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IBM Lotus Foundations StartTech Data Sales Enablement – August 27, 2008France Loubier – WW Channel Sales Executive

Sales Enablement Agenda

Welcome and introduction to IBM Lotus Foundations

Market Positioning

Partner & Customer

IBM SMB Announcement

Earlier this year IBM announced expansion of its SMB strategy - focusing on serving companies with less than 500 employees, making its world-class expertise accessible to small businesses

Net Integration has been acquired by IBM and is part of the Lotus software division of IBM SWG group led by Bob Picciano, General Manager, Lotus software.

IBM will integrate Net Integration’s technology into the Lotus Foundations family of servers. – Allowing the Lotus software offerings with an affordable, simple and essential business

solutions that will allow companies to focus on business instead of on IT.

Sam Palmisano – “SMB market is poised to become IBM's biggest source of revenue”

Small business is still big business

Businesses with under 1,000 employees:– account for 36$B in middleware opportunity in 2008 – 31% of all middleware

opportunity*– outpace large enterprise opportunity growth 6.1% to 4.5%*

Business with less than 100 employees:– comprise 53% of the under 1,000 employee spend*– represent a significant, untapped market segment– require easy to install, easy to maintain, affordable solutions– need quick integration and rapid deployment of applications– are showing increased interest in appliance solutions – are in need of alternatives to the current market solutions

*Source: IBM GMV 1H08 Constant Currency Middleware Served

SMBs are not small companies with small problems – they require increasing complex IT solutions, but rely on trusted advisors for assistance

Increasing business complexity– Multi-location, Multi-vendor, Remote workforce

Increasingly similar demands as larger companies– Meeting customer needs so they can increase sales and profits– Competing effectively against both large and small rivals– Increase efficiencies and thereby decrease costs

Rely heavily on trusted advisers or business partners to help with IT

– Partners who have experience with similar implementations, offer a complete solution, and really understand their business (vertical expertise)

– Top preferred channel for SMBs is a local or regional VAR or SI

Source: IBM Market Intelligence forecast for Total IT, Overview of the SMB Market, May 2008

Innovation

Collaboration leadership

Business Partner Network

Global reach

With its recent acquisition of Net Integration Technologies, IBM announced its commitment to make its world-class expertise accessible to smaller businesses – affordably, and with ease.

Proven approach for SMB needs

Innovative capabilities for customers and partners

Simple, reliable technology

IBM Commits to Businesses with 5 – 500 Employees

Invested in serving companies with 5 – 500 employees

Devoted to enabling smaller businesses with the essential IT services they need to run their businesses

Committed to providing a smart and affordable networking alternative that is simple to use and maintain

Foundations=

7

IBM Lotus Foundations is optimized for small businesses

The Lotus Foundations family is a series of on-premiseon-premise software servers

Provides the essential IT services to easily and efficiently run a business with 5 – 500 employees

Deploys in under 30 minutes

Designed to accommodate growth

Requires no in-house IT resources

Self-managing, self-healing and self-configuring

Provides advanced remote administration capabilities

Delivered through business partners

Compatible with both IBM and 3rd party hardware platforms

8

IBM Lotus Foundations Start is a complete first server – an out-of-the-box solution for every small business

Email and collaboration

Choice of email clients: Notes, Webmail and support for MS Outlook

Office tools: spreadsheets, presentations, documents

Network infrastructure

File management

Firewall, VPN, secure remote access

Backup, Disaster Recovery

AntiVirus and AntiSpam

Complete operating system: Self-managing, self-healing and self-configuring

Lotus Foundations Start is designed to deliver a complete IT solution for the small business

Who is our key competitor?

Microsoft – Small Business Server (SBS)

Established market leader in this space– 80% market share– Lack of any other strong competitor– Partnership with leading hardware vendors

Lotus Foundation Start offers several advantages over the competition – it’s designed to alter the status-quo

Runs atop Linux for a proven, robust, yet compact server Operating System environment.

– Without the need for Linux skills

Autonomic capabilities reduce the need for on-site IT skills– Automates key tasks such as installation, configuration and updates

Small footprint allows the OS and configuration files to be stored on a CD-ROM, hard disk or solid state chip.

– Start measures complete system recovery in minutes – without the need for IT assistance.

Integrated disk backup technology provided as standard

Anti-virus, anti-spam and a self-configuring firewall provided as standard – Complemented by the fact that Linux OS is less targeted to malicious attacks

Office productivity tools are included as standard

Integrated vs. Layered Approach

Operating system

Back-upAdministration

D/R

Email, File

Operating system

Email, File storage

3rd party security

3rd party back-up

MS - SBS

In summary – Customer comparison

Top 3 priorities for SMB

1. Simplicity – Autonomics, administration

2. Functionality – Domino strength, all-in-one

3. Value - $ implementation, $ management, $ up-front

“Our customers experience on average 30-50% savings using Foundations” Smart Technology Enablers

Partner Profile

Clear strategy around providing IT services to customers in the 5-500 space– Corporate and/or global resellers should be the first focus – Sweet Spot has been small VARs with 5-15 employees

Expertise in meeting the demands of small business IT services such as network infrastructure, software design, security,

connectivity, communication, and managed services

DNA of a top partner1. Business partners that have established a vertical based expertise.

Reason – They fully understand the nuances of the customer vertical

2. Business partners that have carved out a niche from a geographical perspective i.e. small community

Reason – Word of mouth and reputation are very powerful in the small business community

Value to You

IBM solution for a fast growing market Tremendous services revenue opportunity

Remote management capabilities (BP can support 3 times as many servers as competitive products)

Overall labor required is 1/3 of other comparable products

Solution that maximize their time and value Low up-front costs (ie. Enablement – hours not days)

Low touch, simple solution = short sales cycles

Easy to install, non-complex, and autonomic

Lightweight Linux OS, but no Linux skills required

Rich online and extensive phone-based technical product support

Reliable and security-rich = customer satisfaction

Example: Managed Services and Support Revenue Opportunity

Services may Include: Highest Priority Service All Lotus Foundations Server problems are covered Hardware replacement if optional hw warranty is

purchased Network, Server Management & Monitoring Same-Day Response or better Remote Support available Application Support Online Help Desk Trouble Ticket Submission System Limited Helpdesk email support for all users Monthly IT Status reports & recommendations Cold Stand-by Hardware Availability Plan

ISP & email management Backup management Network management Firewall management VPN management Disaster recovery incidents Security management**

Users Per Foundations Server ($/Month)

Per Foundations User ($/Month)

Scheduled On-Site Visit

5 – 25 $120 - $150 $15 - $30 Twice/Year

25 – 100 $150 - $250 $15 - $25 Quarterly

100 – 500 $250 - $350 $10 - $20 Monthly

How Business Partners Find Target Customers

Community Involvement i.e. local chamber of commerce

Industry/Trade Associations

Local Advertisement References & Endorsements Vertical expertise

Target MarketCompanies with up to 500 users

Ideal first server for: Any business or a branch office

Companies in industries pressured with regulatory compliance or those dealing with confidential client data

Companies looking for a server that can also provide reliable data backup of electronic information

Ideal replacement server for:

Small businesses struggling with outdated and unreliable systems

Growing businesses whose existing server cannot handle growing server loads

Companies that want to move toward a more "electronic or paperless" office

Companies looking for a small-business server that can also provide reliable data backup of electronic information

Target Market Analysis

First Server Purchase(5-50 employees)

Business Needs:

Document sharing Networked applications (accounting,

timesheets) File and records backup e-mail management Data and Network Security Mobile access to mail, files, data LAN (faster network) Low maintenance solution Cost $$ conscious Simplicity – No “IT “in-house

Connecting the Business(50-100 employees)

Business Needs:

Wider use of productivity and business applications

First Enterprise Applications (ERP, CRM) Records management

EDI Intranets / portals Networked storage WAN – branch offices Establish processes and standards

Extending the Business

(100-500 employees)

Business Needs:

Enterprise Application Integration CRM, SFA, ERP… Extensive customization Deep interdependencies with supply

chain IT department organized between

infrastructure and applications

New customers who have not yet purchased first server

Companies upgrading obsolete servers or adding additional capacity

Branch offices wanting connectivity/infrastructure that’s easy to administer

Customer Opportunity - Legal Firm

Legal firm specializing in technology and intellectual property law:• Two offices with 12 employees (no IT staff)• When their server went down, they lost a week of data and billable hours trying to restore from backup tapes

• Business problems:• Reliable and complete backup and restore• Document management and storage• Security, anti-virus, anti-spam• Two offices need to be able to share data

Customer Opportunity – Dental Office

Dental office specializing in families and children:• One location with several patient rooms and complicated dental IT equipment - 7 employees (with and IT point of contact) rely completely on their IT service provider, to deal with the computers. “He needs to be there for me so I can keep doing my

real work.”

• Business problems:• A lot of IT equipment in the office, but when the server goes down the office cannot get anything done as they have to revert to paper. • Increasingly frustrated with the cost and distraction of dealing with viruses, spam and server crashes. • Although the system has a backup tape drive they have had problems in the past when the receptionist has forgotten to change the tapes on schedule, and the tapes they use are starting to look damaged - he’s concerned that he’s not protected.

Objection Handling

IBM/Domino/Notes is an enterprise product & company Domino/Notes is too complex My customers are not asking for Notes I don’t have any Linux experience

Lotus Foundations Channel Strategy And Programs

IBM building a set of tactics targeted at the end users market– Designing a series of webcasts, short videos and thought leadership pieces

• Convey message that IBM is committed to the small business space• Position IBM’s partners as trusted advisers in delivering simplified, yet

comprehensive solution that is easy for small businesses to deploy, maintain and use• Show end users that IBM is working to demystify IT and make it simple for small

businesses• Build awareness and gain mindshare around the Lotus Foundations offering• Drive end-users to local solution providers

Lead passing program starting in Q4

Lotus Foundations partner program – Will leverage IBM’s PartnerWorld program with special profile for Foundations

partners– Easy access to get information on Foundations and small business market – Access to knowledge database, online training, Campaign in the box material,

etc…

Embrace a new alternative today! Get Started Now

Talk to your customers about Foundations

Participate in our training sessions: – One Day Sales & Technical sessions only open to Tech Data partners:

• Sept. 15 – NY – 590 Madison Avenue - midtown Manhattan - RSA-0289-12-1218

classroom• Sept. 16 – Cincinnati

– IBM facility at 4600 McAuley Place - ADI-6299-02-TJ Watson Classroom

• Philadelphia - Date and location tbd

– Two 2 days Deep Dive technical enablement sessions :• Sept. 9 – 10 – Virtual workshop• Sept 29 & 30 – Waltham, Massachusetts• Oct. 7 & 8 – Toronto, Canada• Nov. 4 & 5 – Virtual workshop