Software giants think small IBM, Microsoft move into niche marketsDecember 11, 2004

IBM Expects SMB to rev up IT spending in 2004 January 2, 2004

SMB Partners Eyeing WebSphere Express June 6, 2003

NOTE:Any local press headlines?

Articles about the BP?

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Assess your on demand business readiness and map out your journey

Calculate your ROI

Get started. Start anywhere

Go to BP URL or email xxx for next steps

Capitalize on the opportunity presented by a connected world

Take action today

www.ibm.com/software/smb

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© Copyright IBM Corporation 2004. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software.References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way.IBM, the IBM logo, the e-business logo and other IBM products and services are trademarks or registered trademarks of the International Business Machines Corporation, in the United States, other countries or both. Java and all Java-based trademarks are trademarks of Sun Microsystems, Inc. in the United States, other countries or both.Microsoft, Windows, Windows NT and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries or both.All other trademarks, company, products or service names may be trademarks, registered trademarks or service marks of others

Disclaimer: NOTICE – BUSINESS VALUE INFORMATION IS PROVIDED TO YOU 'AS IS' WITH THE UNDERSTANDING THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED. IBM DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IBM DOES NOT WARRANT OR MAKE ANY REPRESENTATIONS REGARDING THE USE, VALIDITY, ACCURACY OR RELIABILITY OF THE BUSINESS BENEFITS SHOWN.. IN NO EVENT SHALL IBM BE LIABLE FOR ANY DAMAGES, INCLUDING THOSE ARISING AS A RESULT OF IBM'S NEGLIGENCE.WHETHER THOSE DAMAGES ARE DIRECT, CONSEQUENTIAL, INCIDENTAL, OR SPECIAL, FLOWING FROM YOUR USE OF OR INABILITY TO USE THE INFORMATION PROVIDED HEREWITH OR RESULTS EVEN IF IBM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE ULTIMATE RESPONSIBILITY FOR ACHIEVING THE CALCULATED RESULTS REMAINS WITH YOU.

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Back up

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Add key benefit customer

Challenge Value

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Solutions

“….quote goes here...l.” – attribution goes here

(Name, title, company)

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