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IBM Growth MarketsExternal Presentation

****This presentation contains speaking notes and infographics which can be used as stand-alone assets (pages 10, 35, 40)

© 2012 IBM Corporation

GMU External Relations April 2012


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Overview of contents

IBM’s growth markets focus+ Market drivers+ Opportunity

+ Structure & investment

IBM Growth Markets strategy+ Market Expansion

+ Industry leadership

Smarter Planet

Generating value

+ Smarter Cities

+ Business model+ Corporate responsibility

+ GMU facts


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Over the past decade, IBM has sustainedleadership by pursuing the most transformationalopportunities, inventing the breakthroughtechnologies to capture them and building anorganization able to deliver superior results overthe long term.

Today IBM is pursuing a roadmap laid out to2015 targeting $20 billion in top line revenuegrowth from four growth initiatives: Growth

IBM GMU External Relations 20123

ar e s, ou , us ness na y cs an mar erPlanet


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Russia has committed a spend of$400bn on 304 infrastructure

India power sector needsinvestment of $ 230 billion

Demand for technology & infrastructure is driving growth markets

Emerging markets infrastructure isex ected to benefit from: 6 trillion

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projects by 2015—and 300B onrailways by 2030

China is expected to build some1,000 gigawatts of new power-

generation capacity over the next15 years

Argentina’s investment in energyis about $740 million and it has a

target of 8% of its energy to besourced from renewables by 2016

In Africa, 2012 onwards FDIinflows are forecasted to increase

to $150 billion. The decade 2000-2010 saw it increase by 87%

between 2012 to 2017

in government and privatespending by 2013

Source: EIU 2011


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Understanding and building business in growth markets requires

focus and investment

Understanding growth Assessin the market Investments that su ort

.

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market characteristics

Making marketsDeveloping skills & talent

opportunity

growth

Brand eminence


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Revenue from growthmarkets will approach30% of total IBMrevenue by 2015;

Growth from new

marketsGrowth in IT will come from newmarkets that are emerging at anastonishing rate. To relieve the strain oninadequate infrastructure, they are

leapfrogging to new technologies.


IBM is relying on marketexpansion to drive 32%of new GMU growth.


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Developing new markets for growth“The IMF expects emerging markets to contribute over 80% of world GDP growth in 2012”.-- The Economist

“As IBM begins our second century, we remain driven by our

founder's vision. To be sustainable a business must be built onintellect, problem solving, imagination, transformation andinnovation. And in our growth markets, this is particularly the case.

It’s in growth markets that some of the most complex challenges

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an oppor un es ex s , as coun r es an us nesses grapp e wurban migration of levels unknown in the developed world and withdemands from citizens – urban and rural – to deliver solutions withunprecedented speed to connect people and business.

We believe this calls for new operating models, new ways of

innovating, new ways of serving clients and we believe IBM’sproven experience and advanced expertise will help public andprivate enterprise to move quickly to adapt to these new dynamics.”

Jim BramanteSenior Vice PresidentIBM Growth Markets


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IBM does business in more than 147 countries in Growth Markets:

Global Headquarters in ShanghaiEight Growth Market Teams

Central & Eastern Europe

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Latin America

Greater ChinaMiddle East Afric a

IndiaSouth Asia

ASEAN

Korea

Australia,New Zealand


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IBM does business in more than 147 countries in Growth Markets:Global Headquarters in Shanghai

Eight Growth Market Teams

Eight regional leaders

David Stokes

Middle East Africa

IndiaSouth Asia

ASEAN

orea

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Latin America

Greater China

Australia,New Zealand

Elly Keinan

Takreem el Tohamy

Shanker Annaswamy

Andrew Stevens

Cordelia Chung

DC Chien

HS Lee


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10


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Key IBM 2011 investments announced in Growth Markets

IBM to build Cloud ComputingData Center with local China firm

IBM establishes Science &Technology Center within theSkolkovo Innovation Center in

IBM opens first server re-manufacturing center in China


IBM sets up services integrationhub in Changi, Singapore

IBM advances analytics skillsprogram to global universities

.

The Africa revolution nobodyshould ignore. IBM’s invests big

across African countries.


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We’re investing in partners across growth markets

• Over 50,000 Business Partners• In 2011, Co-marketing investments supported

600+ Business Partners

Over $1B investments in business partners across growth markets

• Systems technology group spends over $5Mannually transforming the partner ecosystem• Access to over 20 innovation centers, 8 cloud

labs and 2 cloud datacenters• 133,000+ professional certifications held by

44,000+ partners in 2011


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IBM has selected 20 countries key for business growth based ona range of variables

Russia

CzechRepublic

South

Poland

• IT Market Size & Growth• IT as a % of GDP• Macro-economic• Business Environment• Political Environment• Human Capital• Physical Infrastructure• Economic Recovery•

Australia

Brazil

Chile

Mexico

SouthAfrica

Indonesia

India

China

VietnamTaiwan

SingaporeThailand

UAESaudi

Arabia

Philippines

Malaysia


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IBM’s Geographic Expansion Initiative

China: 80% IT opportunity outside major citiesIndia: 63% IT opportunity outside major citiesASEAN: 72% IT opportunity outside capital citiesBrazil: 6 metro areas outside Sao Paulo, Brasilia, Rio with >$500M

IT opportunity each

IBM currently has over 250 branches in morethan 60 growth market countries

IBM plans to open new branches across allgrowth market regions in 2012 and through to2015

IBM's Geographic Expansion initiative includessmaller, high-growth cities in Brazil, Russia,India, China and Central Europe as well asemerging economies in Middle East, Africa, Latin


mer ca, an as ern urope


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Making markets is making news in growth markets

African Banks Turn to IBM to SupportNew Wave of Innovation in BankingServicesIBM signs agreements with leading Kenyan

banks as financial institutions across Africainvest in smarter banking solutions

IBM Opens 30th Branch Office inChinaIncreases the number of growth market

branches by 140 percent over the past 10years


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ASEANMarket Expansion• Population surpassed 550 million, majority 40

years and under

• GDP growth to average 6% annually

• 2011 investments included Global ServicesIntegration Hub, the Asia Pacific Cloud

Computing Data Centre, and the Smarter CitiesResearch Collaboratory

2012 top investments and priorities• IBM will o en several new branches in smaller

Lac Viet Computing Joint Stock Co . signed acooperation deal with IBM Vietnam to provide cloudcomputing-based solutions and services for local

Growing demand for advancedbanking systems and major

investments intelco and energy

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rapidly growing CITIES across ASEAN

• IBM will open its 7th Innovation Center inSingapore making it the leading innovation hubof Asia

• Across the region, focus on banking andfinance, telecommunications, healthcare,

government, underpinned by Smarter Cities,BAO and Cloud

businesses.

Global Digital Niaga , a subsidiary of Djarum Grouptoday launched its new online customer sales websitecalled Blibli.com. The website uses IBM software todeliver a personalized and more interactive shoppingexperience for Indonesians, selling leading brands inapparel, cosmetics, electronic equipment, homefurnishings among others.


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Australia & New ZealandMarket Expansion

• 2011 investments included R&D lab in Australia and aCloud Data Center in New Zealand

• Economic recovery is strengthening, with GDPforecast to grow by 3.25% in 2011-2012 and 2012-2013

• Both the federal and state governments haverecognized the need to invest heavily in water,transport, ports, telecommunications, and educationinfrastructure to expand Australia's supply capacity

National E-Health Transition Authority (NEHTA)appointed IBM to transform Australia’s healthsystem and help to drive smarter healthcaredelivery in an A$23.6 million dollar contract todesi n and build Australia’s National

Dominated by services sector;agricultural & mining sectors account

for bulk of exports

•

Expansion in Western Australia and Queenslandsupport focus on natural resources industry

• Continued focus on banking & finance,telecommunications, public sector and energy &utilities industries

Authentication Service for Health (NASH) project.

Australia’s National Broadband Network - NBNappointed IBM to implement and manage the corebusiness and operational support systemsrequired to operate Australia’s.


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• Bucharest Systems Laboratory opened inRomania as a facility for SystemsNetworking

• A multipurpose Cloud Computing centeropened in Poland

• Poland’s IT market is expected to accelerateand grow in 2012 at 7.1% vs 4.3% in 2011

• Investment in infrastructure development inRussia to 2020 will surpass US$1 trillion

Guarantee Fund Turns to IBM to Create Smarter CarInsurance System in Bulgaria: IBM’s Smarter Computingsolution brings drivers and insurance companies fastercustomer service, decreased levels of fraud and lowerinsurance premiums.

An increased emphasis oninnovation-related projects drivingdemand for IT equipment, training

and infrastructure

•

Increase footprint in high-growth cities andregions through Geographic Expansioninitiative

• Key sectors for investment are banking,government and telecommunications

• Drive growth from long term

transformational engagements

ea ng an s n en ra as ern urope urn o

IBM to Support Business Transformation: IBM announceddetails of 10 Smarter Computing Deals.

Bauman Moscow State Technical University (BMSTU)in partnership with IBM announced the opening of aSmarter Cities Development and Education Center inRussia – the first of its kind in the region. Located on theuniversity's Moscow campus, the center will be home to aunique educational program giving students the chance toexplore and apply IBM's latest technologies and solutionsto improve the management of urban infrastructure andsupport the development of smarter cities.


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Greater China• Power consumption rose 11.7 percent year-on-

year. The growth in 2012 is expected to slow to 8.5percent

• China’s largest online retailers expect sales to asmuch as triple in 2012 as urban per capita incomerose 7.8 percent

• Continued growth momentum in the mobile, 3G,internet and broadband sectors

• The Chinese government has pledged 850 billionyuan (US$124 billion) for a healthcare reform

Yi Lian Zhong Information is working with IBM tobuild a cloud computing platform that will improve thelife of citizens in China via an online portal for a varietyof social services. YLZInfo will expand services inFujian Province to seven more Chinese provincesallowing them to construct a citizen livelihood serviceinformation network covering 300 million people.

The government is making

US$$173.2B worth of investmentsin cloud initiatives

• e nese governmen s ma ng erce

investments in cloud initiatives, with an investmentof RMB 1.1 trillion ($173.2 billion)

2012 top investments and priorities

• Further expansion into inland cities

• Launch of a lab in Taiwan (Taipei) with focus onInternet of Things.

• Focus on Banking, Energy & Utilities, Rail, Healthcare,Retail, Telecommunications, Insurance andAutomotive -- to support Chinese government'spriorities.

Peking University People’s Hospital is beingsupported by IBM to build an evidence-based patientcentric care (ePC3) system that will enablecooperation and sharing among medical servicesproviders for improved patient care. The ePC3 system,developed by scientists at IBM Research - China andPeople’s Hospital, will provide better clinical decisionsupport at the point of care by offering a

comprehensive overview of a patients’ health data aswell as best practices from previous diagnoses,treatment and research.


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Korea• The 2012 government budget concentrates on

welfare and job creation and allocated 60% ofthe total for stimulus spending in the first sixmonths of the year in the face of expectedeconomic problems.

• Country aims to gain 10% of the global cloudservices market by 2014 through developmentof Korean cloud computing facilities

• More than 70 percent of its 48 millionpopulation carries one or more mobilehandsets

E-MartE-Mart - Mobile Office Systemthe largest retailer in Korea chose IBM to undertake theirmobile office project for E-Mart, to build the optimized mobilebusiness environment. IBM's mobile office s stem is desi ned

Continuation of government "expansionarymacroeconomic measures” to counter

global and local challenges

2012 top investments and priorities• Expanding into an addtional 19 cities across

Korea

• Focus on Banking & Finance, Government,Telecommunications

for utilizing smartphone and will provide the comprehensiveservices for an optimal working environment. Increaseproductivity, client satisfaction and enhanced collaboration areexpected through this system.

E-Trade Securities selected IBM’s Power System as thehardware platform to establish its next-generation system,following its business expansion to become a comprehensivesecurities company.


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Latin America• Four cities in Latin America are within the 25 most

populated in the world (Mexico City, Sao Paulo, BuenosAires and Rio de Janeiro).

• Net food exporter accounts for 10% of global agriculturalexports.; a third of the world's unused land suitable forfarming; has capacity and potential to help solve globalfood crisis.

• Will become an increasingly important oil producer by2015 and an important component of the emergingAtlantic Basin energy system

Nieves de Chape tlco in Argentina selected IBM todevelop a solution to enable rack skiers in real timeand speed up rescues

LA’s income per person has doubledin 20 years & governments will invest

US$450B in infrastructure by 2015

• Expand the IBM footprint through geo-expansioninitiative in LA countries

• Lead industry agenda/discussion in banking,healthcare, natural resources, energy & utilities, retailand telco

• Drive transformational value for our clients throughservices, software and high end systems

In Rio de Janeiro , Brazil, city managers apply thetechnology through a unified operations center toaccurately gather, analyze and act on informationabout city systems and services; analyze real-timeinformation to better model and anticipate problems;and integrate real-time information from acrossmultiple city systems to foster collaborative decision-making


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• Africa’s $107B financial services industry will logimpressive growth for the rest of the decade

• Economy estimated to grow 5.5 - 6% in 2012

Africa is poised for a wave of modernization and industry

infrastructure developmentsAfrica is the fastest urbanising continent in theworld and must provide energy to meet annual

urban growth rate twice as high as Asia and Latin

America

Luanda

LagosAccra

Dakar

Dar Es Salaam

Nairobi

Algiers

Casablanca

Tunis

RabatTripoli

Key statistics

• Large Companies: More than 75 companies’ revenuesover $3B

• Growing Middle Class: By 2015, 87M households (34%pop) in the middle income group

• Critical Mass in Cities: 52 cities of over 1M people(more than Europe)

• Largest Working Age Population: By 2040 to exceed1.1B (> China or India)

Cape TownDurban

Johannesburg

• Expanding into Africa by doubling offices by 2015

• Smarter Cities events to take place in many countries• IBM has developed strong competencies in Banking, Telco, Public

Sector, Oil & Gas• Investments made in education and business & technology skills

development• IBM will double the amount of Corporate & Executive Service Corps

teams working in African countries in 2012

IBM priorities


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IndiaSouth Asia

CentralEasternEurope

Middle EastAfrica

SofiaZagrebPrague

BrnoOstrava

TallinnBudapest

AlmatyRiga

VilniusWarsawWroclaw

KrakowGdansk

KatowicePoznan

AustraliaNew Zealand

BrisbaneSydney

AucklandPerth

AdelaideHobart

BallaratMelbourneWellington

ChristchurchLower Hutt

ASEAN

Bandar Seri BegawanJakarta

SurabayaMedan

MakassarManila

CebuChiangmai

BangkokPattaya

DaNangHo Chi Minh City

GreaterChinaGroup

BeijingHong Kong

TaipeiHefei

XiamenChongqing

ShanghaiBeijing

TianjinFuzhou

GuangzhouShenzhen

NanjingHarbin

ShijiazhuangWuhan

Korea

SeoulDaejeon Daegu

KwangjuPusan

LatinAmerica

Buenos AiresCordobaRosario

Rio de JaneiroSalvadorFortalez

Belo HorizonteUberlandia

RecifeCuritiba

Porto AlegreCampinas

JoinvilleAnto fogasta

MedellinCali

Guayaquil

ChandigarhDehradun

DelhiGurgaon

NoidaJaipur

LucknowGuwahati

AhmedabadIndoreMumbaiKolkata

PuneBhubaneshwar

HyderabadVizag

LuandaQatar

AlexandriaCairoAccra

NairobiCasablanca

Port LouisLagos

KarachiIslamabad

LahoreRiyadhDakar

JohannesburgPretoria

IBM hasestablishedpresence in manyGrowth Marketcountries...

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Timisoara

UfaKazanRostov-on-Don

SamaraPerm

NovosibirrskKrasnoyarsk

MoscowSt PetersburgEkaterinburg

BelgradeBratislava

Banska BystricaKosice

LjubljanaAnkara

IstanbulIzmir

DnepropetrovskKiev

Tashkent

engzouChangsha

ChangchunNanningSuzhou

NanchangShenyang

DalianTaiyuahQingdao

Jinan

Xi’anChengduUrumchiKunming

HangzhouNingbo

GuadalajaraMonterreyQueretaro

Lima

anga oreChennai

CoimbatoreKochiNasik

ColomboDakkar

DurbanCape Town

Port ElizabethBloemfontein

Dar es SalaamTunis

Abu DhabiDubai

OuangadougouN’Djamena

Kinshasa

LibrevilleAccraLilongwe

AntananarivoNiamey

SeychellesFreetownKampala

Lusaka** Representative only, not acomplete list of all IBM branches.


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‘Simplifying’ technology for companies is key to IBM’s growth


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IBM ushers in a simpler era of computing introducing "expertintegrated systems” – PureSystems

The world s first family of expert integrated systems


Infrastructure System:Expert at sensing and anticipating resource needs to optimize your infrastructure

Platform System:Expert at optimally deploying and running applications for rapidtime-to-value


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IBM PureSystems integration by design for clients

Development

Middleware

DeploymentApplications

Optimizes the complete solution stack:

• All hardware and software components factory


ServersStorage

Networking

Virtualization

Management

• Single point of unified lifecycle management• Integrated monitoring & maintenance• Integrated and elastic application and data runtimes• Application patterns allocate system resources for

optimal performance, security and reliability

• Fully virtualized and built for cloud• Storage tuned to data needs


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IBM PureSystems enable multiple client initiativesUsing a consistent, standardized approach

ConsolidateMore efficientlyconsolidate

OptimizeBetter tune and automate systems andapplications to improve applicationperformance, scalability and reliability

Accelerate CloudLaunch self-service

InnovateMore rapidly deliver new applicationsand services tomeet new business needs


applications to reduceoperating expenses

a secure, and integratedcloud environment

Consolidate AccelerateCloud

InnovateOptimize


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Research: new innovations and

Research & demo

Commercialization

Future technologies


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• For each industry the journey consists of a series of steps along a path of competencies to reach a smarter outcomefor organizations

• The power to pull together many sources of data in real time to source actionable insights and optimize clients’business

• Revenue IBM generated from Analytics solutions grew 16% from 2010

Analytics is enabling clients with trusted and relevantinformation in REAL TIME


Through to 2015, morethan 85% of Fortune500 organizations willfail to exploit ‘big data’for competitiveadvantage

--Gartner Predictions 2012


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IBM has developed capabilities that improve visibility, control andautomation of cloud computing services


80% of the Fortune 500use IBM cloud computing

capabilities

IBM generated 3.8 timesthe 2010 revenue

Private & Hybrid CloudsCloud Enablement technologies

Managed Cloud ServicesInfra & platform as a Service

Cloud Business SolutionsSoftware & Business Processas a Service

Commitment to open standards & broad ecosystems

IBM Smart Cloud

IBM Smart CloudSolutions

IBM Smart CloudServices

IBM Smart CloudFoundation

Business Process as a ServiceSoftware as a Service

Platform as a Service

Infrastructure as a Service


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• EH&S

IBM response IBM response IBM response • Traffic prediction &IBM response


• Citizen demand

• Disaster response• Broadband foreducation

• Border control &immigration

• ore an ng or

customer demand• Analytics for risk andfraud

• Private & hybridcloud

requirements

• Pressure on gridinfrastructure

• Asset control andoperationalefficiency

analytics

• Contractor networkmanagement

• Transport logisticsfor speed &efficiency

• Customerexperience demand

• Cloud infrastructure• Enterprise mobility

solutions• Infrastructure for

new markets

response


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By ‘smarter’ wemean the world isbecoming

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nstrumente ,interconnectedand intelligent.


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A city is essentially asystem of systems—transportation,healthcare, public safetyand education.


To enable a marterCity, IBM is working toimprove the quality &efficiency of servicesand how they operateand function.


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Enable business serviceand product innovation

Drive enterpriseoperations' effectiveness

and efficiency

Manage risk, securityand compliance

Smarter Planet principles deliver client value by solving industryspecific problems

Turn information intoinsights

Increase agility Connect and empowerpeople


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Investing in cities, creating a Smarter Planet

The Smarter CitiesChallenge is acompetitive grant

program awarding $50million worth of IBMexpertise over the nextthree years to 100 cities

Smarter Cities Challenge Award 2012Geraldton, AustraliaJurong Lake District, SingaporeDa Nang, Vietnam

aroun e g o e.

Designed to address thechallenges facing citiestoday, these grants have

addressed topics fromurban agriculture topublic safety.

,Cheongju, KoreaNanjing, ChinaNew Taipei City, TaiwanAhmedabad, IndiaPune, IndiaToluca, MexicoRosario, ArgentinaCuritiba, BrazilMedellin, ColombiaAccra, GhanaNairobi, KenyaTshwane, South AfricaRabat, Morocco


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IBM’s portfolio of solutions are designed to help clients solve theircritical business problems

IBM has more leadership positions thankey competitors...


H a r d w a r eSystems

TechnologyGroupResearchBusinessPartners

S o

f t w a r eBrands

AcquisitionsDevelopmentBusinessPartners S

e r v

i c e

sGlobal Business

ServicesGlobalTechnologyServicesGlobal ProcessServicesGlobal Finance

“With over 60 acquisitions since 2005, IBM is now asoftware powerhouse with leading positions in nearly allcategories. But there are also several white spaces,which our analysis of 103 Gartner Magic Quadrantsidentified.” Morgan Stanley March 2012


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Integrating corporate citizenship & social responsibility into everyaspect of IBM

IBM engages with communities around theworld by offering our technology, services andexpertise to help solve some of the world’smost complex problems.

Over the 100 years of IBM’s history, we’vedeveloped a thoughtful and comprehensiveapproach to corporate citizenship aligned toIBM’s values.

We identify and act on new opportunities toapply our technology and expertise to societalproblems such as disaster response,community investment and educationdevelopment.

In 2011 IBMers around the world pledgedmore than 3 million hours of service to theircommunities, equating to more than 1000person years of service in just this last year

Empoweringemployeesto serve their communities


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P b b i d it i b ild f d ti l


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Corporate & Executive Service Corps Deployments 2008-2011 & plans for 2012

Egypt

KazakhstanPoland

Romania

Russia

Turkey

India

MoroccoChina

Bangladesh

Pro-bono business and community service builds foundationalrelationships at city levels

*

Ghana Nigeria

SouthAfrica

SriLanka

CSCESC

Malaysia

Indonesia

Thailand

Cambodia

Brazil

Peru

Philippines

Kenya

Tanzania

Vietnam

Colombia

Argentina

Chile

Senegal

2008-2011

2012CSC

ESC


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Growth Markets are key to IBM’s roadmap for success in 2015

Headquarters: Armonk, NY, USACEO: Virginia M Rometty

Chairman : Samuel J Palmisano

2011 year-end from continuing worldwide operations

Revenue: $106.9 billionNet income: $15.9 billionTotal assets: $116.4 billionNumber of employees (worldwide): 426,751Stockholders of record: 525,870* All dollar figures are US

GMU Headquarters: Jin Mao Tower, Shanghai, China

Senior Vice President: Jim Bramante

Regional offices: Bangalore, Beijing, Dubai, Prague, Sao

Paulo, Seoul, Singapore, Sydney

Total countries: 140+


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This presentation was created by IBM GMU External Relations

For information or queries about this presentation please contact:

Megan Rosier , Manager, GMU External Relations – [email protected]

Karen Davis , Director, GMU External Relations – [email protected]

https://twitter.com/#IBMGrowthMkts

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